Quyết định 87/QĐ-UBCK 2017 Quy chế hướng dẫn giao dịch ký quỹ chứng khoán

DECISION

Providing Regulation guiding the securities margin trading

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THE CHAIRMAN OF THE STATE SECURITIES COMMISSION OF VIETNAM

Pursuant to the Law on Securities dated June 29, 2006;

Pursuant to the Law Amending and Supplementing a Number of Articles of the Law on Securities dated November 24, 2010;

Pursuant to the Government's Decree No. 58/2012/ND-CP dated July 20, 2012, detailing and guiding the implementation of a number of articles of the Law on Securities and the Law Amending and Supplementing a Number of Articles of the Law on Securities;

Pursuant to the Government's Decree No. 60/2015/ND-CP dated June 26, 2015, amending and supplementing a number of articles of the Government's Decree No. 58/2012/ND-CP dated July 20, 2012, detailing and guiding the implementation of a number of articles of the Law on Securities and the Law Amending and Supplementing a Number of Articles of the Law on Securities;

Pursuant to the Government’s Decree No. 86/2016/ND-CP dated July 01, 2016, prescribing the securities investment and trading conditions;

Pursuant to the Prime Minister’s Decision No. 48/2015/QD-TTg dated October 08, 2015, defining functions, tasks, powers and organizational structure of the State Securities Commission of Vietnam;

Pursuant to the Minister of Finance’s Circular No. 210/2012/TT-BTC dated November 30, 2012, guiding the establishment and operation of securities companies, and the Minister of Finance’s Circular No. 07/2016/TT-BTC dated January 18, 2016, amending and supplementing a number of articles of the Minister of Finance’s Circular No. 210/2012/TT-BTC dated November 30, 2012, guiding the establishment and operation of securities companies;

Pursuant to the Minister of Finance’s Circular No. 203/2015/TT-BTC dated December 21 2015, guiding for securities transactions;

At the proposal of the Director of the Securities Business Management Department,

DECISION:

Article 1. To promulgate together with this Decision the Regulation guiding the securities margin trading.

Article 2. This Decision takes effect from April 01, 2017, and replaces Decision No. 637/QD-UBCK dated August 30, 2011, providing regulation guiding the securities margin trading,  and Decision No. 09/QD-UBCK dated January 08, 2013, amending the Regulation guiding the securities margin trading.

Article 3. The Chief of Office, the Director of the Securities Business Management Department, the General Director of the Ho Chi Minh Stock Exchange, the General Director of the Hanoi Stock Exchange, the General Director of the Vietnam Securities Depository, the General Directors (Directors) of securities companies, and relevant parties shall implement this Decision.

REGULATION

Guiding securities margin trading
(Attached to Decision No. 87/QD-UBCK dated January 25, 2017, of the Chairman of the State Securities Commission of Vietnam)

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. This Regulation guides the margin trading of securities.

2. This Regulation applies to securities companies, investors conducting margin trading, organizations and individuals involved in margin trading.

Article 2. Interpretation of terms

1. Marginable securities mean the securities satisfying the conditions specified in this Regulation.

2. Ordinary trading account means the account opened by customers at a securities company to trade securities without using money borrowed from the securities company.

3. Customer’s margin debit balance on the margin trading account means the total amount the customer owes to the securities company (DB).

4. Value of securities (v) means the value determined by the securities company on the contract to open a margin trading account signed with the customer but not exceeding the closing price on the most recent date of that security.

5. Total assets in margin trading account (equity balance - EB) is equal to the money, pending securities sale proceeds (cash balance - CB) plus the value of marginable securities on the margin trading account (PV).

6. Real assets on the customer's margin trading account (AB) are equal to the total value of assets on the margin trading account minus the customer's margin balance (AB=EB-DB).

7. Margin ratio means to the ratio of the real assets on the customer’s margin trading account to the total assets in margin trading account.

8. Initial margin ratio (IMR) is the ratio of the real asset value to the value of securities expected to be bought by margin trading orders calculated according to the market price at the time of the transaction

9. Maintenance margin ratio (mmr) is the minimum ratio of real assets to the total assets in margin trading account.

10. Margin requirement (MR) is equal to the value of the securities multiplied by the initial margin ratio.

11. Excess equity (EE) means the difference between the real assets on the margin trading account and the margin requirement.

