Securities registration, depository,
clearing and settlment system
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NOTION
Securities depository, registration and clearing system is
a system of facilities and people for pre- , - in and posttransaction processing including securities registration,
securities depository, clearing and settlement of
securities transactions for smooth securities trading.
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System operations
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Registration activity: is the registration of information about securities
and the ownership of securities by holders.
Clearing: is the processing of information about securities
transactions in order to give a final net figure that the participants
must pay after the transaction.
Payment activity: is the activity of completing securities transactions,
in which the parties will fulfill their obligations.
Depository activities: is the activity of storing and preserving
customer's securities and helping customers exercise their rights to
depository securities.
The role of the system
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1.
Reduce risks for stock market activity
2.
Reduce costs for stock market participants
3.
Promote fast capital flow
4.
Help effectively manage the stock market
5.
Ensure that securities transactions are completed
The organizational model of the
DEPOSITORY
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The first model: The depository fully performs the functions
of the system
The second model (functional division): each participating
organization in the market will perform one or several
activities of the system.
Functions of the
depository
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Management of client custodial securities
Provide certificates of ownership and information on the changing
situation of custodial securities to clients
Payment of money and securities through the account system
Distribution of interest, payment of principal and dividends to
owners of securities
Exercise the rights of the holder to the securities deposited at the
Depository
Carry out transfers, transfers, withdrawals, pledges of securities
through bookkeeping entries in the account system
Providing information about fake, stolen securities ...
Vietnam Securities
Depository (VDS)
Being a state-owned one-member limited liability company
⚫ Works according to the first model
⚫ Operating capital of the depository includes:
- Charter capital: VND 1000 billion,
- Self-replenishing capital from after-tax profits and other
lawful sources of capital
- Sources of loans and other lawfully mobilized capital
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1. SECURITIES REGISTRATION
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Registration of information about securities: name of securities, ticker symbol,
number of securities, type of securities ...
Registration of information about the owner of securities: Full name, ownership
registration number, address, contact phone of the owner, number of securities
owned ...
PURPOSE
The issuer provides detailed information about shareholders,
types and quantities of securities owned so that the depository
center and depository members have grounds to receive
shareholders' securities into the depository
⚫ To determine who is entitled to the rights of the depository
securities
⚫ Help customers exercise their rights to depository securities:
the right to receive dividends, the right to vote, the right to
receive dividends and principal capital, the right to buy, the right
to convert,...
⚫ Provide transfer agent services as authorized by the Issuer.
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REGISTRATION CASES
- Issued securities
- New issued securities, additional issuances
- Securities name change, split
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Types of securities subject to
registration
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Registration of issued securities
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-
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Registering bookkeeping depository: applicable to the case of
issuing bookkeeping securities or securities but the issuer
converts to the form of bookkeeping before registering the
depository
- Registration of certificate depository: applicable to the case of
an issuer issuing securities printed by the state treasury
For public companies
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Securities must be centrally registered at a securities depository
Must select 1 securities company as a consultant for the
implementation of securities depository registration
Must convert the par value of securities
Must convert physical certificate to bookkeeping form (if any)
Owners of securities who want to trade will have to make
transactions at securities companies
For public companies (continued)
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Coordinate with depository members, depository centers to
carry out bookkeeping procedures for customers
Coordination of transfer restriction share information
management
Provide change information in the depository registration file
Notification of information related to the exercise of rights to
depository members
Exercising rights
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How rights are exercised
Issuers
Holders of
non-deposited
securities
Holders of
deposited
securities
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4
nominated
bank for
payment
Depository
members
1
Depository
centre (4)
2
3
Diagram annotations
(1): The issuer notifies the depository of the last registration date
and rights exercise information
(2): the depository notifies the depository member of the last
registration date and requires the creation of a list of holders of
depository securities
(3): depository member for depository The list of holders of
depository securities
(4): The depository shall make a consolidated list of shareholders
(including the list of holders of depository and non-depository
securities), calculate the right to allocate and transfer it to the
17 Issuer for confirmation.
2. SECURITIES DEPOSITORY
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-
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Is the activity of storing and preserving securities of customers;
Perform services related to opening depository accounts,
depositing, withdrawing, transferring, performing secured
transactions such as pledges, disbursement of securities...
