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THE
STATE BANK
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SOCIALIST
REPUBLIC OF VIET NAM
Independence Freedom Happiness
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No.
101/1999/QD-NHNN13
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Hanoi,
March 26, 1999
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DECISION
ON THE ISSUANCE OF THE REGULATION ON THE ORGANIZATION AND
OPERATION OF THE FOREIGN CURRENCY INTER-BANK MARKET
GOVERNOR OF THE STATE BANK OF VIETNAM
- Pursuant to the Law on the
State Bank of Vietnam No. 01/1997/QH10 dated 12 December, 1997 and the Law on
credit institutions No. 02/1997/QH10 dated 12 December, 1997.
- Pursuant to the Decree No. 15 CP dated 2 March, 1993 of the Government on the
assignment, authority and responsibility for State management of ministries and
ministerial-level agencies.
- Pursuant to the Decree No. 63/1998/ND-CP dated 17 August, 1998 of the
Government on the Foreign Exchange Control.
- Upon proposal of the Director of the Banking Operations Department of the
State Bank of Vietnam.
DECIDES
Article 1.
To issue
in conjunction with this Decision the "Regulation on the organisation and
operation of the foreign currency inter-bank market".
Article 2.
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Article 3.
The Head
of the Governor office, the Director of the Banking Operations Department,
Directors and Heads of units in the State Bank, General Managers of the State
Bank branches in the provinces and cities and Chairmen and Directors general
(Directors) of credit institutions being members of the foreign currency
inter-bank market shall be responsible for the implementation of this Decision.
FOR
THE GOVERNOR OF THE STATE BANK
DEPUTY GOVERNOR
Nguyen Van Giau
REGULATION
ON THE ORGANIZATION AND OPERATION OF THE FOREIGN CURRENCY
INTER-BANK MARKET
(issued in conjunction of the Decision No.101 /1998/QD-NH13 dated March 26
1998 by the Governor of the State Bank of Vietnam)
I. GENERAL
PROVISION
Article 1.
Purpose
of the organisation and operation of the foreign currency interbank market
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2. The State Bank shall
participate in the Market as the last buyer and seller and take any intervening
measure when necessary for the implementation of the national monetary policy.
Article 2.
Conditions for participating in the Market
The conditions for credit
institutions to participate in the Market shall be as follows:
1. They have a foreign exchange
licence;
2. They have a satisfactory
track record of foreign exchange business and have not violated any current
provision on foreign exchange control;
3. They are in possession of a
system of machines and equipment which are on-line for smooth and safe
transactions with other members of the Market and with the State Bank.
4. They have a number of
well-educated staff who are knowledgeable on foreign currency transaction.
Article 3.
Procedures on participation in the Market
1. Credit institutions shall
file an application for the participation in the Market (in accordance with the
form attached as Schedule 1) to the State Bank (the Banking Operations
Department).
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Article 4.
Rights and responsibilities of the member
1. Members participating in the
Market shall have the right to buy and sell foreign currency in the Market in
accordance with the existing provisions of the State Bank.
2. Members shall be responsible
to strictly comply with the Regulation on organisation and operation of the
Market, Rules on transaction and other provisions during the transaction in the
Market.
3. Members shall be responsible
to submit to the State Bank (the Banking Operations Department):
a. The official document
assigning responsible persons to manage the activities of" the Dealing
Room" of the credit institutions;
b. The internal rule on foreign
exchange dealing of the credit institution;
c. The list of dealers and the
transaction limit for each dealer;
d. The facilities code or number
to be used in the transaction (telex, telephone, and dealing system).
e. Internal guidelines relating
to the participation of credit institutions in the Market;
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II. DETAILED
PROVISIONS
Article 5.
Currency used in the transaction
1. Transaction in the Market
shall be made between foreign currencies and VND or between foreign currencies
permitted for dealing in the Market by the State Bank from time to time.
2. Considering the practical
situation, Directors general ( Directors) of member credit institutions shall
determine [the amount of] foreign currencies for their business among
those permitted by the State Bank.
Article 6.
Transaction time
The Market shall operate on all business
days except for during public holiday at the following times:
- In the morning from 8.00 am to
11.00 am
- In the afternoon from 1.30 am
to 3.30 pm
Article 7.
Amount of foreign currency in a transaction
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Article 8.
Type of transaction
Credit institutions being Market
members shall be permitted to engage in spot, forward and swap transactions and
other transactions in accordance with provisions of the State Bank.
Article 9.
Transaction exchange rate in the Market
1. The exchange rate of
transaction between the US$ and VND in the Market between members shall be
agreed upon on the basis of demand for and supply of foreign currencies in
accordance with the respective provision for exchange rates and within the
transaction bands provided for by the Governor of the State Bank.
