Amendment of certain principles in the purchase and sale of valuable papers by credit institutions in Vietnam from February 15, 2025

Amendment of certain principles in the purchase and sale of valuable papers by credit institutions in Vietnam from February 15, 2025

The principles in the buying and selling of valuable papers of credit institutions and foreign bank branches purchasing and selling promissory notes, treasury bills, certificates of deposit, bonds issued domestically by other credit institutions and foreign bank branchesin Vietnam are amended as follows:

(1) Credit institutions and foreign bank branches are permitted to buy and sell valuable papers when authorized by law, and as specified in the Establishment and Operation License of the credit institution or the Establishment License of the foreign bank branch issued by the State Bank of Vietnam (hereinafter referred to as the License) as follows:

- Credit institutions (excluding credit institutions specified at point b, clause 1, Article 3 of Circular 12/2021/TT-NHNN) and foreign bank branches may buy and sell certificates of deposit when the License contains the content of buying and selling other valuable papers; may buy and sell bonds issued domestically by another credit institution when the License contains the content of buying and selling corporate bonds;

- Specialized finance companies may buy and sell certificates of deposit when the License contains the content of buying and selling certificates of deposit issued domestically by credit institutions and foreign bank branches.

(Under current regulations: Credit institutions and foreign bank branches can buy and sell valuable papers in accordance with the content of buying and selling corporate bonds and/or other valuable papers stated in the License issued by the State Bank of Vietnam.)

(2) The buyer and seller are legally responsible for the legality of buying and selling valuable papers in accordance with Circular 12/2021/TT-NHNN and relevant legal provisions.

(3) The currency used in transactions of buying and selling valuable papers is the Vietnamese Dong.

(4) The valuable papers purchased and sold must be the legal property of the seller and should not have reached full principal and interest payment; the seller must ensure the valuable papers are unrestricted, permitted for transactions by law, and not currently discounted or rediscounted.

(5) Credit institutions and foreign bank branches (excluding specialized finance companies) may buy and sell bonds issued domestically by other credit institutions in accordance with the Law on Credit Institutions 2024, Securities Law 2019, Government decrees regulating the issuance of corporate bonds, other guidance documents of the Securities Law 2019, relevant legal guidelines, and Circular 12/2021/TT-NHNN.

(Under current regulations: Credit institutions and foreign bank branches can buy and sell bonds in accordance with the Law on Credit Institutions 2010, Securities Law 2019, government regulations on issuing corporate bonds, other guidance documents of Securities Law 2019, relevant legal guidelines, and Circular 12/2021/TT-NHNN.)

(6) Credit institutions and foreign bank branches are only permitted to purchase any promissory notes, ballots, or certificates of deposits with a remaining maturity of less than 12 months. The remaining term is calculated from the payment date for the purchase of valuable papers as stipulated in clause 3, Article 4 of Circular 12/2021/TT-NHNN until the due date for the complete payment of principal and interest of those valuable papers.

(7) Foreign bank branches cannot purchase convertible bonds.

(8) For valuable papers issued by consolidated finance companies or specialized finance companies, credit institutions and foreign bank branches are only allowed to buy and sell with organizations (including credit institutions and foreign bank branches).

(Under current regulations: For valuable papers issued by finance companies or leasing companies, credit institutions and foreign bank branches are allowed to buy and sell only with organizations (including credit institutions and foreign bank branches).)

Refer to more details in tCircular 59/2024/TT-NHNN effective from February 13, 2025.

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