Circular No. 119/2020/TT-BTC stipulates the activities of securities trading registration, priority registration, netting, and settlement.

MINISTRY OF FINANCE -------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------------
Number: 119/2020/TT-BTC	Hanoi, December 31, 2020

CIRCULAR

Regulations on securities registration, custody, netting, and settlement activities

On the basis of Securities Law November 26, 2019;

On the basis of Enterprise Law dated June 17, 2020;

Decree No. 155/2020/NĐ-CP dated December 31, 2020 of the Government detailing implementation of certain provisions of the Securities Law;

Decree No. 87/2017/NĐ-CP July 26, 2017 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Chairman of the State Securities Commission;

The Minister of Finance issues this Circular regulating securities registration, custody, netting, and settlement activities.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular regulates securities registration, custody, netting, and settlement activities on the Vietnamese securities market.

This Circular does not regulate netting and settlement activities for derivative securities transactions, government debt instruments, government-guaranteed bonds, and local government bonds.

2. The subjects to which this Circular applies include:

a) Vietnam Securities Depository Corporation;

b) Securities companies, commercial banks, foreign bank branches, custodian members, clearing members, direct account opening organizations, payment banks, issuers, public companies;

c) Organizations and individuals using securities registration, custody, netting, and settlement services;

d) Other relevant agencies, organizations, and individuals.

Article 2. Interpretation of Terms

In this Circular, the following terms are understood as follows:

1. Certificate securities are securities issued in the form of physical certificates. Information on the lawful ownership of the holder of certificate securities is recorded on the security certificate.

2. Book-entry securities are securities issued in the form of book entries or electronic data. Information on the lawful ownership of the holder of book-entry securities is recorded in the securities owner registration book.

3. Securities owner registration book is a record of information about the securities owner established by the issuer or public company when submitting a securities registration application to the Vietnam Securities Depository Corporation and the book established by the Vietnam Securities Depository Corporation when managing registered securities.

4. Securities owner is the person whose name appears in the securities owner registration book established by the Vietnam Securities Depository Corporation when managing registered securities.

5. Securities ownership certificate or Securities ownership book is a document issued by the issuer or public company or an organization authorized by the issuer or public company to issue to the holder of book-entry securities to confirm the ownership information of the securities at a specific point in time.

6. Final registration date is the date on which the Vietnam Securities Depository Corporation establishes a list of securities owners entitled to rights in accordance with the law.

7. Multilateral netting is the process of netting the total amount of money and securities received and the total amount of money and securities to be paid for securities transactions with the same cycle and payment method implemented on the securities trading system to determine the net payment obligation for investors and clearing members.

8. Market segment is a separate area within the clearing and settlement system of the Vietnam Securities Depository Corporation, established for securities with the same cycle, payment method, risk management mechanism, clearing members, and payment banks participating in securities transaction clearing and settlement activities.

9. Deposit of securities is the act of transferring registered securities to the centralized custody of the Vietnam Securities Depository Corporation to facilitate transactions.

10. Valuable papers are types of valuable papers as prescribed by banking laws used in money market operations between the State Bank and deposit customers.

11. Valid documents and records are documents and records that contain all required papers and have complete information filled out according to the law.Supplement

Chapter II

SECURITIES REGISTRATION ACTIVITIES

Article 3. Registration of securities with the Vietnam Securities Depository and Central Counterparty Corporation

1. The types of securities and the forms of registration of securities with the Vietnam Securities Depository and Central Counterparty Corporation are prescribed in Clauses 1, 2, and 3 of Article 149 of Decree No. 155/2020/ND-CP dated December 31, 2020, detailing certain provisions of the Securities Law.

2. Issuing organizations and public companies shall register the following information with the Vietnam Securities Depository and Central Counterparty Corporation:

a) Information on the issuing organization and public company;

b) Information on the securities of the issuing organization and public company;

c) Information on the security holder including: list of security holders, type of securities, quantity of securities held, and the securities deposit account in cases where the security holder requests to register securities simultaneously with depositing them.

3. Issuing organizations and public companies may directly register securities with the Vietnam Securities Depository and Central Counterparty Corporation or through a securities company. When there is a change in the registered information, the issuing organization and public company must adjust the information with the Vietnam Securities Depository and Central Counterparty Corporation. The issuing organization and public company shall be responsible for the accuracy, completeness, and timeliness of the information specified in Clause 2 of this Article.

4. The Vietnam Securities Depository and Central Counterparty Corporation shall promulgate regulations on securities registration activities.

Article 4. Issuance of Security Codes

1. The Vietnam Securities Depository and Central Counterparty Corporation shall issue domestic security codes and international securities identification numbers (ISIN) for all types of securities and shares registered centrally at the Vietnam Securities Depository and Central Counterparty Corporation.

2. Domestic security codes shall be uniformly used when registering securities with the Vietnam Securities Depository and Central Counterparty Corporation and listing and trading on the securities trading system.

3. International securities identification numbers shall be uniformly used for securities issued in Vietnam for trading and settlement in both domestic and international securities markets.

4. The Vietnam Securities Depository and Central Counterparty Corporation shall promulgate regulations on the issuance of domestic security codes and international securities identification numbers.

Article 5. Management of Registered Securities Information

1. The Vietnam Securities Depository and Central Counterparty Corporation shall centrally manage all information of issuing organizations and public companies registered as stipulated in Clause 2 of Article 3 of this Circular.

2. The Vietnam Securities Depository and Central Counterparty Corporation shall manage and adjust registered securities information according to the regulations on securities registration activities.

Article 6. Transfer of Ownership of Securities

1. The transfer of ownership of centrally registered securities at the Vietnam Securities Depository and Central Counterparty Corporation shall be carried out by the Vietnam Securities Depository and Central Counterparty Corporation based on the following principles:

a) Transfer of ownership of securities through transactions conducted via the securities trading system;

b) Transfer of ownership of securities outside the securities trading system for transactions that do not have a buying and selling nature or cannot be executed via the securities trading system.

2. The cases of transferring ownership of securities as provided in point b of Clause 1 of this Article include:

a) Gift or inheritance of securities as prescribed by the Civil Code;

b) Transactions involving odd-lot securities as prescribed by laws on securities and the securities market;

c) Issuing organizations and public companies purchasing shares from employees according to their share issuance regulations for employees; issuing organizations and public companies purchasing shares from preferential employees according to laws on corporate restructuring; issuing organizations and public companies purchasing shares at the request of shareholders, purchasing corresponding shares of each shareholder in proportion to their shareholding in the company as prescribed by the Enterprise Law;

d) Transfer of ownership of founder shareholders' shares during restricted transfer periods;

đ) Investors entrusting the transfer of ownership of their securities to fund management companies when such companies manage entrusted investment portfolios; fund management companies transferring ownership of entrusted securities back to investors upon changes in the terms of the investment trust agreement; fund management companies transferring ownership of entrusted securities to investors or other fund management companies upon termination of portfolio management agreements; fund management companies liquidating, bankrupting, ceasing operations, returning assets to investors, or transferring asset portfolios to other fund management companies for management; transferring ownership between fund management companies managing assets of the same investor upon the investor's request;

e) Transfer of ownership pursuant to court judgments, arbitration decisions, or enforcement agency decisions;

g) Corporate mergers, acquisitions, spin-offs, consolidations, contributions of shares to enterprises, reorganization of public service units, dissolution of enterprises, and individual businesses as prescribed by law;

h) Public tender offers; transfer of state-owned capital and state-owned enterprise investments in listed or traded organizations through auctions, competitive bidding, or book-building as prescribed by law; transfer of ownership due to public offerings by shareholders of public companies through stock exchange auctions;

i) Transfer of ownership of structured securities and fund certificates in exchange transactions with index funds; transfer of ownership of securities for issuance or cancellation of depositary receipts in transactions between investors and issuers of depositary receipts abroad;

k) Transfer of ownership of negotiable instruments on the money market at the request of the State Bank; transfer of ownership of privately placed corporate bonds.

l) Transfer of ownership in securities lending and borrowing activities as provided for in Article 40 of this Circular includes transferring ownership of securities from the lender to the borrower and vice versa, or transferring ownership of collateral securities from the borrower to the lender in case the borrower loses the ability to repay the loan; transferring ownership of securities to handle cases where the ability to settle securities transactions is lost.

m) Transfer of ownership due to the disposal of registered collateral securities at the Vietnam Securities Depository and Clearing Corporation and implementing freezing as stipulated in point c, Clause 1, Article 23 of this Circular. In cases where the transfer of ownership of securities involving foreign investors leads to changes in the proportion of foreign ownership in public companies, securities companies, or fund management companies, such transfers shall only be carried out after obtaining approval from the State Securities Commission.

n) Unrestricted transfer of ownership of freely tradable preference shares as prescribed by the Enterprise Law; transfer of ownership of securities due to the division of joint marital property as prescribed by the Marriage and Family Law.

o) Transfer of ownership of underlying securities to execute guaranteed warrants, government bond futures contracts through the method of transferring underlying securities.

p) Transfer of ownership of securities when carrying out the division, separation, merger, consolidation, or dissolution of investment funds; establishing or increasing the charter capital of individual investment securities companies; increasing or decreasing the charter capital of member funds; transfer of ownership of securities when the fund pays with securities in its repurchase operations.

Added Clause

q) Transfer of ownership of shares between foreign investors in cases where the maximum limit of foreign ownership has been reached for those shares and the agreed price among the parties is higher than the ceiling price of the shares on the securities trading system at the time of transaction.

r) Other cases of transfer of ownership of securities after obtaining approval from the State Securities Commission.

3. The State Securities Commission shall consider and approve cases of transfer of ownership of securities as specified in point r, Clause 2, Article 2 of this provision based on some or all of the following documents:

a) A letter requesting the transfer of ownership of securities outside the securities trading system.

b) Trading contract or agreement between the parties.

c) Decision of the Shareholders' Meeting or Board of Directors or Management Board or Owner of the enterprise (for domestic organizations) through the transfer of ownership of securities as prescribed by the Enterprise Law.

d) Decision of the Shareholders' Meeting of public companies, Board of Trustees of closed-end funds through not having to carry out the public tender offer procedure as stipulated in points a and b, Clause 2, Article 35 of the Securities Law.

đ) A letter stating the opinion of the issuer of the securities being transferred regarding the transfer of ownership of securities between the investors mentioned in the file.

e) Confirmation document of the depositary member (in case the securities have been deposited) or the issuer, public company (in case the securities have not been deposited) regarding the quantity of securities being transferred that the parties currently own.

g) Document of the specialized management agency with opinions on the transfer of ownership of securities of issuers, public companies operating in fields regulated by specialized laws requiring such opinions.

Article amendment and supplementation

h) License for establishment and operation or Business Registration Certificate or equivalent documents of the parties transferring ownership (if they are organizations); identity card or citizen identification card (if they are individuals).

i) Certificate of registration of securities trading code issued by the Vietnam Securities Depository and Clearing Corporation for foreign investors.

k) Power of attorney or documentation proving authority to sign the trading contract.

l) Documents of the parties transferring ownership clarifying contents related to information disclosure, public tender offers, cashless settlement, sources of funds for settlement, and other contents as required by the State Securities Commission.

4. The documents stipulated in Clause 3 of this Article must be established in one original file in Vietnamese and submitted directly or sent via postal service to the State Securities Commission. If the documents in the file are copies, they must be certified true copies issued from the original book or certified true copies authenticated by authorized agencies or organizations, or copies that have been verified to match the originals. Documents prepared in a foreign language must be accompanied by a certified translation into Vietnamese by an authorized agency; documents issued or confirmed by an authorized agency abroad must be legalized by consular certification.

