Decree 318/2026/ND-CP detailing Law on Recovery and Bankruptcy regarding cases of non-application to derivative contracts containing close-out netting terms

DECREE

Detailing a number of articles of the Law on Recovery and Bankruptcy regarding cases of non-application to derivative contracts containing close-out netting terms

Pursuant to the Law on Organization of the Government No. 63/2025/QH15;

Pursuant to the Law on Recovery and Bankruptcy No. 142/2025/QH15;

Pursuant to the Law on Credit Institutions No. 32/2024/QH15, amended and supplemented under Law No. 96/2024/QH15;

At the proposal of the Governor of the State Bank of Vietnam;

The Government hereby promulgates the Decree detailing a number of articles of the Law on Recovery and Bankruptcy regarding cases of non-application to derivative contracts containing close-out netting terms.

Article 1. Scope of regulation

This Decree details a number of articles of the Law on Recovery and Bankruptcy regarding cases of non-application to interest rate derivative contracts containing close-out netting terms, including:

1. Clause 2, Article 27, and Clause 3, Article 40, regarding cases in which the disposal of collateral of enterprises or cooperatives for secured creditors shall not be temporarily ceased.

2. Point c, Clause 1, Article 49, regarding cases in which payments or clearing shall not be deemed null and void.

3. Clauses 1 and 5, Article 51, regarding cases in which the performance of contracts in force shall not be suspended or terminated.

4. Clause 1, Article 53, regarding cases in which reporting to Judges before carrying out the clearing of obligations is not required.

Article 2. Subjects of application

1. Enterprises, cooperatives and unions of cooperatives (hereinafter referred to as cooperatives) established and operating in accordance with relevant laws.

2. Credit institutions and foreign bank branches established and operating in accordance with the law on credit institutions.

3. Agencies, organizations and individuals participating in recovery or bankruptcy procedures for enterprises or cooperatives.

4. Other agencies, organizations and individuals related to the implementation of this Decree.

Article 3. Interpretation of terms

For the purposes of this Decree, the terms below shall be construed as follows:

1. Interest rate derivative contract means an agreement between the parties that establishes rights and obligations for the purpose of hedging against and mitigating interest rate risks in accordance with the law on trading and provision of interest rate derivative products by credit institutions and foreign bank branches.

2. Close-out netting means an arrangement in an interest rate derivative contract whereby, upon termination of interest rate derivative contracts at or before their maturity as agreed, the parties determine and pay a single net amount after setting off the amounts payable under the interest rate derivative contracts between the contracting parties, thereby determining a single amount receivable or payable by one party on the maturity date or early termination date of the interest rate derivative contracts.

Article 4. Cases in which the disposal of collateral of enterprises or cooperatives for secured creditors is not temporarily ceased under Clause 2, Article 27, and Clause 3, Article 40, of the Law on Recovery and Bankruptcy

1. The disposal of collateral of an enterprise or a cooperative for a secured creditor under an interest rate derivative contract containing close-out netting terms shall not be temporarily ceased when the Court accepts a claim for the application of recovery or bankruptcy procedures to such enterprise or cooperative.

2. At the request of an asset management officer, asset management and liquidation enterprise, or Judge, the secured creditor shall provide the following information relating to the disposal of collateral of the enterprise or cooperative:

a) The reason for not temporarily ceasing the disposal of collateral;

b) The collateral being disposed of;

c) The time at which the disposal of collateral commences;

d) The place of disposal of collateral.

Article 5. Cases in which payment or clearing is not deemed null and void under Point c, Clause 1, Article 49 of the Law on Recovery and Bankruptcy

1. Payment or clearing made under an interest rate derivative contract containing close-out netting terms within 06 months before the date on which the Court issues a decision to commence bankruptcy procedures shall not be deemed null and void.

2. At the request of an asset management officer, asset management and liquidation enterprise, or Judge, the parties to the interest rate derivative contract containing close-out netting terms shall provide the following information relating to the payment or clearing specified in Clause 1 of this Article:

a) The close-out netting terms;

b) The time at which the payment or clearing is made;

c) Documents and data relating to the payment or clearing.

Article 6. Cases in which the performance of contracts in force is not suspended or terminated under Clauses 1 and 5, Article 51 of the Law on Recovery and Bankruptcy

1. An interest rate derivative contract containing close-out netting terms that is in force when the Court accepts a claim for the application of bankruptcy procedures or when the Court issues a decision to commence bankruptcy procedures shall not be suspended or terminated under Clauses 1 and 5, Article 51 of the Law on Recovery and Bankruptcy.

2. At the request of an asset management officer, asset management and liquidation enterprise, or Judge, the parties to the interest rate derivative contract containing close-out netting terms shall provide the following information:

a) The close-out netting terms;

b) Documents and data proving that the interest rate derivative contracts are in force.

Article 7. Cases in which reporting to the Judge before carrying out the clearing of obligations is not required under Clause 1, Article 53 of the Law on Recovery and Bankruptcy

1. After the Court issues a decision to commence bankruptcy procedures, for an interest rate derivative contract containing close-out netting terms concluded before that time, the clearing of obligations shall be carried out as agreed by the parties upon the occurrence of a bankruptcy event, including the termination of all interest rate derivative contracts between one party and the same counterparty, and the determination and clearing of the amounts payable by the parties under such interest rate derivative contracts to determine a single difference in asset value of one party in relation to the other party. Such clearing of obligations is not required to be reported to the Judge for opinion before being carried out.

2. The clearing of obligations specified in Clause 1 of this Article is solely for the purpose of determining the difference in asset value between the parties. Payment of such difference in asset value shall be made in accordance with the law on recovery and bankruptcy.

3. At the request of an asset management officer, asset management and liquidation enterprise, or Judge, the parties to the interest rate derivative contract containing close-out netting terms shall provide the following information relating to the clearing of obligations:

a) The interest rate derivative contracts containing close-out netting terms that include an agreement applicable upon the occurrence of a bankruptcy event and serve as the basis for carrying out the clearing of obligations;

b) The manner and calculation method used to determine the net difference in asset value.

Article 8. Effect

This Decree takes effect from August 12, 2026.

Article 9. Transitional provisions

1. For a recovery or bankruptcy case that has been accepted by the Court but in which a decision declaring the enterprise or cooperative bankrupt has not been issued before the effective date of this Decree, the provisions of this Decree shall apply to the review and settlement of the case with respect to interest rate derivative contracts containing close-out netting terms.

2. Where the Court has issued a decision declaring the enterprise or cooperative bankrupt before the effective date of this Decree, the provisions of this Decree shall not apply to the review and settlement of the case.

Article 10. Implementation responsibilities

1. The State Bank of Vietnam shall organize the implementation of this Decree as prescribed by law; assume the prime responsibility for, and coordinate with ministries and ministerial-level agencies in, removing difficulties and problems relating to the implementation of this Decree at the request of the Supreme People’s Court.

2. Ministers, heads of ministerial-level agencies, and relevant organizations and individuals shall implement this Decree.

On Behalf of the Government

For the Prime Minister

Deputy Prime Minister

NGUYEN VAN THANG