VN issues rules for securities lending

Sep 11th at 13:58

11-09-2014 13:58:22+07:00

The Viet Nam Securities Depository (VSD) recently announced the list of securities to be used as collateral to implement securities lending regulations in its Decision No 111/QD-VSD.

Accordingly, exactly 223 codes listed on two national stock exchanges were qualified. This includes 60 codes on the HNX30 and VN30 packages, made up of the top stocks by capitalisation and liquidity, and others based on liquidity. It also includes Government bonds and Government-guaranteed bonds listed on Ha Noi Stock Exchange.

The VSD issued its decision on the securities lending and borrowing system last August 19, in preparation for the operation of exchange-traded funds in Viet Nam and as support for securities trading in case of transaction corrections in which a temporary shortage of securities for payment would occur.

Deduction rates of asset value, the rate to be deducted from the prices of securities used as collateral, was set at five per cent on Government bonds and Government-guaranteed bonds, 30 per cent on securities in the VN30 and HNX30 packages and 40 per cent on others.

VSD said the reduction rates aimed to prevent risks and ensure the rights of lenders, since a number of stocks might be priced beyond their true value.

The lending interest rates will be subject to agreements between borrowers and lenders but should not exceed 120 per cent of the rate regulated by the State Bank of Viet Nam.

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