Circular 16/2022/TT-NHNN the depository and use of valuable papers at the State Bank of Vietnam

CIRCULAR

Providing for the depository and use of valuable papers at the State Bank of Vietnam

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

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

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

Pursuant to the Decree No. 01/2011/ND-CP dated January 5, 2011 of the Government on the issuance of government bonds, government-guaranteed bonds and local government bonds.

Pursuant to the Decree No. 95/2018/ND-CP dated June 30, 2018 of the Government on providing the issuance, registration, depositing, listing and trading of government debt instruments on securities market;

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

At the proposal of the Director of the Transaction Bureau;

The Governor of the State Bank of Vietnam promulgates the Circular providing for the depository and use of valuable papers at the State Bank of Vietnam.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of adjustment

This Circular regulates the depository and use of valuable papers at the State Bank of Vietnam (hereinafter referred to as the State Bank).

Article 2. Subjects of application

1. Units of the State Bank.

2. Deposit Insurance of Vietnam, credit institutions, foreign bank branches and other organizations under the decision of the Governor of the State Bank (hereinafter referred to as members).

Article 3. Interpretation of terms

1. Valuable paper means a proof evidencing the debt-payment obligation of the issuer towards the owner in a certain duration under the interest payment condition and other conditions. Valuable papers include: book-entry valuable papers (in the form of book entries or electronic data) and certified valuable papers.

2. Depository of valuable papers at the State Bank means the receipt of valuable papers for deposit, preservation, transfer and exercise of the rights related to the ownership of valuable papers directly deposited at the State Bank by a member or deposited at the customer account of the State Bank at the Vietnam Securities Depository and Clearing Corporation (hereinafter referred to as VSDC) to ensure the rights and interests related to valuable papers of the owner and perform some operations at the State Bank.

3. Transfer of valuable papers between parties in a transaction using valuable papers means the transfer of book-entry valuable papers or the handover, the counting and the recording into the accounting system for certified valuable papers. The transfer of valuable papers may or may not include the transfer of the ownership of the valuable papers.

4. Dealing account means an account opened by VSDC for a depository member of VSDC or for an organization allowed to open an account at VSDC to manage valuable papers owned by the depository member or the organization allowed to open the account at VSDC.

5. Brokerage account means an account opened by VSDC for a depository member of VSDC or for an organization allowed to open an account at VSDC to manage valuable papers owned by the depository member or the customer of the organization allowed to open the account at VSDC.

6. Valuable paper accounts of the State Bank include the valuable paper accounts under the management of the State Bank and the State Bank's valuable paper accounts deposited at VSDC.

Valuable paper account under the management of the State Bank means an internal account of the State Bank for depositing valuable papers owned by the State Bank.

The State Bank’s valuable paper account deposited at VSDC means a dealing account opened by VSDC at the request of the State Bank to deposit valuable paper owned by the State Bank.

7. Customer account of the State Bank at VSDC means a brokerage account opened by VSDC at the request of the State Bank to block and deposit valuable papers owned by the member in order to carry out certain operations at the State Bank.

8. Valuable paper account deposited by the customer means an account opened by the State Bank to monitor the depository of valuable papers of the member. Valuable paper account deposited by the customer includes the valuable paper account deposited directly by the customer at the State Bank and the valuable paper account deposited by the customer in the State Bank's customer account at VSDC.

Valuable paper account deposited directly by the customer at the State Bank is the account opened by the State Bank at the request of members to deposit valuable papers directly at the State Bank.

Valuable paper account deposited by the customer on the State Bank's customer account at VSDC means VSDC account opened at the request of the State Bank to deposit the member’s valuable paper at VSDC.

9. Deposited valuable paper account for pledge means an internal account of the State Bank opened for members to manage valuable papers according to the member's request for pledge or deposit when participating in some monetary market operations.

10. Deposited valuable paper account for grant of credit in the interbank market means an internal account of the State Bank opened for members to block valuable papers in lending transactions secured by pledging valuable papers among members in the interbank market.

Article 4. Conditions, par value and code of valuable papers deposited at the State Bank

1. Valuable papers include:

a) State Bank Bills;

b) Government bonds;

c) Government-underwritten bonds with settlement of 100% of principal and interest upon maturity;

d) Local government bonds used in transactions of the State Bank as decided by the Governor of the State Bank in each period;

dd) Special bonds, bonds issued directly to credit institutions to sell debts to buy bad debts at market value of Vietnam Asset Management Company;

e) Bonds issued by commercial banks in which more than 50% of charter capital is held by the State (except for compulsorily purchased commercial banks); bonds issued by credit institutions (except credit institutions under special control) and other enterprises;

g) Other valuable papers decided by the Governor of the State Bank in each period.

