Vietnam: Each clearing margin account of investors may open 01 clearing margin account

According to the Circular No. 119/2020/TT-BTC of the Ministry of Finance of Vietnam, a clearing member (CM) opens a clearing margin account for an investor to manage clearing margin asset and fulfill the investor's obligation to pay for securities transactions according to the principle that each clearing margin account of investors may open 01 clearing margin account. The securities company other than a CM and its clients must open a clearing margin account to manage clearing margin asset and fulfill payment obligations at a general CM on the basis of the clearing and settlement trust contract between the securities company and the general CM. Concurrently, it should be noted that:

- In case an investor has a securities depository account at a custodian bank that is not a CM, the investor opens a securities trading account and a clearing margin account at the same securities company being CM to manage clearing margin asset and fulfill obligations to settle securities transactions.

- In case the clearing margin asset is money, the CM must open a deposit account in the CM's name at a bank to post clearing margin and separately manage the deposit to post a clearing margin for the investor. In case the clearing margin asset is securities, the CM shall manage the securities right on the investor's securities depository account at the Vietnam Securities Depository and Clearing (VSDC).

Moreover, an investor's clearing margin account can only be used for the following activities:

- Receiving and returning clearing margin asset to the investor;

- Receiving or settling securities transactions of the investor, receiving the interest on bank deposit at the interest rate agreed between the CM and the account managing bank;

- Receiving or transferring securities on the date of settlement, receiving rights and benefits arising for securities on the clearing margin account as guided in VSDC's regulations.

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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