Circular 58/2021/TT-BTC on Derivatives

CIRCULAR 58/2021/TT-BTC

July 12, 2021

PROVIDING GUIDELINES FOR SOME ARTICLES OF GOVERNMENT’S DECREE NO. 158/2020/ND-CP DATED DECEMBER 31, 2020 ON DERIVATIVES AND DERIVATIVE MARKET

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

Pursuant to the Government’s Decree No. 158/2020/ND-CP dated December 31, 2020 on derivatives and derivative market;

Pursuant to the Government's Decree No. 155/2020/ND-CP dated December 31, 2020 on elaboration of some Articles of the Law on Securities;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Finance;

At the request of the Chairman of the State Securities Commission of Vietnam (“SSC”);

The Minister of Finance promulgates a Circular providing guidelines for some Articles of Government’s Decree No. 158/2020/ND-CP dated December 31, 2020 on derivatives and derivative market.

CHAPTER I. GENERAL PROVISIONS

Article 1. Scope and regulated entities

1. This Circular provides guidelines for some Articles of the Government’s Decree No. 158/2020/ND-CP dated December 31, 2020 on derivatives and derivative market (hereinafter referred to as “Decree No. 158/2020/ND-CP”), including:

a) Trading, clearing and settlement for derivative transactions, including: Stock-index futures contracts and government-bond futures contracts;

b) Activities of members of Vietnam Exchange (VNX) and Vietnam Securities Depository and Clearing Corporation (VSDCC).

2. This Circular applies to:

a) Securities authorities;

b) Vietnam Exchange (VNX), Hanoi Stock Exchange (HNX) and Ho Chi Minh Stock Exchange (HSX);

c) Vietnam Securities Depository and Clearing Corporation (VSDCC);

d) Derivative trading organizations, clearing and settlement service providers, and settlement banks;

dd) Trading members, special trading members, market makers and clearing members;

e) Investors and relevant organizations and individuals.

Article 2. Definitions

For the purposes of this Circular, in addition to the terms defined in Decree No. 158/2020/ND-CP, the terms below shall be construed as follows:

1. “clearing” means the process of determining net positions and settlement obligations of the trading parties.

2. “matched sale-purchase transaction” means a transaction whereby a new long position (or short position) is opened to reduce the previously opened short position (or long position) of derivatives of the same type, underlying asset and maturity date.

3. “settlement price" means the matching price of futures orders placed by investors on the trading system of HNX.

4. “daily settlement price” means the price which is determined at the close of each trading day and used for calculating daily profit or loss between positions.

5. “final settlement price” means the price determined on the last trading day and used for determining settlement obligations when executing a contract.

6. “margin value” means the sum of cash margin account balance and value of securities provided which is determined according to VSDCC’s regulations.

7. “brokerage client” means an investor that conducts derivative transactions using brokerage services rendered by a trading member.

8. “clearing and settlement client” means a non-clearing member or its brokerage client that has entrusted a designated clearing member to make clearing and settlement for their derivative transactions.

9. “open interest” of a derivative at a given time means total number of outstanding derivative contracts at that time.

10. “margin” means an amount of money or marginable securities provided by an obligor to ensure its fulfillment of settlement obligations for derivative transactions.

11. “initial margin” means the margin provided before conducting a derivative transaction.

12. “margin requirement” means the value or percentage of margin that an obligor must pay for executing derivative contracts or maintaining outstanding derivative contracts.

13. “risk margin” means the margin value that an investor or clearing member must pay for covering the maximum potential losses of a derivative, which are calculated according to fluctuations in prices of underlying assets.

14. “spread margin” means an increased margin value that an investor or clearing member holding a futures contract must pay for covering maximum potential losses compared to the risk margin due to the difference in price fluctuations of underlying asset and futures contract.

15. “delivery margin” means the margin value that an investor making settlement for government-bond futures contract must pay for covering potential losses in case that investor does not have enough money to pay for the transaction or government bonds to deliver.

16. “cash margin ratio” means the ratio of cash margin value to total required margin.

17. “stock-index futures contract” or “index futures contract” means a futures contract of which the underlying asset is stock index.

18. “government-bond futures contract” means a futures contract of which the underlying asset is government bond or quasi-sovereign bond that has some basic characteristics of the government bond.

19. “clearing and settlement contract” means a contract made by and between a clearing member and VSDCC for carrying out clearing and settlement for derivative transactions conducted in the name of that clearing member with VSDCC.

20. “trading account” means an account opened at a trading member and used to conduct derivative transactions for the client.

21. “contract exercise” means the process whereby the parties to a futures contract deliver underlying assets, transferable assets and make cash settlement or pay for the difference between the daily settlement price or settlement price and final settlement price according to terms and conditions of the contract and VSDCC's regulations.

22. Positions held in the name of a clearing member include the positions of investors and those of that clearing member. To be specific:

a) Positions in proprietary trading and market making transactions of the clearing member;

b) Positions of brokerage clients of the clearing member;

c) Positions of clearing and settlement clients.

23. “omnibus trading account” means a trading account of an investor where long and short positions of a futures contract (on the same underlying asset and expiring in the same month) are opened and maintained until a clearing member requests VSDCC to make deduction under specific agreements or at the request of the investor.

CHAPTER II. DERIVATIVE PRODUCTS

Article 3. Index futures contract

1. The underlying asset of an index futures contract is the stock index which is designed by VNX according to VNX’s rules for setting up and managing indices after obtaining approval from SSC.

2. The index futures contract shall be exercised in the form of cash settlement in accordance with VSDCC’s regulations.

3. The template of the index futures contract shall be issued by VNX after obtaining approval from SSC.

Article 4. Government-bond futures contract

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

a) The government bond which is being traded on the market; or

b) The quasi-sovereign bond which has some basic characteristics of the government bond. SSC shall develop the basic characteristics of the government bond, design the quasi-sovereign bond, and submit them to the Ministry of Finance for approval.

2. The government-bond futures contract shall be exercised in the form of cash settlement or delivery of the underlying asset in accordance with VSDCC’s regulations. The settlement method must be specified before listing.

3. The template of the government-bond futures contract shall be issued by VNX after obtaining approval from SSC.

4. HNX shall cooperate with VSDCC to determine and publish the following information on its website:

a) The list of transferable government bonds, conversion factor and calculation rules (in case of a government-bond futures contract which is exercised in the form of delivery of the underlying asset);

b) The list of government bonds which are used for calculating the final settlement price, calculation rules and percentage of each listed bond (in case of a government-bond futures contract which is exercised in the form of cash settlement).