2. Conditions for valuable papers

a) Under the legal ownership of members;

b) Under the valuable papers specified in Clause 1 of this Article;

c) The right to receive principal and interest has not been finalized at maturity;

d) The certified valuable papers deposited at the State Bank must be intact, not torn, damaged, not changed in color, faded with pattern images, letters, numbers, not crumpled or crushed, blurred, dirty, erased.

3. Par value of valuable papers

The par value of valuable papers deposited at the State Bank is VND 100,000 (one hundred thousand dong) or a multiple of VND 100,000 (one hundred thousand dong).

For the special valuable papers directly managed by the State Bank and the valuable papers in foreign currencies, the par value of valuable papers shall comply with the provisions of the law for each type of valuable paper.

4. Valuable paper code

Valuable papers deposited at the State Bank are managed according to the code system prescribed by VSDC and the State Bank (the Transaction Bureau). The State Bank manages valuable papers uniformly according to the International Securities Identification Number system (ISIN) when necessary.

Article 5. Use of valuable papers deposited at the State Bank

1. Valuable papers used in monetary market operations include:

a) Open market operations;

b) Re-financing operations:

- Granting loans secured by the pledge of valuable papers of the State Bank to the credit institutions, the foreign bank branches;

- Discounting valuable papers of the State Bank for the credit institutions, the foreign bank branches;

- Other forms of refinancing decided by the State Bank. 

c) Pledge of valuable papers to set up overdraft limit and overnight lending limit in inter-bank electronic payment;

d) Pledge, deposit of valuable papers to set up net debt limit in inter-bank electronic payment;

dd) Pledge, deposit of valuable papers to set up centralized payment limit;

e) Pledge, deposit of valuable papers to set up electronic clearing limit via the Electronic Clearing System;

g) Pledge, deposit of valuable papers to perform other operations decided by the Governor of the State Bank from time to time.

2. Valuable papers are used in special loan operations for specially controlled credit institutions.

3. Transactions of valuable papers deposited at the State Bank among members include:

a) Loans secured by pledging valuable papers among members

b) Purchasing and selling valuable papers among members.

4. The State Bank shall receive dossiers and documents to process the request for the use of valuable papers deposited at the State Bank no later than 3:30 p.m. of a working day. After this time, request for the use of valuable papers deposited at the State Bank shall be processed on the next working day. In case it is necessary to extend the time for receiving dossiers and documents, the State Bank shall coordinate with the member to agree on the time of receiving dossiers of such working day.

Chapter II

SPECIFIC REGULATIONS

Section 1
Depository of valuable papers

Article 6. Opening of deposited valuable paper account

1. An application for account opening

In order to deposit valuable papers at the State Bank, the members specified in Clause 2, Article 2 of this Circular shall make and send 01 (one) set of documents directly or via postal service to the head office of the State Bank (single-window section), including:

a) Written request for opening a deposited valuable paper account according to Appendix 1a/LK issued with this Circular (03 copies);

b) Registration form of seal, signature of the user of the deposited valuable paper account at the State Bank according to Appendix 1b/LK issued with this Circular (03 copies);

c) Documents proving the legal establishment and operation of the member opening of a deposited valuable paper account, such as: charter, establishment and operation license, business registration certificate or other documents as prescribed by law;

d) Documents proving the legal representative status of the legal representative of the account-opening member (the State Bank’s decision on approval of the proposed title, appointment decision) accompanied by valid identity card or citizen’s identity card or passport of such person;

dd) Appointment document or decision and valid identity card or citizen’s identity card or passport of the chief accountant or person in charge of accounting, the person controlling the documents on transaction with the State Bank;

e) In case the legal representative or the chief accountant authorizes another person (including re-authorization (if any)), the member opening depository account must provide the appointment decision of the authorized person and the power of attorney according to Appendix 7/LK issued with this Circular together with valid people’s identity card or citizen’s identity card or passport of the authorized person. The power of attorney of the person authorized by the chief accountant must have the signature of the representative of the account holder;

g) The member is not required to provide the papers specified at Points c, d, dd, e, Clause 1 of this Article in case the member has provided them to the State Bank (the Transaction Bureau) when opening and using a payment account at the State Bank or in case personal information (identity card number, citizen identification number or passport number) of the legal representative, chief accountant or the authorized person can be extracted on the National Population Database.

