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Banks and securities companies at variance over investors’ money   2008-08-21 - TBKTVN

A lot of securities companies still do not want to transfer the management of investors’ money to commercial banks as per request of the Ministry of Finance, though the deadline of October 1 nears.


If banks manage investors’ money, this would help ease the burden on securities firms

In late July, the State Securities Commission released Decision No 611, requesting that all securities companies hand over the management of investors’ money to commercial banks.


After the decision was released, several commercial banks, including ACB and Techcombank, tried to contact securities companies, offering to provide some related products.


However, to date, only 13 securities companies have finished the transfer, while others say they are still preparing, or facing some obstacles in preparations.


A representative of Hai Phong Securities Company said that in addition to the difficulties in seeking suitable bank partners and suitable connection technology, there exist problems related to securities companies’ legal responsibility.


Doan Van Minh, General Director of Haseco, said that if banks manage investors’ money, this would help ease the burden on securities firms. However, he is worried about the legal risks that could occur, saying that the lack of regulations that clearly stipulate the responsibilities of banks and securities companies could raise complicated disputes.


Nguyen Quang Bao, Deputy Director of Securities Services under the Saigon Securities Incorporated (SSI), asked who would be responsible if the connection system did not work properly. Securities companies would have to compensate investors for losses; however, there are no concrete regulations about the responsibility that banks, the software providers, have to bear.


Securities companies have voiced the same concern that the deadline of October 1, 2008 should be delayed as they need more time to prepare for the transfer. The delay would also provide more time for state management agencies to set up a perfect legal framework for banks’ management of securities investors’ money, they affirm.


Meanwhile, banks do not agree with securities firms.


Techcombank’s representative said that there are some difficulties with the connection systems as the technical bases of different securities companies are different. However, he said the problems can be resolved easily.


The Bank for Investment and Development of Vietnam (BIDV) said on August 20 that the bank has successfully connected with 10 securities companies, and that it always has spare plans in case of trouble.


“Our system can serve millions of transactions at the same time,” he stated.


Nguyen Van Dung, Deputy Director of the Hanoi Securities Trading Centre (HASTC), said that technical issues are not the problem: securities companies do not really want to implement the decision on the transfer of the management of investors’ money.


Thuc Anh, Deputy Head of the Business Division under the State Securities Commission, said that the commission has toured some regional countries, where investors’ money is under the management of banks, and found out that this is done smoothly with very few errors and at reasonable cost.


Anh said that securities companies have cited difficulties because they still want to retain the benefits of managing investors’ money.


“Securities companies must face the truth and respect the regulations,” Anh said.

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