The Prime Minister has issued Decree 42/2015/ND-CP on derivatives andthe derivative trading market in Vietnam, which will become valid nextmonth.
Under the new decree, companies that trade derivativesfor profits on the derivative trading market must have at least 600billion VND (27.8 million USD) in chartered capital.
Brokeragefirms on the new market should have at least 800 billion VND (37 millionUSD) in chartered capital and will be allowed to trade derivatives fortheir own profits.
Firms should also meet the requirements set bythe Ministry of Finance on profit, disposable capital, and professionalprocedures.
Securities firms and commercial banks may sign up tobecome clearing members at Vietnam Securities Depository (VSD) thatwill settle trading orders if they satisfy some regulations on equity,including that the equity of a direct clearing member remains less thanthat of a general clearing member.
In detail, a commercial bankshould have equity of at least 5 trillion VND (231.5 million USD) tobecome a direct clearing firm and at least 7 trillion VND (324 millionUSD) to become a general clearing member.
A securities firmshould have at least VND900 billion ($41.6 million) to become a directclearing member and at least 1.2 trillion VND (55.5 million USD) tobecome a general clearing member.
hus, 15-20 securities firmsthat meet the requirements set by the Finance Ministry will operatetheir businesses on the Vietnam's derivative trading market.
Inorder to prepare for the promising derivative market, large securitiescompanies have issued more shares to increase their chartered capitaland support their clients in this new market.
For example, BaoViet Securities Company (BVS) in its annual shareholder meeting decidedto increase its chartered capital by 1 trillion VND (46.3 million USD),which should not be a problem for the company.
Nhu Dinh Hoa, BVSDirector General, said derivatives will have a bright future in Vietnam,just like at the Taiwan Stock Exchange, where derivative tradingoccupied 70 percent of the total securities market.
Other largesecurities firms, including Vietinbank Securities Joint Stock Company,Vietcombank Securities Joint Stock Company and Saigon-Hanoi SecuritiesJoint Stock Company also plan to raise their capitals to enter thederivative market.
Derivative is a security on the securitiesmarket which is used to reduce financial risks, protect initialinvestments, and generate profits for investors.
On thesecurities market, no matter how stocks and bonds change in marketvalues, derivatives will maintain their initial market values.
Derivativesare futures, options, and forwards that are traded on the stockexchange and listed securities that are traded on the stock exchange.
Stockexchanges, including the Hanoi Stock Exchange and the Hochiminh StockExchange, are the only legal organisations can hold derivative tradingactivities.-VNA
Under the new decree, companies that trade derivativesfor profits on the derivative trading market must have at least 600billion VND (27.8 million USD) in chartered capital.
Brokeragefirms on the new market should have at least 800 billion VND (37 millionUSD) in chartered capital and will be allowed to trade derivatives fortheir own profits.
Firms should also meet the requirements set bythe Ministry of Finance on profit, disposable capital, and professionalprocedures.
Securities firms and commercial banks may sign up tobecome clearing members at Vietnam Securities Depository (VSD) thatwill settle trading orders if they satisfy some regulations on equity,including that the equity of a direct clearing member remains less thanthat of a general clearing member.
In detail, a commercial bankshould have equity of at least 5 trillion VND (231.5 million USD) tobecome a direct clearing firm and at least 7 trillion VND (324 millionUSD) to become a general clearing member.
A securities firmshould have at least VND900 billion ($41.6 million) to become a directclearing member and at least 1.2 trillion VND (55.5 million USD) tobecome a general clearing member.
hus, 15-20 securities firmsthat meet the requirements set by the Finance Ministry will operatetheir businesses on the Vietnam's derivative trading market.
Inorder to prepare for the promising derivative market, large securitiescompanies have issued more shares to increase their chartered capitaland support their clients in this new market.
For example, BaoViet Securities Company (BVS) in its annual shareholder meeting decidedto increase its chartered capital by 1 trillion VND (46.3 million USD),which should not be a problem for the company.
Nhu Dinh Hoa, BVSDirector General, said derivatives will have a bright future in Vietnam,just like at the Taiwan Stock Exchange, where derivative tradingoccupied 70 percent of the total securities market.
Other largesecurities firms, including Vietinbank Securities Joint Stock Company,Vietcombank Securities Joint Stock Company and Saigon-Hanoi SecuritiesJoint Stock Company also plan to raise their capitals to enter thederivative market.
Derivative is a security on the securitiesmarket which is used to reduce financial risks, protect initialinvestments, and generate profits for investors.
On thesecurities market, no matter how stocks and bonds change in marketvalues, derivatives will maintain their initial market values.
Derivativesare futures, options, and forwards that are traded on the stockexchange and listed securities that are traded on the stock exchange.
Stockexchanges, including the Hanoi Stock Exchange and the Hochiminh StockExchange, are the only legal organisations can hold derivative tradingactivities.-VNA
