In order to facilitate and protect the benefits of investors participating in the stock market, on August 19, 2022, Vietnam Securities Depository (VSD) issued Decision 109/QĐ-VSD, stipulating the regulations of securities payment and clearing process (“Decision 109”), replacing Decision 211/QĐ-VSD dated December 18, 2015 (“Decision 211”).
In accordance with Decision 109, VSD provided various new points in the process of payment and clearing securities transactions as well as adding several obligations for depository members to ensure the interests of securities investors, specifically as follows:
1. Reduce the time limit for implementing the payment and clearing process for stocks, fund certificates and secured warrants
Comparing to the former securities payment and clearing process in Decision 211, the period for carrying out payment and clearing procedure in Decision 109 has been significantly shortened, thereby bringing better benefits to investors and the market when investors can trade securities immediately in the afternoon session on T+2 instead of waiting until T+3 like before.
In details of the process, the steps remain the same, but the execution duration for each step is reduced, specifically:
- Step of sending confirmation of approval or disapproval of transaction results of members implemented by VSD under Decision 109 must be completed no later than 14:30 on T+1 date; while previously in Decision 211, the time limit for this step could be extended to 17:00 on T+1 date;
- Various steps according to the previous regulations, which had to be implemented on T+2 date, could currenly be performed on T+1 date, specifically: “Transaction error correction and handling; Prepare and send to Members multilateral clearing notifications; Elimination of payment or Delay of Payment; etc.”;
- The period for the clearing bank to complete the payment and for the VSD to complete the securities payment, was adjusted from 15:30 - 16:00 to 11:00 - 11:30 on T+2 (in case there is a depository member who is incompetent to fulfil the payment, the payment completion period shall be no later than 12h00)
- Members must allocate money and securities to customers as soon as the VSD completes the payment of securities and the clearing bank completes the payment and ensures to complete the allocation before 13:00 on the payment date for shares, bonds, fund certificates, secured warrants, or before 15:00 payment date for corporate bonds.
2. Supplement obligations of depository members
(i) Obligation to update investor's account information
Article 5.4 of Decision 109 stipulated: “Members must completely update the investor account information in advance of 8:30 on T+1 for corporate bond transactions and at 14:30 on T+1 for stocks, fund certificates, secured warrants”.
(ii) Obligation to confirm transaction payment
“Members of the party in charge of payment are responsible for confirming the adequacy/inadequacy of money for payment no later than 16:30 on T+1”.
All these obligations shall minimize the risk of error or insolvent transactions, affecting the interests of investors and the stock market.
Decision 109/QĐ-VSD will take effect from August 29, 2022.
Comment: