VI What is the individual corporate bond trading payment system? How are bond transactions paid through the individual corporate bond trading payment system? How do customers who open a depository account who are not members of individual corporate bond trading pay their transactions? Through today’s article, let’s learn about this issue with Pham Consult!
What is the individual corporate bond trading payment system?
Pursuant to Article 3 of Circular 30/2023/TT-BTC, the explanation of the payment system for individual corporate bond transactions is as follows:
Explanation of terms
1. The individual corporate bond transaction system is a system of facilities, technical infrastructure, and technology organized by the Hanoi Stock Exchange to serve the trading activities of individual corporate bonds.
2. The individual corporate bond transaction payment system is a system of facilities, technical infrastructure, and technology organized by the Vietnam Securities Depository and Clearing Corporation and the payment bank with the participation of related parties to serve the payment activities of individual corporate bond transactions.
3. Instant payment for each transaction is a payment method in which the transfer of individual corporate bonds is made on the system of the Vietnam Securities Depository and Clearing Corporation simultaneously with payment at the payment bank on a transaction-by-transaction basis as soon as the buyer has enough money and the seller has enough individual corporate bonds in the account.
Thus, the individual corporate bond transaction payment system is a system of facilities, technical infrastructure, and technology organized by the Vietnam Securities Depository and Clearing Corporation and the payment bank with the participation of related parties to serve the payment activities of individual corporate bond transactions.
How are bond transactions paid through the individual corporate bond transaction payment system?
Pursuant to Clause 8, Article 4 of Circular 30/2023/TT-BTC, the following provisions are made:
Principles of registration, depository, exercise of rights, transfer of ownership, payment of transactions and organization of the individual corporate bond trading market
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6. Securities companies are trading members responsible for determining the status of professional securities investors, ensuring that investors are eligible to buy bonds as prescribed in Clause 6, Clause 13, Article 1 of Decree No. 65/2022/ND-CP and Clause 1, Article 3 of Decree No. 08/2023/ND-CP and sign the confirmation document of the investor before buying bonds according to the form in Appendix V issued with Decree No. 65/2022/ND-CP before entering orders into the individual corporate bond trading system.
7. The depository member is responsible for determining the status of a professional securities investor in accordance with the provisions of law, ensuring that the investor is the correct subject as prescribed in Clause 6, Clause 13, Article 1 of Decree No. 65/2022/ND-CP and Clause 1, Article 3 of Decree No. 08/2023/ND-CP before submitting a request for ownership transfer to the Vietnam Securities Depository and Clearing Corporation in the case of ownership transfer not through the trading system of the Stock Exchange.
8. Transactions on the individual corporate bond trading system are paid through the individual corporate bond trading payment system by the instant payment method for each transaction, not applying the central clearing counterparty mechanism.
Accordingly, based on the above provisions, individual corporate bond transactions on the individual corporate bond trading system are paid through the individual corporate bond transaction payment system using the instant payment method for each transaction and are not subject to the central clearing counterparty mechanism.
Where do customers who open a depository account who are not individual corporate bond trading members pay for transactions?
Based on Clause 2, Article 16 of Circular 30/2023/TT-BTC, the following provisions are provided:
Payment for individual corporate bond transactions
1. Depository members and organizations that open direct accounts must open deposit accounts in the name of depository members and organizations that open direct accounts at payment banks to make payments for individual corporate bond transactions for domestic and foreign brokerage and self-trading transactions. The paying bank is responsible for managing detailed information on the balance of payment deposits for individual corporate bond transactions of investors opening depository accounts at depository members according to the information provided by depository members to ensure correct payment for that investor’s transactions.
2. In case the customer opens a depository account at a depository member that is not a trading member, the transaction order is placed through the trading member and the transaction payment is made through the depository member.
3. Based on the transaction results provided by the Hanoi Stock Exchange as prescribed in Clause 5, Article 12 of this Circular, the Vietnam Securities Depository and Clearing Corporation shall check the validity of the transaction, block the number of bonds sold and notify the depository member and the organization opening the direct account of the valid transaction result to confirm the transaction result. Based on the confirmation of the depository member and the organization opening the direct account, the Vietnam Securities Depository and Clearing Corporation shall determine the payment obligation for cash and individual corporate bonds and send payment obligation information to the relevant parties and the paying bank.
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Thus, in case a customer opens a depository account at a depository member that is not a trading member, the transaction payment will be made through the depository member.
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