Circular No. 04/2016/TT-NHNN on the custody and use of securities at the State Bank of Vietnam

CIRCULAR

Regulations on the registration and use of securities

at the State Bank of Vietnam

Pursuant to the Law on Credit Institutions No. 32/2024/QH15; dated June 16, 2022 2010;

BASED ON THE LAW ON CREDIT ORGANIZATIONS NUMBER 47/2010/QH12 OF June 16, 2010 2010;

BASED ON THE SECURITIES LAW NUMBER 70/2006/QH11 OF JUNE 29, 2006;

BASED ON THE LAW AMENDING AND COMPLEMENTING CERTAIN PROVISIONS OF THE SECURITIES LAW NUMBER 62/2010/QH12 OF NOVEMBER 24, 2010;

Pursuant to Decree No. 01/2011/NĐ-CP dated January 5, 2011 of the Government on the issuance of government bonds, government-guaranteed bonds, and local government bonds;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Trading Department;

The Governor of the State Bank of Vietnam issues this Circular regulating the registration and use of securities at the State Bank of Vietnam.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular regulates the registration and use of securities at the State Bank of Vietnam (hereinafter referred to as the State Bank).

Article 2. Applicability

1. Units under the State Bank.

2. Credit organizations, foreign bank branches, and other organizations as decided by the Governor of the State Bank (hereinafter referred to as members).

 ARTICLE 3. DEFINITIONS

1. Valuable paper is evidence confirming the obligation to repay debt between the issuer of valuable paper and the holder of valuable paper within a certain period, interest payment conditions, and other conditions.

2. Depositing valuable paper at the State Bank is the activity of receiving deposits, preserving, transferring, and exercising rights related to ownership of valuable paper directly deposited at the State Bank or deposited in customer accounts at the State Bank's Securities Depository Center (hereinafter referred to as VSD) to ensure the rights and interests related to valuable paper of the holder and to perform certain transactions at the State Bank.

3. Transferring valuable paper among parties in transactions using valuable paper involves transferring the account for book-entry type valuable paper or delivering, counting, and recording into accounting systems for certificate-type valuable paper. The transfer of valuable paper may or may not include the transfer of ownership of valuable paper.

4. Self-trading account is an account opened by VSD for VSD deposit members or organizations opening accounts at VSD to manage valuable paper owned by the deposit member or the organization opening an account at VSD.

5. Brokerage account is an account opened by VSD for VSD deposit members or organizations opening accounts at VSD to manage valuable paper owned by the deposit member's customers or the organization's customers opening accounts at VSD.

6. State Bank's valuable paper account includes the State Bank's valuable paper account being managed and the State Bank's valuable paper account deposited at VSD.

The State Bank's securities account being managed is an internal account of the State Bank for registering securities owned by the State Bank.

The State Bank's valuable paper account deposited at VSD is a self-trading account opened by VSD upon request of the State Bank to deposit valuable paper owned by the State Bank.

7. Customer account of the State Bank at VSD is a brokerage account opened by VSD upon request of the State Bank to freeze and deposit valuable paper owned by members to perform certain transactions at the State Bank.

8. Customer valuable paper deposit account is an account opened by the State Bank to monitor the deposit of valuable paper from members. The customer valuable paper deposit account includes the customer valuable paper deposit account at the State Bank and the customer valuable paper deposit account on the State Bank's customer account at VSD.

The customer valuable paper deposit account at the State Bank is an account opened by the State Bank upon request of the member to deposit valuable paper directly at the State Bank.

The customer valuable paper deposit account on the State Bank's customer account at VSD is an account opened by VSD upon request of the State Bank to deposit valuable paper of members at VSD.

9. Valuable paper pledge account is an internal account of the State Bank opened for members to record valuable paper according to the pledge and margin requirements proposed by members when participating in certain money market transactions.

10. Valuable paper deposit account for credit purposes on the interbank market is an internal account of the State Bank opened for members to freeze valuable paper in collateralized lending transactions between members on the interbank market.

Article 4. Conditions, denominations, and codes of securities to be deposited at the State Bank

1. Types of securities include:

a) State Bank Treasury Bills;

b) Government Bonds;

c) Government-guaranteed bonds for full repayment of principal and interest upon maturity;

d) Other types of valuable paper as decided by the Governor of the State Bank during each period.

