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New regulations on required conditions for operating debt trading services

On July 3­rd, 2017, Circular No.53/2017/TT-BTC guiding the implementation of the Decree No. 69/2016/ND-CP dated July 1st, 2016 regarding requirements for operating debt trading services formally comes effect. The Circular is applied to enterprises registered for operating debt trading services; organizations and individuals desire to tradein debt trading services and relevant agencies, organizations and individuals.
The main contents of the circular regulate requisite conditions before starting debt service business. Accordingly, the first and most important provision is that such enterprises must publish their satisfaction of all required conditions in relation to capital, internal management regulations on organization, internal regulations on debt trading services, regulations on the operation of the debt trading floor at the head office and on the website of the enterprise. Such regulation aims to concretizethe principle of debt trading as stipulated in Article 4 of DecreeNo.69/2016/ND-CP, which is “The debt trading service must be provided onpublic, transparent and equal terms in compliance with the law”.
Regarding conditions of registered capital, Circular No.53/2017/TT-BTC stipulates that the charter capital/ actual investment capital recorded in its balance sheet must be higher than or equal to the minimum capital levels prescribed in Decree 69/2016 (5billion VND, 100 billion VND or 500 billion depending on the type of business service) at the time of begining. This regulation limits the status of "virtual capital" which is very prevalent in the business world today by satisfying the condition of "real investment capital contributed on the balance sheet" by enterprises operating debt trading service.

(Currently, VMAC is the only entity conducting debt trading service owned by Financial institutions in Vietnam)
Inaddition, to analyze and clarify the provisions of Decree 69/2016, Circular 53/2017/TT-BTC also added conditions applied to enterprises operating debt trading floor services. Specifically, for legally start their trading floor services, the enterprise must have: The audited financial statements proving that the enterprise has experienced in debt trading services for at least 01 year up to the time of starting, and earned at least VND 500 billion of revenues from debt trading services in the year preceding the year in which it is going to run debt trading floor services; Original written explanation about the enterprise’s technical facilities and information technology system that meet requirements for operation of a debt trading floor to receive, update and provide information about debt trading activities between trading floor participants; software system for managing and supervising transactions,including retention and provision of information about debts to be posted onthe trading floor; enterprises also need to have a labor contract signed with at least 02 persons who possess certificate of professional auditor or at least 02 persons who have practicing card in valuation granted by Minister of Finance.
Regarding reporting system, within 30 days from the ending date of the financial year and in irregular circumstances, the enterprise operating debt trading services must submit reports to the People’s Committeeof province or central-affiliated city where its head office is located on its satisfaction of requirements for running debt trading service, operating results and its compliance with law according to guidance by the People’s Committee of province or central-affiliated city.
This Circular takes effect as from July 3rd, 2017, enterprises running debt trading service established and operating before the effective date of Decree No. 69/2016/ND-CP must satisfy all the conditions applied to debt trading services in accordance with the provisions of Decree No.69/2016/ND-CP and the guidance in this Circular at the latest by July 1st,2017. Simultaneously, the enterprises must complete the documents evidencingand publishing the satisfaction of conditions for operating debt trading services at the head office and on the website of the enterprise. Before July 1st,2017, the enterprise must report to competent Enterprise registration agency onthe satisfaction or non-satisfaction of the conditions for operating debttrading services. In case of failure, the business registration of such enterprisemust be terminated and reported.
Vietthink News./.
Last updated: 07/12/2017