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Few securities companies to be established in coming time: SSC
Vu Bang, Chairman of the State Securities Commission (SSC), affirmed that there will be only a few securities companies to be licenced in the time to come.
The limited number of securities companies to be newly established has been anticipated. It is the result of a series of measures state management agencies are applying in order to limit the number of securities companies.
There have been some 200 applications for establishing securities companies submitted to SSC since the end of 2007 and early 2008 on the table. However, Bang affirmed that the number of securities companies will only increase by a little in the time to come.
Decision No 126 dated late 2008 on the conditions for the establishment and operation of securities companies stipulates stricter requirements on securities companies’ establishment, especially requirements on founding shareholders.
For example, a securities company must have at least two founding shareholders, and one of them must be a commercial bank, finance company or insurance company. Institutional investors must hold at least 65% of chartered capital of securities companies, while the capital contribution ratio of finance and insurance companies must be 30% of the chartered capital of securities companies at least.
SSC has admitted that it is necessary to reinforce the operations of securities companies.
By December 31, 2008, SSC had licenced 103 securities companies. Many companies have completed their capital increase plans, while others are fulfilling the procedures for raising capital in order to improve their operations as the market has continued to fall.
SSC said that in 2009, one of the important tasks the commission is going to do is to strengthen the management and supervision of securities companies by organising inspection tours of securities companies, asking companies to strictly follow the internal auditing and risk management processes, and urging companies to increase chartered capital to meet the requirements on minimum capital stipulated by the Securities Law.
SSC has also said that the commission is compiling procedures on risk management and guidance for securities companies’ internal auditing.
It will also tighten or stop licencing securities companies and check the operations of securities companies in order to ensure the healthy operation of securities institutions.
Regarding the work of perfecting the legal framework, SSC plans to promulgate a circular on risk management, merger and acquisition, and resolution of securities companies, and consider the issue of requiring quarterly auditing of securities companies.
VietNamNet, TBKTVN
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