How to pay for the performance of Government bond futures contracts at the Vietnam Securities Depository?

How to pay for the performance of Government bond futures contracts at the Vietnam Securities Depository?

Pursuant to Article 21 of the Regulation on clearing and settlement of derivatives transactions at the Vietnam Securities Depository issued together with Decision 61/QD-VSD in 2022 stipulating payment of the performance of Government bond futures contracts at the Vietnam Securities Depository as follows:

1. The payment for the performance of the Government bond futures contract is made in the form of transferring the underlying asset with the final payment date being the third working day after the last trading day (E+3).

2. Clearing members are obliged to pay and maintain the deposit to secure the performance of the futures contract in accordance with the provisions of Clause 2, Article 5 of this Regulation.

3. At the last trading day

3.1. VSD will determine the clearing member of the buyer, the clearing member of the seller is obliged to pay the contract in detail to each investor's account.

3.2. At least 3:30 p.m., clearing member of the buyer is obliged to provide VSD with documents proving solvency with an amount not lower than the contract value calculated according to the bond's par value, specifically:

a. The bank's written confirmation that the amount of money used for the maturity payment of the Government bond futures contract has been frozen on the deposit account in the name of the clearing member; or

b. Letter of guarantee from the bank on the clearing member's performance of the clearing member's obligation to pay the G-bond futures contract at maturity. The letter of guarantee is valid for at least 04 working days from the last transaction date and must clearly state an unconditional, irrevocable commitment to pay VSD any amount within the guarantee amount when there is a document from VSD notifying the clearing member has breached the payment obligation within the validity period of the guarantee.

3.3. The seller clearing member is responsible for providing the list of bonds used for transfer according to Form 04A/PS-TTBT attached to this Regulation to VSD from the following sources:

a. Bonds on the investor's trading account at clearing members;

b. Bonds expected to be purchased or borrowed.

Confirmed bond codes must belong to the list of transferable bonds determined by the Hanoi Stock Exchange and published on the websites of the Hanoi Stock Exchange and VSD.

4. On the day of E+2

4.1. At least 3:30 p.m., the clearing member of the seller using bonds from the source mentioned at Point b, Clause 3.3 of this Article is responsible for certifying the list of bonds to be delivered according to Form 04B/PS-TTBT attached to this Regulation. at the same time, commit to complete the transfer of the bond amount from the result of buying and borrowing right after receiving it on the depository account.

4.2. VSD prepares a list of bonds that will be transferred to clearing members and buyers in detail to each investor's trading account according to the principle of random allocation (automatically performed by the system) and calculates payment obligations. final payment in cash to clearing members of the buyer based on the list of distributed bonds.

5. At the last payment date (E+3):

The seller's clearing member must transfer the correct amount and correct type of certified bonds to the VSD's checking account.

6. The payment process and method of determining the payment obligation to perform the G-bond futures contract of clearing members, the buyer and the seller, shall comply with the instructions in Appendix 9 to this Regulation. Clearing members are responsible for completing the allocation of proceeds from bond sales to investors on the settlement day, after the central bank completes the payment for the performance of government bond futures contracts.

7. At the end of the working day, after completing payment activities, in case there is still balance on the member's current deposit account (due to an excess transfer by the clearing member compared to the payment obligation), the Bank will automatically transfer the balance of money to the account receiving the deposit refund registered by the clearing member.

8. Make payment for Government bond futures contracts in the form of cash

8.1. VSD makes contract payment in the form of money in the following cases:

a. The buyer's clearing member fails to provide documents proving solvency as prescribed in Clause 3.2 of this Article;

b. The seller's clearing member fails to provide a list of bonds to be transferred or has not mobilized enough bonds to be transferred from purchase or loan sources according to the provisions of Clauses 3.3 and 4.1 of this Article.

8.2. The trading account holds a counter position to participate in a contract for payment in money established by VSD on the principle of randomness.

For the case mentioned at point a, clause 8.1 of this Article, after determining the obligation to pay the profit and loss of the positions of related parties, VSD will transfer the position from the buyer's trading account to the trading account. counterpart seller to close the position.

8.3. The payment when performing the Government bond futures contract in the form of cash is completed when the position profit and loss payment of the last trading day is completed.

In addition, the clearing member who fails to prove the solvency is liable to compensate the relevant clearing member with the amount calculated according to the following formula:

Compensation value = 5% x FSP x Contract multiplier x Number of contracts

In which, FSP is the final payment price as prescribed in Article 22 of this Regulation.

8.4. At the final payment date, the clearing member must transfer the full amount mentioned in Clause 8.3 of this Article according to the notice of VSD. After receiving the full amount of compensation, VSD will transfer it to the relevant clearing member. In case a clearing member fails to transfer the full amount of compensation on time, VSD will apply the handling measures as prescribed in the Regulations on clearing member of VSD.

What are regulations on the final settlement price of the futures contract at the Vietnam Securities Depository?

Pursuant to Article 22 of the Regulation on clearing and settlement of derivatives transactions at the Vietnam Securities Depository issued together with Decision 61/QD-VSD in 2022 stipulating the final settlement price of the futures contract at the Vietnam Securities Depository as follows:

1. Day-end settlement price (DSP) and final settlement price (FSP) are used by VSD to calculate daily position profit and loss value and settlement value when performing index futures and government bond futures.

2. DSP is determined by VSD based on futures trading price information provided by Hanoi Stock Exchange. In case the transaction price does not meet the calculation requirements, VSD is entitled to use the replacement theoretical price or another price after it is approved by the State Securities Commission.

3. FSP is determined by VSD according to the following principles:

a. For index futures: Is the simple arithmetic average of the index in the last 30 minutes of the last trading day (including 15 minutes of continuous order matching and 15 minutes of periodic closing order matching), after when excluding the 3 highest index values ​​and the 3 lowest index values ​​of the continuous matching session. FSP is rounded to two decimal places.

b. For government bond futures contract: The DSP of the contract is determined at the last trading day.

4. The method of determining DSP shall comply with the instructions in Appendix 8 issued with this Regulation.

5. Daily, after making and sending daily payment report to TVBT as prescribed at point I, Section C, Appendix 9 of this Regulation, VSD shall announce DSP price and FSP price (if any products are matured) the website of VSD.

What are regulations on electronic documents at the Vietnam Securities Depository?

Pursuant to Article 23 of the Regulation on clearing and settlement of derivatives transactions at the Vietnam Securities Depository issued together with Decision 61/QD-VSD in 2022 stipulating electronic documents at the Vietnam Securities Depository as follows:

1. The electronic documents in this Regulation are detailed in Appendix 10 issued with this Regulation. In necessary cases, clearing members may request to convert documents in the form of electronic documents into paper ones in accordance with the law on electronic transactions in financial activities.

2. VSD's electronic documents when converted to paper documents will be stamped with the following symbols:

VIETNAM SECURITIES CENTER DOCUMENTS FOR TRANSFER FROM ELECTRONIC DOCUMENTS First and last name: Signature: Conversion time:

3. In case a clearing member cannot receive documents in the form of electronic documents as prescribed in this Regulation due to the disconnection of the online communication portal with VSD, the receipt of this list information will be displayed via the email address that the clearing member has registered with VSD.

Best regards!