GUIDE ON SECURITIES TRADING

Transcription

1 I. ACCOUNT OPENING GUIDE ON SECURITIES TRADING Step 1: Application for securities trading code with Vietnam securities depository through Korean Investment Securities Vietnam (KIS Vietnam) Individual client Documents required: 01 application for registration or securities trading code signed by the individual client; 01 information sheet about foreign individual client (notarized either by the authorized agency in the home country, then verified by the Vietnam Consulate in the home country; or by the Consulate in Vietnam, then verified by the Vietnam Department of Foreign Affairs in Hochiminh city). Institutional client Documents required: 01 application for registration of securities trading code signed by the institutional client (notarized by the notary public or appropriate authorities in the home country or by an authorized body of the institution itself); 01 Notarized copy of Incorporation certificate in the home country; 01 the mandate of the institution s Board of Direction appointing the delegated person as the representative of and contact point for the institution. Investment fund: Additional documents are required: 01 copy of chatter of investment fund 01 copy of chatter of management fund (if any) Financial statements of the latest two years. Step 2: Application for opening Vietnam dong account and securities depository account with KIS Vietnam Individual clients opening cash account in their selected banks and securities depository account with KIS Vietnam Documents required: 02 account opening contract with KIS Vietnam 02 photocopy of customers passport Institutional clients opening cash accounts and securities depository account Please contact the custodian bank for relevant procedure and documents required. Step 3: Transferring foreign currency from overseas to Vietnam Individual clients opening cash accounts with VCB securities depository account with KIS VIETNAM Document required: The instruction of remittance Client s account overseas USD Clients account USD with VCB VND Clients account VND with VCB Clients may, at their discretion, open their own USD, VND account.

2 Please ensure that every transfer money must strictly follow the applicable regulations anti-money laundry. Clients shall be responsible for the legality of the source of money transferred to Vietnam for the purpose of securities trading. Institutional Clients opening cash accounts and securities depository account with VCB Please contact the custodian for relevant procedure and document required. Step 4: Placing orders to KIS VIETNAM Methods: Trading orders can be placed directly at KIS VIETNAM trading floor or indirectly via or Internet (sub-contract shall be required for indirect order placing) Documents required: Order tickets (sale, purchase and cancellation). Clients must have sufficient funds (securities) in their VND account (securities depository account) before placing a purchase (sale) order. Clients opening cash accounts and securities depository account with VCB and trading accounts with KIS VIETNAM: Clients fund and securities will be kept under the custodian banks while securities trading orders are placed with KIS VIETNAM, hence there would be no credit risk involved in the process. KIS VIETNAM will check clients cash and/or SECURITIES balance with the custodian bank before executing orders to ensure clients ability to settle the transactions. II. DEPOSIT FOR TRADING: 1. Cash deposit a. Content: When buying securities, client must deposit 100% of the purchare money plus the incurred fees. Deposit money = (number of ordered securities x price of ordered securities ) + brokerage fees b. Procedure: The client can choose within these methods to deposit money to KIS VIETNAM: - Cash: The client can deposit money at the bank's Head Office in KIS VIETNAM Maritime Bank Tower, Level 3, Nguyen Cong Tru St., District 1, Ho Chi Minh City or other branches of the banks. - Money transfer: The client must prepare the money order to tranfer money to KIS VIETNAM s account which is opened at a bank designated settlement. 2. Deposit selling securities When selling securities, your securities depository account opened at KIS VIETNAM must have enough 100% of the securities you want to sell. III. PLACING ORDERS TO KIS VIETNAM: HSX: 1. Trading time and placing orders: a) Trading time: The number of trading days in the Stock Exchange is five days from Monday to Friday (except public holidays). Each trading day consists of: For securities and investment fund certificates: 08:30 AM 08:45 AM: Periodic Order Matching Determining Opening Price

