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Official Gazette

Tuesday, September 26, 2017

A derivative securities market in the offering

Updated: 09:56’ - 21/06/2014

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              Stock trading at Maybank KimEng Securities Company (Ho Chi Minh City)__Photo: Hoang Hai/VNA

In order to complete the structure of the current securities market, support the sustainable development of bond and stock markets, strengthen the role of the securities market in the financial market and the entire economy, and build the securities market into a safe and long-term capital mobilization channel to serve the economic growth, the Prime Minister on March 11 issued Decision No. 366/QD-TTg to approve the scheme to build and develop a derivative securities market in Vietnam.

Under the scheme, the derivative securities market will be a unit of the stock exchanges. Derivatives are instruments issued based on existing products such as shares and bonds with various purposes such as lowering risks and generating profits.

To begin with, derivatives permitted for transactions in the stock exchanges are future contracts based on securities market indexes or government bonds. Future contracts based on stocks, option contracts based on stock market indexes, government bonds and stocks will be launched once the securities market gains stable development.

In a long term, derivative financial instruments such as future contracts and option contracts and currency and commodity future contracts will be transacted on the stock exchanges.

The derivative transaction system will be run independently from the stock and bond transaction systems at the stock exchanges. Its market members will include transaction members and clearing payment members.

The scheme also stresses that the State Securities Commission will supervise all operations of the derivative securities market while the stock exchanges will control members’ operations and transactions.

Meanwhile, the Vietnam Securities Depository will monitor operations of clearing payment members.

As scheduled, the derivative securities market will launch all types of commodities from simple to complicated, securing the management capability and controlling market risks.-

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