DECISION

ON THE ISSUANCE OF THE REGULATION ON THE OPEN MARKET OPERATION

THE GOVERNOR OF THE STATE BANK

- Pursuant to the Law on the State Bank of Vietnam issued in 1997; the Law on the amendment, supplement of several articles of the Law on the State Bank of Vietnam issued in 2003;
- Pursuant to the Law on Credit Institutions issued in 1997; the Law on the amendment, supplement of several articles of the Law on Credit Institutions issued in 2004;
- Pursuant to the Decree No. 52/2003/ND-CP dated 19/5/2003 of the Government providing for the function, assignment, authority and organizational structure of the State Bank of Vietnam
Upon the proposal of the Director of Credit Department,

DECIDES:

Article 1. To issue in conjunction with this Decision the Regulation on open market operation.

Article 2. This Decision shall be effective after 15 days since its publication in the Official Gazette and replace the Decision No. 85/2000/QD-NHNN14 dated 09/3/2000 on the issuance of the Regulation on the open market operation, the Decision No.1439/2001/QD-NHNN dated 20/11/2001 on the amendment of several articles of the Regulation on the open market operation, the Decision No.877/2002/QD-NHNN dated 19/8/2002 on the amendment of Article 1 of the Decision No.1439/2001/QD-NHNN dated 20/11/2001, the Decision No.1085/2003/QD-NHNN dated 16/9/2003 on the amendment of, supplement to several articles of the Regulation on the open market operation issued in conjunction with the Decision No.85/2000/QD-NHNN14 dated 09/3/2000 and Paragraph 4 Article 1 of the Decision No.1439/2001/QD-NHNN dated 20/11/2001 of the Governor of the State Bank.

Article 3. Director of Administrative Department, Director of Credit Department, Director of the Banking Operation Department, Director of Monetary Policy Department, Heads of units of the State Bank, Chairpersons of the Board of Directors and the General Directors (Directors) of the credit institutions engaging in the open market operations shall be responsible for the implementation of this Decision.

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FOR THE GOVERNOR OF THE STATE BANK OF VIETNAM
DEPUTY GOVERNOR




Nguyen Dong Tien

REGULATION

ON THE OPEN MARKET OPERATION
(Issued in conjunction with the Decision No.01/2007/QD-NHNN dated 05/01/2007 of the Governor of the State Bank)

Chapter I

GENERAL PROVISIONS

Article 1. Governed scope

This Regulation provides for the organization and performance of the open market operation at the State Bank.

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1. Open market operation shall be short-term sale, purchase of valuable papers by the State Bank with credit institutions.

2. Remaining period shall be the period of time from the sale, purchase of valuable papers through the open market operation to the maturity date of those valuable papers.

3. Time purchase means the purchase and receipt of the ownership to the valuable papers from a credit institution by the State Bank, at the same time the credit institution commits to re-purchase and take back the ownership to those valuable papers after a certain period of time.

4. Time sale means the sale and hand over of the ownership to the valuable papers by the State Bank to a credit institution, at the same time, the State Bank commits to re-purchase and take back the ownership to the valuable papers after a certain period of time.

5. Outright purchase shall be the purchase and receipt of ownership to the valuable papers by the State Bank from a credit institution without any commitment of resale of valuable papers enclosed.

6. Outright sale shall be the sale and hand over of ownership to the valuable papers by the State Bank to a credit institution without any commitment of re-purchase of valuable papers enclosed.

7. Auction by volume shall be the auction appraisal on the basis of the volume offered by a credit institution, volume of valuable papers which the State Bank wishes to buy or sell and the interest rate announced by the State Bank.

8. Auction by interest rate shall be the auction appraisal on the basis of interest rate, volume offered by a credit institution and volume of valuable papers which the State Bank wishes to buy or sell.

