Consolidated Document number 03/VBHN-NHNN stipulates the organization of credit institutions and foreign bank branches purchasing and selling deposit certificates and bonds issued by other credit institutions and foreign bank branches within the country.

CIRCULAR

Provisions on credit institutions and foreign bank branches purchasing and selling[1] deposit certificates and bonds issued by other credit institutions and foreign bank branches within the country

Circular No. 12/2021/TT-NHNN dated July 30, 2021, of the Governor of the State Bank of Vietnam, concerning credit institutions and foreign bank branches purchasing and selling promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, shall take effect from October 27, 2021, amended and supplemented by:

Circular No. 59/2024/TT-NHNN dated December 31, 2024, of the Governor of the State Bank of Vietnam, amending and supplementing certain provisions of Circular No. 12/2021/TT-NHNN dated July 30, 2021, of the Governor of the State Bank of Vietnam, concerning credit institutions and foreign bank branches purchasing and selling promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, shall take effect from March 15, 2025.

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010, and the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Securities Law promulgated on November 26, 2019;

Pursuant to Decree No. 16/2017/NĐ-CP dated February 17, 2017, stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Article 1.

The Governor of the State Bank of Vietnam issues this Circular regulating credit institutions and foreign bank branches purchasing and selling promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country[2].

Article 1. Scope of Regulation

1. This Circular regulates credit institutions and foreign bank branches purchasing and selling[3] deposit certificates and bonds issued by other credit institutions and foreign bank branches within the country (hereinafter referred to as securities) that have not yet reached their maturity date, where the buyer receives the transfer of ownership rights without accompanying a commitment to resell or repurchase the securities or retain the right of recourse (hereinafter referred to as purchasing and selling securities).

2. This Circular does not regulate the following activities:

a) Purchasing and selling securities of credit institutions and foreign bank branches on the international market;

b) Purchasing and selling government-guaranteed bonds issued by credit institutions;

c) Issuing securities within the country by credit institutions and foreign bank branches; repurchasing and swapping bonds issued by the same credit institution;

d) Purchasing and selling securities with a term between credit institutions and foreign bank branches;

e) Transferring ownership of securities due to the disposal of collateral. Such transfer of ownership shall be carried out in accordance with the law on secured transactions.

Article 2. Applicability

The seller and buyer of securities include the following entities:

1.[4] Credit institutions and foreign bank branches established and operating in accordance with the Law on Credit Institutions, including commercial banks, cooperative banks, non-bank credit institutions, and foreign bank branches (hereinafter referred to as credit institutions and foreign bank branches).

2. Vietnamese organizations and individuals and foreign organizations and individuals conducting purchases and sales of securities with credit institutions and foreign bank branches.

Article 3. Principles for purchasing and selling negotiable instruments

1.[5] Credit institutions and foreign bank branches may purchase and sell negotiable instruments when permitted by law and as specified in their establishment and operation licenses issued by the State Bank of Vietnam (hereinafter referred to as the License) as follows:

a) Credit institutions (except those specified in point b of this clause) and foreign bank branches may purchase and sell deposit certificates when the License includes permission to purchase and sell other negotiable instruments; may purchase and sell corporate bonds issued by other credit institutions within the country when the License includes permission to purchase and sell corporate bonds.

b) Specialized finance companies may purchase and sell deposit certificates when the License includes permission to purchase and sell deposit certificates issued by credit institutions and foreign bank branches within the country.

2. The buyer and seller shall be responsible under the law for purchasing and selling negotiable instruments in accordance with the provisions of this Circular and relevant laws.

3. The currency used in transactions for purchasing and selling negotiable instruments shall be the Vietnamese Dong.

4. Negotiable instruments purchased and sold must be legally owned by the seller and not yet due for full principal and interest repayment; the seller must commit that the negotiable instruments are free from disputes, permitted for trading according to the law, and not currently being discounted or rediscounted.

