brokers have signed a contract with each other, unless otherwise agreed (Clause 1, Article 153). The brokerage fee, if not agreed in the brokerage contract, will be determined according to the price of brokerage services under similar conditions of method and time of supply, geographical market, payment method... (Clause 2, Article 153).
Corresponding to the rights of the broker, the brokered party has the obligation to pay remuneration and other reasonable expenses to the broker; at the same time, provide necessary information, documents and means related to the goods and services (Clause 1, 2, Article 152).
Compared to the 2005 Law on Commerce of Vietnam, specialized laws have more detailed provisions on the rights and obligations of commercial brokers. These provisions are basically quite consistent with the 2005 Law on Commerce of Vietnam. Specialized laws often do not mention the rights and obligations of the brokered party; and not all specialized laws stipulate both the rights and obligations of the broker. For example, the 2000 Law on Insurance Business clearly states the rights and obligations of insurance brokerage enterprises (Article 91), but the 2006 Law on Securities only mentions the obligations of securities companies - the only entities permitted by this Law to conduct securities brokerage activities (Article 71).
A common inconsistency between the Vietnamese Commercial Law and specialized laws is the difference in regulations on the right to receive brokerage fees or brokerage commissions - the most important right for the broker.
Chapter 2. Current status of Vietnamese legal regulations on commercial brokerage activities, implementation of regulations on commercial brokerage activities and issues raised
2.1 Current status of regulations of Vietnam Commercial Law 2005 on MGTM activities
2.1.1 Law's understanding of MGTM activities
Clause 1, Article 3 of the 2005 Law on Commerce of Vietnam defines: “Commercial activities are activities aimed at generating profits, including buying and selling goods, providing services, investing, promoting trade and other activities aimed at generating profits”. Thus, commercial brokerage activities, as understood by the 2005 Law on Commerce, are first of all a profit-making activity.
Clause 11, Article 3, Vietnam Commercial Law 2005 states: “Trade intermediary activities are activities of traders to carry out trade transactions for one or several identified traders, including activities of representing traders, trade brokerage, goods purchase and sale entrustment and trade agency”. From that, it can be inferred that, according to the understanding of this Law, trade brokerage activities are a type of trade intermediary activities, the hiring party and the broker are both traders. Traders, according to Clause 1, Article 6, Vietnam Commercial Law 2005, “include legally established economic organizations, individuals conducting trade activities independently, regularly and with business registration”.
Article 150 of the 2005 Law on Commerce of Vietnam stipulates: “Commercial brokerage is a commercial activity in which a trader acts as an intermediary (called the broker) for parties buying and selling goods and providing services (called the brokered party) in negotiating and concluding contracts for the purchase and sale of goods and services and is entitled to remuneration according to the brokerage contract”. In this activity,
Brokerage, the broker acts on its own behalf to transact with the brokered parties, is an intermediary for the parties to conduct commercial transactions, helps the parties have the opportunity to meet, negotiate, sign contracts and provide support services related to commercial transactions.
The 1997 Commercial Law provides for brokerage in Section 4, Chapter 2 (Commercial activities), including Articles 93 to 98. The 2005 Commercial Law provides for commercial brokerage from Articles 150 to 154. Compared to the 1997 Commercial Law, the 2005 Commercial Law has removed Article 94 regulating the Brokerage Contract; the obligations of the commercial broker are regulated in Article 151 of the 2005 Commercial Law, replacing Articles 95 and 96 of the 1997 Commercial Law. The 2005 Commercial Law also provides for the Right to receive brokerage remuneration in Article 153; provides for payment of costs arising from brokerage in Article 154; and adds Article 152 on the Obligations of the brokered party.
2.1.2 Specific regulations on MGTM activities
The 2005 Law on Commerce of Vietnam specifically regulates commercial brokerage activities in Section 2, Chapter V, Articles 150 to 154; in addition, Section 3, Chapter II also has Articles 69, 70, 71 regulating traders who broker the purchase and sale of goods through the Commodity Exchange.
The Commercial Law 2005 deals with the obligations of the commercial broker, the obligations of the brokered party, the right to receive brokerage remuneration and the payment of costs arising in connection with brokerage.
