What are procedures for ETF exchange transactions in Vietnam?

What are procedures for ETF exchange transactions in Vietnam? - image from internet

Pursuant to Clause 3 Article 43 of the Circular 98/2020/TT-BTC stipulating procedures for ETF exchange transactions in Vietnam:

- Before the exchange trading session or at the end of the day preceding the exchange trading day, the fund management company shall notify information about the basket of component securities exchanged for 01 ETF creation unit to authorized participants, and publish it on its website and the websites of SE and VSDCC. Such information includes symbols of component securities, weight and quantity of each component securities symbol in the basket. This component securities basket shall be determined according to the closing price of the trading day before the exchange trading day;

- Exchange trading orders of investors shall be sent directly to authorized participants or through distribution agents as prescribed in the fund’s charter and prospectus or summary prospectus. If an authorized participant is unable to receive orders from investors because the distribution agent or the authorized participant is dissolved, declared bankrupt, has its license for establishment and operation revoked, or its operations suspended or terminated, or due to the IT system's failure or other force majeure events, investors' orders may be sent directly to the fund management company;

Authorized participants shall send their exchange trading orders and those of investors to the fund management company or the transfer agent service provider or VSDCC before the market closing time as prescribed in the fund’s charter, the ETF establishment agreement and guidelines of VSDCC;

- Within 02 working days from the exchange trading day (but before distribution of ETF certificates), if a transaction error which is caused by mistakes in placing orders, consolidating information, receiving, transferring or inputting trading orders into the system is detected, the distribution agent or authorized participant shall notify it to the fund management company, supervisory bank and VSDCC, and request for error correction according to the procedures/guidelines adopted by VSDCC. After this time limit, the distribution agent or authorized participant shall assume responsibility before investors for that transaction error;

- After receiving orders from investors and authorized participants, the fund management company shall, through VSDCC and supervisory bank, verify clients’ capacity to meet such orders as prescribed in Point dd Clause 2 of this Article, confirm and execute trading orders of investors and authorized participants according to this Clause and guidelines of VSDCC.

- Within 03 working days from the exchange trading day but before the following fund certificate trading day, VSDCC and supervisory bank shall complete the transfer of component securities baskets from depository accounts of investors or authorized participants to the depository account of the ETF or vice versa, and register/deposit ETF certificates on accounts of investors or authorized participants; receive or return cash payments as prescribed in Clause 4 of this Article; the fund management company or transfer agent service provider shall confirm the completion of transaction and ownership of authorized participants and investors.

Best regards!