5 Principles in Bank Currency Brokerage from July 1, 2024

05 Principles in Currency Brokerage by Banks from July 01, 2024

Regarding currency brokerage principles, Circular 02/2024/TT-NHNN has abolished the principle that at least one party in the currency brokerage must be a credit institution, foreign bank branch established and operating according to the Law on Credit Institutions 2010.

There are now only 05 principles in the Bank's currency brokerage as follows:

(1) Commercial banks and foreign bank branches must issue internal regulations on currency brokerage activities in accordance with this Circular and relevant legal provisions, including at least the following contents: the process, procedures for carrying out currency brokerage; scope of responsibilities and powers of individuals involved in currency brokerage activities; risk management in currency brokerage activities.

Within 10 days from the date of issuance, amendment, supplementation, or replacement of internal regulations on currency brokerage activities, commercial banks, and foreign bank branches must directly or by postal service send the issued, amended, supplemented, or replaced internal regulations on currency brokerage activities to the State Bank (Bank Inspection and Supervision Authority).

(2) The implementation of currency brokerage must comply with this Circular and other relevant legal provisions.

(3) Ensure honesty, objectivity, and the legitimate interests of customers:

- Information about the transactions under currency brokerage and other information permitted by the customer must be fully and accurately reflected;- Information must not be misrepresented or interfered with in any form to mislead customers regarding the transactions under currency brokerage and/or affect the legitimate interests of customers.

(4) Do not provide information related to customers and transactions under currency brokerage to third parties, except in cases required by competent state authorities according to legal regulations or with the approval of the customer.

(5) Commercial banks and foreign bank branches must not simultaneously act as both the broker and a party executing the currency brokerage transaction with the customer.

More details can be found in Circular 02/2024/TT-NHNN, effective from July 01, 2024.

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