New payment mode for G-bonds launched (Illustrative image. Source: VNA)According to Duong Van Thanh, General Director ofthe Vietnam Securities Depository Centre (VSDC), payment via the commercialbank mode, as done previously, is only suitable for a small- or medium-sizedG-bond market. It is not preferable now when the market develops to a new highlevel with fast rising transaction value.
In the first half of this year alone, the listing value of theG-bond market reached 979 trillion VND (42.93 billion USD), equal to 18 percentof Vietnam’s GDP. Average transaction value in a session in H1 was 7.7 trillionVND, 21 times higher than in 2009, while the payment value in the market alsorose 586 percent against 2010 to 1.2 quadrillion VND.
With the rising value in the G-bond market, payment fortransactions of G-bonds should be made through the central bank to ensuresafety and ease in the payment of G-bond transactions, Thanh said.
According to the Ministry of Finance, this is a breakthrough inthe modernisation of the bond trading system in accordance with internationalpractices. It also helps accelerate the process of international integration ofthe market, creating a prerequisite for the development of cross-border bondpayment services.
Under the new payment model, payment for transactions of G-bondslisted on stock exchanges is carried out using the mode of payment according oneach transaction.
Based on the data provided by the stock exchanges, the VSDCidentifies the payment obligation of each relevant party and sends the paymentinformation to the SBV.
The transfer of G-bonds is implemented on VSDC’s system on thebasis of transferring G-bonds between depository accounts of organisations andensuring the principle that the selling side has sufficient bonds to betransferred on the payment date and the purchasing side has enough money to payfor the G-bond transactions.
The cash payment for G-bond transactions between organisations,which perform direct payments via the SBV, is conducted through the inter-bankonline payment system.
The State Securities Commission of Vietnam decides the paymentdate for G-bond transactions after reaching a consensus with the SBV. The VSDCis responsible for guiding payment steps and procedures for G-bondtransactions.-VNA
VNA