Within seven working days from the date of receipt of the file, the State Securities Commission shall send a written request for modification or supplementation of the file (if necessary). Within ten working days from the date of receipt of valid files and documents, the State Securities Commission must reply in writing about the approval or rejection of the transfer of ownership of securities.

5. The party transferring ownership of securities must deposit the securities before carrying out the transfer of ownership for the cases specified in Clause 2 of this Article, except for the following cases:

a) The party transferring ownership of securities is missing, deceased, or settled abroad without contact.

b) Issuers, public companies repurchasing shares of employees according to the issuance regulations for employee shares of the company; issuers, public companies repurchasing shares of preferential buyers according to the law on shareholding.

c) Transfer of ownership pursuant to court judgments, decisions, arbitration decisions, or enforcement agency decisions.

d) Transfer of ownership due to restructuring, dissolution of enterprises, or dissolution of individual businesses where the transferring party no longer exists after completing the procedures for restructuring, dissolving enterprises, or dissolving individual businesses;

đ) Other cases after obtaining approval from the Securities Commission;

6. The Vietnam Securities Depository Corporation shall issue regulations on the operation of transferring ownership of securities.

Article 7. Cancellation of Securities Registration

1. The Vietnam Securities Depository Corporation shall cancel securities registration in the following cases:

a) Government bonds, government-guaranteed bonds, local government bonds, corporate bonds, and guaranteed warrants upon maturity;

b) Government bonds, government-guaranteed bonds, local government bonds, and corporate bonds repurchased by the issuer before maturity;

c) Issuers implementing capital reduction, dissolution, bankruptcy, or cessation of existence due to enterprise restructuring;

d) Issuers exchanging shares, government bonds, government-guaranteed bonds, local government bonds, and corporate bonds;

đ) Shares of non-public joint-stock companies that are delisted and deregistered and the company requests cancellation of securities registration;

e) Investment fund certificates and guaranteed warrants being delisted;

g) Dissolution of index funds;

h) Securities of public companies registered with the Vietnam Securities Depository Corporation but no longer meeting the criteria for public companies and the company requests cancellation of registration;

i) Issuers and public companies registered with the Vietnam Securities Depository Corporation voluntarily canceling securities registration according to agreements with the Vietnam Securities Depository Corporation;

k) Cancellation of government bonds, government-guaranteed bonds, and local government bonds due to non-payment by market makers or investors; cancellation of government bonds due to expiration of liquidity support contracts between the State Treasury and market makers or investors.

2. The cancellation of securities registration shall be carried out in accordance with the regulations on securities registration activities.

Article 8. Exercise of Rights by Security Holders

1. The Vietnam Securities Depository Corporation shall prepare a list of security holders on the final registration date, calculate and allocate rights that security holders are entitled to receive under the law based on the following documents:

a) Notification documents from issuers, public companies, or authorized organizations or individuals as stipulated by relevant laws;

b) Authorization from issuers, public companies granting the Vietnam Securities Depository Corporation the authority to act on behalf of the issuers, public companies to provide related services for securities registered with the Vietnam Securities Depository Corporation as specified in the service provision contract between the Vietnam Securities Depository Corporation and the issuers, public companies.

2. Issuers, public companies, and authorized organizations or individuals convening shareholders' meetings in accordance with the Law on Enterprises may only use the list of security holders provided by the Vietnam Securities Depository Corporation for the purposes stated in the notification document prescribed at point a, Clause 1 of this Article and bear full responsibility if they misuse it or disclose confidential information.

3. Registered security holders receive their rights and benefits through the Vietnam Securities Depository Corporation and depositary members where they have opened securities deposit accounts. Unregistered security holders receive their rights and benefits directly from the issuer, public company, or organization authorized by the issuer, public company.

4. The Vietnam Securities Depository Corporation and depositary members are responsible for exercising rights for registered and deposited security holders, and are liable for damages caused to security holders due to non-compliance with the provisions on exercising rights in this Circular and the operational regulations of the Vietnam Securities Depository Corporation within their scope of responsibility.

5. The preparation, provision, and organization of the exercise of rights by security holders shall be based on authorization from issuers, public companies, and the regulations on the exercise of rights of the Vietnam Securities Depository Corporation.

Article 9. Responsibilities of the Issuing Organization and Listed Companies with Securities Registered

1. Comply with the provisions of the law and operational regulations related to the Vietnam Securities Depository and Clearing Corporation.

2. Enter into service provision contracts with the Vietnam Securities Depository and Clearing Corporation in accordance with Article 10 of this Circular.

3. Timely and accurately provide the Vietnam Securities Depository and Clearing Corporation with information or necessary documents for the registration of securities and the exercise of rights as prescribed or when the Vietnam Securities Depository and Clearing Corporation requests in writing to clarify such information or documents; bear responsibility for the information and documents provided to the Vietnam Securities Depository and Clearing Corporation.

4. Bear responsibility for damages caused to the Vietnam Securities Depository and Clearing Corporation and security holders when failing to comply with the provisions of the law and the regulations of the Vietnam Securities Depository and Clearing Corporation, except in cases of force majeure.

5. Pay service fees to the Vietnam Securities Depository and Clearing Corporation in accordance with the regulations of the Ministry of Finance.

6. Other responsibilities as prescribed by law and the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 10. Service Provision Contracts between the Vietnam Securities Depository and Clearing Corporation and Issuing Organizations and Listed Companies

1. The service provision contract between the Vietnam Securities Depository and Clearing Corporation and issuing organizations and listed companies shall include the following main contents:

a) Services that the issuing organization and listed company authorize the Vietnam Securities Depository and Clearing Corporation to perform (services managing information on registered securities at the Vietnam Securities Depository and Clearing Corporation, services confirming the transfer of ownership of securities to security holders, services exercising the rights of security holders, other services arising from mutual agreement);

b) Rights and obligations of the Vietnam Securities Depository and Clearing Corporation, issuing organizations, and listed companies;

c) Dispute resolution;

d) Termination of the contract;

đ) Collection of service fees.

2. The Vietnam Securities Depository and Clearing Corporation shall issue a model service provision contract between the Vietnam Securities Depository and Clearing Corporation and issuing organizations and listed companies.

Chapter III

SECURITIES DEPOSITORY ACTIVITIES

Article 11. Registration of Securities Depository Activities

1. Conditions, documents, and procedures for registering securities depository activities of securities companies, commercial banks, and foreign bank branches in Vietnam shall be implemented in accordance with Articles 57, 58, and 59 of the Securities Law. The application for registration of securities depository activities and the explanation regarding the material and technical facilities ensuring the conduct of securities depository activities shall follow the models specified in Appendix I and Appendix II attached to this Circular.

2. After being granted a Certificate of Registration for Securities Depository Activities by the State Securities Commission, securities companies and commercial banks may authorize their branches to carry out securities depository activities. Securities companies and commercial banks must ensure that their branches meet the material and technical requirements for conducting securities depository activities.

3. Securities companies and commercial banks have the responsibility to report to the State Securities Commission about authorizing their branches to carry out securities depository activities, accompanied by an explanation regarding the material and technical facilities ensuring the conduct of securities depository activities at the branch according to the model specified in Appendix II attached to this Circular.

4. Within seven working days from the date of receiving the report as stipulated in Clause 3 of this Article, the State Securities Commission shall notify in writing to the securities company and commercial bank about having received the authorization report for the branch to carry out securities depository activities.

5. Within three months from the date of receiving the notification from the State Securities Commission as stipulated in Clause 4 of this Article, the securities company and commercial bank must register for securities depository activities and commence securities depository activities for the branch in accordance with the regulations of the Vietnam Securities Depository and Clearing Corporation. If, after this period, the securities company and commercial bank do not register for securities depository activities and commence securities depository activities for the branch, they must report to the State Securities Commission.

Article 12. Termination of Securities Custody Activities of Branches of Securities Companies and Commercial Banks

Clause 1. The Vietnam Securities Depository and Clearing Corporation shall terminate securities custody activities of branches of securities companies and commercial banks in the following cases:

Point a. The securities company or commercial bank has had its registration certificate for securities custody revoked.

Point b. The securities company or commercial bank voluntarily terminates securities custody activities at its branch.

Point c. The branch of the securities company or commercial bank ceases operations.

Point d. The physical and technical facilities of the branch are not adequate to conduct securities custody activities as notified by the State Securities Commission.

Clause 2. The termination of securities custody activities of branches of securities companies and commercial banks shall be carried out in accordance with the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 13. Principles of Securities Custody

Clause 1. Customer securities custody at the Vietnam Securities Depository and Clearing Corporation shall be conducted on the principle that customers deposit their securities with custodian members who then re-deposit those securities on behalf of the customers at the Vietnam Securities Depository and Clearing Corporation.

Clause 2. Custodian members accept securities deposits from customers as agents authorized by the customers to perform securities custody transactions. To deposit securities, customers must sign a securities custody account opening contract with the custodian member.

Clause 3. The Vietnam Securities Depository and Clearing Corporation accepts securities deposits from custodian members and organizations that open accounts directly. To deposit securities, custodian members and organizations that open accounts directly must open a securities custody account in their own name at the Vietnam Securities Depository and Clearing Corporation.

Article 14. Opening of Securities Custody Accounts

Clause 1. Custodian members must open a securities custody account at the Vietnam Securities Depository and Clearing Corporation to conduct transactions involving their securities. Each custodian member may only open one securities custody account at the Vietnam Securities Depository and Clearing Corporation and may not open a securities custody account at another custodian member except in the following cases:

Point a. A custodian member opens a securities custody account at a fund establishment entity to carry out transactions related to index funds.

Point b. A custodian member that is a securities company which has ceased its membership status at the Vietnam Stock Exchange is permitted to open a securities custody account at other custodian members to handle remaining securities on its proprietary trading account.

Point c. A custodian member that is not a clearing member may open a securities custody account at a clearing member for the purpose of managing collateral and executing securities transaction settlements for the custodian member.

Point d. A custodian member that is a securities company issuing warrant-secured bonds may open an additional securities custody account at the Vietnam Securities Depository and Clearing Corporation to manage risk for warrant-secured bonds.

Point e. A market maker custodian member may open an additional securities custody account at the Vietnam Securities Depository and Clearing Corporation to carry out market-making activities.

Clause 2. Direct account-opening organizations are permitted to open a securities custody account at the Vietnam Securities Depository and Clearing Corporation.

Clause 3. Opening of securities custody accounts for investors and foreign issuers of depositary receipts:

Point a. At each custodian member, an investor may only open one securities custody account.

Point b. Foreign investors open securities custody accounts in accordance with relevant laws.

Point c. Foreign issuers of depositary receipts may open a securities custody account after being assigned a stock trading code.

Clause 4. Each investment fund and securities investment company may only open one securities custody account at one designated custodial bank or supervisory bank as stipulated by relevant laws.

Clause 5. Fund management companies must open separate securities custody accounts for themselves and for each investment fund they manage. In the case of portfolio management, at each custodial bank, the fund management company may open two securities custody accounts in its own name on behalf of entrusted investors (one securities custody account for domestic entrusted clients and one securities custody account for foreign entrusted clients).

Clause 6. Branches of foreign fund management companies in Vietnam may open two securities custody accounts at custodian members, one for themselves and one for managing portfolios for foreign investors.

Clause 7. Foreign securities companies may open two separate securities custody accounts at custodian members, one for themselves and one for their clients.