5. Determination and publishing of information about government bonds specified in Clause 4 of this Article shall comply with regulations adopted by VNX and VSDCC. HNX shall cooperate with VSDCC to determine the closing time of the list of government bonds transferable or used for calculating the final settlement price. After this time, HNX and VSDCC shall not be allowed to make any revisions to the aforesaid lists of government bonds.

CHAPTER III. TRADING, CLEARING AND SETTLEMENT FOR DERIVATIVE TRANSACTIONS

SECTION 1. DERIVATIVE TRADING

Article 5. Derivative trading by investors

1. In order to conduct derivative transactions, investors are required to open trading accounts at trading members and margin accounts at clearing members that are designated by trading members. An investor may use their trading account opened at a trading member for conducting transactions in underlying securities to conduct derivative transactions after opening a margin account at the clearing member designated by the trading member.

2. Before placing trading orders, while holding positions and when exercising contracts, investors must provide margin at the request of clearing members.

3. Investors must ensure position limits on their trading accounts according to VSDCC’s regulations. In case the position limit is exceeded, the investor, clearing member and VSDCC shall implement the following measures:

a) The investor must conduct matched sale-purchase transactions to reduce their positions;

b) After a prescribed period, if the investor fails to reduce their positions, the clearing members is allowed to conduct match sale-purchase transactions to close a part or all of positions of the investor so as to ensure the position limit on the investor’s account;

c) In case the clearing member fails to conduct matched sale-purchase transactions to close the investor’s positions, VSDCC may request another clearing member or directly conduct matched sale-purchase transactions to close a part or all of the investor’s positions held in the name of that clearing member.

4. Matched sale-purchase transactions specified in Clause 3 of this Article shall be conducted in accordance with VSDCC’s regulations.

Article 6. Trading accounts of investors

1. Investors must enter into contracts for trading account opening with trading members. Before opening trading accounts, foreign investors must follow procedures for registration of securities trading codes as prescribed by law. Securities companies that have certificate of eligibility to trade derivatives but are not trading members shall be allowed to open trading accounts at trading members to serve their derivative investment activities according to provisions herein.

2. Investors that are members of Boards of Directors, members of Boards of Members, Directors (General Directors), Deputy Directors (Deputy General Directors), heads of departments/divisions, and employees of trading members shall only open their trading accounts at such trading members.

3. Notwithstanding the provisions of Clauses 4 and 5 of this Article, an investor may open many trading accounts provided that only a trading account is opened at each trading member. Corresponding to each trading account, the investor is allowed to open a margin account at the clearing member designated by the trading according to Clause 1 Article 10 hereof.

4. A fund management company may open more than one trading account at each trading member. To be specific:

a) 02 omnibus trading accounts are opened in its name to manage investment portfolios of trustors, including 01 account used for serving domestic trustors and 01 account used for serving foreign trustors; and

b) 01 trading account may be opened for each of securities investment funds or companies that it manages at each trading member. This account shall be opened in the name of the securities investment fund or company.

5. A securities company established abroad may open 02 trading accounts at each trading member. To be specific:

a) 01 trading account is opened to serve its derivative proprietary trading; and

b) 01 omnibus trading account is opened to provide derivative brokerage services for other foreign investors.

6. Provision of information about trading accounts and omnibus trading accounts on the derivatives clearing and settlement system shall comply with VSDCC’s regulations.

Article 7. Receiving, executing and notifying results of execution of trading orders

1. Trading members shall receive and execute trading orders, and notify transactions results in accordance with Clauses 1, 2, 3, 5, 7 Article 16 of the Circular No. 121/2020/TT-BTC dated December 31, 2020 of Minister of Finance prescribing operation of securities companies and its amending and superseding documents (if any).

2. Trading members shall only be allowed to executive clients’ trading orders if the received trading order contains adequate and accurate information about the client, trading date, order receipt time, trading account, trading date, ticker symbol, trading method, order type, trading volume and price as specified in VSDCC’s regulations.

3. Trading members must refuse trading orders placed by clients in the following cases:

a) The order does not contain adequate information as prescribed in Clause 2 of this Article;

b) The client fails to fully make the required margin, except orders for matched sale-purchase transactions; or

c) The client’s order exceeds the order limit set out by VNX or causes the client’s position on their account exceeding the position limit prescribed by VSDCC’s regulations.

Article 8. Post-trading error correction

1. VSDCC shall correct post-trading errors in the following cases:

a) A transaction lacks the client’s account information which is not updated on the settlement system;

b) A transaction is conducted to close positions where the number of matched positions is greater than the number of corresponding positions on the trading account which is suspended due to commission of violations against VSDCC’s regulations on margin, position limits and open interest limits.

2. Post-trading error correction shall be made as follows:

a) For the case specified in Point a Clause 1 of this Article, VSDCC shall conduct the transaction according to accurate information about the client's account after it has been successfully updated on the system. If the clearing member fails to update the client’s account information on the system within the time limit prescribed by VSDCC, VSDCC shall transfer the transaction that lacks the client’s account information to the proprietary trading account of the clearing member;

b) For the case specified in Point b Clause 1 of this Article, VSDCC shall transfer the erroneous transaction to the proprietary trading account of the clearing member.

3. With regard to trading errors other than those specified in Clause 1 of this Article, VSDCC must obtain approval from SSC before error correction.

4. Parties to the transaction shall take responsibility for their mistakes within the scope of their powers and responsibilities. Clearing members shall assume responsibility for clients’ trading errors, including transactions of non-clearing members and their clients (to general clearing members).

5. Clearing members that are insolvent after error correction may use sources of financial support specified in Clause 2 Article 15 hereof.

6. Applications and procedures for post-trading errors shall comply with VSDCC’s regulations.

SECTION 2. CLEARING AND SETTLEMENT FOR DERIVATIVE TRANSACTIONS

Article 9. Settlement rules for derivative transactions of investors

1. Settlement for derivative transactions of investors includes payment of position gain/loss and settlement upon contract exercise. To be specific:

a) Payment of position gain/loss:

- On trading days prior to the last trading day, value of payment of position gain/loss shall be daily determined by relying on open positions on the investor's trading account and the difference between the daily settlement price and that determined on the previous trading day; or the difference between the daily settlement price and the settlement price (in case of positions that have been opened within the trading day); or the difference between the settlement price and the daily settlement price determined on the previous trading day (in case of positions that are closed prior to their expiration); or the difference between the settlement price for closing a position and the settlement price for opening a position (in case of positions that are opened and closed within the same trading day);

- On the last trading day, value of payment of position gain/loss shall be determined by relying on open positions on the investor's trading account and the difference between the final settlement price and the daily settlement price determined on the previous trading day; or the difference between the final settlement price and the settlement price (in case of positions that have been opened within the trading day); or the difference between the settlement price and the daily settlement price determined on the previous trading day (in case of positions that are closed prior to their expiration); or the difference between the settlement price for closing a position and the settlement price for opening a position (in case of positions that are opened and closed within the same last trading day).

