Process of the clearing margin of clearing members in Vietnam

According to the Circular No. 119/2020/TT-BTC of the Ministry of Finance of Vietnam, the clearing margin of clearing members in Vietnam is as follows:

- The clearing member (CM) must promptly post clearing margins in full to the Vietnam Securities Depository and Clearing (VSDC) for all securities transactions that have not yet been settled in the CM's name, including the CM's own transactions and transactions of the CM’s clients;

- The CM must deposit more clearing margin asset when the value of clearing margin asset does not meet the value of clearing maintenance margin or the clearing margin deposit balance does not guarantee the minimum clearing margin ratio in cash calculated by VSDC for all unfinished securities settlement in the name of the CM and the clearing margin asset may be withdrawn if the value of the clearing margin asset is in excess of the value of clearing maintenance margin;

- Clearing margin assets of CMs include money and securities accepted by VSDC. The ratio of clearing margin in cash complies with VSDC's regulations, ensuring that it is not lower than 90% of the value of the clearing margin asset. The value of clearing maintenance margin for unsettled securities in the CM's name is calculated by VSDC for the CM on a daily basis based on the risk margin value, variation margin value, market risk premium.

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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