2. The papers specified at Points a, b, Clause 1 of this Article are originals and signed and sealed by the lawful representative of the member opening the depository account for valuable papers; the papers specified at Points c, d, dd, e, Clause 1 of this Article are copies issued from the master register or certified copies or copies accompanied by presentation of the original for comparison or certified electronic copy of the original. If the documents in the application for account opening are in a foreign language, they must be translated into Vietnamese and notarized and authenticated in accordance with law.

3. Within 05 (five) working days from the date of receipt of a complete and valid application for opening a deposited valuable paper account of the member, the State Bank (the Transaction Bureau) shall open a deposited valuable paper account and inform the member of the account number and the date of commencement of operation of such deposited valuable paper account; in case of incomplete or invalid application for opening a deposited valuable paper account, the State Bank (the Transaction Bureau) shall notify the member to complete the dossier; in case of refusal to open a deposited valuable paper account, the State Bank (the Transaction Bureau) shall notify the reason to the member.

Article 7. Change of deposited valuable paper account information

1. Upon change in information about the member's deposited valuable paper account related to the documents in the application for account opening specified in Clause 1, Article 6 of this Circular, within 15 working days from the date of arising of the changed information, the member must notify and send relevant legal documents and records to the State Bank (Transaction Bureau), including:

a) Notice of change of information about the deposited valuable paper account opened at the State Bank according to Appendix 1c/LK issued with this Circular (03 copies);

b) Registration form of seal, signature of the user of the deposited valuable paper account at the State Bank according to Appendix 1b/LK issued with this Circular (03 copies);

c) Documents specified at Points c, d, dd and e, Clause 1, Article 6.

2. The documents specified at Points a and b, Clause 1 of this Article are the originals and signed and sealed by the lawful representative of the member opening the deposited valuable paper account. The documents specified at Point c, Clause 1 of this Article are copies issued from the master register or certified copies or copies accompanied by presentation of the originals for comparison or certified electronic copies of the originals. If the documents in the application for account opening are in a foreign language, they must be translated into Vietnamese and notarized and authenticated in accordance with law.

Article 8. Depository of valuable papers

1. For book-entry valuable papers deposited directly at the State Bank

a) In case a member conducts depository of valuable papers on the list of valuable papers under the management of the State Bank:

The member submits to the State Bank (the Transaction Bureau) a written request for depository of valuable papers according to Appendix 2a/LK issued together with this Circular and related documents (if any). Within 01 (one) working day from the date of receiving the member's written request for depository of valuable papers, the State Bank (the Transaction Bureau) shall transfer the valuable papers to the valuable paper account deposited directly by the customer at the State Bank;

b) In case the winning member purchases valuable papers in the transaction sessions organized by the State Bank, the State Bank (the Transaction Bureau) shall transfer the member's winning valuable papers into the valuable paper account deposited directly by the customer at the State Bank.

2. For book-entry valuable papers deposited at VSDC

a) When there is a need to deposit valuable papers at the State Bank, the member transfers valuable papers from the member's depository account at VSDC to the State Bank’s customer account opened at VSDC. Upon receiving VSDC's notice on the transfer of deposited valuable papers of a member, the State Bank shall perform the accounting of such changes to the valuable paper account deposited by the customer;

b) In case the winning member purchases valuable papers in the transaction sessions where the State Bank acts as an issuing agent or the State Bank sells valuable papers, the State Bank shall send VSDC auction information for VSDC's accounting for depository of valuable papers.

3. For the certified valuable papers

The member shall send to the State Bank (Transaction Bureau or State Bank branches in provinces and centrally-run cities authorized by the Governor of the State Bank (hereinafter referred to as the State Bank branches in provinces and cities)) written request for depository of valuable papers according to Appendix 2a/LK issued together with this Circular and all certified valuable papers.

In case the member submits certified valuable papers at the State Bank (Transaction Bureau), within 01 (one) working day from the date of completion of receipt, counting and inspection of the validity and legality of valuable papers, the State Bank (the Transaction Bureau) shall carry out the procedures for depositing valuable papers into the valuable paper account deposited directly by the customers at the State Bank.

