Vietnam: How many steps are there for bidding treasury bills? Who is responsible for organizing the bidding for bills?
Who is responsible for organizing the bidding for bills in Vietnam?
Pursuant to Article 4 of Circular 111/2018 / TT-BTC stipulating the organization of bidding for treasury bills such as:
Article 4. Organization of bidding for T-bills and bonds
1. The bidding for T-bills shall be organized by the SBV’s Operations Center.
2. The bidding for bonds shall be organized by the Stock Exchange.
3. The State Treasury shall directly organize the bidding for T-bills or bonds in accordance with the Ministry of Finance’s specific guidelines.
Accordingly, the State Bank of Vietnam Exchange is the entity organizing the bidding for bills.
Vietnam: How many steps are there for bidding treasury bills? Who is responsible for organizing the bidding for bills?
How are tenders for treasury bills carried out in steps in Vietnam?
Pursuant to Article 6 of Circular 111/2018 / TT-BTC, the steps for organizing the bidding for bills are as follows:
Step 1: At least three (03) working days before the date of organizing the bidding for bills, the State Treasury shall send a notice of issuance of bills to the State Bank of Vietnam Exchange and the Stock Exchange. The content of the notice includes:
+ The code of bills expected to be issued by the Vietnam Securities Depository;
+ The term of the bill, the volume of bidding calls, the form of bills for each bill code expected to be issued, clearly stating the first issued or additional issued bills. In case of additional issued bills, the notice must clearly state the conditions and terms of the outstanding bills;
+ Date of issuer, date of issuance, date of payment of money for purchase of bills and maturity date for each bill code;
+ Payment method of bills due;
+ Form of bidding;
+ Method of determining bidding results;
+ Account receiving money to buy bills of the State Treasury.
Step 2: At least two (02) working days before the date of organizing the bidding for bills, based on the request of the State Treasury, the State Bank of Vietnam Exchange shall send notices of bond issuance to market makers and publish information on the website of the State Bank of Vietnam Transaction Office.
Step 3: At the latest at 10:30 am on the day the issuer and market maker send the State Bank of Vietnam Transaction Office with bid information according to the bidding registration process and form prescribed by the State Bank of Vietnam Transaction Office.
Each market maker and each market maker's client are allowed to bid up to five (05) interest competitive bid rates for each tender bill, each bid level consisting of bid interest rate (up to 2 decimal places) and the corresponding bid volume. In the case of buying bills for customers, the market maker must provide the full name of the customer, the interest rate and the corresponding bid volume of each customer.
Step 4: At least fifteen (15) minutes after the final bid registration time as prescribed in Clause 3 of this Article, the State Bank of Vietnam Exchange shall open the bid, synthesize bid information and send it to the State Treasury.
Step: At least at 11:30 am on the date of the issuer, based on the aggregate bid information received from the State Bank of Vietnam Exchange, the State Treasury shall determine the issuance interest rate for each tender bill code and notify the State Bank of Vietnam Transaction Office to determine the results of the tender for bills according to specified in Article 11 of this Circular.
Step 6: Notification of bidding results
+ The State Bank of Vietnam Transaction Office shall notify the bidding results to market makers by electronic data through the electronic bill bidding system.
+ The State Bank of Vietnam Transaction Office shall notify the issuance results (including the bidding results specified at Point a of this Clause and the results of further issuance immediately after the bidding session specified in Article 8 of this Circular, if any) to the State Treasury, Vietnam Securities Depository, The Stock Exchange follows the form specified in Appendix 1 of this Circular. At the same time, publish information about the results of the release.
Can treasury bills be issued further after the tender in Vietnam?
Pursuant to Clause 1, Article 8 of Circular 111/2018 / TT-BTC, there are the following provisions on the issuance of additional bills immediately after the bidding session as follows:
Article 8. Additional issuance of T-bills after the bidding session
1. Based on the bidding result prescribed in Article 6 hereof, the State Treasury shall decide the additional issuance of T-bills immediately after the bidding session and inform the SBV’s Operations Center of such additional issue in accordance with Clause 2 of this Article.
Accordingly, immediately after the bidding session, the State Treasury shall, based on the winning bid results, decide on the issuance of additional bills according to the above provisions.
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