Manage the safe import, export and preservation of securities
certificates at the stock certificate warehouse.
Form of depository
General Depository: is a form of depository in which securities of
the same type of issuer are managed together, not separately by
each customer.
⚫ Advantage:
- Simplify procedures
- Facilitate customers to carry out securities transactions
- Facilitate customers when they want to withdraw securities
- The depository can provide utility services for depository securities
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Form of depository (continued)
Separate depository: is the form of depository in which
enrolled securities are deposited and managed in the name of
the customer depositing such securities.
Kept separate from other customers' securities
Withdraw the correct type of deposited securities
Additional purchases/upsells must specify the series, stock
code and other characteristics (if any)
High depository costs
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Securities Depository Account
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Trading securities account: used to reflect the number of securities
available by the client
Pledged securities account: used to reflect the number of securities
pledged
Securities account waiting for listing (waiting for transaction): used to
account for the number of securities waiting for listing but still allowed
to be deposited at the depository
Securities account waiting for withdrawal: used to account for the
number of securities customers wish to withdraw but are waiting for
withdrawal
Securities Depository Account
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22
Clearing account for traded securities (pending payment): used to
account for the delivery and receipt of securities according to securities
settlement documents
Suspended trading account: Controlled securities, no longer controlled,
but suspended from trading to redefine the reference price
Custody account: received from the use of payment support funds
Depository members
⚫
Depository members: Securities companies, commercial banks
Depository members open direct accounts: (article 9)
including
- state bank
- state treasury
- State Capital Investment and Trading Corporation
- Credit and insurance institutions participating in the
Government bond market organized by stock exchanges and
securities trading centers
- depository of countries
23 - Other subjects as prescribed by the securities depository
⚫
Principles of securities depository activities
According to article 21:
Management in 2 levels
Customers must sign an open contract with depository
member
Depository member must open TKLK in DM's name
at Depository Centre
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S¬ ®å hÖ
thèng Tµi
kho¶n
TTGDCKTTLK
HN
TVLK 1
Môi giới nước
ngoài
CÊp
Trung
t©m
100
150
Môi giới
nước ngoài
TVLK 1
50
TVLK
B
A
CÊp
ThµNH
VI£N
Môi giới trong
nước
50
50
Môi giới
trong nước
Nhà đầu tư A
Nhà đầu tư B
Nhà đầu tư C
Lu ký 50 CK
Lu ký 50 CK
Lu ký 100
Tự doanh
D
C
100
50
Nhà đầu tư
D
Nhà đầu tư nước ngoài
50
TVLK
Lu ký 50
Lu ký 50
25
Tù doanh
Nhà đầu tư trong nước
CUSTODY ACCOUNT
MANAGEMENT
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⚫
Customers carry out procedures for opening accounts and
depositing securities at depository members
⚫
depository member opens detailed securities depository
account for each client
⚫
The depository opens securities depository accounts for
depository members under two self-employed and brokerage
accounts (domestic and foreign) - not detailed to each investor
⚫
Management of foreign investor ownership information:
⚫
Foreign investors apply to a depository for a securities trading
code through a depository member
Principles of management of
securities depository accounts
At the securities depository:
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At Securities companies:
Services related to opening securities
depository accounts
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Deposit of securities (article 28)
Withdrawal of securities (article 29)
Transfer of securities (article 30)
Pledge and release of pledge (article 31)
For pledged securities
Depository members are only allowed to pledge customer
securities deposited at the Depository when:
- Depository members who give credit to depository
customers and are collateralized with securities that are
included in the aggregate depository at the Depository
- The depository customer has a written authorization
for the depository member at his/her securities account when
the depository member wishes to be refinanced from the
depository center
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Securities Pledge and Clearance
Process
Depository
Members (3)
7
6
4
Depository
(5)
2
Depository
members
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Pledger
Pledgee
1
30
6
Diagram annotations
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1: The pledger and the pledgee sign a contract to pledge securities
2: The pledger carries out procedures for pledging securities with a
depository member where the pledger opens an account
3: the pledger depository member will check the validity and accuracy of
the dossier and open a pledge account for the client; accounting for
securities from trading account to securities pledge account
4: the pledger depository member will notify the depository of the
pledge transaction
5: The depository opens a pledge account for depository members and
accounts for the number of pledged securities according to
regulations
6: The depository notifies the result of the pledge to the depository
member of the pledger and the pledgee
For public companies
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Investors must open a trading account at 1 securities company
to trade securities of an unlisted public company
In case the investor already has a listed securities trading
account, he/she will immediately use that account to trade and
deposit unlisted securities.
