In December 2022, the Prime Minister decided to establish VSDC by converting Vietnam Securities Depository Center (VSD) being a Government agency under the State Securities Commission (SSC) into a single limited liability company under the Enterprise Law 2020. The Minister of Finance will act as representative of the State capital in VSDC.

The conversion of VSD into VSDC could have the following legal implications:

• As an enterprise, VSDC can now be exposed to civil claims by its users if VSDC breaches its rules or contracts signed with securities companies, listed companies or other users. VSDC could also be subject to non-contractual claims by securities investors. As a Government agency, VSD is only exposed to administrative claims by its users which are more limited than civil claims.

• The rules of VSDC are now considered as services rules of a company instead of being rules issued by a Government agency. Accordingly, the interpretation of VSDC’s rules will be subject to the contract interpretation rules. Notably, if the VSDC’s rules are considered as standard contractual terms then such terms will be interpreted against VSDC if they are not clear.

• As an enterprise, VSDC will be subject to more stringent regulations on personal data protection or consumer protection.

This post is written by Nguyen Quang Vu.