Circular No. 120/2020/TT-BTC on trading of listed shares, registered trading, fund certificates, corporate bonds, and guaranteed warrant listings on the securities trading system

CIRCULAR

Regulations on trading of listed shares, registered securities transactions, fund certificates, corporate bonds, and guaranteed warrant listings on the securities trading system

On the basis of Securities Law No. 54/2019/QH14 dated November 26, 2019;

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

Decree No. Decree No. 87/2017/NĐ-CP dated 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 to regulate trading of listed shares, registered securities transactions, fund certificates, corporate bonds, and guaranteed warrant listings on the securities trading system.

Article 1. Scope of Regulation and Applicability

1. This Circular regulates trading of listed shares, registered securities transactions, fund certificates, corporate bonds, and guaranteed warrant listings on the securities trading system.

第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定

a) Investors;

b) Securities companies, depositary members, clearing members, and investment fund management companies;

c) Vietnam Stock Exchange; Hanoi Stock Exchange, Ho Chi Minh City Stock Exchange (hereinafter referred to as the Stock Exchange);

d) Vietnam Securities Depository and Clearing Corporation;

đ) Other agencies, organizations, individuals related to the matter;

Article 2. Interpretation of Terms

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

1. Price fluctuation range is the limit of price fluctuation of securities within a trading day, calculated as a percentage (%) relative to the reference price.

2. Market circuit breaker (Circuit breaker) is an automatic mechanism for suspending trading during a trading session when the price of securities or stock index reaches predetermined levels on the securities trading system.

3. Reference price is the price determined by the Stock Exchange and used as the basis for determining the highest price (ceiling price) and the lowest price (floor price) within a trading day.

4. Centralized matching method is a trading method implemented on the securities trading system based on matching buy orders and sell orders of securities. The centralized matching method includes periodic matching and continuous matching.

5. Periodic matching is a trading method implemented on the securities trading system based on matching buy orders and sell orders of securities at a specified time.

6. Continuous matching is a trading method implemented on the securities trading system based on matching buy orders and sell orders of securities immediately upon entry into the securities trading system.

7. Negotiated trading method is a trading method where the parties involved in the transaction negotiate the terms of the trade through a trading member on the securities trading system; or the parties involved in the transaction negotiate and execute the trade, then record the results of the transaction in the securities trading system through a trading member.

8. Day trading is a trading activity involving buying and selling the same security code that the investor does not yet own with the same volume of trade, conducted on the same account and within the same trading day.

9. Mandatory purchase transaction (buy-in) is a transaction to purchase securities to ensure sufficient quantity of securities for settlement of trades lacking securities according to the law.

10. Margin trading at a securities company (hereinafter referred to as margin trading) is a transaction to purchase securities using borrowed funds from a securities company, wherein the securities obtained from this transaction and other margin-traded securities of the investor are used as collateral for the loan.

11. Short selling with collateral (hereinafter referred to as short selling with collateral) is a transaction to sell securities borrowed from the securities lending and borrowing system of the Vietnam Securities Depository and Clearing Corporation. The seller is then obligated to repurchase the same number of securities to repay the loan.

12. Pending securities are securities that an investor has purchased on the securities trading system on previous trading days and are currently in the process of completing ownership transfer.

13. Odd-lot securities trading is a trading activity involving a quantity of securities smaller than a trading unit.

Article 3. Securities Trading Organization

1. The securities trading organization shall organize securities trading through centralized matching and negotiated trading methods based on the following principles:

a) Centralized matching on the securities trading system must ensure the price priority and time priority principles;

b) Negotiated trading on the securities trading system shall be conducted according to the principle that the parties involved in the transaction negotiate and agree on the terms of the transaction.

2. Securities specified in Clause 1, Article 1 of this Circular may be traded on the securities trading system, excluding cases of transferring ownership outside the securities trading system as regulated by laws on securities registration, custody, netting, and settlement. The securities trading organization may organize mandatory purchase sessions (buy-in) through the securities trading system.

3. The Vietnam Securities Trading Corporation shall issue trading regulations including the following basic contents: trading methods; trading hours; reference price determination method; stock price fluctuation range; market circuit breaker mechanism (if applicable); types of trading orders; order modification and cancellation procedures; establishment and removal of securities transactions; suspension of trading, partial or full cessation of trading for a specific security code; publication of trading results information and other related matters.

