Decree No. 158/2020/ND-CP on derivatives and the derivatives market
Derivative investment consultancy company must have at least VND 250 billion of charter capital
The Decree No. 158/2020/ND-CP on derivatives and the derivatives market is promulgated by the Government on December 31, 2020.
According to this Decree, a securities company may be granted a Certificate of eligibility for derivative business when meeting the following conditions on charter capital and equity: at least VND 800 billion for derivative brokerage; at least VND 600 billion for derivative dealing; at least VND 250 billion for derivative investment consultancy.
Additionally, such securities company must have minimum liquidity ratio of 220% for the past 12 consecutive months; fully set up the provisions as prescribed by law provisions, have no loss in the last 02 years, etc.
To add the application of price fluctuations, market circuit breakers to market stabilization measures. The Stock Exchange may partially or wholly suspend or resume derivative trading operations after obtaining approval from the State Securities Commission.
This Decree takes effect on January 01, 2021.
For further details of the Decree 158/2020/ND-CP, Click here
translation of the Official Gazette of the Vietnam News Agency
THE SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
Hanoi, December 31, 2020
on derivatives and the derivatives market
Pursuant to the Law on Organization of Government dated June 19, 2015; Law dated November 22, 2019 amending and supplementing a number of articles of the Law on Organization of the Government and the Law on Organization of Local Administration;
Pursuant to the Law on Securities dated November 26, 2019;
Pursuant to the Law on Enterprises dated June 17, 2020;
At the proposal of the Minister of Finance;
The Government promulgates the Decree on derivatives and the derivatives market.
Article 1. Scope of regulation
This Decree provides derivatives and the derivatives market in Vietnam.
Article 2. Subjects of application
1. Vietnamese and foreign institutions and individuals investing in derivatives and operating on the derivatives market in Vietnam.
2. State management agencies on securities and the securities market.
3. Other institutions and individuals involved in the investment and trading in derivatives and the derivatives market in Vietnam.
Article 3. Interpretation of terms
In this Decree, the terms below are construed as follows:
1. Derivative business means the conduct of one, several or all of the following activities: derivative brokerage, derivative dealing, and derivative investment consultancy.
2. Position of a derivative (hereinafter referred to as position) at a time means the trading status and volume of an immature derivative held by an investor at that time. When an investor buys or sells a derivative, he/she/it is said to be opening a long position or opening a short position of such derivative.
3. Open position of a derivative means that an investor is holding a derivative which remains immature.
4. Net position of a derivative at a time is the difference between the open long position and open short position of such derivative at a prescribed time.
5. Position limit of a derivative means the maximum position of a derivative or of a derivative and other derivatives based on the same underlying asset which an investor is entitled to hold at a time.
6. Trading order limit of a derivative means the maximum quantity of such derivative which may be placed on a trading order.
7. Derivative trading member (hereinafter referred to as trading member for short) means a securities company accepted by the Stock Exchange to become a derivative trading member.