Joint Circular 46/2009/TTLT-BTC-BCA Guiding Cooperation in Handling Violations in Securities and Securities Market

|MINISTRY OF FINANCE - MINISTRY OF PUBLIC SECURITY | SOCIALIST REPUBLIC OF VIETNAM | |________________ | Independence - Freedom - Happiness | |No: 46/2009/TTLT-BTC-BCA |_________________ | | | Hanoi, March 11, 2009 |

JOINT CIRCULAR Guiding Cooperation in Handling Violations of Law in the Field of Securities and Securities Market

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Pursuant to the Law on Securities No. 70/2006/QH11 dated June 29, 2006; Pursuant to the Law on People's Police No. 54/2005/QH11 dated November 29, 2005; Pursuant to Decree No. 178/2007/NĐ-CP dated December 3, 2007 of the Government defining the functions, tasks, powers, and organizational structure of Ministries and ministerial-level agencies; Pursuant to Decree No. 36/2007/NĐ-CP dated March 8, 2007 of the Government on administrative penalties in the field of securities and securities market; The Ministry of Finance and the Ministry of Public Security agree to guide the cooperation in handling violations of law in the field of securities and securities market as follows:

I. GENERAL PROVISIONS

1. Scope of Regulation This Circular guides the cooperation between the Ministry of Finance and the Ministry of Public Security in detecting and handling violations of law in the field of securities and securities market.

2. Interpretation of Terms In this Circular, the following terms are understood as follows: 2.1 "Causing serious consequences" means causing significant financial loss and non-material consequences (causing adverse effects on the implementation of the Party's line, State policies; causing adverse effects on the fairness, openness, transparency, and safety of the securities market) as stipulated in legal documents on securities and securities market or other legal documents stipulating and guiding the definition of serious consequences. 2.2 "Voluntary remediation of consequences": refers to the act where a person committing a violation of law in securities causing financial, economic, order, and social stability losses voluntarily assumes responsibility and voluntarily repairs, compensates for damages, and remedies consequences accepted by the injured party and permitted by law.

3. Principles of Cooperation in Handling Violations of Law in the Field of Securities and Securities Market 3.1 Within the scope of functions, tasks, and powers stipulated by law, the Ministry of Finance and the Ministry of Public Security are responsible for close cooperation in prevention, detection, clarification, and handling of violations of law in the field of securities and securities market. 3.2 When considering a case of violation of law in the field of securities and securities market, the competent authority must clearly determine the nature of the case as civil, economic, administrative, or criminal to correctly determine jurisdiction, apply legal regulations correctly, and avoid causing trouble or damage to organizations and individuals participating in the securities market. 3.3 In cases where, before the criminal act is discovered, the offender voluntarily and timely compensates for damages, remedies consequences caused by the violation of law in the field of securities and securities market, promptly declares the facts clearly, contributes effectively to the inspection and investigation of the case, and strives to minimize the consequences of the criminal act to the lowest level, they may also be exempted from criminal liability. 3.4 Must objectively, comprehensively, and fully evaluate the causes, nature, degree, and consequences of violations of law in the field of securities and securities market; if necessary, must request expert appraisal from specialized agencies according to legal regulations.

II. SPECIFIC GUIDANCE

1. Competent Agencies for Implementing Cooperation The Ministry of Finance assigns the State Securities Commission, and the Ministry of Public Security assigns the Investigative Police Agency (Economic Crime and Office Crime Investigation Department) (hereinafter referred to as the Investigative Agency) to cooperate in implementing this Circular.

2. Content of Cooperation in Handling Violations of Law in the Field of Securities and Securities Market 2.1 Content of Cooperation: a) Timely provide each other with relevant legal documents and the situation of administrative violations and crimes in the field of securities and securities market; b) Cooperate in handling acts of violation causing serious consequences or acts of violation with signs of crime.

2.2 Specific Cooperation Activities: a) Transfer of violation case files with signs of crime for criminal prosecution:

• During the implementation of inspection tasks or in the process of handling violations of law, if it is detected that an organization or individual violating the law has signs of crime, within five days from the date of detecting signs of crime, the State Securities Commission is responsible for transferring the violation case file to the competent Investigative Agency to request initiation of prosecution according to criminal procedure law regulations and guidance in Circular No. 03/2006/TTLT-VKSNDTC-TTrCP-BCA-BQP dated May 23, 2006 of the inter-agency body of the Supreme People's Procuracy, Government Inspectorate, Ministry of Public Security, and Ministry of National Defense on cooperation relations in detecting, investigating, and handling cases with signs of crime proposed for prosecution by inspection agencies.
• In cases where an administrative penalty decision has already been issued, but subsequently it is detected that the organization's or individual's violation has signs of crime and the statute of limitations for criminal prosecution has not expired, the person who issued the administrative penalty decision must annul that decision and within three days from the date of annulment, transfer the violation handling file to the competent Investigative Agency to request initiation of prosecution according to legal regulations.
• The transferred case file includes: Official letter transferring the file to the Investigative Agency for handling; Record of violation (copy); appraisal and verification results (if any); other related documents (copies). The transfer of the file must be recorded in a Record.
• Based on the violation case file with signs of crime transferred by the State Securities Commission, the Investigative Agency reviews and handles it and notifies the State Securities Commission in writing about the decision to initiate or not initiate a criminal case. If the State Securities Commission receives a decision not to initiate a criminal case, the competent person to impose administrative penalties in the field of securities and securities market must issue a penalty decision for the violation according to the guidance in this Circular and notify the Investigative Agency about the administrative penalty.
• In cases where the State Securities Commission has concluded there are no signs of crime, but the Investigative Agency detects signs of crime, consultation with the State Securities Commission is required before issuing a decision to initiate a criminal case according to legal regulations. The State Securities Commission is responsible for providing files, documents, and related information collected during inspection and the State Securities Commission's conclusions to the Investigative Agency for investigation and clarification of the crime.

