What are requirements for margin securities at the Vietnam Securities Depository Center (VSD)?

What are requirements for margin securities at the Vietnam Securities Depository Center (VSD)?

Based on Article 6 of the Regulations on Clearing and Settlement of Derivative Securities Trading at the Vietnam Securities Depository Center (VSD), issued together with Decision 61/QD-VSD in 2022, the following requirements are applied to margin securities at VSD:

1. List of accepted margin securities:

a. Government bonds, government guaranteed bonds except treasury bills.

b. Listed securities on stock exchanges (shares, investment certificates except ETF certificates).

2. Margin securities listed at point b paragraph 1 of this Article must meet the following conditions:

a. Belong to the list of margin securities determined by VSD on a periodic basis based on the liquidity of the securities in accordance with the method specified in Appendix 3 attached to this Regulation.

b. Meets all the conditions specified in points b, c, d of Clause 3 Article 14 of Circular 58/2021/TT-BTC.

3. The list of accepted margin securities (including haircut rates) is determined and announced by VSD on VSD's website on a quarterly basis and does not change until the next announcement. In special cases, securities that no longer meet the conditions specified in point b of paragraph 2 of this Article will be considered by VSD to be removed from the list of accepted margin securities that have been announced.

What are requirements for margin securities at the Vietnam Securities Depository Center (VSD)? - Source: Internet

What are regulations on valuation of margin securities at VSD in Vietnam?

Based on Article 7 of the Regulations on Clearing and Settlement of Derivative Securities Trading at the Vietnam Securities Depository Center (VSD), issued together with Decision 61/QD-VSD in 2022, the value of margin securities at VSD is determined as follows:

1. The value of valid margin assets is determined using the following formula:

VKQ = C + x * QKQ * P * (1 - H)

Where:

VKQ is the value of valid margin assets.

C is the cash margin.

x is the minimum margin ratio in cash.

QKQ is the number of margin securities.

P is the price of margin securities as specified in paragraph 2 of this Article.

H is the margin haircut ratio as specified in Article 8 of this Regulation.

2. The price of margin securities (P) used to value margin assets as specified in paragraph 1 of this Article is updated daily after the end of the trading session:

a. For government bonds, government guaranteed bonds: is the price determined based on the government bond yield curve of the Hanoi Stock Exchange.

b. For listed securities on stock exchanges: is the closing price on the trading day.

What are regulations on margin haircut at the Vietnam Securities Depository Center?

Based on Article 8 of the Regulations on Clearing and Settlement of Derivative Securities Trading at the Vietnam Securities Depository Center (VSD), issued together with Decision 61/QD-VSD in 2022, the margin haircut ratio at VSD is as follows:

1. The margin haircut ratio when determining the value of margin securities, except for securities on the ex-dividend trading day, is applied as follows:

a. 5% for government bonds, government guaranteed bonds.

b. 30% for securities included in the VN30, HNX30 index constituent list.

c. 40% for other securities.

2. For cases where the reference price is adjusted on the ex-dividend trading day according to the regulations of the stock exchanges, after the end of trading on the working day immediately preceding the ex-dividend trading day, the margin haircut ratio for margin securities mentioned in Clause 1 of this Article is adjusted according to the formula specified in Appendix 4 attached to this Regulation. The clearing member is responsible for replenishing the margin before the date of adjustment to ensure that the value of valid margin assets is in accordance with regulations.

3. VSD may change the margin haircut ratio for margin securities mentioned in Clause 1 of this Article based on the liquidity and risk of each type of security. In case of changing the margin haircut ratio for margin securities, VSD will send a written notification to the clearing member at least 01 working day before the effective date of application.

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