Decision No. 1022/2004/QD-NHNN on Issuing the Regulation on Custody of Valuable Instruments at the State Bank

DECISION

Regarding the issuance of the Central Depositary Rules for Valuable Papers at the State Bank

 ________________________

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated December 12, 1997 and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam No. 10/2003/QH11 dated June 17, 2003;

Based on the Law on Credit Organizations number 02/1997/QH10 dated 12/12/1997;

Pursuant to Decree No. 86/2002/NĐ-CP dated 05/11/2002 of the Government stipulating the functions, tasks, powers, and organizational structure of Ministries and ministerial-level agencies;

At the proposal of the Director of the State Bank Trading Department,

DECISION:

Article 1. This Decision promulgates the Central Depositary Rules for Valuable Papers at the State Bank. The State Bank.

Article 2. This Decision shall take effect fifteen days after its publication in the Official Gazette and shall replace Decision No. 171/2000/QĐ-NHNN dated March 25, 2000, issued by the Governor of the State Bank of Vietnam on the issuance of regulations on the registration of short-term negotiable instruments.

Article 3. The Heads of the Office, the Director of the Trading Department, the Director of the Accounting and Finance Department, the Director of the Banking Information Technology Department, the Heads of units under the State Bank of Vietnam related to this matter, the Directors of the State Bank of Vietnam branches in provinces and centrally-administered cities, the Chairmen of the Management Boards, and the General Managers (Directors) of credit organizations shall be responsible for implementing this Decision.

REGULATIONS

DEPOSITARY OF VALUABLE PAPERS AT THE STATE BANK

(Issued together with Decision No. 1022/2004/QĐ-NHNN

 dated 17/8/2004 of the Governor of the State Bank)

PART I. GENERAL PROVISIONS

Article 1. Scope of application

These Rules stipulate the procedures for the State Bank of Vietnam to hold custody of negotiable instruments issued through the State Bank of Vietnam and other negotiable instruments owned by customers participating in money market transactions, including secured loans with collateral of negotiable instruments, discounting, overdrafts, and overnight loans. establishing net debt limits, open market operations between the State Bank and credit organizations; rediscounting and lending operations among members of the government bond auction market at the State Bank.

Article 2. Participants in the depositary

The subjects participating in the custody of negotiable instruments at the State Bank of Vietnam are credit organizations operating under the Law on Credit Organizations that engage in money market transactions and other entities that are members of the Government Bond Auction Market at the State Bank of Vietnam (hereinafter referred to collectively as custodial clients).

Article 3. Definitions

In these Regulations, the following terms shall be understood as follows:

1. Valuable papers  including short-term and long-term valuable papers  used in money market transactions between the State Bank and depositary customers as prescribed by the Governor of the State Bank.

2. Depositary of valuable papers  is the activity of the State Bank managing, storing, and preserving valuable papers and exercising ownership rights over valuable papers of depositary customers upon request of depositary customers.

3. Depositary account for valuable papers  is an account opened by the State Bank  at the request of depositary customers for recording valuable papers held by depositary customers.

4. Valuable papers deposited at the State Bank include valuable papers directly deposited by depositary customers at the State Bank and deposited in accounts opened by the State Bank at the Securities Trading Center.

5. Collateralization of valuable papers  It refers to the State Bank of Vietnam receiving and implementing the freeze of negotiable instruments of custodial clients held at the State Bank of Vietnam upon request of the custodial client to participate in certain money market transactions.

6. Collateral account for valuable papers  is an account opened by the State Bank for recording valuable papers requested by depositary customers to be pledged or deposited as collateral by the State Bank to participate in certain money market transactions.

7. Pledging valuable papers  is the act of depositary customers requesting the State Bank to pledge valuable papers currently deposited at the State Bank to establish net debt limits.

8. Registration of valuable papers  is the act of depositary customers registering with the State Bank a list of valuable papers currently deposited at the State Bank for resale in open market operations or requesting the State Bank to discount them. deduction.