9. Date of notice shall be the day where the State Bank serves a notice of the purchase or sale of valuable paper.

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11. Difference rate between the value of valuable papers at the valuation time and the payment price (haircut) shall be the difference percentage between the value of valuable papers at the valuation time in the transaction of time sale, purchase and the payment price between the State Bank and credit institutions. Haircut of each type of valuable paper shall be announced by the State Bank from time to time on the basis of considering the risk level and the remaining period of each type of valuable paper.

12. Transaction rate of valuable papers shall be the rate of volume of valuable papers participating in the open market operation which is calculated by the transaction value (payment price between the State Bank and credit institution).

Article 3. The Executive Board of the open market operation

The Executive Board of the open market operation shall be established by the State Bank, headed by a Deputy Governor and consist of members who are representatives of relevant units of the State Bank. The Executive Board of the open market operation is organized and operates in accordance with applicable provisions of the Governor of the State Bank.

Article 4. Members participating in the open market operation

Members participating in the open market operation shall be credit institutions which are established and operate in accordance with the Law on Credit Institutions and fully satisfy conditions provided for in the Article 5 of this Regulation.

Article 5. Recognizing members participating in the open market operation

1. Credit institutions shall be recognized as members participating in the open market operation upon fully satisfying following conditions:

1.1. Having a deposit account at the State Bank (Banking Operation Department or State Bank branches in provinces, cities);

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1.3. Having registered for participating in the open market operation (in line with the Appendix No.01/TTM of this Regulation).

2. Credit institutions fully satisfying conditions as provided for in Paragraph 1 in this Article shall be given a written recognition by the State Bank as a member participating in the open market operation.

Article 6. Competence to sign for participating in the open market operation

1. General Directors (Directors) of credit institutions shall be competent to sign the documents for participating in the open market operation at the State Bank. General Directors (Directors) of credit institutions may directly authorize, or issue a document stipulating the competence to sign the documents for participating in the open market operation of titles in the system of the credit institutions in conformation with provisions of applicable laws and take responsibility for that authorization.

2. Director of the Banking Operation Department shall be competent to sign documents on the transaction of open market operation, or may authorize the Deputy Director of the Operation Department to sign the documents on the transaction of open market operation and take responsibility for that authorization.

Article 7. Supply of information through the information page of open market operation

1. The State Bank shall provide credit institutions which are members participating in the open market operation with:

1.1. Information of the auction of the open market operation;

1.2. General information about the open market operation;

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2. Credit institutions which are members participating in the open market operation shall provide the State Bank with following information:

2.1. The expected liquidity in Vietnamese dong at the credit institutions (Appendix No.02/TTM);

2.2. Demand for the sale, purchase of valuable papers;

2.3. The sale, purchase of valuable papers among credit institutions;

2.4. Other information as provided for by the State Bank.

3. The exchange of information as stipulated in Paragraph 1 and Paragraph 2 in this Article shall be performed through the information page of the open market operation in accordance with the guidance at the Procedures of the open market operation. Information shall be periodically supplied once a week at the minimum.

Article 8. Valuable papers entitled to be traded through the open market operation

1. Valuable papers, which are permitted by the State Bank to be traded through the open market operation, must fully satisfy following conditions:

1.1. To be able to purchase, sell and be in the list of valuable papers entitled to be traded through the open market operation;

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1.3. To be deposited at the State Bank before the registration for sale;

1.4. The maximum remaining period of the outright purchased or outright sold valuable papers is of 90 days.

2. List of valuable papers, the difference rate between the value of valuable papers at the valuation time and the payment price, transaction rate of valuable papers through the open market operation shall be provided for by the Governor of the State Bank from time to time.

Article 9. Mode of selling or purchasing valuable papers

It is stipulated by the Executive Board of the open market operation that each transaction session shall only apply one of following modes:

1. Time purchase transaction.

2. Time sale transaction.

3. Outright purchase transaction.

4. Outright sale transaction.

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Representatives of credit institutions which are members participating in the open market operation shall be granted by the State Bank with a code, key code, key of electronic signature for transaction through computer with the State Bank to perform the secret keeping regime in respect of the transactions of the open market operation.

