What are reporting responsibilities of clearing members at the Vietnam Securities Depository?

What are reporting responsibilities of clearing members at the Vietnam Securities Depository?

In Article 10 of the Regulation on members clearing derivatives at the Vietnam Securities Depository, issued together with Decision 84/QD-VSD in 2022, there are regulations on reporting responsibilities of clearing members at the Vietnam Securities Depository are as follows:

1. Clearing members must report to VSD within 01 working day from the occurrence of the following events:

a) The system for clearing and settlement of derivatives transactions at clearing members encounters problems;

b) Occurrence of problems related to clearing and settlement of derivative securities transactions that cannot be remedied within the same day;

b) Being suspended from trading in derivatives;

c) The membership of derivatives trading members is canceled;

d) Being insolvent as prescribed in Clause 1, Article 15 of Circular 58/2021/TT-BTC ;

dd) Being placed in warning status according to the provisions of the securities law on financial safety, the banking law on capital adequacy.

2. On-demand reporting

In case of necessity, VSD may request clearing members to provide information on open positions, margin assets of clearing members, clearing members' customers and other documents related to clearing and settlement of derivative securities transactions at clearing members.

What is examination of clearing members at the Vietnam Securities Depository?

In Article 11 Regulation on members clearing derivatives at the Vietnam Securities Depository, issued together with Decision 84/QD-VSD in 2022, there are regulations on examination of clearing members at the Vietnam Securities Depository are as follows:

1. Test content

VSD conducts checks on clearing members in compliance with VSD's regulations and regulations related to clearing and settlement activities for derivatives transactions.

2. Inspection plan, order and procedures

VSD shall coordinate to comply with the plan, order and procedures for periodic or extraordinary inspection of the State Securities Commission according to the provisions of Clause 5, Article 16 of Circular 95/2020/TT-BTC on supervision of securities transactions on the stock market.

What is form of a explanation that meets the requirements of business processes at the Vietnam Securities Depository? 

In Form 01/PS-TVBT issued together with the Regulation on members clearing derivatives at the Vietnam Securities Depository, issued together with Decision 84/QD-VSD in 2022, there is a provision on the form of explanation to meet the requirements of the business process at The Vietnam Securities Depository Center is as follows:

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
---------------

………, day month Year ……

EXPLANATION

MEET THE REQUIREMENTS ON BUSINESS PROCESS

(For clearing and settlement of derivative securities transactions)

I. GENERAL INFORMATION

1. Name of organization: …………………………………………………………………………………………

2. Head office: ……………………………………………………..

3. Phone: ……………… Fax …………………………………………………….

4. Registered clearing member type: ……………………………………………………

5. List of members of the Board of Directors assigned to be in charge of clearing and settlement of derivatives transactions (according to the attached Appendix) .

II. NOTES ON BUSINESS PROCESS

Explain the procedures for handling clearing and settlement of derivatives transactions between clearing members and VSD (order, time, and method of handling) as follows:

A. Registering, unregistering margin securities account information

1. Register account information

a. For regular (netted) accounts:

- Register information on margin securities accounts in case investors already have trading accounts at clearing members.

- Register information on margin securities accounts in case investors do not have or do not use trading accounts at clearing members.

b. For an omnibus account:

- Process of handling documents.

- Process on the system.

2. Unregister account information

- Process of position handling, deposit, fulfillment of position loss/profit payment obligations, contract performance payment (if any) before sending the email to unregister account information.

- Process of sending email to cancel registration of account information.

B. Calculating required margin, depositing, withdrawing, managing deposited assets to VSD

1. Determine the margin value to be paid to VSD before performing a transaction, set up the system function to block investors' trading orders when the account does not guarantee the required margin value.

2. Determine the margin value to maintain for positions on investor accounts

3. Deposit, withdraw deposit

- The process of depositing deposit, handling successfully submitted electricity, failed payment (after receiving confirmation email/notification from VSD).

- Deposit withdrawal process: how to check and compare the balance to determine the valid withdrawal (only allowing investors to withdraw margin when ensuring that the ratio of using margin assets after withdrawal is not higher than 100%); how to handle the successful withdrawal, the withdrawal is rejected (after receiving the confirmation/confirmation message from VSD).

- Processing time for electricity submission and withdrawal in the day.

4. Allocating deposit interest on received margin account.

C. Clearing and settlement of derivative securities transactions

1. Receive position notifications.

2. Get information on final settlement price (DSP), final settlement price (FSP), calculate, compare and confirm position loss/profit with VSD.

3. Make daily I/O payment:

- Notify position loss for each investor, pay position loss according to regulations.

- Announce position profit to each investor, allocate position profit to investors after receiving.

4. Payment for the performance of Government bond futures contracts.

- The jobs processed after the last transaction day (from day E+1 to the end of day E+3).

- The method of allocating money and government bonds to investors after VSD and the paying bank complete the payment.

5. Handling insolvency.

D. Margin asset utilization rate management, position limit

1. Receive and process information that violates warning thresholds 1, 2, and 3.

2. How to handle in case an investor's trading account is locked due to violation of margin ratio and position limit.

E. Compare position information, margin account with VSD

1. Method and time of comparison.

2. Handling cases of incorrect information.

(Note: Only shows the content of the interactive process between TVBT and VSD)

We commit that the construction processes at the unit are completely appropriate, meet the requirements and strictly comply with the provisions of law and regulations of the Vietnam Securities Depository.

 

LEGAL REPRESENTATIVE (Signature, stamp, full name)

 

APPENDIX

List of members of the Board of Directors in charge of clearing and settlement of derivatives transactions

(Attached to Form 01/PS-TVBT)

STT	First and last name	ID number or CCCD or Passport	Workplace	Sample signature 1	Sample signature 2
1
2
…

 

Seal pattern 1		2 . seal pattern		3 . seal pattern

We commit and take full responsibility for the accuracy and truthfulness of the above information.

Best Regards!