Vietnam's derivatives market will start official operations on August 10 with the VN30-Index futures contract set to launch first (Source: internet)This was stated by Pham Hong Son, Vice Chairman of the State SecuritiesCommission, at a press conference on August 8.
In Vietnam, the current law allows three types of derivative products --futures contracts of shares indexes with the VN30-Index and HNX30-Index asunderlying assets, and five-year Government bond future contracts.
The VN30-Index and HNX30-Index capture the performance of the top 30 largeststocks on the HCM and Hanoi stock exchanges in terms of market value andliquidity.
Derivative is a security with price that is dependent upon or derived from oneor more underlying assets.
According to the Prime Minister’s direction, since the derivatives market isnew and under trial, the VN30 futures contract will be launched first to limitrisks, while the HNX30 and Government bond futures will be introduced later, Sonsaid.
He said the VN30 adequately covers the largest large-cap companies on the HCMStock Exchange.
The most important factor for the derivatives market is margin lending. In thederivatives market, an investor must make the deposit in cash or shares at theVietnam Securities Depository and at market trade members (securitiescompanies) before a transaction takes place.
The current collateral requirements in the derivatives market are 80 percent incash and 20 percent in shares, but at the initial stage to ensure the highestsafety, the margin ratio is set at 100 percent in cash.
The derivative market will open at 8.45am, 15 minutes earlier than theopening hour of the stock market, and close at 3pm. Prices of products areallowed to fluctuate by /- 7 per cent and and price quotation is 0.1 VN30index point.
Transaction unit is one contract. Contract unit is valued at 100,000 VND perVN30 index point. The last trading day is the third Thursday in themonth of maturity. The month of maturity is the current month, the next monthand the last two months of the next two quarters.
Son said legal framework and procedures to ensure the listing, trading andclearing of derivative products have been fully enacted.
The Hanoi Stock Exchange, Vietnam Securities Depository and Vietinbank havefinished testing the trading system with seven market clearing members,including HCM Securities, Saigon Securities Inc, VP Bank Securities and VietCapital Securities, as well as VNDirect Securities and MB Securities.
According to securities firms, some 2,000 derivative accounts have beenactivated so far.-VNA
VNA