Article 11. Transaction day and periodical organization of open market operation

1. Transaction day of the open market operation shall be calculated under the working days, excluding weekend days, holidays and New Year holidays.

2. The period and the day to organize the open market transaction shall be stipulated by the Executive Board of the open market operation from time to time.

Chapter II

DETAILED PROVISIONS

Article 12. Mode of auction

The open market operation shall be performed through the mode of auction by volume or auction by interest rate. In each auction session, the State Bank shall only apply either the mode of auction by volume or mode of auction by interest rate.

1. Auction by volume

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1.2. The State Bank shall decide to announce or not to announce the volume of valuable papers which the State Bank wishes to buy or sell before each auction session;

1.3. Credit institutions shall offer the volume of valuable papers they need to purchase or sell at the interest rate announced by the State Bank.

1.4. In case where the total volume offered by credit institutions is equal to or less than the volume which the State Bank wishes to purchase or sell, the winning volume shall be equal to the bidding volume offered by credit institutions and the winning volume of each credit institution shall be the volume offered by that credit institution.

1.5. In case where the total volume offered by credit institutions is in excess of the volume which the State Bank wishes to purchase or sell, the winning volume of valuable papers shall be equal to the volume to be sold or purchased by the State Bank, and the winning volume of each credit institution shall be distributed directly proportional with the volume offered by the credit institutions and shall be rounded to dong unit.

1.6. Where the bidding application of the winning credit institution has registered for many types of valuable papers that need purchasing or selling, the State Bank shall appraise auction according to the order of each type of valuable paper as follows:

1.6.1. Valuable paper of which the difference rate between its value at the valuation time and the payment price is lower;

1.6.2. Valuable paper which is registered for sale or purchase with larger volume;

1.6.3. Remaining period of the valuable paper is shorter.

2. Auction by interest rate

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2.2. Credit institutions shall offer the interest rates (5 levels of interest rate for a bidding application at the maximum) and the volume of valuable papers to be sold, purchased at each interest rate. The offered interest rates shall be at percentage per annum and rounded to two decimal digits;

2.3. The bidding applications of credit institutions shall be arranged under the order of descending offered interest rates for the case where the State Bank purchases valuable papers or in the order of ascending offered interest rates for the case where the State Bank sells valuable papers;

2.4. The winning interest rate shall be the lowest offered interest rate (in case where the State Bank purchases the valuable papers) or the highest offered interest rate (in case where the State Bank sells the valuable papers) within the scope of interest rate conducted by the Executive Board of open market operation, at which the State Bank can have the volume of valuable papers it needs to buy or sell;

2.5. The winning volume of credit institutions shall be the offered volume at the interest rate which is equal to or higher than the winning interest rate (in case where the State Bank purchases the valuable papers) or at the interest rate which is equal to or lower than the winning interest rate (in case where the State Bank sells the valuable papers);

2.6. From time to time, the State Bank shall decide and announce the application of the form of offer appraisal under the unified interest rate or single interest rate:

2.6.1. Unified interest rate: the entire winning volume shall be calculated at a unified winning interest rate;

2.6.2. Single interest rate: each winning volume shall be calculated at a respective level of offered interest rate which is considered as winning interest rate;

2.7. In the event where, at the winning interest rate, the total volume offered by the credit institutions exceeds the volume of valuable papers the State Bank needs to purchase or sell, the winning volume of valuable papers of credit institutions at the winning interest rate shall be distributed directly proportional with the volume offered by credit institutions at the winning interest rate and shall be rounded to dong unit.

2.8. In the event where there are various types of valuable papers to be purchased or sold at the winning interest rate of a credit institution, the State Bank shall appraise the auction by the order of each valuable paper as stipulated in Point 1.6 Paragraph 1 in this Article.

