On April 16, 2025, the Vietnam Securities Depository and Clearing Corporation ("VSDC") issued Decision No. 26/QĐ-HĐTV ("Decision 26") on the promulgation of the "Regulations on Clearing and Settlement of Derivatives Transactions at the Vietnam Securities Depository and Clearing Corporation (VSDC)", replacing the previous regulations under Decision No. 12/QĐ-HĐTV dated August 10, 2023 ("Decision 12"). The new set of regulations was developed in the context of the Vietnamese securities market preparing for the implementation of the new KRX information technology system – a comprehensive integrated platform for the stock, bond, and derivatives markets, supported by the Korea Exchange. This marks one of the significant transformations aimed at modernizing the trading and settlement infrastructure, bringing the market closer to international standards. According to the new set of regulations, the key highlights are as follows:
1. Supplementation of detailed regulations on the conditions of "Deliverable Bonds" in Government Bond Futures Contracts and for margin deposits:
The new regulations officially incorporate detailed provisions on deliverable bonds used for settlement on the final trading day of Government Bond Futures Contracts ("GB Futures Contracts").
Accordingly, deliverable bonds must meet the following conditions:
(i) Issued by the State Treasury, with a face value of VND 100,000, bearing a fixed nominal interest rate, with interest paid periodically at the end of every twelve (12) months, in equal installments, and principal repaid once upon maturity;
(ii) Compliant with remaining maturity and minimum listing value conditions as prescribed in the GB Futures Contract specifications.
VSDC will publish a list of eligible deliverable bonds along with conversion factors calculated in accordance with the formula set forth in the regulations. The list must be finalized at least 30 working days in advance and shall not be amended thereafter.
The new regulations also stipulate that in the case of margin deposit using deliverable bonds, the following principles apply: only one bond code from the list of deliverable bonds shall be submitted per GB Futures Contract, and the quantity of bonds must be a multiple of the contract multiplier.
2. Establishment of an electronic communication portal to digitize the clearing and settlement processes for derivatives transactions:
For the first time, the regulations define and provide detailed rules regarding the Electronic Communication Portal – an application platform that allows depository members, direct account-opening institutions, and VSDC to exchange business data in the form of electronic reports and transactions. Specifically, the Electronic Communication Portal is a software application environment through which depository members, direct account-opening institutions, and VSDC exchange information on operational activities via electronic reports and electronic transactions, indirectly through workstations installed at the head office or branches of the depository member or direct account-opening institution, where VSDC’s software has been deployed.
This initiative contributes to the complete digitization of the clearing and settlement process and synchronization of data systems among involved parties. Depository members and direct account-opening institutions are required to invest in technological infrastructure and staff training to maximize the efficiency of this system.
3. Supplementation of procedures for post-trade error correction in derivatives transactions by VSDC:
While post-trade error correction for derivatives transactions is stipulated in Circular No. 58/2021/TT-BTC, Decision 12 lacked specific provisions on the deadline for submitting error correction documents and the procedures for handling and amending erroneous transactions.
Under the new regulations in Decision 26, error correction will follow the process below:
- VSDC will only handle errors falling within the scope of Clause 1, Article 8 of Circular No. 58/2021/TT-BTC. Any other cases must be reported to and approved by the State Securities Commission before processing.
- Deadline for submission of error correction documentation: no later than 3:00 PM on trading day (T).
- VSDC will proceed with the error correction.
- Immediately after the correction is completed, VSDC will send a Post-Trade Error Correction Notification (Message MT 598) to the Hanoi Stock Exchange and relevant members.
Obligations of clearing members:
+ In cases where documentation is not submitted or is invalid, VSDC is entitled to transfer the erroneous transaction to the proprietary account of the clearing member.
+ The member shall bear full responsibility for any losses arising from this action. Clearing members are responsible for the accuracy and integrity of the post-trade error correction documentation. VSDC’s processing of such corrections shall not be deemed as an acknowledgment or guarantee of the accuracy or truthfulness of the submitted documents.
Decision 26 shall only take effect upon the official operation of the information technology system under the project package titled "Design, Solution, Supply, Installation, and Handover of the Information Technology System – Ho Chi Minh City Stock Exchange". Accordingly, Decision No. 26/QĐ-HĐTV not only reflects updates in legal content but also technical preparedness for the integration of the new system, thereby ensuring stability, interoperability, and efficiency when the KRX system is officially launched.
Comment: