On September 18 2024, the Minister of Finance issued Circular 68/2024/TT-BTC, amending regulations related to securities trading, including trading on the stock exchange system, clearing and settlement of securities transactions, the operation of securities companies, and information disclosure in the securities market.
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An important new point in the Circular is the addition of the regulation that foreign investors are no longer required to deposit 100% when purchasing stocks. According to Clause 2, Article 1 of Circular 68/2024/TT-BTC, Article 9a is added to Article 9 of Circular 120/2020/TT-BTC, stipulating that foreign institutional investors are not required to have sufficient funds when placing stock purchase orders.
Specifically: The securities company will assess the payment risk of the foreign investor to determine the necessary amount of funds when placing the order, based on the agreement between both parties. In the event that the investor does not make full payment, the payment obligation will shift to the securities company where the order was placed, except in special cases provided for in Clause 5, Article 9 of Circular 120/2020/TT-BTC.
The securities company has the right to transfer stock ownership off-exchange or sell through negotiation on the exchange system for stocks transferred to their proprietary account, but must comply with foreign investor ownership limits as per legal regulations.
Any costs, profits, or losses arising from the transaction will be handled based on the agreement between the securities company and the investor. If there is an error in confirming the investor's deposit balance, the custodian bank will be responsible for the insufficient payment and any related costs incurred.
Therefore, foreign investors purchasing stocks no longer need to deposit 100% of the transaction amount as before.
Circular 68/2024/TT-BTC will officially take effect from November 2, 2024.
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