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1. The Executive Board of the open market operation shall be competent to make decision on the main contents in a transaction session of the open market operation, including:

1.1. Volume of valuable papers to be purchased or sold at the payment price between the State Bank and credit institutions;

1.2. Deciding to announce or not to announce the volume of valuable papers that the State Bank needs to purchase or sell before each auction session;

1.3. Types of valuable papers to be purchased, sold;

1.4. Transaction proportion of valuable papers;

1.5. Mode of auction;

1.6. Mode of auction appraisal (for the auction by interest rate);

1.7. Term of time purchase, sale transaction (a period of sale, purchase for valuable papers in each auction session);

1.8. Interest rate of purchase or sale.

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3. The Executive Board of the open market operation shall inform the Banking Operation Department of the contents on the transaction session decided by the Executive Board of the open market operation so that the Operation Department can give a notice to members.

4. The determination of contents as stipulated in Paragraph 1 in this Article shall be based on:

4.1. The target of the monetary policy;

4.2. Result of the liquidity forecast;

4.3. Winning volume, interest rate of the valuable papers purchased or sold by the State Bank through the open market operation at the latest auction session;

4.4. Reference to the current interest rates in the market;

4.5. The performance of the refinancing activity by the State Bank to credit institutions.

Article 14. Notice of the purchase, sale of valuable papers

By the date of notice, the Banking Operation Department of the State Bank shall give a notice to the members, via the computer network, of the purchase or sale of valuable papers with following main contents:

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2. Mode of auction;

3. Mode of appraisal;

4. Mode of purchase, sale;

5. Volume of valuable papers to be purchased or sold at the payment price (except for the case where the Executive Board of the open market operation decides not to announce, in advance, the volume that the State Bank needs to purchase or sell);

6. Types of valuable paper to be purchased or sold;

7. Transaction proportion of valuable paper (in case where the State Bank purchases);

8. Term of valuable paper;

9. Issuing date of valuable paper (in case where the State Bank sells);

10. Payment period of valuable paper’s interests (in the event where the State Bank sells valuable papers with the interest to be paid periodically);

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12. Remaining period of the valuable paper (in case where the State Bank sells, except for the case of issuing bills of the State Bank);

13. Term of time purchase, sale transaction;

14. Interest rate applied by the State Bank in the purchase, sale (in case of auction by volume);

15. Interest rate for the issuance of valuable paper in the primary market (in case where the State Bank sells, except for the case of issuing bills of the State Bank by the mode of auction by interest rate);

16. Mode of valuable paper interest payment (in case where the State Bank sells).

Article 15. Submission of bidding application

1. By the date of auction, credit institution shall, based on the notice of purchase or sale of valuable paper by the State Bank, submit its bidding application to register for the purchase or the sale with the Banking Operation Department of the State Bank via the computer network with the following contents:

1.1. Types of valuable paper to be purchased or sold;

1.2. Term of valuable paper;

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1.4. Offered interest rate of each type of valuable paper to be purchased or sold (in case of auction by interest rate);

1.5. Issuing date of valuable paper (in case where the credit institution sells);

1.6. Period of valuable paper interest payment (in case where the credit institution sells valuable paper, of which the interest is periodically paid);

1.7. Maturity date of valuable paper (in case where the credit institution sells);

1.8. Remaining period of valuable paper (in case where the credit institution sells);

1.9. Mode of purchase or sale;

1.10. Purchase or sale period of valuable paper (number of days);

1.11. Issuing interest rate of valuable paper in the primary market (in case where the credit institution sells);

1.12. Mode of valuable paper interest payment (in case where the credit institution sells).

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3. Total volume of valuable papers registered for purchase or sale by a credit institution in a bidding application shall be 100 million dong at the minimum.

Article 16. Invalid bidding application

1. Bidding application of the credit institution shall be considered as invalid in following cases:

1.1. The bidding application is not in conformity with the stipulated code;

1.2. It is unable to verify the electronic signature of the representative of the credit institution in the bidding application;

1.3. The bidding application offers more interest rate levels than being required;

1.4. The offered interest rate is not rounded to two decimal digits;

1.5. The offered interest rate is not in conformity with the interest rate announced by the State Bank (in case of auction by volume);

1.6. The bidding application states clearly the request for the purchase at the lowest price or the sale at the highest price;

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1.8. Credit institutions selling valuable papers do not have, or do not have sufficient valuable papers deposited at the State Bank as required;

1.9. The remaining period of valuable papers registered for sale is shorter than the period of the time purchase, sale transaction, or exceeds 90 days for the outright purchase, sale transaction.

