Decision No. 27/2008/QD-NHNN on amending and supplementing certain articles of the Open Market Operations Regulation issued together with Decision No. 01/2007/QD-NHNN dated January 5, 2007 by the Governor of the State Bank of Vietnam.

Pursuant to …;

Regarding the amendment and supplementation of certain articles of the Open Market Operations Regulation issued together with Decision No. 01/2007/QĐ-NHNN dated January 5, 2007 of the Governor of the State Bank of Vietnam

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GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam 1997, and the Law Amending and Supplementing Certain Articles of the Law on the State Bank of Vietnam 2003;

Pursuant to the Law on Credit Organizations 1997, and the Law Amending and Supplementing Certain Articles of the Law on Credit Organizations 2004;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Head of the Credit Department,

DECISION:

Article 1. Amend and supplement certain articles of the Open Market Operations Regulation issued together with Decision No. 01/2007/QĐ-NHNN dated January 5, 2007 of the Governor of the State Bank of Vietnam as follows:

1. Clause 2 shall be amended and supplemented as follows:

1.1. Amend Clause 10 as follows:

“10. Auction day: Is the day when the State Bank organizes the auction, evaluates bids, and announces the auction results.”

1.2. Add Clauses 13, 14, and 15 as follows:

“13. Payment day: Is the day when the credit organization that wins the bid performs the delivery and receipt of securities and payment with the State Bank.

14. Repurchase day: Is the day when the repurchaser and the assignor transfer ownership of the purchased securities (for term purchase and sale transactions), and the seller pays the repurchase price to the buyer according to the repurchase price.

15. Sale period: Is the number of days from the auction day of the term purchase and sale transaction to the repurchase day (including the auction day but excluding the repurchase day).”

a) A customs declaration form for imported goods according to the information criteria specified in Model No. 01 - Declaration Form for Imported Goods attached as Appendix I to Circular No. 39/2018/TT-BTC dated April 20, 2018, issued by the Minister of Finance.

“Article 5. Recognition of Participants in Open Market Operations

1. Credit organizations shall be recognized as participants in open market operations if they meet the following conditions:

1.1. Having an account at the State Bank (State Bank Trading Center or State Bank branch in provinces and cities).

1.2. Possessing necessary means to participate in open market operations including: fax machines, computers connected to the internet.

1.3. Having a registration for participation in open market operations (Annex No. 01/TTM of this Regulation).

2. Credit organizations meeting the conditions specified in Clause 1 of this Article shall be granted a certificate recognizing them as participants in open market operations by the State Bank.

3. The certificate recognizing a participant in open market operations shall automatically terminate its validity in cases where competent state authorities issue documents regarding the restructuring, dissolution, or bankruptcy of the credit organization, or in cases where the State Bank issues notifications regarding the credit organization not meeting the conditions specified in Clause 1 of this Article.

4. Credit organizations shall return the registration for participation in open market operations (Annex No. 01/TTM) to the State Bank (Trading Center) in cases where the credit organization has been restructured or has met the conditions to be reissued the certificate recognizing it as a participant in open market operations.

3. Article 7 Clause 3 is amended as follows:

"The exchange of information prescribed in Clause 1 and Clause 2 of this Article shall be carried out through the open market operations information page. Information shall be provided regularly at least once a week."

4. Article 8 Clause 1 Point 1.3 and Point 1.4 are amended as follows:

“1.3. Being deposited with the State Bank before selling (including securities directly deposited with the State Bank and deposited in accounts opened by the State Bank at the Securities Exchange Center);

1.4. Securities purchased outright must have a remaining term of up to 91 days.”

5. Article 9 shall be amended as follows:

"Article 9. Methods of buying or selling securities

1. Term purchase transaction;

2. Term sale transaction;

3. Outright purchase transaction;

4. Outright sale transaction.”

6. Article 11 Clause 1 is amended as follows:

“1. The trading day of open market operations is calculated based on working days, excluding weekends, holidays, and New Year's Day. In case the repurchase day or the maturity date of the securities coincides with a weekend, holiday, or New Year's Day, the payment and transfer of securities will be carried out on the next working day.”

7. Article 12 Clause 1 Point 1.6 is amended as follows:

“1.6. In case the winning bidder registers multiple types of securities to buy or sell in their bid form:

1.6.1. If it does not include types of securities for which the State Bank specifies a transaction ratio at each open market operations trading session, the State Bank will determine the priority order of each type of security as follows:

1.6.1.1. Securities with shorter remaining terms;

1.6.1.2. Securities registered for sale or purchase in larger quantities.

1.6.2. If it includes types of securities with specified transaction ratios and types of securities without specified transaction ratios, the State Bank will evaluate bids according to the principle that the proportion of securities won corresponds to the transaction ratio of the securities registered in the bid form as specified by the State Bank. The determination of the priority order of evaluation among securities without specified transaction ratios and securities with specified transaction ratios shall be carried out according to the provisions of Points 1.6.1.1 and 1.6.1.2 of this Article.”

8. Article 13 Clause 1 Point 1.7 is amended as follows:

“1.7. Duration of purchase and sale transactions.”

9. Article 14 Clause 13 is amended as follows:

“13. Duration of purchase and sale transactions;”

10. Article 16 Clause 1, Point 1.8 and Point 1.9 are amended as follows:

“1.8. A credit organization sells securities without having, or without sufficient securities deposited as required;

1.9. The remaining term of securities registered for sale is shorter than the duration of term purchase and sale transactions, or longer than 91 days for outright purchase transactions;”

11. Article 20 shall be amended as follows:

“Article 20. Repurchase Contract

1. Each credit organization participating in open market operations must sign a repurchase contract with the State Bank (Trading Center) (Annex No. 03/TTM) applicable to all term purchase and sale transactions between the State Bank and such credit organization.”

