Rules for trading of financial instruments in Vietnam

Rules for trading of financial instruments in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What are valuable papers?

According to Clause 1, Article 2 of Circular 01/2012/TT-NHNN, valuable papers are an evidence of the confirmation of debt payment obligations between the issuer of valuable papers with the owner of valuable papers in a certain time, interest conditions and other conditions.

In which, valuable papers include:

- Long-term valuable papers are valuable papers for a period of one year or more from the issuance until the time for payment.

- Short-term valuable papers are valuable papers for a period of less than one year from the issuance until the time for payment.

(Clause 2, 3, Article 2 of Circular 01/2012/TT-NHNN)

2. Rules for trading of financial instruments in Vietnam

Specifically, in Article 3 of Circular 12/2021/TT-NHNN, the rules for trading of financial instruments include:

- Credit institutions/FBBs are allowed to carry out the trading of financial instruments according to the contents about trading of corporate bonds and/or other financial instruments specified in their licenses issued by SBV.

- Buyers and sellers shall assume legal responsibility for their compliance with regulations herein and relevant laws when carrying out trading of financial instruments.

- VND (Vietnamese Dong) shall be the currency used in trading of financial instruments.

- The financial instrument to be purchased or sold is under the lawful ownership of the seller and is not matured; the seller undertakes that the financial instrument is not in any disputes, is eligible for trading as prescribed by law, and is not undergoing any discounting or rediscounting.

- Credit institutions/FBBs shall carry out the trading of bonds in accordance with the Law on Credit Institutions 2010 (amended in 2017), the Law on Securities 2019, Government’s Decrees on issuance of corporate bonds, legislative documents providing guidance on the Law on Securities 2019, relevant laws and Circular 12/2021/TT-NHNN.

- Credit institutions/FBBs shall only purchase promissory notes, treasury bills and deposit certificates whose remaining term to maturity is less than 12 months. 

The remaining term to maturity is the length of time commencing on the date of payment for the financial instrument as prescribed in Clause 3 Article 4 of Circular 12/2021/TT-NHNN and ending on the maturity date of that financial instrument on which its principal and interest must be fully paid.

- FBBs shall not be allowed to purchase convertible bonds.

- Credit institutions/FBBs shall only carry out trading of financial instruments issued by finance companies or finance lease companies with organizations (including credit institutions/FBBs).

3. Financial instruments deposited at the State Bank of Vietnam

Financial instruments include:

- SBV bills;

- Government bonds;

- Bonds for which principal and interest payments are entirely guaranteed by the Government when they become due;

- Municipal bonds which are used in SBV’s transactions conducted according to a decision issued by the SBV’s Governor in each period;

- Special bonds and bonds directly issued to credit institutions that sell debts to buy bad debts of Vietnam Asset Management Company (VAMC) at market prices;

- Bonds issued by commercial banks over 50% of charter capital of which is held by the State (except commercial banks which have been compulsorily acquired); bonds issued by credit institutions (except credit institutions placed under special control) and other enterprises;

- Other types of financial instruments as specified in the decision issued by the SBV’s Governor in each period.

(Clause 1, Article 4 of Circular 16/2022/TT-NHNN)

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