DECISION

ON THE AMENDMENT, SUPPLEMENT OF SEVERAL ARTICLES OF THE REGULATION ON OPEN MARKET OPERATION ISSUED IN CONJUNCTION WITH THE DECISION No. 85/2000/QD-NHNN14 DATED 09 MARCH, 2000 AND PARAGRAPH 4, ARTICLE 1 OF THE DECISION No. 1439/2001/QD-NHNN DATED 20 NOVEMBER, 2001 OF THE GOVERNOR OF THE STATE BANK OF VIETNAM

THE GOVERNOR OF THE STATE BANK

- Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated 12 December, 1997; the Law No. 10/2003/QH11 dated 17 June, 2003 on the amendment, supplement of several Articles of the Law on the State Bank of Vietnam and the Law on the Credit Institutions No. 02/1997/QH10 dated 12 December, 1997;
- Pursuant to the Decree No. 86/2002/ND-CP dated 05 November, 2002 of the Government providing for the function, assignment, authority and organization structure of Ministries and ministerial-level agencies;
- Upon the proposal of the Director of the Credit Department,

DECIDES:

Article 1. To amend, supplement several Articles of the Regulation on open market operation issued in conjunction with the Decision No. 85/2000/QD-NHNN14 dated 09 March, 2000 of the Governor of the State Bank of Vietnam as follows:

1. Article 1 shall be amended as follows:

“Article 1. Governing scope and subjects of application

This Regulation provides for the organization of open market operations at the State Bank. The State Bank shall perform open market operations through the short-term purchase and sale of Treasury Bills, State Bank Bills and other types of valuable papers (hereinafter referred to as valuable papers) with credit institutions in the monetary market for carrying out the national monetary policy."

2. Article 2, paragraph 1 and paragraph 4 shall be amended as follows:

“1. Remaining period means the time calculated from the purchasing, selling date of the valuable paper through the open market operation till the maturity date of this valuable paper."

"4. Auction by volume shall be the determination of the winning volume of credit institutions participating in the open market operation on the basis of the volume put into auction by credit institutions, volume of valuable papers to be purchased or sold and the interest rate announced by the State Bank.

3. Article 8 shall be amended as follows:

“Article 8. Valuable papers to be transacted through open market operations:

1. Treasury Bills;

2. State Bank bills;

3. Treasury Bonds;

4. Investment Bonds, the payment of which is made by the central Budget;

5. Government Bonds

6. Other types of valuable paper provided for specific period of time by the Governor of the State Bank.”

4. Article 12 paragraph 3 shall be amended as follows:

"3. Being registered with the State Bank in accordance with the provision of the State Bank on the registration of valuable paper;”

5. Article 13 paragraph 1 point a shall be amended as follows:

"a. The State Bank shall give notice to credit institutions of the rate of auction interest. The Executive Committee of the open market operation shall decide to notify or not in advance of the volume of valuable paper, which need to be purchased or sold by the State Bank prior to each auction session".

6. Article 14 Paragraph 2 point c shall be amended as follows:

"c. Winning volume, winning interest rate of valuable papers that the State Bank has purchased or sold through the open market operation at the latest auction session;"

7. Article 15 paragraph 7 shall be amended as follows:

"7. Payment date of each type of valuable paper (in case the State Bank sells);"

8. Article 18 paragraph 1: to cancel the passage "From 10 a.m to 11.30 a.m of the auction day, the State Bank shall carry out the offer appraisal."

9. Article 20 paragraph 1: to cancel the passage "at 14 p.m the auction day at the latest"

10. Article 21 paragraph 4, paragraph 5 and 6 shall be amended as follows:

a. Paragraph 4: to repeal the paragraph 4

b. Paragraph 5: to repeal the passage "at 15.30 p.m on the auction day at the latest "

c. Paragraph 6: to repeal the passage "prior to 16.30 p.m of the same day"

11. Article 25 paragraph 2, point b shall be amended as follows:

"b. To recommend the Executive Committee of Open Market Operation of the volume of valuable paper which needs to be purchased, sold, of the required time limit of purchase and sale and expected interest rate levels applicable to the purchase, sale of valuable paper".

12. Appendixes No. 01, 02, 03, 04, 05, 06 and 07 shall be amended and attached with this Decision.

Article 2. To amend paragraph 4, Article 1 of the Decision No. 1439/2001/QD-NHNN dated 20 November, 2001 on the amendment of several Articles in the Regulation on the open market operations issued in conjunction with the Decision No. 85/2000/QD-NHNN14 dated 9 March, 2003 of the Governor of the State Bank as follows:

"4. Article 15 paragraph 6 shall be amended as follows:

6. Volume needs to be purchased, sold in term of value as at the maturity of valuable paper (except for the case where the Executive Committee of the open market operation decides not to give notice in advance of the volume, which the State Bank of Vietnam needs to purchase or sell)";

Article 3. This Decision shall be effective after 15 days from the date of publication in the Official Gazette.