2. Conditions for securities

a) Legally owned by members;

b) Belonging to the types of securities specified in Clause 1 of this Article;

c) Not settled for principal and interest upon maturity;

d) Certificate-type valuable paper deposited at the State Bank must be intact, without tears, damage, color change, faded patterns, letters, numbers, wrinkling, deterioration, smudging, or erasure.

3. Denominations of securities

The denomination of securities deposited at the State Bank is 100,000 VND (one hundred thousand dong) or multiples of 100,000 VND (one hundred thousand dong).

For special valuable paper directly managed by the State Bank and valuable paper denominated in foreign currency, the face value of the valuable paper shall be implemented according to the regulations of the law for each type of valuable paper.

4. Codes of securities

Valuable paper deposited at the State Bank is uniformly managed under the International Securities Identification Numbering System (ISIN) assigned at issuance.

Article 5. Use of securities deposited at the State Bank

1. Securities used in money market operations include:

a) Open market operations;

b) Refinancing operations:

- Loans secured by collateral of State Bank securities to credit institutions and foreign bank branches;

- Discounting of State Bank securities to credit institutions and foreign bank branches;

- Other forms of refinancing as decided by the Governor of the State Bank.

c) Pledging securities to establish overdraft limits and overnight loans in interbank electronic payments;

d) Pledging valuable paper to establish a net debit limit in electronic interbank payments.

2. Transactions involving valuable paper deposited at the State Bank between members include:

a) Secured loans by pledging securities between members;

b) Purchase and sale of securities between members.

Chapter II

SPECIFIC PROVISIONS

Section 1

DEPOSIT OF SECURITIES

Article 6. Opening a securities custody account

1. Documents for opening an account

To deposit valuable paper at the State Bank, organizations specified in Clause 2 of Article 2 of this Circular (referred to as organizations) prepare and submit to the State Bank one set of documents including:

a) Application for opening a valuable paper deposit account according to Appendix 1a/LK attached to this Circular;

b) Registration form for stamp samples and signatures according to Appendix 1b/LK attached to this Circular;

c) Documents proving the establishment and lawful operation of the organization opening a valuable paper deposit account such as: Decision on establishment, business license, business registration certificate, or other documents as prescribed by law;

d) Documents proving the legal representative's authority of the account holder accompanied by their identity card, citizen identification card, or valid passport;

đ) In cases where the organization opening a valuable paper deposit account is required by law to have the signature of the chief accountant or accounting supervisor on accounting transaction documents with banks, in addition to the documents mentioned in points a, b, c, and d of Clause 1 of this Article, the application for opening a valuable paper deposit account must also include the appointment decision along with the identity card, citizen identification card, or valid passport of the chief accountant (or accounting supervisor) of the organization opening the valuable paper deposit account.

2. The documents specified in points a and b of Clause 1 of this Article are originals, the documents specified in points c, d, and đ of Clause 1 of this Article are copies issued from the original register or certified copies or copies accompanied by the presentation of the original for verification.

3. Within five (5) working days from the date of receiving complete and valid files as prescribed in Clauses 1 and 2 of this Article, the State Bank (Trading Center) shall open an account for the custody of securities for members.

Article 7. Custody of Securities

1. For securities directly deposited with the State Bank

a) In the case where the member deposits valuable papers listed in the category of valuable papers currently managed by the State Bank:

Members submit to the State Bank (Trading Center) the Application for Custody of Securities according to Appendix 2/LK attached to this Circular and related documents. Within one (1) working day from the date of receipt of the Application for Custody of Securities from the member, the State Bank (Trading Center) shall transfer the securities into the Customer's Securities Account held in custody at the State Bank;

b) In the case where a member wins a tender to purchase securities in trading sessions organized by the State Bank, the State Bank (Trading Center) shall transfer the winning tender securities of the member into the Customer's Securities Account held in custody at the State Bank.

2. For securities recorded in the VSD custody account

a) When there is a need to hold securities in custody with the State Bank, the member transfers the securities from the member's custody account at VSD to the customer's account opened by the State Bank at VSD. Upon receipt of VSD's notification regarding the transfer of the member's custodial securities, the State Bank will update the changes on the Customer's Securities Account held in custody;

b) In the case where a member wins a tender to purchase securities in trading sessions organized by the State Bank as an issuing agent or the State Bank sells securities, the State Bank sends VSD bidding information so that VSD can record the custody of securities.