In case the member submits certified valuable papers at the State Bank branches in provinces and cities, within 05 (five) working days from the date of completing the receipt, counting and inspection of the validity and legality of certified valuable papers, the State Bank branches in provinces and cities shall hand over the valuable papers to the State Bank (Transaction Bureau). Within 01 (one) working day from the date of completion of inspection of the valuable papers, the State Bank (the Transaction Bureau) shall carry out the procedures of depository of the valuable papers to the valuable paper account deposited directly by the customer at the State Bank.

Article 9. Principles of transfer of the ownership of valuable papers

1. For valuable papers deposited directly at the State Bank, the State Bank (the Transaction Bureau) shall transfer the ownership of valuable papers on the date of the transaction on the following principles:

a) In case the State Bank is the purchaser or the receiver of valuable papers when handling security assets, the valuable papers shall be transferred from the valuable paper account deposited directly by the customer at the State Bank or the member’s deposited valuable paper account for pledge to the State Bank's valuable paper account;

b) In case the State Bank is the seller, the valuable papers shall be transferred from the State Bank's valuable paper account to the valuable paper account deposited directly by the customer at the State Bank;

c) In case handling pledged assets in lending transactions secured by pledging valuable papers among members in the inter-bank market, the valuable papers shall be transferred from the deposited valuable paper account for grant of credit in the interbank market of the pledger to the valuable paper account deposited directly by the customer at the State Bank of the pledgee.

2. For the valuable papers deposited on the State Bank's customer account at VSDC, the transfer of ownership of valuable papers shall be performed by VSDC in accordance with the law on securities, the agreement between the State Bank (the Transaction Bureau) and VSDC on the following principles:

a) In case the State Bank is the purchaser or the receiver of valuable papers when handling security assets, the valuable papers shall be transferred from the valuable paper account deposited by the customer on the State Bank's customer account at VSDC to the State Bank’s valuable paper account deposited at VSDC;

b) In case the State Bank is the seller, the valuable papers shall be transferred from the State Bank’s valuable paper account deposited at VSDC to the valuable paper account deposited by the customer on the State Bank's customer account at VSDC;

c) In case of handling of pledged assets in lending transactions secured by pledge of valuable papers among members on the interbank market, the valuable papers shall be transferred from the pledger to the pledgee in the State Bank’s customer account opened at VSDC.

3. The State Bank shall carry out the transfer of ownership of valuable papers according to the purchase and sale contract or the Notice of auction results in open market operations as authorized by the member. For the operations of discounting, pledging, depositing valuable papers, other forms of refinancing on the basis of pledging valuable papers and trading valuable papers among members, the transfer of valuable paper rights shall comply with the provisions of Articles 14, 15, 16, 17 and 18 of this Circular.

4. The State Bank (the Transaction Bureau) shall transfer the ownership of valuable papers in case of separation or merger of credit institutions at the request of the member being the owner of valuable papers under Written request for transfer of ownership of valuable papers according to Appendix 5/LK issued together with this Circular together with the written approval of the State Bank on the separation or merger of the credit institution and relevant papers (if any).

The credit institutions that are divided, consolidated, dissolved or bankrupt must withdraw valuable papers as prescribed in Article 11 of this Circular and close the deposited valuable paper account at the State Bank as prescribed in Article 12 of this Circular before they cease to exist. The State Bank (the Transaction Bureau) shall transfer the ownership of valuable papers according to the written request for transfer of ownership of valuable papers according to Appendix 5/LK issued with this Circular and the State Bank's written approval of the division, consolidation, dissolution of the credit institution or the People's Court's decision on declaration of bankruptcy of the credit institution and relevant papers (if any).

Article 10. Payment of principal and interest of valuable papers

1. For valuable papers deposited directly at the State Bank

a) Book-entry valuable papers

Upon due date of the valuable papers, the State Bank (the Transaction Bureau) shall inspect the fulfillment of obligations of the members towards the State Bank in the operations of use of related valuable papers. In case the members have fulfilled their obligations, the procedures for payment of principal and interest to members shall be carried out. In case the members have not fulfilled their obligations, the provisions of Clause 4 of this Article shall be applied;

b) Certified valuable papers 

Upon due date of the certified valuable papers, the members request to withdraw the valuable paper as prescribed in Article 11 of this Circular, the State Bank (the Transaction Bureau) shall inspect the fulfillment of obligations of the members towards the State Bank in the operations of use of related valuable papers. In case the members have fulfilled their obligations, the valuable papers shall be returned to the member to carry out payment procedures at the issuing organization or the agent of issuing organization. In case the members have not fulfilled their obligations, the provisions of Clause 4 of this Article shall be applied.