Article 4. When engaging in money market transactions with the State Bank of Vietnam, credit organizations must deposit negotiable instruments with the State Bank of Vietnam. The custody of negotiable instruments of custodial clients is carried out by the Trading Department and the State Bank of Vietnam branches in provinces and centrally-administered cities.

CHAPTER II. SPECIFIC PROVISIONS

Article 5. The types of negotiable instruments that may be deposited with the State Bank include:

1. Treasury bills;

2. State Bank bills;

3. Government bonds;

4. Central government construction bonds;

5. Investment bonds settled by the central budget;

6. Foreign currency bonds;

7. Public debt securities;

8. Other types of negotiable instruments as specified by the Governor of the State Bank for each period.

Article 6.  To participate in the deposit of negotiable instruments, depositors must prepare and submit to the State Bank a "Request to Participate in Negotiable Instrument Deposit" according to Form No. 1/LK (attached).

Article 7. Depositing negotiable instruments

1. For negotiable instruments issued by the State Bank or sold through book-entry form:

a. In the case where negotiable instruments are being monitored at the State Bank of Vietnam: The custodial client shall prepare a "Request for Custody of Negotiable Instruments" according to Model No. 2/LK (attached) along with relevant supporting documents and submit them to the State Bank of Vietnam. Based on the Request for Custody of Negotiable Instruments from the custodial client, the State Bank of Vietnam will automatically transfer the negotiable instruments into the custodial client's negotiable instrument custody account.

b. In the case where the custodial client wins an auction to purchase negotiable instruments in trading sessions organized by the State Bank of Vietnam, the State Bank of Vietnam will automatically transfer those negotiable instruments into the custodial client's negotiable instrument custody account unless the client requests otherwise.

2. For negotiable instruments currently deposited at the Securities Trading Center:

Before using negotiable instruments held in custody at the Securities Trading Center to participate in money market transactions with the State Bank of Vietnam, the custodial client must transfer the negotiable instruments to their custody account opened at the Securities Trading Center in accordance with the Securities Trading Center's regulations. Upon receipt of notification from the Securities Trading Center regarding the transfer of negotiable instruments from the custodial client's account to the State Bank of Vietnam's account, the State Bank of Vietnam will transfer the negotiable instruments into the custodial client's negotiable instrument custody account at the State Bank of Vietnam.

3. For other types of negotiable instruments:

The custodial client prepares and submits to the State Bank of Vietnam a Request for Custody of Negotiable Instruments along with a list of negotiable instruments to be deposited and all negotiable instrument certificates. The State Bank of Vietnam receives and processes the transfer of negotiable instruments into the custodial client's negotiable instrument custody account.

Article 8Registering negotiable instruments to participate in discounting operations and open market operations

When there is a need to discount negotiable instruments, the custodial client submits to the State Bank of Vietnam a list of negotiable instruments proposed for discounting in accordance with the Discounting Rules. The State Bank of Vietnam checks and confirms that the negotiable instruments meet the conditions to participate in discounting transactions for the custodial client.

When there is a need to sell negotiable instruments during open market operations trading sessions, the custodial client submits a list of negotiable instruments registered for sale in accordance with the Open Market Operations Rules. The State Bank of Vietnam checks and accepts the negotiable instruments eligible for trading for the custodial client.

Article 9. Pledging negotiable instruments to borrow rediscount funds

1. When the custodial client is approved by the State Bank of Vietnam for a secured loan with collateral of negotiable instruments, based on valid documentation, the State Bank of Vietnam transfers negotiable instruments from the custodial client's account. negotiable instruments deposit account to the negotiable instrument pledge account.

2. When the custodial client fulfills their obligation to repay the State Bank of Vietnam, based on repayment documentation and the custodial client's Request for Return of Collateralized Negotiable Instruments, the State Bank of Vietnam releases the collateral, transferring the collateralized negotiable instruments. back to the depositor's negotiable instrument deposit account.

