Circular No. 58/2021/TT-BTC guiding certain provisions of Decree No. 158/2020/NĐ-CP dated December 31, 2020 of the Government on derivative securities and the derivative securities market

CIRCULAR

Guidelines for certain provisions of Decree No. 158/2020/NĐ-CP dated December 31, 2020 of the Government on derivative securities and the derivative securities market

Pursuant to the Securities Law promulgated on November 26, 2019;

Pursuant to Decree No. 158/2020/NĐ-CP dated December 31, 2020 of the Government on derivative securities and the derivative securities market;

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

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

Part I. 

The Minister of Finance issues this Circular guiding certain provisions of Decree No. 158/2020/NĐ-CP dated December 31, 2020 of the Government on derivative securities and the derivative securities market.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular guides the following contents of Decree No. 158/2020/NĐ-CP dated December 31, 2020 of the Government on derivative securities and the derivative securities market (hereinafter referred to as Decree No. 158/2020/NĐ-CP):

a) Trading activities, netting, and settlement of derivative securities transactions, including: Futures contracts on stock indices, futures contracts on government bonds;

b) Activities of members of the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation.

2. The subjects to which this Circular applies include:

a) State management agencies for securities and the securities market;

b) Vietnam Stock Exchange, Hanoi Stock Exchange, Ho Chi Minh City Stock Exchange;

c) Vietnam Securities Depository and Clearing Corporation;

d) Derivative securities business organizations, service providers for netting and settlement of derivative securities transactions, payment banks;

đ) Trading members, special trading members, market makers, clearing members;

e) Investors and related organizations and individuals.

Article 2. Interpretation of Terms

In addition to terms already defined in Decree No. 158/2020/NĐ-CP, in this Circular, the following terms shall be understood as follows:

1. Netting is the process of determining the net position and net payment obligations for the parties involved in transactions.

2. Offset transaction is the opening of a new buy (or sell) position to reduce the existing sell (or buy) position of the same type of derivative security, with the same underlying asset, and the same maturity date.

3. Settlement price is the matched trade price of futures contracts between investors through the trading system of the Hanoi Stock Exchange.

4. End-of-day settlement price is the price determined at the end of the trading day to calculate daily profits and losses of positions.

5. Final settlement price is the price determined on the last trading day to determine the payment obligation when fulfilling the contract.

6. Collateral value for netting (hereinafter referred to as collateral value) includes the balance on the margin account and the value of the collateral securities portfolio determined according to the regulations of the Vietnam Securities Depository and Clearing Corporation.

7. Brokerage client is an investor who conducts derivative securities transactions through the brokerage activities of trading members.

8. Clearing and settlement client is a non-clearing member and brokerage clients of this member who have entrusted clearing and settlement of derivative securities transactions to a designated clearing member.

9. Open interest of a derivative security at a point in time is the number of outstanding derivative security contracts at that time.

10. Margin deposit is the act of a party with an obligation to deposit a sum of money or acceptable collateral securities to ensure the obligation to settle derivative securities transactions.

11. Initial margin deposit is the margin deposit before conducting derivative securities transactions.

12. Margin requirement is the value of margin or margin ratio that a party with an obligation must deposit for anticipated executed or maintained derivative security contracts.

13. Risk margin is the value of margin that investors and clearing members must deposit to cover the maximum potential loss of derivative securities calculated based on scenarios of underlying asset price fluctuations.

14. Futures contract parallel margin is the value of margin that investors and clearing members holding futures contracts must deposit to cover additional potential losses due to differences in underlying asset price volatility and futures contract price volatility.

15. Government bond futures contract transfer margin is the value of margin that participating investors in the settlement of government bond futures contracts must deposit to cover potential losses that may occur if investors do not have sufficient funds for settlement or government bonds for delivery.

16. Cash margin ratio is the ratio between the value of cash collateral and the total value of required collateral.

17. Futures contract on stock index (hereinafter referred to as futures contract on index) is a futures contract based on a stock index as the underlying asset.

18. Government bond futures contract is a futures contract based on government bonds or hypothetical government bonds with certain basic characteristics of government bonds as the underlying asset.

19. Netting and settlement agreement is an agreement between a clearing member and the Vietnam Securities Depository and Clearing Corporation to perform netting and settlement of derivative securities transactions in the name of the clearing member with the Vietnam Securities Depository and Clearing Corporation.

20. Derivative securities trading account is an account opened at a trading member for the client's derivative securities transactions.

21. Contract fulfillment is the act of the parties involved in futures contracts transferring the underlying asset, deliverable assets, and paying money or settling the difference between the end-of-day settlement price, settlement price, and final settlement price according to the contract and the regulations of the Vietnam Securities Depository and Clearing Corporation.

22. Position in the name of the clearing member includes the position of the investor and the position of the clearing member, specifically as follows:

a) Positions in proprietary trading and market making (if any) of the clearing member;

b) Positions of brokerage clients of the clearing member;

c) Positions of clearing and settlement clients.

23. A consolidated trading account is the trading account of an investor where positions for both purchases and sales of the same futures contract (with the same underlying asset and the same maturity month) are opened and maintained until the clearing member requests the Vietnam Securities Depository Corporation to perform netting based on an agreement or at the request of the investor.

Chapter II

DERIVATIVE SECURITIES PRODUCTS

Article 3. Futures Index Contract

1. The underlying asset of a futures index contract is a stock index designed by the Vietnam Stock Exchange based on principles established and managed by the Vietnam Stock Exchange, which have been reported and approved by the State Securities Commission.

2. Upon expiration, a futures index contract shall be settled in cash according to regulations issued by the Vietnam Securities Depository Corporation.

3. The form of a futures index contract shall be issued by the Vietnam Stock Exchange after reporting and being approved by the State Securities Commission.

Article 4. Government Bond Futures Contract

1. The underlying asset of a government bond futures contract is:

a) Government bonds traded on the market, or

b) Hypothetical government bonds with basic characteristics of government bonds. The State Securities Commission establishes the basic characteristics of government bonds, designs hypothetical bonds, reports to the Ministry of Finance for approval before implementation.

2. Upon expiration, a government bond futures contract shall be settled in cash or by transferring the underlying asset according to regulations of the Vietnam Securities Depository Corporation. The settlement method must be specified before listing.

3. The form of a government bond futures contract shall be issued by the Vietnam Stock Exchange after reporting and being approved by the State Securities Commission.

4. The Hanoi Stock Exchange shall cooperate with the Vietnam Securities Depository Corporation to determine and publish on its website the following contents:

a) List of government bonds that can be transferred, determination principles, and conversion factors (for government bond futures contracts settled by transferring the underlying asset);

b) List of government bonds used to determine the final settlement price, determination principles, and weight of each bond in the list (for government bond futures contracts settled in cash).

5. Determination and publication of information about government bonds as stipulated in Clause 4 of this Article shall be carried out according to regulations of the Vietnam Stock Exchange and the Vietnam Securities Depository Corporation. The Hanoi Stock Exchange shall cooperate with the Vietnam Securities Depository Corporation to determine the final deadline for closing the list of government bonds that can be transferred or used to determine the final settlement price. After this deadline, the Hanoi Stock Exchange and the Vietnam Securities Depository Corporation shall not adjust the aforementioned lists of government bonds.

Chapter III

ACTIVITIES OF TRADING, NETTING, AND SETTLING DERIVATIVE SECURITIES TRANSACTIONS

Section 1

ACTIVITIES OF TRADING DERIVATIVE SECURITIES

Article 5. Derivative Securities Transactions of Investors

1. To conduct derivative securities transactions, investors must open a derivative securities trading account at a trading member and a margin account (hereinafter referred to as the margin account) at a clearing member designated by the trading member. In cases where investors already have a base securities trading account opened at a trading member, investors are permitted to use this base securities trading account for derivative securities transactions after opening a margin account at a clearing member designated by the trading member.

2. Prior to placing a transaction order, during the holding period of a position, and when executing additional trades, investors must deposit margin as required by the clearing member.

3. Investors must ensure that their positions on the trading account comply with the regulations of the Vietnam Securities Depository and Clearing Corporation. In cases where the position limit is exceeded, the investor, the clearing member, and the Vietnam Securities Depository and Clearing Corporation must take the following measures:

a) The investor must execute offsetting transactions to reduce the position,

b) After the specified time period, if the investor does not reduce the position, the clearing member may execute offsetting orders to close part or all of the investor's position to the level required to comply with the position limit on the account;

c) If the clearing member does not execute offsetting transactions to close the investor's position, the Vietnam Securities Depository and Clearing Corporation may request another clearing member to execute offsetting orders to close part or all of the investor's position registered under the clearing member.

