How is the Government of Vietnam Bond Futures Contract Regulated?
According to Article 4 of Circular 58/2021/TT-BTC (Effective from August 27, 2021), regulations on futures contracts of Government of Vietnam bonds are as follows:
The underlying asset of the futures contracts of Government of Vietnam bonds is:
a) Government of Vietnam bonds currently traded in the market; or
b) Hypothetical bonds with certain basic characteristics of Government of Vietnam bonds. The State Securities Commission shall establish the basic characteristics of Government of Vietnam bonds, design the hypothetical bonds, and report to the Ministry of Finance for approval before implementation.
Futures contracts of Government of Vietnam bonds upon maturity shall be executed in the form of cash settlement or physical delivery of the underlying asset according to the regulations of the Vietnam Securities Depository and Clearing Corporation. The settlement method must be specified prior to listing.
The standard form of futures contracts of Government of Vietnam bonds shall be issued by the Vietnam Stock Exchange after reporting and obtaining approval from the State Securities Commission.
The Hanoi Stock Exchange shall cooperate with the Vietnam Securities Depository and Clearing Corporation to determine and announce the following information on their electronic information portal:
a) List of Government of Vietnam bonds eligible for delivery, the principles for determination, and the conversion factors (for futures contracts of Government of Vietnam bonds settled by physical delivery of the underlying asset);
b) List of Government of Vietnam bonds used to determine the final settlement price, the principles for determination, and the weight of each bond in that list (for futures contracts of Government of Vietnam bonds settled by cash).
The determination and announcement of information on Government of Vietnam bonds stipulated in Clause 4 of this Article shall be carried out according to the regulations of the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation. The Hanoi Stock Exchange shall cooperate with the Vietnam Securities Depository and Clearing Corporation to determine the final time to finalize the list of Government of Vietnam bonds eligible for delivery or used to determine the final settlement price. After this time, the Hanoi Stock Exchange and the Vietnam Securities Depository and Clearing Corporation are not allowed to adjust the aforementioned list of Government of Vietnam bonds.
Respectfully!