Article 4. Price Fluctuation Range

1. The Vietnam Securities Trading Corporation shall decide on the price fluctuation range after obtaining approval from the State Securities Commission.

2. In case it is necessary to stabilize the market, the State Securities Commission shall decide to adjust the price fluctuation range and publish the information on its electronic portal.

Article 5. Market Circuit Breaker Mechanism

1. The Vietnam Securities Trading Corporation shall decide on the market circuit breaker mechanism after obtaining approval from the State Securities Commission.

2. Based on the actual conditions of the market, the State Securities Commission shall decide to apply the market circuit breaker mechanism or a combination of the market circuit breaker mechanism with the price fluctuation range.

Article 6. Securities Trading Accounts

1. Investors must open a securities trading account at a securities company that is a trading member to conduct securities trading as stipulated in this Circular; they are responsible for providing complete and accurate customer identification information when opening a securities trading account and must comply with the following provisions:

a) During the period before the implementation of securities netting and settlement activities under the central counterparty mechanism, investors shall conduct securities trading and settle securities transactions through their securities trading accounts and securities custody accounts without having to open a margin account for netting.

b) After the implementation of securities netting and settlement activities under the central counterparty mechanism, investors must have a margin account for netting at a clearing member before conducting securities trading. If the investor opens a margin account for netting at a clearing member which is also a depositary bank, the investor can only open a securities trading account at a trading member that is a clearing member or at a non-clearing trading member with a mandate agreement for netting and settlement with the common clearing member depositary bank where the investor has opened the margin account for netting.

2. Investors may open multiple securities trading accounts according to the principle that each investor may only open one securities trading account at each securities company, except for the cases provided for in Clauses 4, 5, 6, 7, and 8 of this Article, Article 9, Article 10, and Article 11 of this Circular.

3. For each securities trading account, the investor may only open one margin account for netting at a clearing member.

4. A securities investment fund management company may open multiple securities trading accounts at each securities company according to the following principles:

a) One securities trading account to conduct its own securities business operations;

b) Two securities trading accounts to manage the portfolio for entrusted investors, including one account for trading domestic entrusted investors' securities and one account for trading foreign entrusted investors' securities.

c) Each investment fund or securities company managed by the fund management company may open one securities trading account in the name of the investment fund or securities company at each securities company.

5. A branch of a foreign securities investment fund management company in Vietnam may open two securities trading accounts at each securities company, one for its own trading activities and one for trading on behalf of foreign entrusted investors.

6. A securities company may open a securities trading account according to the following principles:

a) A securities company engaged in proprietary trading and is a member of the Vietnam Securities Trading Corporation may only open one proprietary trading account at its own company and may not open any securities trading accounts at other securities companies, except for the case provided for in point d of this clause.

b) In the event that a securities company has been removed from membership of the Vietnam Securities Trading Corporation, the securities company may open a securities trading account at another trading member of the Vietnam Securities Trading Corporation to handle remaining securities on its proprietary trading account.

c) A securities company may open one market-making trading account for listed and registered securities and one risk-hedging trading account for guaranteed warrant securities at its own company to conduct transactions for these businesses.

d) A securities company that is not a fund manager establishing an exchange-traded fund shall open a securities trading account at a fund manager establishing an exchange-traded fund. This account shall be used to execute transactions of exchanging exchange-traded fund certificates on the primary market, selling securities and exchange-traded fund certificates obtained from exchange transactions on the secondary market, purchasing structured securities and exchange-traded fund certificates on the secondary market for the purpose of executing exchange transactions, and shall not be used for other securities transactions.

đ) Other securities trading accounts as prescribed by relevant laws.

7. Foreign securities business organizations may open two securities trading accounts at each securities company as follows:

a) One securities trading account for conducting proprietary trading activities.

b) One brokerage trading account for conducting brokerage activities for other foreign investors.

8. Insurance enterprises may open two securities trading accounts at each securities company as follows:

a) One securities trading account for trading with own capital. In cases where the insurance enterprise has a foreign investor holding more than 50% of its charter capital, securities trading on this account shall be subject to regulations on foreign ownership in the securities market.

b) One securities trading account for trading with domestic premium income from insurance funds as stipulated by insurance business laws. Securities trading on this account shall not be subject to regulations on foreign ownership in the securities market.

9. Securities companies shall not reuse account codes of closed trading accounts to open trading accounts for new clients.

