According to latest regulations, what is financial instrument deposited at the State Bank of Vietnam (SBV)?

What are financial instruments in Vietnam?

Pursuant to Clause 1 Article 3 of the Circular 16/2022/TT-NHNN stipulating as follows:

“financial instrument” means an evidence of the issuer’s debt repayment obligation to the holder for a specified period of time that also indicates interest payment conditions and other terms and conditions. Financial instruments include book-entry financial instruments (in the form of book entries or electronic data) and certificated financial instruments.

As regulations above, financial instruments include:

- Book-entry financial instruments

- Certificated financial instruments

What shall financial instruments deposited at SBV include?

Pursuant to Article 4 of the Circular 16/2022/TT-NHNN stipulating as follows:

Conditions, face value and code of financial instruments deposited at SBV

1. Financial instruments include:

a) SBV bills;

b) Government bonds;

c) Bonds for which principal and interest payments are entirely guaranteed by the Government when they become due;

d) Municipal bonds which are used in SBV’s transactions conducted according to a decision issued by the SBV’s Governor in each period;

dd) Special bonds and bonds directly issued to credit institutions that sell debts to buy bad debts of Vietnam Asset Management Company (VAMC) at market prices;

e) Bonds issued by commercial banks over 50% of charter capital of which is held by the State (except commercial banks which have been compulsorily acquired); bonds issued by credit institutions (except credit institutions placed under special control) and other enterprises;

g) Other types of financial instruments as specified in the decision issued by the SBV’s Governor in each period.

2. Conditions of a financial instrument

a) It is under the legal ownership of a member;

b) It is one of types of financial instruments specified in Clause 1 of this Article;

c) The right to receive its principal and interest when they become due is not yet determined;

d) Certificated financial instruments deposited at SBV must not be torn or deteriorated, and their color, images, letters and digits thereon must not be faded, wrinkled, blurred, dirty or erased.

3. Face value of financial instruments

The face value of a financial instrument is VND 100.000 (one hundred thousand) or its multiple.

The face value of special financial instruments under direct management of the SBV and those issued in foreign currency shall comply with relevant regulations of law applicable to each type of such financial instruments.

4. Code of financial instruments

Financial instruments deposited at the SBV shall be managed according to a coding system established by VSDC and SBV (SBV's Operations Center). The SBV may consistently manage financial instruments according to the international securities identification numbering (ISIN) system, if it’s deemed necessary.

As regulations above, financial instruments deposited at SBV include:

- SBV bills;

- Government bonds;

- Bonds for which principal and interest payments are entirely guaranteed by the Government when they become due;

- Municipal bonds which are used in SBV’s transactions conducted according to a decision issued by the SBV’s Governor in each period;

- Special bonds and bonds directly issued to credit institutions that sell debts to buy bad debts of Vietnam Asset Management Company (VAMC) at market prices;

- Bonds issued by commercial banks over 50% of charter capital of which is held by the State (except commercial banks which have been compulsorily acquired); bonds issued by credit institutions (except credit institutions placed under special control) and other enterprises;

- Other types of financial instruments as specified in the decision issued by the SBV’s Governor in each period.

What is the time limit of every business day for SBV to receive requests and supporting documents for use of financial instruments?

Pursuant to Article 5 of the Circular 16/2022/TT-NHNN stipulating as follows:

Use of financial instruments deposited at SBV

1. Financial instruments shall be used for the following money market operations:

a) Open market operations;

b) Refinancing operations:

- Grant of loans secured by financial instruments by the SBV to credit institutions and FBBs;

- Discounting on financial instruments granted by the SBV to credit institutions and FBBs;

- Other refinancing forms as prescribed by the SBV;

c) Pledge of financial instruments to set limits on overdraft facility and overnight loans in interbank payment operations;

d) Pledge or provision of financial instruments as deposits for setting limits on net debts in interbank electronic payment;

dd) Pledge or provision of financial instruments as deposits for setting centralized payment limits;

e) Pledge or provision of financial instruments as deposits for setting limits on electronic clearing through the electronic clearing system;

g) Pledge or provision of financial instruments as deposits for performing other operations according to the decision issued by the SBV’s Governor in each period.

2. Financial instruments shall be used for granting special loans to credit institutions which are placed under special control.

3. Transactions of financial instruments deposited at SBV between members include:

a) Grant of loans secured by financial instruments between members;

b) trading of financial instruments between members.

4. The SBV shall only receive requests and supporting documents for use of financial instruments deposited at the SBV by 15:30 PM of every business day. Any requests for use of financial instruments deposited at the SBV sent after this deadline shall be processed in the next business day. If the deadline of a business day needs to be extended, the SBV shall cooperate with its members to agree upon a specific deadline of that business day.

As regulations above, the SBV shall only receive requests and supporting documents for use of financial instruments deposited at the SBV by 15:30 PM of every business day. Any requests for use of financial instruments deposited at the SBV sent after this deadline shall be processed in the next business day.

Best regards!