4. The execution of offsetting transactions as stipulated in Clause 3 of this Article shall be carried out in accordance with the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 6. Investor’s Derivative Securities Trading Account

1. Investors must sign a contract to open a derivative securities trading account with a trading member. Foreign investors must register a securities trading code in accordance with the law before opening a derivative securities trading account. Securities companies with a Certificate of Eligibility for Derivative Securities Business but not trading members may open a trading account at a trading member for derivative securities investment in accordance with this Circular.

2. Investors who are Members of the Board of Directors, Members of the Board of Members, Directors (General Directors), Deputy Directors (Deputy General Directors), heads of departments, and employees of trading members may only open a derivative securities trading account with that trading member.

3. Except for the cases stipulated in Clause 4 and Clause 5 of this Article, investors may open multiple derivative securities trading accounts according to the principle that each trading member can only open one derivative securities trading account per investor. For each derivative securities trading account, the investor may open one margin account at a clearing member designated by the trading member in accordance with Clause 1 of Article 10 of this Circular.

4. Investment Fund Management Companies may open multiple derivative securities trading accounts at each trading member, specifically as follows:

a) May open two total trading accounts named after the investment fund management company to manage portfolios for entrusted investors, including one account for domestic entrusted investors' derivative securities transactions and one account for foreign entrusted investors' derivative securities transactions;

b) May open one derivative securities trading account for each investment fund and securities investment company managed by the investment fund management company, named after the investment fund or securities investment company at each trading member.

5. Securities companies established abroad may open two derivative securities trading accounts at each trading member, specifically as follows:

a) May open one account for proprietary derivative securities trading activities;

b) May open one total trading account for brokerage activities for other foreign investors.

6. Registration of information for trading accounts and total trading accounts on the settlement system for derivative securities transactions shall be carried out in accordance with the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 7. Receiving, executing orders, and confirming transaction results

1. Trading members shall receive, execute orders, and confirm the results of derivative securities transactions in accordance with the provisions of Clauses 1, 2, 3, 5, and 7 of Article 16 of Circular No. 121/2020/TT-BTC dated December 31, 2020, issued by the Minister of Finance on the activities of securities companies and any amendments, supplements, or replacements thereof (if any).

2. Trading members may only execute customer orders when the trading order contains all required information about the customer, trading date, time of receipt of the order, trading account, trading date, derivative security code traded, trading method, type of order, trading volume, and trading price according to the regulations of the Vietnam Stock Exchange.

3. Trading members must refuse to accept customer orders in the following cases:

a) The order does not contain all the required information as stipulated in Clause 2 of this Article;

b) The customer has not fully deposited margin, except for offsetting transactions; or

c) The order exceeds the limit set out in the regulations of the Vietnam Stock Exchange or the order leads to the customer's position on that account exceeding the position limit set out in the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 8. Post-transaction error correction

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

a) Transactions lacking customer account information due to incomplete system updates;

b) Closing position transactions where the number of matched orders exceeds the number of offset positions on the suspended account due to non-compliance with margin requirements, position limits, and open position limits set by the Vietnam Securities Depository and Clearing Corporation.

2. Post-transaction error correction shall be carried out as follows:

a) For transaction errors at point a of Clause 1 of this Article, the Vietnam Securities Depository and Clearing Corporation shall correct the transaction to the correct customer account after completing the information update in the system. If the clearing member fails to update customer information in the system by the deadline set by the Vietnam Securities Depository and Clearing Corporation, the Vietnam Securities Depository and Clearing Corporation will correct the transaction lacking account information to the self-trading account of the clearing member;

b) For transaction errors at point b of Clause 1 of this Article, the Vietnam Securities Depository and Clearing Corporation shall correct the erroneous transaction to the self-trading account of the clearing member.

3. For transaction errors not covered under Clause 1 of this Article, the Vietnam Securities Depository and Clearing Corporation may consider and report to the State Securities Commission for approval to handle such errors.

4. All parties involved in the transaction shall bear responsibility for errors caused by themselves within their authority and responsibilities. The clearing member shall be responsible for customer transaction errors, including those of non-clearing members and customers of non-clearing members (for common clearing members).

5. After post-transaction error correction, if a clearing member loses its ability to pay, it may utilize support sources as provided for in Clause 2 of Article 15 of this Circular.

6. Documentation, procedures, and processes for post-transaction error correction shall be carried out in accordance with the regulations of the Vietnam Securities Depository and Clearing Corporation.

Section 2

DERIVATIVE SECURITIES TRADING SETTLEMENT AND CLEANSING ACTIVITY

Article 9. Principles for Settlement of Derivative Securities Transactions for Investors

1. The settlement activities of derivative securities transactions for investors include the settlement of position profits and losses and the settlement upon contract execution, specifically as follows:

a) In the case of position profit and loss settlement:

On trading days prior to the final trading day, the value of the position profit and loss settlement amount is determined daily based on open positions on the investor's trading account and the difference between the end-of-day settlement price compared to the end-of-day settlement price of the previous trading day; or the difference between the end-of-day settlement price compared to the settlement price (for positions opened on the same day); or the difference between the settlement price and the end-of-day settlement price of the previous trading day (for early position closure cases); or the difference between the end-of-day closing position settlement price and the opening position settlement price (for cases where positions are opened and closed on the same trading day).

On the final trading day, the value of the position profit and loss settlement amount is determined based on open positions on the investor's trading account and the difference between the final settlement price compared to the end-of-day settlement price of the previous trading day; or the difference between the final settlement price compared to the settlement price (for positions opened on the same day); or the difference between the settlement price and the end-of-day settlement price of the previous trading day (for early position closure cases); or the difference between the end-of-day closing position settlement price and the opening position settlement price (for cases where positions are opened and closed on the final trading day).

The end-of-day settlement price, the final settlement price are published on the electronic information page of Vietnam Securities Depository and Central Counterparty Corporation.

b) In the case of settlement upon contract execution:

For contracts settled in cash form: the contract execution is completed when the settlement of the final trading day's position profit and loss is completed.

For contracts settled in the form of transferring underlying assets: Contract execution is completed when the selling investor must transfer the underlying asset or transferable asset according to regulations and the buying investor must make payment according to the terms stipulated in the contract and the rules of Vietnam Securities Depository and Central Counterparty Corporation; or the investor completes the payment of compensation amount (if any) as prescribed in point c, Clause 4, Article 11 of this Circular.

2. Settlement is carried out through the investor's margin deposit account and margin securities account. The settlement activity is coordinated and implemented by Vietnam Securities Depository and Central Counterparty Corporation and clearing members in accordance with the provisions of Clauses 3 and 4, Article 11 of this Circular.

Article 10. Investor Margin Account

1. Clearing members open a margin deposit account for investors under their name and are responsible for managing margin deposits separately for each investor as prescribed in point a, Clause 4, Article 34 of Decree No. 158/2020/ND-CP. Clearing members may use the investor's margin deposit account in accordance with the provisions of Clause 2 of this Article.

Clearing members open one margin securities account for each investor to manage positions, margin obligations, collateral assets, transferable assets, and perform settlement obligations for positions on the investor's trading account. Non-clearing members and non-clearing member clients open a margin securities account at a common clearing member.

2. The investor's margin deposit account and margin securities account can only be used for the following activities:

a) Receiving and returning margin deposits to investors;

b) Receiving daily interest or paying daily losses from the investor's position; settlement upon contract execution; receiving interest on margin deposits at banks (if applicable);

c) Receiving or transferring underlying assets, transferable assets when executing contracts (in the case of settlement in the form of transferring underlying assets) for the investor's position.

3. When conducting derivative securities transactions, investors must deposit initial margins with clearing members as follows:

a) Investors are responsible for fully depositing initial margins for all anticipated open positions with clearing members before executing transactions, except for offsetting transactions;

b) Investors must maintain margins for their positions and must replenish margins when the value of collateral assets falls below the required margin level or the balance of margin deposits does not meet the required cash margin ratio as specified by the clearing member. Depending on market conditions, clearing members have the right to request investors to replenish margins during the trading session;

c) Investors may withdraw excess collateral assets if the value of collateral assets exceeds the required margin level set by the clearing member;

d) When depositing initial margins or replenishing margins, clearing members may require investors to deposit margins entirely in cash or allow investors to use part of the collateral assets as securities according to the cash margin ratio specified by the clearing member but not lower than the cash margin ratio stipulated in the rules of Vietnam Securities Depository and Central Counterparty Corporation.