Clause 8. Insurance enterprises may open two securities custody accounts to separately manage investments from their own capital and insurance premiums when investing in the securities market. If the insurance enterprise has a foreign investor holding more than 50% of its charter capital, securities deposited on the securities custody account from its own capital will be subject to regulations on foreign ownership in the securities market.

Clause 9. Foreign investment funds and foreign organizations managed by multiple fund management companies or government organizations or financial organizations belonging to international financial organizations of which Vietnam is a member may open multiple securities custody accounts based on the principle that one securities custody account is opened at the custodial bank for each issued trading code.

10. In cases where the depositary bank where the investor opens a securities deposit account is not a settlement member, the investor must open a securities deposit account at a settlement member to serve the purpose of managing collateral for settlement and executing securities transaction settlements. Supplement

11. The opening of a securities deposit account at the Vietnam Securities Depository and Central Depository Corporation shall be carried out in accordance with the regulations on securities deposit activities of the Vietnam Securities Depository and Central Depository Corporation.

Article 15. Securities Deposit Accounts of Depositary Members and Organizations Opening Accounts Directly at the Vietnam Securities Depository and Central Depository Corporation

1. To meet the management requirements of the Vietnam Securities Depository and Central Depository Corporation, the securities deposit accounts of depositary members and organizations opening accounts directly at the Vietnam Securities Depository and Central Depository Corporation include:

a) Trading securities account;

b) Suspended trading securities account;

c) Securities account for guarantee transactions;

d) Frozen and temporarily held securities account;

đ) Pending settlement securities account;

e) Pending receipt securities account;

g) Securities account for lending;

h) Securities account pledged for a securities loan at the Vietnam Securities Depository and Central Depository Corporation;

i) Collateral settlement account when the depositary member is also a settlement member of the Vietnam Securities Depository and Central Depository Corporation;

k) Other accounts according to the regulations of the Vietnam Securities Depository and Central Depository Corporation.

2. The securities deposit accounts of depositary members mentioned in Clause 1 of this Article are classified as follows:

a) Account of the depositary member itself;

b) Domestic customer account of the depositary member;

c) Foreign customer account of the depositary member.

3. The securities deposit accounts of depositary members and organizations opening accounts directly at the Vietnam Securities Depository and Central Depository Corporation include the following contents:

a) Securities deposit account number;

b) Name and address of the depositary member, organization opening the account directly;

c) Quantity, type, and code of deposited securities;

d) Increase or decrease in the quantity of securities and reasons for such changes;

đ) Other necessary information.

Article 16. Management of Securities Deposit Accounts at the Vietnam Securities Depository and Central Depository Corporation

1. The Vietnam Securities Depository and Central Depository Corporation manages securities deposit accounts according to the following principles:

a) Securities deposited at the Vietnam Securities Depository and Central Depository Corporation are assets belonging to customers, managed separately from the assets of the Vietnam Securities Depository and Central Depository Corporation;

b) The Vietnam Securities Depository and Central Depository Corporation may only use customer securities in the cases specified in Points h, i, k, l, m of Clause 1 of Article 156 of Decree No. .../2020/ND-CP dated ... month ... year issued by the Government detailing the implementation of certain provisions of the Securities Law.

2. The Vietnam Securities Depository and Central Depository Corporation shall only record transactions on securities deposit accounts when the accounting vouchers are complete, valid, and original.

3. The total balance on the securities deposit accounts of customers opened at depositary members must always match the balance on the securities deposit accounts of depositary members opened at the Vietnam Securities Depository and Central Depository Corporation. The detailed balance on the securities deposit account of each customer at the depositary member must match the ownership data of that customer at the Vietnam Securities Depository and Central Depository Corporation.

4. When there is any change or error in the information of the securities deposit account, the depositary member, organization opening the account directly has the obligation to report and adjust immediately with the Vietnam Securities Depository and Central Depository Corporation. Adjustments to the information of the securities deposit account shall be carried out in accordance with the regulations on deposit activities of the Vietnam Securities Depository and Central Depository Corporation.

5. Upon discovering errors in the information of the securities deposit account of the depositary member, the organization opening the account directly, or the customer of the depositary member, the Vietnam Securities Depository and Central Depository Corporation must immediately notify the depositary member, the organization opening the account directly, and these organizations have the responsibility to make appropriate adjustments.

Article 17. Customer's Securities Custody Account at a Depository Member

1. To meet the management requirements of the depository member, the securities custody account of the customer opened at the depository member shall include:

a) Trading securities account;

b) Suspended trading securities account;

c) Securities account for guarantee transactions;

d) Frozen and temporarily held securities account;

đ) Pending settlement securities account;

e) Pending receipt securities account;

g) Securities account for lending;

h) Securities account pledged for a securities loan at the Vietnam Securities Depository and Central Depository Corporation;

i) Collateral settlement account when the depositary member is also a settlement member of the Vietnam Securities Depository and Central Depository Corporation;

k) Other accounts according to the regulations of the Vietnam Securities Depository and Central Depository Corporation.

2. The securities custody account of the customer opened at the depository member shall include the following contents:

a) Securities deposit account number;

b) Name and contact address of the customer who is the account holder;

Article amendment and supplementation

c) Number and date of issuance of identification card or citizen identity card for individual customers who are Vietnamese citizens; number and date of issuance of business registration certificate, license for establishment and operation or equivalent documents for domestic organization customers; number and date of issuance of securities trading code registration certificate for foreign investor customers;

d) Quantity, type and code of securities held in custody;

đ) Quantity of increased or decreased securities held in custody and reasons for such increase or decrease;

e) Other necessary information.

3. For the management of investment portfolios of fund management companies, the securities custody account at the depository bank must have complete information about the entrusted customer as stipulated in points b, c, d, đ and e of Clause 2 of this Article.

Article 18. Management of Securities Custody Accounts at Depository Members

1. Depository members must manage the securities custody accounts of customers according to the following principles:

a) Depository members must open detailed securities custody accounts for each customer and manage assets separately for each customer;

b) Securities held in custody of customers at depository members are assets owned by customers and are managed separately from the assets of the depository member;

c) Depository members may only use securities in the securities custody accounts of customers in the following cases:

- When the depository member is a securities company processing securities on the customer's account in margin transactions in accordance with the provisions of the law, or processing securities on the customer's account in accordance with the commitments and agreements between the customer and the depository member or other organizations or individuals, or processing securities on the customer's account in accordance with the written instructions or authorization of the customer;

- When the depository member is a clearing member processing securities in the customer's margin account to ensure the ability to settle securities transactions, repay used support sources, and compensate financial losses in case the customer loses the ability to settle securities transactions.

d) Depository members are responsible for promptly and fully informing customers of any rights arising from securities held in custody;

đ) Depository members are responsible for updating daily information on opening and closing securities custody accounts of customers at depository members for the Vietnam Securities Depository and Clearing Corporation and performing reconciliation of the balance of securities custody accounts of each customer with the ownership data of customers at the Vietnam Securities Depository and Clearing Corporation based on the ownership data of customers provided by the Vietnam Securities Depository and Clearing Corporation to the depository member. Information updates and balance reconciliations are carried out in accordance with the regulations on custody activities of the Vietnam Securities Depository and Clearing Corporation.

2. Upon request of the customer, the depository member must send a copy of the securities custody account statement to each customer within the agreed period; in case there is no agreement on the period, the depository member must send a copy of the securities custody account statement to the customer within one working day from the date the customer requests.

3. Customers are obliged to immediately notify the depository member of any changes or errors in the information of the securities custody account of the customer at the depository member.

Article 19. Effectiveness of Securities Custody

1. The custody of securities at the Vietnam Securities Depository and Clearing Corporation becomes effective from the moment the Vietnam Securities Depository and Clearing Corporation records on the securities custody account of the custodian member or directly opening organization's account at the Vietnam Securities Depository and Clearing Corporation.

2. The bookkeeping entries for transferring securities between securities custody accounts of custodian members, directly opening organizations, or depositors at the Vietnam Securities Depository and Clearing Corporation shall have legal effect equivalent to the transfer of physical securities certificates and be recognized by law.

Article 20. Deposit of Securities

1. The deposit of securities, excluding government debt instruments, government-guaranteed bonds, and local government bonds, by customers at the Vietnam Securities Depository and Clearing Corporation shall be carried out according to the following principles:

a) Customers deposit securities with the Vietnam Securities Depository and Clearing Corporation through the custodian member where they open their securities custody account;

b) The custodian member is responsible for processing the receipt of customer's deposited securities and re-depositing them into the Vietnam Securities Depository and Clearing Corporation within one working day from the date of receiving the valid application from the customer;

c) The Vietnam Securities Depository and Clearing Corporation is responsible for processing the deposited securities application within one working day from the date of receiving the valid application from the custodian member;

2. Custodian members, directly opening organizations, and customers who deposit invalid securities, counterfeit securities, reported lost securities, or securities without sufficient information as required shall bear responsibility for the deposit of such securities and must compensate related parties for losses caused by the custody of these securities.

3. The Vietnam Securities Depository and Clearing Corporation shall implement the request to deposit securities for shareholders of the issuing organization when requested by the issuing organization representing the shareholders.

4. The Vietnam Securities Depository and Clearing Corporation shall record securities into the securities custody account of the custodian member, directly opening organization, or the depositor's related custodian member in cases of depositing government debt instruments, government-guaranteed bonds, local government bonds, and depositing additional shares or fund certificates registered from previously deposited securities at the Vietnam Securities Depository and Clearing Corporation.

5. The deposit of securities shall be carried out in accordance with the regulations on securities custody operations of the Vietnam Securities Depository and Clearing Corporation.

Article 21. Withdrawal of Securities

1. Withdrawal of securities upon customer's request:

a) Customers may only request the withdrawal of securities within the quantity of securities owned on their securities custody accounts, except for those temporarily held, frozen, or pledged for margin;

b) The custodian member must submit the securities withdrawal application to the Vietnam Securities Depository and Clearing Corporation within one working day from the date of receiving the valid application from the customer;

c) The Vietnam Securities Depository and Clearing Corporation is responsible for processing the securities withdrawal application within one working day from the date of receiving the valid application from the custodian member;

d) The ownership information of the investor withdrawing securities will be recorded in the list of non-custodied security holders;

e) The issuing organization is responsible for reissuing the ownership certificate or ownership book for the holder of withdrawn securities if the issuing organization has issued ownership certificates or ownership books.

2. The withdrawal of securities due to the expiration of the securities' validity period or voluntary delisting of securities shall be carried out according to the principle that the Vietnam Securities Depository and Clearing Corporation automatically reduces the number of securities in the securities custody account of custodian members after the issuing organization completes the delisting process at the Vietnam Securities Depository and Clearing Corporation.

3. The withdrawal of securities deposited at the Vietnam Securities Depository and Clearing Corporation shall be carried out in accordance with the regulations on securities custody operations of the Vietnam Securities Depository and Clearing Corporation.

Article 22. Securities Transfer

1. The transfer of securities for settlement of securities transactions shall be carried out through the securities trading system in accordance with the provisions on netting and settlement of securities transactions.

