This year will see the implementation of the first stage of the securities companies restructuring, which will aim to handle those enterprises that are performing poorly, according to the plan approved yesterday by Minister of Finance Vuong Dinh Hue.
Accordingly, local securities companies will be divided into three groups: the first group, or the “normal group,” will include companies with a usable capital ratio (total usable capital to total risk exposure) of more than 150 percent, and accumulated profits or losses of less than 30 percent of their total registered capital.
Meanwhile, the second group -- the “under control” category -- will include securities companies with a usable capital ratio ranging between 120 and 150 percent, and accumulated losses accounting for 30 to 50 percent of total registered capital.
Finally, the last group, called “under special control,” will include those companies whose usable capital ratio is less than 120 percent, and whose accumulated losses are greater than 50 percent of total registered capital.
According to the State Securities Commission of Vietnam (SSC), the securities companies restructuring is aimed at boosting operational effectiveness, financial ability, business administration, and risk management.
In the longer term, it is intended to reduce the number of stock companies, and increase the authorities’ management and supervision over their operation.
By April 1, securities companies belonging to the third group are required to submit their operation reports to SSC on a daily basis, while those of the second group must to do so weekly.
Securities companies that have repeatedly failed to clear payments for customers, or misused their deposits, will have their licenses revoked.
As of April 1, companies belonging to the second and third groups will be required to sell assets that have high risk exposures, stop buying treasury shares and paying dividends, or merge with or be acquired by other securities trading institutions.
The restructuring will be conducted in a careful manner, without harming the stock market, and will ensure customers’ rights, the Ministry of Finance promised.