3. For valuable papers in the form of certificates

Members submit to the State Bank (Trading Center or authorized branch of the State Bank) the Application for Custody of Securities according to Appendix 2/LK attached to this Circular and all certificates type securities. The State Bank (Trading Center or authorized branch of the State Bank) receives, counts, and checks the certificates type securities. Within one (1) working day from the date of completing the check of the securities, the State Bank (Trading Center) shall process the transfer of the securities into the Customer's Securities Account held in custody at the State Bank.

Article 8. Principles of Transfer of Ownership of Securities

1. For negotiable instruments directly deposited with the State Bank, the State Bank (Trading Department) shall transfer the ownership of negotiable instruments on the day the transaction occurs according to the following principles:

a) In the case where the State Bank is the buyer or the recipient of securities when handling collateral assets, the securities are transferred from the Customer's Securities Account held in custody at the State Bank or the Pledged Securities Account of the member to the State Bank's Securities Account;

b) In the case where the State Bank is the seller, the securities are transferred from the State Bank's Securities Account to the Customer's Securities Account held in custody at the State Bank;

c) In the case of handling collateral assets in interbank lending transactions secured by pledged securities between members, the securities are transferred from the Interbank Credit Market Pledged Securities Account of the pledgor to the Customer's Securities Account held in custody at the State Bank of the pledgee.

2. For securities held in custody on the Customer's Account of the State Bank at VSD, the transfer of ownership of securities is carried out by VSD according to the agreement between the State Bank and VSD based on the principle:

a) In the case where the State Bank is the buyer or the recipient of securities when handling collateral assets, the securities are transferred from the Customer's Securities Account held in custody on the Customer's Account of the State Bank at VSD to the State Bank's Securities Account held in custody at VSD;

b) In the case where the State Bank is the seller, the securities are transferred from the State Bank's Securities Account held in custody at VSD to the Customer's Securities Account held in custody on the Customer's Account of the State Bank at VSD;

c) In the case of handling collateral assets in interbank lending transactions secured by pledged securities between members, the securities are transferred from the pledgor to the pledgee within the Customer's Account of the State Bank opened at VSD.

3. The State Bank shall carry out the transfer of ownership of securities according to the Purchase and Sale Contract or the Tender Result Announcement in money market operations upon the authorization of the member. For discounting, pledging, margin deposit of securities, refinancing based on special bonds and market value bonds purchased by the Vietnam Asset Management Company (VAMC), and securities trading between members, the transfer of securities shall be carried out in accordance with Articles 13, 14, 15, 16, and 17 of this Circular.

4. The State Bank (Trading Center) shall carry out the transfer of ownership of securities in cases of division, separation, merger, consolidation, and revocation of licenses of credit institutions at the request of the member who is the owner of the securities based on the Application for Transfer of Ownership of Securities according to Appendix 5/LK attached to this Circular and related documents.

Article 9. Principal and interest payment for securities

1. For securities directly deposited with the State Bank

a) Securities of the book-entry type

When securities mature, the State Bank (Trading Department) shall examine the completion of members' obligations to the State Bank in related securities transactions. If the member has fulfilled their obligations, procedures for principal and interest payments to the member shall be carried out. If the obligations have not been fulfilled, provisions of Clause 4 of this Article shall apply.

b) Certificate-type securities

When certificate-type securities reach maturity, if the member requests withdrawal of securities according to Article 10 of this Circular, the State Bank (Trading Department) shall examine the completion of the member's obligations to the State Bank in related securities transactions. If the member has fulfilled their obligations, the securities shall be returned to the member to process payment at the issuer organization or the issuer's agent. If the obligations have not been fulfilled, provisions of Clause 4 of this Article shall apply.