5.[6] Credit institutions and foreign bank branches (excluding specialized finance companies) purchasing and selling corporate bonds issued by other credit institutions within the country must comply with the provisions of the Law on Credit Institutions, the Securities Law, the Government Decree on Corporate Bond Issuance, securities law-related guiding documents, and the provisions of this Circular.

6. Credit institutions and foreign bank branches may only purchase deposit certificates with remaining terms of less than 12 months. The remaining term is the period determined from the date of payment for purchasing the negotiable instrument as stipulated[7] until the maturity date for full principal and interest repayment of such negotiable instrument. Clause 3 of Article 4 of this Circular 7. Foreign bank branches may not purchase convertible bonds.

For negotiable instruments issued by consolidated finance companies and specialized finance companies, credit institutions and foreign bank branches may only purchase and sell with organizations (including credit institutions and foreign bank branches).

8.[8] Article 4. Transaction Information

All transactions for purchasing and selling negotiable instruments must be conducted in a form consistent with relevant legal provisions. Agreements on purchasing and selling negotiable instruments must include at least the following contents:

1. Information about the seller and buyer.

2. Name of the negotiable instrument; issuing credit institution or foreign bank branch; term of the negotiable instrument; maturity date for full principal and interest repayment of the negotiable instrument; face value of the negotiable instrument.

3. Date of payment for purchasing the negotiable instrument.

4. Amount of payment for purchasing the negotiable instrument.

5. Rights and obligations of the seller and buyer.

Article 5. Internal Regulations

1. Based on the provisions of the Law on Credit Institutions, this Circular, and relevant laws, credit institutions and foreign bank branches shall establish internal regulations on purchasing and selling negotiable instruments suitable to their management model, characteristics, business conditions, and ensuring safe operations for credit institutions and foreign bank branches.

2. Internal regulations must clearly define the responsibilities and obligations of each department and individual involved in executing transactions for purchasing and selling negotiable instruments.

3. Minimum internal regulations must include business procedures and risk management regulations for purchasing and selling negotiable instruments activities.

3. Internal regulations must minimally include business procedures and risk management provisions for the purchase and sale of securities.

Article 6. Implementation Provisions

1. This Circular takes effect from October 27, 2021.

2. This Circular amends and supplements some articles of Circular No. 01/2021/TT-NHNN dated March 31, 2021 of the Governor of the State Bank of Vietnam on the issuance of promissory notes, bills of exchange, deposit certificates, and domestic bonds of credit institutions and foreign bank branches as follows:

a) Amend and supplement Clause 1 of Article 4 as follows:

"1. The subjects purchasing securities include organizations (including credit institutions and foreign bank branches), Vietnamese individuals, and foreign organizations and individuals, except for cases provided for in Clause 2, Clause 3, and Clause 4 of this Article."

b) Supplement Clause 4 to Article 4 as follows:

"4. For securities that are promissory notes, bills of exchange, or deposit certificates, credit institutions and foreign bank branches may only purchase securities with a term of less than 12 months."

Article 7. Implementation Organization

The Director of the Office, the Head of the Monetary Policy Department, and the Heads of units under the State Bank of Vietnam; credit institutions and foreign bank branches shall be responsible for organizing the implementation of this Circular./.

[1] The phrase "promissory notes, bills of exchange" is abolished according to Article 2 of Circular No. 59/2024/TT-NHNN amending and supplementing some articles of Circular No. 12/2021/TT-NHNN dated July 30, 2021 of the Governor of the State Bank of Vietnam on the purchase and sale of promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, which takes effect from March 15, 2025.

