Securities borrowing and lending (SBL) activities at Vietnam Securities Depository (VSD) support settlement of securities transactions in case of temporary shortage of securities for settlement by VSD’s depository members as a result of error corrections as well as supporting ETF authorized participants (APs) in acquiring sufficient securities for capital contribution and execution of creation/redemption transactions with ETF in accordance with current regulations. VSD acts as an intermediary and operator of the SBL system to ensure participants’s compliance with regulations.
SBL activities are executed based on the principle that borrowers and lenders sign SBL contracts before communicating information to the SBL system as regards transactions applied direct negotiation method, or after establishing SBL agreement as regards transactions applied negotiation via VSD’s system method.
SBL contracts are managed on VSD’s system from the time of contract establishment to the time of contract termination to ensure rights and benefits of the parties to the contracts.
Processes and procedures are specified in the Guideline on Securities Borrowing and Lending Activities at Vietnam Securities Depository issued with Decision no. 111/QD-VSD dated 19 August 2014 by the Chief Executive Officer of VSD.
Guideline on Securities Borrowing and Lending Activities can be found here.