2. For securities deposited in the Customer Account of the State Bank at VSD

a) When it is time to pay interest on periodic interest-paying securities, the State Bank (Trading Department) shall examine the completion of members' obligations to the State Bank in related securities transactions. If the member has fulfilled their obligations, the State Bank (Trading Department) shall notify VSD to confirm the list of members holding securities in the Customer Account of the State Bank so that VSD can process interest payments to the member. If the obligations have not been fulfilled, provisions of Clause 4 of this Article shall apply.

b) When securities reach maturity, The State Bank (Trading Department) shall examine the completion of members' obligations to the State Bank in related securities transactions. If the member has fulfilled their obligations, the State Bank (Trading Department) shall notify VSD to confirm that the relevant securities of the member in the Customer Account of the State Bank at VSD meet the conditions for principal and interest payments so that VSD can process payments to the member. If the obligations have not been fulfilled, provisions of Clause 4 of this Article shall apply.

c) The principal and interest payment for securities deposited in the Customer Account of the State Bank at VSD shall be carried out according to the agreement between the State Bank and VSD.

3. Interest and other income (if any) from securities during the period of ownership transfer from the seller to the buyer in term-limited transactions on the money market shall be implemented according to the regulations of the State Bank.

4. In cases where members have not completed their obligations to the State Bank, the State Bank (Trading Department) shall temporarily freeze or retain the principal and interest of securities currently being used for these obligations. Handling of members who have not fulfilled their obligations shall be carried out according to the regulations of the State Bank for each transaction.

Article 10. Withdrawal of Securities

1. Valuable Instruments Directly Deposited with the State Bank

When there is a need to withdraw directly from the State Bank certificate-type securities held in custody, the member shall submit to the State Bank (Trading Department) a request for withdrawal of securities according to Appendix 3/LK attached to this Circular.

Within one working day from the date of receipt of the member's request, the State Bank (Trading Department) shall examine the completion of the member's obligations to the State Bank in related securities transactions. If the member has fulfilled their obligations, the securities shall be recorded as withdrawn from the Customer Securities Account held in custody at the State Bank and the certificate-type securities shall be returned to the member. If the obligations have not been fulfilled, provisions of Clause 4 of this Article shall apply.

2. Securities deposited in the Customer Account of the State Bank at VSD

When there is a need to withdraw securities deposited in the Customer Account of the State Bank at VSD, the member shall submit to the State Bank (Trading Department) a request to transfer the securities account from the Customer Securities Account held in custody at the State Bank at VSD to the member's custodial account at VSD.

Within one working day from the date of receipt of the member's request, the State Bank (Trading Department) shall examine the completion of the member's obligations to the State Bank in related securities transactions. If the member has fulfilled their obligations, the State Bank (Trading Department) shall instruct VSD to transfer the member's securities account from the Customer Account of the State Bank at VSD to the member's custodial account at VSD. If the obligations have not been fulfilled, provisions of Clause 4 of this Article shall apply.

3. In cases where members have not completed their obligations to the State Bank, the State Bank (Trading Department) shall temporarily freeze the securities currently being used for these obligations. Handling of members who have not fulfilled their obligations shall be carried out according to the regulations of the State Bank for each transaction.

Article 11. Closing of Deposit Accounts for Valuable Securities

1. When there is no need to deposit valuable securities with the State Bank or due to division, separation, merger, consolidation, and revocation of the License, members submit to the State Bank (Trading Department) a request to close the deposit account for valuable securities according to Appendix 4/LK attached to this Circular.

2. Within five working days from the date of receipt of the member's request, the State Bank (Trading Department) closes the member’s deposit account for valuable securities, requests VSD to close the corresponding deposit account for valuable securities on the member’s customer account at VSD, and notifies the member.

3. In cases where members are divided, separated, merged, consolidated, and have their Licenses revoked without processing the procedures to close the deposit account for valuable securities, the State Bank (Trading Department) will close the account after fifteen working days from the date of receipt of the Governor's Decision regarding the division, separation, merger, consolidation, and revocation of the License (if the account has no balance) or freeze the account (if the account has a balance) and notify the member. The handling of valuable securities deposited in the account shall be carried out in accordance with the laws on the liquidation of assets of credit organizations and relevant laws. (Article 12. Open Market Operations

Section 2

USE OF VALUABLE INSTRUMENTS IN MONEY MARKET OPERATIONS

MONEY MARKET

Based on the contract for the sale and purchase of valuable securities for transactions where the State Bank purchases on a forward basis or the announcement of the auction results for transactions where the State Bank purchases outright, the State Bank (Trading Department) pays the money for purchasing valuable securities and performs the procedure to transfer ownership of valuable securities from the member’s customer deposit account for valuable securities to the State Bank’s deposit account for valuable securities for the winning valuable securities.