The daily settlement price and final settlement price are published on VSDCC’s website;

b) Settlement upon contract exercise:

- In case of cash settlement: the contract exercise is considered complete upon the completion of payment of position gain/loss on the last trading day.

- In case of delivery of the underlying asset: the contract exercise is considered complete when the selling investor delivers the underlying asset or other transferable assets as prescribed and the buying investor makes cash payment under terms and conditions of the contract and VSDCC’s regulations; or the investor completes the payment of compensation (if any) as prescribed in Point c Clause 4 Article 11 hereof.

2. Settlement shall be made on the investor’s cash margin account and/or securities margin account. VSDCC shall cooperate with clearing members to make settlement according to Clauses 3, 4 Article 11 hereof.

Article 10. Margin accounts of investors

1. A clearing member shall open cash margin accounts for investors in its name and shall separately manage cash margin account of each investor as prescribed in Point a Clause 4 Article 34 of Decree No. 158/2020/ND-CP. The clearing member shall be allowed to use cash margin accounts of investors according to Clause 2 of this Article.

The clearing member shall open 01 securities margin account for each investor for managing positions, obligations to provide margin, margin assets, transferable assets and making settlement for positions on the investor’s trading account. Non-clearing members and their brokerage clients shall open securities margin accounts at a general clearing member.

2. Cash margin accounts and securities margin accounts of investors shall be used for performing the following activities:

a) Receive and return margin assets to investors;

b) Receive daily gains or losses from the investor’s positions; make settlement upon contract exercise; receive interests on cash margin deposited at banks (if any);

c) Receive or deliver underlying assets or transferable assets upon contract exercise (in case of delivery of underlying assets upon contract exercise) for the investor’s positions.

3. When conducting derivative transactions, an investor is required to provide margin for the clearing member according to the following provisions:

a) The investor shall fully provide the initial margin for all of positions to be opened for the clearing member before conducting any transactions, except matched sale-purchase transactions;

b) The investor shall provide maintenance margin for their positions and additional margin when the margin value is lower than the margin requirement or the balance on cash margin account does not meet the cash margin ratio as requested of the clearing member. Depending on the market conditions, the clearing member is entitled to request the investor to provide additional margin within the trading session;

c) The investor may withdraw their margin if the margin value exceeds the margin requirement set out by the clearing member;

d) In case of initial margin or additional margin, the clearing member may request the investor to fully provide margin in cash or allow the investor to provide securities as a part of the required margin according to the cash margin ratio set by the clearing member provided that this cash margin ratio shall not be lower than that prescribed by VSDCC.

Article 11. Clearing and settlement rules of VSDCC

1. VSDCC shall carry out clearing for derivatives according to each account of the investor or clearing member according to the rule that corresponding positions of a derivative with the same maturity date on an account shall be considered and deducted by VSDCC for determining net position on that account.

2. VSDCC is entitled to refuse novation for invalid transactions and notify them to HNX in the following cases:

a) Transactions which are conducted by a clearing member after VSDCC has sent a notification to request HNX to suspend transactions conducted by that clearing member. Novation for transactions of non-clearing members that have entered into clearing and settlement entrustment contracts with that clearing member shall also be refused;

b) Received transactions of which the trading date is different from that recorded on VSDCC’s system;

c) Transactions involving derivatives ticker symbols for which clearing and settlement are not yet accepted on VSDCC’s system;

d) Transactions which are conducted by non-clearing members before the clearing and settlement for their transactions on VSDCC’s system are accepted by general clearing members;

dd) Other cases reported by VSDCC and accepted by SSC.

3. With regard to payment of daily position gains or losses, based on gains or losses determined at the end of the trading day on each investor’s account, VSDCC shall make clearing in cash for each clearing member in order to determine amounts receivable or payable of that clearing member. Payment of daily position gains or losses shall be made by bank transfer through VSDCC’s checkable deposit accounts opened at settlement banks.

4. With regard to settlement upon contract exercise, VSDCC shall make settlement on the final settlement date according to the following rules:

a) In case of cash settlement: VSDCC shall separately determine settlement obligations of each investor and each clearing member. The paying clearing member shall make full transfer of money to the checkable deposit account opened at the settlement bank. The receiving clearing member shall make payment to the investor immediately after receiving payment from VSDCC;

b) In case of delivery of underlying assets: The clearing member at the seller’s side shall transfer an adequate quantity and correct type of the underlying asset or transferable asset specified in the derivative contract to its securities margin account at the request of VSDCC. The clearing member may use securities borrowed from VSDCC’s securities lending and borrowing system to make such payment in accordance with VSDCC’s regulations.

The clearing member at the buyer’s side can receive the delivered asset only after making full payment at the request of the VSDCC, and then immediately assign it to the investor at the buyer’s side;

c) Where the clearing member has neither enough money to make such payment nor government bonds to make such transfer within the prescribed time limit, VSDCC may make cash settlement for the government-bond futures contract. To that extent, the clearing member at fault shall be responsible for paying the clearing member concerned a compensation sum which is not less than 5% of the contract settlement value through VSDCC. VSDCC shall set out regulations on determination of value and mechanism for payment of compensation.

5. VSDCC shall promulgate regulations on procedures for clearing, settlement and delivery of underlying assets upon contract exercise, settlement methods and time limits.

Article 12. Margin accounts of clearing members

1. VSDCC shall open cash margin accounts and checkable deposit accounts in its name at settlement banks (hereinafter referred to as “member’s deposit account”) and securities margin accounts at VSDCC (hereinafter referred to as “member’s securities margin account”) for managing margin and fulfilling settlement obligations for positions held in the name of clearing members.

2. Member’s deposit accounts opened at settlement banks for each clearing member include:

a) Cash margin account for proprietary trading activities which is used for managing margin for proprietary trading and market making of that clearing member;

b) Cash margin account for clients which is used for managing cash margin of all clients of that clearing member; and

c) Checkable deposit account which is used for paying daily position gains or losses, making settlement upon exercise of the contracts established in the name of the clearing member, and making other settlement activities of that clearing member.

