HSTC’s strict requirements to create sub-licences?

17:11' 30/07/2007 (GMT+7)

VietNamNet Bridge – Newly set up securities companies have expressed concerns since hearing the news that the HCM City Securities Trading Centre (HSTC) will inspect their capabilities before granting HSTC membership. HSTC has set up a new rule, under which securities companies, after getting operation licences, must go through a process of being inspected in terms of technical conditions and material facilities before getting HSTC membership. A council to be established by the trading centre will examine the companies to find out if they are technically capable of being granted membership. What worries securities companies most is that the new regulation by HSTC will create the ‘ask-and-grant’ mechanism and the so called ‘sub-licence’, a big social problem that needs to be cleared up. Meanwhile, HSTC’s Deputy Director Le Hai Tra affirmed that HSTC acted within its authorised power and in accordance with international practice. Mr Tra said that a licenced securities company did not automatically become a member of HSTC. He said that the New York Stock Exchange only recognised the membership of 1,336 securities companies out the several tens of thousands of securities companies in the US. “It is not difficult to give more tables and seats for securities companies’ staffs at the centre. However, we need to examine securities companies to see if they can meet requirements in terms of technology, service quality and a lot of other requirements,” said Mr Tra. However, the explanation by Mr Tra does not help dispel the worries of securities companies. A lot of questions have been raised: Why didn’t HSTC inspect the securities companies which were set up before? Will the previously established companies be inspected? The chairman of a big general corporation which is applying to set up a securities company belonging to the corporation wondered if HSTC was setting stricter regulations because it wanted to stop licencing new companies. It is clear that the announcement by HSTC on setting up stricter requirements on new securities companies has put investors, who are applying to establish 50 securities companies, on the edge. Securities companies have to do a lot of things to get an operation licence, and after getting the licence, they still have to exert more effort to get HSTC membership, which they called a kind of ‘sub-licence’. If a company cannot be granted membership, it means that it will go bankrupt, because no client will use the services of companies which are not recognised by HSTC. Yen Trang, Viet Nam Net