What are regulations on clearing member's margin account regarding derivatives in Vietnam?

What are regulations on clearing member's margin account regarding derivatives in Vietnam? - image from internet

Pursuant to Article 20 of the Circular 11/2016/TT-BTC on guidelines for the Decree 42/2015/ND-CP dated May 05, 2015 on derivatives and derivatives market, which is issued by the Minister of Finance, the regulations on clearing member's margin account regarding derivatives in Vietnam are as follows:

1. VSD shall open margin deposit accounts under the name of VSD at the settlement bank (hereinafter referred to as the member’s margin deposit account) and margin securities accounts at VSD (hereinafter referred to as the member’s margin securities account) for managing the margins and fulfilling settlement obligations for the positions of holder of clearing membership.

2. The member’s margin deposit accounts which are opened at the settlement bank for each clearing member include:

a) Self-trading margin deposit account for managing margins for self-trading and market marking of that clearing member;

b) Customer's margin deposit account for managing margins of all customers of that clearing member;

c) Settlement account for making settlement of daily position-based gain or loss, settlement for executing contract signed by the clearing member and other settlements made by clearing member;

3. The member’s margin deposit account and the member’s margin securities account are used in the following cases:

a) Receive and return margins to clearing member. The margins on this account include the customer’s assets which are used by the clearing member as margins for positions of that customer;

b) Receive gain or pay for daily loss for positions of holder of clearing membership; make and receive settlement for contract execution; receive interests from bank deposits;

c) Receive and transfer underlying securities for contract execution (if the settlement is made by transferring underlying assets) for positions of holder of clearing membership.

4. The member's margin account must be set up and the clearing member’s assets must be managed separately from those of VSD; separately from those of other clearing member and separately from those of customer of that clearing member.

5. VSD can request the clearing member to provide at any time with detailed information of trading accounts, margin accounts, value and list of margins of each investor.

6. Cashes and derivatives from executing the rights of margin securities on the member’s margin account shall be allocated in accordance with the rules of VSD. VSD is not allowed to use the clearing member's margin deposits as term deposits. Interest of deposits shall be returned to the clearing member according to the interest rate of demand deposits announced by the settlement bank.

7. VSD shall establish a managing system with adequate information of changes of positions, daily position-based gain or loss, value of initial margin, value of required maintenance margin, value and list of margins according to each trading account of the investor and clearing member.

8. The State Securities Committee of Vietnam shall appoint a commercial bank as the settlement bank providing settlement services for derivative trading on the Stock Exchange according to criteria, order and procedures regulated by the law on securities with respect to registration, deposits, clearing and settlement of securities trading. The settlement bank shall have the following rights and obligations:

a) Establish an account system for managing margin deposits as prescribed in this Circular;

b) Punctually provide with adequate information of operations and detailed balance on margin deposit account at the request of VSD or the State Securities Committee of Vietnam;

c) Execute other rights and fulfill other obligations as regulated by the law on securities with respect to registration, deposits, clearing and settlement of securities trading.

Above are regulations on clearing member's margin account regarding derivatives in Vietnam. Please refer to the Circular 11/2016/TT-BTC for further information.

Best regards!