Article 7. Securities Trading

1. During the period before the implementation of securities settlement and clearing through central counterparty mechanisms, securities purchase transactions shall be conducted as follows:

b) Securities companies shall be responsible for monitoring the balance of securities and funds (except in cases where investors open deposit accounts at custodian banks), checking the legality and validity of investors' trading orders.

2. After the implementation of securities settlement and clearing through central counterparty mechanisms, securities purchase transactions shall be conducted as follows:

a) Investors placing buy orders must have sufficient collateral for settlement at the clearing member as prescribed by laws on registration, custody, settlement, and clearing of securities transactions.

b) The securities company where the investor opens a trading account may only enter orders into the securities trading system when the investor meets the requirements for settlement collateral as prescribed and required by the clearing member. In cases where investors open trading accounts, settlement collateral accounts at securities companies, and deposit accounts at custodian banks, securities companies may enter orders into the trading system when there is a guarantee or confirmation from the custodian bank regarding the fulfillment of the investor's settlement collateral and payment requirements based on agreements between the securities company and the custodian bank.

c) The monitoring and confirmation of securities and fund balances prior to securities transactions shall be carried out according to laws on settlement and clearing of securities transactions.

3. Investors may only place sell orders for securities that are permitted to trade and are available in their deposit accounts on the trading day, except in the following cases: fund managers establishing exchange-traded funds may sell exchange-traded fund certificates and structured securities when ensuring the availability of sufficient exchange-traded fund certificates and structured securities for pre-settlement transfer according to the regulations of Vietnam Securities Depository and Clearing Corporation; intraday trading as provided for in Article 10 of this Circular; selling pending securities.

Depending on market conditions, the State Securities Commission may implement the sale of pending securities.

4. Investors shall not place simultaneous buy and sell orders for the same security code in the same periodic matching session, except for orders already entered into the trading system in the previous trading session that have not been matched but remain valid.

5. Securities companies shall be responsible for controlling simultaneous buy and sell orders in the same periodic matching session placed by investors on trading accounts opened at their own company.

6. Foreign securities business organizations may use the brokerage trading account specified in point b, Clause 7, Article 6 of this Circular to simultaneously place buy and sell orders for the same security code in each matching session (periodic or continuous) or negotiated transactions, but must ensure that the buy and sell orders for securities are not for the same foreign investor.

Article 8. Public companies trading their own shares

1. Public companies purchasing their own shares on the securities trading system must comply with the following provisions:

a) Public companies must conduct transactions to repurchase their own shares in accordance with the information disclosed in accordance with Clause 4, Article 37 of the Securities Law.

b) The principle for determining the purchase price for repurchasing their own shares through matching orders or agreements shall be as follows:

- Purchase price ≤ Reference price + (Reference price x 50% of the share price fluctuation range).

- Volume of purchase: In each trading day, the minimum total volume of purchase is 3% and the maximum is 10% of the volume of transactions registered with the State Securities Commission (the volume of purchase does not include canceled orders and this provision is exempted when the remaining purchase volume is less than 3%).

This provision applies until the public company completes the transaction to repurchase its own shares with the volume registered with the State Securities Commission.

2. Public companies repurchasing their own shares may sell the repurchased shares in accordance with Clause 7, Article 36 of the Securities Law. The sale of shares shall be conducted on the securities trading system in accordance with the trading regulations of the Vietnam Stock Exchange or outside the securities trading system in accordance with the legal provisions on registration, custody, settlement, and securities transaction payment.

3. Except for the case stipulated in Clause 2 of this Article, public companies repurchasing their own shares before January 1, 2021 may sell the repurchased shares through matching orders or agreements as follows:

- Selling price ≥ Reference price - (Reference price x 50% of the share price fluctuation range).

- Volume of sale: In each trading day, the minimum total volume of sale is 3% and the maximum is 10% of the volume of transactions registered with the State Securities Commission (the volume of sale does not include canceled orders and this provision is exempted when the remaining sale volume is less than 3%).

1. Investors must sign a margin trading contract with a securities company permitted to provide customer loan services for buying securities in accordance with the law before conducting margin trading. The margin trading contract simultaneously serves as a loan contract on the margin trading account. The margin trading contract must minimally include contents regarding collateral for margin trading, the period for additional margin, handling collateral for margin trading when the investor fails to add margin; methods for resolving disputes that arise; clearly stating potential risks, losses that may occur, and costs that customers must pay.