Pursuant to Article 151 of the 2005 Law on Commerce of Vietnam, the MGTM party has the following obligations (unless otherwise agreed by the parties):
Preserve samples of goods and documents delivered to perform brokerage and must return them to the brokered party after completing brokerage obligations;
Not to disclose or provide information that is detrimental to the interests of the brokered party;
Responsible for the legal status of the brokered parties, but not responsible for their solvency;
Not to participate in the performance of contracts between brokered parties, except in cases where there is authorization from the brokered party.
The above provisions on the obligations of the brokerage party are only relative. In reality, it is very difficult to control whether the brokerage party discloses information that is harmful to the interests of the brokered party. Furthermore, because the brokerage party is only responsible for the legal status of the brokered party, the determination of payment capacity will belong to the brokered party - the party that needs to sell (buy) goods and services. However, the negotiation of transaction conditions is often conducted through the broker, the brokered parties often meet each other at the contract signing stage - when the basic transaction conditions have been agreed upon. This is disadvantageous for the seller in checking the buyer's payment capacity, and also puts psychological pressure, leading to the seller still agreeing to sign the contract when he is not sure about the buyer's payment capacity.
Corresponding to the obligations of the broker, the brokered party also has the following obligations (Article 152, Vietnam Commercial Law 2005):
Provide necessary information, documents and means related to goods and services;
Pay brokerage fees and other reasonable expenses to the broker.
In relation to specialized laws such as the 2005 Maritime Code, the 2006 Real Estate Business Law, etc., the 2005 Commercial Law is a general law, and is also a rare law that refers to the obligations of the brokered party.
According to Article 153, the obligation to pay brokerage fees, or the right to receive brokerage fees, arises from the time the brokered parties have signed a contract with the broker.
If the parties do not have a separate agreement, the brokerage fee will be determined according to Article 86 of the Commercial Law 2005.
Article 86 of this Law allows the determination of brokerage service prices in the absence of an agreement on the price and method of determining the service price, as well as any other instructions. In that case, the brokerage service price is determined according to the price of brokerage services under similar conditions regarding the method and time of supply, geographical market, payment method and other conditions affecting the service price.
The brokered party is not only obliged to pay the broker when the brokerage is successful. Even if a contract is not signed between the brokered party and the third party, the brokered party must still pay reasonable expenses arising in connection with the brokerage, unless otherwise agreed (Article 154). That is, even if the brokerage does not bring results, the broker is still certain to recover the “reasonable expenses” that they have incurred to perform the brokerage work. The problem lies in what is “reasonable expenses”? The 2005 Vietnamese Commercial Law does not regulate this issue at all, so how it is understood depends on the broker, the brokered party and the dispute resolution person (if a dispute occurs).
Articles 69, 70, and 71 are regulations on traders conducting commercial brokerage activities at the Commodity Exchange. These regulations are stricter than those for brokers in general (in Section 2, Chapter V, Vietnam Commercial Law 2005) and focus on prohibited acts for traders brokering the purchase and sale of goods through the Commodity Exchange.
2.2 Current status of commercial brokerage activities in Vietnam in recent times
2.2.1 General comments on positive results
Over the past five years, commercial brokerage activities in Vietnam have developed strongly. The most noticeable sign is the emergence of
The establishment of the Hanoi Stock Exchange (established under Decision No. 01/2009/QD-TTg dated January 2, 2009 of the Prime Minister on the basis of converting and reorganizing the Hanoi Stock Exchange Center) and the Ho Chi Minh City Stock Exchange (established under Decision No. 599/QD-TTg dated May 11, 2007 of the Government on the basis of converting from the Ho Chi Minh City Stock Exchange Center). As of March 16, 2010, the two Exchanges had 203 member securities companies , most of which were engaged in securities brokerage. The daily trading volume at each Exchange reached tens of millions of securities, with transaction values reaching thousands of billions of VND (see Table 4).
Table 4: Stock trading volume on March 21, 2010 at Ho Chi Minh City Stock Exchange
Volume/Value
Order matching | Agree | Total | |
Trading volume (unit: 1 share) | 39,529,580,000 | 2,559,940,000 | 42,089,520,000 |
Transaction value (unit: billion VND) | 1,670,307 | 108,321 | 1,778,629 |
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Source: http://www.hsx.vn/, Transaction information/Transaction statistics/Transaction size, accessed on March 22, 2010.