12. Buying power (BP) means the ratio of excess equity to initial margin ratio.

13. Stock Exchange refers to the Ho Chi Minh Stock Exchange or the Hanoi Stock Exchange.

Chapter II

MARGINABLE SECURITIES

Article 3. Marginable securities

The marginable securities include: stocks, fund certificates listed at the Stock Exchanges, other than those falling into the following cases:

1. The securities that have been listed for less than 06 months from the first trading date to the date they are considered and selected for trading in margin. If the stocks are transferred to another stock exchange, the listing period is equal to the total listing period at both Stock Exchanges;

2. The securities under warning, control or special control, suspended from trading or delisted under relevant regulations on listing of securities;

3. Securities of issuing organization whose annual financial statements are audited or biannual financial statements are examined or audited with an opinion other than the unqualified opinion of the auditing firm;

4. The listed institution delays the disclosure of the audited financial statement or examined biannual financial statement more than 05 business days from the deadline or extended deadline for information disclosure as prescribed;

5. The listed company receives a notice on its violations against tax law sent by a tax office;

6. The business results of the listed institution have losses at the review period and/or accumulated losses based on the most recent audited annual financial statements or the most recently examined or audited biannual financial statements. In case the listed institution is the parent company, business results shall be based on the consolidated financial statements. In case the listed institution is a public investment fund with at least one month's net asset value (NAV) calculated per unit of fund certificate less than the par value, business results shall be based on the report on changes in net asset value monthly for 03 consecutive months up to the time of selection for margin trading.

Article 4. Selection and announcement of the list of marginable securities

1. Within 02 business days from the day of occurrence of the cases prescribed in Article 3 this Regulation, the Stock Exchange shall announce the list of securities ineligible for margin trading. The announced information includes at least all securities ineligible for margin trading as of the date of disclosure. Except for the cases specified in Clause 1 Article 3 this Regulation, at least every 06 months from the latest time on which the Stock Exchange announces the list of securities ineligible for margin trading, the Stock Exchange may consider removing the securities from the list of securities ineligible for margin trading. The specific time shall be decided by the Stock Exchange.

2. The securities company shall, based on the list of securities ineligible for margin trading announced by the Stock Exchange under Clause 1 this Article, select a list of marginable securities. Within 02 business days from the date the Stock Exchange announces the list of securities ineligible for margin trading as prescribed in Clause 1 this Article, the securities company shall publicize the list of marginable securities until the publishing date on its website and business locations.

3. The Stock Exchange shall be responsible for supervising the list of securities ineligible for margin trading announced by the securities company as prescribed in this Regulation.

Chapter III

REGULATIONS ON THE MARGINS, MORTGAGED ASSETS AND THE REALIZATION OF MORTGAGED ASSETS

Article 5. Initial margin ratio and maintenance margin ratio

1. The initial margin shall be decided by the securities company but not less than 50%

2. The maintenance margin shall be decided by the securities company but not less than 30%

3. Depending on the operations of the securities market, the State Securities Commission of Vietnam may adjust the margin ratio specified in Clauses 1 and 2 of this Article.

Article 6. Determination of margin ratio

1. At the end of the trading day, the securities company must determine the margin ratio of each margin trading account with the value of the securities specified in Clause 4 Article 2 of this Regulation.

2. The specific time for determining the margin ratio of a margin trading account shall be agreed upon in writing by the securities company and the customer on the basis of ensuring the principles specified in Clause 1of  this Article.

Article 7. Margin call

1. The customer is obligated ensure that the margin ratio not lower than the maintenance margin ratio. In case where the margin of the customer’s margin trading account falls below the maintenance margin ratio, the securities company shall issue a margin call to the customer using the methods agreed in the margin trading account contract. The customer must post more mortgaged assets within the time limit required by the securities company but not exceeding 03 business days. The specific time limit shall be agreed upon by the securities company and the customer on the basis of the margin trading account contract.

