3 CASES WHERE A SECURITIES TRADING INSTITUTION IS PLACED IN THE STATE OF WARNING
The Ministry of Finance issues the Circular No. 91/2020/TT-BTC prescribing prudential ratios and remedies to be taken by securities trading institutions that fail to achieve these ratios on November 13, 2020.
The State Securities Commission shall issue a decision to place a securities trading institution in the state of warning if its liquidity ratio is between 150% and less than 180% in all reporting periods for 03 consecutive months; or its liquidity ratio reviewed or audited by an accredited audit firm is between 150% and under 180%.
The third case where a securities trading institution is placed in the state of warning is prescribed as follow: In a prudential ratio report, an accredit audit firm gives modified opinions (or adverse opinions), makes a disclaimer of opinions (or is unable to give opinions), gives qualified opinions on a number of items in such report, and if the impact of qualified opinions on liquidity is done away, the liquidity ratio will reach between 150% and under 180%.
The warning period starts from the date on which the securities trading institution is placed in the state of warning to the date on which the State Securities Commission issues a decision to place such securities trading institution out of the state of warning.
A securities trading institution may be considered to be placed out of the state of warning if its liquidity ratio reaches or surpasses 180% for 03 consecutive months.
This Circular takes effect on January 01, 2021.
