Circular No. 09/2021/TT-NHNN amending and supplementing certain articles of Circular No. 42/2015/TT-NHNN dated December 31, 2015 of the Governor of the State Bank of Vietnam on open market operations

CIRCULAR

Amending and supplementing certain articles of Circular No. 42/2015/TT-NHNN dated December 31, 2015 of the Governor of the State Bank of Vietnam on open market operations Vietnam provisions on open market operations                                                                                                                                                                                                                             

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 Decree No. 16/2017/NĐ-CP dated February 17, 2017 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 promulgates this Circular amending and supplementing certain articles of Circular No. 42/2015/TT-NHNN dated December 31, 2015 of the Governor of the State Bank of Vietnam on open market operations (hereinafter referred to as Circular No. 42/2015/TT-NHNN).

Article 1. Amending and supplementing certain articles of Circular No. 42/2015/TT-NHNN

1. Supplement Clause 3 to Article 14 as follows:

"3. For the sale (issuance) of State Bank bills through open market operations, the State Bank shall conduct it via interest rate bidding; the State Bank sells (issues) State Bank bills via quantity bidding when the State Bank needs to announce the interest rate of State Bank bills to implement monetary policy objectives."

2. Amend and supplement Article 15 as follows:

"Article 15. Announcing the purchase or sale of securities
1. Prior to each auction session for open market operations, the State Bank (Trading Department) announces the purchase or sale of securities to members. For the session selling (issuing) State Bank bills, in addition to announcing to members, the Trading Department posts the announcement of selling (issuing) State Bank bills on the State Bank's Electronic Information Portal no later than 13:30 on the day of the auction.
2. The basic contents of the announcement include:

a) Auction date;

b) Auction method;

c) Evaluation method;

d) Purchase or sale method;

đ) Quantity of securities to be purchased or sold based on payment price or face value (except in cases where the State Bank does not pre-announce the quantity of securities to be purchased or sold);

e) Types of securities to be purchased or sold;

g) Transaction ratio of types of securities (in case the State Bank purchases);

h) Tenor of securities;

i) Issuance date of securities (in case the State Bank sells);

k) Interest payment method of securities (in case the State Bank sells);

l) Due date of securities (in case the State Bank sells);

m) Remaining term of securities (in case the State Bank sells);

n) Purchase or sale period (number of days);

o) Interest rate applied by the State Bank when purchasing or selling (in case of quantity bidding);

p) Primary market issuance interest rate of securities (in case the State Bank sells);

q) Time to receive bids from members;

r) Closing time."

3. Amending and supplementing Point b Clause 1 of Article 25 as follows:

"b) Propose and submit to the Head of the Management Board for decision on the type of securities to be purchased/sold, quantity to be purchased/sold, purchase/sale method, auction method, evaluation method, purchase/sale period, and interest rate applied when purchasing/selling securities; notify the Trading Department of these contents after approval by the Head of the Management Board."

4. Amending and supplementing Point d Clause 2 of Article 25 as follows:

"d) Organize the trading session for the purchase or sale of securities between the State Bank and members according to the approval of the Head of the Management Board; implement the posting of announcements for selling (issuing) State Bank bills as prescribed in this Circular."

Article 2. Responsibility for Implementation

The Chief of the Office, Heads of the Monetary Policy Department, Heads of units under the State Bank, credit institutions, and foreign bank branches are responsible for implementing this Circular.

Article 3. Effectiveness

This Circular takes effect from August 25, 2021./.