The Ministry of Finance and Security Commission has drastically handled cases of manipulating securities

According to the Ministry of Finance, legal regulations on the supervision of irregular transactions and handling of manipulative transactions have been fully promulgated. Source: Internet

In terms of stocks, the information about the issue relating the plummet of the stock market which caused damage for F0 investors, leading to a loss of trust in the stock market. One of the reasons is the lack of transparency and equality. The Ministry of Finance said that Vietnam's stock market in 2021 and the first months of 2022 would develop stably, affirming the role as an important medium and long-term capital mobilization channel for the Government and businesses.

However, recently, Vietnam's stock market has been affected by negative developments in the country and overseas such as the increase in interest rates in the US, the trade war between countries, the geopolitical situation, and the sharp increase in oil prices, as well as fluctuations in the international financial - monetary market.

Besides the positive side of the stock market, based on the supervision, the State Securities Commission (SSC) found that there were listed and registered stocks with strong fluctuations in trading volume and prices. In particular, there are some fluctuations showing unusual signs. A number of newspapers, magazines, and websites have also reported on the price increase of some stock tickers on the stock market.

According to the Ministry of Finance, legal regulations on the supervision of irregular transactions and handling of manipulative transactions have been fully promulgated. The supervision of the stock market was previously divided into two levels. Accordingly, the Stock Exchange was the supervisor of line 1 which was responsible for monitoring signs of abnormal transactions, reporting to the State Securities Commission, and the State Securities Commission was in charge of supervisory line 2.

From the Law on Securities 2019, the supervision of transactions on the stock market has been upgraded to 3-level supervision, thereby supplementing a supervisory line of a securities company besides the supervision of the Stock Exchange and the State Securities Commission.

Recently, under the direction of the Ministry of Finance, the State Securities Commission has drastically implemented the supervision, inspection and handling of cases of stock market manipulation.

Typically, the State Securities Commission has recommended and warned investors when participating in securities groups, is continuing to strengthen supervision and information processing in cyberspace, and coordinates with relevant competent authorities to detect and strictly handle individuals and organizations that violate the provisions of the Law on Securities (in the case of Dang Nhu Quynh, who posted inaccurate information on his personal Facebook page, negatively affecting the stock market in April, 2022).

Along with that, the State Securities Commission would strengthen supervision and strictly handle organizations and individuals that violate regulations on transactions and information disclosure, especially trading activities and information disclosure of major shareholders, founding shareholders, business leadership (specifically, the case of Trinh Van Quyet was prosecuted for the act of "Manipulating the stock market", "Hiding information in securities activities" in March 2022).

Besides that, strengthening the control of securities companies’ activities, especially lending activities using financial leverage; strictly handling securities companies involved in stock market manipulation (the case of "stock market manipulation" occurred at Tri Viet Securities Joint Stock Company, Louis Holdings Joint Stock Company in April 2022).

Regarding the issue of reporting on the phenomenon of securities companies that both manage accounts, consult and freely invest in securities, the Ministry of Finance said, regarding international practices, securities companies are allowed to operate self-trading, securities issuance guarantee, securities brokerage and securities investment consulting.

Furthermore, Clause 1, Article 72 of the Law on Securities stipulates that a securities company is licensed to conduct one, several or all securities business operations, including self-trading, securities issuance guarantee, securities brokerage and securities investment consulting.

Regarding the prevention of conflicts of interest, the Ministry of Finance said that during its operation, a securities company that is licensed to operate self-trading activities, manage customer accounts and advise on securities investment may have conflicts of interest between securities companies and customers.

Therefore, in order to prevent this, the Law on Securities (Article 89) and guiding documents (Circular No. 121/2020/TT-BTC of the Minister of Finance regulating securities company activities) have stipulated restrictions on conflicts of interest between customers and securities companies (Articles 4, 13, 22). Accordingly, securities companies are obliged to prioritize interests and protect customer assets.

Regarding management and supervision, the State Securities Commission conducts regular and continuous monitoring through reports or on-site inspections of the activities of securities companies to ensure that securities companies comply with the law.