[2] Circular No. 59/2024/TT-NHNN amending and supplementing some articles of Circular No. 12/2021/TT-NHNN dated July 30, 2021 of the Governor of the State Bank of Vietnam on the purchase and sale of promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, is based on the following grounds:

Foreign

Pursuant to the Law on Credit Institutions dated January 18, 2024;

Pursuant to the Securities Law dated November 26, 2019; the Law Amending and Supplementing Some Articles of the Securities Law, the Accounting Law, the Independent Auditing Law, the State Budget Law, the Management and Use of Public Assets Law, the Tax Administration Law, the Personal Income Tax Law, the National Reserve Law, and the Administrative Violation Handling Law dated November 29, 2024;

Pursuant to Decree No. 102/2022/NĐ-CP dated December 12, 2022 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Article 1.

The Governor of the State Bank of Vietnam issues this amendment to amend and supplement some articles of Circular No. 12/2021/TT-NHNN dated July 30, 2021 of the Governor of the State Bank of Vietnam on the purchase and sale of promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country.”

[3] The phrase "promissory notes, bills of exchange" is abolished according to Article 2 of Circular No. 59/2024/TT-NHNN amending and supplementing some articles of Circular No. 12/2021/TT-NHNN dated July 30, 2021 of the Governor of the State Bank of Vietnam on the purchase and sale of promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, which takes effect from March 15, 2025.

[4] This Clause is amended according to the provisions of Clause 1 of Article 1 of Circular No. 59/2024/TT-NHNN amending and supplementing some articles of Circular No. 12/2021/TT-NHNN dated July 30, 2021 of the Governor of the State Bank of Vietnam on the purchase and sale of promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, which takes effect from March 15, 2025.

[5] This Clause is amended according to the provisions of Clause 2 of Article 1 of Circular No. 59/2024/TT-NHNN amending and supplementing some articles of Circular No. 12/2021/TT-NHNN dated July 30, 2021 of the Governor of the State Bank of Vietnam on the purchase and sale of promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, which takes effect from March 15, 2025.

[6] This Clause is amended according to the provisions of Clause 3 of Article 1 of Circular No. 59/2024/TT-NHNN amending and supplementing some articles of Circular No. 12/2021/TT-NHNN dated July 30, 2021 of the Governor of the State Bank of Vietnam on the purchase and sale of promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, which takes effect from March 15, 2025.

[7] The phrase "promissory notes, bills of exchange" is abolished according to Article 2 of Circular No. 59/2024/TT-NHNN amending and supplementing some articles of Circular No. 12/2021/TT-NHNN dated July 30, 2021 of the Governor of the State Bank of Vietnam on the purchase and sale of promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, which takes effect from March 15, 2025.

[8] This Clause is amended according to the provisions of Clause 4 of Article 1 of Circular No. 59/2024/TT-NHNN amending and supplementing some articles of Circular No. 12/2021/TT-NHNN dated July 30, 2021 of the Governor of the State Bank of Vietnam on the purchase and sale of promissory notes, bills of exchange, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, which takes effect from March 15, 2025.

[9] Article 3 and Article 4 of Circular No. 59/2024/TT-NHNN amending and supplementing certain provisions of Circular No. 12/2021/TT-NHNN dated July 30, 2021, issued by the Governor of the State Bank of Vietnam, regarding the organization of credit institutions and foreign bank branches purchasing and selling promissory notes, acceptance bills, deposit certificates, and bonds issued by other credit institutions and foreign bank branches within the country, shall take effect from March 15, 2025, and are stipulated as follows:

Article 3. Responsibilities for Implementation

The Head of the Office, the Director of the Monetary Policy Department, and the Heads of units under the State Bank of Vietnam; credit institutions and foreign bank branches shall be responsible for implementing this Circular.

Article 4. Implementation provisions

1. This Circular shall take effect from March 15, 2025.

2. The purchase and sale of promissory notes and acceptance bills issued before the Law on Credit Institutions 2024 comes into force by credit institutions and foreign bank branches shall be carried out in accordance with the regulations on the purchase and sale of deposit certificates as stipulated in Circular No. 12/2021/TT-NHNN, which has been amended and supplemented according to this Circular.”