Foreign investors may not need to deposit collateral when buying securities.

The State Securities Commission is seeking feedback on a draft amendment to Circular No. 120/2020 dated December 31, 2020, issued by the Ministry of Finance , which regulates the trading of listed and registered shares, fund certificates, corporate bonds, and secured warrants listed on the securities trading system. The circular will add a provision regarding the 100% deposit requirement for foreign institutional investors when purchasing securities.

Remove the 100% margin requirement for foreign institutional investors when purchasing securities.

Specifically, securities companies are allowed to accept buy orders from foreign institutional investors even when the client's account does not have 100% of the order value. The securities company assesses the client's capacity to determine the margin requirement as agreed upon in the contract signed between the securities company and the client.

In the event that a foreign investor lacks sufficient funds for payment, the securities company will be responsible for paying the shortfall through its proprietary trading account, except in cases where regulations apply to the custodian bank where the foreign institutional investor has an account. The securities company must ensure sufficient funds for payment; in case of insolvency, it will be subject to penalties as prescribed by law.

Facilitating foreign investors to purchase securities.

Securities companies sell securities as soon as they are credited to their proprietary trading accounts. The difference arising from this transaction is handled according to the agreement in the contract between the securities company and the client.

The custodian bank where the foreign institutional investor opens a securities custody account is responsible for paying any shortfall in the event of incorrect confirmation of the client's deposit balance with the securities company, resulting in insufficient funds for securities transaction settlement.

In cases where necessary to stabilize the market, the State Securities Commission has the right to temporarily suspend the 100% margin trading service for foreign institutional investors.

The removal of the 100% margin requirement for foreign institutional investors when purchasing securities is seen as one of the steps being taken to upgrade the Vietnamese stock market and attract foreign investment.

The draft also adds a regulation requiring listed companies and large public companies to disclose periodic information in English from January 1, 2025; and to disclose extraordinary and requested information in English from January 1, 2026. Subsequently, from January 1, 2027, all other public companies must disclose periodic information in English; and disclose extraordinary and requested information in English from January 1, 2028.

Source: https://thanhnien.vn/nha-dau-tu-ngoai-co-the-khong-can-ky-quy-khi-mua-chung-khoan-185240321091809584.htm