What is mechanism to support securities transaction payments for members who are handled for violations of payment activities in Vietnam?

What is mechanism to support securities transaction payments for members who are handled for violations of payment activities in Vietnam?

In Article 13 of the Regulation on clearing and settlement activities for securities transactions at the Vietnam Securities Depository Center issued together with Decision 109/QD-VSD in 2022 regulating mechanism to support securities transaction payments for members who are handled for violations of payment activities as follows:

1. Members are handled by VSD for violations according to the provisions of VSD's Regulations on Depository Members due to temporary inability to pay for securities transactions, failure to fully pay contributions to the Payment Support Fund or failure to repay loans from the Payment Support Fund will only receive support up to the amount of that Member's own contribution to the Payment Support Fund.

2. The time to apply the mechanism specified in Clause 1 of this Article is 03 months for cases where violations are handled in the form of a warning and 06 months in cases of violations of the form of reprimand or higher calculated from the date of issuance of the reminder document or the date of issuance of the Decision to reprimand/temporarily suspend VSD's depository activities or the expiration date of temporary suspension of securities transaction payment activities according to VSD's Decision may extend the application period of the above mechanism to a maximum of 06 months in cases where violations are not remedied or continue to violate regulations on payment activities during the application period of the above mechanism. 

3. During the application of the mechanism specified in Clause 1 of this Article, the Member lacks money to pay for securities transactions in excess of the payment support fund contribution due to adjusting the notice summarizing the results of clearing money. Payment for securities transactions arising from transactions with delayed payment deadlines or cancellation of non-payment by other Members will still be able to borrow from the Payment Support Fund. Refunds to the Fund are carried out in accordance with regulations on management and use of the Payment Support Fund.

What is mechanism to support securities transaction payments for members who are handled for violations of payment activities in Vietnam? (Image from the Internet)

What are procedures for supporting payment for securities transactions for members who are handled for violations of payment activities in Vietnam?

In Article 14, Regulation on clearing and settlement activities for securities transactions at the Vietnam Securities Depository Center issued together with Decision 109/QD-VSD in 2022, stipulating procedures for supporting payment for securities transactions for members who are handled for violations of payment activities as follows:

1. In case of using loans from the Payment Support Fund:

a. The payment bank, based on the official dispatch requesting payment support (Form 07/TTBT of this Regulation) of VSD, transfers money from the Payment Support Fund account to the transaction clearing deposit account. Securities of the Member are temporarily insolvent.

b. After completing the use of loan money from the Payment Support Fund, VSD sends a Notice of use of the Payment Support Fund to the Member who is temporarily insolvent (Form 08/TTBT of these Regulations). Subsequent payments shall be made according to the order specified in Appendix 02 of these Regulations.

2. In case of using loan from the Payment Bank, the Payment Bank shall base on the official dispatch requesting payment support (Form 07/TTBT of this Regulation) from VSD to transfer the Bank's payment to the securities transaction clearing deposit account of the member who is temporarily insolvent. Subsequent payments shall be made according to the order specified in Appendix 02 of these Regulations.

What is refund of money received for securities transaction payment support in Vietnam?

In Article 15 of the Regulation on clearing and settlement activities for securities transactions at the Vietnam Securities Depository Center issued together with Decision 109/QD-VSD in 2022 regulating refund of money received for transaction payment support securities are as follows:

1. Members using money from the Payment Support Fund must bear loan interest and repay the loan according to regulations on management and use of the Payment Support Fund.

2. Members who violate payment obligations result in having to use loan money from the Payment Bank to pay interest and repay the loan to the Payment Bank according to the provisions of the Loan contract or payment support agreement signed between the Member and the payment bank.

3. In case of necessity, based on the payment bank's request to freeze/release securities and the contract between the parties on freezing of securities to secure the loan, VSD will freeze/release the securities that the borrower member agrees to serve as collateral for the loan. The order and procedures for implementing the blockade/clearance are carried out according to the provisions in Appendix 03 of this Regulation.

Best regards!