3. Member’s cash margin accounts and member’s securities margin accounts shall be used for performing the following activities:

a) Receive and return margin assets to the clearing member. Margin assets on these accounts include those of clients of the clearing member which are used for providing margin for positions of such clients;

b) Receive or pay daily gains or losses for positions held in the name of the clearing member; make and receive payments upon contract exercise; receive interests on cash margin deposited at banks;

c) Receive and deliver underlying securities upon contract exercise (in case a contract is exercised by delivery of the underlying asset) for positions held in the name of the clearing member.

4. Member’s cash margin accounts and member’s securities margin accounts must be established and managed in a manner that ensures the separate management of assets of clearing members, assets of VSDCC; separate management of assets of each clearing member, assets of the clearing member and assets of clients of that clearing member.

5. VSDCC may, at any time, request clearing members to provide detailed information about trading account, margin accounts, value and list of margin assets of each investor.

6. Cash and securities earned from taking corporate actions for margin securities on member’s margin accounts shall be distributed according to VSDCC’s regulations. VSDCC shall not be allowed to deposit cash margin of clearing members as term deposits. Interests on cash margin shall be calculated using the interest rate on demand deposits announced by the settlement bank and paid to clearing members.

7. VSDCC shall establish a system for adequately and accurately managing information about positions, settlement obligations, cash margin balance, value and list of margin securities on each margin account of investors and clearing members.

Article 13. Margin of clearing members

1. VSDCC shall determine the margin requirement to be met by the clearing member for outstanding positions held in the name of that clearing member after trading hours end.

2. The margin requirement shall be determined on the basis of risk margin, spread margin for futures contracts, delivery margin for government-bond futures contracts, minimum margin and other factors deemed necessary by VSDCC.

3. The clearing member must provide additional margin in case their margin value does not meet the margin requirement determined by VSDCC. The clearing member is allowed to withdraw a part of margin if the margin value exceeds the margin requirement according to VSDCC's regulations.

4. The clearing member may provide margin in cash or securities provided that the cash margin ratio shall not be lower than 80% of total required margin, except the case where the investor holding short position of government-bond futures contract which is exercised by delivery of underlying asset provides transferable government bonds as margin.

5. During the trading days, VSDCC shall periodically supervise the margin value of clearing members. If a clearing member fails to ensure the required margin value, VSDCC shall is entitled to put the clearing member under alert and adopt one of the following measures:

a) Request HNX to suspend transactions on relevant trading accounts, except matched sale-purchase transactions conducted to reduce positions;

b) Request the clearing member (for proprietary trading account) or, through the clearing member, request the investor (for the investor’s account) to provide additional margin and conduct matched sale-purchase transactions to reduce their positions.

6. Opening of margin accounts, determination of margin type, modification of margin requirement, methods for determining margin requirement and their parameters, marginable assets, method, time and procedures for provision or withdrawal of margin, exercise of corporate actions for securities provided as margin and other relevant contents shall comply with VSDCC's regulations.

Article 14. Margin

1. Investors and clearing members are allowed to use both cash and securities as margin for their derivative transactions.

2. Securities which can be provided as margin by investors for clearing members must meet the following criteria:

a) They are included in the list of marginable securities announced by VSDCC as prescribed in Clause 3 of this Article;

b) They are not used as collateral in other transactions as prescribed by the civil law’s regulations on secured transactions, including shares bought in margin lending transactions; are not seized by regulatory authorities in accordance with relevant laws and are not lent in accordance with regulations of law;

c) Meet other criteria set by clearing members.

3. Securities which are accepted by VSDCC as margin for derivative positions must fully meet the following criteria:

a) They are included in the list of marginable securities announced by VSDCC;

b) They are not put under alert, control and trading suspension on HNX and HSX; or issued by the organizations that are undergoing liquidation, dissolution, bankruptcy, consolidation or merger;

c) They are not pledged, blockaded or temporarily seized by VSDCC;

d) They are freely transferable and have been deposited on securities trading account of VSDCC; they are under the lawful ownership of the margin provider that is the investor or clearing member;

dd) They meet other criteria specified in VSDCC’s regulations.

4. VSDCC and clearing members shall publish the list of marginable securities and discount rate of each security on their websites. In case of changes in marginable securities, investors and clearing members are required to replace the provided margin with cash or other marginable securities at the request of VSDCC or clearing members.

5. Management of margin:

a) VSDCC and clearing members shall manage margin provided by clearing members and investors in accordance with the provisions of Articles 33, 34 of Decree No. 158/2020/ND-CP;

b) Clearing members shall only use assets on investors’ margin accounts for providing margin, ensuring settlement obligations and making settlement for positions on corresponding trading accounts of such investors, except the cases in Points d, dd of this Clause;

c) An investor’s margin must be separately managed, shall not be and would not be considered as margin of the clearing member, even if they are kept on that member’s margin account. If the clearing member is declared bankrupt, the investor’s margin shall be returned to the investor after all settlement obligations of that investor have been fulfilled;

d) In case an investor is insolvent, the clearing member may use, sell or transfer that investor’s margin without obtaining his/her approval. Within 01 day after the margin is disposed of, the clearing member must notify the investor of the margin disposition using the method specified in the contract for trading account opening. The notification must indicate reasons for margin disposition, types of margin, method and time of disposition, and realized value;

dd) VSDCC is entitled to use margin provided by investors and clearing members to VSDCC for making settlement for their positions as prescribed in Points c, dd Clause 5 Article 28 of Decree No. 158/2020/ND-CP;

e) During the margin period, investors and clearing members still have rights and benefits from securities provided as margin in accordance with regulations of the Law on enterprises and the Law on securities. Ensuring investors’ rights and benefits from securities provided as margin shall comply with VSDCC’s regulations;

g) While the margin is kept on a margin account, neither investor nor clearing member may transfer, give or use it as collateral, deposit or security or for serving other purposes.

Article 15. Actions in case of insolvency

1. A clearing member or investor that is the clearing member’s client (hereinafter referred to as “investor”) is considered insolvent in the following cases:

a) The clearing member or investor lately or partially pays for position losses or compensation amounts as prescribed in Point c Clause 4 Article 11 hereof, or lately or partially make cash settlement upon contract exercise according to VSDCC’s regulations.

b) The clearing member or investor goes or is declared bankrupt as prescribed by the Law on bankruptcy of enterprises;

c) Other cases as prescribed by VSDCC.

