Press Release on issuance of Circular No.01/2015/TT-NHNN
The State Bank of Vietnam (SBV) issued Circular No. 01/2015/TT-NHNN on January 6 to stipulate trading and provision of interest rate derivative products of commercial banks and foreign bank branches. This Circular replaces Decision No.62/2006/QD-NHNN dated December 29, 2006 on regulations on execution of interest rate swap transactions.
This Circular is applicable to commercial banks and foreign bank branches that trade and provideinterest rate derivative products; customers using interest rate derivative products including credit institutions and foreign bank branches established and operating in line with Law on Credit Institutions and legal entities (excluding credit institutions and foreign bank branches) established and operating in accordance with Vietnamese laws; organizations and individuals related to trading and provision of interest rate derivative products of commercial banks and foreign bank branches.
This Circular includes 4 chapters and 22 articles as follows:
– Chapter I: General provisions including 4 Articles (Articles 1 to 4) stipulate the scope of governing, the implementers, interpretation, principles of trading and providing interest rate derivative products.
– Chapter II: Provisions on trading and providing interest rate derivative products including 5 sections and 14 articles (Articles 5 to 18) as follows:
+ Section I: Provisions on trading and providing interest rate derivative products in the domestic market including 4 articles (Articles 5 to 8) stipulate the purpose of trading and providing interest rate derivative products in the domestic market; the scope of trading and providing interest rate derivative products in the domestic market (article 6); conditions for customers using interest rate derivative products provided by commercial banks and foreign bank branches in the domestic market (article 7); and counterpart transactions (article 8).
+ Section II: Provisions on trading and providing interest rate derivative products in the international market including 3 articles (Articles 9 to 11) stipulate the purpose of trading and providing interest rate derivative products in the international market (Article 9); the scope of trading and providinginterest rate derivative products in the international market (article 10); conditions for choosing financial organizations and commercial banks, foreign bank branches trading and providing interest rate derivative products (article 11).
+ Section III: Provisions on limit of trading and providing interest rate derivative products including 1 article (Article 12) stipulate the limit of trading and providing interest rate derivative products.
+ Section IV: Provisions on interest rate, interest rate derivative contract and dossiers of trading and providing interest rate derivative products including 3 articles (Articles 13 to 15) stipulateinterest rate applicable to interest rate derivative contract, interest rate derivative contract and dossiers of trading and providing interest rate derivative products.
+ Section V: Provisions on risk provisioning, accounting and reporting including 3 articles (Articles 16 to 18) stipulate the risk provisioning, accounting and reporting.
– Chapter III: responsibilities of commercial bank, foreign bank branches trading and providinginterest rate derivative products, and customers using interest rate derivative products including 2 articles (Articles 19 to 20) stipulate the responsibilities of commercial bank, foreign bank branchestrading and providing interest rate derivative products; and responsibilities of customers using interest rate derivative products.
– Chapter IV: Implementation including 2 articles (Articles 21 to 22) stipulates the effective date and the implementation.
This Circular will take effect from March 2, 2015.
Source: SBV