Not only in the securities sector, but also in other areas of commerce such as transportation, insurance, real estate, steel trading, etc., brokerage activities are also growing. The role of brokers is increasingly recognized by society thanks to their professionalism.
In December 2008, Buon Ma Thuot Coffee Trading Center - the first coffee trading floor in Vietnam was established. In November 2009, in Ho Chi Minh City, Sacombank Group organized the launch of Saigon Thuong Tin Commodity Exchange (Sacom-STE) - the first steel trading floor in Vietnam.
11 Statistics at http://www.hsx.vn/hsx/Modules/Danhsach/CtyChungkhoan.aspxand http://hnx.vn/danhsach_thanhvien.asp?actType=1&menuup=501000&TypeGrp=1&menuid=109000&menuli nk=500000&menupage=danhsach_thanhvien.asp&stocktype=2 , accessed on March 16, 2010.
The first cashew trading floor in our country was also opened on March 20, 2010 in Binh Phuoc. Along with the birth of these floors is the development of both the MGTM team and MGTM activities.
In the maritime sector, the Vietnam Ship Agents and Brokers Association (VISABA) was established in 1994 and now has 50 members . 12. On www.vantaivietnam.com alone - a website specializing in building a directory of companies operating in the field of transportation and forwarding, there are 412 companies operating in the field of maritime brokerage.
The development of commercial brokerage activities in recent years is easy to see. However, for many reasons, this activity still has many shortcomings. Weaknesses in commercial brokerage activities can originate from the fact that businesses have small capital, poor technical facilities, staff lacking knowledge and professional skills, and lack of professionalism...
In the next part of this thesis, the author focuses on analyzing the current situation of securities brokerage (MGCK) and real estate brokerage (MGBĐS) activities to find out how the provisions of the 2005 Vietnam Commercial Law, the 2006 Real Estate Business Law, and the 2006 Securities Law have been applied, which points are contrary to the provisions of the law and which points of the law appear to be inconsistent with the reality of these activities.
The author chose to learn about real estate brokerage and stock brokerage for the following two reasons:
Firstly , in the past 5 years, brokerage activities in the above 2 fields have developed very well. That prosperity is reflected in the 2 Exchanges.
12 Statistics at http://www.visaba.org.vn/vn/gioithieu.aspx?id=43(website of Vietnam Association of Shipping Agents and Brokers), accessed March 23, 2009.
Securities in Hanoi and Ho Chi Minh City and 383 Real Estate Trading Floors nationwide 13 .
Second , the law on brokerage in these two fields still has many points that need to be considered; this is also an issue that the press and businesses are very interested in, because in recent times, the stock market and real estate market have had strong fluctuations.
2.2.2 Situation of commercial brokerage activities in the securities sector
2.2.2.1 Legal regulations on brokerage activities in the securities sector are relatively complete.
Specialized laws in the field of securities in Vietnam currently include the Securities Law 2006 and sub-law documents issued by the Government, the Ministry of Finance, the State Securities Commission and competent authorities.
There are many sub-law documents guiding the implementation of the Securities Law 2006. Among them, the most notable and directly related to securities trading activities are the following documents:
Decree 14/2007/ND-CP of the Government detailing the implementation of a number of articles of the Securities Law;
Decree 36/2007/ND-CP of the Government on administrative sanctions for violations in the field of securities and securities market;
Decision No. 27/2007/QD-BTC on promulgating the Regulation on organization and operation of securities companies;
Decision No. 15/2008/QD-BTC of the Ministry of Finance promulgating the Regulation on securities practice;
13 According to the website of the Vietnam Real Estate Trading Floor Network, http://www.sanbatdongsan.net.vn/Desktop.aspx/Tin-tuc/Thong- bao/Cac_don_vi_dang_ky_tham_gia_san_giao_dich_bat_dong_san- Danh_sach_cac_don_vi_dang_ky_tham_gia_san_giao_dich_bat_dong_san/ , accessed on March 23, 2010.