Non-Prefunding Transactions Will Have More Advantages From May 5

On April 26, 2025, the Minister of Finance signed and issued Circular No. 18/2025/TT-BTC amending and supplementing a number of articles of Circular No. 119/2020/TT-BTC dated December 31, 2020, Circular No. 96/2020/TT-BTC dated November 16, 2020, which was amended and supplemented by a number of articles according to Circular No. 68/2024/TT-BTC dated September 18, 2024 of the Minister of Finance. Circular 18/2025/TT-BTC takes effect from May 5, 2025.

This Circular has amended and supplemented regulations on registration, depository, clearing and settlement of securities transactions, and information disclosure related to the implementation of the mechanism for foreign institutional investors to purchase shares without requiring sufficient funds when placing orders (Non-Prefunding) according to the KRX System and serves the goal of upgrading the market, which is consistent with practical implementation, ensures reasonableness, and at the same time approaches international practices in information disclosure management, serving the goal of upgrading the Vietnamese stock market.

According to the provisions of Circular 18/2025/TT-BTC, the time when Non-Prefunding investors must have enough money and the payment responsibility of the securities company is no different from Circular 68/2024/TT-BTC.

Specifically, similar to the provisions of Circular 68/2024/TT-BTC, Circular 18/2025/TT-BTC, Non-Prefunding investors only need to have enough money before the time the depository member has enough money in the depository member's payment deposit account opened at the payment bank on the payment date: No later than 10:15 am on T+2 according to the Regulations of the Vietnam Securities Depository and Clearing Corporation (VSDC).

At the same time, the securities company is still responsible for ensuring payment on the morning of T+2 for Non-Prefunding transactions in case the Non-Prefunding investor does not make payment similar to Circular 68/2024/TT-BTC to ensure that there are no failed transactions of Non-Prefunding investors.

According to the Drafting Committee, the new regulations in Circular No. 18/2025/TT-BTC have many advantages over Circular 68/2024/TT-BTC, especially related to the rights of Non-Prefunding investors.

Specifically, all established transactions of investors in general and Non-Prefunding investors in particular after confirming payment on the afternoon of T+1 will be paid and will not be delayed or canceled. This is also an advantage of the new IT System (KRX System) with the feature of not delaying or canceling payment for transactions lacking payment funds, similar to the implementation of the Central Clearing Counterparty (CCP) mechanism.

Ho Chi Minh City Stock Exchange (HOSE) also announced the official launch of the Vietnam Stock Market Information Technology System on May 5, 2025.

Many assessments show that the new information technology system will provide an integrated, synchronous technology platform for the entire Vietnamese stock market. The operation of the new system is expected to create a strong breakthrough in market operations, better meeting the needs of businesses and investors.

Ms. Dang Thi Thanh Huong - Deputy General Director of HOSE affirmed that the new information technology system, when operated safely and smoothly, is a common effort and achievement of the whole industry. The system's effective operation is also a new step forward for the Vietnamese stock market, better meeting the development needs and better serving businesses and investors, an opportunity to deploy new products, as well as aiming to upgrade the market.

Along with that, the new regulation ensures to maintain the foreign investor ownership ratio (room) for Non-Prefunding investors in case the Non-Prefunding order is short of money from the Non-Prefunding investor on the payment date (T+2) until the end of the day immediately following the payment date (T+3) because the shares remain in the Non-Prefunding investor's account until the end of T+3 if the Non-Prefunding investor confirms that it will pay the full amount to the securities company. While the current mechanism in Circular No. 68/2024/TT-BTC, shares purchased with insufficient money from Non-Prefunding investors will be recorded in the securities company's proprietary account from T+2 and in case on T+3, the Non-Prefunding investor wants to buy back the shares, it may not be possible because the shares are out of foreign room.

The Drafting Committee added that some proposals of Non-Prefunding investors during the implementation of Circular No. 68/2024/TT-BTC have also been amended.

Accordingly, Circular 18/2025/TT-BTC unifies the implementation method at securities companies for Non-Prefunding investors. Specifically, the new Circular clearly stipulates that Non-Prefunding investors are allowed to place orders to buy shares without requiring sufficient funds when placing orders for all listed shares, registered for trading without being limited by any stock codes, except for stocks for which securities companies are not allowed to receive purchase orders according to the provisions of Clause 9, Article 16 of Circular No. 121/2020/TT-BTC, which has been amended and supplemented in Clause 2, Article 3 of Circular No. 68/2024/TT-BTC.

In addition, Circular 18/2025/TT-BTC also amended Appendix XVII issued with Circular 68/2024/TT-BTC on information disclosure in the direction of not requiring information disclosure for information related to authorized representatives of Non-Prefunding investors.

Circular 18/2025/TT-BTC replaces a number of provisions in Article 9a of Circular No. 120/2020/TT-BTC, amended and supplemented in Clause 2, Article 1 of Circular No. 68/2024/TT-BTC as follows:

- Clause 2, Clause 5, Article 9a of Circular No. 120/2020/TT-BTC are replaced by Clause 2, Article 40k of Circular No. 119/2020/TT-BTC supplemented at Clause 10, Article 1 of this Circular;

- Clause 3, Clause 4, Article 9a of Circular No. 120/2020/TT-BTC are replaced by Clauses 7, 8, 9, Article 40k of Circular No. 119/2020/TT-BTC supplemented at Clause 10, Article 1 of this Circular.

Circular 18/2025/TT-BTC Abolishes some provisions in Circular 68/2024/TT-BTC as follows:

- Abolish clauses 2, 3, 4, Article 4, Article 2 of Circular No. 68/2024/TT-BTC;

- Abolish Clause 2, Article 5 of Circular No. 68/2024/TT-BTC regarding the provisions on clearing and settlement of securities transactions and the provisions on the use and refund of the amount used from the payment support fund that has been replaced in Article 40l of Circular No. 119/2020/TT-BTC supplemented in Clause 10, Article 1 of this Circular. Other contents on the management and use of the payment support fund that have not been specified in Article 40l of this Circular shall continue to be implemented according to the provisions in Clause 2, Article 5 of Circular No. 68/2024/TT-BTC until the central clearing counterparty mechanism is officially implemented.

Source: https://nhandan.vn/giao-dich-non-prefunding-se-co-them-uu-viet-ke-tu-ngay-55-post876852.html