Article 11. Principles of netting and settlement by Vietnam Securities Depository and Clearing Corporation

1. The netting of derivative securities shall be carried out by Vietnam Securities Depository and Clearing Corporation on each investor's account and clearing member's account based on the principle that positions of the same derivative security with the same maturity date on the same account will be offset by Vietnam Securities Depository and Clearing Corporation to determine the net position of derivative securities on that account.

2. Vietnam Securities Depository and Clearing Corporation has the right to refuse to net transactions that are not valid and notify the Hanoi Stock Exchange of refused netting transactions in the following cases:

a) Transactions executed by clearing members after Vietnam Securities Depository and Clearing Corporation has notified the Hanoi Stock Exchange to suspend trading for such clearing members. Transactions of non-clearing members who have entrusted clearing agreements with such clearing members are also refused netting;

b) Receiving transactions with a transaction date different from the working day on Vietnam Securities Depository and Clearing Corporation's system;

c) Transactions conducted with derivative security codes not yet accepted for netting and settlement on Vietnam Securities Depository and Clearing Corporation's system;

d) Transactions conducted by non-clearing members when they have not been accepted for netting and settlement on Vietnam Securities Depository and Clearing Corporation's system by the clearing members;

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

3. For daily profit and loss settlement activities, based on the end-of-day profit and loss results on each investor's account, Vietnam Securities Depository and Clearing Corporation nets funds according to each clearing member to determine the payable and receivable amounts of each clearing member. Daily profit and loss settlement is carried out through bank transfers to the deposit accounts of Vietnam Securities Depository and Clearing Corporation at the settlement bank.

4. For settlement activities upon contract execution, Vietnam Securities Depository and Clearing Corporation performs final settlement on the settlement date based on the following principles:

a) In case of cash settlement: Vietnam Securities Depository and Clearing Corporation calculates separate settlement obligations for each investor and each clearing member. The paying clearing member must transfer sufficient funds into the deposit account opened at the settlement bank. The receiving clearing member is obligated to settle with investors immediately after receiving payment from Vietnam Securities Depository and Clearing Corporation;

b) In case of delivery of underlying assets: the selling clearing member must deliver the full quantity and correct type of underlying assets or substitutable assets as stipulated in the derivative securities contract into the margin securities account as requested by Vietnam Securities Depository and Clearing Corporation. In case of insufficient securities for delivery, the clearing member may use borrowed securities from the securities lending and borrowing system of Vietnam Securities Depository and Clearing Corporation for settlement in accordance with the regulations of Vietnam Securities Depository and Clearing Corporation;

The buying clearing member can only receive delivered assets after fully settling the required amount as requested by Vietnam Securities Depository and Clearing Corporation, then allocate the delivered assets to the buying investors immediately after receiving the assets;

c) In case a clearing member does not have sufficient funds for settlement or government bonds for delivery within the specified period, Vietnam Securities Depository and Clearing Corporation may settle government bond futures contracts in cash. In this case, the clearing member lacking funds for settlement or government bonds for delivery is responsible for compensating the related clearing member through Vietnam Securities Depository and Clearing Corporation, with the compensation amount not less than 5% of the contract settlement value. Vietnam Securities Depository and Clearing Corporation specifies the method of determining the compensation value and the settlement method.

5. Vietnam Securities Depository and Clearing Corporation issues regulations guiding the procedures and formalities for netting, settlement, and delivery of underlying assets when executing contracts, settlement methods, and settlement times.

Article 12. Member Settlement Firm Margin Accounts

1. The Vietnam Securities Depository and Clearing Corporation shall be responsible for opening margin deposit accounts, settlement deposit accounts in the name of the Vietnam Securities Depository and Clearing Corporation at the settlement bank (hereinafter referred to as member deposit accounts) and margin securities accounts at the Vietnam Securities Depository and Clearing Corporation (hereinafter referred to as member margin securities accounts) to manage collateral assets and fulfill settlement obligations for positions in the name of the settlement members.

2. Member deposit accounts at the settlement bank opened for each settlement member include:

a) An independent trading margin deposit account to manage margin deposits for independent trading and market making activities of that settlement member;

b) A customer margin deposit account to manage margin deposits of all customers of that settlement member;

c) A settlement deposit account to settle daily profit and loss positions, execute contracts in the name of the settlement member, and other settlement activities of the settlement member.

3. Member deposit accounts and member margin securities accounts may only be used for the following activities:

a) Receiving and returning collateral assets to settlement members. Collateral assets on this account include both assets of customers used by the settlement member to secure their own positions;

b) Receiving interest or paying losses daily for positions in the name of the settlement member; executing and receiving payments when contracts are executed; receiving interest on margin deposits at the bank;

c) Receiving and transferring underlying securities when contracts are executed (in the case of settlement in the form of transferring underlying assets) for positions in the name of the settlement member.

4. Member deposit accounts and member margin securities accounts must be established to ensure separate management of the assets of settlement members from those of the Vietnam Securities Depository and Clearing Corporation; separate assets of each settlement member; and separate assets of settlement members from their respective customers.

5. At any time, the Vietnam Securities Depository and Clearing Corporation has the right to request settlement members to provide detailed information about transaction accounts, margin accounts, the value and portfolio of collateral assets of each investor.

6. Money and securities arising from exercising rights over margin securities on member margin accounts shall be allocated according to the regulations of the Vietnam Securities Depository and Clearing Corporation. The Vietnam Securities Depository and Clearing Corporation shall not conduct term deposits with margin deposits of settlement members. Interest on margin deposits will be returned to settlement members at the call rate announced by the settlement bank.

7. The Vietnam Securities Depository and Clearing Corporation shall be responsible for establishing a comprehensive system to manage information on positions, settlement obligations, margin balances, the value and portfolio of collateral securities by each investor's margin account, settlement member.

Article 13. Margin Deposits of Clearing Members

1. The Vietnam Securities Depository and Clearing Corporation shall determine the margin requirement that clearing members must deposit for positions held in their name and still outstanding after the trading hours end.

2. The margin requirement shall be determined based on various types of risk margins, futures contract margin, government bond futures contract transfer margin, minimum margin, and other factors deemed necessary by the Vietnam Securities Depository and Clearing Corporation.

3. Clearing members must supplement margin deposits when the value of the margin deposit does not meet the margin requirement set by the Vietnam Securities Depository and Clearing Corporation. Clearing members may withdraw margin deposits if the value of the margin deposit exceeds the margin requirement as stipulated by the Vietnam Securities Depository and Clearing Corporation.

4. Clearing members may deposit margin with either cash or securities, but they must ensure that the cash margin ratio is not less than 80% of the margin requirement, except in cases where an investor holding a short position in a government bond futures contract performs the contract through the transfer of the underlying asset and uses government bonds that can be transferred to secure the margin.

5. During trading days, the Vietnam Securities Depository and Clearing Corporation periodically monitors the value of clearing members' margin deposits. If a clearing member fails to meet the margin requirement, the Vietnam Securities Depository and Clearing Corporation has the right to warn the clearing member and apply one of the following measures:

a) Request the Hanoi Stock Exchange to suspend trading for related accounts, except for offsetting transactions to reduce positions;

b) Require the clearing member (for proprietary accounts) or through the clearing member require the investor (for investor accounts) to supplement margin deposits, execute offsetting transactions to reduce positions.

6. The establishment of margin accounts, determination of margin types, adjustment of margin levels, methods for determining margin levels and parameters of these methods, types of collateral accepted, procedures and times for depositing or withdrawing margin, execution of rights related to pledged securities, and other relevant matters shall be carried out in accordance with the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 14. Collateral Assets

1. Investors and clearing members may use cash and securities to secure margin for derivative securities transactions.

2. Securities permitted by clearing members for investors to use as collateral must meet the following criteria:

a) They are securities included in the list of acceptable collateral published by the Vietnam Securities Depository and Clearing Corporation pursuant to Clause 3 of this Article;

b) They are not assets securing transactions under civil law provisions on secured transactions, including shares purchased in margin financing transactions; they are not assets currently frozen by state management organizations according to relevant laws or not assets currently being lent according to laws;

c) They meet other criteria set by the clearing member.

3. Securities accepted by the Vietnam Securities Depository and Clearing Corporation as collateral for derivative securities positions must satisfy all of the following criteria:

a) They are listed in the collateral acceptance list of the Vietnam Securities Depository and Clearing Corporation;

b) They are not subject to warning, control, or suspension of trading on the Hanoi Stock Exchange or Ho Chi Minh City Stock Exchange; or securities issued by organizations in liquidation, dissolution, bankruptcy, merger, or consolidation;

c) They are not pledged, frozen, or temporarily held at the Vietnam Securities Depository and Clearing Corporation;

d) They are freely tradable and have been deposited in trading securities accounts at the Vietnam Securities Depository and Clearing Corporation; they are assets owned by the pledgor, which is the investor or clearing member;

đ) They meet other criteria according to the regulations of the Vietnam Securities Depository and Clearing Corporation.