The depository of securities is carried out in a 2-level model
Investors are also provided services by the depository and
depository members
3. CLEARING
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-
+ Bilateral clearing
-
+ Multilateral clearing
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Clearing is the processing of information about securities
transactions, recalculation of which is aimed at determining
the final amount and net securities to which the counterparties
involved in the transaction are obliged to pay after the
transaction is made.
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Payment is the final activity for completing securities
transactions, in which the parties will fulfill their obligations
Principles of clearing
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1.
Condition: Centralized securities at the system
2.
Effect: Guaranteed payment of funds and transfer of
securities
3.
Principle:
4.
- Multilateral, bilateral and transaction-by-transaction
clearing results
5.
- Implement according to each securities and separate by
MG account type for domestic, foreign and self-employed
customers of depository members
6.
Principles of clearing (continued)
3. Nguyên tắc: (tiếp)
- Đối với CKNY, thực hiện căn cứ vào KQGD do SGDCK cung cấp
- Đối với CKCNY, căn cứ vào KQGD của NĐT được thực hiện tại các CTCK
và chuyển vào TTLK thông qua SGDCK
- TVLK phải mở tài khoản TTBT chứng khoán chưa niêm yết tại NHCĐTT tách
bạch với tài khoản TTBT chứng khoán niêm yết
- Kh/hàng mở TK tại NHTM là TVLK, giao dịch qua CTCK, việc thanh toán sẽ
do NH lưu ký thực hiện
- TVLK có nghĩa vụ thực hiện TTGD cho kh/hàng trong trường hợp TVLK
không thực hiện đúng nguyên tắc về quản lý và TTGD theo qui định của luật
pháp dẫn tới thiếu tiền hoặc CK để thanh toán.
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- Chuyển giao chứng khoán cùng với thanh toán tiền (DVP)
Clearing method
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Bilateral clearing: is a method of clearing securities
transactions matched on the same day according to each pair
of trading partners and by each type of securities to determine
the net payment obligations for money and securities of each
settlement party.
Multilateral clearing: is a method of clearing securities
transactions that are matched on the same day between all
parties to transactions according to each type of securities to
determine the net payment obligations for money and
securities of each settlement party.