2. From the date of receipt of the margin call, the customer shall sell his/her/its securities, supplement more cash or mortgaged assets in order to at least ensure the maintenance margin ratio, the specific rate shall be decided by the securities company and the additional cash or mortgaged assets shall be supplemented as follows:

a) If the customer supplements more securities, the value of increased securities shall be calculated according to the following formula:

b) If the customer supplements more cash, the value of increased securities shall be calculated according to the following formula:

Article 8. Realization of mortgaged assets

1. The securities company may sell mortgaged securities in the customer’s margin trading account if that customer fails to supplement or insufficiently supplement mortgaged assets within the period requested by the margin call.

a) If the customer fails to supplement or insufficiently supplement mortgaged assets, the securities company may sell a part or all the mortgaged securities, depending on whether the value of the mortgaged assets is smaller or bigger than the value of total securities in the margin trading account;

b) Before selling the mortgaged securities, the securities company shall be responsible for notifying the customer and after selling, it shall be responsible for sending the result of the mortgaged securities trading statement to the customer using the method agreed upon in writing between the securities company and the customer.

2. If the securities company sells all securities in the margin trading account at the customer’s request or when issuing the margin call, the customer may only draw the residual amount (if any) obtained from the sale of the securities in the margin trading account after deducting the margin debit balance.

3. In case the total assets in customer’s margin trading account after selling securities is not enough to repay the margin debit balance and the customer fails to repay the residual loan as agreed in the margin trading account contract, the securities company shall collect the debt according to the method agreed in the margin trading account contract and law provisions.

Chapter IV

LIMITS, RESTRICTION, INTERESTS AND TERM OF FINANCING FOR MARGIN TRADING

Article 9. The limits on financing margin trading

Securities companies must comply with the limits on financing margin trading prescribed in this Article. The equity of a securities company prescribed in this Article shall be determined according to most recently audited or examined financial statement which is made within the last 06 months from the time of calculation. In case the securities company is allowed to increase its charter capital during the interval between the audit report period and the audit examination period, the equity on the most recently financial statement shall be applied.

1. The total loan balance of financing for margin trading of any securities company shall not exceed 200% of its equity.

2. The total amount of financing for margin trading by any securities company to any customer shall not exceed 3% of the securities company's equity.

3. The total debt balance of financing for margin trading by any securities company in respect of any one type of securities shall not exceed 10% of the securities company's equity.

4. The total amount of securities lent for margin trading by any securities company shall not exceed 5% of the total number of listed securities of one listed institution.

Article 10. Restrictions to margin trading

1. The securities company must not provide loans for a customer to conduct margin trading in the following cases:

a) For stocks and fund certificates guaranteed for issuance by the securities company itself, in the form of a firm commitment from the time the securities company signs the guarantee contract until the end of six (06) months from the end of the issuance;

b) Stocks of listed companies that own 50% or more of the charter capital of a securities company and for stocks of listed companies, stocks of companies registered for trading of which 50% or more of charter capital is owned by securities company.

c) Stocks issued by the securities company;

d) In case the customer fails to meet the margin ratio specified in the margin trading account contract and this Regulation;

dd) The customer being a foreign investor;

e) The customer being one of the entities specified in Clause 4 Article 13 this Regulation.

2. If the securities are no longer on the list of marginable securities, the securities company is not allowed to give new loans for such securities on margin and must not include such securities in the customer’s real assets in the margin trading account. However, such securities may be considered as mortgaged assets for margin loans unless otherwise agreed with the customer.

Article 11. Term and interest of financing for margin trading

1. The term of financing for margin trading shall be agreed upon by a securities company and its customers in the margin trading account contract but must not exceed three (03) months from the date of loan disbursement.

2. The securities company may extend the loan term based on the written request of the customers. Each extension must not exceed three (03) months.

3. The interest rate on margin loans shall be determined according to the written agreement between the securities company and the customer in accordance with the Civil Code.

4. The method for calculation of interest rate shall be determined based on the written agreement between the securities company and the customer in accordance with the Civil Code.