1. The State Bank buys outright or buys on term securities

For transactions where the State Bank purchases valuable securities on a forward basis, on the maturity date of the contract, the member must pay back the money for purchasing the valuable securities. Based on valid documentation, the State Bank (Trading Department) transfers ownership of valuable securities from the State Bank’s deposit account for valuable securities to the member’s customer deposit account for valuable securities.

Based on the contract for the sale and purchase of valuable securities for transactions where the State Bank sells on a forward basis or the announcement of the auction results for transactions where the State Bank sells outright, the member must pay the money for purchasing the valuable securities, and the State Bank (Trading Department) performs the procedure to transfer ownership of valuable securities from the State Bank’s deposit account for valuable securities to the member’s customer deposit account for valuable securities.

2. The State Bank sells outright or sells on term securities

For transactions where the State Bank sells valuable securities on a forward basis, on the maturity date of the contract, the member must resell the valuable securities in the contract to the State Bank. Based on valid documentation, the State Bank (Trading Department) pays the money to the member and transfers ownership of valuable securities from the member’s customer deposit account for valuable securities to the State Bank’s deposit account for valuable securities.

Article 13. Discounting of Valuable Securities by the State Bank for Members

1. After receiving the request for discounting valuable securities from the member, if the request is accepted, the State Bank (Trading Department) transfers ownership of valuable securities from the member’s customer deposit account for valuable securities to the State Bank’s deposit account for valuable securities for those valuable securities that are accepted for discounting.

After the member repays the valuable securities according to the commitment to repurchase the discounted valuable securities, the State Bank (Trading Department) transfers ownership of valuable securities from the State Bank’s deposit account for valuable securities to the member’s customer deposit account for valuable securities.

2. If the State Bank accepts a term discount, the remaining term of the securities must be longer than the discount term.

After the settlement member fulfills the repurchase commitment for securities that have been discounted by the State Bank, the State Bank (Trading Center) shall transfer the ownership of the securities from the State Bank's Securities Account to the customer's securities account held in custody by the settlement member.

Article 14. Business of lending with collateral through pledge of negotiable instruments, refinancing based on special bonds and market value debt purchase bonds of the Vietnam Asset Management Corporation (VAMC).

1. After a member submits to the State Bank of Vietnam a request for borrowing with collateral through pledge of negotiable instruments or refinancing based on special bonds and market value debt purchase bonds of VAMC, and the State Bank of Vietnam accepts the member's request, the member transfers negotiable instruments as collateral or special bonds and market value debt purchase bonds of VAMC to the State Bank of Vietnam. The State Bank of Vietnam (Trading Department) implements the freezing and transfer of negotiable instruments from the member’s customer securities account to the member’s pledged securities account at the State Bank of Vietnam, while transferring the loan amount into the member’s deposit account at the State Bank of Vietnam.

2. In case the member requests to exchange negotiable instruments (in the business of lending with collateral through pledge of negotiable instruments) or after the member fully repays the principal and interest, based on the member's repayment or exchange request for negotiable instruments and payment documents, the State Bank of Vietnam (Trading Department) implements the release and transfer of negotiable instruments from the member’s pledged securities account to the member’s customer securities account at the State Bank of Vietnam.

Article 15. Pledge and margin of negotiable instruments to establish overdraft limits and overnight lending limits, net debt limits in inter-bank electronic payment transactions.

1. After receiving a member's request to pledge or margin negotiable instruments to establish overdraft limits and net debt limits in inter-bank electronic payment transactions, the State Bank of Vietnam (Trading Department) implements the freezing and transfer of negotiable instruments from the member’s customer securities account to the member’s pledged securities account at the State Bank of Vietnam.

2. The State Bank of Vietnam releases the member’s pledged negotiable instruments when such pledged negotiable instruments reach their maturity date or when the member uses other negotiable instruments to replace them, or when the member no longer needs to maintain the overdraft limit and net debt limit in inter-bank electronic payment transactions. The State Bank of Vietnam releases part or all of the pledged negotiable instruments according to the member's request and transfers negotiable instruments from the member’s pledged securities account to the member’s customer securities account.

