Decree 17/2000/ND-CP on the organization and operation of the Securities Inspector

DECREE

ON ORGANIZATION AND OPERATION OF THE SECURITIES INSPECTORATE

THE GOVERNMENT

Pursuant to the September 30, 1992 Law on Organization of the Government;Pursuant to the April 1st, 1990 Ordinance on Inspection;At proposals of the Chairman of the State Securities Commission, the Minister-Chairman of the Government Commission for Organization and Personnel and the State Inspector General,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- The securities inspectorate is the specialized securities and securities market State inspectorate in the organizational structure of the State Securities Commission, which has its own seal.

Article 2.- The securities inspectorate’s operations aim to contribute to ensuring that operations of securities market are conducted in a safe, fair, open and efficient manner, thus protecting the interests of the State and the legitimate rights and interests of investors.

Article 3.- Subject to the securities inspection are:

1. Organizations that issue securities to be traded at the central trading markets;

2. Securities trading centers, stock exchanges;

3. Securities companies, issuance-underwriting organizations, investment fund managing companies; organizations that conduct the securities registration, custody and securities clearing payment; supervisory banks;

4. Securities business practitioners;

5. Organizations and individuals involved in securities activities and securities market.

Article 4.- Operation scope of the securities inspectorate covers:

1. Securities issuing activities;

2. Securities transactions;

3. Securities trading, registration, clearing payment and custody activities;

4. Information disclosure.

Article 5.- Operations of the securities inspectorate shall comply only with the law, and be conducted in an accurate, objective, open, democratic and prompt manner. No agency, organization nor individual is allowed to unlawfully interfere in operations of the securities inspectorate.

Chapter II

TASKS, POWERS AND ORGANIZATIONAL STRUCTURE OF THE SECURITIES INSPECTORATE

Article 6.- The securities inspectorate has the following tasks and powers:

1. To inspect the observance of the legislation on securities and securities market; the observance of stipulations in securities issuance licenses, securities operation licenses and securities business practice licenses;

2. To coordinate with the units attached to the State Securities Commission in supervising activities related to securities issuance, trading and transactions. To inspect organizations and/or individuals in their securities issuance, trading and transaction in order to detect and prevent violations. To propose the Chairman of the State Securities Commission to take measures to ensure the enforcement of the legislation on securities and securities market;

3. To detect, prevent and sanction administrative violations according to its competence; to propose the competent agencies to handle violations of the legislation on securities and securities market;

4. To verify and make conclusions on complaints and denunciations related to securities activities and securities market operations, then propose the competent authorities to settle them according to the provisions of the Law on Complaints and Denunciations. To advise and assist the Chairman of the State Securities Commission in directing the work of preventing and combating corruption in the securities sector;

5. To advise and assist the Chairman of the State Securities Commission in directing the inspection of units under the management by the State Securities Commission;

6. To perform tasks and exercise powers provided for in Article 8 and Article 9 of the April 1st, 1990 Ordinance on Inspection and other tasks assigned by the Chairman of the State Securities Commission.

Article 7.- When conducting inspections, the securities inspectorate may:

1. Request the inspected subjects and concerned parties to supply relevant documents and evidences and to answer questions related to the inspected contents;

2. Make written records of inspection and propose handling measures;

3. Apply measures to prevent and handle administrative violations according to the provisions of law;

4. Exercise other powers according to the provisions of the legislation on inspection.

Article 8.- When conducting inspections, the securities inspectorate shall have to:

1. Produce inspection decisions and inspector cards;

2. Carry out inspection activities strictly according to the prescribed inspection order and procedures; not to cause troubles and harassment that impede securities issuance, trading and/or transaction activities and cause damage to the legitimate interests of organizations and individuals involved in such securities issuance, trading and transaction activities;

3. Report to the Chairman of the State Securities Commission on the inspection result and propose handling measures.

Article 9.- The securities inspectorate shall be set up only at the State Securities Commission. The working regulation of the securities inspectorate shall be decided by the Chairman of the State Securities Commission after consulting the State Inspector General and the Minister-Chairman of the Government Commission for Organization and Personnel.