b) Transfer of violation case files for administrative penalty according to regulations on securities and securities market:

• In cases where the violation case file has been transferred to the Investigative Agency, but it is considered that the violation does not have sufficient signs constituting a crime or has not caused serious consequences, the competent person of the Investigative Agency must issue a decision to return the violation case file to the State Securities Commission for administrative penalty according to regulations on securities and securities market. The State Securities Commission issues a penalty decision within 10 days from the date of receiving the decision to return the violation case file. In cases where it is considered that additional time is needed for verification and evidence collection, the person handling the violation case may request an extension of the time limit for issuing the penalty decision according to Decree No. 36/2007/NĐ-CP of the Government on administrative penalties in the field of securities and securities market.
• In cases where the Investigative Agency detects a violation of law in the field of securities and securities market but during investigation considers that the act does not have signs of crime, it is responsible for transferring the file and documents to the State Securities Commission for handling the administrative violation according to its authority. The State Securities Commission must notify the Investigative Agency in writing of the handling results.

c) Cooperation in providing information on the situation of violations of law in the field of securities and securities market: In cases where the Investigative Agency detects an act of violation with signs of crime, it is necessary to provide information and exchange with the State Securities Commission.

2.3 Cooperation activities between the State Securities Commission and the Investigative Agency according to this Circular are manifested in writing.

3. Violations of Law in the Field of Securities and Securities Market Requiring Cooperative Handling The State Securities Commission and the Investigative Agency are responsible for cooperating in detecting and handling violations of law in the field of securities and securities market, specifically as follows: 3.1 Organizations and individuals creating forged registration files to offer securities to the public causing serious consequences. 3.2 Organizations and individuals creating forged files to list securities on the market causing serious consequences. 3.3 Organizations and individuals organizing the securities market illegally causing instability to the securities market causing serious consequences. 3.4 Organizations and individuals operating in securities business abusing their duties and tasks to use funds and securities in customers' accounts without customer authorization causing serious consequences. 3.5 Organizations and individuals establishing securities investment funds without registering or reporting to the State Securities Commission and using such funds causing serious consequences. 3.6 Violations of regulations on securities trading causing serious consequences: a) Organizations and individuals providing, disclosing, or using insider information to buy or sell securities or requesting others to buy or sell securities causing serious consequences; b) Organizations and individuals committing fraud, deception, providing fake documents, forging, altering, or destroying transaction documents to deceive or lure customers to buy or sell securities causing serious consequences; forging securities, circulating fake securities; c) Organizations and individuals committing prohibited acts to manipulate stock prices, create fake stock prices, conduct fake transactions, causing serious consequences; 3.7 Organizations and individuals intentionally publishing false information or creating and propagating false information for profit causing adverse effects on the securities market, causing monopoly in securities trading market, causing serious consequences; 3.8 Other violations of law in the field of securities and securities market causing serious consequences.

III. ORGANIZATION OF IMPLEMENTATION

1. This Circular takes effect after 45 days from the date of signing.
2. During the implementation of this Circular, if difficulties or obstacles arise, please report them promptly to the Ministry of Finance and the Ministry of Public Security for study and appropriate supplementation.

|FOR THE MINISTER |FOR THE MINISTER | |MINISTRY OF PUBLIC SECURITY |MINISTRY OF FINANCE | |DEPUTY MINISTER |DEPUTY MINISTER | |(Signed) |(Signed) | |General Police Lieutenant General - Le The Tiem |Tran Xuan Ha |

Distribution:

• Central Secretariat;
• Central Office and Party Departments;
• Standing Committee of the National Assembly;
• National Assembly Office;
• National Council and National Assembly Committees;
• Prime Minister, Deputy Prime Ministers;
• Spokesperson of the Prime Minister;
• Government Office;
• Ministries, ministerial-level agencies, government-affiliated agencies;
• Provincial People's Councils and People's Committees;
• Office of the President;
• Supreme People's Procuracy;
• Supreme People's Court;
• Legal Document Inspection Department (Ministry of Justice);
• Government Website, Ministry of Finance Website;
• Gazette;
• State Audit Office;
• Units under the Ministry of Finance;
• Units under the State Securities Commission;
• File: VT, SSC, VP, PC, C15 (Ministry of Public Security).