What are regulations on payment of principal and interest on financial instruments directly deposited at the State bank of Vietnam?

What are rules for transfer of ownership of financial instruments in Vietnam?

Pursuant to Article 9 of the Circular 16/2022/TT-NHNN stipulating rules for transfer of ownership of financial instruments in Vietnam as follows:

Rules for transfer of ownership of financial instruments

1. The SBV (the SBV’s Operations Center) shall carry out the transfer of ownership of financial instruments directly deposited at SBV within the same day in which the relevant transaction is conducted according to the following rules:

a) If the SBV is the buyer or receiver of financial instruments upon disposition of collateral, the financial instruments shall be transferred from the account on financial instruments deposited directly at SBV or the account on financial instruments deposited for pledging to the SBV’s financial instrument account;

b) If the SBV is the seller, the financial instruments shall be transferred from the SBV’s financial instrument account to the account on financial instruments deposited directly at SBV;

c) If the collateral of a lending transaction secured by financial instruments between members on the interbank market is disposed of, the financial instruments shall be transferred from the account on financial instruments deposited for credit extension on interbank market of the borrower to the account on financial instruments deposited directly at SBV of the lender.

2. VSDC shall carry out the transfer of ownership of financial instruments deposited on SBV’s client account opened at VSDC in accordance with regulations of law on securities, special agreement between the SBV (the SBV’s Operations Center), and the following rules:

a) If the SBV is the buyer or receiver of financial instruments upon disposition of collateral, the financial instruments shall be transferred from the account on financial instruments deposited on SBV’s client account opened at VSDC to the account on SBV's financial instruments deposited at VSDC;

b) If the SBV is the seller, the financial instruments shall be transferred from the account on SBV's financial instruments deposited at VSDC to the account on financial instruments deposited on SBV’s client account opened at VSDC;

c) If the collateral of a lending transaction secured by financial instruments between members on the interbank market is disposed of, the financial instruments shall be transferred from the borrower to the lender on the SBV’s client account opened at VSDC.

3. The SBV shall carry out the transfer of ownership of financial instruments according to the sales contract or notice of bidding results in open market operations under authorization of a member. The transfer of ownership of financial instruments in case of discounting, pledging, provision of financial instruments as collateral, other forms of refinancing based on pledged financial instruments, and trading of financial instruments between members shall comply with the provisions of Articles 14, 15, 16, 17, 18 of this Circular.

4. The SBV (the SBV’s Operations Center) shall carry out the transfer of ownership of financial instruments in case of split-off or merger of credit institution(s) at the request of holders of financial instruments and on the basis of the application for transfer of ownership of financial instruments made according to Appendix 5/LK enclosed herewith, which is accompanied with the SBV’s approval for the split-off or merger of credit institution(s) and relevant documents (if any).

A credit institution that undergoes split-up, consolidation or dissolution or is declared bankrupt shall follow procedures for withdrawal of its financial instruments as prescribed in Article 11 of this Circular and closing financial instrument depository account at SBV as prescribed in Article 12 of this Circular before its termination of existence. The SBV (the SBV’s Operations Center) shall carry out the transfer of ownership of financial instruments on the basis of the application for transfer of ownership of financial instruments made according to Appendix 5/LK enclosed herewith, the SBV’s approval for the split-up, consolidation or dissolution of the credit institution or the decision to declare bankruptcy of the credit institution issued by a competent People’s Court, and relevant documents (if any).

Above are rules for transfer of ownership of financial instruments in Vietnam.

What are regulations on payment of principal and interest on financial instruments directly deposited at the State bank of Vietnam?

Pursuant to Clause 1 Article 10 of the Circular 16/2022/TT-NHNN stipulating payment of principal and interest on financial instruments directly deposited at the State bank of Vietnam as follows:

Payment of principal and interest on financial instruments

1. Financial instruments directly deposited at SBV

a) Book-entry financial instruments

When a financial instrument reaches maturity, the SBV (the SBV’s Operations Center) shall examine the fulfillment of obligations of members to SBV in operations with use of that financial instrument. If a member has fulfilled all obligations, procedures for paying principal and interest to that member shall be followed. If a member fails to fulfill obligations, the provisions of Clause 4 of this Article shall apply;

b) Certificated financial instruments

When a certificated financial instrument reaches maturity, members shall apply for withdrawal of financial instruments according to the provisions of Article 11 of this Circular and the SBV (the SBV’s Operations Center) shall examine their fulfillment of obligations to SBV in operations with use of that financial instrument. If a member has fulfilled all obligations, the financial instrument shall be returned to that member for following payment procedures with the issuer or the issuer’s agent. If a member fails to fulfill obligations, the provisions of Clause 4 of this Article shall apply.

As regulations above, payment of principal and interest on financial instruments shall depend on book-entry financial instruments or certificated financial instruments.

What are regulations on payment of principal and interest on financial instruments deposited on the SBV’s client account opened at VSDC?

Pursuant to Clause 2 Article 10 of the Circular 16/2022/TT-NHNN stipulating payment of principal and interest on financial instruments deposited on the SBV’s client account opened at VSDC as follows:

Payment of principal and interest on financial instruments

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2. Financial instruments deposited on the SBV’s client account opened at VSDC

a) When the interest on a financial instrument of which interest payment is made periodically becomes due, the SBV (the SBV’s Operations Center) shall examine the fulfillment of obligations of members to SBV in operations with use of that financial instrument. If all members have fulfilled obligations, the SBV (the SBV’s Operations Center) shall provide VSDC with a notice of confirmation of the list of members holding financial instruments deposited on the SBV’s client account opened at VSDC for completing procedures for paying interest to such members. If a member fails to fulfill obligations, the provisions of Clause 4 of this Article shall apply;

b) When a financial instrument reaches maturity, the SBV (the SBV’s Operations Center) shall examine the fulfillment of obligations of members to SBV in operations with use of that financial instrument. If a member has fulfilled obligations, the SBV (the SBV’s Operations Center) shall provide VSDC with a notice of confirmation that the relevant financial instrument of that member deposited on the SBV’s client account opened at VSDC is eligible for principal and interest payment so that VSDC can complete procedures for paying principal and interest to that member. If a member fails to fulfill obligations, the provisions of Clause 4 of this Article shall apply;

c) The payment of principal and interest on financial instruments deposited on the SBV’s client account opened at VSDC shall be made according to specific agreements between the SBV (the SBV’s Operations Center) and VSDC.

As regulations above, payment of principal and interest on financial instruments deposited on the SBV’s client account opened at VSDC shall made according to specific agreements between the SBV (the SBV’s Operations Center) and VSDC.

Best regards!