Vietnam: Can the time limit of completing reports for credit institutions permitted to engage in foreign exchange be extended in case of force majeure events?
- In what cases will the State Bank of Vietnam suspend trade with credit institutions permitted to engage in foreign exchange?
- What are the reporting policies ensured by permitted credit institutions having foreign currency trading connections with the State Bank of Vietnam?
- Shall the time limit of completing reports for credit institutions permitted to engage in foreign exchange in Vietnam be extended in case of force majeure events?
In what cases will the State Bank of Vietnam suspend trade with credit institutions permitted to engage in foreign exchange?
Pursuant to Clauses 1 and 2, Article 14 of Circular 26/2021/TT-NHNN stipulating as follows:
Trade suspension, cancellation of trade connection
1. SBV shall suspend trade with a permitted credit institution for 3 months when:
a) The permitted credit institution fails to submit reports in a timely fashion or fail to submit adequate reports in accordance with Clause 1 Article 15 hereof 3 times in a single quarter (except for cases under Clause 3 Article 15 hereof); or
b) The permitted credit institution fails to comply with regulations under Clause 2 Article 15 hereof.
2. SBV shall suspend foreign currency trade with a permitted credit institution when the permitted credit institution is:
a) placed under special control; or
b) suspended from engaging in foreign exchange.
3. SBV shall cancel foreign currency trading connection with a permitted credit institution if the permitted credit institution has their license revoked in accordance with the Law on Credit Institutions.
4. SBV shall notify permitted credit institutions in writing of the reasons for suspension of trade or cancellation of foreign currency trading connection.
Thus, the State Bank of Vietnam shall suspend trade with credit institutions permitted to engage in foreign exchange in the following cases:
- SBV shall suspend trade with a permitted credit institution for 3 months when:
+ The permitted credit institution fails to submit reports in a timely fashion or fail to submit adequate reports in accordance with Clause 1 Article 15 hereof 3 times in a single quarter (except for cases under Clause 3 Article 15 hereof); or
+ The permitted credit institution fails to comply with regulations under Clause 2 Article 15 hereof.
- BV shall suspend foreign currency trade with a permitted credit institution when the permitted credit institution is:
- Placed under special control; or
- Suspended from engaging in foreign exchange.
- SBV shall notify permitted credit institutions in writing of the reasons for suspension of trade or cancellation of foreign currency trading connection.
What are the reporting policies ensured by permitted credit institutions having foreign currency trading connections with the State Bank of Vietnam?
Pursuant to Clause 1, Article 15 of Circular 26/2021/TT-NHNN as follows:
Communication and reporting policies
1. A permitted credit institution having foreign currency trading connection with SBV must report to SBV (via Central Banking Department) as follows:
a) If trading system of Refinitiv is not used, produce reports on foreign currency trading with other credit institutions in accordance with applicable reporting policies of SBV;
b) If the trading system of Refinitiv is used, produce reports in accordance with guidelines of SBV on procedures for producing reports on trading foreign currency via the trading system of Refinitiv.
From the point in which foreign currency trading is completed via the Refinitiv trading system, the parties must report on trade completion via the Refinitiv trading system within 15 minutes. If the parties do not trade via Refinitiv trading system, the report on trade completion must be made on Refinitiv trading system within 45 minutes.
Thus, permitted credit institutions having foreign currency trading connections with the State Bank of Vietnam must report to the State Bank of Vietnam in accordance with the above cases.
Shall the time limit of completing reports for credit institutions permitted to engage in foreign exchange in Vietnam be extended in case of force majeure events?
According to the provisions of Clause 3, Article 15 of Circular 26/2021/TT-NHNN as follows:
Communication and reporting policies
...
3. A permitted credit institution is exempted from producing reports mentioned under Point b Clause 1 Article 15 hereof in case of any of the following force majeure:
a) A connection error from the server containing report data of the permitted credit institution to SBV caused by the internet service provider;
b) A technical error of Refinitiv trading system caused by the service provider of Refinitiv;
c) Power outage caused by the electricity service provider or other objective reasons;
d) A technical error of reporting server of SBV;
dd) Other cases originating from an objective cause.
4. As soon as incidents under Clause 3 of this Article are rectified, the permitted credit institution must immediately report on completed trades to SBV (via Central Banking Department). The steps for reporting on these trades shall comply with guidelines of SBV regarding procedures for producing reports on trading foreign currency via the Refinitiv trading system.
Accordingly, credit institutions permitted to engage in foreign exchange in Vietnam shall only be exempt from producing reports according to the above provisions:
- A connection error from the server containing report data of the permitted credit institution to SBV caused by the internet service provider;
- A technical error of Refinitiv trading system caused by the service provider of Refinitiv;
- Power outage caused by the electricity service provider or other objective reasons;
- A technical error of reporting server of SBV;
- Other cases originating from an objective cause.
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