2. The Vietnam Securities Depository and Clearing Corporation shall carry out the transfer of deposited securities outside the securities trading system and not linked to the transfer of ownership of securities in the following cases:

a) A customer transfers securities from their securities deposit account at this depository member to their own securities deposit account or margin account at another depository member;

b) The transfer of negotiable instruments between securities deposit accounts of the same investor to facilitate transactions in the money market;

c) The transfer of securities to implement risk management activities for guaranteed warrant issued by a securities company issuing such warrants; the transfer of securities to implement market-making activities by market makers;

d) The transfer of securities due to portfolio transfer between securities deposit accounts of the same investor upon the request of that investor;

đ) The transfer of securities due to changes in information about the type of securities, correction of errors in the quantity of owned securities, change in state capital representative; the transfer of securities due to changes in foreign ownership ratio or changes in nationality leading to a change from domestic investor to foreign investor and vice versa;

e) The transfer when the depository member where the customer has opened an account is revoked of the Certificate of Registration for Securities Deposit Activities by the State Securities Commission, withdraws brokerage services, or is revoked of the Member Certificate by the Vietnam Securities Depository and Clearing Corporation; the transfer when the clearing member is revoked of the Certificate of Eligibility to Provide Clearing and Settlement Services for Securities Transactions by the State Securities Commission;

g) When the direct account-opening organization terminates its service provision contract with the Vietnam Securities Depository and Clearing Corporation.

h) The direct account-opening organization transfers securities from its own securities deposit account at the Vietnam Securities Depository and Clearing Corporation to its own securities deposit account or margin account at a depository member and vice versa.

3. The Vietnam Securities Depository and Clearing Corporation shall carry out the transfer of deposited securities linked to the transfer of ownership of securities outside the securities trading system for the cases stipulated in Clause 2 of Article 6 of this Circular and other transfer cases after obtaining the opinion of the State Securities Commission.

4. Depository members must submit the securities transfer file to the Vietnam Securities Depository and Clearing Corporation within one working day from the date of receiving the valid customer file.

5. The Vietnam Securities Depository and Clearing Corporation is responsible for processing the securities transfer file within one working day for the cases stipulated in points a, b, c, d, đ, h of Clause 2 of this Article and a maximum of five working days for the cases stipulated in points e, g of Clause 2 and Clause 3 of this Article from the date of receiving the valid file.

6. The transfer of securities at the Vietnam Securities Depository and Clearing Corporation shall be carried out in accordance with the regulations on securities deposit activities of the Vietnam Securities Depository and Clearing Corporation.

Article 23. Freezing and Unfreezing of Securities

1. The Vietnam Securities Depository and Central Counterparty Corporation shall carry out freezing and unfreezing of securities in the following cases:

a) Freezing and unfreezing of securities at the request of competent state agencies;

b) Freezing and unfreezing of securities at the request of investors;

c) Freezing and unfreezing of investors' securities used to guarantee the performance of obligations in security transactions.

2. In the case provided for in point a of Clause 1 of this Article, the Vietnam Securities Depository and Central Counterparty Corporation shall only carry out freezing and unfreezing of securities after receiving a written request from the competent state agency in accordance with the provisions of the law.

After freezing and unfreezing securities on securities deposit accounts, the Vietnam Securities Depository and Central Counterparty Corporation shall be responsible for notifying the depositary members and organizations directly implementing the freezing and unfreezing of securities, and informing related customers of the depositary members.

3. In the case provided for in point b of Clause 1 of this Article, the Vietnam Securities Depository and Central Counterparty Corporation shall carry out freezing and unfreezing of investors' securities upon receipt of a request from the investor sent to the Vietnam Securities Depository and Central Counterparty Corporation through the depositary member where the investor's securities are deposited, to implement the freezing and unfreezing.

Frozen securities are freely transferable securities that are not frozen, temporarily held, or pledged. The Vietnam Securities Depository and Central Counterparty Corporation shall be responsible for processing the freezing and unfreezing of securities within one working day from the date of receiving a valid application. The freezing and unfreezing of securities at the request of investors shall be carried out in accordance with the regulations on securities deposit activities of the Vietnam Securities Depository and Central Counterparty Corporation.

4. In the case provided for in point c of Clause 1 of this Article, the Vietnam Securities Depository and Central Counterparty Corporation shall act in accordance with the regulations on registering security pledges for centrally registered securities at the Vietnam Securities Depository and Central Counterparty Corporation.

Chapter IV

SECURITIES SETTLEMENT AND CLEARING ACTIVITIES UNDER THE CENTRAL COUNTERPARTY MECHANISM

Article 24. Principles of Settlement and Clearing of Securities Transactions

1. The Vietnam Securities Depository and Central Counterparty Corporation shall perform multilateral netting to determine the settlement obligations of securities transactions according to the following principles:

a) Securities netting shall be performed on a per-security basis and separately for domestic customer brokerage accounts, foreign customer brokerage accounts, and proprietary trading accounts of clearing members;

b) Cash netting shall be performed for each clearing member based on the netting of amounts received and paid for transactions with the same payment time and method on the securities trading system, and separately for domestic customer brokerage accounts, foreign customer brokerage accounts, and proprietary trading accounts of clearing members.

2. The transfer of securities settlement at the Vietnam Securities Depository and Central Counterparty Corporation and cash settlement at the settlement bank shall be based on the securities and cash settlement obligations determined by the Vietnam Securities Depository and Central Counterparty Corporation.

3. Clearing members shall be responsible for fully performing their clients' obligations towards the Vietnam Securities Depository and Central Counterparty Corporation as authorized representatives of their clients, including transactions of non-clearing members and their clients.

4. Within twelve months from the date of officially launching securities settlement and clearing activities under the central counterparty mechanism, depositary members shall be permitted to participate in securities settlement and clearing activities as direct clearing members, exercising rights and obligations of clearing members in providing securities settlement and clearing services under the central counterparty mechanism in accordance with the law and regulations of the Vietnam Securities Depository and Central Counterparty Corporation.

5. The Vietnam Securities Depository and Central Counterparty Corporation shall ensure the ability to settle securities transactions through the payment guarantee mechanisms stipulated in Article 35 of this Circular.

6. The Vietnam Securities Depository and Central Counterparty Corporation shall promulgate regulations on securities settlement and clearing activities.

Article 25. Investor's Margin Account

1. The clearing member shall open for the investor a margin account to manage the collateral and fulfill the settlement obligations of securities transactions of the investor according to the principle that each transaction account opened for the investor corresponds to one margin account. Securities companies that are not clearing members and their clients must open a margin account to manage the collateral and fulfill settlement obligations at a common clearing member based on a tripartite agreement between the securities company and the common clearing member.

In the case where the investor has a securities custody account at a non-clearing member custodian bank, the investor shall open both a securities trading account and a margin account with a clearing member securities company to manage the collateral and fulfill the settlement obligations of securities transactions.

2. When the collateral is cash, the clearing member must open a deposit account in the name of the clearing member at a bank to perform the margin and manage the deposits separately for the investor’s margin. When the collateral is securities, the clearing member manages the securities directly on the investor's securities custody account at Vietnam Securities Depository Corporation.

3. The investor's margin account may only be used for the following activities:

a) Receiving and returning collateral to the investor;

b) Receiving or paying the transaction amount of the investor's securities transactions, receiving payment of interest on bank deposits at the agreed rate between the clearing member and the bank managing the account;

c) Receiving or transferring securities on the settlement date, receiving rights and interests arising from securities on the margin account according to the guidelines set out in the regulations of Vietnam Securities Depository Corporation.

Article 26. Investor's Margin

1. Prior to executing securities transactions, the investor must have sufficient collateral as required by the clearing member, as stipulated by laws governing securities transactions, settlement, and securities transaction clearance for the anticipated transactions. The investor's margin is made up of either cash or securities owned by the investor. Collateral securities must meet the conditions specified in Clause 3, Article 29 of this Circular and be accepted by the clearing member.

2. The investor must maintain margin for unsettled transactions and must replenish collateral when the value of the collateral is lower than the required margin or when the balance of the margin deposit does not meet the minimum margin ratio in cash as required by the clearing member. Depending on market conditions, the clearing member has the right to request the investor to replenish margin during the trading session. The level of additional margin and the period for replenishing margin are carried out according to the guidance of the clearing member.

3. When the investor initially deposits or replenishes margin, the clearing member may require the investor to fully deposit margin in cash or allow the investor to partially deposit margin in acceptable securities but ensuring it does not exceed 40% of the value of the collateral. The investor may withdraw excess collateral if the value of the collateral exceeds the required margin as determined by the clearing member.

4. Money and securities in the investor's margin account belong to the investor and not to the clearing member. The clearing member may only use money and securities in the investor's margin account in accordance with Clause 5, Article 30 of this Circular.

Article 27. Settlement Guarantee Fund Accounts of Settlement Members

1. The Vietnam Securities Depository and Clearing Corporation shall be responsible for opening settlement guarantee fund deposit accounts in the name of the Vietnam Securities Depository and Clearing Corporation at payment banks and settlement securities guarantee fund accounts in the name of the Vietnam Securities Depository and Clearing Corporation at the Vietnam Securities Depository and Clearing Corporation to manage the settlement guarantee funds for the securities transactions of settlement members and their clients as stipulated in Clause 3, Article 24 of this Circular.

2. At payment banks, the Vietnam Securities Depository and Clearing Corporation shall open three settlement guarantee fund deposit accounts and three payment deposit accounts in the name of the Vietnam Securities Depository and Clearing Corporation for each settlement member to separately manage the settlement guarantee funds and execute payments for proprietary trading, domestic brokerage client transactions, and foreign brokerage client transactions.

3. The settlement guarantee fund account of a settlement member can only be used for activities related to receiving and returning settlement guarantee funds. Assets on this account include both assets of clients that the settlement member uses to provide settlement guarantees for the clients' own securities transactions and interest from bank deposits received. Money and securities arising from exercising rights over securities in the settlement securities guarantee fund account shall be allocated according to the regulations of the Vietnam Securities Depository and Clearing Corporation.

4. The settlement guarantee fund account of a settlement member must be established by the Vietnam Securities Depository and Clearing Corporation to ensure separate management of the settlement member's assets from those of the Vietnam Securities Depository and Clearing Corporation; separate assets and payment balances of each settlement member; and separation from the settlement guarantee funds of the derivatives market.

5. The Vietnam Securities Depository and Clearing Corporation shall be responsible for establishing a comprehensive system to manage information on payment obligations, payment values, required settlement guarantee levels, and the value and portfolio of settlement guarantee assets for each settlement member.

6. The Vietnam Securities Depository and Clearing Corporation has the right to request settlement members to provide detailed information about transaction accounts (in cases where the settlement member is a trading member of the Vietnam Stock Exchange), settlement guarantee fund accounts, and the value and portfolio of settlement guarantee assets for each investor.

Article 28. Settlement Guarantees of Settlement Members

1. The settlement guarantees of settlement members with the Vietnam Securities Depository and Clearing Corporation shall be carried out as follows:

a) Settlement members must timely and fully submit settlement guarantees to the Vietnam Securities Depository and Clearing Corporation for all unsettled securities transactions under their names, including transactions conducted by themselves and their clients;

b) Settlement members must supplement settlement guarantee assets when the value of the settlement guarantee assets does not meet the required settlement guarantee level or the balance of the settlement guarantee deposit does not ensure the minimum margin ratio in cash calculated by the Vietnam Securities Depository and Clearing Corporation for all unsettled securities transactions under the settlement member's name, and may withdraw settlement guarantee assets if the value of the settlement guarantee assets exceeds the required settlement guarantee level;

c) The settlement guarantee assets of settlement members include money and securities accepted by the Vietnam Securities Depository and Clearing Corporation for settlement guarantees. The cash margin ratio is implemented according to the regulations of the Vietnam Securities Depository and Clearing Corporation, ensuring it is not less than 90% of the value of the settlement guarantee assets. The required settlement guarantee level for unsettled securities transactions under the settlement member's name is calculated daily by the Vietnam Securities Depository and Clearing Corporation based on risk margin value, fluctuation margin value, and market risk adjustment.

