GUIDE FOR INVESTORS PARTICIPATING IN DEBT INSTRUMENT (DI) TRADING

“To facilitate Debt Instrument trading activities, SmartInvest Securities Joint Stock Company (AAS) would like to send to Investors (Investors) instructions to participate in Debt Instrument trading on the Debt Instrument trading system at the Hanoi Stock Exchange (HNX) as follows:

1. Types of debt instruments

• Government debt instruments include: Government bonds, Treasury bills, National construction bonds;
• Government-guaranteed bonds issued by policy banks;
• Local government bonds.

2. General regulations on DI trading

2.1 Trading hours
Trading hours are as stipulated by HNX, specifically:

• Morning: from 9:00 AM to 11:30 AM
• Afternoon: from 1:00 PM to 2:45 PM
• Trading from Monday to Friday weekly, excluding holidays as stipulated by the Labor Code and non-trading days as stipulated by the regulatory authority

2.2 Trading method: Negotiated transaction

2.3 Listed par value and trading unit

• The par value of debt instruments listed on HNX is 100,000 (one hundred thousand) dong or a multiple of 100,000 (one hundred thousand) dong.
• The specified trading unit is 01 (one) debt instrument.

2.4 Quoting unit

• The unit of the quoted price is specified as 01 (one) dong.
• The unit of the execution price calculated by the system is rounded to 01 (one) dong.

2.5 Transaction types: There are 04 types of transactions as regulated by the HNX:

• Outright transaction: is a transaction on the trading system where one party sells and transfers ownership of the debt instrument to another party without an accompanying commitment to repurchase the debt instrument.
• Repurchase agreement (Repos): is a transaction on the trading system where one party sells and transfers ownership of the debt instrument to another party, while simultaneously committing to repurchase and regain ownership of that debt instrument after a specified period at a specified price. A repo transaction includes the sale transaction (1st leg) and the repurchase transaction (2nd leg). In a repo transaction, the seller is understood to be the seller in the 1st leg, and the buyer is understood to be the buyer in the 1st leg.
• Sell/Buy Back (SBB): is a transaction on the trading system that combines two outright transactions at the same time with the same counterparty, including one sale of a debt instrument (1st outright transaction) combined with a repurchase of the same debt instrument (2nd outright transaction) at a specified future time. In this, the seller in the 1st outright transaction is the buyer in the 2nd outright transaction; at the same time, the price, volume, and execution time of the 2nd outright transaction must be predetermined at the time of concluding the two transactions.
• Securities Borrowing and Lending (SBL): is a transaction in which the borrower borrows a debt instrument and commits to return the borrowed debt instrument to the lender after a specified period. SBL transactions are conducted by agreement between the parties and on the trading system at the Stock Exchange or on the securities borrowing and lending system at the Vietnam Securities Depository. The parties involved self-agree and are responsible for the contents related to the borrowing volume, borrowed and returned assets, collateral, borrowing interest rates, and other terms, ensuring these agreements fully comply with the legal provisions applicable to the transaction participants and the regulations of the Stock Exchange and the Vietnam Securities Depository.

2.6 Minimum trading volume

• For electronic and conventional negotiated forms: 100 DIs
• For repo transactions involving multiple debt instrument codes, the minimum trading volume for each debt instrument code is 100 DIs
• For outright transactions with a volume of 01-99 DIs (odd-lot transactions), they are carried out directly between the investor and the regular trading member or between debt instrument trading members based on the principle of price agreement.

2.7 Trading method:
HNX applies the negotiated transaction method for debt instrument trades, which includes 02 methods:

• Electronic negotiated transaction: is a form of trading where orders are offered with a firm commitment and are executed immediately upon a counterparty’s selection without needing reconfirmation;
• Conventional negotiated transaction: is a form of trading where parties self-negotiate the terms of the trade using the messaging tool on the trading system or other communication means outside the system and report the results to the trading system to establish the transaction.

2.8 Types of trading orders

1. Electronic negotiated transaction:

• Market-wide electronic negotiated order: A market-wide electronic negotiated order is a buy or sell offer with a firm commitment that is valid for the day and is publicly displayed on the system.
• Optional electronic negotiated order: includes the following two types of orders

• Request for Quote (Inquiry order): An Inquiry order is an advertising-like order used when an investor has not yet identified a counterparty for the transaction. The Inquiry order can be sent to one, a group of members, or the entire market. If the client does not specify, the Inquiry order is sent to the entire market.
• Firm buy, sell offer (Firm order): A Firm order is used to respond to a Request for Quote. A Firm order can only be sent specifically to the member who sent the Request for Quote.

1. Conventional negotiated transaction:

• Intraday transaction report order: The report order is used to enter a transaction into the system when the parties have already agreed on the transaction conditions.

1. Types of orders by transaction type:

• Outright transaction:

• Market-wide electronic negotiated order;
• Optional electronic negotiated order;
• Transaction report order.

• Repurchase agreement

• Optional electronic negotiated order;
• Transaction report order.

• Sell/Buy Back

• Optional electronic negotiated order;
• Transaction report order.

• Securities Borrowing and Lending

• Optional electronic negotiated order;
• Transaction report order.

2.9 Modifying/canceling trading orders

• Regulation on modifying, canceling unexecuted negotiated orders

• During the trading session, unexecuted negotiated orders may be modified or canceled at the investor’s request or in case of an error compared to the original order.
• The modification or cancellation of an unexecuted negotiated order must comply with the procedure for modifying, canceling unexecuted negotiated orders specified in the Debt Instrument Trading Procedure issued by HNX.

• Regulation on modifying, canceling executed negotiated orders

• Debt instrument transactions that have been established on the system are not allowed to be canceled, except for transactions detailed in Regulation 770 in Clause 2, Article 18 of Circular 30/2019/TT-BTC.
  1. Payment method: Payment method is per transaction
  2. Settlement time: Multilateral clearing T+1

3. Other notes

• To trade DIs, Investors must open a securities account at AAS and trade on a regular sub-account;
• For Investors who have not yet deposited their securities, they can do so at the Issuing Organization;
• For DI orders, Investors must come to the counter at AAS’s head office/branch to complete the order entry procedures;
• In case a client opens a depository account at a commercial bank, they will only place trading orders through a securities company, while the payment for money and bonds is carried out at the commercial bank.

”

---