Article 10. Pledging negotiable instruments for overdrafts and overnight loans

1. When the custodial client needs to use negotiable instruments held in custody at the State Bank of Vietnam to participate in overdraft and overnight lending transactions, they submit to the State Bank of Vietnam a Request for Collateralization of Negotiable Instruments. The State Bank of Vietnam transfers negotiable instruments from the custodial client's negotiable instrument custody account to the collateralized negotiable instrument account to carry out the overdraft and overnight lending transactions.

2. The State Bank of Vietnam releases the collateralized negotiable instruments of the custodial client when there is no overnight loan debt and the value of the collateralized negotiable instruments exceeds the specified limit for overdraft and overnight lending transactions. To release the collateral, the custodial client submits to the State Bank of Vietnam a Request for Return of Collateralized Negotiable Instruments. The State Bank of Vietnam releases part or all of the collateralized negotiable instruments as requested by the custodial client and transfers the released negotiable instruments back to the custodial client's negotiable instrument custody account.

Article 11. Pledging negotiable instruments to establish a net debit limit

1. When the custodial client needs to use negotiable instruments held in custody at the State Bank of Vietnam to provide collateral for establishing a net debit position limit in low-value payment settlement, they submit to the State Bank of Vietnam a Request for Collateral. The State Bank of Vietnam transfers negotiable instruments from the custodial client's negotiable instrument custody account to the collateralized negotiable instrument account.

2. The State Bank shall return the securities pledged when the securities have reached their maturity date for payment and have been replaced by other securities, or when the value of the pledged securities exceeds the level specified in the guidelines for establishing and managing net open position limits. Based on the request for the return of pledged securities from credit institutions, the State Bank shall transfer the pledged securities to the customer's account for safekeeping.

Article 12Pledging negotiable instruments for inter-depositor lending

Depositors can directly use negotiable instruments deposited with the State Bank as collateral for mutual lending.

1. A depositor (pledgor) who wishes to pledge negotiable instruments to borrow from another depositor must submit the following documents to the State Bank:

Request for confirmation and freezing of negotiable instruments;

Agreement record between the pledgor and the pledgee accompanied by a list of negotiable instruments used as collateral.

2. The State Bank shall accept the application documents and procedures to freeze the securities and transfer the securities from the customer's account for safekeeping to the account for collateral at the State Bank.

3. During the period of collateral, the pledgor may request the State Bank to exchange the securities currently frozen by the State Bank with other securities directly held at the State Bank if the pledged securities have reached their maturity date for payment. The pledgor may also request the State Bank to extend the term of the collateral. Based on the request of the pledgor, which has been approved by the pledgee, the State Bank shall consider allowing the pledgor to exchange the securities.  negotiable instruments or extend the pledge period of negotiable instruments.

4. The State Bank shall terminate the freezing and transfer the collateral securities to the customer's account for safekeeping upon receipt of the request from the pledgor accompanied by confirmation from the pledgee regarding the full repayment of the loan secured by the collateral.

Article 13. Using negotiable instruments for discounting

1. Negotiable instruments are discounted by the State Bank for the remaining term:

When accepting the discounting of all remaining time periods of the securities by the customer for safekeeping, the State Bank shall transfer the securities from the customer's account for safekeeping to the State Bank's account for safekeeping. The customer for safekeeping shall be responsible for transferring ownership of the securities to the State Bank.

2. Negotiable instruments are discounted by the State Bank with a term:

a. When accepting a term discount of negotiable instruments from the customer, the State Bank transfers negotiable instruments from the customer's account of deposited negotiable instruments to the account of pledged negotiable instruments for management during the discounting period.

b. When the customer fulfills the obligation to repay the debt according to the repurchase agreement, the State Bank transfers negotiable instruments that are pledged back to the depositor's negotiable instrument deposit account.