3. To release the pledged negotiable instruments, the member submits to the State Bank of Vietnam (Trading Department) a request to return the pledged negotiable instruments. The State Bank of Vietnam (Trading Department) checks the completion of the member's obligations to the State Bank of Vietnam on the inter-bank electronic payment system. If the member has fulfilled its obligations, the State Bank of Vietnam (Trading Department) proceeds with the procedures to return the negotiable instruments to the member.

4. If the member has not fulfilled its obligations to the State Bank of Vietnam on the inter-bank electronic payment system, the State Bank of Vietnam (Trading Department) temporarily freezes the negotiable instruments currently being used for these obligations. The handling of members who have not fulfilled their obligations is carried out according to specific regulations of the State Bank of Vietnam in the business of pledging and margining negotiable instruments to establish overdraft limits and overnight lending limits, net debt limits in inter-bank electronic payment transactions.

Section 3

NEGOTIATION OF SECURITIES AMONG MEMBERS

Article 16. Lending with collateral through pledge of negotiable instruments among members

1. Negotiable instruments used in lending transactions with collateral through pledge of negotiable instruments among members must be negotiable instruments that have not been used to secure obligations in operational activities at the State Bank.

2. When a member (the pledgor) needs to pledge negotiable instruments to borrow funds from another member (the pledgee), the pledgor shall submit to the State Bank (Trading Department) one set of documents including:

a) The application for confirmation of the freeze on negotiable instruments according to Appendix 6/LK attached to this Circular;

b) The pledge agreement between the pledgor and the pledgee (original).

3. The State Bank (Trading Department) shall accept the dossier, process the freezing of negotiable instruments, and transfer negotiable instruments from the Customer's Depository Account to the Depository Account for credit purposes on the interbank market of the pledgor.

4. During the pledge period, if the pledgee agrees, the pledgor may request the State Bank (Trading Department) to extend the pledge period and/or replace the negotiable instruments currently frozen by the State Bank with other negotiable instruments deposited at the State Bank. The State Bank will consider implementing the pledgor's request after receiving confirmation from the pledgee.

5. The State Bank shall unfreeze and transfer negotiable instruments from the Depository Account for credit purposes on the interbank market back to the Customer's Depository Account upon receipt of the Application for Release of Negotiable Instruments from the pledgor accompanied by confirmation from the pledgee agreeing to release the negotiable instruments.

6. In case the pledgor cannot repay the full or partial principal and interest of the loan on time to the pledgee, the State Bank shall carry out the procedure to transfer ownership of negotiable instruments from the pledgor to the pledgee based on a written request from the pledgee with confirmation from the pledgor (the owner of the negotiable instruments) and the settlement record between the two parties. If the pledgor fails to fulfill their obligation and does not confirm the use of the collateral to settle the debt, the handling of the collateral shall be carried out in accordance with the provisions of the law.

Article 17. Purchase and sale of negotiable instruments among members

1. For securities directly deposited with the State Bank

a) Members can directly purchase and sell negotiable instruments deposited at the State Bank. The selling member sends the State Bank (Trading Department) the Application for Transfer of Ownership of Negotiable Instruments according to Appendix 5/LK attached to this Circular and the purchase and sale contract between the two parties. The State Bank (Trading Department) shall transfer ownership of negotiable instruments from the Customer's Depository Account of the selling member to the purchasing member. The negotiable instruments will continue to be deposited at the State Bank unless the purchaser requests otherwise;

b) In the case of term purchase and sale of negotiable instruments, the term selling member sends the State Bank (Trading Department) the Application for Transfer of Ownership of Negotiable Instruments according to Appendix 5/LK attached to this Circular and the purchase and sale contract between the two parties. The State Bank shall transfer ownership of negotiable instruments from the term selling member to the term purchasing member.

On the maturity date of the contract, based on valid payment documents and the Application for Transfer of Ownership of Negotiable Instruments according to Appendix 5/LK attached to this Circular from the owner of the negotiable instruments (the term purchasing member), the State Bank (Trading Department) shall transfer ownership of negotiable instruments from the term purchasing member to the term selling member. In other cases, the State Bank shall transfer ownership of negotiable instruments according to the lawful agreement between the parties or in accordance with the provisions of the law.

