Vietnam: When cash settlement for derivative transactions is interrupted, who must the bank report to?
When is the data closing time for derivatives?
According to the provisions of Clause 7 Article 30 of Circular No. 58/2021/TT-BTC, the derivative trading organization must close the data of periodic reports on derivative trading as follows:
Periodic reports
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7. Data closing duration for periodic reports:
a) An annual reporting period is 12 months starting on the 01st of January and ending on the 31st of December of a calendar year;
b) A biannual reporting period is 06 months starting on the 01st of January and ending on the 30th of June of a calendar year;
c) A quarterly reporting period is 03 months starting on the 01st of the first month of the quarter and ending on the last day of the last month of that quarter;
d) A monthly reporting period is 01 month starting on the 01st and ending on the last day of the month.
Thus, data closing duration for periodic reports:
- An annual reporting period is 12 months starting on the 01st of January and ending on the 31st of December of a calendar year;
- A biannual reporting period is 06 months starting on the 01st of January and ending on the 30th of June of a calendar year;
- A quarterly reporting period is 03 months starting on the 01st of the first month of the quarter and ending on the last day of the last month of that quarter;
- A monthly reporting period is 01 month starting on the 01st and ending on the last day of the month.
Vietnam: When cash settlement for derivative transactions is interrupted, who must the bank report to? (Image from the Internet)
In case of the trading system malfunctions, which agency should the derivative trading organization report to?
According to the provisions at Point b, Clause 1 and Clause 4, Article 31 of Circular No. 58/2021/TT-BTC on this content as follows:
Ad-hoc reports
1. Derivative trading organizations, clearing and settlement service providers, trading members, special trading members, market makers, and clearing members are required to submit physical or electronic reports to State Securities Commission within 24 hours from the occurrence of any of the following events:
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b) The trading system (for receiving and placing trading orders) malfunctions;
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4. Vietnam Stock Exchange and Hanoi Stock Exchange are required to submit physical reports to State Securities Commission within 24 hours from the occurrence of any of the following events:
a) The derivative trading system malfunctions or there is any sign of abnormality in derivative transactions;
Thus, in case of the trading system malfunctions, the trading organization required to submit physical or electronic reports to State Securities Commission within 24 hours from the occurrence of the event.
When cash settlement for derivative transactions is interrupted, who must the bank report to?
According to the provisions of Clause 2, Article 31 of Circular No. 58/2021/TT-BTC as follows:
Ad-hoc reports
1. Derivative trading organizations, clearing and settlement service providers, trading members, special trading members, market makers, and clearing members are required to submit physical or electronic reports to State Securities Commission within 24 hours from the occurrence of any of the following events:
a) A clearing member is replaced;
b) The trading system (for receiving and placing trading orders) malfunctions;
c) The clearing member that is a commercial bank or foreign bank branch no longer meets one of the requirements for provision of clearing and settlement services;
d) The charter capital or the owner's equity of the clearing member is reduced by more than 10% compared to those specified in their audited annual financial statements or reviewed half-year financial statements or financial statements of the latest quarter; the clearing member’s debt-to-equity ratio is greater than 05.
2. Settlement banks are required to submit physical or electronic reports to State Securities Commission and Vietnam Securities Depository and Clearing Corporation immediately when their cash settlement for derivative transactions is interrupted.
3. Settlement banks are required to submit physical or electronic reports to State Securities Commission within 24 hours from the time they fail to meet one of the eligibility requirements for settlement banks.
Thus, settlement banks are required to submit physical or electronic reports to State Securities Commission and Vietnam Securities Depository and Clearing Corporation immediately when their cash settlement for derivative transactions is interrupted.
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