VI What is the negotiation trading method? What are the principles of securities trading by negotiation trading method? Can securities be listed by negotiation trading method without regulations? Through today’s article, let’s learn about this issue with Pham Consult!
What is the negotiation trading method?
Pursuant to Article 2 of Circular 120/2020/TT-BTC, it is stipulated as follows:
Explanation of terms
In this Circular, the following terms are construed as follows:
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7. The negotiated transaction method is a transaction method in which the parties participating in the transaction through a trading member agree on the transaction conditions on the securities trading system; or the parties participating in the transaction agree, execute the transaction, and then through a trading member record the transaction results into the securities trading system.
8. Intraday trading is the purchase and sale of the same security code that the investor does not own with the same trading volume, performed on the same account and on the same trading day.
9. A compulsory purchase transaction (buy in) is a transaction to buy securities to ensure that there is enough securities to pay for transactions lacking securities according to the law.
10. Margin trading at a securities company (hereinafter referred to as margin trading) is a transaction to purchase securities using money borrowed from a securities company, in which the securities obtained from this transaction and other securities traded on margin by the investor are used as collateral for the above loan.
… Thus, the negotiated trading method is a securities trading method. In which the parties participating in a securities transaction through a trading member agree on the transaction conditions on the securities trading system or the parties participating in the transaction agree, execute the transaction, and then through a trading member record the transaction results into the securities trading system.
What are the principles of securities trading by the negotiated trading method?
Pursuant to Article 3 of Circular 120/2020/TT-BTC, regulations on the organization of securities trading are as follows:
Organization of securities trading
1. The stock exchange organizes securities trading by the centralized order matching method and the negotiated trading method according to the following principles:
a) The centralized order matching method on the securities trading system must ensure the principle of priority in price and time;
b) The negotiated trading method on the securities trading system is implemented according to the principle that the parties participating in the transaction agree on the transaction contents.
2. Securities specified in Clause 1, Article 1 of this Circular are traded on the securities trading system, excluding cases of transfer of ownership outside the securities trading system in accordance with the law on registration, depository, clearing and payment of securities transactions. The stock exchange is allowed to organize mandatory purchase (buy in) trading sessions through the securities trading system.
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Thus, securities transactions by negotiated transaction method are organized by the Stock Exchange according to the principle that the parties participating in the transaction agree on the transaction contents.
Can securities be listed by negotiated transaction method?
According to Article 50 of the 2019 Securities Law, the regulations on securities transactions are as follows:
Securities transactions
1. Listed and registered securities are organized for trading by centralized order matching method, negotiated transaction method and other transaction methods prescribed in the Securities Trading Regulations of the Vietnam Stock Exchange.
2. Listed and registered securities are not traded outside the securities trading system organized by the Vietnam Stock Exchange and its subsidiaries, except in cases where the transaction is not of a buying and selling nature or other transactions cannot be performed through the securities trading system.
3. The organization of trading of new types of securities, changes and application of new trading methods, and the operation of new trading systems must be approved by the State Securities Commission.
4. The Minister of Finance shall provide detailed regulations on securities trading, supervision of securities trading, and cases of transactions that are not of a buying and selling nature, and securities trading that cannot be conducted through the securities trading system.
5. The Prime Minister shall decide on the connection of securities trading with foreign stock exchanges at the request of the Minister of Finance.
According to the above provisions, listed securities may be organized for trading by the centralized order matching method, the negotiated trading method, and other trading methods prescribed in the Securities Trading Regulations of the Vietnam Stock Exchange.
Thus, securities can be listed by the negotiated trading method
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