1.10. Transaction proportion of types of valuable paper is not registered in line with the notice of the State Bank;

1.11. Contents in the bidding application are not filled in accordance with applicable provisions.

2. The State Bank (Banking Operation Department) shall inform the credit institution of the invalid bidding application via the computer network or by fax.

Article 17. Organizing the auction appraisal

1. The Governor of the State Bank shall assign Director of the Banking Operation Department of the State Bank to organize the auction appraisal with the witness of members of the Executive Board of the open market operation.

2. The auction appraisal shall be performed in accordance with the contents announced by the Executive Board of the open market operation, in accordance with this Regulation and the Process of the open market operation.

Article 18. Determination of purchasing price or selling price of valuable paper

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1.1. Value of the valuable paper at the valuation time

1.1.1. For the valuable paper of which interest is paid right upon the issuance:

a. For short-term valuable paper, interest and principal is paid one-off at the maturity:

G =

MG

1 +

L x T

365

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G: Value of valuable paper at the valuation time;

MG: Face value of the valuable paper

T: Remaining period of valuable paper (number of days);

L: Unified interest rate or single interest rate (in case of auction by interest rate) or interest rate announced by the State Bank (in case of auction by volume) at the auction session (%/annum);

b. For long-term valuable paper, interest rate is paid right upon the issuance:

G

=

MG

(1+L)^T/365

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G: Value of valuable paper at the valuation time;

MG: Face value of valuable paper;

T: Remaining period of valuable paper (number of days);

L: Unified interest rate or single interest rate (in case of auction by interest rate) or interest rate announced by the State Bank (in case of auction by volume) at the auction session (%/annum);

1.1.2. For the valuable paper of which the interest, principal is paid one-off at the maturity:

a. For short-term valuable paper, interest and principal is paid one-off at the maturity:

G =

GT

1 +

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365

Of which:

GT

=

MG x

(1+

Ls x n

)

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G: Value of valuable paper at the valuation time;

GT: Value of valuable paper at the maturity, including face value and interest;

MG: Face value

T: Remaining period of valuable paper (number of days);

L: Unified interest rate or single interest rate (in case of auction by interest rate) or the interest rate announced by the State Bank (in case of auction by volume) at the auction session (%/annum);

Ls: Interest rate for the issuance of the valuable paper (%/annum);

n: Term of valuable paper (number of days);

b. For long-term valuable paper, interest and principal is paid one-off at the maturity (interest is not added to the principal):

G =

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1 +

L x T

365

Of which:

GT = MG x [(1 + (Ls x n)]

G: Value of valuable paper at the valuation time;

GT: Value of valuable paper at the maturity, including face value and interest;

MG: Face value;

T: Remaining period of valuable paper (number of days);

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Ls: Interest rate for the issuance of valuable paper (%/annum);

n: Term of valuable paper (years);

c. For long-term valuable paper, principal and interest is paid one-off at the maturity (interest is added to principal):

G

=

GT

(1+L)^T/365

Of which:

GT = MG x (1 + Ls)ⁿ

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GT: Value of valuable paper at the maturity, including face value and interest;

MG: Face value;

T: Remaining period of the valuable paper (number of days);

L: Unified interest rate or single interest rate (in case of auction by interest rate) or the interest rate announced by the State Bank (in case of auction by volume) at the auction session (%/annum);

Ls: Interest rate for the issuance of the valuable paper (%/annum);

n: Term of valuable paper (year);

1.1.3. For long-term valuable paper, of which interest is periodically paid:

G = åi

Ci

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L

) ^{(Ti x k)/365}

k

Of which:

