Circular No. 28/2021/TT-NHNN amends and supplements certain provisions of Circular No. 40/2011/TT-NHNN dated December 15, 2011, issued by the Governor of the State Bank of Vietnam on the issuance of Licenses and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organizations engaged in banking activities in Vietnam.

CIRCULAR

Amending and supplementing certain Articles of Circular No. 40/2011/TT-NHNN dated December 15, 2011 issued by the Governor of the State Bank of Vietnam on the issuance of Licenses and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organizations engaged in banking activities in Vietnam.

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010, and the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions dated November 20, 2017;

Pursuant to Government Decree No. 16/2017/NĐ-CP dated February 17, 2017 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of Banking Inspection and Supervision;

The Governor of the State Bank of Vietnam issues this Circular to amend and supplement certain Articles of Circular No. 40/2011/TT-NHNN dated December 15, 2011 issued by the Governor of the State Bank of Vietnam on the issuance of Licenses and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organizations engaged in banking activities in Vietnam.

Article 1. Amending and supplementing certain Articles of Circular No. 40/2011/TT-NHNN

1. Amending and supplementing Point b Clause 2 Article 10 as follows:"

b) Having international operational experience and being rated by international credit rating organizations as follows: (i) Outlook Stable or better; (ii) Credit Rating AA- or higher (according to Standard & Poor's or Fitch Ratings) or Aa3 or higher (according to Moody's). In cases where the international credit rating organization uses a different rating scale from that of Standard & Poor's, Moody's, or Fitch Ratings, the international credit rating organization must convert its ratings to be consistent with the rating scales of Standard & Poor's, Moody's, or Fitch Ratings."

2. Amending and supplementing Clause 3 Article 18a (supplemented by Clause 3 Article 1 of Circular No. 17/2017/TT-NHNN dated November 20, 2017 issued by the Governor of the State Bank of Vietnam amending and supplementing certain Articles of Circular No. 40/2011/TT-NHNN) as follows:

"3. For the contents of activities specified in Clause 26 Article 4 of the Model License for the establishment and operation of commercial banks (Annex 01a) and Clause 24 Article 4 of the Model License for the establishment of foreign bank branches (Annex 01b), commercial banks and foreign bank branches may implement such activities after obtaining approval from the State Bank; procedures for adding these activities to the License shall be carried out according to specific regulations of the State Bank and other relevant laws."

3. Supplementing Article 19a following Article 19 as follows:

"Article 19a. Activities under securities law

1. Commercial banks and foreign bank branches may carry out agency services for issuing corporate bonds in the domestic market and agency services for managing collateral in corporate bond issuance in the domestic market when the License issued by the State Bank to commercial banks and foreign bank branches includes agency services related to banking activities and asset management. In cases where commercial banks and foreign bank branches commit to purchasing corporate bonds from investors in their agency services for issuing corporate bonds in the domestic market, they must enter into contracts with investors (specifying the conditions and terms of bond repurchase) and comply with the State Bank’s regulations on credit institutions and foreign bank branches buying and selling corporate bonds and the limits and safety ratios in banking operations when making such commitments.

2. Commercial banks and foreign bank branches may carry out trading activities in government bonds on the securities market when the License issued by the State Bank to commercial banks and foreign bank branches includes trading in government bonds.

3. Commercial banks and foreign bank branches may carry out settlement and payment services for securities transactions as stipulated in Point a Clause 4 Article 56 of the Securities Law, banking supervision activities, and securities custody activities in accordance with securities laws when the License issued by the State Bank to commercial banks and foreign bank branches includes such activities and the commercial banks and foreign bank branches meet the conditions set forth by securities laws and securities market laws as follows:

a) For settlement and payment services for securities transactions as stipulated in Point a Clause 4 Article 56 of the Securities Law: commercial banks and foreign bank branches must be granted a Certificate of Eligibility for Settlement and Payment Services for Securities Transactions by the Securities Commission and approved as clearing members by the Vietnam Securities Depository and Clearing Corporation.

b) For banking supervision activities under securities laws: commercial banks must be granted a Registration Certificate for Securities Custody Operations by the Securities Commission.

c) For securities custody activities: commercial banks and foreign bank branches must be granted a Registration Certificate for Securities Custody Operations by the Securities Commission and approved as custodian members by the Vietnam Securities Depository and Clearing Corporation.

4. The addition of settlement and payment services for securities transactions as stipulated in Point a Clause 4 Article 56 of the Securities Law to the License of commercial banks and foreign bank branches shall be a consent document of the State Bank in accordance with Point d Clause 1 Article 152 of Decree No. 155/2020/NĐ-CP dated December 31, 2020 of the Government detailing the implementation of certain provisions of the Securities Law.

5. For activities related to securities and the securities market, commercial banks and foreign bank branches shall comply with securities laws, securities market laws, and other relevant laws."

4. Add Point m to Clause 8, Article 36 (amended and supplemented by Clause 6, Article 1 of Circular No. 25/2019/TT-NHNN dated December 2, 2019 issued by the Governor of the State Bank of Vietnam amending and supplementing certain provisions of Circular No. 40/2011/TT-NHNN) as follows:

"m) Attach a document with the application file seeking opinions from relevant units of the State Bank of Vietnam regarding the request for supplementary activities on the License concerning derivative interest rate activities, provision of commodity price derivative products, and securities custody activities."

5. Amend and supplement Clause 11, Article 36 (supplemented by Point c, Clause 4, Article 1 of Circular No. 17/2017/TT-NHNN) as follows:

"11. Within a maximum period of 10 days from the date of receipt of the document from the Banking Inspection and Supervision Authority or the State Bank of Vietnam branch regarding the request for supplementary activities on the License concerning derivative interest rate activities, provision of commodity price derivative products, and securities custody activities, relevant units of the State Bank of Vietnam must provide specific opinions in writing and clearly state their agreement or disagreement with the commercial bank's or foreign bank branch’s application file."

Article 2. Replace Appendix 01a and Appendix 01b of Circular No. 40/2011/TT-NHNN (replaced by Clause 6, Article 2 of Circular No. 25/2019/TT-NHNN) with Appendix 01a and Appendix 01b attached to this Circular.

Article 3. Implementation Organization

The Head of the Office, the Head of the Banking Inspection and Supervision Authority, the Heads of units under the State Bank of Vietnam, commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organizations engaged in banking activities are responsible for organizing the implementation of this Circular.

Article 4. Implementation provisions

This Circular takes effect from March 1, 2022./.