What are procedures for registering account information for investors at the Vietnam Securities Depository Center?

What are procedures for registering account information for investors at the Vietnam Securities Depository Center?

Pursuant to Section I, Appendix 1 of the Information exchange process between VSD and Hanoi Stock Exchange, clearing members about warning, suspending and restoring transactions for accounts that violate margin usage ratio, violating the position limit issued together with the Decision 61/QD-VSD in 2022 stipulating procedures for registering account information for investors at the Vietnam Securities Depository Center as follows:

1. For investors using the same (01) account at clearing members for derivatives trading and margin securities management.

a. In case an investor already has a spot securities trading account at a clearing member and requests to use the existing account:

- Clearing members send a request to activate the derivatives trading function for an investor's existing trading account and register information on opening a margin account for investors to VSD using MT598 - Request to open account.

- VSD will send a notice to the member to accept or reject it via phone MT598.

b. In case investors do not have or do not use a spot securities trading account at a clearing member for derivatives trading, margin management for derivatives trading:

- Clearing members shall register information on opening accounts for investors into VSD's depository system similar to the process of updating investors' information on opening securities trading accounts specified in Regulations on securities depository activities of VSD.

- The clearing member sends a request to activate the derivatives trading function for the trading account that has just been opened for investors and at the same time registers information on opening a margin account for investors to VSD on the same phone MT598 - Request account opening request.

- VSD will send a notice to the member to accept or reject it via phone MT598.

2. Investors use derivatives trading accounts at trading members who are not clearing members.

- The clearing member where the investor opens a margin account shall register the account information in the VSD's depository system according to the process of updating information on opening a securities trading account of the investor specified in Regulations on securities depository activities of VSD;

- Then, the clearing member registers the newly opened account information to be used as a trading account and sends the trading account information at the trading member using two (02) MT598 electricity - Request to open a separate account;

- VSD will send a notice to the member to accept or reject it via phone MT598.

3. When sending an email to MT598 - Requesting to open an account, a clearing member must register the principle of clearing positions for investors as follows:

a. For regular trading accounts, the clearing member chooses the clearing principle to be automatic.

b. For the case of registration of total trading account information as prescribed in Clause 4, Article 4 of this Regulation, based on the agreement with investors, clearing members choosing the principle of clearing positions is not automatic.

What are procedures for deregistering trading account information, margin securities accounts for investors at the Vietnam Securities Depository Center?

Pursuant to Section II, Appendix 1 of the Information exchange process between VSD and Hanoi Stock Exchange, clearing members about warning, suspending and restoring transactions for accounts that violate margin usage ratio, violating the position limit issued together with the Decision 61/QD-VSD in 2022 stipulating procedures for deregistering trading account information, margin securities accounts for investors at the Vietnam Securities Depository Center as follows:

1. Clearing member sends a request to cancel registration of registered account information for investors to VSD by email MT598 - Request to close account.

2. VSD will send a notice to the member to accept or reject it via phone MT598.

What are methods of determining the value of initial deposit and security deposit at the Vietnam Securities Depository?

Pursuant to Appendix 2 of the Information exchange process between VSD and Hanoi Stock Exchange, clearing members about warning, suspending and restoring transactions for accounts that violate margin usage ratio, violating the position limit issued together with the Decision 61/QD-VSD in 2022 stipulating methods of determining the value of initial deposit and security deposit at the Vietnam Securities Depository as follows:

1. Initial Margin (IM) Calculation

The initial margin value is calculated based on the updated trading price during the trading session, according to the following formula:

IM = IM rate x number of contracts x transaction price x contract multiplier

At the end of the day, after calculating the DSP, VSD re-evaluates the initial margin value according to the formula:

IM = IM rate x number of contracts x DSP x contract multiplier

2. Determine the initial margin ratio according to the quantitative method of risk value VaR

In there:

n: number of days required to liquidate a position when insolvency occurs.

MVaR: The risk value is calculated according to the Modified VaR methodology with the following formula:

MVaR = (mean + Z x )

In there:

δ : standard deviation of the daily rate of change in the futures trading price/base index/bond price/bond index in an observation period.

Mean: Arithmetic mean of the observed statistical historical price movement rate data series

Z : the adjusted critical value is calculated according to the following formula:

In there:

zc: The critical value corresponding to the selected confidence (for example, zc = 2.89 corresponds to the 99.86% confidence level) in the normal distribution statistical model.

S: The coefficient of asymmetry of the probability distribution of the observed data series

K: Sharpness of the probability distribution of the observed data series

The initial margin ratio (IMrate) determined for futures contracts with the same underlying asset with different maturity months is the same.

3. Determining the value of the deposit to secure the performance of a futures contract paid by transferring the underlying asset

In there:

+ DMrate: The margin ratio to secure the performance of a futures contract paid by transferring the underlying asset as prescribed in Clause 2, Article 5 of this Regulation.

+ FSP: final settlement price of futures contract

+ m: contract multiplier

+ q: number of futures contracts deposited to secure the performance of the payment contract by transferring the underlying asset.

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