3 08:45 AM 10:30 AM: Continuous Order Matching 10:30 AM 10:45 AM: Periodic Order Matching Determining Closing Price 08:30 AM 11:00 AM: Put through (Negotiated) transactions For bonds: 08:30 AM 11:00 AM: Put Through (Negotiated) transactions HNX: UPCOM: From 08:30 AM to 11:00 AM - From 08:30 AM to 11:30 AM - From 13:30 PM to 15:00 PM b) Placing order: Trading orders can be placed directly at KIS VIETNAM trading floor or indirectly via phone (press 1) or website: Trading orders are only valid during the trading day. 2. Trading methods Automatic Order matching (AOM) trading AOM trading performs the order matching process according to price-then-time, without human intervention. After traders of brokerage house key in buy or sell order into the securities trading center s terminals, the system queues the orders and arranges them according to a price-then-time priority. Orders are first grouped according to price, with the best price taking precedence. There are two matching methods: Call auction: buy and sell orders are inputted in the trading system and queued for matching at a specified time at a single price that generates the greatest trading volumes for that particular stock. This matching method is use to determine the opening price a closing price of a particular stock. Continuous auction: the trading system continuously matches the first buy and sells orders in the queue, and at the same time, confirms each executed transaction via the member s terminals. Market price (MP) trading (not applied yet) Principle 1: Market Order (MP) orders is to buy securities at the lowest selling price or sell securities at the highest purchasing price in the market. Principle 2: In comparison with the principle 1, if the MP orders haven t been fully matched yet, they will be considered respectively to buy or sell securities at the higher selling price or the lower buying price available in the market. Priinciple 3: In comparison with the principle 2, if the MP orders can not be matched any longer, they will automatically converted into the Limit Orders to buy securities at 1 tick higher than the prior price or to sell securities at 1 tick lower than the prior price. If the prior price is the ceiling to the buying MP orders or the floor to the selling MP orders, the MP orders will be automatically converted into the Limit Orders to buy securities at the ceiling price and to sell securities at the floor price. Put through (PT) trading: Members negotiate on details and input in the trading system for approval. The trading system allows brokers to advertise buy or sell interests. Members may then deal direct with each other and prices may be adjusted during the negotiation. However, the executed price must follow the price range for that particular stock during the day. 3. Orders transaction: HSX: In the periodic order matching session: Cancellation of trading orders placed in time for periodic order matching is not allowed.

4 Quote trading order is a limit order (LO) which is entered into the trading system of the Stock Exchange and comes into effect until the end of the trading session or expires when customers request to cancel order. ATO or ATC order is entered into the trading system in time for Periodic order matching to determine the opening price/ the closing price and will be automatically cancelled at the end of sessions if they are not executed or partially matched. HNX: Hanoi Stock Exchange is performing the continuous order matching method for limit order type. UPCOM: Hanoi Stock Exchange is performing in two modes: continuous order matching and common agreement. 3. Guide to write order form: Clients fill personal information on order form: - Account holder s name/authorizer s name. - Account number. - ID number/passport number. - Stock code. - Volume. - Price. - Clients sign and full name (clients trade over the phone to provide phone code). HSX: a) Volume: For stocks: Trading unit of automatic order matching: 1 lot = 10 share/investment fund certificates. No trading unit applied for put through transactions; however, the minimum volume of put through transactions is 20,000 securities/ investment fund certificates or more HNX: Trading unit for order matching transaction: 100 stocks Trading unit for put-through transaction for fund certificates: 5,000 certificates or more UPCOM: 100 securities or bonds. For bonds: HSX: Put Through (Negotiated) transactions. HNX: HSX: Volume from 10 million to fewer than 100 million: Price transaction Volume over 100 million: Put through (Negotiated) transaction b) Pricing level: - Currency allowed for trading: VND - Between the floor price and celling price. - For stock:

