Q&A FOR INVESTORS

1  Order matching principles of stocks and investment fund certificates at HOSE?

HOSE trading system automatically matches the buy and sell orders with priority to price then time.

Price priority means:

-           Buy order with higher bid price should be matched first;

-           Sell order with lower ask price should be matched first.

Time priority: In case the buy/sell orders are at the same price, the order that is sent to the trading system first should be matched first.

                     Please describe the call auction and continuous order matching method?

There are two types of auction trading which are call auction and continuous auction.

Call auction is the method in which buy and sell orders are matched at a specified time and at a single price. The executed price is:

• The price that generates the greatest trading volume of such particular stock;
• If there is more than one of such price, the price that is closest to the last sale price will be chosen.

Call auction is utilized to determine the opening and closing price of securities at pre-open and pre-close periods in a trading day.

Continuous auctionis the method in which buy and sell orders are continuously matchedwhen they are sent to trading system. The executed price is the price of the counterpart orders in the queue.

 2. Trading hours at HOSE?

3. Reference price of stocks and investment fund certificates at HOSE? Cases of reference price adjustment?

Reference price of listed stocks or investment fund certificates is the closing price of the previous trading day.

- In case of new listing: Listing company and consulting company (if have) have to indicate the estimating price as the reference for the first trading day.

Cases in which HoSE adjusts the reference price for stocks, investment fund certificates:

• On the ex-right date of stocks and investment fund certificates, the reference price should be the last price adjusted by dividend or rights.
• In case of merging and splitting, the reference price for the re-trading date should be the last trading price before merging/splitting adjusted by merging/splitting ratio.

Cases in which HoSE will not adjust the reference price for stocks, investment fund certificates:

• If the exercise price of the right offering is greater than the closing price of stocks, investment fund certificates on the day before ex-right date.
• In case of issuing convertible bonds (including issuing for current stock holders), private placement, public offering, ESOP and other issues which not affect to rights of current stock holders.

             4.  Types of orders?

        Limit order:

• Order to buy or sell a security at a specific price or better.
• Effect from the time when the order is sent to trading system to the end of the trading day or canceled.

At the opening order (ATO)

• Order to buy or sell at the opening price.
• Effect during opening phase only.
• Have priority comparing to limit orders.

At the closing order (ATC)

• Order to buy or sell at the closing price.
• Effect during closing phase only.
• Have priority comparing to limit orders.

Market order

• Order to buy or sell a stock at the lowest ask/highest bid available prices.
• Effect during continuous phase only.
• Order will be canceled if there is no opposite side limit order at the time market order is sent to trading system.

          5. Order cancellation and correction during trading session?

- In the opening and closing phase: Investors are not authorized to cancel order that is sent during same call auction phase. Investors are only allowed to cancel the original order or the unexecuted volume of the original order during the previous trading phase.

- In continuous phase: Investors are allowed to cancel unexecuted orders or the remaining volume of the order that has not been executed yet.

        6.  Settlement circle and method for trades at HOSE?

7. Trading procedure for investors at HOSE?

Step 1: Investors should come to the broker firm to create a trading account for buy and sell stocks.

Step 2: Depending on the provided services of the broker firm, investors could make orders via brokers’ site or internet, telephone, fax…

Step 3: If the order is valid, broker firm will send the orders to HOSE trading system.

Step 4: HoSE trading system automatically matches and sends the trading results to the broker firm.

Step 5: Broker firm inform the trading results to the investors.

Step 6: Investors receive stock (in case of buying) or money (in case of selling) at their account at broker firm on the payment date.

8. Taxes and fees for trades at HOSE?

Trading fee (according to Circular 3838/2011/TT-BTC, dated 16^th March 2011):

• For bonds: from 0.02% to 0.1% of trading value (rate depending on broker firms);
• For stocks and investment fund certificates: from 0,15% to 0,5% trading value (rate depending on broker firms).

- Custodial fee (according to Circular 02/2013/TT-BTC, dated 08^th January 2013): 0,4VND per stock/investment fund certificate per month ((rate depending on broker firms).

- Tax on income from trading (according to Circular 111/2013/TT-BTC, dated 15^th August 2013): investors may choose one of two options: 20% of the annual taxable income or 0,1% of the selling value each times.

