Aug. 21 – In an effort to enact protection mechanisms to lower the risk investors may be exposed to with regard to securities-related crimes, the Vietnamese government promulgated Circular No. 10, which comes into effect today and contains new regulatory guidelines regarding:
- Intentional disclosure of false information;
- Insider trading; and
- Manipulation of securities prices.
The circular embodies the joint effort by the Ministry of Justice, the Ministry of Public Security, the Supreme People’s Court and the Ministry of Finance to crack down on securities fraud.
Under the circular, three tranches of violations were established ranging from “serious” to “extremely serious.” Specifically, any misconduct that results in damages of at least VND1 billion (US$47,100) will be categorized as a “serious” offense; misconduct resulting in damages of at least VND3 billion (US$141,500) will be considered “very serious”; and offenses resulting in damages above VND3 billion will be considered “extremely serious.”
The circular defines “insider trading” as any transaction, including the inducement of another to transact, on the basis of information yet to be disclosed to the public.
While the circular applies to anyone engaged in insider trading, special emphasis is placed on the need to monitor auditors, securities companies and securities funds, as these entities have the greatest potential to influence market prices.