2. If a clearing member or investor becomes insolvent as prescribed in Point a Clause 1 of this Article, VSDCC may use funding sources to assist them in the following order:

a) Use the cash margin of the insolvent clearing member or investor;

b) In case the cash margin is not enough for fulfilling settlement obligations, VSDCC shall use cash contributions made by the insolvent clearing member to the clearing fund;

c) Use cash contributions made by other clearing members to the clearing fund according to the percentage prescribed by VSDCC. In this case, VSDCC shall provided relevant clearing members with detailed information about the use of the clearing fund within the same day on which the clearing fund is used. The insolvent clearing member is obliged to fully refund the used assets of the clearing fund and pay interests which are calculated using the interest rate determined by VSDCC in accordance with regulations in force to other clearing members.

d) Use the risk management fund of VSDCC as prescribed;

dd) Use other lawful funding sources of VSDCC after obtaining approval from the Ministry of Finance.

3. Apart from the use of funding sources as prescribed in Clause 2 of this Article, VSDCC may also adopt the following measures:

a) Request the insolvent clearing member to provide explanations and adequate information about their insolvency, and provide the list of their clients, client identification information and their margin account information;

b) Cooperate with HNX to limit or prevent the opening of new positions in the name of the insolvent clearing member, except matched sale-purchase transactions;

c) Request the insolvent clearing member to liquidate their positions as prescribed in Point b Clause 5 Article 28 of Decree No. 158/2020/ND-CP;

d) Open trading accounts at HNX to perform matched sale-purchase transactions for reducing positions of the insolvent clearing member as prescribed in Point b Clause 5 Article 28 of Decree No. 158/2020/ND-CP.

4. In case an investor becomes insolvent, the relevant clearing member shall promptly notify VSDCC of positions and margin of that investor, and adopt the following measures:

a) Request the investor or directly close the investor’s positions or compulsorily liquidate the investor’s open positions;

b) Suspend the receipt of trading orders for opening new positions from relevant investors; and cancel uncompleted trading orders of that investor;

c) Use, sell or transfer the investor’s margin for buying or using them as collateral for loans which are used for fulfilling settlement obligations for the investor's open positions. In case of deficiency, the clearing member shall use their own assets for exercising derivative contracts of the investor.

d) The investor is obliged to fully return assets which are used for fulfilling settlement obligations to the clearing member and pay all relevant costs.

5. Where a clearing member becomes insolvent and VSDCC has adopted support measures as prescribed in Clauses 2, 3 of this Article, the clearing member is obliged to fully return the used assets of the clearing fund and the risk management fund, and other lawful funds of VSDCC used for fulfilling their settlement obligations and pay all relevant costs.

VSDCC may sell the margin or securities contributed to the clearing fund of the insolvent clearing member at the prices decided by VSDCC, and use the proceeds for returning the use assets and covering any financial damage incurred during the conduct of actions against insolvency case.

6. The insolvent clearing member or investor is obliged to return the used assets from support sources specified in Clause 2 of this Article in the following order:

a) Lawful funding sources of VSDCC;

b) The risk management fund of VSDCC;

c) Contributions made by other clearing members to the clearing fund;

d) Contributions made by the insolvent clearing members to the clearing fund of VSDCC;

dd) The margin of the clearing member which has been used for fulfilling settlement obligations of the insolvent investor.

Article 16. Clearing fund

1. Methods of contribution to the clearing fund:

a) A clearing member shall make the initial minimum contribution amount to the clearing fund after obtaining an approval in principle for clearing member registration, and make periodical contributions to the clearing fund (if any) as prescribed in Clause 2 of this Article.

The clearing member may make contributions to the clearing fund either in cash or by securities according to VSDCC’s regulations;

b) The clearing member is obliged to additionally make ad-hoc contribution amounts to the clearing fund according to VSDCC’s regulations in the following cases:

- The clearing member is placed under alert according to regulations on financial safety set out in the Law on securities and regulations on capital adequacy set out in the Law on banking;

- Assets contributed by the clearing member to the clearing fund are blockaded or seized by competent authorities or under court’s judgments;

- Other cases reported by VSDCC and accepted by SSC.

2. Contribution amounts:

a) Initial minimum contribution amount: VND 10 billion for a direct clearing member or VND 15 billion for a general clearing member;

b) VSDCC shall monthly carry out re-evaluation of the clearing fund and determine obligations to make contributions to the clearing fund of each clearing member on the basis of trading scale, price fluctuation, financial liabilities, risk level and other criteria. The contribution amount of each clearing member which is determined in the periodical re-evaluation shall not be lower than the initial minimum contribution amount specified in Point a of this Clause.

In case the sum of contribution amounts made to the clearing fund by the clearing member is greater than the required contribution amount, the clearing member is entitled to withdraw the difference; In case the sum of contribution amounts made to the clearing fund by the clearing member is smaller than the required contribution amount, the clearing member is obliged to make additional contribution.

3. Management of the clearing fund:

a) Assets contributed by each clearing member to the clearing fund are still under the ownership of that clearing member and managed by VSDCC separately from assets of VSDCC. VSDCC shall have the full rights to use and even sell such assets for fulfilling settlement obligations for positions held in the name of that clearing member;

b) VSDCC shall open a deposit account at the settlement bank for managing cash contributions made by clearing members to the clearing fund.

With regard to securities contributed to the clearing fund, VSDCC shall open a depository account in its own name for managing the contributed securities of clearing members. Dividends, yields and other interests accrued from the contributed securities must be returned to clearing members after deducting relevant costs and taxes;

c) Interests on cash contributions made to the clearing fund shall be distributed to clearing members in proportion to contributed amounts and contribution period of each clearing member after deducting all relevant costs.

4. Use of the clearing fund:

a) Assets contributed to the clearing fund shall be used by VSDCC for fulfilling settlement obligations of insolvent clearing members. Cases where the clearing fund is used are specified in Points b, c Clause 2 and Clause 5 Article 15 hereof.

The insolvent clearing member shall incur interests on the used amounts of the clearing fund according to VSDCC’s regulations;

b) Assets which clearing members have contributed to the clearing fund shall only be returned to them when their membership is cancelled or they are no longer clearing members. The return of a clearing member’s assets contributed to the clearing fund shall be carried out after VSDCC has deducted all amounts payable, including compensations for financial damage paid to VSDCC (if any), and made settlement for positions held in the name of that clearing member as prescribed.

While a clearing member is following procedures for membership cancellation, their assets contributed to the clearing fund must be managed separately from the clearing fund and shall be used as the basis for competent authorities to issue revocation decision (if any) after deducting amounts payable by that clearing member to VSDCC.