4. The Vietnam Securities Depository and Clearing Corporation and clearing members are responsible for publishing lists of acceptable collateral securities and discount rates for each security on their electronic information websites. In case of changes to acceptable collateral securities, investors and clearing members must replace them with cash or other acceptable collateral securities as required by the Vietnam Securities Depository and Clearing Corporation and clearing members.

5. Management of Collateral Assets:

a) The Vietnam Securities Depository and Clearing Corporation and clearing members manage the collateral assets of clearing members and investors in accordance with Articles 33 and 34 of Decree No. 158/2020/NĐ-CP;

b) Clearing members may only use collateral assets on investor margin accounts for margin purposes, to guarantee payment obligations, and to settle positions on corresponding trading accounts of the same investor, except as provided in points d and đ of this clause;

c) Investor collateral assets must be managed separately and cannot be considered as assets of the clearing member, even if they have been pledged on the clearing member's margin account. In the event of the clearing member's bankruptcy, investor collateral assets must be returned to the investor after fulfilling the investor's own settlement obligations;

d) In the event that an investor loses the ability to pay, the clearing member may use, sell, or transfer collateral assets without the investor's approval. Within one day after processing the collateral assets, the clearing member must notify the investor about the processing of collateral assets according to the methods specified in the derivative securities trading account opening contract. The notification must clearly state the reasons, type of assets processed, method and time of processing, and the amount realized.

đ) The Vietnam Securities Depository and Central Counterparty Corporation has the right to use the collateral assets of investors and clearing members that have been submitted to the Vietnam Securities Depository and Central Counterparty Corporation to support settlement for the positions of investors and clearing members in accordance with points c and đ, Clause 5, Article 28 of Decree No. 158/2020/NĐ-CP.

e) During the collateral period, investors and clearing members still have the right to receive rights and benefits arising from the securities collateral according to the business law and securities law. The handling of investor interests related to collateral securities shall be carried out in accordance with the regulations of the Vietnam Securities Depository and Central Counterparty Corporation.

g) During the collateral period on the collateral account, investors and clearing members are not allowed to transfer, give, gift, mortgage, pledge, re-collateralize, register as secured property, or use collateral assets for other purposes.

Article 15. Handling of Insolvency Cases

1. A clearing member or an investor who is a client of a clearing member is considered insolvent when they fall under any of the following circumstances:

a) Failing to timely perform or fully perform their obligations to cover position losses or obligations to pay compensation amounts as stipulated in point c, Clause 4, Article 11 of this Circular or obligations to pay money upon contract execution according to the regulations of the Vietnam Securities Depository and Central Counterparty Corporation;

b) Being declared bankrupt or undergoing bankruptcy proceedings in accordance with the corporate bankruptcy law;

c) Other cases as specified in the regulations of the Vietnam Securities Depository and Central Counterparty Corporation.

2. In the event that a clearing member or an investor who is a client of a clearing member becomes insolvent as provided in point a, Clause 1 of this Article, the Vietnam Securities Depository and Central Counterparty Corporation may use the following sources of support in the following sequence:

a) Utilizing the collateral funds of the insolvent clearing member and the clients of the insolvent clearing member;

b) If the collateral funds are insufficient to cover the payment obligations, the Vietnam Securities Depository and Central Counterparty Corporation may utilize the monetary contribution to the clearing fund of the insolvent clearing member;

c) Utilizing the monetary contributions to the clearing fund of other clearing members at a ratio determined by the Vietnam Securities Depository and Central Counterparty Corporation. In this case, the Vietnam Securities Depository and Central Counterparty Corporation must notify the relevant clearing members in detail about the use of the clearing fund on the day of use. The insolvent clearing member is obligated to repay the entire amount of assets used from the clearing fund and pay interest to other members at a rate determined by the Vietnam Securities Depository and Central Counterparty Corporation in compliance with current laws;

d) Utilizing the operational risk prevention fund of the Vietnam Securities Depository and Central Counterparty Corporation as prescribed;

đ) Utilizing legitimate capital resources of the Vietnam Securities Depository and Central Counterparty Corporation after obtaining approval from the Ministry of Finance.

3. In addition to using the support sources provided in Clause 2 of this Article, the Vietnam Securities Depository and Central Counterparty Corporation may take the following measures:

a) Requesting the insolvent clearing member to explain the reasons, provide all information related to insolvency, provide a list of clients, customer identification information, and information on the client's collateral account;

b) Cooperating with the Hanoi Stock Exchange to limit or prohibit the opening of new positions in the name of the insolvent clearing member, except for offset transactions;

c) Requesting the insolvent clearing member to liquidate their positions in accordance with point b, Clause 5, Article 28 of Decree No. 158/2020/NĐ-CP;

d) Opening a trading account at the Hanoi Stock Exchange to execute offset transactions to reduce the positions of the insolvent clearing member in accordance with point b, Clause 5, Article 28 of Decree No. 158/2020/NĐ-CP.

4. In the event that an investor becomes insolvent, the clearing member is responsible for immediately notifying the Vietnam Securities Depository and Central Counterparty Corporation of the positions and collateral asset portfolio of that investor and may take the following measures:

a) Requesting the investor to perform or the clearing member to perform the closing or forced liquidation of open positions of the investor;

b) Suspending the acceptance of trading orders to open new positions from the related investor; simultaneously canceling any unexecuted trading orders of that investor;

c) Using, selling, or transferring the investor's collateral assets to purchase or serve as collateral for loans to fulfill payment obligations for the investor's open positions. If insufficient, the clearing member must use its own assets to fulfill derivative securities contracts of the investor;

d) The investor is responsible for repaying the clearing member the full portion of assets used by the clearing member to fulfill the investor's payment obligations and bear all related costs incurred.

5. In the event that a clearing member becomes insolvent and has received support measures for settlement as prescribed in Clauses 2 and 3 of this Article, the clearing member is responsible for repaying the Vietnam Securities Depository and Central Counterparty Corporation the full portion of assets utilized from the clearing fund, the operational risk prevention fund, and legitimate capital resources of the Vietnam Securities Depository and Central Counterparty Corporation to ensure settlement and bear all related costs incurred.

The Vietnam Securities Depository and Central Counterparty Corporation may sell collateral assets and stock contributions to the clearing fund of insolvent clearing members at prices determined by the Vietnam Securities Depository and Central Counterparty Corporation to repay the utilized sources and compensate for financial losses incurred during the insolvency resolution process (if any).

6. In the event that a clearing member or investor, who is a customer of a clearing member, loses their ability to pay, they must repay the sources of support used according to the provisions set forth in Clause 2 of this Article in the following sequence:

a) Legal capital funds of Vietnam Securities Depository and Clearing Corporation;

b) The business 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 that has lost its ability to pay in the clearing fund at Vietnam Securities Depository and Clearing Corporation;

đ) Margin deposits of the clearing member used to ensure payment for investors who have lost their ability to pay.

Article 16. The Clearing Fund

1. Forms of contribution to the clearing fund:

a) A clearing member is obligated to contribute to the clearing fund at a minimum initial level after Vietnam Securities Depository and Clearing Corporation approves the principle of registration as a clearing member, and is also obligated to make periodic contributions to the clearing fund (if applicable) according to the provisions set forth in Clause 2 of this Article.

A clearing member may contribute to the clearing fund in the form of either money or securities according to the regulations of Vietnam Securities Depository and Clearing Corporation;

b) A clearing member is obligated to make extraordinary contributions to the clearing fund according to the regulations of Vietnam Securities Depository and Clearing Corporation in the following cases:

The clearing member is placed under warning status according to securities laws regarding financial safety and banking laws regarding capital safety;

Assets contributed to the clearing fund by the clearing member are frozen or confiscated by state authorities or pursuant to court decisions;

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

2. Contribution levels to the clearing fund:

a) Initial minimum contribution level: 10 billion VND for direct clearing members, 15 billion VND for joint clearing members;

b) Monthly, Vietnam Securities Depository and Clearing Corporation reassesses the scale of the clearing fund and determines each clearing member's obligation to contribute to the clearing fund based on transaction volume, price volatility in the market, financial obligations, risk levels, and other criteria. Each clearing member's contribution amount reassessed must not be lower than the initial minimum contribution level specified in point a of this clause.

If the balance of contributions to the clearing fund exceeds the obligation to contribute, the clearing member may withdraw the difference; if the balance of contributions to the clearing fund is less than the obligation to contribute, the clearing member must make additional contributions to cover the difference.

