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Commercial banks permitted to join bond trading
The Ministry of Finance has issued a regulation on Government bonds trading, providing Ha Noi Securities Trading Centre with a legal framework to manage its project of concentrating the market for trading Government bonds.
Under the regulation, brokerages are the main target for this market, carrying out all trading services. Meanwhile, commercial banks are seen as special target.
The banks with only Viet Nam Securities Depository members must have permission from the State Bank to trade in Government bonds, the regulation said.
After obtaining permission, the banks may only do institutional trading.
"The regulation will create a transparent mechanism for market members doing bond trading," an anonymous official from the Ha Noi centre said, noting that securities firms themselves had become accustomed to trading services rather than utilising commercial banks.
That's why brokerages were the major drivers of the trade, he added.
The regulation also stipulated that bond trade - by auctioning or repossessing - must occur in a face-to-face exchange or via a technical system that the Ha Noi centre is using for the securities trading market.
The securities firms must first ink deal with clients to broker government bonds, and will ensure profit by offering an equal or lesser amount to that listed.
Earlier this year, the government allowed the Ha Noi centre to operate the concentrated market for Government bonds trading, under the same technical system as the current securities trading market. Building a legal framework for this market is a crucial part of the project.
Presently, around 500 different kinds of Government bonds change hands at the Ha Noi Centre. Some 275 of these have been moved from the HCM City Stock Exchange since June 2.
Government bonds are regarded as an effective channel of capital mobilisation, besides the equity market.
According to the centre's data, the average trading value of Government bonds was VND325 billion ($19.7 million) per tranche in the first five months of this year.
Recently, the US Treasury pledged to provide Vietnam with technical assistance in managing and issuing Government bonds, as well in establishing a secondary market for Government bonds.
VNN
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