- Tax on income from cash dividend (according to Circular 111/2013/TT-BTC, dated 15^th August 2013): 5% of the dividend value.

- Other service fee charged by broker firms.

9. Where to find information and contact member brokerage firms of HOSE ?

       http://www.hsx.vn/hsx/Modules/Danhsach/CtyChungkhoan.aspx

10. What is margin trading? How to conduct margin trading?

Margin trading is the buying with leverage from broker firm and use the current holding stocks and receivable stocks which are bought on margin as the collateral.

           How to make margin trading:

- In order to make a margin trading, the investor has to sign a contract to open a margin account at the broker firm where he has his trading account. The contract should indicate some major terms such as initial margin requirement, maintenance margin requirement, leverage rate, interest rate, term of the contract and ways to handle mortgage account.

- Investor can make margin trade on stocks which are allowed to be traded on margin and margin rate stated by the broker firm.

- margin rate:

• Initial margin rate is stated by the broker firm but not less than 50%.
• Minimum maintenance rate is required by the broker firm but not less than 30%.
• When the maintenance rate falls below the minimum maintenance rate, broker firm will make a margin call to require the borrower to deposit additional money or stocks until reach the minimum maintenance rate.

11. How do Investors find out information and contact the listed company?

The websites of the Issuer, SSC, and HOSE have a database of the listed organizations, including: the name of the Issuer, stock code, address, website, phone number / fax, email, name of director / general manager / legal representative, authorized spokesman, company’s profile and all disclosed information.

12. How do Major shareholders, internal share holders disclose information on HCM Stock Exchange?

12.1 Major shareholders disclose information under the provisions of Article 13 of Disclosure Regulation in HCMC Stock Exchange issued together with Decision 7/2013/QĐ-SGDHCM on 24^th July 2013:

-         Major shareholders holding 5% and above of voting stocks of a public company having changes in the volume of owned stocks that exceed thresholds of one percent (1%) of the volume of stocks  (including the cases of giving, offering or being given, inherited, transferring or receiving transfers of the call option of additional stocks) must report as regulated within seven (07) days after such changes are made. The change in the number of shares owned exceeds the threshold of one percent (1%) is identified at the level of 6%, 7%, 8%, 9%...

-         The time of starting/ending the holding of five percent (5%) or above of the volume of stocks or the time of making changes in the volume of the owned stocks that exceed thresholds of one percent (1%) shall be calculated as follow: Transactions performed via the Exchange shall be counted after the end of the transaction payment period; transactions not being performed via the Exchange shall be counted after finishing the securities transfer at VSD; exercising the additionally-issued stocks call option shall be counted after the public company ends the offer.

12.2 Internal shareholders disclose information in accordance with Article 15 of Disclosure Regulation in HCMC Stock Exchange issued together with Decision 7/2013/QĐ-SGDHCM on 24^th July 2013:

-         Internal shareholders planning to perform transactions of stocks, call option of stocks, including the cases of transferring without via transaction system at the Exchange (giving or being given, offering or being offered, inherited, transferring or receiving transfers of stocks, call option of additionally-issued stocks…) must report to the SSC, HOSE and listed company at least three (03) working days before the date of performing the transaction. The time limit for transactions is not more than thirty (30) days as from the date of registering the transaction and the first transaction shall only be performed after twenty four (24) hours as from having the disclosure of information from the HOSE.

-         Within three (03) working days as from the date of finishing the registered transaction, the transaction performer must report to the SSC, HOSE and listed company on the results to perform the stock, call option of stocks.

-         In case the transaction cannot be performed or completely performed the registered volume, within three (03) days after the date of ending the scheduled transaction time limit, internal shareholders must report to the SSC and HOSE on the reasons for not performing the transaction

-         Internal shareholders must perform transactions consistently with the transaction time registered with the SSC, HOSE and shall not be allowed to register for the purchase and sale of stock/call option of stocks simultaneously and shall only be allowed to continue registering for the next transactions once reporting the end of the previous transactions

-         Internal shareholders being major shareholders must fulfill the obligation to make information disclosure similar to that of internal shareholders

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