2. The Vietnam Securities Depository and Clearing Corporation shall determine the required settlement guarantee levels for unsettled securities transactions according to the settlement member, type of security, and separately for proprietary trading, domestic brokerage, and foreign brokerage activities. In case a settlement member fails to timely and fully submit additional settlement guarantees as required, the Vietnam Securities Depository and Clearing Corporation may take the following measures:

a) Request the Vietnam Stock Exchange to suspend trading activities of the violating settlement member and the non-settlement member who has entrusted settlement and payment through the settlement member;

b) Refuse to act as guarantor for transactions of the settlement member and the non-settlement member who has entrusted settlement and payment through the settlement member after the Vietnam Securities Depository and Clearing Corporation has requested the Vietnam Stock Exchange to suspend the trading activities of such member;

c) Handle violations of the violating settlement member according to the regulations of the Vietnam Securities Depository and Clearing Corporation.

3. The Vietnam Securities Depository and Clearing Corporation shall not implement term deposits for settlement guarantee deposits of settlement members. Interest on non-term deposits will be returned to the settlement member according to the announced interest rate of the payment bank.

4. Determination of types of settlement guarantees, methods of calculating settlement guarantees, calculation parameters, types of assets approved for settlement guarantees, procedures for submitting and withdrawing settlement guarantees, margin ratios, minimum cash margin ratios, exercise of rights related to securities in settlement guarantee accounts, and other related matters shall be carried out according to the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 29. Collateral Securities

1. Investors and clearing members may use money and securities that meet the conditions set forth in Clauses 2 and 3 of this Article to perform collateral securities transactions.

2. Securities accepted by Vietnam Securities Depository and Central Depository Corporation as collateral securities for securities transactions must satisfy the following conditions:

a) Not belonging to the type that has been warned, controlled, suspended from trading on the stock exchange or securities issued by organizations undergoing liquidation, bankruptcy, merger, or consolidation;

b) Not being collateral assets in transactions under civil law regulations on collateral transactions, including collateral assets in margin lending transactions at securities companies; not being assets currently frozen by state management agencies according to relevant laws;

c) Not being frozen or temporarily held by Vietnam Securities Depository and Central Depository Corporation;

d) Belonging to the freely transferable category and already deposited in trading securities accounts at Vietnam Securities Depository and Central Depository Corporation; being assets owned by the collateral provider who is an investor or clearing member;

đ) Other conditions stipulated in the charter of Vietnam Securities Depository and Central Depository Corporation.

3. Securities selected by clearing members to allow investors to submit as collateral securities must ensure:

a) Meeting the conditions prescribed in Points a, b, c, and d of Clause 2 of this Article;

b) Meeting other conditions of the clearing member.

4. Vietnam Securities Depository and Central Depository Corporation and clearing members have the responsibility to publish lists of securities approved for collateral and the discount rate of each security on their electronic information websites. In case of changes to approved collateral securities, investors and clearing members shall replace them with money or other approved collateral securities upon request of Vietnam Securities Depository and Central Depository Corporation and clearing members.

5. During the period of collateral transactions, investors and clearing members still enjoy rights and benefits arising from collateral securities according to corporate law, securities law, and the charter of Vietnam Securities Depository and Central Depository Corporation.

6. During the period of collateral transactions, investors and clearing members are not allowed to transfer, gift, mortgage, pledge, register as collateral assets, or use collateral assets for other purposes.

Article 30. Management of Collateral Accounts and Collateral Assets of Investors and Clearing Members

1. Clearing members must manage collateral accounts and collateral assets separately for each investor; separate from their own collateral accounts and collateral assets; and separate collateral accounts and collateral assets from the derivatives market.

2. Clearing members can only use collateral assets in investors' collateral accounts to guarantee payment obligations and execute payments for the investors' securities transactions, not for their own or other investors' transactions, not as collateral assets or for other payment purposes, not as collateral for their loans, except as provided in Clause 5 of this Article. Interest on deposits is refunded to investors at the non-interest-bearing rate announced by the bank.

3. Collateral assets of investors must be managed separately and cannot be considered as assets of clearing members, even if they have been pledged in clearing members' collateral accounts.

4. In case of liquidation or bankruptcy of clearing members, investors' collateral assets are not the assets of clearing members and cannot be used for liquidation or bankruptcy resolution according to the law, nor can they be distributed to clearing members' creditors or shareholders in any form. Clearing members are responsible for immediately refunding remaining collateral assets to investors after completing their payment obligations.

5. Daily and during trading sessions with significant fluctuations in security prices, clearing members calculate required collateral levels, re-evaluate the value of collateral assets, ensuring investors maintain collateral according to agreements in contracts and legal provisions. If investors lose the ability to settle securities transactions, clearing members may use, sell, or transfer collateral assets without investor approval. Within one working day after handling collateral assets, clearing members must notify investors about the handling of collateral assets according to agreed methods. The notification must clearly state the reasons, types of assets handled, methods, times, and values.

6. Vietnam Securities Depository and Central Depository Corporation has the right to use collateral assets submitted by investors and clearing members to fulfill investors' and clearing members' obligations according to Point m of Clause 1 of Article 156 of Decree No. .../2020/ND-CP dated ... month ... year of the Government detailing implementation of certain provisions of the Securities Law. Within one working day after handling collateral assets, Vietnam Securities Depository and Central Depository Corporation must notify clearing members in writing about the handling of collateral assets. The notification must clearly state the reasons, types of assets handled, methods and times of handling, and actual values.

Article 31. Margin Deposits for Settlement and Securities Transactions of Direct Account Openers and Customers of Depositary Banks

1. Direct account openers and customers of depositary banks must comply with requirements for securities transactions and make margin deposits for settlement before engaging in securities transactions in accordance with laws governing securities transactions, settlement, and clearing of securities transactions.

2. In cases where there is an agreement with a central counterparty, direct account openers may manage their own margin deposits for settlement on their depositary accounts; depositary banks that are not central counterparties may manage margin deposits for settlement, which consist of money and securities of customers on customer depositary accounts at such depositary banks, but settlement and clearing of securities transactions of direct account openers and customers of depositary banks must be conducted through margin deposit accounts opened at central counterparties.

3. Central counterparties shall be responsible for all margin deposit and settlement obligations of direct account openers and customers of depositary banks that are not central counterparties towards Vietnam Securities Depository and Clearing Corporation, even if there are agreements regarding management of margin deposits and settlement of securities transactions with direct account openers and depositary banks.

4. Depositary banks that are central counterparties shall fully fulfill the responsibilities of central counterparties as stipulated in Clause 3, Article 24 of this Circular and shall only have the right to refuse to confirm securities transaction settlements in cases where securities companies placing orders are central counterparties that incorrectly enter investor order information or place orders without confirmation or guarantee from depositary banks. In such cases, the securities company acting as a central counterparty shall bear responsibility for correcting errors in investor transactions in accordance with Article 33 of this Circular.

Article 32. Positioning, Reconciliation, and Confirmation of Transactions

1. After receiving transaction results from stock exchanges, Vietnam Securities Depository and Clearing Corporation shall check the validity of transactions before conducting transaction positioning. Vietnam Securities Depository and Clearing Corporation has the right to refuse to position and exclude payment for invalid transactions as provided for in Clause 1, Article 37 of this Circular.

2. Vietnam Securities Depository and Clearing Corporation shall notify lists of valid transactions to central counterparties for reconciliation and confirmation.

3. Central counterparties shall reconcile detailed transactions with lists of valid transactions sent by Vietnam Securities Depository and Clearing Corporation and reconfirm them to Vietnam Securities Depository and Clearing Corporation in accordance with Vietnam Securities Depository and Clearing Corporation's regulations.

Article 33. Post-Transaction Error Correction

1. Vietnam Securities Depository and Clearing Corporation shall correct post-transaction errors in the following cases:

a) A central counterparty, which is a securities company, mistakenly places orders for clients such as entering incorrect client account numbers, incorrect security codes, incorrect prices, duplicate orders, confusing buy orders with sell orders and vice versa, or incorrect quantities of securities;

b) A central counterparty fails to monitor client securities and cash balances as required, leading to insufficient securities or funds for settlement of securities transactions;

c) The total quantity of securities sold does not match the total quantity of securities purchased due to discrepancies in the number of securities sold versus purchased across executed trading orders on the same day by investors;

d) A securities company acting as a central counterparty places orders for clients of depositary banks without confirmation or incorrectly according to depositary bank confirmation information;

đ) Client accounts lacking securities up to the specified time without notifying or confirming with Vietnam Securities Depository and Clearing Corporation;

e) Transactions missing client account information.

2. Post-transaction error correction by Vietnam Securities Depository and Clearing Corporation shall be carried out based on the following principles:

a) Vietnam Securities Depository and Clearing Corporation shall correct self-trading account errors upon request from central counterparties for cases specified in points a, b, and c of Clause 1 of this Article;

b) For the case specified in point d of Clause 1 of this Article, Vietnam Securities Depository and Clearing Corporation shall correct self-trading account errors of securities companies after depositary banks refuse to confirm securities transaction settlements of clients;

c) For the case specified in point đ of Clause 1 of this Article, Vietnam Securities Depository and Clearing Corporation shall correct self-trading account errors of central counterparties without needing approval from central counterparties;

d) For the case specified in point e of Clause 1 of this Article, Vietnam Securities Depository and Clearing Corporation shall correct errors to the correct client accounts updated within the specified period. After this period, for transactions missing client account information, Vietnam Securities Depository and Clearing Corporation shall correct self-trading account errors of central counterparties.

3. If a central counterparty cannot correct errors without a self-trading account, Vietnam Securities Depository and Clearing Corporation will open a temporary self-trading account for the central counterparty to record securities received or to be returned due to corrections. The implementation mechanism is as follows:

a) When receiving securities from corrections, the central counterparty is obligated to immediately sell the received securities back into the nearest trading session for Vietnam Securities Depository and Clearing Corporation to close the account;

b) When returning borrowed securities to lenders, the central counterparty may maintain the self-trading account until fulfilling obligations to the securities lender.

4. In the case where correcting errors leads to exceeding the maximum foreign ownership ratio as prescribed, the settlement member shall be responsible for selling a portion or all of the securities received from the error correction transaction during the nearest trading session to reduce the foreign ownership ratio to the prescribed level.

5. For errors not falling under the cases stipulated in Clause 1 of this Article, the Vietnam Securities Depository and Clearing Corporation shall consider and handle such errors after obtaining approval from the State Securities Commission.

6. A settlement member who loses settlement capability due to post-trade error correction shall have support mechanisms for settlement applied as prescribed in Article 35 of this Circular.

7. The Vietnam Securities Depository and Clearing Corporation shall be responsible for notifying the Stock Exchange of post-trade error correction transactions.

8. Post-trade error correction shall be carried out in accordance with the guidelines set forth in the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 34. Handling Errors in Proprietary Trading Transactions

1. In the event that a settlement member, which is a securities company, incorrectly enters account numbers or proprietary trading orders into the securities trading system, the Vietnam Securities Depository and Clearing Corporation shall make corresponding adjustments to the correct proprietary trading account numbers and orders of the securities company and depositary bank to facilitate settlement and payment of securities transactions.