5. Ratio of cash contributions made to the clearing fund and types of securities to be contributed to the clearing fund; methods for evaluation of the clearing fund; procedures for provision and withdrawal of assets from the clearing fund; methods for receiving and distributing interests on contributed cash amounts and on the used assets of the clearing fund and some other relevant contents shall comply with VSDCC’s regulations.

CHAPTER IV. MEMBERS OF VIETNAM EXCHANGE (VNX) AND VIETNAM SECURITIES DEPOSITORY AND CLEARING CORPORATION (VSDCC)

SECTION 1. MEMBERS OF VNX

Article 17. Activities of trading members and special trading members

1. A non-clearing member must enter into a clearing and settlement entrustment contract with a general clearing member. The contract must comply with regulations and laws in force and shall, inter alia, have the primary contents specified in Form 01 in the Appendix enclosed herewith. Closing, transfer of margin and positions in case of replacement of the general clearing member shall comply with VSDCC’s regulations.

2. Trading members must enter into contracts for trading account opening with their clients. The contract for trading account opening must comply with regulations and laws in force and shall, inter alia, have the primary contents specified in Form 02 in the Appendix enclosed herewith.

3. Non-clearing members shall frequently verify, check and review as well as adequately and promptly update and provide information about transactions and other relevant information for general clearing members. Any information about investors and their trading accounts (if any) must be adequately and punctually provided for SSC, VSDCC, HNX and VNX at their written request.

4. The trading member must immediately stop receiving trading orders from the client, except matched sale-purchase transactions, and close the client’s trading account immediately after completing the liquidation of that client’s positions if the client is found to open a trading account in one of the following cases:

a) The client violates the provisions of Clause 2 Article 6 hereof;

b) The client is a minor;

c) The client has limited legal capacity; is incapacitated; has difficulty in controlling his/her own behaviors; is serving an imprisonment sentence or is banned by the court from holding certain positions or doing certain works.

5. Trading members shall only receive matched sale-purchase transactions from clearing members or clients of clearing members that are insolvent and perform other activities at the request of HNX, VSDCC and SSC.

Article 18. Activities of market makers

1. Market makers shall fulfill market making obligations under market making contracts and VNX’s regulations.

2. Market makers may simultaneously conduct market-making transactions and proprietary trading provided that they must comply with the rules set out in VNX’s regulations.

Article 19. Suspension of activities of trading members

1. VNX shall suspend a part or all of derivative trading activities of trading members in the following cases:

a) The trading member’s derivative brokerage or derivative proprietary trading activities are suspended under SSC’s decision;

b) The trading member’s clearing and settlement for derivative transactions (in case the trading member is also a clearing member) are suspended under VSDCC’s decision;

c) The general clearing member that is providing clearing and settlement services for the trading member has their clearing and settlement for derivative transactions suspended or their membership canceled under VSDCC’s decision (in case the trading member is a non-clearing member);

d) The trading member seriously and systematically violates their obligations as specified in VNX’s regulations;

dd) Other cases specified in VNX’s regulations;

e) Other cases reported by VNX and approved by SSC.

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

a) With regard to the case specified in Point a Clause 1 of this Article, the suspension period is that of derivative trading activities decided by SSC;

b) With regard to the case specified in Point b Clause 1 of this Article, activities of the trading member shall be suspended until they are allowed to restore their clearing and settlement activities by VSDCC;

c) With regard to the case specified in Point c Clause 1 of this Article, activities of the trading member shall be suspended up to 90 days or until they are provided with clearing and settlement services by another substitute clearing member (whichever comes first);

d) With regard to the case specified in Point d Clause 1 of this Article, the maximum suspension period is 90 days;

dd) With regard to the cases specified in Points dd and e Clause 1 of this Article, the suspension period shall comply with VNX’s regulations.

3. Procedures for suspension of activities of trading members shall comply with VNX’s regulations.

Article 20. Cancellation of membership of trading members

1. VNX shall cancel membership of trading members in the following cases:

a) A trading member submits an application for voluntary cancellation of membership which is approved by VNX;

b) A trading member is subject to compulsory cancellation of membership.

2. A trading member shall be subject to compulsory cancellation of membership as prescribed in Point b Clause 1 of this Article in the following cases:

a) The trading member fails to rectify the causes of suspension by the end of the maximum suspension period specified in Clause 2 Article 19 hereof;

b) The trading member fails to meet membership requirements for trading member laid down in Clause 1 Article 22 of Decree No. 158/2020/ND-CP;

c) The securities trading license of the trading member is revoked;

d) The trading member undergoes merger, dissolution or bankruptcy;

dd) Other cases specified in VNX’s regulations;

e) Other cases reported by VNX and approved by SSC.

3. Required documents and procedures for cancellation of membership of trading members shall comply with VNX’s regulations.

Article 21. Suspension of activities of special trading members

1. VNX shall suspend trading activities of special trading members in the following cases:

a) The provision of clearing and settlement services by the special trading member (in case the special trading member is also a clearing member) is suspended under SSC’s decision;

b) The special trading member’s clearing and settlement for derivative transactions (in case the special trading member is also a clearing member) are suspended under VSDCC’s decision;

c) The general clearing member that is providing clearing and settlement services for the special trading member has their clearing and settlement for derivative transactions suspended or their membership canceled under VSDCC’s decision (in case the special trading member is a non-clearing member);

d) The special trading member seriously and systematically violates their obligations as specified in VNX’s regulations;

dd) Other cases specified in VNX’s regulations;

e) Other cases reported by VNX and approved by SSC.

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

a) With regard to the case specified in Point a Clause 1 of this Article, the suspension period is that of clearing and settlement services decided by SSC;

b) With regard to the case specified in Point b Clause 1 of this Article, the suspension period is that of clearing and settlement activities decided by VSDCC;

c) With regard to the case specified in Point c Clause 1 of this Article, activities of the special trading member shall be suspended up to 90 days or until they are provided with clearing and settlement services by another substitute clearing member (whichever comes first);

d) With regard to the case specified in Point d Clause 1 of this Article, the maximum suspension period is 90 days;

dd) With regard to the cases specified in Points dd and e Clause 1 of this Article, the suspension period shall comply with VNX’s regulations.

3. Procedures for suspension of activities of special trading members shall comply with VNX’s regulations.

Article 22. Cancellation of membership of special trading members

1. VNX shall cancel membership of special trading members in the following cases:

a) A special trading member submits an application for voluntary cancellation of membership which is approved by VNX;

b) A special trading member is subject to compulsory cancellation of membership.

