Circular 19/2009/TT-NHNN guiding foreign exchange management for government bond transactions in foreign currencies issued under Decision 211/QD-TTg issued by the State Bank of Vietnam

CIRCULAR

GUIDING FOREIGN EXCHANGE CONTROL APPLICABLE TO TRADING GOVERNMENT BONDS DENOMINATED IN FOREIGN CURRENCY ISSUED PURSUANT TO DECISION 211-QD-TTg OF THE PRIME MINISTER OF THE GOVERNMENT DATED 13 FEBRUARY 2009

Pursuant to the 1997 Law on State Bank of Viet Nam and the 2003 Law on Amendments to the Law on State Bank of Viet Nam;
Pursuant to Decree 96-2008-ND-CP of the Government dated 26 August 2008 on functions, duties, powers and organizational structure of the State Bank of Viet Nam;
Pursuant to the Ordinance on Foreign Exchange dated 13 December 2005;
Pursuant to Decree 160-2006-ND-CP of the Government dated 28 December 2006 providing regulations for implementation of the Ordinance on Foreign Exchange Control ["Decree 160"];
Pursuant to Decision 211-QD-TTg of the Prime Minister of the Government dated 13 February 2009 on issuance of Government bonds denominated in foreign currency on the domestic capital market ["Decision211"];

The State Bank of Viet Nam hereby provides the following guidelines on foreign exchange control applicable to trading Government bonds denominated in foreign currency issued pursuant to Decision 211:

Article 1 Governing scope and applicable entities

1. This Circular regulates foreign exchange control applicable to trading Government bonds denominated in foreign currency issued pursuant to Decision 2111.

2. This Circular applies to resident organizations and resident individuals legally operating in Viet Nam and participating in trading FC Bonds.

Article 2 Foreign currency sources permitted to be used to trade bonds

1. A resident individual or resident organization shall only be permitted to use foreign currency in its foreign currency savings account opened at a credit institution licensed to conduct foreign exchange activities, in order to trade FC Bonds.

2. Organizations shall not be permitted to use State budget capital or other sources of Government assistance capital in order to purchase FC Bonds.

Article 3 Opening and using a foreign currency savings account in order to trade FC Bonds

1. Viet Nam Securities Depository2 and depository members shall open a foreign currency savings account at a designated payment bank in accordance with current regulations on foreign exchange control, in order to settle FC Bonds [transactions].

2. A resident individual or resident organization shall only be permitted to use its foreign currency savings account opened at a credit institution licensed to conduct foreign exchange activities as stipulated in article 30 of Decree 160. A foreign currency savings account shall be used in order to implement the following revenue and disbursement transactions relating to trading FC Bonds:

(a) Revenue into the account:

To collect foreign currency proceeds from the sale of FC Bonds; to receive payment being repayment of principal and interest when the bonds mature; and to collect proceeds being receipt in one's capacity as trustee engaged in bidding for bonds, and other items of revenue relating to trading FC Bonds.

(b) Disbursements from the account:

To disburse foreign currency in order to purchase FC Bonds; to disburse payments out as

trustee, including fees for trading bonds and other disbursements relating to trading FC Bonds.

Article 4

Resident organizations and resident individuals who are bondholders shall be permitted to pledge their FC

Bonds in order to borrow capital at credit institutions licensed to conduct foreign exchange activities, in accordance with current regulations.

Article 5 Organization of implementation

1. This Circular shall be of full force and effect on 1 November 2009.

2. The Chief of Office, the Chief Inspector of the Banking Inspection and Supervisory body, heads of entities under the State Bank, Directors of State Bank branches of provinces and cities under central authority, and chairmen of boards of management and general directors (directors) of credit institutions licensed to conduct foreign exchange activities shall be responsible for implementation of this Circular.

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