Provisions on Margin Accounts for Investors in Derivative Securities Trading
Pursuant to Article 10 of Circular 58/2021/TT-BTC on the investor's margin account, specifically:
- The clearing member opens a deposit margin account for the investor in the name of the clearing member and is responsible for managing the margin deposits for each investor separately according to point a clause 4 Article 34 of Decree No. 158/2020/ND-CP. The clearing member is allowed to use the investor's deposit margin account as stipulated in clause 2 of this Article.
The clearing member opens 01 securities margin account for each investor to manage the position, margin obligations, clearing margin assets, transferrable assets, and perform payment obligations for the position on the investor’s trading account. Non-clearing members, brokerage customers of non-clearing members open securities margin accounts at a common clearing member.
- The investor's deposit margin account and securities margin account are only used for the following activities:
a) Receiving and returning margin assets for the investor;
b) Receiving interest or daily loss payments from the investor's position; settling upon contract execution; receiving interest from margin deposits at the bank (if any);
c) Receiving or transferring underlying assets, transferrable assets when executing a contract (in the case of settlement in the form of transferring underlying assets) for the investor's position.
- When conducting derivative securities transactions, investors must margin with the clearing member as follows:
a) The investor is responsible for fully submitting the initial margin for the entire anticipated open position to the clearing member before conducting the transaction, except for offsetting transactions;
b) The investor must maintain the margin for their position and must supplement the margin when the value of the margin assets falls below the required margin level or the deposit margin balance does not meet the required cash margin ratio as required by the clearing member. Depending on market conditions, the clearing member has the right to request the investor to supplement the margin immediately during the trading session;
c) The investor is allowed to withdraw excess margin assets if the value exceeds the required margin level stipulated by the clearing member;
d) When initial or additional margining, the clearing member may require the investor to fully margin in cash or allow the investor to use a portion of the margin assets as securities according to the cash margin ratio stipulated by the clearing member but not lower than the cash margin ratio according to the regulations of the Vietnam Securities Depository and Clearing Corporation.
Respectfully!