2. For the valuable papers deposited at the State Bank's customer account at VSDC

a) Upon due date of the interest of the valuable papers with periodic interest payment, the State Bank (the Transaction Bureau) shall inspect the fulfillment of obligations of the members towards the State Bank in the operations of use of related valuable papers. In case the members have fulfilled their obligations, the State Bank (the Transaction Bureau) shall send VSDC a notice on confirming the list of members owning valuable papers in the customer account of the State Bank at VSDC so that VSDC can carry out the procedures for interest payment to the members. In case the members have not fulfilled their obligations, the provisions of Clause 4 of this Article shall be applied;

b) Upon due date of the valuable papers, the State Bank (the Transaction Bureau) shall inspect the fulfillment of obligations of the members towards the State Bank in the operations of use of related valuable papers. In case the members have fulfilled their obligations, the State Bank (the Transaction Bureau) shall send VSDC a notice on confirming the members' relevant valuable papers in the State Bank's customer account at VSDC that are eligible for principal and interest payments so that VSDC can carry out the payment procedures to the members. In case the members have not fulfilled their obligations, the provisions of Clause 4 of this Article shall be applied;

c) The payment of principal and interest of valuable papers deposited at the State Bank's customer accounts at VSDC shall comply with the agreement between the State Bank (the Transaction Bureau) and VSDC.

3. The interests and other incomes (if any) from valuable papers during the transfer of ownership from the seller to the purchaser in term operations in the monetary market shall comply with the State Bank's regulations.

4. In case the members have not fulfilled their obligations towards the State Bank, the State Bank (the Transaction Bureau) shall not release or retain the principal and interest of valuable papers used for these obligations. The handling of members who have not yet fulfilled their obligations shall comply with regulations of the State Bank in each operation.

Article 11. Withdrawal of valuable papers

1. Valuable papers deposited directly at the State Bank

When wishing to withdraw the certified valuable papers deposited at the State Bank, the members shall send to the State Bank (the Transaction Bureau) a written request for withdrawal of valuable papers according to Appendix 3/LK issued together with this Circular.

Within 01 (one) working day after receiving the members' request, the State Bank (the Transaction Bureau) shall inspect the fulfillment of obligations of the members towards the State Bank in the operations of use of related valuable papers. In case the members have fulfilled their obligations, the accounting of valuable papers from the valuable paper account deposited directly by the customer at the State Bank and the return of the certified valuable papers to the member shall be carried out. In case the members have not fulfilled their obligations, the provisions of Clause 3 of this Article shall be applied.

2. Valuable papers deposited at the State Bank's customer account at VSDC 

When there is a need to withdraw valuable papers deposited at the State Bank's customer account at VSDC, the member shall send a written request to the State Bank (the Transaction Bureau) to request the transfer of valuable papers from the valuable paper account deposited by the customer on the State Bank's customer account at VSDC to the member's depository account at VSDC.

Within 01 (one) working day after receiving the members' request, the State Bank (the Transaction Bureau) shall inspect the fulfillment of obligations of the members towards the State Bank in the operations of use of related valuable papers. In case the members have fulfilled their obligations, the State Bank (the Transaction Bureau) shall request VSDC to transfer the member's valuable papers from the State Bank's customer account at VSDC to the member's depository account at VSDC. In case the members have not fulfilled their obligations, the provisions of Clause 3 of this Article shall be applied.

3. In case the members have not fulfilled their obligations towards the State Bank, the State Bank (the Transaction Bureau) shall not release valuable papers used for these obligations. The handling of members who have not yet fulfilled their obligations shall comply with regulations of the State Bank in each operation.

Article 12. Closing of deposited valuable paper account

1. When there is no need to deposit valuable papers at the State Bank or before their existence ceases due to division, separation, merger, consolidation, dissolution or bankruptcy, the members shall make and send directly or via postal service to the head office of the State Bank (single-window section) the written request for closing of valuable paper accounts according to Appendix 4/LK issued with this Circular.

2. Within 05 (five) working days from the date of receiving the member's request, the State Bank (the Transaction Bureau) shall close the member's deposited valuable paper account, request VSDC to close the corresponding deposited valuable paper account on the State Bank's customer account at VSDC and notify the member.

3. In case the member is divided, consolidated, dissolved or bankrupt without carrying out the procedures to close the deposited valuable paper account, the State Bank (the Transaction Bureau) shall close the member's account after 15 (fifteen) working days from the date of receiving the Decision of the Governor of the State Bank on the division, consolidation, dissolution or the People's Court's decision on declaration of bankruptcy (in case of no balance in the account).

