What are the conditions of the valuable papers for transaction of purchase and sale with term between credit institutions in Vietnam?
What is a transaction of purchase and sale of valuable papers with term between credit institutions in Vietnam?
Transaction of purchase and sale of valuable papers with term between credit institutions are explained in Clause 2, Article 3 of Circular 21/2012/TT-NHNN (amended by Point a, Clause 2, Article 1 of Circular 01/2013 /TT-NHNN) as follows:
Explanation of terms
In this Circular, the following terms are construed as follows:
1. Transaction of lending and borrowing is the transaction in which a credit institution or branch of foreign bank (the lender) perform handing over or commit to hand over a sum of money for other credit institution or branch of foreign bank (the borrower) in order to use with a definite purpose in a definite time with the principle of repayment of principal and interest.
2. Transaction of purchase and sale with term is the transaction in which a foreign credit institution, bank branch purchases and receives the ownship of valuable papers of undue payment (the purchaser) from another foreign credit institution and bank branch (sellers), at the same time the seller commits to re-purchase those valuable papers after a definite time.
3. Lending time limit is the period calculated from the subsequent date of the borrowing date to the maturity date of the loan.
4. Time limit of purchase and sale of valuable papers with term from the subsequent date of the purchasing date to the re-purchasing date, including days-off and holidays and are calculated by date (hereinafter referred to as the time limit of purchase and sale).
5. Remaining time limit of the valuable papers is the period from the date when the valuable papers are purchased and sold to the maturity date of the entire principal of those valuables
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Thus, according to the above regulations, Transaction of purchase and sale with term is the transaction in which a foreign credit institution, bank branch purchases and receives the ownship of valuable papers of undue payment (the purchaser) from another foreign credit institution and bank branch (sellers), at the same time the seller commits to re-purchase those valuable papers after a definite time.
What are the conditions of the valuable papers for transaction of purchase and sale with term between credit institutions in Vietnam?
What are the conditions of the valuable papers for transaction of purchase and sale with term between credit institutions in Vietnam?
Pursuant to the provisions of Article 20 of Circular 21/2012/TT-NHNN as follows:
Conditions of the valuable papers
The valuable papers transacted must satisfy the following conditions:
1. Being the valuable papers legally issued under the regulation of Vietnamese Law and permitted for assignment
2. Being issued by Vietnam dong or foreign currency of free conversion;
3. Legally owned by the seller;
4. The remaining time limit of the valuable papers must be greater than the time limit of purchase and sale.
Thus, according to the above regulations, the valuable papers transacted must satisfy the following conditions:
- Being the valuable papers legally issued under the regulation of Vietnamese Law and permitted for assignment
- Being issued by Vietnam dong or foreign currency of free conversion;
- Legally owned by the seller;
- The remaining time limit of the valuable papers must be greater than the time limit of purchase and sale.
When carrying out term trading of valuable papers between credit institutions, what principles must be followed?
Pursuant to the principles specified in Article 18 of Circular 21/2012/TT-NHNN (amended by Clause 6, Article 1 of Circular 18/2016/TT-NHNN) as follows:
Principle of the transaction of purchase and sale
Upon performance of the transaction of purchase and sale with term of valuable papers, the foreign credit institutions and the bank branches must ensure the following principles:
1. Abide by the principles defined in Article 4 of this Circular.
2. Take self-responsibility before law for the decision to purchase and sell its valuable papers with term; implement the purchase and sale of valuable papers with term with other foreign credit institutions and the bank branches as agreed in accordance with the provisions of this Circular, the current relevant legal provisions and international practice.
3. Fully and punctually recover the amount (principal and interest) upon performance of the purchase and sale of the valuable papers with term with other foreign credit institutions and bank branches.
4. Re-purchase the valuable papers sold when they are due as agreed with the purchaser.
5. All interests arising in relation to the valuable papers during the time of performing the purchase and sale of valuable papers with term will be agreed by the foreign credit institutions and bank branches in writing in accordance with the current law.
Thus, upon performance of the transaction of purchase and sale with term of valuable papers, the foreign credit institutions and the bank branches must ensure the following principles:
- Abide by the principles defined in Article 4 of this Circular.
- Take self-responsibility before law for the decision to purchase and sell its valuable papers with term; implement the purchase and sale of valuable papers with term with other foreign credit institutions and the bank branches as agreed in accordance with the provisions of this Circular, the current relevant legal provisions and international practice.
- Fully and punctually recover the amount (principal and interest) upon performance of the purchase and sale of the valuable papers with term with other foreign credit institutions and bank branches.
- Re-purchase the valuable papers sold when they are due as agreed with the purchaser.
- All interests arising in relation to the valuable papers during the time of performing the purchase and sale of valuable papers with term will be agreed by the foreign credit institutions and bank branches in writing in accordance with the current law.
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