G: Value of valuable paper at the valuation time;

Ci: Amount of interest, principal to be paid at the ith  time;

i: The ith  time of interest, principal payment;

L: Unified interest rate or single interest rate (in case of auction by interest rate) or the interest rate announced by the State Bank (in case of auction by volume) at the auction session;

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Ti: The period from the valuation date to the date of interest, principal payment at the the ith time (number of days);

1.2. Payment price between the State Bank and credit institution:

Gđ = G x (1 – h)

Of which:

Gđ: Payment price;

G: Value of valuable paper at the valuation time;

h: The difference rate between the value of valuable paper at the valuation time and the payment price;

1.3. Repurchase price of valuable paper between the State Bank and credit institution is determined in accordance with following formula:

Gv = Gđ x (

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L x Tb

)

365

Of which:

Gv: Repurchase price;

Gđ: Payment price;

L: Unified interest rate or single interest rate (in case of auction by interest rate) or the interest rate announced by the State Bank (in case of auction by volume) at the auction session;

Tb: Sale period (number of days);

1.4. The purchaser shall be entitled to receive the amount of periodical interest payment of valuable paper (for long-term valuable papers, interest is periodically paid) within the period of time purchase, sale.

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Outright purchase or outright sale price of valuable paper between the State Bank and a credit institution shall be applied as provided for in Point 1.1, Paragraph 1 in this Article.

Article 19. Notice of auction result

1. The State Bank shall inform credit institutions participating in the auction about the auction result via the computer network. The notice of auction result shall include following main contents:

1.1. The auction date;

1.2. The winning volume;

1.3. The failed volume;

1.4. The winning interest rate;

1.5. The payment amount.

2. The notice of auction result shall be the basis for the payment and delivery, receipt of valuable papers in case of outright purchase or outright sale of valuable papers, and at the same time, it shall be the basis for the preparation of repurchase contract in case of time purchase, sale.

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1. Repurchase contract of valuable paper shall be prepared by the seller in accordance with the Appendix No.03/TTM of this Regulation.

2. Based on the notice of auction result of the State Bank, the seller shall prepare the repurchase contract of valuable paper, send to the purchaser via the computer network. The repurchase contract must be signed with electronic signature by the competent person of the seller before being sent to the purchaser.

3. After the receipt of the repurchase contract, the competent person of the purchaser shall put an electronic signature on the contract and return it to the seller via the computer network.

4. The repurchase contract must have sufficient electronic signatures by competent people of the purchaser and seller, and be sealed by the purchaser (for the contract archived by the purchaser) or by the seller (for the contract archived by the seller).

5. The repurchase contract shall be the basis for the payment and delivery, receipt of valuable papers between the State Bank and credit institution in case of time purchase, sale transaction.

Article 21. Payment and handover of ownership to the valuable papers

1. Upon the receipt of the notice of auction result or the repurchase contract signed by and between the parties, the seller must hand over the ownership to the valuable papers to the purchaser, at the same time, the purchaser must make payment for the purchase of valuable papers to the seller. The payment and handover of the ownership to the valuable papers shall be performed in the auction day.

2. In the event where the winning credit institution purchases valuable papers, but does not have enough money for payment, the State Bank (Operation Department) shall deduct from the winning credit institution’s account at the State Bank an amount enough to make full payment correlative with the winning volume. If there is not enough money for payment, the State Bank shall cancel the result of the winning volume, which has not yet been paid.

3. At the termination date of the repurchase contract, the purchaser and seller shall hand over the ownership to valuable papers and make payment in accordance with commitment of the parties in the repurchase contract.

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Article 22. Dealing with violation

1. If credit institutions participating in the auction commit one of following violation acts for 3 consecutive times, the State Bank shall temporarily suspend them from participation in the sale, purchase within a period of 3 months since the notice of the third violation:

1.1. They do not have enough money for payment equivalent to the winning volume announced by the State Bank;

1.2. They do not make payment or do not make full payment of the required amount at the maturity (in case where the credit institution sells and commits to repurchase valuable papers).