Forms of clearing
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⚫
Multilateral clearing
⚫
Bilateral Clearing
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Direct payment
Multilateral clearing
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⚫
Payments based on multilateral clearing results
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Do not identify specific partners of the buyer or seller
⚫
The member's partner is represented by 1 central partner
(depository)
⚫
T+3 payment time
Example: multilateral clearing
(trading results)
Transaction Buyer Seller Volume Value
(stock) (1,000vnd)
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1
A
B
120
121
2
A
C
70
70
3
D
A
50
51
4
D
B
100
98
5
A
C
90
92
6
B
C
80
80
7
B
D
60
59
Example: multilateral clearing
(multilateral clearing results)
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Transaction
Buyer seller Volume
Value(1,000
vnd)
1,2,3,5
A
TTLK 230
232
1,4,6,7
TTLK
B
80
80
2,5,6
TTLK
C
240
242
3,4,7
D
TTLK 90
90
Bilateral Clearing
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⚫
Payments based on bilateral clearing results
⚫
Bilateral clearing: applicable to 1 specific type of
securities, according to each trading pair
⚫
Payment time:
Bilateral clearing example
Transaction
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Buyer
Seller Volume
(stock)
Value
(1,000vnd)
1
A
B
120
121
2
A
C
70
70
3
D
A
50
51
4
D
B
100
98
5
A
C
90
92
6
B
C
80
80
Bilateral clearing example
(Bilateral clearing results)
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Transaction Buyer
Seller
Volume
(stock)
Value
(1,000vnd)
1
A
B
120
121
2,5
A
C
160
162
3
D
A
50
51
4,7
D
B
40
39
6
B
C
80
80
Direct payment
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Payment per transaction and not based on clearing results
⚫
Payment time: according to the preferences of the parties
to the transaction
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SƠ ĐỒ QUY TRÌNH THANH TOÁN BÙ TRỪ
SGDCK/TTGDCK
Hệ thống Giao dịch
TVLK
Bên mua (M)
(1)
(2)
(4)
(4)
TTLK
Bộ phận Lưu ký
TK
CKGD
(M)
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(9)
TK
TTBT
(M)
TTLK
(2)
TTLK
Bộ phận TTBT
(3)
(11)
TVLK
Bên bán (B)
(3)
(4)
(4)
Ngân hàng chỉ định
(6) , (8) , (10)
(7)
(5)
TK
TTBT
(B)
(11)
TK
CKGD
(B)
TK
TGGD
(B)
(9)
TK
TTBT
(B)
(7)
TTLK
(5)
TK
TTBT
(M)
TK
TGGD
(M)
Chú thích sơ đồ
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
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TTGD gửi kết quả giao dịch cho TTLK
TTLK gửi “Thông báo kết quả giao dịch” cho các TVLK.
TVLK gửi “Thông báo xác nhận kết quả giao dịch”.
Bp. TTBT gửi chứng từ thanh toán cho các TVLK, bp. LK, NHCĐ.
- Bp. LK chuyển số CK từ TK CKGD của B vào TK TTBT B.
- NHCĐ chuyển tiền từ TK TGGDCK của M vào TK TTBT M.
TTLK và NHCĐ kiểm tra đối chiếu số dư.
Bp. LK chuyển số CK từ TK TTBT của B vào TK TTBT của TTLK.
- NHCĐ chuyển tiền từ TK TTBT của M vào TK TTBT của TTLK.
TTLK và NHCĐ kiểm tra đối chiếu số dư.
- Bp. LK chuyển số CK từ TK TTBT củaTTGD vào TK TTBT của M.
- NHCĐ chuyển tiền từ TK TTBT của TTGD vào TK TTBT của B.
TTLK và NHCĐ kiểm tra đối chiếu số dư.
- Bp. LK phân bổ CK từ TK TTBT của M vào TK CKGD của M.
- NHCĐ phân bổ tiền từ TK TTBT của B vào TK TGGDCK của B
Transaction payment method and time
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Bonds
⚫Stocks
and investment fund
certificates
Information system on the stock
market
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Concept: are indicators and documents that reflect the
picture of the stock center and the related socio-politicaleconomic situation at different times or periods
Role
- Ensure trust and fairness for investors on the stock
center
- Ensure the principle of market disclosure
- Support investors when making investment decisions
- Help the regulator to regulate the market well
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Features of information on the Stock Exchange
- Rich, varied
- Agility
- Publicity - fairness
- Electronics – Information technology
Request information on The Stock Exchange
- Accuracy
- Completeness
- Timeliness
- Accessibility
Laws on information disclosure on the
Vietnam stock market
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Subjects disclose information
Request for information disclosure
Authorized person to disclose information
Means and forms of disclosure
Store information
Handling of violations on information disclosure
Subjects of information
disclosure
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Public companies
The issuers conduct a public offering of bonds
Organizations listing and registering transactions
Securities companies, fund management companies
Securities Investment Company
Stock exchanges and related persons
Means and forms of disclosure
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Obligations to disclose information
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Periodic disclosure
Disclosure of unusual information (within 24 hours and 72
hours)
Disclosure of information upon request (within 24 hours)
Regulations
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