Where should investors open a derivative trading account in Vietnam? What are the regulations on execution of derivative trading orders?
How many derivative trading accounts can a securities investment fund management company open?
Pursuant to Article 6 of Circular 58/2021/TT-BTC as follows:
Trading accounts of investors
1. Investors must enter into contracts for trading account opening with trading members. Before opening trading accounts, foreign investors must follow procedures for registration of securities trading codes as prescribed by law. Securities companies that have certificate of eligibility to trade derivatives but are not trading members shall be allowed to open trading accounts at trading members to serve their derivative investment activities according to provisions herein.
2. Investors that are members of Boards of Directors, members of Boards of Members, Directors (General Directors), Deputy Directors (Deputy General Directors), heads of departments/divisions, and employees of trading members shall only open their trading accounts at such trading members.
3. Notwithstanding the provisions of Clauses 4 and 5 of this Article, an investor may open many trading accounts provided that only a trading account is opened at each trading member. Corresponding to each trading account, the investor is allowed to open a margin account at the clearing member designated by the trading according to Clause 1 Article 10 hereof.
4. A fund management company may open more than one trading account at each trading member. To be specific:
a) 02 omnibus trading accounts are opened in its name to manage investment portfolios of trustors, including 01 account used for serving domestic trustors and 01 account used for serving foreign trustors; and
b) 01 trading account may be opened for each of securities investment funds or companies that it manages at each trading member. This account shall be opened in the name of the securities investment fund or company.
5. A securities company established abroad may open 02 trading accounts at each trading member. To be specific:
a) 01 trading account is opened to serve its derivative proprietary trading; and
b) 01 omnibus trading account is opened to provide derivative brokerage services for other foreign investors.
6. Provision of information about trading accounts and omnibus trading accounts on the derivatives clearing and settlement system shall comply with VSDCC’s regulations.
Thus, a fund management company may open more than one trading account at each trading member. Specifically in the above provisions.
Where should investors open a derivative trading account in Vietnam? What are the regulations on execution of derivative trading orders?
Where should investors open a derivative trading account in Vietnam?
Pursuant to the provisions of Article 5 of Circular 58/2021/TT-BTC as follows:
Derivative trading by investors
1. In order to conduct derivative transactions, investors are required to open trading accounts at trading members and margin accounts at clearing members that are designated by trading members. An investor may use their trading account opened at a trading member for conducting transactions in underlying securities to conduct derivative transactions after opening a margin account at the clearing member designated by the trading member.
2. Before placing trading orders, while holding positions and when exercising contracts, investors must provide margin at the request of clearing members.
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Thus, investors are required to open trading accounts at trading members and margin accounts at clearing members that are designated by trading members.
How to receive, execute orders, and notify derivatives trading results?
Pursuant to the provisions of Article 7 of Circular 58/2021/TT-BTC as follow:
- Trading members shall receive and execute trading orders, and notify transactions results in accordance with Clauses 1, 2, 3, 5, 7 Article 16 of the Circular No. 121/2020/TT-BTC.
- Trading members shall only be allowed to executive clients’ trading orders if the received trading order contains adequate and accurate information about the client, trading date, order receipt time, trading account, trading date, ticker symbol, trading method, order type, trading volume and price as specified in the regulations of Vietnam Securities Depository and Clearing Corporation.
- Trading members must refuse trading orders placed by clients in the following cases:
+ The order does not contain adequate information as prescribed in Clause 2 of this Article;
+ The client fails to fully make the required margin, except orders for matched sale-purchase transactions; or
+ The client’s order exceeds the order limit set out by VNX or causes the client’s position on their account exceeding the position limit prescribed by the regulations of Vietnam Securities Depository and Clearing Corporation.
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