Deputy Minister of Finance Nguyen Duc Chi has just signed and issued Circular 68/2024/TT-BTC dated September 18, 2024 amending and supplementing a number of articles of the Circulars regulating securities transactions on the securities trading system; clearing and settlement of securities transactions; activities of securities companies and information disclosure on the stock market.
Foreign investors are organizations that can place orders without having to fund 100% of the money.
In Article 1, Circular 68/2024/TT-BTC amended and supplemented a number of articles of Circular No. 120/2020/TT-BTC dated December 31, 2020 of the Minister of Finance regulating the trading of listed stocks, registration of trading and fund certificates, corporate bonds, and listed secured warrants on the securities trading system.
Specifically, the new Circular stipulates that investors must have sufficient money when placing an order to buy securities, except for two cases: (1) investors trading on margin as prescribed in Article 9 of this Circular; (2) Organizations established under foreign law participating in investment in the Vietnamese securities market (NTTTCNN) to buy stocks are not required to have sufficient money when placing an order as prescribed in Article 9a of this Circular.
Circular 68/2024/TT-BTC has added Article 9a on "Stock purchase transactions do not require sufficient funds when placing orders by foreign institutional investors".
The Circular stipulates that securities companies (SCs) shall assess the payment risk of foreign investors to determine the amount of money required when placing an order to buy shares (if any) according to the agreement between the SCs and foreign investors or authorized representatives of foreign investors.
In case the foreign investor fails to pay in full for the stock purchase transaction, the obligation to pay for the transaction with insufficient money shall be transferred to the securities company where the foreign investor places the order through the self-trading account, except for the case specified in Clause 5 of this Article.
The Circular also clearly stipulates that securities companies are allowed to transfer ownership outside the securities trading system or sell by agreement on the securities trading system (in case the agreement cannot be implemented because the stock transfer price is outside the price range or the stock volume does not meet the minimum agreed trading volume of the Stock Exchange) for the number of shares transferred to their proprietary trading account for foreign investors who lack money to pay for the stock purchase transaction as prescribed in Clause 2 of this Article, no later than the trading day following the day the shares are recorded in the securities company's proprietary trading account and ensure that they do not exceed the maximum limit on the ownership ratio of foreign investors as prescribed by law for such shares.
Circular 68/2024/TT-BTC also clearly stipulates that the depository bank where the foreign investor opens a securities depository account is responsible for paying for transactions with insufficient funds and arising costs (if any) in case of incorrect confirmation of the foreign investor's deposit balance with the securities company, leading to insufficient funds to pay for stock purchase transactions.
Securities companies must ensure sufficient funds to pay for transactions.
Circular 68/2024/TT-BTC also amends and supplements a number of articles of Circular No. 119/2020/TT-BTC dated December 31, 2020 of the Minister of Finance regulating the registration, depository, clearing and payment of securities transactions.
Specifically, Circular 68/2024/TT-BTC supplements Article 35a on payment for stock purchase transactions of foreign investors who are organizations specified in Article 9a of Circular No. 120/2020/TT-BTC.
The new circular clearly states that foreign investors placing orders to buy shares must have enough money 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).
Foreign investors who place orders to buy shares but lack payment according to the provisions of Clause 2, Article 9a of Circular No. 120/2020/TT-BTC, VSDC shall transfer the payment obligation for the stock purchase transaction of the foreign investors who lack payment to the obligation of the securities company where the foreign investors place orders to buy shares (through the securities company's proprietary account) on the payment date.
In addition, Clause 3, Article 3 of Circular 68/2024/TT-BTC also stipulates the investment limit of securities companies as follows: "In case a securities company complies with the provisions of Clause 2, Article 9a of Circular No. 120/2020/TT-BTC, leading to exceeding the investment limit prescribed in Clause 4 of this Article, the securities company shall not continue to receive orders to buy shares that do not require sufficient funds from foreign institutional investors until the investment limit is met and must apply necessary measures within a maximum period of 1 year to comply with the investment limit".
According to domestic and foreign experts, the new solutions and regulations in Circular 68/2024/TT-BTC of the Ministry of Finance are appropriate and highly feasible. Many opinions also expressed their hope that the issuance of this Circular will have a positive impact on the process of considering upgrading the Vietnamese stock market.
Source: https://vov.vn/thi-truong/chung-khoan/thong-tu-68-gop-phan-thao-go-nut-that-giup-nang-hang-thi-truong-chung-khoan-post1122636.vov
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