What is payment for transactions delayed by payment deadline in Vietnam?

What is payment for transactions delayed by payment deadline in Vietnam?

In Article 18 of the Regulation on clearing and settlement of securities transactions at the Vietnam Securities Depository, issued together with Decision 109/QD-VSD in 2022, regulating payment for transactions delayed by payment deadline as follows:

1. The payment for delayed transactions shall be made according to the payment method for each transaction (direct payment method) according to the principle of concurrent securities transfer and cash payment (DVP).

2. Transactions that are delayed due to lack of securities shall be paid in whole or by transaction depending on the Member's ability to borrow securities.

3. Time for payment of delayed transactions is 13:30 the first consecutive working day or the second adjacent working day after the payment date (T+2, T+3 for corporate bond transactions; T. +3, T+4 for trading stocks, fund certificates, covered warrants). Members must allocate money and securities to customers as soon as VSD completes the payment of securities and the clearing bank completes the payment and must be completed before 14:00 on the day of payment.

4. During the delay in the payment term (ownership has not yet been transferred from the seller to the buyer), in the case of corporate bonds, stocks, fund certificates, warrants included in the delayed transactions, arising rights related to material interests, the settlement price for these transactions is the price after deducting the value of dividends received or the value of the attached rights. The value of dividends received or the value of attached rights is equal to the adjustment of the reference price of such securities on the trading day that is not entitled to the right in accordance with the provisions of the Stock Exchange.

5. Members are responsible for borrowing securities on the borrowing and lending system in case of shortage of payment securities or raising sufficient money for securities settlement in case of lack of payment, send a Notice of Payment Confirmation Direct transaction for VSD is not later than 11:30 a.m. in the first or second consecutive working days after the payment date (T+2, T+3 for corporate bond transactions; T+3, T+4 for trading stocks, fund certificates, covered warrants).

6. Measures to ensure the solvency of the transaction is delayed

a. For the transaction of late payment due to lack of payment: VSD will block all securities in the reciprocal sale transaction for the short-term purchase.

b. For transactions that are delayed due to lack of corporate bonds, stocks, fund certificates, warrants: The member receiving securities must transfer payment according to the notice of payment of backward transactions of VSD on the member's clearing account no later than 15:30 (T+1) payment day for corporate bond transactions; (T+2) for trading stocks, fund certificates, covered warrants. Such amount will be blocked by the Payment Bank at the request of VSD until the transaction is paid within the time limit specified in Clause 3 of this Article. After the aforesaid time, the Member who does not have enough balance to carry out the blockade will be considered temporarily insolvent. VSD will have a written reminder and consider handling member violations as prescribed in the Regulations on Depository Members.

c. VSD will release securities and the Payment Bank shall release the blocked amount as prescribed in Points a and b of this Clause no later than 2:00 p.m. the first or second consecutive working day after the payment date. In case the backward transaction is rejected for non-payment specified in Clause 1.1 of Article 19.

7. The order and procedures for making payments are specified in Section III, Appendix 02 of this Regulation.

What is elimination of non-payment of securities transactions in Vietnam?

In Article 19 of the Regulation on clearing and settlement of securities transactions at the Vietnam Securities Depository, issued together with Decision 109/QD-VSD in 2022, stipulating elimination of non-payment of securities transactions as follows: 

1. VSD shall eliminate non-payment of securities transactions in the following cases:

1.1. Transactions that are delayed for payment as prescribed at Point a, Clause 1, Article 45 of Circular 05/2015/TT-BTC , include:

a. The transaction has applied the mechanism of delaying payment as prescribed in Clause 1, Article 17 of this Regulation, but the member still does not have enough money or securities to pay for the transaction within the payment time limit specified in Clause 3 of this Article. 18 these Regulations;

b. The transaction has applied the mechanism of delaying payment as prescribed in Clause 1, Article 17 of this Regulation and the member lacking securities has borrowed enough securities to pay but the counterpart member has not transferred or transferred insufficient payment. Payment of direct transactions as prescribed at Point b, Clause 6, Article 18 of this Regulation.

1.2. Short-selling transactions of securities as prescribed at Point b, Clause 1, Article 45 of Circular 05/2015/TT-BTC , including:

a. Short-selling transactions of securities of the Member/the member's customers are carried out without the guidance of the Ministry of Finance.

b. Short selling transactions of the Member's securities, the Member's customers but the Member does not submit or submit the error correction/error handling dossier within the prescribed time limit.

c. Short-selling transactions of the member's securities, the member's customers are performed before the time VSD completes the payment for securities transactions.

1.3. Transactions that lack information on the identity of the client's trading account are not updated by the member in accordance with the provisions of Point c, Clause 1, Article 45 of Circular 05/2015/TT-BTC and Clause 4, Article 5 of this Regulation.

2. Time to remove non-payment of transactions:

a. 09:30 on payment day for corporate bond transactions and 15:00 on T+1 day for trading in stocks, fund certificates and covered warrants for the cases specified in Clause 1.2. and 1.3 this Article.

b. 1:30 p.m. the second consecutive working day after the payment date: (T+3) for corporate bond transactions, (T+4) for transactions of stocks, fund certificates, covered warrants for the cases specified at Point a, Clause 1.1. This.

c. 1:30 p.m. the first or second working day after the payment date: (T+2/T+3) for corporate bond transactions, (T+3/T+4) for stock and certificate transactions secured funds and warrants, for the cases specified at Point b, Clause 1.1. This.

3. VSD will send a notice on the removal of non-payment of transactions to the Member, the relevant direct account opening organization, the Stock Exchange ( Form 11/TTBT of this Regulation), and at the same time send the Notice of results on clearing and adjusting in the form of electronic documents to relevant organizations, the clearing bank for the cases of non-payment of transactions specified in Clause 1.2. and 1.3 this Article. 

4. Depository members who fail to comply with regulations leading to the rejection of non-payment of securities transactions will be handled for violations in accordance with the Regulations on Depository Members.

What is list of payment vouchers, notices to be applied in the form of electronic documents when making payment for securities transactions in Vietnam? 

In Appendix 01 of the Regulation on clearing and settlement of securities transactions at the Vietnam Securities Depository, issued together with Decision 109/QD-VSD in 2022, stipulating list of payment vouchers, notices to be applied in the form of electronic documents when making payment for securities transactions as follows:

Best Regards!