Article 14. Using negotiable instruments to conduct open market operations

1. Purchasing negotiable instruments outright:

a. The State Bank purchases negotiable instruments outright:

On the auction day, the customer for safekeeping must submit to the State Bank the Application for Sale of Securities. Based on the auction results, the State Bank shall transfer the securities from the customer's account for safekeeping to the State Bank's securities. The customer for safekeeping shall be responsible for transferring ownership of the securities to the State Bank.

b. The State Bank sells negotiable instruments outright:

Based on the auction results, the State Bank transfers its negotiable instruments to the customer's account of deposited negotiable instruments.

2. Purchasing negotiable instruments with a term:

a. The State Bank purchases negotiable instruments with a term:

Based on the auction results, the sale and repurchase agreement between the customer for safekeeping and the State Bank, the State Bank shall transfer the securities from the customer's account for safekeeping to the State Bank's account for safekeeping.

Upon fulfillment of the commitments in the contract by the customer for safekeeping, based on valid documentation, the State Bank shall transfer the securities from the State Bank's account for safekeeping to the customer's account for safekeeping.

b. The State Bank sells negotiable instruments with a term:

Based on the auction results of the customer for safekeeping, the sale and repurchase agreement between the State Bank and the customer for safekeeping, the State Bank shall transfer the State Bank's securities to the customer's account for safekeeping.

Upon expiration of the sale and repurchase agreement, the State Bank shall transfer the securities from the customer's account for safekeeping to the State Bank's securities account.

Article 15. Trading negotiable instruments between customers

1. When there is a need to sell securities directly held at the State Bank, the customer for safekeeping must submit to the State Bank the Request for Transfer of Securities Account accompanied by the Confirmation of Transfer of Ownership of Securities and any related documents if necessary.

2. Based on the customer for safekeeping's request to sell, the State Bank shall transfer the securities from the customer's account for safekeeping to the buyer's account for safekeeping.

Article 16. Principal and interest payment of negotiable instruments at maturity

1. Principal and interest payment of negotiable instruments directly deposited with the State Bank.

a. For negotiable instruments issued by the State Bank or acting as an agent for issuance:

When the securities reach their maturity date for principal and interest payments, the customer for safekeeping shall submit a payment request to the State Bank. The State Bank shall process the payment and reduce the corresponding matured securities on the customer's account for safekeeping.

b. For other negotiable instruments:

When negotiable instruments such as certificates reach their principal and interest payment due date, the customer processes the withdrawal of negotiable instruments to the issuing organization or its agent for payment.

2. Principal and interest payment of negotiable instruments deposited in the State Bank's account at the Securities Trading Center:

The payment of principal and interest of negotiable instruments of customers deposited in the State Bank's account at the Securities Trading Center is carried out by the Securities Trading Center.

Article 17Withdrawal of negotiable instruments

1. Negotiable instruments directly deposited with the State Bank:

When there is a need to withdraw securities certificates directly from the State Bank, the customer for safekeeping must submit to the State Bank the "Request for Withdrawal of Securities" according to Form No. 3/LK (attached). Based on the customer's request, the State Bank shall reduce the securities on the customer's account for safekeeping and process the return of the securities certificate to the customer for safekeeping.

2. Negotiable instruments deposited in the State Bank's account at the Securities Trading Center:

a. When there is a need to withdraw securities held in accounts at the State Bank's Securities Trading Center, the customer for safekeeping must submit to the State Bank the Request for Transfer of Securities Held in Accounts at the State Bank's Securities Trading Center to the customer's account at the Securities Trading Center.

b. Based on the customer's request, the State Bank shall instruct the Securities Trading Center to transfer the customer's securities account to the customer's account at the Securities Trading Center. Subsequently, the withdrawal of the customer's securities will be carried out by the Securities Trading Center in accordance with its regulations.

Article 18. Termination of Custody

When there is no need to hold negotiable instruments in custody at the State Bank, the custodial client must complete procedures to close the negotiable instrument accounts in accordance with the regulations of the State Bank.

