02 principles of clearing and settlement of securities transactions in Vietnam from February 15, 2021

According to Article 24 of the Circular No. 119/2020/TT-BTC of the Ministry of Finance of Vietnam, the Vietnam Securities Depository and Clearing (VSDC) performs multilateral netting to determine the obligation to settle securities transactions according to the following principles:

- The clearing of securities is done for each securities and separately according to the type of brokerage account for domestic clients, brokerage account for foreign clients and proprietary trading account of clearing members (CMs);

- The clearing is done for each CM on the basis of general clearing between the amounts receivable and the amounts payable for transactions with the same time and payment method on the securities trading system and segregated by type of brokerage account for domestic clients, brokerage account for foreign clients and proprietary trading accounts of CMs.

Besides, the payment for securities transfer at VSDC and money payment at the settlement bank are done on the basis of the obligation to pay securities and money determined by VSDC. The CM is responsible for fulfilling all obligations of clients towards VSDC as the authorized representative of the clients, including transactions of non-clearing members (NCMs), clients of NCMs.

Moreover, within 12 months from the date of official implementation of clearing and settlement for securities transactions under the central counterparty clearing house, DMs are allowed to participate in clearing and settlement of securities as direct CMs, exercise the rights and obligations of CMs with respect to the provision of clearing and settlement services for securities transactions under the central counterparty clearing house in accordance with law and regulations of VSDC.

The Circular No. 119/2020/TT-BTC of the Ministry of Finance of Vietnam takes effect from February 15, 2021.

Ty Na

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