2. A special trading member shall be subject to compulsory cancellation of membership as prescribed in Point b Clause 1 of this Article in the following cases:

a) The special trading member fails to rectify the causes of suspension by the end of the maximum suspension period specified in Clause 2 Article 21 hereof;

b) The special trading member fails to meet membership requirements for special trading member laid down in Clause 1 Article 23 of Decree No. 158/2020/ND-CP;

c) The special trading member undergoes merger, dissolution or bankruptcy;

d) Other cases specified in VNX’s regulations;

dd) Other cases reported by VNX and approved by SSC.

3. Required documents and procedures for cancellation of membership of special trading members shall comply with VNX’s regulations.

Article 23. Suspension of activities of market makers

1. VNX shall suspend market-making activities of a market maker in the following cases:

a) The market maker fails to fulfill one of their obligations set out in VNX’s regulations;

b) The market maker is suspended from trading on the derivatives market under VNX’s decision or from provision of clearing and settlement services on the derivatives market under VSDCC’s decision;

c) Other cases specified in VNX’s regulations;

d) Other cases reported by VNX and approved by SSC.

2. d) With regard to the cases specified in Points a, b Clause 1 of this Article, the maximum suspension period is 90 days. With regard to the cases specified in Points c, d Clause 1 of this Article, the suspension period shall comply with VNX’s regulations.

3. Procedures for suspension of market-making activities of market makers shall comply with VNX’s regulations.

Article 24. Cancellation of membership of market makers

1. VNX shall cancel membership of market makers in the following cases:

a) The market maker submits an application for voluntary cancellation of membership which is approved by VNX under terms and conditions of the market making contract signed with HNX;

b) The market maker is subject to compulsory cancellation of membership.

2. A market maker shall be subject to compulsory cancellation of membership as prescribed in Point b Clause 1 of this Article in the following cases:

a) The market maker fails to rectify the causes of suspension by the end of the suspension period of market making activities specified in Clause 2 Article 23 hereof;

b) The market maker fails to meet membership requirements for market makers laid down in Clause 1 Article 24 of Decree No. 158/2020/ND-CP;

c) The membership of trading member or special trading member of the market maker is cancelled by VNX, or their membership of clearing member is cancelled by VSDCC;

d) Other cases specified in VNX’s regulations;

dd) Other cases reported by VNX and approved by SSC.

3. Required documents and procedures for cancellation of membership of market makers shall comply with VNX’s regulations.

Article 25. Actions against other violations committed by members of VNX

1. In addition to the actions against violations specified in Clauses 1, 2 Article 19, Clause 2 Article 20, Clauses 1, 2 Article 21, Clause 2 Article 22, Clauses 1, 2 Article 23, and Clause 2 Article 24 hereof, VNX may also take the following actions:

a) Warning;

b) Reprimand;

) Suspension of connection to the trading system or sending and receipt of trading orders.

2. Violations and procedures for taking actions against violations committed by members as prescribed in Clause 1 of this Article shall comply with VNX’s regulations.

SECTION 2. MEMBERS OF VSDCC

Article 26. Activities of clearing members

1. Clearing members must enter into clearing and settlement contracts with VSDCC. General clearing members must enter into clearing and settlement entrustment contracts with non-clearing members (if any). Such a contract must include provisions stating that the clearing member is an authorized representative of brokerage clients and clearing and settlement clients to hold their positions and shall fulfill all obligations of these clients to VSDCC.

2. The clearing member shall separately manage accounts and margin of each client; establish a system of logbooks and record adequate information about positions, daily position gains/losses, initial margin, margin requirement, value and list of assets provided as margin on each account of the investor.

3. A clearing member is entitled to set out the initial margin, margin requirement and cash margin ratio to be satisfied by each investor provided that they shall not be lower than the corresponding values specified in VSDCC’s regulations. The clearing member must provide detailed information about marginable assets, methods and time limits for provision of margin on their website.

Article 27. Suspension of clearing and settlement activities of clearing members

1. VSDCC shall issue decision to suspend clearing and settlement activities of a clearing member in the following cases:

a) The clearing member becomes insolvent and their deficit exceeds the sum of the margin which can be used at the time the clearing member is determined insolvent and assets contributed to the clearing fund of that clearing member;

b) The clearing member fails to fully make the required contribution to the clearing fund within 10 days from the deadline for provision of such contribution notified by VSDCC;

c) The clearing member fails to fully repay the funds from the clearing fund, risk management fund and lawful funding sources of VSDCC, which are used for fulfilling their settlement obligations, within 05 working days from the day on which such funds are used;

d) The clearing member fails to fully pay the compensation amounts as prescribed in Point c Clause 4 Article 11 hereof within 02 working days from the payment deadline notified by VSDCC;

dd) The clearing member fails to take actions to reduce their positions, in case their position limit is exceeded, within 05 working days from the receipt of notice of violation from VSDCC;

e) The clearing member fails to provide margin within 03 working days from the receipt of notice from VSDCC;

g) The clearing member receives 02 decisions to reprimand, or more, within a month or 02 consecutive months from VSDCC;

h) The clearing member’s clearing and settlement activities are suspended under SSC’s decision;

i) Other cases specified in VSDCC’s regulations;

k) Other cases reported by VSDCC and accepted by SSC.

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

a) With regard to the cases specified in Points a, b, c, d, dd, e, g Clause 1 of this Article, the maximum suspension period is 90 days;

b) With regard to the case specified in Point h Clause 1 of this Article, the suspension period is that of clearing and settlement services decided by SSC;

c) With regard to the cases specified in Points i, k Clause 1 of this Article, the suspension period shall comply with VSDCC’s regulations.

3. Procedures for suspension of clearing and settlement activities of clearing members shall comply with VSDCC’s regulations.

Article 28. Cancellation of membership of clearing members

1. VSDCC shall cancel membership of a clearing member in the following cases:

a) The clearing member submits an application for voluntary cancellation of membership which is approved by VSDCC;

b) A clearing member is subject to compulsory cancellation of membership.

2. The clearing member shall be subject to compulsory cancellation of membership as prescribed in Point b Clause 1 of this Article in the following cases:

a) The clearing member fails to rectify the causes of suspension as requested by VSDCC and SSC by the end of the suspension period of clearing and settlement activities as prescribed in Clause 2 Article 27 hereof;

b) Clearing and settlement activities of the clearing member are voluntarily or compulsorily terminated under SSC’s decision as prescribed in Article 12 and Article 13 of Decree No. 158/2020/ND-CP;

c) The membership of trading member or special trading member of the clearing member is cancelled under VNX’s decision;

d) Other cases as prescribed by VSDCC;

dd) Other cases reported by VSDCC and accepted by SSC.