Chapter III. IMPLEMENTATION ORGANIZATION

Article 19Responsibilities of the custodial client

Prepare all necessary documents to participate in the custody of negotiable instruments at the State Bank.

Provide information related to negotiable instruments held in custody upon the request of the State Bank.

Adhere strictly to all regulations stipulated in relevant agreements and contracts concerning negotiable instruments.

Article 20. Responsibilities of units under the State Bank of Vietnam

1. Trading Department:

a. Guide the process of custody of negotiable instruments at the State Bank and related forms.

b. Carry out the custody and accounting of negotiable instruments at the State Bank in accordance with the regulations.

c. Enter into an agreement on the custody of negotiable instruments with the Securities Trading Center.

2. Accounting and Finance Department:

a. Guide the accounting of negotiable instrument custody according to the provisions of this Regulation.

b. Guide the procedures for opening and closing negotiable instrument accounts.

3. Banking Information Technology Department:

Develop software programs for negotiable instrument custody to monitor and manage negotiable instruments and guide technical procedures for negotiable instrument custody through computer networks.

4. State Bank branch in provinces and centrally-administered cities:

a. Conduct negotiable instrument custody for clients with headquarters within its jurisdiction pursuant to the authorization of the Governor.

b. Regularly report the status of negotiable instrument custody of clients within its jurisdiction to the Trading Department of the State Bank.

Article 21. Implementation Provisions

Any amendments or supplements to the contents of this Regulation shall be decided by the Governor of the State Bank./.

APPLICATION FOR PARTICIPATION IN THE CUSTODY OF NEGOTIABLE INSTRUMENTS

Unit: Equivalent USD:  The State Bank Vietnam Male

Name of entity: (custodial client)... Code number:...

Address...

Telephone: …Fax: …

Account number for settlement in Vietnamese currency:...

Opened at: ...

Based on the provisions of the Central Depository Regulations for Securities issued by the State Bank pursuant to Decision No... dated... month... year 2004 of the Governor of the State Bank,... (the entity requesting registration) requests to participate in the Central Depository for Securities at the State Bank with the following contents:

1. We hereby introduce the list of authorized officers who have the authority to sign transaction-related documents involving depositing, withdrawing, and transferring negotiable instruments:

                         Full Name                                    Position                   Signature 1              Signature 2

General Director (Director):

First Authorized Representative:

Second Authorized Representative:

Entity Seal Model:

2We hereby commit:

To comply with all regulations stipulated in the Negotiable Instrument Custody Regulation issued together with Decision No.../2004/NHNN dated... month... year... of the Governor of the State Bank and any amendments or supplements to this Regulation;

To pay the custody fee as prescribed by the State Bank for each period;

To provide the State Bank with all information requested by the State Bank relating to the custody of negotiable instruments.                                                               

                                                                              HEAD OF THE UNIT

                                                                                    (Signature and stamp)

Form No. 2/LK

APPLICATION FOR CUSTODY OF NEGOTIABLE INSTRUMENTS

                        Respectfully submitted to:   State Bank of Vietnam Male

(Trading Department or State Bank branch in province/city)

- My name is:... Position:...

- Representing the Bank:...

- Address:...

- Bank code number:...... Telephone:... Fax:...

- Custody negotiable instrument account number:...

Request to custody the following types of negotiable instruments:

GENERAL DIRECTOR (DIRECTOR)

         (Signature, stamp)

Form No. 3/LK

APPLICATION FOR WITHDRAWAL OF NEGOTIABLE INSTRUMENTS

Respectfully submitted to:   State Bank of Vietnam Male

(Trading Department or State Bank branch in province/city)

- My name is:... Position:...

- Representing the Bank:...

- Address:...

- Bank code number:...... Telephone:... Fax:...

- Custody negotiable instrument account number:...

Request to withdraw the following types of negotiable instruments:

GENERAL DIRECTOR (DIRECTOR)

         (Signature, stamp)