This paper study the impact of shadow banking activities on the financial conditions in different aspects, which are measured by CAEL rating system and its components, of Vietnamese securities firms. The shadow banking services are found to have negative effect on the overall financial soundness of the securities companies. In componential aspects, although positively related to Earnings, those services also negatively affect Securities firms’ Capital adequacy, Asset quality and Liquidity. The effect is also stronger for those companies that do not meet the requirement of the regulations to provide official credit services and rely heavily on under-regulated shadow banking activities based on the inefficiency of current law and regulations.