2. In the event that a settlement member, which is a securities company, incorrectly enters orders leading to insufficient securities for payment or if a fund swap portfolio manager lacks securities or fund swap portfolio certificates for payment due to unsuccessful fund swaps as regulated by the fund swap portfolio management rules, then the support mechanisms for settlement as prescribed in Article 35 of this Circular shall apply.

3. The Vietnam Securities Depository and Clearing Corporation shall be responsible for notifying the Stock Exchange of transactions to rectify errors after the trade.

Added Clause

Article 35. Handling Cases of Loss of Settlement Capability for Securities Transactions

1. A settlement member or client of a settlement member shall be deemed to have lost the ability to settle securities transactions when they fall under any of the following circumstances:

a) Failing to timely perform or fully fulfill the margin requirements for settlement and payment of securities transactions as prescribed in the regulations of the Vietnam Securities Depository and Clearing Corporation;

b) Being declared bankrupt or undergoing bankruptcy proceedings as prescribed by laws on corporate bankruptcy;

c) Other circumstances as prescribed in the regulations of the Vietnam Securities Depository and Clearing Corporation.

2. In the case of insufficient funds, the Vietnam Securities Depository and Clearing Corporation may utilize available support sources to ensure settlement of securities transactions when a settlement member or client of a settlement member has lost the ability to settle securities transactions in the following sequence:

a) Utilizing the settlement margin of the settlement member who has lost the ability to settle securities transactions according to the procedures prescribed in the regulations of the Vietnam Securities Depository and Clearing Corporation;

b) Utilizing the contribution to the settlement fund in cash of the settlement member who has lost the ability to settle securities transactions when the settlement margin of the settlement member is insufficient to cover the payment obligation;

c) Implementing the utilization, sale, or transfer of collateral provided by the settlement member or investor who has lost the ability to settle securities transactions, and securities contributions to the settlement fund by the settlement member who has lost the ability to settle securities transactions according to the regulations of the Vietnam Securities Depository and Clearing Corporation;

d) Utilizing the contribution to the settlement fund of other settlement members at a ratio determined by the Vietnam Securities Depository and Clearing Corporation. In this case, the Vietnam Securities Depository and Clearing Corporation shall notify other settlement members about the use of the settlement fund to ensure settlement on the day of use. The settlement member who has lost the ability to settle securities transactions shall be responsible for repaying the entire amount of the utilized settlement fund assets and paying interest to other settlement members at the rate prescribed by the Vietnam Securities Depository and Clearing Corporation;

e) Utilizing the Risk Management Fund and other lawful capital sources of the Vietnam Securities Depository and Clearing Corporation after obtaining approval from the Ministry of Finance.

3. In the case of insufficient securities due to post-trade error correction or handling proprietary trading errors, the settlement member shall apply support measures in the following sequence:

a) Borrowing securities through the securities lending and borrowing system managed by the Vietnam Securities Depository and Clearing Corporation;

b) If, at the time of payment as prescribed, the settlement member still does not have sufficient securities for payment, the Vietnam Securities Depository and Clearing Corporation shall extend the payment deadline for the shortfall of securities of the settlement member to continue applying the support mechanism for insufficient securities as prescribed in point a or point c of this clause. The extension of the payment deadline shall be carried out in accordance with Article 36 of this Circular;

c) Compulsory purchase through the securities trading system. The compulsory purchase transaction shall be settled on the same day and netted together with transactions having the same settlement date through the system of the Vietnam Securities Depository and Clearing Corporation;

4. The Vietnam Securities Depository and Clearing Corporation may settle in cash for transactions with insufficient securities in the following cases:

a) The settlement date is the final registration date for exercising rights that generate material benefits, and the settlement member fails to complete the borrowing or compulsory purchase of securities within the prescribed period;

b) The insufficient securities are not permitted to be borrowed or compulsorily purchased according to the regulations of the Vietnam Securities Depository and Clearing Corporation and the Vietnam Stock Exchange;

c) The settlement member has applied the support measures prescribed in Clause 3 of this Article but still lacks sufficient securities for payment.

5. In the event that a clearing member loses the ability to settle securities transactions, the customer of such clearing member who also loses the ability to settle securities transactions must repay the sources of support used as prescribed in Clause 2 of this Article in the following sequence:

a) The legitimate capital of Vietnam Securities Depository and Clearing Corporation;

b) The operational risk prevention fund of Vietnam Securities Depository and Clearing Corporation;

c) Contributions from other clearing members in the clearing fund;

d) Contributions from the clearing member itself which has lost the ability to settle securities transactions in the clearing fund.

6. Vietnam Securities Depository and Clearing Corporation may utilize, sell, transfer existing securities, securities pending receipt from previous purchase transactions on proprietary trading accounts, market-making accounts of the clearing member that has lost the ability to settle funds; securities pending receipt from previous purchase transactions lacking funds on the account of the investor that has lost the ability to settle funds to repay the sources of support used and to cover related incidental costs.

In cases where it is not possible to sell, utilize, or transfer the aforementioned existing securities, pending securities, or if the proceeds from selling, utilizing, or transferring these securities are insufficient to repay the sources of support and cover related incidental costs, Vietnam Securities Depository and Clearing Corporation may utilize proceeds from other securities sale transactions, rights and benefits derived from securities of the clearing member, investor that has lost the ability to settle funds to repay the sources of support and cover costs and losses incurred.

7. The utilization of settlement support sources, the mechanism for handling collateral assets, repayment of loans, determination of payment prices, timeframes, and procedures for cash payments shall be carried out in accordance with the regulations of Vietnam Securities Depository and Clearing Corporation.

8. In addition to implementing measures to ensure settlement capability as stipulated in Clauses 2, 3, and 4 of this Article, Vietnam Securities Depository and Clearing Corporation may implement the following measures:

a) Requesting the clearing member to explain the reasons, provide all relevant information regarding the loss of ability to settle securities transactions, provide a list of customers, customer identification information, and information on the margin accounts of the customer and the clearing member;

b) Cooperating with the Vietnam Stock Exchange to suspend trading activities for the clearing member that is a trading member, non-clearing trading member with a mandate to clear and settle transactions with the clearing member that has lost the ability to settle securities transactions, except for transactions requested by Vietnam Securities Depository and Clearing Corporation (if any) to reduce the settlement obligations or margin requirements of investors, clearing members;

c) Adjusting the required margin levels, contributions to the clearing fund for the clearing member that has lost the ability to settle securities transactions.

9. In the case where an investor loses the ability to settle securities transactions, the clearing member is responsible for immediately reporting to Vietnam Securities Depository and Clearing Corporation information about the securities transaction, the margin collateral asset portfolio of that investor, and implementing appropriate handling measures, including:

a) Requiring the investor or clearing member to execute a corresponding mandatory transaction on the same day of the transaction to minimize settlement obligations;

b) Suspending the acceptance of new securities trading orders from the related investor while canceling any unexecuted trading orders of that investor;

c) Utilizing, selling, or transferring the margin collateral assets of the investor to purchase or serve as collateral for a loan to fulfill settlement obligations for the investor's securities transactions. If insufficient, the clearing member must use its own assets to make the payment on behalf of the investor.

10. The application of securities lending and borrowing mechanisms to support settlement shall be implemented according to the guidelines set forth in the regulations of Vietnam Securities Depository and Clearing Corporation.

11. In the event that a clearing member is required to compulsorily purchase securities through the securities trading system, the clearing member shall comply with the provisions of the Vietnam Stock Exchange. Supplement

1. A settlement member or client of a settlement member shall be deemed to have lost the ability to settle securities transactions when they fall under any of the following circumstances:

a) Failing to timely perform or fully fulfill the margin requirements for settlement and payment of securities transactions as prescribed in the regulations of the Vietnam Securities Depository and Clearing Corporation;

b) Being declared bankrupt or undergoing bankruptcy proceedings as prescribed by laws on corporate bankruptcy;

c) Other circumstances as prescribed in the regulations of the Vietnam Securities Depository and Clearing Corporation.

2. In the case of insufficient funds, the Vietnam Securities Depository and Clearing Corporation may utilize available support sources to ensure settlement of securities transactions when a settlement member or client of a settlement member has lost the ability to settle securities transactions in the following sequence:

a) Utilizing the settlement margin of the settlement member who has lost the ability to settle securities transactions according to the procedures prescribed in the regulations of the Vietnam Securities Depository and Clearing Corporation;

b) Utilizing the contribution to the settlement fund in cash of the settlement member who has lost the ability to settle securities transactions when the settlement margin of the settlement member is insufficient to cover the payment obligation;

c) Implementing the utilization, sale, or transfer of collateral provided by the settlement member or investor who has lost the ability to settle securities transactions, and securities contributions to the settlement fund by the settlement member who has lost the ability to settle securities transactions according to the regulations of the Vietnam Securities Depository and Clearing Corporation;

d) Utilizing the contribution to the settlement fund of other settlement members at a ratio determined by the Vietnam Securities Depository and Clearing Corporation. In this case, the Vietnam Securities Depository and Clearing Corporation shall notify other settlement members about the use of the settlement fund to ensure settlement on the day of use. The settlement member who has lost the ability to settle securities transactions shall be responsible for repaying the entire amount of the utilized settlement fund assets and paying interest to other settlement members at the rate prescribed by the Vietnam Securities Depository and Clearing Corporation;

e) Utilizing the Risk Management Fund and other lawful capital sources of the Vietnam Securities Depository and Clearing Corporation after obtaining approval from the Ministry of Finance.

3. In the case of insufficient securities due to post-trade error correction or handling proprietary trading errors, the settlement member shall apply support measures in the following sequence:

a) Borrowing securities through the securities lending and borrowing system managed by the Vietnam Securities Depository and Clearing Corporation;

b) If, at the time of payment as prescribed, the settlement member still does not have sufficient securities for payment, the Vietnam Securities Depository and Clearing Corporation shall extend the payment deadline for the shortfall of securities of the settlement member to continue applying the support mechanism for insufficient securities as prescribed in point a or point c of this clause. The extension of the payment deadline shall be carried out in accordance with Article 36 of this Circular;

c) Compulsory purchase through the securities trading system. The compulsory purchase transaction shall be settled on the same day and netted together with transactions having the same settlement date through the system of the Vietnam Securities Depository and Clearing Corporation;

4. The Vietnam Securities Depository and Clearing Corporation may settle in cash for transactions with insufficient securities in the following cases:

a) The settlement date is the final registration date for exercising rights that generate material benefits, and the settlement member fails to complete the borrowing or compulsory purchase of securities within the prescribed period;

b) The insufficient securities are not permitted to be borrowed or compulsorily purchased according to the regulations of the Vietnam Securities Depository and Clearing Corporation and the Vietnam Stock Exchange;

c) The settlement member has applied the support measures prescribed in Clause 3 of this Article but still lacks sufficient securities for payment.

5. In the event that a clearing member loses the ability to settle securities transactions, the customer of such clearing member who also loses the ability to settle securities transactions must repay the sources of support used as prescribed in Clause 2 of this Article in the following sequence:

a) The legitimate capital of Vietnam Securities Depository and Clearing Corporation;

b) The operational risk prevention fund of Vietnam Securities Depository and Clearing Corporation;

c) Contributions from other clearing members in the clearing fund;

d) Contributions from the clearing member itself which has lost the ability to settle securities transactions in the clearing fund.

6. Vietnam Securities Depository and Clearing Corporation may utilize, sell, transfer existing securities, securities pending receipt from previous purchase transactions on proprietary trading accounts, market-making accounts of the clearing member that has lost the ability to settle funds; securities pending receipt from previous purchase transactions lacking funds on the account of the investor that has lost the ability to settle funds to repay the sources of support used and to cover related incidental costs.