Chapter V

RESPONSIBILITY FOR MANAGEMENT OF MARGIN TRADING ACCOUNTS

Article 12. Margin trading account contracts

1. The margin trading account contract shall also be the credit contract for the loans in the margin trading account.

2. The contents of the margin trading account contract shall be agreed upon by the securities company and the customer but at least must contain the following information:

a) The information about the customer such as: full name, date of birth, people indentity card number (citizen identity card)/enterprise's name, number, date of issuance and issuing agency of the business registration certificate, address, email, fax (if any), contact number;

b) The purpose of the loan: buying margin securities;

c) Initial margin ratio; method for determination of value of mortgaged securities;

d) Maintenance margin ratio;

dd) Deadline and method of payment at the request for additional mortgaged assets;

e) Loan limit;

g) Loan interest rate;

h) Contract term, effective date of the contract and the time when the loan interest begins;

i) Method of contact with the customer to perform a margin call, perform the selling order for liquidation, send the statement of margin trading account; method for realization of mortgaged assets in the customer’s margin trading account when the customer fails to comply with the contract and the priority order to use the proceeds grained from the sale of the customer’s mortgaged securities;

k) Handling method in case the securities company is not allowed to conduct margin trading;

l) Provisions on protection of the interests of contracting parties;

m) Dispute settlement method upon occurrence of disputes;

n) Contract liquidation method;

o) Customer’s commitment on the securities company’ clear explanations on the risks arising after making transactions using the margin trading account.

Article 13. Responsibility for management of margin trading accounts

1. Securities companies must find out and update information about customers opening margin trading accounts to identify customers as insiders and people related to insiders to ensure compliance with relevant regulations on information disclosure. In case the customers fail to provide information as requested by the securities companies, the securities companies are exempt from liability related to this regulation.

2. The securities companies must develop transaction systems and software to manage margin trading accounts according to the principles prescribed in Clause 5, Article 9 of Circular No. 203/2015/TT-BTC and this Regulation.

3. Except for the case of obtaining the customers’s approval and compliance with relevant laws, the securities company is not allowed use securities in the customers’ margin trading accounts as mortgaged assets for any transactions apart from the mortgaged assets for the margin trading between the securities company and customers.

4. Margin trading accounts shall not be opened for the following entities:

a) The following subjects in a securities company: owners, major shareholders, capital contributing members, members of the Board of Directors/Members' Council, Supervisory Board, General Director (Director), Deputy General Director Director (Deputy Director), chief accountant, other positions appointed by the Board of Directors/Board of Members/Owner of the securities company and people related to the above subjects;

b) Legal entities in a state of dissolution or bankruptcy according to the provisions of current law;

c) Entities breaching the contract to open a margin securities trading account according to the regulations of the securities company.

5. Principles for management of margin trading accounts:

a) The margin trading accounts must be managed separately from ordinary trading accounts as prescribed in Clause 5, Article 9 of Circular No. 203/2015/TT-BTC.

b) The customer may only use cash, marginable securities and the rights relating to such securities as mortgaged assets for the loans in service of the margin trading; other securities shall be used as mortgaged assets for margin loans as agreed in writing with the customers; cash, securities and securities-related rights in the margin trading accounts are the customers’ property;

c) The customer must pay the interest on the margin debit balance according to the specific forms as agreed upon in the margin trading account contract; the customer is allowed to draw cash from the margin trading account after making fully payment of all debts to the securities company;

d) The securities company may not allow the customer to conduct margin transactions or withdraw more cash than the current buying power on the customer’s margin trading account.

dd) The securities company shall be responsible for promptly and sufficiently notifying the customers of the arising benefits relevant to the securities in their margin trading accounts; sending them the statements of margin trading accounts in accordance with the method and time agreed upon in writing with the customers;

e) Margin trading order slips must be distinguished from regular securities trading order slips, must include all information related to the customer and be confirmed by the customer. Margin trading in the form of electronic transactions must comply with the provisions of this Regulation and relevant regulations on electronic transactions. The margin trading order slip is an inseparable appendix of the margin trading account contract.

6. The securities company may only conduct transactions relating to the mortgaged securities at the requests of the customers, except for the case of selling the mortgaged securities to collect debts.

7. The securities company shall disclose the information about the requirements for the provision of margin trading services, including the list of marginable securities, the margin ratio requirement and the interest rates on the securities company’s website.

8. The securities company must make accounting books and separate each margin trading account, the list of assets in the margin trading account and the margin ratio at the end of each trading day; fully keep the dossiers, report accurately and in details the transactions on each margin trading account, including the daily information about the list of margin assets, mortgaged assets, market value, margin ratios together with the margin calls and margin trading order slips.