3. Management of the clearing fund:

a) Assets contributed by each clearing member to the clearing fund belong to that clearing member and are managed separately from the assets of Vietnam Securities Depository and Clearing Corporation by Vietnam Securities Depository and Clearing Corporation. Vietnam Securities Depository and Clearing Corporation has full authority to use, including selling, the contributed assets to fulfill the obligations of positions registered under the name of the clearing member;

b) For monetary contributions, Vietnam Securities Depository and Clearing Corporation opens a deposit account at a settlement bank to manage the money contributed by clearing members to the clearing fund.

For securities contributions, Vietnam Securities Depository and Clearing Corporation opens a securities deposit account in the name of Vietnam Securities Depository and Clearing Corporation to manage the securities contributions of clearing members. Dividends, interest, and other benefits arising from contributed securities must be returned to the clearing member after deducting related costs and taxes;

c) Interest generated from contributions to the clearing fund is allocated to clearing members proportionally to the amount and duration of their contributions after deducting related costs.

4. Use of the clearing fund:

a) Assets contributed to the clearing fund are used by Vietnam Securities Depository and Clearing Corporation to guarantee the payment obligations of clearing members who have lost their ability to pay. Cases of using the clearing fund are carried out according to the provisions set forth in points b and c of Clause 2 and Clause 5 of Article 15 of this Circular.

A clearing member who has lost their ability to pay must bear the interest on the use of the clearing fund according to the regulations of Vietnam Securities Depository and Clearing Corporation;

b) A clearing member can only be refunded the assets contributed to the clearing fund when their status as a clearing member is revoked or they are no longer a clearing member. Refunds of the clearing fund will be made after Vietnam Securities Depository and Clearing Corporation has deducted all amounts owed, including financial compensation to Vietnam Securities Depository and Clearing Corporation (if applicable) and payments required to fulfill positions registered under that member according to the regulations.

In the case where a clearing member is in the process of being processed for revocation of their status as a clearing member, the assets contributed to the clearing fund by that clearing member are managed separately from the clearing fund and serve as the basis for the competent authority to issue a decision to recover (if applicable) after deducting the amount the clearing member still owes to Vietnam Securities Depository and Clearing Corporation.

5. The ratio of monetary contributions to the clearing fund and types of securities contributed to the clearing fund; methods of assessing the scale of the clearing fund; procedures for submitting and withdrawing contributions to the clearing fund; methods of receiving and allocating interest from deposits and the use of the clearing fund, and other related matters are implemented according to the regulations of Vietnam Securities Depository and Clearing Corporation.

Chapter IV

MEMBERS OF THE VIETNAM SECURITIES EXCHANGE AND VIETNAM SECURITIES DEPOSITORY AND CLEARING CORPORATION

Section 1

MEMBERS OF THE VIETNAM SECURITIES EXCHANGE

Article 17. Activities of Trading Members, Special Trading Members

1. Non-collateral members must enter into a collateral settlement and payment agency contract with the common clearing member. The contract must comply with current regulations and include the minimum contents according to Model No. 01 of the Appendix issued together with this Circular. The final settlement, transfer of margin deposits, and position transfer in case of change of the common clearing member shall be carried out in accordance with the regulations of the Vietnam Securities Depository and Clearing Corporation.

2. Trading members must enter into a securities derivatives trading account opening contract with customers. The securities derivatives trading account opening contract must comply with current regulations and include the minimum contents according to Model No. 02 of the Appendix issued together with this Circular.

3. Non-collateral members have the responsibility to regularly reconcile, review, update, and provide complete and timely information about transactions and other related information to the common clearing member. All information about investors and investor trading accounts (if any) must be provided fully and promptly to the State Securities Commission, the Vietnam Securities Depository and Clearing Corporation, the Hanoi Stock Exchange, and the Vietnam Stock Exchange upon request in writing.

4. Trading members must immediately stop accepting trading orders from customers, except for offsetting trades, and close the customer's account immediately after completing the liquidation of the customer's positions when it is discovered that the customer has opened a trading account under any of the following circumstances:

a) The customer violates the provisions of Clause 2, Article 6 of this Circular;

b) The customer is a minor;

c) The customer is a person with limited civil capacity; a person deprived of civil capacity; a person with difficulty in understanding and controlling behavior; a person serving a criminal sentence or prohibited by the court from practicing a profession or performing certain work.

5. Trading members may only continue to accept offsetting trades from clearing members and customers of clearing members who have lost their ability to pay, and perform other activities as required by the Hanoi Stock Exchange, the Vietnam Securities Depository and Clearing Corporation, and the State Securities Commission.

Article 18. Activities of Market Maker Members

1. Market maker members fulfill market-making obligations according to the market-making contract and the regulations of the Vietnam Stock Exchange.

2. Market maker members may simultaneously carry out market-making transactions and proprietary trading but must ensure the principles set forth in the regulations of the Vietnam Stock Exchange.

Article 19. Suspension of Trading Activities of Trading Members

1. The Vietnam Stock Exchange suspends part or all of the trading activities of derivative securities of trading members in the following cases:

a) The trading member is suspended from operating derivative securities brokerage or proprietary trading by the State Securities Commission;

b) The trading member is suspended from clearing and settlement of derivative securities transactions by the Vietnam Securities Depository and Clearing Corporation (in the case where the trading member is also a clearing member);

c) The common clearing member providing clearing and settlement services to that trading member is suspended from clearing and settlement of derivative securities transactions or revoked its membership status by the Vietnam Securities Depository and Clearing Corporation (in the case where the trading member is a non-clearing member);

d) The trading member seriously and systematically breaches obligations under the regulations of the Vietnam Stock Exchange;

đ) Other cases as stipulated in the regulations of the Vietnam Stock Exchange;

e) Other cases reported by the Vietnam Stock Exchange and approved by the State Securities Commission.

2. The suspension period for the cases specified in Clause 1 of this Article is as follows:

a) For the case specified in point a, Clause 1 of this Article, the suspension period is the time the State Securities Commission suspends the operation of derivative securities business;

b) For the case specified in point b, Clause 1 of this Article, the trading member will be suspended until the Vietnam Securities Depository and Clearing Corporation restores its clearing and settlement activities for derivative securities transactions;

c) For the case specified in point c, Clause 1 of this Article, the trading member will be suspended for a maximum of 90 days or until provided with clearing and settlement services from another clearing member (whichever occurs first);

d) For the case specified in point d, Clause 1 of this Article, the suspension period is a maximum of 90 days;

đ) For the cases specified in points đ and e, Clause 1 of this Article, the suspension period is implemented according to the regulations of the Vietnam Stock Exchange.

3. The procedures for suspending trading activities of trading members are carried out according to the regulations of the Vietnam Stock Exchange.

Article 20. Revocation of Trading Member Status

1. The Vietnam Stock Exchange shall revoke the trading member status in the following cases:

a) The trading member voluntarily requests to revoke their status and is approved by the Vietnam Stock Exchange;

b) The trading member's status is compulsorily revoked.

2. The compulsory revocation of the trading member status as provided for in point b, Clause 1 of this Article includes the following cases:

a) Exceeding the maximum suspension period as stipulated in Clause 2, Article 19 of this Circular without remedying the causes leading to suspension;

b) Failing to meet the conditions for trading members as prescribed in Clause 1, Article 22 of Decree No. 158/2020/NĐ-CP;

c) Having the Securities Business Establishment and Operation License revoked;

d) Being merged, dissolved, or declared bankrupt;

đ) Other cases as stipulated in the regulations of the Vietnam Stock Exchange;

e) Other cases reported by the Vietnam Stock Exchange and approved by the State Securities Commission.

3. The dossier, procedures, and process for revoking the trading member status shall be carried out according to the regulations of the Vietnam Stock Exchange.

Article 21. Suspension of Trading Activities of Special Trading Members

1. The Vietnam Stock Exchange shall suspend the trading activities of special trading members in the following cases:

a) The special trading member is suspended from providing derivative securities settlement and transaction services by the State Securities Commission (in case the special trading member is also a clearing member);

b) The special trading member is suspended from derivative securities settlement and transaction activities by the Vietnam Securities Depository and Clearing Corporation (in case the special trading member is also a clearing member);

c) The common clearing member providing settlement services for the special trading member is suspended from derivative securities settlement and transaction activities or has their status revoked by the Vietnam Securities Depository and Clearing Corporation (in case the special trading member is a non-clearing member);

d) The special trading member seriously and systematically breaches obligations under the regulations of the Vietnam Stock Exchange;

đ) Other cases as stipulated in the regulations of the Vietnam Stock Exchange;

e) Other cases reported by the Vietnam Stock Exchange and approved by the State Securities Commission.