2. Foreign investors are not allowed to conduct margin trading.

3. At each securities company where an investor opens a securities trading account, the investor can only open one margin trading account. The margin trading account is a separate account or managed separately or recorded as a sub-account of the existing securities trading account of the investor. The securities company must record the margin trading account separately from the ordinary securities trading account of each investor, and separate the margin trading account and the ordinary securities trading account between different investors.

4. Securities eligible for margin trading are listed or traded shares, listed fund certificates on the securities trading system and meet the following basic criteria: listing time, trading registration; scale of capital and business results of the issuer; liquidity and price volatility (if applicable); transparency of information and other criteria according to the regulations of the State Securities Commission. The stock exchange publishes a list of securities eligible for margin trading or securities not eligible for margin trading based on criteria set by the State Securities Commission.

5. Based on the list of securities eligible for margin trading or securities not eligible for margin trading published by the stock exchange, the securities company selects a list of securities to be traded on margin at the company and discloses information in accordance with the law.

6. Investors have the obligation to ensure the initial margin ratio and the maintenance margin ratio according to the signed contract with the securities company. When the margin ratio on the investor's margin trading account falls below the maintenance margin ratio, the securities company issues a margin call for additional margin. Securities not eligible for margin trading are not included in the collateral when determining the initial margin ratio and the maintenance margin ratio for margin trading. If the investor fails to add margin, the securities company has the right to sell the collateral securities according to the terms of the margin trading account opening contract. Before selling the collateral securities, the securities company must disclose information in accordance with the law and notify the investor of the results of the collateral securities sale transaction to fulfill the obligation to report ownership and disclose information about the transaction in accordance with the law (if applicable).

7. Securities companies no longer meeting the conditions to provide customer loan services for buying securities must immediately stop signing new contracts, extending margin trading account opening contracts, stop lending funds for margin trading, and report in writing to the State Securities Commission within 48 hours from the occurrence of such event.

8. The State Securities Commission promulgates guidelines for margin trading operations at securities companies.

9. In necessary cases to stabilize the market, the State Securities Commission has the authority to require the suspension of margin trading at securities companies.

Article 10. Day Trading Transactions

1. Investors may conduct day trading transactions after signing a day trading transaction contract with a securities company providing margin lending services. The day trading transaction contract must include provisions allowing the securities company to execute borrowing transactions and mandatory purchase transactions to support settlement in cases where there is a shortage of securities for transfer as stipulated by law on securities settlement and transaction settlement. The day trading transaction contract must clearly state the risks arising, losses, and costs that the investor must pay.

2. Day trading activities must ensure compliance with the following principles:

a) At each securities company where the investor opens a securities trading account, the investor can only open one day trading account. The day trading account is either a separate account, managed separately, or recorded as a sub-account of the existing securities trading account of the investor. The securities company must record the day trading account separately from the ordinary securities trading account and the margin trading account (if any) of each investor.

b) Investors conducting day trading transactions must comply with the provisions of Clause 4, Article 7 of this Circular and shall not conduct day trading transactions for odd-lot securities transactions and negotiated transactions.

c) The securities company has the right to select securities codes listed in the list of securities permitted for margin trading at the securities company to execute day trading transactions for investors. The list of securities eligible for day trading must be publicly disclosed on the securities company's electronic information website.

d) Investors are responsible for placing trading orders, ensuring that the total number of securities on sell orders equals the total number of securities of the same code on buy orders on the same trading day, and vice versa. In cases where the total number of securities on executed sell orders exceeds the total number of securities on executed buy orders or vice versa, the securities company is responsible for settling on behalf of the investor the shortfall amount or securities at the settlement date.

đ) The securities company must refuse to execute day trading orders from investors when it cannot guarantee sufficient funds for payment and securities for delivery at the settlement date.

e) Investors are responsible for compensating for losses and paying the securities company all costs incurred related to mandatory purchases, securities borrowing, and borrowing money to support settlement in cases where there is insufficient funds for payment and insufficient securities for delivery at the settlement date as stipulated in the signed day trading contract with the securities company and relevant laws.

g) The securities company has the right to require investors to deposit collateral in cash or securities before allowing them to conduct day trading transactions.

h) On any trading day, the total value of day trading transactions (determined based on the total value of executed buys and sells) at each securities company shall not exceed a ratio prescribed relative to the company's net assets. The volume of securities traded on a day trading basis at each securities company shall not exceed a prescribed ratio relative to the circulating volume of securities. These ratios are implemented according to the regulations of the State Securities Commission.

