What are principles for allocating deposit interest and interest using the Clearing Fund for the derivatives market at the Vietnam Securities Depository?

What are principles for allocating deposit interest and interest using the Clearing Fund for the derivatives market at the Vietnam Securities Depository?

In Clause 4, Article 7, Regulations on management and use of clearing funds for the derivatives market at the Vietnam Securities Depository, issued together with Decision 115/QD-VSD in 2022 (Expires on August 10, 2023), stipulates the principles of allocation of deposit interest and interest using the Clearing Fund for the derivatives market at the Vietnam Securities Depository Center are as follows:

a) Deposit interest arising from the Clearing Fund deposit account and interest using the Clearing Fund collected from insolvent clearing members will be allocated by VSD to clearing members in accordance with the amount. The amount and time of each member's contribution after deducting the deposit account management fee at the payment bank (if any). The receipt and distribution of deposit interest and interest using the Clearance Fund shall comply with the provisions of Clauses 1 and 2, Appendix 3 issued with this Regulation.

b) Except for the case specified in Point a, Clause 1, Article 8 of this Regulation, deposit interest and interest using the Clearance Fund are distributed by VSD on the last day of the month.

c) The total amount allocated by clearing members will be recorded by VSD in the value of assets contributed to the Clearing Fund of each clearing member or the value of the amount to be refunded as prescribed in Point b, Clause 1, Article 8 of the Regulations.

What is VSD's implementation of separate management of assets contributed to the Clearing Fund of clearing members who are in process of canceling their clearing member status in Vietnam? 

In Clause 1, Article 8, Regulations on management and use of clearing funds for the derivatives market at the Vietnam Securities Depository, issued together with Decision 115/QD-VSD in 2022 (Expires on August 10, 2023), stipulating that VSD implements management Management of separation of assets contributed to the Clearing Fund of clearing members who are in the process of canceling their clearing member status is as follows:

After the clearing member is stopped providing services by VSD to cancel its clearing member status and the clearing member has completed the work including: selling assets contributed to the Clearing Fund in securities to repay payment support sources used (if any); Closing and transferring positions, paying for losses and position profits, and paying for contract performance, VSD carries out separate management of assets contributed to the Clearing Fund of clearing members that are in the process of canceling their ownership. The way of clearing members is as follows:

a) Determine the value of assets contributed to the Clearance Fund by clearing members to be managed separately from the Clearance Fund (hereinafter referred to as the value of separately managed assets), including:

- The value of assets contributed to the Clearance Fund in cash and securities (if any) is determined according to the provisions of Clause 1, Section III, Appendix 2 issued with this Regulation.

- Interest on deposits and interest on the use of the Clearance Fund are allocated at the time of implementation of separate management determined according to the provisions of Clause 2, Appendix 3 issued with this Regulation.

b) Determine the value of assets contributed to the Clearing Fund that VSD must repay or still receivable to clearing members (hereinafter referred to as reimbursable and receivable amounts) according to the principles:

- In case the amount of money a clearing member is using from the Clearing Fund but has not yet returned is less than the value of separately managed assets, the amount to be refunded is determined to be the difference between the value of separately managed assets with the amount of money that clearing members are using from the clearing fund but have not yet refunded;

- In case the amount of money a clearing member is using from the Clearing Fund but has not yet refunded is greater than the value of separately managed assets, the receivable is determined to be the difference between the amount of money the clearing member is using from the Clearing Fund but has not yet returned the value of separately managed assets.

- In case the clearing member no longer owes the Clearing Fund, the amount to be repaid is determined as the value of separately managed assets.

What are obligations of clearing members to the Clearing Fund for derivatives market at Vietnam Securities Depository?

In Clause 2, Article 10, Regulations on management and use of clearing funds for the derivatives market at the Vietnam Securities Depository, issued together with Decision 115/QD-VSD in 2022 (Expires on August 10, 2023), stipulates bligations of clearing members to the Clearing Fund for derivatives market at Vietnam Securities Depository as follows:

a) Contribute to the Clearance Fund according to regulations.

b) Refund the amount used from the Clearance Fund and interest from using the Clearance Fund (if any) according to regulations.

c) Report to VSD within 01 working day from the date of receiving the official dispatch from the competent authority regarding the clearing member being placed on warning status according to securities laws on financial safety, banking law regulations on capital safety.

Best regards!