CIRCULAR

AMENDMENTS TO CIRCULAR NO. 40/2011/TT-NHNN DATED DECEMBER 15, 2011 OF THE GOVERNOR OF THE STATE BANK OF VIETNAM ON THE ISSUANCE OF LICENSES AND THE ORGANIZATION, OPERATION OF COMMERCIAL BANKS, FOREIGN BANK BRANCHES, REPRESENTATIVE OFFICES OF FOREIGN CREDIT INSTITUTIONS, OTHER FOREIGN ORGANIZATIONS HAVING BANKING ACTIVITIES IN VIETNAM

Pursuant to the Law on State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law on amendments to the Law on Credit Institutions dated November 20, 2017;

Pursuant to Decree No. 16/2017/ND-CP dated February 17, 2017 of the Government on function, tasks, powers and organizational structures of the State Bank of Vietnam;

At the request of Chief Inspector, supervisor of the Bank;

The Governor of the State Bank of Vietnam promulgates a Circular on amendments to Circular No. 40/2011/TT-NHNN dated December 15, 2011 of the Governor of the State Bank of Vietnam on the issuance of Licenses and the organization, operation of commercial banks, foreign bank branches (FBB), representative offices of foreign credit institutions, other foreign organizations having banking activities in Vietnam.

Article 1. Amendments to Circular No. 40/2011/TT-NHNN

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“b) Have experience in international operation and are ranked by international credit rating organizations as follows:

(i) Outlook rating is stable or better;

(ii) Credit rating is AA upwards (according to Standard & Poor’s or Fitch Ratings) or from Aa3 upwards (according to Moody’s). In case an international credit rating organization has other credit rating scales other than Standard & Poor’s or Moody’s or Fitch Ratings, the international credit rating organization must convert the credit rating according to that of Standard & Poor’s or Moody’s or Fitch Ratings.”

2. Amendments to Clause 3 Article 18a (amended by Clause 3 Article 1 of Circular No. 17/2017/TT-NHNN dated November 20, 2017 of the Governor of the State Bank of Vietnam on amendments to Circular No.40/2011/TT-NHNN):

“3. A commercial bank or FBB may perform the activities specified in Clause 26 Article 4 of the form in Appendix 01a and Clause 24 Article 4 of the form in Appendix 01b after obtaining the approval from the State Bank; procedures for application for addition of such activities to the License shall be carried out in accordance with specific regulations of the State Bank and other relevant law provisions.”

3. Addition of Article 19a after Article 19:

“Article 19a. Operation in accordance with the law on Securities

1. A commercial bank or a FBB may perform corporate bond issuance agency activities in the domestic market and collateral asset management agency activities in corporate bond issuance activities in the domestic market when the License granted by the State Bank to the commercial bank or FBB covers agency activities related to banking and asset management. In case a commercial bank or a FBB performing corporate bond issuance agency activities in the domestic market make an agreement with an investor on purchase of the corporate bonds, it must sign a contract with the investor (which specifies terms and conditions on the purchase of bonds) and comply with the regulations of the State Bank on purchase and sale of corporate bonds by credit organizations and FBBs, restriction and safety ratios in banking activities when implementing such agreement.

2. A commercial bank and FBB may purchase and/or sell Government bonds in the securities market when it is permitted by the License granted by the State Bank.

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a) Regarding provision of securities clearing and settlement services according to the regulations prescribed in Point a Clause 4 Article 56 of the Law on Securities: The commercial bank or FBB must be granted the certificate of eligibility to provide securities clearing and settlement services by the State Securities Committee and approved to be a clearing member by the Vietnam Securities Depository and Balancing Corporation;

b) Regarding supervisory bank activities according to the law on securities: The commercial bank or FBB must be granted the certificate of securities depository registration by the State Securities Committee;

c) Regarding securities depository activities: The commercial bank or FBB must be granted the certificate of securities depository registration by the State Securities Committee and approved to be a clearing member by the Vietnam Securities Depository and Balancing Corporation.

4. Addition of clearing and settlement services to the License of a commercial bank or FBB according to the regulations prescribed in Point a Clause 4 Article 56 of the Law on Securities shall be made via a written approval issued by the State Bank in accordance with the regulations in Point d Clause 1 Article 152 of Decree No. 155/2020/ND-CP dated December 31, 2020 of the Government elaborating implementation of the Law on Securities.

5. For activities relative to securities, securities market, the commercial bank or FBB shall implement the regulations of the law on securities, securities market and relevant law."

4. Addition of Point m to Clause 8 of Article 36 (amended by Clause 6 Article 1 of Circular No. 25/2019/TT-NHNN dated December 02, 2019 of the Governor of the State Bank of Vietnam on amendments to Circular No.40/2011/TT-NHNN):

“Send comment forms and documents to relevant units of the State Bank regarding addition of operations related to interest-rate derivatives, provision of commodity derivatives and securities depository to the License.”

5. Amendments to Clause 11 of Article 36 (amended by Point c Clause 4 Article 1 of Circular No. 17/2017/TT-NHNN):

“11. Within 10 days after receiving the written report of the Bank Inspection and Supervision Agency, the State Bank branches on applications for addition of operation to the License for interest-rate derivatives, provision of commodity derivatives and securities depository, relevant units of the State Bank must have written response which specify whether they agree or disagree on such applications submitted by the commercial bank or FBB.”

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Article 3. Implementation

Chiefs of Offices, Chief Inspectors, banking custodians, heads of units affiliated to the State Bank, commercial banks, foreign bank’s branches, representative offices of foreign credit organizations and other foreign organizations having banking operations are responsible for implementation of this Circular.

Article 4. Implementation Clauses

This Circular comes into force from March 01, 2022./.

PP. GOVERNOR
DEPUTY GOVERNOR




Doan Thai Son