9. The information about the margin trading accounts of the customers must be kept confidential by the securities company; and the securities company is not allowed to not provide such information to a third party, unless otherwise requested by competent State agencies or agreed by the customers.

Article 14. Reporting obligation of the securities company

1. Before the 5th trading day of the next month, the securities company shall send the Stock Exchange a list of securities it conducts margin transactions made according to the form provided in Appendix No. 01 of this Regulation.

2. The securities company is obligated to report the margin trading at the request of the State Securities Commission of Vietnam and the Stock Exchange.

3. In case the securities company changes its margin trading management system, it must report to the State Securities Commission of Vietnam at least 15 days before the expected date of official implementation. The report must demonstrate that the new management system continues to meet current regulations on margin trading management.

Article 15. Voluntary discontinuation of margin trading

1. The securities company voluntarily wishing to terminate the margin trading must make information disclosure at the head office, other lawful business locations and on its website and send a notification to the customers, the Stock Exchange, the State Securities Commission of Vietnam of the termination of the margin trading.

2. Information that is disclosed and reported to the State Securities Commission according to Clause 1 of this Article must be accompanied by a plan to terminate margin trading. This plan must include the following information: time to stop margin trading; time to finalize contracts and margin trading loans; methods to handle unsettled contracts when the settlement period expires according to the plan.

3. The securities company shall send the State Securities Commission of Vietnam the report on the settlement of the margin trading within 15 days from the date of completing the liquidation of the margin trading account contracts, including the following:

a) Report on the termination of margin trading, made according to the form provided in Appendix 2 of this Regulation;

b) Report on the result of liquidation of the margin trading account contracts;

c) Decision of the Board of Directors or the Board of Members or the company owner on termination of margin trading.

Article 16. Suspension of margin trading

1. A securities company failing to satisfy one or several of the conditions prescribed in Article 8 Clause 1 of the Government’s Decree No. 86/2016/ND-CP dated July 01, 2016, must immediately stop signing new contracts to open margin trading accounts, stop financing the margin trading and send a report to the State Securities Commission of Vietnam within 48 hours from the occurrence of such event.

2. The securities company may only sign new margin trading account contracts and provide new loans to make margin transactions after receiving the notice from the State Securities Commission of Vietnam on the basis of  provision of sufficient dossiers and documents proving the fulfillment of all conditions for conducting margin trading under Clause 1 Article 8 of the Government’s Decree No. 86/2016/ND-CP dated July 01, 2016, prescribing the securities investment and trading conditions.

Chapter IV

IMPLEMENTATION ORGANIZATION

Article 17. Implementation organization

1. This Regulation takes effect on the same date as that of the Decision promulgating this Regulation.

2. The Chairman of the State Securities Commission of Vietnam shall decide on the amendment and supplementation to this Resolution.

Appendix 1: Form of report to the Stock Exchange

REPORT ON THE LIST OF SECURITIES FOR MARGIN TRADING

To: The Stock Exchange…………

Securities company ….. hereby reports to the.....Stock Exchange the list of securities for margin trading as follows:

- Ho Chi Minh Stock Exchange (in case of reporting to the Hanoi Stock Exchange, this content is not required)

- Hanoi Stock Exchange (in case of reporting to the Ho Chi Minh Stock Exchange, this content is not required)

- The link to the above mentioned information on the company’s website:......

We hereby guarantee to take responsibility for the accuracy and reliability of this report.

Report to: Stock Exchange…………

Appendix 2. Form of report on the termination of margin trading

THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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....., date….. month….. year ……

REPORT ON THE TERMINATION OF MARGIN TRADING

To: State Securities Commission of Vietnam

We are:

-   Securities limited liability/joint-stock company.......

- License for establishment and operation No. ......... issued by…… on….. date….month… year…. at….

- Headquarters address:

- Tel. ........                                   Fax.........

We hereby report to the State Securities Commission of Vietnam the termination of margin trading since.......

Reasons for termination of margin trading.....

We hereby commit to take full responsibility for the accuracy and reliability of the report and attached dossiers.