Article 4. The Head of the Administration Department, the Director of Credit Institutions, the Director of the Banking Operation Department, the Director of the Monetary Policy Department, Heads of units of the State Bank, Managers of the State Bank branches in provinces and cities under the central Government's management, Chairpersons of the Board of Directors, General Director (Directors) of credit institutions participating in the open market operation shall be responsible for the implementation of this Decision.

Appendix No. 01/TTM

REGISTRATION FOR PARTICIPATING IN THE OPEN MARKET OPERATION

To: The State Bank of Vietnam
(The Banking Operation Department)

Name of the Credit Institution:

Address:

Telephone: Fax:

Telex:

VND deposit account: at

hereby registers to participate in the open market operation at the State Bank and undertakes to fully comply with provisions of the Regulation on open market operation.

We would like to introduce the signatures and apply for the grant of signature codes to following persons for participating in the open market operations:

Appendix No. 02/TTM

NOTICE OF PURCHASE OF VALUABLE PAPER

Date:……………………….

To:……………………………………………

Based on the Notice No.: ..............dated ……… by the Executive Committee of the open market operation, the Banking Operation Department of the State Bank gives hereby the Notice of Purchase auction of valuable papers with following main contents:

- Auction date:

- Mode of auction:

- Form of offer appraisal:

- Payment date:

THE DIRECTOR OF THE BANKING OPERATION DEPARTMENT

Appendix No. 03/TTM

NOTICE OF SALE OF VALUABLE PAPER

Date:……………………………

To:……………………………………………………..

Based on the Notice No.: ..............dated …………. by the Executive Committee of the open market operation, the Banking Operation Department of the State Bank gives hereby the Notice of sale auction of valuable papers with following main contents:

- Auction date:

- Mode of auction:

- Form of offer appraisal:

- Payment date:

THE DIRECTOR OF THE BANKING OPERATION DEPARTMENT

Appendix No. 04/TTM

REGISTRATION FOR THE PURCHASE OF VALUABLE PAPER

Date:………………………

To: Banking Operation Department

Based on the Notice of Sale of valuable paper No. ………..dated…………..of the Banking Operation Department, …………….(name of the credit institution) makes hereby the Registration for the purchase of short-term valuable paper as follows:

Appendix No. 05/TTM

REGISTRATION FOR THE SALE OF VALUABLE PAPER

Date…………………………………

To: Banking Operation Department

Based on the Notice of Purchase of valuable paper No………….dated…………..of the Banking Operation Department, …………..(name of the credit institution) makes hereby the Registration for the sale of valuable paper as follows:

Appendix 06/TTM

(prepared by the selling party)

THE SALE AND REPURCHASE AGREEMENT FOR VALUABLE PAPER
Date:……………………………..

Based on the Decision No. 85/2000/QD-NHNN14 dated 9 March 2000 of the Governor of the State Bank on the issuance of the Regulation on the Open market operation, the Decision No. ................ dated............... on the amendment, supplement of several Articles in the Regulation on the open market operation and the notice of the auction winning results dated ............. by the Banking Operation Department.

The selling party: (hereinafter referred to as party A)

Address:

Tel: Fax:

Account No.

The purchasing party (hereinafter referred to as party B)

Address:

Tel: Fax:

Account No.

The parties hereto agree on the contents of the Agreement as follows (Form attached):

1. Party A agrees to sell valuable to party B at the price of ……….(amount) for a period of…… (day number). Party A shall be responsible for the delivery of valuable paper to Party B and Party B shall be responsible to make full payment of the valuable paper to Party A on ……… (date of payment).

2. Party A commits to repurchase above-mentioned valuable paper at the repurchase price of …….. (amount) at the expiration of the Agreement. Party B shall be responsible to return above-mentioned valuable paper to Party A and Party A shall be responsible to make full payment of the repurchase of the valuable paper at……….. (the expiry date of the Agreement)

3. This Agreement shall be effective from ………….. The two parties commit to comply with the agreed contents of this Agreement and provisions of the Regulation on open market operation issued in conjunction with the Decision No........... dated ................. of the Governor of the State Bank.

FORM ATTACHED TO THE APPENDIX NO. 06/TTM

Note: Seal on the Fax copy

Appendix No. 07/TTM

REPORT ON THE PERFORMANCE OF OPEN MARKET OPERATION

Date.....................

DIRECTOR OF THE BANKING OPERATION DEPARTMENT

[1] Interest rate announced by the State Bank in the event of auction by volume

1 Interest rate announced by the State Bank in the event of auction by volume

[1] In case of auction for interest rate, credit institutions shall be permitted to state 5 levels of auction participating interest rates for each type of valuable paper in one application of auction participation

[2] In case of auction by volume

1 In case of auction for interest rate, credit institutions shall be permitted to state 5 levels of auction participating interest rates for each type of valuable paper in one application of auction participation

2 In case of auction by volume

1 Clearly state whether term purchase or term sale

2 Clearly state whether to be outright purchase or outright sale