Securities borrowing and lending (SBL) activities at Vietnam Securities Depository (VSD) is implemented for the purpose of:
- Supporting the settlement of securities transactions in case of temporary shortage of securities for settlement by VSD’s depository members (DMs) as a result of error corrections;
- 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;
- Support DMs cum clearing members to borrow GBs for the settlement and transfer of underlying assets upon executing GBs futures if clearing members do not have right type and sufficiency of assets for transfer;
- Support trading members who are GBs bidders to borrow GBs for sale.
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.157/QD-VSD dated 21st August 2017 by the Chief Executive Officer of VSD.
Guideline on Securities Borrowing and Lending Activities in Legal Documents on VSD’s website.