Section 2
VALUABLE PAPERS USED IN MONETARY MARKET OPERATIONS

Article 13. Open market operations

1. The State Bank definitively purchases or purchases valuable papers for a certain period of time

Under the valuable paper purchase and sale contract, for term purchase transactions of the State Bank of Vietnam or Notice of auction results for definitively purchased transactions of the State Bank, the State Bank (the Transaction Bureau) shall pay for the purchase of valuable papers and carry out procedures for transferring ownership of valuable papers from the valuable paper account deposited by the customer to the State Bank's valuable paper account for the winning valuable papers.

For term purchase transactions of the State Bank for valuable papers, on the maturity date of the contract, the member shall make payment for repurchase of valuable papers. After receiving the full amount to repurchase valuable papers from the member, the State Bank (the Transaction Bureau) shall transfer the ownership of valuable papers from the State Bank's valuable papers account to the member’s valuable paper account deposited by the customer.

2. The State Bank definitively sells or sells valuable papers for a certain period of time

Under the valuable paper purchase and sale contract, for term selling transactions of the State Bank of Vietnam or Notice of auction results for definitively sold transactions of the State Bank, the member shall pay for the purchase of valuable papers and the State Bank (the Transaction Bureau) shall transfer the ownership of valuable papers from the State Bank's valuable paper account to the member’s valuable paper account deposited by the customer.

For term selling transactions of the State Bank for valuable papers, on the maturity date of the contract, the member shall resell the valuable papers in the contract to the State Bank. Based on valid documents, the State Bank (the Transaction Bureau) shall make payment to the member and transfer the ownership of valuable papers from the member’s valuable paper account deposited by the customer to the State Bank's valuable paper account.

Article 14. Discount of valuable papers of the State Bank for members

1. After receiving the member's request to discount valuable papers, in case of accepting the member's request, the State Bank (the Transaction Bureau) shall transfer the ownership of valuable papers from the member’s valuable paper account deposited by the customer to the State Bank's valuable paper account for valuable papers accepted for discount.

2. In case the State Bank accepts a term discount, the remaining term of the valuable paper must be longer than the discount term.

After the member makes payment according to the commitment on repurchase of valuable papers discounted by the State Bank, the State Bank (the Transaction Bureau) shall transfer the ownership of valuable papers from the State Bank's valuable papers account to the member’s valuable paper account deposited by the customer.

Article 15. Re-financing operations secured by pledge of valuable papers

1. After the member submits a request to the State Bank for a loan secured by pledging valuable papers in the form of refinancing and the State Bank accepts the member's request, the member shall transfer valuable papers as pledged assets to the State Bank. The State Bank (the Transaction Bureau) transfers valuable papers from the member’s valuable paper account deposited by the customer to the member’s deposited valuable paper account for pledge at the State Bank.

In case of disbursement at the Transaction Bureau: After completing the pledge of valuable papers, the Transaction Bureau shall transfer the loan amount to the member's deposit account at the State Bank.

In case of disbursement at State Bank branches in provinces and cities: After completing the pledge of valuable papers, the Transaction Bureau shall notify the State Bank branches in provinces and cities where the loan disbursement is performed.

 2. In case the member wishes to exchange valuable papers, based on the member's request for exchange of valuable papers according to Appendix 2b/LK issued together with this Circular, the State Bank (the Transaction Bureau) conducts inspection and accounting under the regulations on ensuring the principle of release of security assets after completing the addition of new security assets.

3. In case the member fully repays the principal and interest, based on the member's request for refund and payment documents, the State Bank (the Transaction Bureau) shall release and transfer valuable papers from the member's pledged valuable paper account to the member’s valuable paper account deposited by the customer at the State Bank.

Article 16. Pledge, deposit of valuable papers to set up overdraft limit and overnight lending limit, net debt limit, centralized payment limit, electronic clearing limit

1. After receiving the member's request to pledge and deposit valuable papers according to Appendix 2c/LK issued together with this Circular to set up overdraft limit, net debt limit, centralized payment limit, electronic clearing limit, the State Bank (the Transaction Bureau) shall check the validity and legality of documents and transfer valuable papers from the member’s valuable paper account deposited by the customer to the deposited valuable paper account for pledge at the State Bank.

