Margin rates not to above 150pct of basic interest rate

The State Securities Commission of Vietnam (SSC) held a meeting with securities companies on August 4 to finalise the draft regulations on margin trading which have been considered to be more feasible and much closer to reality.

Specifically, the abolition of the discrimination between domestic and foreign investors in conditions of margin trading has been founded in the new draft.

Most importantly, the margin rate that was capped at 150pct of the basic interest rate is now determined by securities companies and investors. Such adjustment has been well received since the margin rate cannot exceed 13.5pct p.a whereas the ceiling mobilisation rate is staying at 14pct p.a and the lending rate has soared to 22.5pct p.a equivalent to 250pct of the basic rate.

Additionally, it is suggested to replace the six-month term of margin trading agreements with negotiable terms. Also, monthly or quarterly reports on margin transactions would be more time-saving than daily ones.

Further recommendations from securities companies are urged in the two and three days’ time for the final draft revision.

A SEC representative revealed the official regulations on margin trading would be effective in mid August.

 

Category: Legal