2. The suspension period for the cases specified in Clause 1 of this Article is as follows:

a) For the case stipulated in point a, Clause 1 of this Article, the suspension period is the time the State Securities Commission suspends the provision of derivative securities settlement and transaction services;

b) For the case stipulated in point b, Clause 1 of this Article, the suspension period is the time the Vietnam Securities Depository and Clearing Corporation suspends derivative securities settlement and transaction activities;

c) For the case stipulated in point c, Clause 1 of this Article, the special trading member may be suspended for up to 90 days or until they receive settlement services from another substitute clearing member (whichever occurs first);

d) For the case specified in point d, Clause 1 of this Article, the suspension period is a maximum of 90 days;

đ) For the cases specified in points đ and e, Clause 1 of this Article, the suspension period is implemented according to the regulations of the Vietnam Stock Exchange.

3. The procedure for suspending the trading activities of special trading members shall be carried out according to the regulations of the Vietnam Stock Exchange.

Article 22. Revocation of Special Trading Member Status

1. The Vietnam Stock Exchange shall revoke the special trading member status in the following case:

a) The special trading member voluntarily requests to revoke their status and is approved by the Vietnam Stock Exchange;

b) The special trading member's status is compulsorily revoked.

2. The compulsory revocation of the special trading member status as provided for in point b, Clause 1 of this Article includes the following cases:

a) Exceeding the maximum suspension period as stipulated in Clause 2, Article 21 of this Circular without remedying the causes leading to suspension;

b) Failing to meet the conditions for special trading members as prescribed in Clause 1, Article 23 of Decree No. 158/2020/NĐ-CP;

c) Being merged, dissolved, or declared bankrupt;

d) Other cases as provided for in the regulations of the Vietnam Stock Exchange;

đ) Other cases reported by the Vietnam Stock Exchange and approved by the State Securities Commission;

3. The dossier, procedures, and process for revoking the special trading member status shall be carried out according to the regulations of the Vietnam Stock Exchange.

Article 23. Suspension of Market-Making Activities of Market-Making Members

1. The Vietnam Stock Exchange shall suspend the market-making activities of market-making members in the following cases:

a) A market-making member fails to comply with any of its obligations under the regulations of the Vietnam Stock Exchange;

b) A market-making member is suspended from trading on the derivatives securities market by the Vietnam Stock Exchange or is suspended from settlement and payment activities on the derivatives securities market by the Vietnam Securities Depository and Clearing Corporation;

c) Other cases as stipulated in the regulations of the Vietnam Stock Exchange;

d) Other cases reported by the Vietnam Stock Exchange and approved by the State Securities Commission.

2. For the cases specified in points a and b of Clause 1 of this Article, the maximum suspension period is ninety days. For the cases specified in points c and d of Clause 1 of this Article, the suspension period shall be implemented according to the regulations of the Vietnam Stock Exchange.

3. The procedures for suspending the market-making activities of market-making members shall be carried out in accordance with the regulations of the Vietnam Stock Exchange.

Article 24. Revocation of Market-Making Member Status

1. The Vietnam Stock Exchange shall revoke the status of a market-making member in the following case:

a) A market-making member voluntarily requests to revoke its market-making member status and such request is approved by the Vietnam Stock Exchange in accordance with the market-making agreement signed with the Hanoi Stock Exchange;

b) A market-making member is compulsorily revoked of its market-making member status.

2. Compulsory revocation of market-making member status as provided for in point b of Clause 1 of this Article includes the following cases:

a) Upon expiration of the suspension period for market-making activities as prescribed in Clause 2 of Article 23 of this Circular, if the member fails to rectify the causes leading to the suspension;

b) Failure to meet the requirements to become a market-making member as stipulated in Clause 1 of Article 24 of Decree No. 158/2020/NĐ-CP;

c) Being revoked of trading member status, special trading member status, or settlement member status by the Vietnam Stock Exchange or being revoked of settlement member status by the Vietnam Securities Depository and Clearing Corporation;

d) Other cases as provided for in the regulations of the Vietnam Stock Exchange;

đ) Other cases reported by the Vietnam Stock Exchange and approved by the State Securities Commission;

3. The documentation, procedures, and processes for revoking market-making member status shall be carried out in accordance with the regulations of the Vietnam Stock Exchange.

Article 25. Other Forms of Violation Handling Against Members of the Vietnam Stock Exchange

1. In addition to the forms of violation handling prescribed in Clauses 1 and 2 of Article 19, Clause 2 of Article 20, Clauses 1 and 2 of Article 21, Clause 2 of Article 22, Clauses 1 and 2 of Article 23, and Clause 2 of Article 24 of this Circular, the Vietnam Stock Exchange may apply the following forms of violation handling:

a) Reminder;

b) Reprimand;

c) Temporary disconnection from the trading system, temporary cessation of order submission and receipt.

2. The acts of violation, procedures, and processes for handling violations of members as stipulated in Clause 1 of this Article shall be implemented in accordance with the regulations of the Vietnam Stock Exchange.

MEMBERS OF THE VIETNAM SECURITIES DEPOSITORY AND CLEARING CORPORATION
VIETNAMESE SECURITIES

Article 26. Activities of Clearing Members

1. Clearing members must enter into clearing and settlement contracts with the Vietnam Securities Depository and Clearing Corporation. Common clearing members must also enter into agency clearing and settlement contracts with non-clearing members (if any). The contracts must include provisions clearly stating that the clearing member acts as the agent for the brokerage clients and clearing clients, standing in the positions of these clients and being responsible for fully performing the obligations of the clients towards the Vietnam Securities Depository and Clearing Corporation.

2. Clearing members must have the obligation to manage accounts and collateral separately for each client; establish a system of records and compile comprehensive information on daily position gains and losses, initial margin value, required margin value, and the value and list of collateral assets according to each investor's account.

3. Clearing members have the right to determine the initial margin value, required margin value, and cash collateral ratio for investors but shall not be lower than the corresponding values stipulated in the regulations of the Vietnam Securities Depository and Clearing Corporation. Information about accepted collateral assets, methods, and time of depositing collateral must be detailed published on the electronic information website of the clearing member.

Article 27. Suspension of Clearing and Settlement Activities for Derivative Securities Transactions of Clearing Members

1. The Vietnam Securities Depository and Clearing Corporation shall issue a decision to suspend the clearing and settlement activities for derivative securities transactions of clearing members in the following cases:

a) The clearing member loses its ability to settle with outstanding payment obligations exceeding the total usable collateral asset balance at the time of determining the inability to settle and the balance of the contribution to the Clearing Fund of the clearing member itself;

b) The clearing member fails to contribute adequately to the Clearing Fund within ten days from the due date as notified by the Vietnam Securities Depository and Clearing Corporation;

c) The clearing member fails to repay sufficient funds supported by the Clearing Fund, Risk Prevention Fund, and the capital of the Vietnam Securities Depository and Clearing Corporation within five working days from the date of usage;

d) The clearing member fails to transfer the compensation amount as prescribed in point c, Clause 4, Article 11 of this Circular within two working days from the due date as notified by the Vietnam Securities Depository and Clearing Corporation;

đ) The clearing member fails to reduce the number of positions exceeding the position limit within five working days from the date of receiving the violation notice from the Vietnam Securities Depository and Clearing Corporation;

e) The clearing member fails to submit collateral assets within three working days from the date of receiving the notice from the Vietnam Securities Depository and Clearing Corporation;

g) The clearing member has been issued disciplinary decisions by the Vietnam Securities Depository and Clearing Corporation two or more times within one month or consecutively within two months;

h) The clearing member is suspended from providing clearing and settlement services for derivative securities transactions by the State Securities Commission;

i) Other cases as stipulated in the regulations of the Vietnam Securities Depository and Clearing Corporation;

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

2. The suspension period for the cases specified in Clause 1 of this Article is as follows:

a) For the cases specified in points a, b, c, d, đ, e, and g of Clause 1 of this Article, the suspension period shall not exceed ninety days;

b) For the case specified in point h of Clause 1 of this Article, the suspension period shall be the duration of the suspension imposed by the State Securities Commission on the provision of clearing and settlement services for derivative securities transactions;

c) For the cases specified in points i and k of Clause 1 of this Article, the suspension period shall be implemented according to the regulations of the Vietnam Securities Depository and Clearing Corporation.

3. The procedures and formalities for suspending clearing and settlement activities for derivative securities transactions of clearing members shall be carried out in accordance with the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 28. Revocation of Clearing Member Status

1. The Vietnam Securities Depository and Clearing Corporation shall revoke the clearing member status in the following cases:

a) A clearing member voluntarily requests to revoke their clearing member status and such request is approved by the Vietnam Securities Depository and Clearing Corporation;

b) A clearing member's clearing member status is compulsorily revoked.