2. Credit institutions, which are members participating in the open market operation, fail to supply information as provided for in Article 7 of this Regulation, shall be temporarily suspended from participating in the purchase, sale within a period of 1 month since the receipt of the notice of violation from the State Bank.

Article 23. Report on the performance of the open market operation

After each transaction session, the Banking Operation Department of the State Bank shall make report to the Governor of the State Bank, the Executive Board of the open market operation, the Monetary Policy Department, Credit Department on the auction result of that transaction session.

On the monthly, quarterly, annual basis, the Banking Operation Department shall synthesize, report the performance of the open market operation in the period to the Governor of the State Bank, the Executive Board of the open market operation and related units.

Chapter III

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Article 24. Responsibility of the units of the State Bank

1. Credit Department:

1.1. Coordinating with related units to preside over the implementation of this Regulation;

1.2. Supplying information to the Executive Board of the open market operation about the refinancing activity;

1.3. Submitting the Governor of the State Bank for the provision on the list of valuable papers, the difference rate between the value of the valuable papers at the valuation time and the payment price, the transaction ratio of types of valuable paper through the open market operation from time to time.

2. Monetary Policy Department:

2.1. Managing, following up and supplying the result of the liquidity forecast of credit institutions to the Executive Board of open market operation as provided for in the Regulation on the liquidity management;

2.2. Suggesting the volume of valuable papers to be purchased, sold, mode of the purchase or sale, term of the purchase or sale and the expected interest rates in the purchase, sale of valuable papers to the Executive Board of open market operation;

2.3. Coordinating with the Credit Department, the Banking Operation Department to advice the Governor of the State Bank to provide for the list of valuable papers, difference rate between the value of valuable papers at the valuation time and the payment price, transaction ratio of valuable papers through the open market operation from time to time.

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3.1. Considering, recognizing credit institutions to be members participating in the open market operation;

3.2. Performing the transactions of purchase, sale of valuable papers with credit institutions;

3.3. Issuing the Regulation on the open market operation;

3.4. Coordinating with the Credit Department and the Monetary Policy Department to advice the Governor of the State Bank to provide for the list of valuable papers, difference rate between the value of valuable papers at the valuation time and the payment price, transaction ratio of valuable papers through the open market operation from time to time.

3.5. Giving advice to the Executive Board of open market operation in the determination of the structure, period of the purchase, sale of valuable papers;

3.6. Making payment and accounting in accordance with applicable provisions;

3.7. Collecting, following up and reporting the information about the open market operations to the Executive Board of the open market operation, Credit Department and the Monetary Policy Department;

3.8. Managing and supplying information about the open market operation to credit institutions through the information page of open market operation.

4. Finance – Accounting Department: Guiding the process of accounting relating to the open market operation.

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5.1. Installing the software program and ensuring the infrastructure of the communication network for the stable, safe and secret operation of the open market operation;

5.2. Stipulating the code, key code and key of electronic signature for the people participating in the open market operation of the State Bank and members participating in the open market operation.

FOR THE GOVERNOR OF THE STATE BANK OF VIETNAM
DEPUTY GOVERNOR




Nguyen Dong Tien

APPENDIX NO. 01/TTM

NAME OF CREDIT INSTITUTION
------------

SOCIALIST REPUBLIC OF VIETNAM
Independence- Freedom - Happiness
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Date………….

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:........................................................

SWIFT CODE:.......................................................................................................................

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VND deposit account:.............................................. at: .......................................................

Hereby would like to register for participating in the open market operation at the State Bank and undertake 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 key of electronic signatures to following persons for participating in the open market operation:

Position

The first signature

The second signature

Competent persons:
- The first person:
- The second person:
Controllers:
- The first controller:
- The second controller:
Transactors (Drawer):
- The first transactor:
- The second transactor:

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GENERAL DIRECTOR (DIRECTOR)
(Sign, seal)




(Full name)

APPENDIX NO. 02/TTM

NAME OF CREDIT INSTITUTION: …………………………………..

