New rules give greater investor security

Investors will have greater protection under the new circular, which aims to crack down on securities-related crimes, including the willful provision of misleading information, the concealment of factual information in securities trading, insider trading and stock price manipulation. Photo vinacorp

The circular is a joint effort between the Ministry of Justice, the Ministry of Public Security, the Supreme People's Court, the Supreme People's Procuracy and the Ministry of Finance.

Investors will have greater protection under the new circular, which aims to crack down on securities-related crimes, including the willful provision of misleading information, the concealment of factual information in securities trading, insider trading and stock price manipulation.

Damages to investors upwards of VND1 billion (US$47,100) and gains from insider trading of more than VND500 million ($23,550) will be punishable under the act.

Additionally, the circular aims to punish ˜intangible' losses to the stock market, including the disruption of the State's implementation of policies, losses in investor confidence and the creation of unfair advantages, which will be considered aggravating factors.

Crimes will be categorized as "serious", "very serious" and "extremely serious" misconduct under the law, depending on the damages inflicted.

"Serious" charges will be laid against those causing VND1 billion losses to investors with "very serious" charges put to those exceeding VND3 billion ($141,500) in damages.

The regulations aim to keep pace with securities-related crime which has evolved rapidly in recent years. The Government is hoping the new law will restore market discipline and investor confidence.

The unveiling comes amid rumours from private investors the Chairman of the Bank for Investment and Development of Viet Nam, Tran Bac Ha, had been arrested on February 21.

The market fell VND29 trillion ($1.3 billion) in just a single session, while stock indices fell 3-5 per cent.

Last year, the State Securities Commission issued 180 penalties to individuals and investors totaling fines of VND11 billion ($518,800). The penalties were described as an ineffective deterrent for white collar criminals.