1. LEGAL DOCUMENTS ARE ISSUED IN 11/2021
1.1. Circular No. 16/2021/TT-NHNN regulations on corporate bond trading of credit institutions and branches of foreign banks
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Name of legal document: Circular 16/2021/TT-NHNN issued on 10/11/2021 by the State Bank of Vietnam on regulations corporate bond trading of credit institutions and branches of foreign banks (referred to as the “Circular No. 16/2021/TT-NHNN”).
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Effective date: 15/01/2022.
Some contents should be noted:
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Firstly, regulating on corporate bond eligible for trading.
Specifically, Article 5 of Circular No. 16/2021/TT-NHNN stipulates: “Article 5. Corporate bond eligible for trading
A corporate bond is eligible for trading when all requirements below are satisfied:
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The corporate bond is issued in accordance with regulations and law.
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The corporate bond is issued in VND.
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The corporate bond is under legal ownership of the seller, has not reached maturity which requires payment of both principal and interest, is not subject to any dispute, is allowed to be traded as per the law, is not under forward contract or discount contract or rediscount contract as guaranteed by the seller (except for cases where a credit institution purchases corporate bond to sell for the first time).”
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Secondly, regulating on corporate bond purchase limit.
Specifically, Article 8 of Circular No. 16/2021/TT-NHNN stipulates: “Article 8. Corporate bond purchase limit
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The total corporate bond purchase balance shall be included in total amount of credit extended of a customer or a customer and a related person according to Article 128 of the amended Law on Credit Institutions and regulations of the State Bank of Vietnam on prudential limits and ratios in operations of credit institutions.
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Credit institutions shall elaborate on corporate bond purchase limits: Corporate bonds of an issuer; corporate bonds of an issuer and a related person; secured bonds; non-secured bond; readily marketable bonds; bonds held until maturity; corporate bonds being traded.”
1.2. Circular No. 18/2021/TT-NHNN regulations on rediscounting of negotiable instruments between credit institutions, foreign bank branches
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Name of legal document: Circular 18/2021/TT-NHNN issued on 18/11/2021 by the State Bank of Vietnam regulations on rediscounting of negotiable instruments between credit institutions, foreign bank branches (referred to as the “Circular No. 18/2021/TT-NHNN”).
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Effective date: 07/01/2022.
Some contents should be noted:
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Firstly, regulating on principles of rediscounting negotiable instruments.
Specifically, Article 3 of Circular No. 18/2021/TT-NHNN stipulates: “Article 3. Principles of rediscounting negotiable instruments
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Credit institutions, foreign bank branches may rediscount negotiable instruments when the License issued by the State Bank of Vietnam (hereinafter referred to as the State Bank) contains contents of operation on the rediscounting negotiable instrument.
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Credit institutions, foreign bank branches shall rediscount negotiable instruments according to the provisions of this Circular, in accordance with the provisions of the Law on Credit Institutions, the Law on negotiable instruments and regulations provisions of relevant laws. In case of rediscounting a negotiable instrument involving foreign elements, the parties shall comply with the provisions of this Circular, the Law on Credit Institutions, the provisions on application of international treaties and international trade practices in relation to negotiable instruments with foreign elements in the Law on negotiable instruments and the provisions of the law on civil relations with foreign elements.
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Credit institutions, foreign bank branches shall rediscount foreign currency negotiable instruments in accordance with the permitted scope of foreign exchange operations of each credit institution, foreign bank branch.”
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Secondly, regulating on corporate bond purchase limit.
Specifically, Article 6 of Circular No. 18/2021/TT-NHNN stipulates: “Article 6. Rediscount currency
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For negotiable instruments payable in Vietnam dong, credit institutions, foreign bank branches shall rediscount in Vietnam dong.
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For negotiable instruments payable in foreign currency:a) Credit institutions, foreign bank branches shall rediscount in foreign currency stated on such negotiable instrument or in Vietnam dong as agreed. In case of rediscount in Vietnam dong, the parties shall agree on the applicable exchange rate in accordance with the regulations of the State Bank on the exchange rate;b) In case of rediscounting of a negotiable instrument by method of term purchase, a credit institution or foreign bank branch shall repurchase the negotiable instrument in the currency of the sale of such negotiable instrument.”
1.3. Official Letter No. 8458/NHNN-TT regarding the application of basic standards on domestic chip cards
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Name of legal document: Official Letter No. 8458/NHNN-TTissued on 31/11/2021 by the State Bank of Vietnam regarding the application of basic standards on domestic chip cards (referred to as the “Official Letter No. 8458/NHNN-TT”)
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The content should be noted in Official Letter No. 8458/NHNN-TT:
“in order to speed up the transition to domestic chip cards, Circular No. 19 (amended and supplemented) stipulates the responsibilities of card issuers (CIs) in implementing the conversion roadmap from domestic magnetic cards to domestic chip cards in circulation and stop issuing domestic magnetic cards after March 31, 2021, there is no regulation on stopping or refusing card transactions for domestic magnetic cards in circulation (still has an expiry date) issued by CIs in Vietnam; at the same time, it stipulates the responsibilities of card payment organizations (CPOs) in implementing the roadmap for converting ATMs and point-of-sale (POS) terminals operating in Vietnam in compliance with the basic standards on domestic chip cards, there is no regulation on refusing to accept card transactions for domestic magnetic cards in circulation.”
