Circular 09/2021/TT-NHNN amending Circular 42/2015/TT-NHNN regulating open market operations issued by the State Bank of Vietnam

CIRCULAR

AMENDING AND SUPPLEMENTING SEVERAL ARTICLES OF CIRCULAR NO. 42/2015/TT-NHNN DATED DECEMBER 31, 2015 OF THE GOVERNOR OF THE STATE BANK OF VIETNAM ON OPEN MARKET OPERATIONS

Pursuant to the Law on State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law on Amending and Supplementing certain Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Government's Decree No. 16/2017/ND-CP dated February 17, 2017, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

Upon the request of the Director of the Monetary Policy Department;

The SBV’s Governor hereby promulgates the Circular on amendments and supplements to several Articles of the Circular No. 42/2015/TT-NHNN dated December 31, 2015 of the Governor of the State Bank of Vietnam, regulating open market operations (hereinafter referred to as Circular No. 42/2015/TT-NHNN). 

Article 1. Amending and supplementing certain Articles of the Circular No. 42/2015/TT-NHNN

1. Adding Clause 3 to Article 14 as follows:

“3. For the sale (issuance) of State Bank’s treasury bills through open market operations, the State Bank shall employ the interest rate-based method of bill auction; the State Bank sells (issues) State Bank’s treasury bills by the volume bidding method in case the State Bank needs to announce interest rates of State Bank’s treasury bills in order to achieve objectives of monetary policies.”

2. Amending and supplementing Article 15 as follows:

“Article 15. Notices of purchase and sale of security instruments

1. Before each open market operation auction, the State Bank (Transaction Office) announces the purchase or sale of security instruments to members. For the sale (issuance) of State Bank’s treasury bills, in addition to notifying members, the Exchange should publish the notice of sale (issuance) of State Bank’s treasury bills on the SBV’s Portal by 13:30 of the bidding day at the latest.

2. Each notice shall comprise the following basic information:

a) Bidding date;

b) Bidding method or approach;

c) Bid evaluation method or approach;

d) Buy/sell approach;

dd) Volume of security instruments to be bought or sold at the settlement price or at par value (except for the case where the State Bank does not notify the volume of security instruments to be bought or sold in advance);

e) Security instruments to be bought or sold;

g) Rate of trading of security instruments (in case where the State Bank buys);

h) Tenure of security instruments;

i) Date of issuance of security instruments (in case where the State Bank sells);

k) Approach to payment of interest on security instruments (in case where the State Bank sells);

l) Due date of payment of security instruments (in case where the State Bank sells);

m) Remaining maturity period of security instruments (in case where the State Bank sells);

n) Call/put period (the number of days);

o) Interest rate that the State Bank applies to buy/sell transactions (in case of the volume bid);

p) Interest rates of security instructions issued on the primary market (in case where the State Bank sells);

q) Duration of acceptance of bids from members;

r) Bid closing date.”

3. Amending and supplementing point b of clause 1 of Article 25 as follows:

“b) Proposing and requesting the Head of the Executive Board to issue the decision on types of security instruments sold/bought, buy/sell volume, buy/sell method, bidding method, bid evaluation method, call/put time limit and interest rate applied in case of buying/selling security instruments; notifying the Exchange of the aforesaid information after receipt of approval from the Head of the Executive Board.”

4. Amending and supplementing point d of clause 2 of Article 25 as follows:

“d) Performing trades in security instruments between the State Bank and its members as approved by the Head of the Executive Board; publishing the notice of sale (issuance) of the State Bank’s treasury bills in accordance with this Circular.”

Article 2. Implementation responsibilities 

The Chief of the Office, Director of Monetary Policy Department, Heads of the State Bank’s affiliates, credit institutions, foreign bank branches shall be responsible for implementing this Circular./.

Article 3. Entry into force

This Circular shall take effect as of August 25, 2021./.

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