2. The State Bank (the Transaction Bureau) shall release the member’s pledged or deposited valuable papers in case the member’s pledged or deposited valuable papers are due or the member uses other valuable papers to replace them or when a member has a need to reduce or no longer needs to maintain overdraft limit, net debt limit, centralized payment limit, electronic clearing limit. The State Bank (the Transaction Bureau) shall release due valuable papers, part or all of pledged or deposited valuable papers at the request of the member and transfer the valuable papers from the deposited valuable paper account for pledge to the member’s valuable paper account deposited by the customer.

3. In order to release pledged or deposited valuable papers, the member shall submit a request to the State Bank (the Transaction Bureau) for change of valuable papers according to Appendix 2b/LK issued with this Circular or request release of pledged or deposited valuable papers in accordance with Appendix 2d/LK issued together with this Circular. The State Bank (the Transaction Bureau) inspects the fulfillment of obligations of members towards the State Bank in related operations. In case the members have fulfilled their obligations, the State Bank (the Transaction Bureau) shall carry out procedures of releasing valuable papers to the members.

In case the members have not fulfilled their obligations towards the State Bank, the State Bank (the Transaction Bureau) shall not release valuable papers pledged or deposited for these obligations. The handling of members who have not yet fulfilled their obligations shall comply with regulations of the State Bank in the field of pledge and deposit of valuable papers to set up overdraft limits and overnight lending limit, net debt limit, centralized payment limit, electronic clearing limit.

Section 3
TRANSACTION OF VALUABLE PAPERS AMONG MEMBERS

Article 17. Loans secured by pledging valuable papers among members

1. Valuable papers used in lending transactions secured by pledge of valuable papers among members must have not been used to secure the performance of obligations in operations at State bank. These valuable papers must be deposited at the State Bank, including directly deposited at the State Bank or deposited at the State Bank's customer accounts at VSDC.

2. When wishing to pledge valuable papers to borrow loans from another member (the pledgee), the member (the pledger) shall send 01 (one) set of documents to the State Bank (the Transaction Bureau) including:

a) Written request for pledge of valuable papers according to Appendix 6a/LK issued together with this Circular;

b) Valuable paper pledge contract between the pledgee and the pledger (the original).

3. The State Bank (the Transaction Bureau) shall receive documents, carries out procedures to block valuable papers and transfer valuable papers from the valuable paper account deposited by the customer to the deposited valuable paper account for grant of credit in the interbank market of the pledger.

4. During the pledge period, if agreed in writing by the pledgee, the pledger may request the State Bank (the Transaction Bureau) to extend the pledge term and/or exchange valuable papers blocked by the State Bank with other valuable papers deposited at the State Bank. The State Bank shall consider implementing the pledger's request after receiving the pledgee's confirmation.

5. The State Bank shall transfer valuable papers from the deposited valuable paper account for grant of credit in the interbank market to the member’s valuable paper account deposited by the customer upon receipt of the pledger’s request for release of valuable papers according to Appendix 6b/LK issued together with this Circular, together with the pledgee's certification of consent for the release of valuable papers.

6. In case the pledger fails to repay on time all or part of the loan principal and interest to the pledgee, within 05 (five) working days from the date of receipt of the pledgee's written request, the State Bank shall carry out procedures for transferring the ownership of valuable papers from the pledger to the pledgee at the pledgee’s written request without the confirmation of the pledger (the owner of the valuable papers) if the two parties have agreed in the Pledge Contract. In case the pledger and the pledgee do not reach an agreement on the procedure for transferring the ownership of valuable papers from the pledger to the pledgee in the Pledge Contract, the State Bank shall only carry out procedures to transfer the ownership of valuable papers from the pledger to the pledgee at the pledgee’s written request with confirmation of the pledger (the owner of the valuable papers) and the record of debt settlement between the two parties. In case the pledger fails to perform the obligation and does not confirm the use of security assets instead of the debt repayment obligation, the State Bank shall not release valuable papers and handle security assets in accordance with law.

Article 18. Purchase and sale of valuable papers among members

1. For valuable papers deposited directly at the State Bank

a) The members are entitled to purchase and sell the valuable papers deposited directly at the State Bank. The members selling valuable papers shall send to the State Bank (the Transaction Bureau) a written request for transfer of ownership of valuable papers according to Appendix 5/LK issued together with this Circular and the valuable paper sale and purchase contract between two parties (the original). The State Bank (the Transaction Bureau) transfers the ownership of valuable papers from the seller's valuable paper account deposited by the customer to the purchaser. The valuable papers may continue to be deposited at the State Bank unless the purchaser requests otherwise;

b) In case the term purchase and sale of valuable papers, the term selling member shall send to the State Bank (the Transaction Bureau) a written request for transfer of ownership of valuable papers according to Appendix 5/LK issued together with this Circular and the valuable paper sale and purchase contract between two parties (the original). The State Bank shall transfer the ownership of valuable papers from the term seller to the term purchaser.