2. A clearing member's compulsory revocation of clearing member status as provided for in point b, Clause 1, Article 28 of this Circular includes the following cases:

a) Upon expiration of the suspension period for derivative securities clearing and trading activities as stipulated in Clause 2, Article 27 of this Circular, if the clearing member fails to rectify the violation as required by the Vietnam Securities Depository and Clearing Corporation and the State Securities Commission;

b) Voluntarily ceasing or being compulsorily ceased by the State Securities Commission from providing clearing and trading services for derivative securities as prescribed in Articles 12 and 13 of Decree No. 158/2020/ND-CP;

c) Being decided by the Vietnam Stock Exchange to revoke the trading member or special trading member status;

d) Other cases as prescribed in the regulations of the Vietnam Securities Depository and Clearing Corporation;

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

3. The revocation of clearing member status can only be carried out after the clearing member has completed the transfer of positions, margin deposits to settle customer accounts, liquidate positions, and fulfill payment obligations on proprietary accounts (if any), and has fully fulfilled all obligations with the Vietnam Securities Depository and Clearing Corporation.

4. The documentation, procedures, and formalities for revoking clearing member status shall be implemented according to the regulations of the Vietnam Securities Depository and Clearing Corporation.

Article 29. Other Forms of Violation Handling for Clearing Members

1. In addition to the forms of handling violations as prescribed in Clauses 1 and 2 of Article 27 and Clause 2 of Article 28 of this Circular, the Vietnam Securities Depository and Clearing Corporation may apply the following forms of handling violations:

a) Reminder;

b) Reprimand.

2. The acts of violation, procedures, and formalities for handling violations of clearing members as prescribed in Clause 1 of this Article shall be implemented according to the regulations of the Vietnam Securities Depository and Clearing Corporation.

REPORTING SYSTEM

Article 30. Periodic Reporting

1. Derivative securities business organizations must submit periodic reports in writing or electronically to the State Securities Commission on their derivative securities business operations according to Model No. 03 of the Appendix issued together with this Circular monthly, quarterly, and annually.

2. Commercial banks and foreign bank branches that are special trading members must submit periodic reports in writing or electronically to the State Securities Commission on their derivative securities trading activities according to Model No. 04 of the Appendix issued together with this Circular monthly, quarterly, and annually.

3. Payment banks must submit periodic reports in writing or electronically to the State Securities Commission on their derivative securities trading settlement activities according to Model No. 05 of the Appendix issued together with this Circular monthly, quarterly, and annually.

4. Payment banks must submit annual reports in writing or electronically to the State Securities Commission on meeting the conditions to act as a payment bank according to Model No. 06 of the Appendix issued together with this Circular annually.

5. Commercial banks and foreign bank branches that are clearing members must submit semi-annual reports in writing or electronically to the State Securities Commission on meeting the conditions to provide clearing and trading services for derivative securities according to Model No. 07 of the Appendix issued together with this Circular semi-annually.

6. 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 following quarter;

c) Semi-annual reports to the State Securities Commission within 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.

7. The data cut-off periods for periodic reports are as follows:

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

b) For semi-annual reports, the period is six months, from January 1 to June 30 of the calendar year;

c) For quarterly reports, the 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) For monthly reports, the period is one month, from the first day to the last day of the month.

Article 31. Unusual Reports

1. Derivatives securities business organizations, service providers for derivatives securities settlement and transaction, trading members, special trading members, market makers, clearing members must report in writing or electronically to the State Securities Commission within a maximum period of 24 hours from the occurrence of the following events:

a) Changes in clearing members;

b) When there are incidents related to the trading system (order receipt, placement);

c) Clearing members that are commercial banks or foreign bank branches no longer meet one of the conditions for providing settlement and transaction services for derivatives securities;

d) Clearing members have charter capital, owner's equity reduced by more than 10% compared to the charter capital, owner's equity in the audited annual financial statements or reviewed semi-annual financial statements or the most recent quarterly financial statements; The debt-to-equity ratio exceeds five times.

2. Payment banks must immediately report in writing or electronically to the State Securities Commission and Vietnam Securities Depository Corporation when there is a disruption in the payment activity for derivatives securities transactions.

3. Payment banks must report in writing or electronically to the State Securities Commission within a maximum period of 24 hours from the time they fail to meet one of the conditions to be a payment bank.

4. Vietnam Stock Exchange, Hanoi Stock Exchange must report in writing to the State Securities Commission within a maximum period of 24 hours from the occurrence of the following events:

a) When there are incidents in the derivatives securities trading system or when there are unusual signs in derivatives securities trading;

b) Suspension of derivatives securities trading activities, market making activities, revocation of trading member, special trading member, market maker status;

c) Providing confidential information to competent state agencies.

5. Vietnam Securities Depository Corporation must report to the State Securities Commission within a maximum period of 24 hours from the occurrence of the following events:

a) Clearing members lose the ability to settle derivatives securities transactions;

b) Suspension of clearing and settlement activities for derivatives securities transactions, revocation of clearing member status;

c) Providing confidential information to competent state agencies.

Article 32. Reports upon Request

1. In addition to the regular and unusual reports prescribed in Articles 30 and 31 of this Circular, in necessary cases to protect common interests and investor interests, the State Securities Commission may request Vietnam Stock Exchange, Hanoi Stock Exchange, Vietnam Securities Depository Corporation, derivatives securities business organizations, service providers for derivatives securities settlement and transaction, payment banks to report on trading activities, derivatives securities business activities, clearing and settlement activities for derivatives securities transactions.

2. Vietnam Stock Exchange, Hanoi Stock Exchange, Vietnam Securities Depository Corporation, derivatives securities business organizations, service providers for derivatives securities settlement and transaction must report to the State Securities Commission in writing or electronically within the time limit requested by the State Securities Commission from the date of receiving the report request as stipulated in Clause 1 of this Article.

Chapter VI

IMPLEMENTING PROVISIONS

Article 33. Effective Date

1. This Circular takes effect from August 27, 2021.

2. Circular No. 11/2016/TT-BTC dated January 19, 2016, issued by the Minister of Finance guiding certain provisions of Decree No. 42/2015/NĐ-CP dated May 5, 2015 of the Government on derivatives securities and derivatives securities markets (hereinafter referred to as Circular No. 11/2016/TT-BTC) and Circular No. 23/2017/TT-BTC dated March 16, 2017, issued by the Minister of Finance amending and supplementing certain provisions of Circular No. 11/2016/TT-BTC dated January 19, 2016, issued by the Minister of Finance guiding certain provisions of Decree No. 42/2015/NĐ-CP dated May 5, 2015 of the Government on derivatives securities and derivatives securities markets (hereinafter referred to as Circular No. 23/2017/TT-BTC) shall cease to be effective from the date this Circular takes effect, except for the provision at Clause 1 of Article 34 of this Circular.

Article 34. Transitional Provisions

1. Prior to the official implementation of margin requirements for clearing members as prescribed in Article 13 of this Circular, Vietnam Securities Depository Corporation, Hanoi Stock Exchange, trading members, special trading members, market makers, clearing members continue to apply the margin requirements as prescribed in Circular No. 11/2016/TT-BTC and Circular No. 23/2017/TT-BTC. Margin requirements, refusal of substitute positions, post-trade error correction activities prescribed in this Circular will be implemented from the date of the official implementation of the margin system according to the new information technology system for the securities market.

2. Provisions on operational activities in this Circular apply to Vietnam Securities Depository Corporation carried out by the Vietnam Securities Depository until Vietnam Securities Depository Corporation officially operates as prescribed in the Securities Law No. 54/2019/QH14.

3. Provisions on operational activities in this Circular apply to Vietnam Stock Exchange carried out by Hanoi Stock Exchange until Vietnam Stock Exchange officially operates as prescribed in the Securities Law No. 54/2019/QH14 and Clause 1 of Article 8 of Decision No. 37/2020/QĐ-TTg dated December 23, 2020 of the Prime Minister on the establishment, organization, and operation of Vietnam Stock Exchange.

Article 35. Implementation

1. Based on the provisions of this Circular, Vietnam Securities Depository Corporation, Vietnam Stock Exchange shall promulgate operational regulations after obtaining approval from the State Securities Commission.

2. During implementation, if there are any difficulties, organizations and individuals are requested to promptly report them to the Ministry of Finance for research and guidance on amendments and supplements.