3. Day trading activities shall not be conducted during a period of five (05) working days prior to the final registration date for exercising shareholder rights associated with the securities traded on a day trading basis.

4. In case of necessity to stabilize the market, the State Securities Commission has the right to request a temporary suspension of day trading activities.

5. Securities companies that do not meet the conditions for providing margin lending services must immediately cease entering into new, extending existing day trading contracts, stop allowing investors to conduct day trading transactions, and report in writing to the State Securities Commission within forty-eight (48) hours from the occurrence of such events.

6. Depending on market conditions, the State Securities Commission implements day trading activities and issues guidelines for day trading transactions.

Article 11. Short selling with collateral

1. The securities lending and borrowing contract on the securities lending and borrowing system at the Vietnam Securities Depository and Clearing Corporation for implementing short selling without minimum collateral must include provisions on collateral assets, interest rate, loan term, loan extension, handling of collateral assets when the investor fails to return the securities, dispute resolution methods, clearly stating possible risks, losses that may arise, and costs.

2. Investors opening a short selling account with collateral at a securities company providing securities lending services, where the investor opens a trading account to implement short selling with collateral, shall have such a short selling account with collateral either as a separate account or as a sub-account of the existing securities trading account of the investor. The securities company must separately record the short selling account without collateral from the margin trading account, the intraday trading account, and the ordinary securities account of each investor.

3. Securities permitted for short selling with collateral include listed shares, fund certificates traded on the securities trading system and meeting criteria regarding listing time, trading registration time; capital scale and business performance of the issuer; liquidity and price volatility (if applicable); transparency of information and other criteria as guided by the State Securities Commission. The stock exchange publishes a list of securities eligible for short selling with collateral or ineligible for short selling with collateral based on criteria set by the State Securities Commission.

4. Short selling with collateral shall not be conducted during the five (05) working days prior to the final registration date for exercising rights associated with the securities eligible for short selling with collateral.

5. Depending on market conditions, the State Securities Commission implements short selling with collateral activities. The State Securities Commission issues regulations guiding short selling with collateral transactions.

6. In cases deemed necessary to ensure the safety of the securities market operations, the State Securities Commission may require securities companies to temporarily suspend short selling with collateral activities.

Article 12. Market Making Transactions

1. Market making transactions must comply with the following principles:

a) Trading members participating in market making must act honestly and in good faith when performing market making functions to ensure effective and stable market operation;

b) Depending on market conditions, trading members participating in market making may quote two-way prices or one-way prices for the securities they have registered for market making according to the rules of the Vietnam Stock Exchange and the market making contract. The securities requiring liquidity, market making period, quotation method, price spread limit between bid and ask prices, quotation ratio, quotation maintenance time, and situations allowing temporary suspension of trading are carried out according to the rules of the Vietnam Stock Exchange and the market making contract (if any);

c) Trading members participating in market making can only place limit orders for market making transactions. Trading members participating in market making can simultaneously conduct market making transactions and proprietary trading but must ensure pricing principles according to the rules of the Vietnam Stock Exchange.

2. Trading members participating in market making may quote prices to simultaneously buy and sell the securities designated as market makers in the same batch matching. These transactions must be conducted through the market making account.

3. The Vietnam Stock Exchange is responsible for developing and issuing guidelines for market making activities after approval by the State Securities Commission.

4. The Vietnam Stock Exchange has the right to terminate or suspend market making activities of trading members for one or several securities if the trading members fail to fulfill their obligations and responsibilities and violate the rules of the Vietnam Stock Exchange and the terms of the market making contract (if any).

Article 13. Effective Date

This Circular takes effect from February 15, 2021 and replaces Circular No. 203/2015/TT-BTC dated December 21, 2015 of the Minister of Finance guiding securities trading on the securities market.

Article 14. Implementation Organization

The State Securities Commission, the Vietnam Stock Exchange, the Hanoi Stock Exchange, the Ho Chi Minh City Stock Exchange, the Vietnam Securities Depository and Clearing Corporation, securities companies, depositary members, clearing members, investment fund management companies, and other related organizations and individuals are responsible for implementing this Circular.