The regulation on the organisation and operation of securities companies will become effective on May 10. Companies which cannot meet the requirements stipulated by the regulation will have their operation licences revoked.
Under the new regulation, securities companies must have the right to use their head office for one year at least, while the total surface area for the trading floor must be 150 sq m large at least.
They also must have facilities that ensure normal operations, including a trading floor, office equipment, a computer system with software serving securities trading transactions, and other equipment.
The founding shareholders of securities companies must hold at least 20% of the real initial capital of the companies. The initial capital contribution cannot be transferred within three years of the date of the establishment certificate. Their capital contribution can then only be transferred to other founding shareholders.
Securities companies will be forced to stop operating if they provide false information when applying to establish companies or changing the contents of their licences. In addition, companies will have to stop operating if they suffer the cumulative loss of 50% of chartered capital and cannot raise enough capital as required. Any companies which do not initiate operations within 12 months of the day their licences are granted will also have their licences revoked.
The new regulation stipulates that officers working for securities companies can only open personal transaction accounts at the securities companies which they work for.
Source: VNE
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