3. The membership of a clearing member shall be only cancelled after that clearing member has completed the transfer of positions and margin for closing clients’ accounts, liquidating positions and fulfilling settlement obligations on their proprietary trading account (if any) and fulfilled all obligations to VSDCC.

4. Required documents and procedures for cancellation of membership of clearing members shall comply with VSDCC’s regulations.

Article 29. Actions against other violations committed by clearing members

1. In addition to the actions against violations specified in Clauses 1, 2 Article 27, and Clause 2 Article 28 hereof, VSDCC may also take the following actions:

a) Warning;

b) Reprimand.

2. Violations and procedures for taking actions against violations committed by clearing members as prescribed in Clause 1 of this Article shall comply with VSDCC’s regulations.

CHAPTER V. REPORTING

Article 30. Periodic reports

1. On a monthly, quarterly and annual basis, derivative trading organizations shall provide SSC with physical or electronic reports on their derivative trading using the Form 03 in the Appendix enclosed herewith.

2. On a monthly, quarterly and annual basis, commercial banks and foreign bank branches that are special trading members shall provide SSC with physical or electronic reports on their derivative transactions using the Form 04 in the Appendix enclosed herewith.

3. On a monthly, quarterly and annual basis, settlement banks shall provide SSC with physical or electronic reports on their cash settlement for derivative transactions using the Form 05 in the Appendix enclosed herewith.

4. On an annual basis, settlement banks shall provide SSC with physical or electronic reports on their fulfillment of requirements for a settlement bank using the Form 06 in the Appendix enclosed herewith.

5. On a biannual basis, clearing members that are commercial banks or foreign bank branches shall provide SSC with physical or electronic reports on their fulfillment of requirements for provision of clearing and settlement services using the Form 07 in the Appendix enclosed herewith.

6. Such reports shall be submitted within the following time limits:

a) A monthly report shall be submitted to SSC within the first 10 days of the following month;

b) A quarterly report shall be submitted to SSC within the first 20 days of the following quarter;

c) A biannual report shall be submitted to SSC within 45 days from the end of the first 06 months;

d) An annual report shall be submitted to SSC within the first 90 days of the following year.

7. Data closing duration for periodic reports:

a) An annual reporting period is 12 months starting on the 01^st of January and ending on the 31^st of December of a calendar year;

b) A biannual reporting period is 06 months starting on the 01^st of January and ending on the 30^th of June of a calendar year;

c) A quarterly reporting period is 03 months starting on the 01^st of the first month of the quarter and ending on the last day of the last month of that quarter;

d) A monthly reporting period is 01 month starting on the 01^st and ending on the last day of the month.

Article 31. Ad-hoc reports

1. Derivative trading organizations, clearing and settlement service providers, trading members, special trading members, market makers, and clearing members are required to submit physical or electronic reports to SSC within 24 hours from the occurrence of any of the following events:

a) A clearing member is replaced;

b) The trading system (for receiving and placing trading orders) malfunctions;

c) The clearing member that is a commercial bank or foreign bank branch no longer meets one of the requirements for provision of clearing and settlement services;

d) The charter capital or the owner's equity of the clearing member is reduced by more than 10% compared to those specified in their audited annual financial statements or reviewed half-year financial statements or financial statements of the latest quarter; the clearing member’s debt-to-equity ratio is greater than 05.

2. Settlement banks are required to submit physical or electronic reports to SSC and VSDCC immediately when their cash settlement for derivative transactions is interrupted.

3. Settlement banks are required to submit physical or electronic reports to SSC within 24 hours from the time they fail to meet one of the eligibility requirements for settlement banks.

4. VNX and HNX are required to submit physical reports to SSC within 24 hours from the occurrence of any of the following events:

a) The derivative trading system malfunctions or there is any sign of abnormality in derivative transactions;

b) They decide to suspend derivative trading or market making activities or cancel membership of trading member, special trading member or market maker;

c) They provide information for competent authorities according to regulations on provision of confidential information.

5. VSDCC shall submit reports to SSC within 24 hours from the occurrence of any of the following events:

a) A clearing member is incapable of settling derivative transactions;

b) Clearing and settlement activities of a clearing member are suspended or membership of a clearing member is cancelled;

c) VSDCC provides information for competent authorities according to regulations on provision of confidential information.

Article 32. Reports on request

1. In addition to periodic and ad-hoc reports specified in Article 30 and Article 31 hereof, where necessary, for the purposes of protecting common interests and interests of investors, SSC is entitled to request VNX, HNX, VSDCC, derivative trading organizations, clearing and settlement service providers, and settlement banks to provide reports on derivative trading, derivative transactions, and clearing and settlement for derivative transactions.

2. VNX, HNX, VSDCC, derivative trading organizations, and clearing and settlement service providers shall submit physical or electronic reports to SSC within the time limit requested by SSC after receiving the request as prescribed in Clause 1 of this Article.

CHAPTER VI. IMPLEMENTATION

Article 33. Effect

1. This Circular comes into force from August 27, 2021.

2. The Circular No. 11/2016/TT-BTC dated January 19, 2016 of the Minister of Finance and the Circular No. 23/2017/TT-BTC dated March 16, 2017 of Minister of Finance cease to have effect from the effective date of this Circular, except the provisions of Clause 1 Article 34 hereof.

Article 34. Transition

1. Before the provisions on margin of clearing members in Article 13 hereof are officially applied, VSDCC, HNX, trading members, special trading members, market makers and clearing members shall continue applying regulations on margin set out in the Circular No. 11/2016/TT-BTC and Circular No. 23/2017/TT-BTC. Provisions on margin, refusal of novation, and post-trading error correction set out herein shall be applied from the official date of application of provisions on margin through the new information technology system which is used for serving the securities market.

2. Regulations on professional activities applied to Vietnam Securities Depository and Clearing Corporation (VSDCC) in this Circular shall be implemented by Vietnam Securities Depository until VSDCC starts to officially operate according to the Law on Securities No. 54/2019/QH14.

3. Regulations on professional activities applied to Vietnam Exchange (VNX) in this Circular shall be implemented by HNX until VNX starts to officially operate according to the Law on Securities No. 54/2019/QH14 and Clause 1 Article 8 of Decision No. 37/2020/QD-TTg dated December 23, 2020 of the Prime Minister.

Article 35. Implementation organization

1. VSDCC and VNX shall, pursuant to this Circular, promulgate their own operational regulations upon approval from SSC.

2. Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance for consideration./.