On the contract maturity date, based on valid payment documents and written request for transfer of ownership of valuable papers according to Appendix 5/LK issued together with this Circular of the valuable paper owner (the term purchaser), the State Bank (the Transaction Bureau) shall transfer the ownership of valuable papers from the term purchaser to the term seller. In other cases, the State Bank shall transfer the ownership of valuable papers according to a lawful agreement between the parties or as prescribed by law.

2. For valuable papers being deposited at VSDC, the members must carry out procedures to withdraw valuable papers from the State Bank's customer account at VSDC before purchase and sale. The purchase and sale of valuable papers being deposited at VSDC shall comply with the provisions of the law on securities.

Chapter III

IMPLEMENTATION PROVISIONS

Article 19. Responsibilities of units of the State Bank

1. The Transaction Bureau

a) Perform accounting of depository, payment, interest collection, depository fee collection, pledge, deposit and transfer of ownership of valuable papers at the State Bank according to regulations;

b) Decentralize transactions on the system of depository of valuable papers of the State Bank for the personnel of members participating in the depository and use of valuable papers at the State Bank;

c) Provide the member with the right to look up the depository balance, the use of valuable papers of the member at the State Bank online and the account statement of the valuable papers deposited by the customer;

d) Act as the focal point to coordinate with relevant units in handling difficulties and problems during depository and use of valuable papers at the State Bank;

dd) Sign an agreement with VSDC on the use of VSDC's services and the connection of electronic data transmission between the two parties in the depository and use of valuable papers at the State Bank.

2. The Finance and Accounting Department

Guide the accounting for transactions on depository and use of valuable papers at the State Bank in accordance with this Circular.

3. The Agency of Information Technology

a) Act as the focal point to coordinate with the Transaction Bureau and related units to build, install, perform maintenance of the related software programs and ensure the transaction and communication network infrastructure for the depository and use of valuable papers at the State Bank;

b) Issue digital signatures and access accounts for the depository and use of valuable papers at the State Bank.

4. The Banking Inspection and Supervision Agency

a) Act as the focal point and coordinate with relevant units in handling administrative violations against members in accordance with this Circular and the provisions of law;

b) Notify the Transaction Bureau in case the member is divided, separated, merged, consolidated, dissolved or bankrupt.

5. The State Bank branches in provinces and centrally run cities where foreign bank branches and credit institutions are headquartered

a) Check the validity and lawfulness of the valuable papers and keep the certified valuable papers for members that have head office in the locality as authorized by the Governor of the State Bank;

b) Manage, monitor and return the certified valuable papers as notified by the Transaction Bureau.

Article 20. Responsibilities of members

1. Fully and promptly supply and update dossiers and documents as prescribed in this Circular and take responsibility before law for the accuracy and lawfulness of data, documents and records provided to the State Bank.

2. Make commitments and make full and timely payments to the State Bank and other members according to the signed contract.

3. Authorize the State Bank to transfer the ownership of valuable papers in monetary market operations.

4. Comply with the requirements in the State Bank's notice on monetary market operations.

5. Pay service fees arising from the transfer of the ownership of valuable papers in accordance with regulations of the Ministry of Finance (if any).

Article 21. Transitional provisions

1. The credit institutions, the foreign bank branches and the organizations as members specified in Clause 2, Article 2 of this Circular with current deposited valuable paper accounts at the State Bank may continue to use the above account to perform the operations specified in this Circular.

2. The valuable paper-related transactions performed before the effective date of this Circular continue to be performed according to the agreement signed between the related parties.

Article 22. Effect

1. This Circular takes effect from January 17, 2023.

2. From the effective date of this Circular, the Circular No. 04/2016/TT-NHNN dated April 15, 2016 of the Governor of the State Bank providing for the depository and use of valuable papers at the State Bank shall cease to be effective.

3. The Chief of Office, the Director of Transaction Bureau, Heads of relevant units under the State Bank, Deposit Insurance of Vietnam and credit institutions, foreign bank branches shall be responsible for organizing the implementation of this Circular./.

For the Governor
The Vice-Governor
Dao Minh Tu 
 

* All Appendices are not translated herein.