In cases where it is not possible to sell, utilize, or transfer the aforementioned existing securities, pending securities, or if the proceeds from selling, utilizing, or transferring these securities are insufficient to repay the sources of support and cover related incidental costs, Vietnam Securities Depository and Clearing Corporation may utilize proceeds from other securities sale transactions, rights and benefits derived from securities of the clearing member, investor that has lost the ability to settle funds to repay the sources of support and cover costs and losses incurred.

7. The utilization of settlement support sources, the mechanism for handling collateral assets, repayment of loans, determination of payment prices, timeframes, and procedures for cash payments shall be carried out in accordance with the regulations of Vietnam Securities Depository and Clearing Corporation.

8. In addition to implementing measures to ensure settlement capability as stipulated in Clauses 2, 3, and 4 of this Article, Vietnam Securities Depository and Clearing Corporation may implement the following measures:

a) Requesting the clearing member to explain the reasons, provide all relevant information regarding the loss of ability to settle securities transactions, provide a list of customers, customer identification information, and information on the margin accounts of the customer and the clearing member;

b) Cooperating with the Vietnam Stock Exchange to suspend trading activities for the clearing member that is a trading member, non-clearing trading member with a mandate to clear and settle transactions with the clearing member that has lost the ability to settle securities transactions, except for transactions requested by Vietnam Securities Depository and Clearing Corporation (if any) to reduce the settlement obligations or margin requirements of investors, clearing members;

c) Adjusting the required margin levels, contributions to the clearing fund for the clearing member that has lost the ability to settle securities transactions.

9. In the case where an investor loses the ability to settle securities transactions, the clearing member is responsible for immediately reporting to Vietnam Securities Depository and Clearing Corporation information about the securities transaction, the margin collateral asset portfolio of that investor, and implementing appropriate handling measures, including:

a) Requiring the investor or clearing member to execute a corresponding mandatory transaction on the same day of the transaction to minimize settlement obligations;

b) Suspending the acceptance of new securities trading orders from the related investor while canceling any unexecuted trading orders of that investor;

c) Utilizing, selling, or transferring the margin collateral assets of the investor to purchase or serve as collateral for a loan to fulfill settlement obligations for the investor's securities transactions. If insufficient, the clearing member must use its own assets to make the payment on behalf of the investor.

10. The application of securities lending and borrowing mechanisms to support settlement shall be implemented according to the guidelines set forth in the regulations of Vietnam Securities Depository and Clearing Corporation.

11. In the event that a clearing member is required to compulsorily purchase securities through the securities trading system, the clearing member shall comply with the provisions of the Vietnam Stock Exchange. Supplement

Article 36. Postponement of Payment Deadline

1. The postponement of payment deadline shall be carried out according to the following principles:

a) Vietnam Securities Depository and Central Depository Corporation will separate the quantity of securities lacking for the postponement of payment deadline;

b) The maximum postponed payment deadline is three working days from the payment date of the quantity of securities lacking. The value of the quantity of securities with postponed payment deadline is determined based on the closing price of the securities with postponed payment deadline on the trading day immediately preceding the payment date;

c) The payment of securities with postponed payment deadline shall be carried out through netting together with transactions having subsequent payment dates;

d) A clearing member whose transaction has a postponed payment deadline must compensate organizations or individuals involved in related counterpart transactions at a rate of 5% of the value of the securities with postponed payment for each day of postponed payment deadline.

2. The method for determining the quantity and value of securities lacking for the postponement of payment deadline and the procedure for postponing the payment deadline shall be implemented in accordance with the guidelines set forth in the regulations of Vietnam Securities Depository and Central Depository Corporation.

Article 37. Refusal of Transaction Guarantee by Clearing Member and Exclusion of Securities Transaction Settlement

1. Vietnam Securities Depository and Central Depository Corporation has the right to refuse guarantee and exclude settlement of securities transactions in the following cases:

a) A clearing member or a client of a clearing member sells securities without owning them in accordance with the guidance of the Ministry of Finance;

b) Transactions of a clearing member or a client of a clearing member are conducted after Vietnam Securities Depository and Central Depository Corporation has notified the Stock Exchange of the suspension of transactions for that clearing member;

c) Transactions are conducted with security codes not accepted for netting and settlement on the system of Vietnam Securities Depository and Central Depository Corporation;

d) Transactions have invalid account numbers due to non-existent clearing member registration numbers or non-existent transaction account type characters;

đ) Transactions have invalid information including: no trading session code; trading date different from the current date; no buyer or seller order number; transaction price or volume less than or equal to zero; no order confirmation;

e) Transactions have a combination of four pieces of information market code, trading board code, security code, order confirmation number identical to a previously received transaction;

g) Other cases approved by the State Securities Commission.

2. A clearing member whose transaction is refused guarantee and excluded from settlement under points a and b of Clause 1 of this Article must compensate organizations or individuals involved in related counterpart transactions at a rate of 20% of the value of the transaction refused guarantee or not settled. In case of violation of laws, the clearing member shall be handled in accordance with the provisions of the law on administrative sanctions in the field of securities and the securities market.

3. Vietnam Securities Depository and Central Depository Corporation is responsible for notifying the Stock Exchange of transactions refused guarantee and excluded from settlement.

Article 38. Management and Use of the Settlement Fund

1. The Settlement Fund is formed from contributions in cash or securities accepted by the Vietnam Securities Depository and Clearing Corporation for the purpose of compensating losses and completing securities transactions and payment obligations under the name of settlement members in cases where investors or settlement members lose their ability to settle securities transactions. The ratio of the value of securities contributed to the Settlement Fund shall be carried out according to the regulations of the Vietnam Securities Depository and Clearing Corporation.

2. The Vietnam Securities Depository and Clearing Corporation determines the contribution level of the Settlement Fund based on the risk of losing the ability to settle securities transactions of each settlement member separately by market area. The value of contributions to the Settlement Fund for a particular market area can only be used to support payments and compensate losses arising from securities transactions in that market area.

3. Settlement members have the obligation to contribute to the Settlement Fund at the initial minimum level, periodic contributions based on reassessment, and extraordinary supplementary contributions upon request of the Vietnam Securities Depository and Clearing Corporation. The contribution level to the Settlement Fund of settlement members shall be implemented according to the regulations of the Ministry of Finance regarding funds managed by the Vietnam Securities Depository and Clearing Corporation.

4. The Vietnam Securities Depository and Clearing Corporation periodically reviews the scale of the Settlement Fund and determines the contribution obligations of each settlement member based on the scale of payment values, market volatility, risk levels, and other criteria:

a) In the case where the balance of contributions to the Settlement Fund exceeds the required contribution obligation, the settlement member may withdraw the excess amount.

b) In the case where the balance of contributions to the Settlement Fund is less than the required contribution obligation, the settlement member must make additional contributions to cover the shortfall.

5. Settlement members have the responsibility to make extraordinary supplementary contributions to the Settlement Fund according to the regulations of the Vietnam Securities Depository and Clearing Corporation in the following situations:

a) After using up all contributed assets to the Settlement Fund in accordance with the procedures stipulated in point d, Clause 2, Article 35 of this Circular and still not having enough money to settle securities transactions. The additional contribution level shall be determined by the Vietnam Securities Depository and Clearing Corporation after obtaining approval from the State Securities Commission;

b) The settlement member is placed in warning status according to securities laws on financial safety and banking laws on capital safety;

c) The contributed assets of the settlement member are frozen or confiscated according to the provisions of competent state authorities or court decisions;

d) Other cases reported by the Vietnam Securities Depository and Clearing Corporation and approved by the State Securities Commission.

6. Management and use of the Settlement Fund:

a) Contributions in cash to the Settlement Fund belong to the settlement member and are managed separately from the assets of the Vietnam Securities Depository and Clearing Corporation and separate from the Settlement Fund of the derivatives market. The Vietnam Securities Depository and Clearing Corporation has full authority to use, transfer, including selling contributed assets to fulfill payment obligations and compensate losses arising from securities transactions under the name of the settlement member;

b) For contributions in cash, the Vietnam Securities Depository and Clearing Corporation opens a deposit account at a settlement bank to manage the contributions of settlement members to the Settlement Fund;

c) For contributions in securities, the Vietnam Securities Depository and Clearing Corporation opens a securities deposit account at the Vietnam Securities Depository and Clearing Corporation to manage the contributions of settlement members to the Settlement Fund. Dividends, interest, profits generated, and other benefits arising from contributed securities must be returned to the settlement member after fulfilling related financial obligations;

d) Interest generated from deposits related to contributions to the Settlement Fund in cash is allocated to the settlement member proportionally to the amount and time of contributions made by each settlement member after deducting management costs for the Vietnam Securities Depository and Clearing Corporation and other related costs (if any);

đ) Depending on the actual value of the Settlement Fund and the frequency and extent of its use by settlement members, the Vietnam Securities Depository and Clearing Corporation may set a ceiling for usage in each case of payment support. The borrowing interest rate for the Settlement Fund shall be determined by the Vietnam Securities Depository and Clearing Corporation after reaching agreement with the settlement member and obtaining approval from the State Securities Commission.

7. Repayment of the Settlement Fund:

a) A settlement member may only be refunded the amount contributed to the Settlement Fund when that settlement member's Certificate of Settlement Member is revoked. The repayment shall only be carried out after the Vietnam Securities Depository and Clearing Corporation has deducted all amounts due (debts), including financial compensation to the Vietnam Securities Depository and Clearing Corporation and payments for unsettled securities transactions and payment obligations of the settlement member and its customers as stipulated in Clause 3, Article 24 of this Circular.

b) If a settlement member is currently undergoing processing for revocation of the Certificate of Settlement Member, the contributed value of the Settlement Fund of that settlement member shall be managed separately from the Settlement Fund and serves as the basis for the decision-making authority to revoke the certificate (if applicable) after deducting the amount the settlement member still owes to the Vietnam Securities Depository and Clearing Corporation.

8. Methods for determining the scale, contribution obligations; cash contribution ratios; procedures for submission, withdrawal, and repayment; methods of receiving and allocating interest are carried out according to the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 39. Management and use of the payment support fund from the date of officially implementing the settlement mechanism under the central counterparty system

1. Management and use of the payment support fund within a period of 12 months from the date of officially implementing the settlement mechanism under the central counterparty system:

a) The Vietnam Securities Depository and Central Counterparty Corporation shall continue to manage and use the payment support fund for compensating financial losses suffered by the Vietnam Securities Depository and Central Counterparty Corporation and completing securities transactions and payment obligations of depositary members, clearing members, and investors in cases where depositary members, clearing members, or investors lose their ability to settle securities transactions. During this period, the Vietnam Securities Depository and Central Counterparty Corporation may use the payment support fund as a clearing fund to ensure payments in accordance with this Clause and Points b and d of Clause 2, Article 35 of this Circular.

b) Depositary members shall be responsible for contributing to the payment support fund with a fixed initial contribution amount, an annual contribution amount, and a maximum contribution amount as prescribed by the Ministry of Finance regarding funds managed by the Vietnam Securities Depository and Central Counterparty Corporation.

c) Contributions to the payment support fund belong to depositary members and are managed separately from the assets of the Vietnam Securities Depository and Central Counterparty Corporation. Depositary members shall be refunded the contribution amounts to the payment support fund in the following cases:

- Depositary members have their certificates of depositary membership revoked in accordance with the law;

- Depositary members are not issued a certificate of clearing membership within 12 months from the date of officially implementing the settlement mechanism under the central counterparty system.

d) The refund at Point c of this Clause shall only be implemented after the Vietnam Securities Depository and Central Counterparty Corporation issues a decision to revoke the certificate of depositary membership and has deducted all payable amounts (debts), including financial loss compensation for the Vietnam Securities Depository and Central Counterparty Corporation and payments due for securities transactions and unsettled payment obligations of the depositary member and its clients.

