On September 18, the Ministry of Finance issued Circular 68/2024/TT-BTC of the Minister of Finance amending and supplementing a number of articles of the Circulars regulating securities transactions on the securities trading system, clearing and settlement of securities transactions, operations of securities companies and information disclosure on the securities market, effective from November 2.
Buying stocks does not require enough money
The Circular clearly states that foreign institutional investors are allowed to place orders to buy shares without requiring sufficient funds. On that basis, the securities company shall assess the payment risk of the foreign institutional investor to determine the amount of money required when placing an order to buy shares (if any) according to the agreement between the two parties.
Accordingly, in case a foreign institutional investor fails to pay in full for a stock purchase transaction, the obligation to pay for the transaction with insufficient funds shall be transferred to the securities company (where the foreign institutional investor places the order) through the proprietary trading account. The Circular also clearly stipulates that the securities company may transfer ownership outside the trading system or sell by agreement on the trading system for the number of shares transferred to its proprietary trading account to the foreign institutional investor with insufficient funds for payment, no later than the next trading day. In case the ownership of the above securities is not transferred to the foreign institutional investor (due to the lack of room or the foreign institutional investor not making a repurchase, etc.), the securities company shall sell the shares on the stock market. Losses, profits and other expenses arising from the transaction shall be carried out according to the agreement between the two parties.
Circular 68/2024/TT-BTC also stipulates that the custodian bank (where foreign institutional investors open securities depository accounts) is responsible for paying for transactions with insufficient funds and arising costs (if any) in case of incorrect confirmation of the foreign institutional investor's deposit balance with the securities company, leading to insufficient funds to pay for stock purchase transactions.
Secure payment for transactions
In addition, the new Circular also stipulates that foreign institutional investors placing orders to buy shares must have sufficient funds in their accounts before the time when the depository member must transfer money into the depository member's deposit account at the payment bank to make payment for securities transactions. Clearing and payment for stock purchase transactions are carried out in accordance with the law and regulations of the Vietnam Securities Depository and Clearing Corporation (VSDC).
If a foreign institutional investor places an order to buy shares and lacks payment, VSDC will transfer the payment obligation to the securities company where the foreign institutional investor places the order to buy shares (through the securities company's proprietary account) on the payment date.
In which, securities companies ensure payment safety for payment activities of foreign institutional investors.
Specifically, the limit for accepting stock purchase orders is equal to the total amount that can be converted into cash but does not exceed the difference between twice the equity of the securities company and the outstanding loan balance for margin trading securities. Amounts that can be converted into cash include cash at the fund, bank deposits, government debt instruments, deposit certificates, etc.
In addition, the equity of a securities company is determined based on the quarterly financial statements prepared in the most recent period prior to the calculation date. In case the securities company is a parent company, the equity is determined based on the consolidated quarterly financial statements after excluding the interests of non-controlling shareholders.
To comply with the provisions on cross-ownership in the Enterprise Law, the Circular also stipulates that securities companies do not accept orders to buy shares of themselves, their parent company, or subsidiaries of the same parent company.
In addition, the regulation clearly states that if a securities company complies with the regulations but results in exceeding the investment limit, it will not be allowed to continue receiving orders to buy shares without requiring sufficient funds from foreign institutional investors until it meets the investment limit and must apply necessary measures within a maximum period of 1 year to comply with the investment limit.
Notably, the new Circular also requires securities companies to disclose information about foreign institutional investors not repurchasing shares on the information disclosure media within 24 hours. In addition, Circular 68 stipulates that the language of information disclosure on the stock market is Vietnamese and English.
TH (according to VNA)Source: https://baohaiduong.vn/nhung-quy-dinh-dang-chu-y-ve-giao-dich-chung-khoan-moi-duoc-ban-hanh-393437.html
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