Market oversight to be tightened

The warning is included in a draft circular being developed by the Ministry of Finance to instruct the SSC to monitor and supervise the securities market.

The proposed circular authorizes the SSC to approve the policies of the two exchanges and VSD that serve the operation of the securities market.

The SSC has to develop yearly inspection plans on the local exchanges and VSD and carry out surprise inspections of the three member agencies.

The SSC will monitor and supervise the operation of the two local exchanges and VSD based on the monthly reports they are required to submit within the first 10 working days of the following month.

The SSC will also provide the local exchanges and VSD with complaints of individual and institutional investors and media reports about trading activities, and work with its three member agencies to manage the operation of the securities market.

The local stock exchanges and VSD must report to the SSC about their market management monthly and yearly, including the evaluation of their compliance with legal policies on the operation of the securities market.

The two local exchanges and VSD must submit reports to the SSC within 72 hours of putting a stock on their warning list, control list and suspension from trading.

The three member agencies are also required to do the same when suspending a brokerage from trading, settlement and clearing activities, and revoking the depository and clearing membership of the brokerage firm that is issued by the VSD.

Similar reports are also required to provide details about the violations of the companies that trade shares on the stock market and register as trading members for securities products in general, and derivatives products in particular.

The three agencies also have to provide reports about disputes involving clearing and depository members, trading members, the two local exchanges and the VSD.

The finance ministry is collecting feedback on the draft circular.