What are regulations on assets contributed to the Clearing Fund for derivatives market at the Vietnam Securities Depository?

What are regulations on assets contributed to the Clearing Fund for derivatives market at the Vietnam Securities Depository?

In Article 5 of the Regulation on management and use of clearing funds for derivatives market at the Vietnam Securities Depository, issued together with Decision 115/QD-VSD in 2022, providing for assets contributed to the Clearing Fund for derivatives market at the Vietnam Securities Depository as follows:

1. Clearing members are responsible for contributing to the Clearing Fund in cash (VND) or money and securities. The rate of contribution in cash must be at least 80% of the total value of assets contributed to the Clearing Fund. VSD stipulates a specific rate of monetary contribution after being approved by the State Securities Commission and published on VSD's website at least 02 working days before application.

2. Securities contributed to the Clearing Fund are government bonds, government-guaranteed bonds in the list of securities that are accepted for deposit as prescribed in the Regulation on clearing and settlement of derivatives transactions. at VSD and published on the website of VSD.

3. Assets contributed to the Clearing Fund are assets owned by clearing members and monitored and managed by VSD according to each clearing member. At the latest on the second working day of the following month, VSD shall send a written notice in the form of email and by post to each clearing member with information related to the member's contributed assets to the Clearing Fund. Such clearing member includes deposit interest, allocated use interest, contribution obligation, value of existing assets at the Fund and the deficit to be additionally paid or the excess amount that can be withdrawn. In case of detecting deviation, clearing member is responsible for notifying VSD on the next working day. Within 03 working days from the date of receiving the written notice or email from VSD (whichever comes first), the clearing member is responsible for completing the additional contribution (if any).

4. VSD opens an account to manage money and securities of clearing members contributing to the Clearing Fund according to the provisions of Point b, Clause 3, Article 16 of Circular No. 58/2021/TT-BTC .

5. The arising rights related to the securities contributed by the clearing member to the Clearing Fund will be aggregated by VSD into the list of custodial securities owners exercising the rights established at the last registration date in accordance with regulations on exercise of rights for securities holders at VSD.

What are regulations on deposit, withdrawal and replacement of assets contributed to the Clearing Fund for derivatives market at the Vietnam Securities Depository?

In Article 6 of the Regulation on management and use of clearing funds for derivatives market at the Vietnam Securities Depository, issued together with Decision 115/QD-VSD in 2022 stipulating deposit, withdrawal and replacement of assets contributed to the Clearing Fund for derivatives market at the Vietnam Securities Depository is as follows:

1. Clearing members may withdraw their contribution to the Clearing Fund according to the notice of VSD, in accordance with the provisions of Point b, Clause 2, Article 16 of Circular No. 58/2021/TT-BTC . In case of withdrawal of assets contributed to the Clearing Fund, the clearing member shall send VSD a request to withdraw the contributed assets to the Clearing Fund according to Form 01/QBT issued together with this Regulation within 03 working days from the date of receipt written notice or email from VSD (whichever comes first).

2. Clearing members may substitute securities contributing to the Clearing Fund provided that the substitute securities must satisfy the provisions of Clause 2, Article 5 of this Regulation.

3. In case it is forced to replace the securities contributed to the Clearing Fund due to the securities reaching maturity or failing to meet the conditions specified in Clause 2, Article 5 of this Regulation, VSD shall send a written request to the clearing member. Substitute securities contributed to the Clearing Fund according to Form 02/QBT issued together with this Regulation in the form of email and sent by post. Within 02 working days from the date of receiving the VSD's text or email (whichever comes first), the clearing member shall replace the securities contributing to the Clearing Fund according to the principle of submitting securities on behalf of the Clearing Fund. the former, withdrawing securities that no longer satisfy the following conditions.

4. The process of depositing and withdrawing assets contributed to the Clearing Fund shall comply with the provisions of Sections I and II of Appendix 2 issued together with this Regulation.

What are rights of VSD towards the Clearing Fund for derivatives market at the Vietnam Securities Depository? 

In Clause 1, Article 9 of the Regulation on management and use of clearing funds for derivatives market at the Vietnam Securities Depository, issued together with Decision 115/QD-VSD in 2022, defining rights of VSD towards the Clearing Fund for derivatives market at the Vietnam Securities Depository as follows:

1. VSD's rights:

a) Prescribing principles for setting up, managing and using the clearing fund.

b) Use the clearing fund to secure payment obligations in case clearing members become insolvent as prescribed.

c) Monitor the compliance of clearing members with regulations in the contribution, use and return of the Clearing Fund.

d) Apply sanctions for violations in case clearing members fail to comply with the contents related to the Clearing Fund as prescribed in the Regulations on derivatives clearing members at VSD.

d) Deducting accounts payable (debt obligations), clearing members' use of the clearing fund and expenses for financial losses incurred in connection with the handling of transactions when the clearing member loses solvency.

Best Regards!