All credit institutions authorized to provide foreign exchange services in Vietnam are required license conversion

On 18 August 2014, State Bank of Vietnam (SBV) has just issued aforesaid Circular which will go in force from 15th October 2014 and replace Circular 03/2008/TT-NHNN with new business related contents as follows:

1. SBV provides the guidelines on scope of foreign exchange services, conditions and SBV’s approval procedures for commercial banks, foreign bank branches and financial companies in Vietnam (hereafter called “authorized credit institutions”).

2. License conversion is required for all credit institutions authorized to provide foreign exchange services in Vietnam.

All credit institutions authorized to provide foreign exchange services in Vietnam are required license conversion

2.1. Within the period of 12 (twelve) months from the effective date of this Circular, the authorized credit institution which had operation license,  certificate of eligibility foreign exchange operations on the domestic market, certificate of registration of foreign exchange operations on the international market, the written permission of the State Bank prior to the effective date of this Circular shall convert into the License on operation or Decision on amendment or written approval on limit time by the State Bank in accordance with the provisions of this Circular. After this expiry date, the authorized credit institution shall terminate the foreign exchange activities being not converted or not to be converted because it did not meet the conditions specified in this circular.

2.2. During the conversion, authorized credit institutions continue to carry out foreign exchange activities in accordance with the license, certificate of eligibility foreign exchange operations on the domestic market, certificate of registration of foreign exchange operations on the international market, the written permission granted by State Bank prior to the effective date of this Circular.

2.3. Authorized credit institutions continue to implement the agreements and contracts signed prior to the expiry date of conversion in accordance with the provisions of Clause 2.1 of this Article with the scope of foreign exchange operations authorized as prescribed by law at the time of signing the agreement and that contract. Any amendment, supplement, extend the agreement, the contract mentioned above from the expiry date of the conversion is conducted only if such amendment, supplement or extension is consistent with the provisions of this Circular.

3. The conditions for license conversion for all authorized credit institutions in Vietnam

3.1. State Bank considers converting the basic foreign exchange operations on the domestic market according to scope of services specified in this Circular into License on operation or Decision on amendment if authorized credit institution meets the conditions prescribed clauses 2, 3, 4 of Article 8 of this Circular.

3.2. State Bank considers converting the basic foreign exchange operations on international markets according to scope of services specified in this Circular into License on operation or Decisions on amendment if authorized credit institution meets the conditions prescribed in clauses 2, 3, 4 Article 8 and clause 3 Article 9 of this Circular.

3.3. State Bank considers converting other foreign exchange operations in the domestic market and international market according to scope of services specified in this Circular into the written Approval on limit time if authorized credit institutions meet the conditions specified in Clause 1 Article 10 of this Circular.

4. Application files for license conversion of authorized credit institutions in Vietnam

4.1. Application files for license conversion on basic foreign exchange operations on the domestic market, include:
4.1.1. An application for conversion in standard form of this Circular;
4.1.2. A copy of the license on operation, eligibility certificate,  registration certificate and other documents granted for the exchange activities (if any);
4.1.3. Internal rules of operation procedure, the risk management process for each proposed professional foreign exchange conversion. Risk management process includes at least the following details: the risks that may occur for each foreign exchange operations, management processes and plans for dealing with these risks;
4.1.4. Report on the status of equipment and facilities together with the commitment to have met the qualifying equipment and facilities;
4.1.5. The list of personnel management and professional staff and attaches degrees, certificates and information about qualifications meeting conditions prescribed in this Circular;
4.1.6. A description of information technology systems, solutions and technical application processes in the foreign exchange operations of information technology systems.

4.2. Application files for license conversion on basic foreign exchange operations on international markets, include:
4.2.1. A dossier as prescribed in Clause 4.1 of this Article;
4.2.2. Internal regulations of the selection criteria for organization partner, the transaction limit for partners, in which shall include provisions for review and reassess periodically and events unexpected affect credit ratings of its partners.

4.3. Application files for license conversion on other foreign exchange operations on the domestic market and international market, includes:
4.3.1. An application for conversion in standard form;
4.3.2. A dossier as prescribed in point b, c, d, e, f, g, h, Clause 4, Article 11 of this Circular;
4.3.3. Report on the performance of each activity in foreign exchange since licensed date.

5. The order and procedures for license conversion of authorized credit institutions in Vietnam.

5.1. Authorized credit institutions shall lodge directly or sent via post 01 (one) set of dossier as defined above to State Bank (via Banking Supervisory Agency).

5.2. Banking Supervisory Agency shall receive and send documents related units of SBV for their opinions on the proposal of the authorized credit institution.

Within 40 (forty) days from the date of receipt of application under the provisions of this circular, the State Bank shall convert to License on operation or Decision on amendment or written Approval on limit time for each case as specified in this Circular. In case of refusal for conversion, the State Bank shall reply with in written reason.

5.3. License conversion shall be carried out by two steps:

Step 1: Application files for license conversion on the basic foreign exchange operation on the domestic market, and on the basic foreign exchange operation on international markets;

Step 2: After step 1 is complete, application file for license conversion on other foreign exchange activity in the domestic and international market (if any);

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