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Norm

Increase (+), decrease (-) of current day (t)

Increase (+), decrease (-) of the following day (t+1)

+/- of the day t+2

+/- of the day t+3

+/- of the day t+4

+/- of the  day t+5

+/- of following 1 month

...

...

...

+/- of following 6 months

I. Changes in capital source in VND

At

A (t+1)

...

...

...

- Change in treasury’s deposit

...

...

...

- Change in deposit of the people and economic organizations

...

...

...

- Change in capital source from the issuance of valuable papers

...

...

...

- Change in capital financed under the entrustment

...

...

...

- Change in loans from the SBV

...

...

...

- Change in loans from domestic CIs

...

...

...

- Sales of foreign currency for collection of VND

...

...

...

- Others

...

...

...

...

...

...

II. Changes in the use of capital in VND

Bt

B (t+1)

...

...

...

- Change in cash balance

...

...

...

- Change in deposit at the SBV

...

...

...

- Change in loans to individual and economic organizations

...

...

...

- Change in loans to CIs

...

...

...

- Change in the investments in valuable papers

...

...

...

- Items using VND for the purchase of foreign currency

...

...

...

- Others

...

...

...

...

...

...

III. Difference between the capital source and use of capital

Ct

C(t+1)=A(t+1)-B(t+1)

...

...

...

...

...

...

IV. Deficit (-), Excess (+) of the capital source in VND

Dt

D(t+1)=It + C(t+1)

...

...

...

...

...

...

Expected balanced capital

Et

E(t+1)=G(t+1)-H(t+1)

...

...

...

- Borrowing from (+)/Lending to (-) CIs

Gt

G(t+1)

...

...

...

- Borrowing from (+)/Deposit (-) at the SBV

Ht

H(t+1)

...

...

...

...

...

...

V. State of liquidity at the end of the day

It

I(t+1)=D(t+1)+E(t+1)

...

...

...

Note:    - Only changes in the capital source and use of capital in VND are expected

- The calculation mode is based on the expectation of the arising and mature amounts in VND (if any)

APPENDIX NO. 03/TTM
(Prepared by the seller)

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness

--------------------------

REPURCHASE CONTRACT OF VALUABLE PAPERS
Date……..

Based on the Decision No. ../2000/QD-NHNN dated …. of the Governor of the State Bank on the issuance of the Regulation on the open market operation and the Notice of the auction result dated ............. by the State Bank.

...

...

...

Address:...............................................................................................................................

Tel:............................................................................. Fax:..................................................

Account No:..........................................................................................................................

Purchaser: ................................................................... (hereinafter referred to as the Party B)

Address:...............................................................................................................................

Tel:............................................................................. Fax:..................................................

Account No:..........................................................................................................................

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

1. Party A agrees to sell valuable papers to party B at the price of ………(amount stated under the payment price) for a period of ……… (days number). Party A shall be responsible for the delivery of valuable papers to Party B and Party B shall be responsible for making full payment for the valuable paper purchased to Party A on ………… (date of auction).

...

...

...

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

REPRESENTATIVE OF THE PURCHASER

REPRESENTATIVE OF THE SELLER

FORM ATTACHED TO THE APPENDIX NO. 03/TTM

Code of valuable papers

Volume of valuable paper calculated at the payment price (dong)

Repurchase price

...

...

...

Winning interest rate (unified or single) or interest rate announced by the SBV (%/annum)

Issuing interest rate of the valuable papers in the primary market

Issuing date of the valuable papers

Period of interest payment (for valuable papers of which interest is periodically paid)

Maturity date of the valuable papers

Date of delivery, receipt and payment at the expiry of the repurchase contract

(1)

(2)

(3)

...

...

...

(5)

(6)

(7)

(8)

(9)

(10)

...

...

...

...

...

...

REPRESENTATIVE OF THE PURCHASER

REPRESENTATIVE OF THE SELLER