5 HNX & UPCOM: Price tick (VND): For bonds: Pricing level (VND) Price tick (VND) HSX: Price tick (VND): 100 (Exp: VND, VND ) HNX & UPCOM: No regulation - No price tick applied for put through transaction 4. Trading band: For securities and investment fund certificates: price range is +/- 5% of the reference price (HSX), +/- 7% of the reference price (HNX), +/- 10% of the reference price (UPCOM). The price range for a particular stock is determined as follows: Maximum price (ceiling price) = reference price + (reference price x trading band) Minimum price (floor price) = reference price (reference price x trading band) HSX: For bonds: no price range applied. 5. Preference price: Reference price of a particular stock/investment fund certificate is its last trading day s closing price. Newly listed securities/investment fund certificates: are accepted to trade in both periodic and continuous matching sessions, issuing organization and the consulting organization must provide an expected trading price which shall act as the reference price in the first trading day. The trading band applied in the first trading day is +/- 20% from the expected trading price, the matching price of the first trading day shall be the reference price for the next trading day, normal trading band (+/- 5%) shall be applied from the next trading day. In case the securities be suspended from trading on 30 days after being traded back to the reference price shall be determined similar provisions for newly listed securities/investment fund certificates. On the ex-dividend date or ex-right date, the reference price shall be determined by adjusting last trading day s closing price by the value or dividend or right accordingly. HNX & UPCOM: Reference price of a stock is the average of this stock s matched prices in continuous order matching method session of the nearest transaction date. No price variation range applied for the new listed stocks which are traded on the first day. These prices are calculated as the principle above on next days. In case the securities were suspended from trading on 30 days (HNX) & 25 days (UPCOM) after being traded back to the reference price shall be determined similar provisions for newly listed securities/investment fund certificates. On the ex-dividend date or ex-right date, the reference price shall be determined by adjusting last trading day s closing price by the value or dividend or right accordingly. HSX: 6. Settlement method: < securities: T+3 > securities: T+1 For bonds : T+1 HNX: Multilateral clearing (T+3) for both stocks and bonds Put Through (Negotiated) transactions:

6 100,000 securities and bonds: T+3 100,000 securities and bonds: T+1 or T+2 or T+3 UPCOM: T+3 7. Inform trading results: KIS VIETNAM will send to you SMS confirmed trading results as soon as possible after receiving results from the trading center and at 3 p.m. of the trading day. Notes: A- Matching principles: o Price priority: - Buy orders at higher price shall take precedence. - Sell orders at lower price shall take precedence. o Time priority: For buy or sell orders at the same price, those entered into the trading system earlier shall take precedence in execution. B- Regulations on payment: Three days after the order was made (on T + 3) cash and stock will be transferred to the account of customers. If you need money from selling stock prior to the date of payment as required, you can contact the brokers to make the cash in advance. C- Transactions of buying or selling of same type of securities in the a transaction day (Day-trading applied from 01 August 2011) Investors are entitled to make the opposite transaction (buy, sell) of the same securities in the transaction day as meeting the following conditions: Using an account opened in a securities company to make both buying and selling orders; Only place the buy order (or sell order) of a type of security if the sell order (or buy order) of such type of security which was previously made in the system was executed (entirely matched or entirely cancelled). If the previous sell order (or buy order) was partly matched, then the remaining must be cancelled before customer continues to place another buy order (or sell order). Transaction orders of Customer must ensure deposit rate in cash or securities in the transaction in accordance with the Law The investors are not permitted to place at the same time selling and buying orders of the same type of security in each matching on the same account or different accounts that are under the name of investors, except for these transactions are the force-sale transactions on the Customer account which are conducted according to the contracts between Customer and securities companies. Authorized person is not entitled to perform the transactions with himself/herself or with third person who authorizes to such authorized person. D- Cancellation of orders: HSX: Clients can ask the broker to cancel if the order or remaining part of partially - matched order has not been imp, including those which have not been implemented in the previous periodic or continuous order matching session. Cancellation of trading orders placed in time for periodic order matching is not allowed. HNX: Cancellation of orders: Clients can request brokers to cancel if all of or the rest of the orders have not been executed. Amendment of orders: Clients are entitled to change price (not the volume) for unmatched Buy/Sell orders or remaining part of partially-filled orders which have not been executed. UPCOM: Clients can request brokers to cancel or amend of unmatched Buy/Sell orders or remaining part of partially-filled orders which have not been executed. FOREIGN OWNERSHIP LIMIT OF LISTED STOCK IN THE VIETNAM STOCK MARKET (DECISION NO. 238/2005/QD-TTG OF THE PRIME MINISTER) For Securities Foreign clients are entitled to hold up to maximum 49% stake of a particular listed company. For securities of financial institutions, this foreign ownership limit is 30% with a cap of 10% stake per one foreign client. For Bonds

7 There is no foreign ownership limit to all types of bonds. Investment Fund Certificates Foreign clients are entitled to hold up to maximum 9% of total listed investment fun certificates of a securities investment fund listed at the Securities Trading Center.