Article 10.- The securities inspectorate shall submit to the direction by the Chairman of the State Securities Commission in the performance of its tasks of inspecting securities activities and securities market.

Article 11.- The securities inspectorate shall be administered by the Chief Inspector, who shall be assisted by a number of Deputy Chief Inspectors.

The appointment and dismissal of the Chief Inspector shall be decided by the Prime Minister at the State Securities Commission Chairman’s proposal submitted by the State Inspector General.

The appointment and dismissal of other posts and securities inspectors’ ranks shall comply with the provisions of the current legislation on inspection.

Chapter III

TASKS AND POWERS OF THE CHIEF SECURITIES INSPECTOR AND SECURITIES INSPECTORS

Article 12.- The chief securities inspector has the following tasks and powers:

1. To direct and organize the performance of tasks and exercise of powers of securities inspectors specified in Article 6 of this Decree;

2. To sanction administrative violations and propose sanctions against administrative violations in the field of securities and securities market according to the provisions of law;

3. To exercise other rights provided for in Article 15 of the Ordinance on Inspection;

4. To perform other tasks assigned by the Chairman of the State Securities Commission.

Article 13.- Securities inspectors must satisfy the criteria set for various ranks and grades of State employees in the State inspection service.

Article 14.- Securities inspectors, while conducting inspections, shall have to duly perform the tasks and properly exercise the powers prescribed in the Ordinance on Inspection and other legal documents which contain provisions on the tasks and powers of securities inspectors.

Article 15.- Securities inspectors shall enjoy the preferential regime and policy and be equipped with technical and professional means according to provisions of the current law.

Chapter IV

RELATIONSHIP BETWEEN SECURITIES INSPECTORATE AND CONCERNED AGENCIES

Article 16.- The securities inspectorate shall submit to the direction and instruction in terms of organization and professional inspection operations by the State Inspectorate and maintain other relations with the State Inspectorate according to the legislation on inspection.

Article 17.- If the securities inspectorate, in the course of inspecting securities issuance, trading and transaction activities, detects any signs of violations of the legislations on other fields, it shall have to report them to the inspection organizations in such fields, so that the latter can take appropriate handling measures.

If inspection organizations of the ministries, ministerial-level agencies and agencies attached to the Government and the State inspection organizations in localities, while conducting the inspection and/or examination of activities within their respective State management scope, detect signs of violations of the legislation on securities and securities market, they shall have to report them to the securities inspectorate.

Article 18.- The securities inspectorate shall have to coordinate with the investigation agencies, the People’s Procuracies and the People’s Courts at all levels in preventing and combating crimes in the field of securities and securities market according to the provisions of law.

In the inspection course, if it detects crime-constituting elements related to securities and securities market activities of organizations and individuals, the securities inspectorate shall have to forward the dossiers thereon to the competent investigation agencies.

When they deem it necessary, investigation agencies shall have to coordinate with the securities inspectorate in the course of conducting the investigation into matters related to securities activities and securities market.

Article 19.- The securities inspectorate is entitled to use collaborators in its inspection activities according to provisions of the current inspection legislation.

Chapter V

COMMENDATIONS, REWARDS AND HANDLING OF VIOLATIONS

Article 20.- The securities inspection personnel, collaborators and securities inspection organizations that record achievements in their inspection activities shall be commended and/or rewarded according to law.

Article 21.- Securities inspectors who commit acts of violating law provisions, neglect their responsibility in performing their tasks or commit acts of concealing organizations and/or individuals that violate provisions of the legislation on securities and securities market as well as provisions of this Decree shall, depending on the seriousness of their violations, be disciplined or examined for penal liability. If damage is caused, they shall have to make compensations therefor according to the provisions of law.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 22.- This Decree takes effect 15 days after its signing.

Article 23.- The Chairman of the State Securities Commission shall guide the implementation of this Decree.

Article 24.- The ministers, the heads of the ministerial-levels agencies, the heads of the agencies attached to the Government and the presidents of the People’s Committees of the provinces and centrally-run cities shall have to implement this Decree.

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