Central Party Office and Party Committees:

Office of the General Secretary;

Office of the Government:

National Assembly Office;

THE SUPREME PEOPLE'S COURT:

Prime Minister, Deputy Prime Ministers;

Ministries, ministerial-level agencies, and government agencies:

Central agencies of mass organizations;

Supreme People's Procuracy;

Supreme People's Court:

Provincial People's Councils, People's Committees of centrally governed cities:

Official Gazette;

Government Electronic Portal:

Department of Legal Drafting (Ministry of Justice):

Units under the Ministry of Finance:

Ministry of Finance Electronic Portal:

State Securities Commission Electronic Portal:

ANNEX

(Issued together with Circular No. 58/2021/TT-BTC

dated July 12, 2021, of the Minister of Finance) ..., date..., month..., year...

Form No. 01

SOCIALIST REPUBLIC OF VIET NAM

Independence - Freedom - Happiness

-----------------------------

TRADING MARGIN ACCOUNT CONTRACT

The trading margin account contract between non-margin members and common margin members shall include at least the following contents:

1. Legal basis

Based on the Securities Law No. 54/2019/QH14 dated November 26, 2019 of the Socialist Republic of Vietnam;

Based on the Civil Code of the Socialist Republic of Vietnam;

Based on Decree No. 158/2020/NĐ-CP dated December 31, 2020 of the Government on derivative securities and the derivative securities market;

Based on Circular No. ... dated .../.../2021 of the Minister of Finance guiding certain provisions of Decree No. 158/2020/NĐ-CP dated December 31, 2020 of the Government on derivative securities and the derivative securities market.

2. Parties involved in signing the contract

Name, address, telephone number, establishment and operation license number of the non-margin member; Name, position, identity card/passport number, authorization decision of the representative and authorized person according to the law of the non-margin member;

Name, address, telephone number, establishment and operation license number of the common margin member; Name, position, identity card/passport number, authorization decision of the representative and authorized person according to the law of the common margin member.

3. Specific terms and agreements

Opening investor accounts at the non-margin member;

Opening margin accounts at the common margin member;

The non-margin member represents investors in their relationship with the common margin member;

Three-party contract between investor - non-margin member - common margin member;

Provisions regarding the deposit/withdrawal of investor margin assets;

Provisions regarding pre-trade margin verification before placing orders for derivative securities transactions;

Provisions regarding monitoring the quantity of held contracts to ensure margin usage ratio and permissible position limits.

4. Terms regarding rights and obligations of the parties involved

The common margin member accepts the mandate from the non-margin member to ensure settlement of derivative securities transactions through payment mechanisms and risk management measures;

The common margin member provides the non-margin member with services related to clearing and settlement activities, including: clearing and settlement of derivative securities transactions; monitoring and managing margin assets of the non-margin member and its clients; ensuring separate management of the non-margin member's accounts and assets from those of its clients;

Other rights and obligations (if any) of the parties.

5. Terms regarding other agreements

Mandate fees as prescribed (if any) or agreed upon by the parties;

Dispute resolution;

Handling scenarios where the non-margin member or its client loses the ability to pay;

Handling scenarios where the non-margin member or its client goes bankrupt;

Handling issues arising from errors of the non-margin member (incorrect orders...) or the margin member (incorrect margin information, contract holding records...);

Amending, supplementing, or terminating the contract.

6. Other matters affecting the rights and obligations of the parties.

Form No. 02

SOCIALIST REPUBLIC OF VIET NAM

Independence - Freedom - Happiness

-----------------------------

..., date..., month..., year...

ACCOUNT OPENING CONTRACT
FOR DERIVATIVE SECURITIES TRADING

The account opening contract for derivative securities trading between a securities company and a customer shall include at least the following contents:

1. Parties involved in signing the contract

Name, address, telephone number, establishment and operation license number of the securities company; Name, position, identity card/passport number, authorization decision of the representative and authorized person according to the law of the securities company.

Name, address, telephone number, identity card/passport number of individual customers; Name, address, business registration certificate of organizational customers; Name, position, identity card/passport number, authorization decision of the representative and authorized person according to the law of organizational customers (if any).

2. Specific terms and agreements

a) Methods of receiving orders by the securities company;

b) Margin requirements for derivative securities;

c) Agreement on interest rates on margin deposits at banks;

d) Time limit and method of handling assets in case the customer loses the ability to pay;

đ) Agreement on the time and method of converting foreign currency to Vietnamese Dong in case of transferring funds for derivative securities transactions in foreign currency;

e) Clearly stating the risks that may arise in case the margin member loses the ability to pay or is suspended, temporarily halted, dissolved, or declared bankrupt.

3. Terms regarding rights and obligations of the parties involved

a) Rights and obligations of the customer (ownership of money, derivative securities, and profits, and other legitimate rights and interests attached to such money and derivative securities; providing information as required by the securities company, paying transaction fees

b) Rights and obligations of the securities company (collecting transaction fees, performing other lawful mandates agreed upon with the customer; keeping and managing money and derivative securities for the customer, executing transactions, protecting confidential information, providing information as required by the customer...);

c) Rights of the member to offset (use the pledged assets of the investor to collateralize for Vietnam Securities Depository and Clearing Corporation for the investor's open position; have the right to close out positions and use the investor's pledged assets in case the investor loses the ability to pay...).

4. Provisions on other agreements

a) Liability for breach of contract, this provision specifies:

The customer shall be compensated for damages if the company breaches its obligations stipulated in this Contract;

Amount of compensation for damages: To be specifically agreed upon by the parties or in accordance with the provisions of the law.

b) Methods for handling accounts in cases where the company is suspended from operations, revoked of membership status, adjusted to withdraw brokerage business, dissolved, or had its license to operate revoked;

c) Cases of early termination of the contract;

d) Duration of the contract's effectiveness;

d) Resolution of disputes arising;

Other agreements in accordance with applicable legal regulations.

Implementation Report of Production Projects of Supporting Industry Products Confirmed with Incentives

REPORT
Derivative securities business activities in month.../quarter.../year...

To: State Securities Commission

The derivative securities business organization... has been granted a Certificate of Eligibility for Derivative Securities Business by the State Securities Commission under number...

We respectfully report to the State Securities Commission on the situation of derivative securities business activities in month.../quarter.../year... as follows:

Table 1. Human Resources Situation

Unit of measurement: person

Columns (2), (3), (4), (5): Enter in numerical format ("Number"). In case of negative numbers, enclose them in parentheses ().

Table 2. Number of Investor Trading Accounts for Derivative Securities

Columns (2), (3), (4): Enter in numerical format ("Number"). In case of negative numbers, enclose them in parentheses ().

Table 3. Investor Funds Deposited for Derivative Securities Trading

Note:

List in detail each account at all banks receiving funds deposited for derivative securities trading of investors.

Row 1 column (3): Total balance on account A1, A2,...

Row 5 column (3): Total balance on account A1, A2,...

Table 4. Derivative Securities Transactions

Table 5. Derivative Securities Advisory Activities ..., day...month...year...

Form number 04

Number:.../BC-

REPORT

(From day.../... to day.../... )

Form number 05

REPORT
Settlement of funds for derivative securities transactions
month.../quarter.../year...

(From day.../... to day.../...)

To: State Securities Commission

Bank... has been authorized by the State Securities Commission to act as a settlement bank pursuant to Decision number...

Bank... respectfully reports to the State Securities Commission on the settlement of funds for derivative securities transactions as follows:

1. Indicators

Index

2. Issues and recommendations:

REPORTER

Form number 06

REPORT

Regarding compliance with conditions to act as a settlement bank in year...

To: State Securities Commission

Bank... has been authorized by the State Securities Commission to act as a settlement bank pursuant to Decision number...

Bank... respectfully reports to the State Securities Commission on compliance with conditions to act as a settlement bank in year... as follows:

Note: The settlement bank must clearly state whether it meets the required conditions and submit supporting documentation. If the conditions are not met, the settlement bank must specify the reasons.

Form No. 07

REPORT
On Compliance with Conditions for Providing Settlement and Clearing Services for Derivative Securities Transactions

(From day.../... to day.../... )

To: State Securities Commission

Commercial Bank/Branch of Foreign Bank... has been granted a Certificate of Eligibility for Providing Settlement and Clearing Services for Derivative Securities Transactions by the State Securities Commission under number...

Commercial Bank/Branch of Foreign Bank... respectfully reports to the State Securities Commission on compliance with conditions for providing settlement and clearing services for derivative securities transactions as follows:

Conditions for providing securities settlement and transaction payment services

Note: Commercial banks/Foreign bank branches shall clearly state whether they meet the prescribed conditions and submit documentation proving compliance with such conditions. In cases where the conditions are not met, commercial banks/Foreign bank branches shall clearly specify the reasons.