What is blockade of margin securities for derivatives transactions of investors at the Vietnam Securities Depository Center?

What is blockade of margin securities for derivatives transactions of investors at the Vietnam Securities Depository Center?

Pursuant to Article 9 of the Regulation on clearing and settlement of derivative securities transactions at the Vietnam Securities Depository Center issued together with Decision 61/QD-VSD in 2022 regulating the blockade and release of signed securities Funds for derivative securities transactions of investors at the Vietnam Securities Depository Center are as follows:

1. Based on the agreement with the investor on margin securities for derivatives transactions, the clearing member is responsible for blocking and releasing securities on the investor's margin securities account, and at the same time, send a notification to VSD for corresponding accounting at VSD.

In case an investor opens a depository account at a depository member that is not a clearing member, the investor must transfer the securities to the margin securities account at the clearing member before freezing to deposit margin for securities transactions. derivative securities according to the provisions of VSD's regulations on securities depository operations.

2. The process of blocking and releasing margin securities on the margin securities account at the clearing member shall comply with the instructions in Appendix 5 issued with this Regulation.

What is blockade of margin securities for derivatives transactions of investors at the Vietnam Securities Depository Center? (Image from the Internet)

What is depositing money at the Vietnam Securities Depository Center?

According to Clause 1, Article 10 of the Regulation on clearing and settlement of derivative securities transactions at the Vietnam Securities Depository Center issued together with Decision 61/QD-VSD in 2022 regulating depositing money at the Vietnam Securities Depository Center as follows:

1. Deposit money:

a. Clearing members deposit deposits of members and customers into the member margin deposit account in VSD's name opened at Payment bank for derivatives transactions. The clearing member's deposit request must clearly state that it is a deposit and have full information about the type of deposit account (self-trading, customer), detailed deposit value for each account. Margin has been registered with VSD by the clearing member.

b. Based on the clearing member's deposit payment, Payment bank for derivatives transactions will send a telegram to notify VSD of the amount of money paid by clearing members to the self-trading margin account and/or the amount of money paid by clearing members to the customer's margin deposit account. Deposits deposited before 4:30 p.m. on business days will be notified by Payment bank for derivatives transactions to VSD for processing on the same day. Deposits after 4:30 p.m. on business days will be notified by Payment bank for derivatives transactions to VSD for processing on the next working day.

c. After receiving the Payment bank for derivatives transactions's notification, VSD checks the margin securities account information and records an increase in the value of escrow assets on the margin securities account of each member and each investor and sends a telegram to notify the compensating member. 

d. In case the investor margin securities account information sent by Payment bank for derivatives transactions does not match the information on VSD's system, VSD will notify Payment bank for derivatives transactions to refund the deposit to clearing members.

What is depositing securities at the Vietnam Securities Depository Center? 

In Clause 2, Article 10 of the Regulation on clearing and settlement of derivative securities transactions at the Vietnam Securities Depository Center issued together with Decision 61/QD-VSD in 2022, regulations on depositing securities in securities at Vietnam Securities Depository Center as follows:

2. Deposit in securities:

a. Depending on the purpose of initial deposit or deposit to ensure the implementation of the government bond futures contract, the clearing member sends VSD a telegram requesting to transfer securities from the investor's depository account. Particularly in the case of a clearing member using borrowed bonds on VSD's securities borrowing and lending system to deposit margin to ensure the implementation of the Government Bond Futures Contract, the clearing member sends VSD a request to transfer securities according to Form 01/PS-TTBT is issued together with this Regulation into the members' accounts.

The request for securities transfer must state complete information about the stock code, number of deposited securities, purpose of deposit, and investor's margin securities account and be sent to VSD no later than 4:00 p.m on working days.

b. Based on the clearing member's margin transfer request, VSD records an increase in the number of securities on the member's depository account. After that, VSD will notify clearing members to perform corresponding accounting.

3. The process of exchanging information between VSD and Payment bank for derivatives transactions and clearing members in depositing cash and securities deposits mentioned in Clauses 1 and 2 of this Article is carried out according to the instructions in Appendix 5 issued together. according to these Regulations.

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