Circular 09/2021/TT-NHNN amending and supplementing Circular No. 42/2015/TT-NHNN on open-market operations

CIRCULAR

Amending and supplementing a number of Articles of the Circular No. 42/2015/TT-NHNN dated December 31, 2015 of the Governor of the State Bank of Vietnam prescribing regulations on open-market operations

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

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

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

At the proposal of the Director of the Monetary Policy Department;

The Governor of the State Bank of Vietnam hereby promulgates the Circular amending and supplementing a number of Articles of the Circular No. 42/2015/TT-NHNN dated December 31, 2015 of the Governor of the State Bank of Vietnam prescribing regulations on open-market operations (hereinafter referred to as the Circular No. 42/2015/TT-NHNN).

Article 1. To amend and supplement a number of articles of the Circular No. 42/2015/TT-NHNN

1. To add Clause 3 to Article 14 as follows:

“3. Regarding the sale (issuance) of State Bank bills through open-market operations, the State Bank shall follow the method of bidding by interest rate; the State Bank shall sell (issue) State Bank bills according to the method of bidding by volume in case the State Bank needs to announce interest rates of State Bank bills in order to realize monetary policy targets.”

2. To amend and supplement Article 15 as follows:

“Article 15. Notice on purchase or sale of valuable papers

1. Before each open-market operation-related bidding session, the State Bank (the operation centre) shall notify the purchase or sale of valuable papers for its members. For a session of sale (issuance) of State Bank bills, in addition to notifying its members, the operation centre shall post the notice on sale (issuance) of State Bank bills on the State Bank’s e-portal no later than 13:30 on the bidding date.

2. A notice shall comprise at least the following information:

a) Bidding date;

b) Bidding method;

c) Bid consideration method;

d) Method of purchase, sale;

dd) The volume of valuable papers to be purchased or sold calculated according to the settlement price or par value (except for cases without prior notice on the volume of valuable papers to be purchased of sold of the State Bank);

e) Types of valuable papers to be purchased or sold;

g) Transaction ratios of valuable papers (in case the State Bank purchases them);

h) Tenor of valuable papers;

i) Issuing date of valuable papers (in case the State Bank purchases them);

k) Interest payment method of valuable papers (in case the State Bank purchases them);

l) Payment due date of valuable papers (in case the State Bank purchases them);

m) Remaining term to maturity of valuable papers (in case the State Bank purchases them);

n) Sale or purchase term (number of days);

o) Interest rates applied by the State Bank when purchasing or selling (in case of bidding by volume);

p) Interest rate for issuance on the primary market of valuable papers (in case the State Bank purchases them);

q) Time of receipt of the bidding participation application of members;

r) Bid closing time.”

3. To amend and supplement Point b, Clause 1, Article 25 as follows:

“b) Propose and submit to the Head of Executive Board for making decision on the types of valuable papers to be purchased/sold, volume of purchase/sale, method of purchase/sale, bidding method, bid consideration method, time limit for purchase/sale and interest rates to be applied when purchasing/selling valuable papers; and notify such contents to the operation centre after obtaining approval from the Head of Executive Board.”

4. To amend and supplement Point d, Clause 2, Article 25 as follow:

“d) Organize the implementation of transactions of purchasing or selling of valuable papers between the State Bank and its members according to the approval of the Head of Executive Board; upload notices on sale (issuance) of State Bank bills in accordance with this Circular.”

Article 2. Responsibility for implementation organization

The Chief of Office, Director of the Monetary Policy Department, Heads of units affiliated to the State Bank; credit institutions and foreign bank branches shall be responsible for the implementation of this Circular.

Article 3. Effect

This Circular takes effect on August 25, 2021./.