2. When a term transaction of negotiable instruments occurs, the seller shall prepare an Annex attached to the Repurchase Agreement for each transaction. This Annex details each term transaction between the State Bank and credit institutions and is an integral part of the Repurchase Agreement for negotiable instruments.

3. The signing, delivery, and receipt of the Repurchase Agreement for negotiable instruments and the Annex attached to the Repurchase Agreement for negotiable instruments shall be carried out according to the guidelines set forth in the Open Market Operations Procedures. The Repurchase Agreement for negotiable instruments and the Annex attached to the Repurchase Agreement for negotiable instruments serve as the basis for implementing payment and delivery/receipt of negotiable instruments between the State Bank and credit institutions in term transactions.

12. Article 21 is amended and supplemented as follows:

"Article 21. Payment and Transfer of Ownership of Negotiable Instruments

1. Upon receiving the auction result notification or the Annex attached to the signed Repurchase Agreement for negotiable instruments, the seller must transfer ownership of the negotiable instruments to the buyer, while the buyer must pay the purchase price to the seller. The payment and transfer of ownership of negotiable instruments shall be completed on the settlement date.

2. In case a credit institution that wins the auction does not have sufficient funds to make the payment, the State Bank (Trading Department) will deduct from the winning bidder's account at the State Bank the amount required for settlement corresponding to the winning volume; if there is still insufficient payment, the State Bank will cancel the unfulfilled portion of the winning bid results.

3. On the expiration date of the term transaction, the buyer and seller will carry out the transfer of ownership of negotiable instruments and payment according to the commitments made by both parties in the Annex attached to the Repurchase Agreement for negotiable instruments.

4. If a credit institution that sells and commits to repurchase negotiable instruments fails to make the required payment upon maturity or makes an insufficient payment, the State Bank (Trading Department) will deduct from the credit institution's account at the State Bank the amount required for settlement. If the credit institution's account lacks sufficient funds, the State Bank will transfer the outstanding amount to overdue debt and the credit institution will bear an overdue interest rate of 150% of the unified interest rate or individual interest rate or the interest rate announced by the State Bank applicable to the term transaction, calculated based on the outstanding amount and the number of days delayed. The late payment penalty amount is calculated using the following formula:

P = Gp x Lp x Np/365

Where:

P: Amount of Penalty;

Gp: Outstanding Amount;

Lp: Penalty Interest Rate (%/year);

Np: Number of Days Late.

The State Bank will temporarily hold the entire volume of negotiable instruments of the term transaction in a separate account and will deduct from the credit institution's account at the State Bank to recover the outstanding amount (including overdue interest) when the credit institution's account at the State Bank has sufficient funds and return the negotiable instruments to the credit institution, or the State Bank may consider selling the negotiable instruments before their due date or settle with the issuer upon the negotiable instruments' due date to recover the outstanding amount (including overdue interest).

13. Clause 1 of Article 22 is amended as follows:

"1. The State Bank will issue a written violation notice to credit institutions that win the auction and violate any of the following situations:

1.1. Insufficient funds to settle the winning volume as announced by the State Bank;

1.2. Failure to settle or insufficient settlement upon maturity (for the case where the credit institution sells and commits to repurchase);

1.3. Failure to transfer ownership of negotiable instruments to the State Bank on the settlement date (for the case where the credit institution sells) or on the repurchase date (for the case where the credit institution buys and commits to resell).

A credit institution participating in open market operations that violates any of the situations specified in this clause three or more times will be temporarily suspended from participating in open market operations for a period of one month from the date of the third violation notice issued by the State Bank.

14. "d) Within no more than one working day from the date of receiving the dossier submitted for administrative procedures by the specialized agency assigned by the Provincial People's Committee, the Chairman of the Provincial People's Committee shall issue a notification of the result of the inspection of plant-based food exports or a certificate at the request of the importing country." Clauses 1, 2, and 3 are supplemented as follows:

14.1. Clause 1 is supplemented with Point 1.4 as follows:

"Collaborate with the Trading Department to monitor credit institutions violating the provision of information on demand for buying and selling negotiable instruments and activities of buying and selling negotiable instruments among credit institutions as stipulated in Points 2.2 and 2.3 of Clause 2, Article 7 of this Regulation."

14.2. Clause 2 is supplemented with Point 2.4 as follows:

"2.4. Collaborate with the Trading Department to monitor credit institutions violating the provision of information on expected available capital in Vietnamese dong at credit institutions as stipulated in Point 2.1 of Clause 2, Article 7 of this Regulation."

14.3. Clause 3 is supplemented with Point 3.9 as follows:

"3.9. Monitor and act as the focal point for handling violations by members participating in open market operations who violate regulations set forth in this Regulation and the Open Market Operations Procedures."

15. Annex No. 03/TTM attached to this Decision replaces Annex No. 03/TTM attached to the Open Market Operations Regulation promulgated together with Decision No. 01/2007/QĐ-NHNN.

Article 2. Repurchase Agreements signed between the State Bank and credit institutions (as stipulated in Article 20 of the Open Market Operations Regulation) and cases of credit institutions being penalized for violations (as stipulated in Article 22 of the Open Market Operations Regulation) prior to the effective date of this Decision shall continue to apply until all related obligations and responsibilities of the parties involved are fulfilled.

Article 3. This Decision takes effect fifteen days after its publication in the Official Gazette.

Article 4. The Director of the Office, Heads of Departments under the State Bank, and Chairmen of Management Boards and General Directors (Directors) of credit institutions participating in open market operations are responsible for implementing this Decision./.