đ) In cases where depositary members are undergoing processing for revocation of their depositary membership certificates, the value of contributions to the payment support fund by depositary members shall be managed separately from the payment support fund and serve as the basis for the competent authority to issue a revocation decision (if any) after deducting the amount that the depositary member still owes to the Vietnam Securities Depository and Central Counterparty Corporation.

e) Interest generated from contributions to the payment support fund shall be allocated to depositary members corresponding to the amount and duration of each depositary member's contributions after deducting management costs for the Vietnam Securities Depository and Central Counterparty Corporation (if any).

g) The method for determining the scale and obligation of contributions; procedures for submission, withdrawal, and refund; methods for receiving and allocating interest shall be carried out according to the regulations of the Vietnam Securities Depository and Central Counterparty Corporation.

2. After 12 months from the date of officially implementing the settlement and transaction clearance mechanism under the central counterparty system, the Vietnam Securities Depository and Central Counterparty Corporation shall establish, manage, and use the clearing fund in accordance with Article 38 of this Circular to replace the payment support fund and handle contributions to the payment support fund of depositary members as follows:

a) The value of contributions to the payment support fund by depositary members who have been issued a certificate of clearing membership shall be transferred to become contributions to the clearing fund. Clearing members shall make additional contributions or be refunded contributions (if any) according to notifications from the Vietnam Securities Depository and Central Counterparty Corporation.

b) The Vietnam Securities Depository and Central Counterparty Corporation shall refund the contribution amounts to the payment support fund to depositary members who have not been issued a certificate of clearing membership after deducting the amount that the depositary member still owes to the Vietnam Securities Depository and Central Counterparty Corporation, including payable amounts (debts), financial loss compensation for the Vietnam Securities Depository and Central Counterparty Corporation, and payments due for securities transactions and unsettled payment obligations borne by the depositary member in accordance with the law.

Article 40. Management of the Securities Lending and Borrowing System 1. The Vietnam Securities Depository and Central Counterparty Corporation shall act as an intermediary, organizing and operating the securities lending and borrowing system with the aim of connecting lenders and borrowers to carry out transactions in accordance with the law.

2. The securities lending and borrowing system shall be implemented based on the following principles:

a) Securities lending and borrowing activities shall be conducted through negotiation or matching orders between the borrower and the lender on the principle that the borrower must have collateral. The matching order mechanism must ensure priority in terms of interest rate, quantity of securities, and time.

b) Collateral may be cash or eligible securities. The Vietnam Securities Depository and Central Counterparty Corporation shall specify eligible securities as collateral and the discount rate of collateral after obtaining approval from the State Securities Commission.

c) The value of collateral must reach at least 110% of the loan amount. The Vietnam Securities Depository and Central Counterparty Corporation shall determine the ratio of the value of collateral to the loan amount after obtaining approval from the State Securities Commission.

d) The lending interest rate shall be agreed upon in accordance with relevant legal provisions.

đ) The loan must be repaid with the borrowed securities or in cash after obtaining the lender's consent. In cases where the lender receives repayment of the loan in securities, leading to exceeding the maximum foreign ownership ratio as prescribed, the excess portion must be repaid in cash.

e) When the lender receives the transfer of collateral in securities due to the borrower's inability to settle securities transactions, leading to exceeding the maximum foreign ownership ratio as prescribed, the lender shall be responsible for selling the excess securities within the next trading day after receiving the transfer.

3. The Vietnam Securities Depository and Central Counterparty Corporation shall be responsible for organizing, managing, and operating the securities lending and borrowing system at the Vietnam Securities Depository and Central Counterparty Corporation.

4. Securities lending and borrowing activities shall be carried out in accordance with the regulations of the Vietnam Securities Depository and Central Counterparty Corporation.

Article 41. Periodic Reports

Chapter V

REPORTING SYSTEM

1. Monthly, depositary members and organizations directly opening accounts must submit reports on their securities depositary activities, clearing members must submit reports on their clearing and settlement activities in securities in writing or electronically to the Vietnam Securities Depository and Central Counterparty Corporation in accordance with the content specified in the operational regulations of the Vietnam Securities Depository and Central Counterparty Corporation.

2. Annually, payment banks must submit reports in writing or electronically to the State Securities Commission regarding compliance with the conditions to become a payment bank according to the form prescribed in Appendix III issued together with this Circular.

3. Every six months, depositary members and clearing members who are commercial banks or foreign bank branches must submit reports in writing or electronically to the State Securities Commission regarding compliance with the conditions for registering securities depositary activities and providing clearing and settlement services for securities transactions according to the forms prescribed in Appendices IV and V issued together with this Circular.

4. Monthly, quarterly, and annually, payment banks must submit reports in writing or electronically to the State Securities Commission regarding the bank's securities transaction payment activities according to the form prescribed in Appendix VI issued together with this Circular.

5. The reporting deadlines are as follows:

a) Monthly reports to the State Securities Commission within the first ten days of the following month;

b) Quarterly reports to the State Securities Commission within the first twenty days of the first month of the following quarter;

c) Six-monthly reports to the State Securities Commission within the first forty-five days from the end of the first six months of the year;

d) Annual reports to the State Securities Commission within the first ninety days of the following year.

6. The data cut-off period for periodic reports is as follows:

a) The annual reporting period is twelve months, from January 1 to December 31 of the calendar year;

b) The six-month reporting period is from January 1 to June 30 of the calendar year;

c) The quarterly reporting period is three months, from the first day of the first month of the quarter to the last day of the last month of the quarter;

d) The monthly reporting period is one month, from the first day to the last day of the month.

d) The monthly reporting period is from the beginning of the 1st day to the end of the last day of the month.

Article 42. Unusual Reports

1. The Vietnam Securities Depository and Central Counterparty Corporation must submit a written report or electronic data to the State Securities Commission within a maximum period of 24 hours from the occurrence of the following events;

a) Suspension of securities deposit activities, suspension of settlement activities, and securities transaction settlement of members;

b) Revocation of the Membership Certificate for securities depository, Membership Certificate for central counterparty; termination of securities deposit activities of the securities company branch, commercial bank branch;

c) Provision of information under confidentiality regulations to competent state agencies;

d) Partial or complete paralysis of securities registration, deposit, settlement, and transaction settlement activities.

2. Payment banks must immediately submit a written report or electronic data to the State Securities Commission and the Vietnam Securities Depository and Central Counterparty Corporation when the securities transaction payment settlement activity is partially or completely paralyzed.

3. Payment banks, securities depository members, and central counterparty members that are commercial banks, foreign bank branches must submit a written report or electronic data to the State Securities Commission within a maximum period of 24 hours from the time they fail to meet one of the conditions for being a payment bank, the condition for registering securities deposit activities, and the condition for providing securities transaction settlement services.

4. Central counterparty members must submit a written report or electronic data to the State Securities Commission within a maximum period of 24 hours from the occurrence of the following events:

a) Registered capital, owner's equity decreases by more than 10% compared to the registered capital, owner's equity in the most recent annual or quarterly financial report;

b) Debt-to-equity ratio exceeds five times.

Article 43. Reports upon Request

1. In addition to the regular and unusual reports prescribed in Articles 41 and 42 of this Circular, in cases deemed necessary to protect common interests and investor interests, the State Securities Commission may request the Vietnam Securities Depository and Central Counterparty Corporation, securities depository members, direct account opening organizations, central counterparty members, and payment banks to submit written reports or electronic data on securities registration, deposit, settlement, and transaction settlement activities.

2. The Vietnam Securities Depository and Central Counterparty Corporation, securities depository members, direct account opening organizations, central counterparty members, and payment banks must submit reports to the State Securities Commission in writing or electronically within the time limit requested by the State Securities Commission from the date of receipt of the report request as stipulated in Clause 1 of this Article.

3. In cases deemed necessary to ensure the safety of the securities transaction settlement system, the Vietnam Securities Depository and Central Counterparty Corporation may request central counterparty members and payment banks to submit written reports or electronic data on margin settlement and securities transaction settlement activities. Central counterparty members and payment banks have the responsibility to report to the Vietnam Securities Depository and Central Counterparty Corporation within 24 hours from the date of receipt of the report request.

Chapter VI

IMPLEMENTING PROVISIONS

Article 44. Effective date of implementation

1. This Circular takes effect from February 15, 2021.

2. Circular No. 05/2015/TT-BTC dated January 15, 2015, guiding the operation of securities registration, deposit, settlement, and transaction settlement issued by the Minister of Finance shall cease to be effective from the date this Circular takes effect except for the provisions at Clause 3, Article 45 of this Circular.

Article 45. Transitional Provisions

1. Prior to the official operation of the Vietnam Securities Depository and Central Counterparty Corporation in accordance with the Securities Law No. 54/2019/QH14, the securities registration, deposit, settlement, and transaction settlement activities shall be carried out by the Vietnam Securities Depository Center in accordance with the Securities Law No. 54/2019/QH14, Decree No. 155/2020/NĐ-CP dated December 31, 2020 of the Government detailing certain provisions of the Securities Law, and this Circular.

2. Securities company branches, commercial bank branches that have been granted approval decisions for securities deposit operations by the State Securities Commission and membership certificates for branches engaged in securities deposit operations by the Vietnam Securities Depository Center before the effective date of this Circular shall continue their securities deposit operations.

The State Securities Commission will revoke the approval decision for securities deposit operations for securities company branches, commercial bank branches after the Vietnam Securities Depository and Central Counterparty Corporation terminates the securities deposit operations of these branches according to Article 12 of this Circular.

3. Before the official implementation of the central counterparty mechanism for securities transaction settlement, the Vietnam Securities Depository and Central Counterparty Corporation may continue to carry out securities settlement and transaction settlement, and manage and use the transaction support fund in accordance with Circular No. 05/2015/TT-BTC dated January 15, 2015, guiding the operation of securities registration, deposit, settlement, and transaction settlement issued by the Minister of Finance.

Article 46. Implementation organization

1. Based on the provisions of this Circular, the Vietnam Securities Depository and Central Counterparty Corporation shall issue business operation regulations and member regulations after obtaining the approval of the State Securities Commission.

2. During the implementation process, if there are any difficulties, it is recommended that organizations and individuals promptly reflect them to the Ministry of Finance for research and supplementary guidance.

Place of Receipt: - Central Party Office and Party Committees; - General Secretary's Office; - Government Office; - National Assembly's Office; - President's Office; - Prime Minister, Deputy Prime Ministers; - Ministries, agencies equivalent to ministries, and government agencies; - Central Agencies of Mass Organizations; - Supreme People's Procuracy; - Supreme People's Court; - Provincial People's Councils and People's Committees under central jurisdiction; - State Audit Agency; - Official Gazette; - Government Electronic Information Portal; - Legal Documents Inspection Bureau (Ministry of Justice); - Units under the Ministry of Finance; - Ministry of Finance Electronic Information Portal; - Securities Commission’s Official Website; - To be filed: VT, SEC (150b).

DEPUTY MINISTER DEPUTY MINISTER Huynh Quang Hai