2. For negotiable instruments deposited at VSD, members must complete procedures to withdraw negotiable instruments from the Customer's Account at the State Bank at VSD before conducting purchases and sales. The purchase and sale of negotiable instruments deposited at VSD shall be carried out in accordance with the provisions of the securities law.

Chapter III

IMPLEMENTING PROVISIONS

Article 18. Responsibilities of Units under the State Bank

1. Trading Department

a) Implement depository, payment, interest collection, depository fee collection, accounting, pledge, freeze, and transfer of ownership of negotiable instruments at the State Bank in accordance with regulations;

b) Monitor, review, and grant transaction permissions to personnel of members participating in depository operations and using negotiable instruments at the State Bank;

c) Provide members with the ability to check deposit balances and usage status of valuable papers through the network and statement of the customer deposit account at the State Bank;

d) Serve as the point of contact to coordinate with related units to handle difficulties and issues during the implementation of depository operations and the use of negotiable instruments at the State Bank;

đ) The Director of the Trading Department shall sign an agreement with VSD regarding the use of VSD services and electronic data transmission between the two parties in depository operations and the use of negotiable instruments at the State Bank.

2. Financial Accounting Division

Guide accounting entries for depository and use of negotiable instruments at the State Bank in accordance with this Circular.

3. Information Technology Department

a) Serve as the point of contact and coordinate with the Trading Department and related units to develop, install, maintain, and ensure the network infrastructure for depository and communication operations and the use of negotiable instruments at the State Bank;

b) Issue digital signatures, access codes, and approval codes for depository and use of negotiable instruments at the State Bank.

4. Banking Inspection and Supervision Authority

Serve as the point of contact to coordinate with related units to handle violations by members in implementing the provisions of this Circular.

5. Branches of the State Bank in provinces and centrally-administered cities where credit organizations and foreign bank branches are headquartered

a) Verify the legality and validity of negotiable instruments and retain certificate-type negotiable instruments for members with headquarters within the jurisdiction.

b) Manage, monitor, and return certificate-type valuable papers according to notifications from the Trading Department.

Article 19. Responsibilities of members

1. Provide complete and timely documents and materials as prescribed in this Circular and bear legal responsibility for the accuracy and legality of the data and materials provided to the State Bank.

2. Fulfill commitments and make full and timely payments to the State Bank and other members according to signed contracts.

3. Authorize the State Bank to execute transfer of ownership of negotiable instruments in money market transactions.

4. Strictly comply with all requirements set forth in notifications from the State Bank related to money market operations.

5. Members shall be responsible for paying service fees arising from the transfer of ownership of securities in accordance with regulations of the Ministry of Finance (if applicable).

Article 20. Transitional Provisions

1. Credit institutions, foreign bank branches, and organizations recognized as members pursuant to Decision No. 1022/2004/QĐ-NHNN dated August 17, 2004, of the Governor of the State Bank on the issuance of the Securities Safekeeping Regulations at the State Bank shall continue to be members of the safekeeping business and use securities in accordance with this Circular.

2. Transactions completed before the effective date of this Circular shall continue to be implemented according to agreements previously signed between the parties involved.

Article 21. Effective Date

This Circular takes effect from June 1, 2016.

2. From the date this Circular takes effect, the following documents shall cease to be effective:

a) Decision No. 1022/2004/QĐ-NHNN dated August 17, 2004, of the Governor of the State Bank on the issuance of the Securities Safekeeping Regulations at the State Bank;

b) Decision No. 42/2006/QĐ-NHNN dated August 28, 2006, of the Governor of the State Bank on amending and supplementing certain articles of the Securities Safekeeping Regulations at the State Bank issued together with Decision No. 1022/2004/QĐ-NHNN dated August 17, 2004, of the Governor of the State Bank.

3. The Director of the Office, the Director of the Trading Department, the Heads of relevant units under the State Bank, the Directors of the State Bank branches in provinces and centrally-administered cities; the Chairmen of the Board of Directors, the Chairmen of the Board of Members, and the General Managers (Directors) of credit institutions and foreign bank branches are responsible for organizing the implementation of this Circular./.