2. For the transaction between
other convertible foreign currencies (excluding US$ ) and VND, members shall use
the cross rates on the basis of the VND/US$ rate ( as provided for in paragraph
1 Article 9) and the rate of other foreign currencies to US$ in the
international market on the transaction date.
3. The transaction exchange rate
between foreign currencies shall be determined by the Directors General of
member credit institutions with reference to the exchange rates in the
international market on the transaction date.
Article 10.
Means of transaction
The transaction between Market
members shall take place through the VND trading system (VDS) of the Telerate
Corporation, Dealing 2000 of Reuters, by telex or SWIFT network.
Article 11.
Transaction principle
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2. The trading by the means of
transaction shall be considered as a commitment and shall not be altered.
3. Upon commitment through the
means of transaction, the parties to a transaction shall confirm with each
other prior to 4 pm of the same day through one of the following means: Telex,
Fax or Swift network (in the form of the attached Schedule 2). In case of a
transaction with the State Bank, the above-mentioned confirmation shall be sent
to the Banking Operations Department of the State Bank. In case of Fax
confirmation, the original shall be sent by post on the same day.
Article 12.
Sequence of transaction
1. Market members shall offer at
the same time the buying and selling rates together with the foreign currency
amount and shall be bound by the offered rates in the buying and selling
transactions.
2. Upon the agreement on the
buying and selling transaction, the dealing parties shall provide each other
with the confirmation of the transaction (in the form of the attached Schedule
2).
3. The settlement between the
parties shall be made by the transfer through the accounts with the State Bank,
credit institutions or with offshore banks.
Article 13.
Terms of payment
1. In the case of spot foreign
currency transactions (SPOT), the settlement date shall be 2 working days after
the date of transaction (holidays and Sundays are not counted). In case the
settlement is made through accounts placed with offshore banks, Saturdays are
not counted as working days.
2. In the case of forward
foreign currency transactions (FORWARD), the settlement date shall be agreed
upon by both parties and stated in the contract. If the value date of these
transactions coincides with a holiday, the settlement date shall be the next
transaction day.
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a. For foreign currency payment,
the penalty shall be 150% of the one week LIBOR in the respective payment
currency for the days and the amount of delayed payment.
b. For VND payment, the penalty
shall be 150% of the rediscount rates of the State Bank of Vietnam for the days
and the amount of delayed payment.
III.
ORGANISATION, SUPERVISION AND OPERATION
Article 14.
Responsibility of the Director of the Banking Operations Department
The Director of the Banking
Operations Department shall be the daily operator and be responsible to the
Governor for the following:
1. Organisation of the
implementation of the Regulation and the Rule on Market transactions;
2. Determination of the buying and
selling rates of the State Bank in transactions with members on the basis of
the exchange rate announced by the State Bank;
3. Determination of the foreign
currency amount to buy and sell within the limit authorised by the Governor;
4. Report to the Governor on the
performance of the Market activities;
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IV.
IMPLEMENTING PROVISION
Article 15.
Credit
institutions which have been recognised by the State Bank as member of the
foreign currency interbank market prior to the effective date of this
Regulation shall not be obliged to complete procedures of application for
Market membership. Their activities shall be in conformity with the provision
of this Regulation.
Article 16.
Members
participating in the foreign currency inter-bank market shall be committed to
the provisions of this Regulation. In case of violation, depending on the
seriousness, participating members shall be subject to fine or to revocation of
the membership certificate.
APPENDIX 1
SOCIALIST
REPUBLIC OF VIET NAM
Independence Freedom Happiness
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Date..
APPLICATION
FOR MEMBERSHIP OF THE FOREIGN CURRENCY INTERBANK MARKET
To:
The State Bank of Vietnam (The Banking Operations Department)
Name :
Address :
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Telex :
Telefax :
Foreign currency account Open
with Bank
Account number:
Vietnamese Dong account Open
with Bank
Account number:
Foreign exchange license
No.:............................dated:
Permit for opening offshore
account No.............dated:
Applying for membership of the
foreign currency interbank market and commit:
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- We hereinafter introduce:
* Market dealers:
1- Name in full position
Signature:
2- Name in full position
Signature:
* Competent persons authorised
to sign the confirmation of transactions:
1- Name in full position:
Signature
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We hereby request the State Bank
of Vietnam to permit our participation in the foreign currency interbank
market.
General Manager (of the Bank)
(sign and seal)
APPENDIX 2
FORM OF CONFIRMATION OF FOREIGN CURRENCY
TRANSACTION
Bank sending the confirmation of
transactions:
Bank receiving the confirmation
of transactions:
Code: for the amount:
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We shall transfer the payment of
this amount to the account No................................
of your Bank at the Bank
..................... and request your good Bank to transfer the amount of
..................
to our account
No..................................
at the
Bank............................................
on.......................... at
the latest
Name
of the sending Bank:......................
(signature in case of fax confirmation)