CIRCULAR

ON AMENDMENTS TO CIRCULAR NO. 107/2020/TT-BTC DATED DECEMBER 21, 2020 OF THE MINISTER OF FINANCE ON GUIDELINES FOR TERM REPURCHASE OF GOVERNMENT BONDS USING TEMPORARILY IDLE STATE FUNDS OF STATE TREASURY

Pursuant to Law on State Budget dated June 25, 2015;

Pursuant to the Law on Securities dated November 26, 2019;

Pursuant to Decree No. 24/2016/ND-CP dated April 5, 2016 of the Government on management of state funding;

Pursuant to Decree No. 95/2018/ND-CP dated June 30, 2018 of the Government on issuance, registration, depositing, listing and trading of Government debt instrument on securities market;

Pursuant to Decree No. 87/2017/ND-CP dated July 26, 2017 of the Government on functions, tasks, powers, and organizational structure of the Ministry of Finance;

At request of General Director of State Treasury;

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Article 1. Amendments to Circular No. 107/2020/TT-BTC dated December 21, 2020 of the Minister of Finance on guidelines for term repurchase of government bonds using temporarily idle state funds of State Treasury as follows:

1. Clause 5 Article 3 is amended as follows:

 “5. remaining term of government bonds: refers to remaining time (by day) from the payment date of the first trade (T day + 2) to maturity date of government bonds.”.

2. Clause 1 Article 5 is amended as follows:

“1. The government bonds are issued by the State Treasury and posted publicly at the Stock Exchange.".

3. Article 9 is amended as follows:

a) Point a clause 4 is amended as follows:

“a) Information on government bonds under term repurchase: code of government bonds, remaining term of government bonds, haircuts, discount interest rate (%/year).”.

b) Point c clause 4 is amended as follows:

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c) Clause 5 is amended as follows:

 “5. Framework contracts and contract annexes shall be prepared in paper documents (bearing all seals, signatures of competent representatives of parties to the contracts) or electronic documents (digitally signed by the authorized person and digitally signed by agencies and organizations as prescribed by law), in accordance with regulations on electronic transactions in professional practices of the State Treasury.”.

4. Certain clauses of Article 10 is amended as follows:

a) Clause 2 is amended as follows:

“2. From 9 a.m. to 10 a.m. of T day, financial institutions shall submit price quotes as per trading regulations of the Stock Exchange while ensuring that total price quote for all repurchase terms of government bonds do not exceed remaining outstanding debt quota of the financial institutions (price quotes submitted after 10:30 a.m. are invalid), to be specific:

a) For each repurchase term of government bonds, each financial institution may send up to 5 price quotes while ensuring that total price quotes do not exceed total price quotes requested by the State Treasury for the repurchase term.

b) Each price quote must include interest for term repurchase (rounded to the nearest tenths); one or multiple codes of government bonds are used as security in term repurchase of government bonds; price quotes are calculated based on value of government bonds corresponding to each code of government bonds and other relevant details.

c) Offered quantity calculated based on value of government bonds of each price quote must not be lower than the minimum quantity as per notice of the State Treasury from time to time.”.

b) Clause 3 is amended as follows:

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5. Certain clauses of Article 12 is amended as follows:

a) Clause 1 is amended as follows:

“1. Value of the first trade of the State Treasury corresponding to each price quotes is determined using following formula:

V₁= ƩV_i

In which, Vi refers to value of the first trade corresponding to each code of government bonds of selected price quotes and is calculated as follows:

V_i= GG x (1 - H) x KL

In which:

V_i: Value of the first trade corresponding to code of government bonds i of the selected price quotes (rounded down to VND).

GG: Price including nominal interest of a government bond of code of government bonds i, calculated according to Article 13 hereof.

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KL: Quantity of government bonds corresponding to code of government bonds i (= quantity for term repurchase of the code of governments calculated based on value/bond value).”.

b) Clause 3 is amended as follows:

“3. Value of the second trade of the State Treasury corresponding to each price quotes is determined using following formula:

V₂ = V₁ + L

In which, V₂ is value of the second trade.”.

6. Article 13 is amended as follows:

“Article 13. Price including nominal interest, included nominal interest, and posted price of government bonds

 1. Price including nominal interest:

a) Identify price of a government bond without periodic settlement of interest

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In which:

GG = Price of a government bond (rounded down to VND).

MG = Face value of government bonds.

a = Number of days from the date on which payment for the first trade is made and the subsequent date of interest settlement.

E = Number of days during the presumed period of interest settlement where government bonds are eligible for term repurchase.

t = Number of times the interest of government bonds is settled from the payment date of the first trade to the maturity date of government bonds.

L_t = Interest rate of government bonds (%/year), refers to interest until maturity (YTM) publicized by the Stock Exchange on the date on which term repurchase of government bonds is performed for code of government bonds used in trade on website of the Stock Exchange (section of the curve yield).

a.2) For government bond without periodic settlement of interest with the remaining term of less than 1 year:

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In which:

GG = Price of a government bond (rounded down to VND).

MG = Face value of government bonds.

a = Number of days from the payment date of the first trade to the maturity date of government bonds.

E = Number of days during the presumed period of interest settlement where government bonds are eligible for term repurchase.

Lt = Interest rate of government bonds (%/year), refers to interest until maturity (YTM) publicized by the Stock Exchange on the date on which term repurchase of government bonds is performed for code of government bonds used in trade on website of the Stock Exchange (section of the curve yield).

b) Identify price of a government bond with fixed nominal interest, periodic settlement of interest, and equal interest payment periods:

b.1) For government bond with the remaining term of at least 1 year:

- In case payment date of the first trade occurs before or on the final registration date of the subsequent interest payment period, price of a government bond is determined as follows:

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- In case payment date of the first trade occurs after the final registration date of the subsequent interest payment period, price of a government bond is determined as follows:

In which:

GG = Price of a government bond (rounded down to VND).

MG = Face value of government bonds.

Lc = Nominal interest of government bonds (%/year).

k = Number of periodic interest payments in a year.

d = Number of days from the date on which payment for the first trade is made and the subsequent date of interest settlement.

E = Number of days during the period of interest settlement where government bonds are eligible for term repurchase.

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Lt = Interest rate of government bonds (%/year), refers to interest until maturity (YTM) publicized by the Stock Exchange on the date on which term repurchase of government bonds is performed for code of government bonds used in trade on website of the Stock Exchange (section of the curve yield).

b.2) For government bond with the remaining term of less than 1 year:

- For governments whose interest is settled once every 12 months, price of a government bond is determined as follows:

- For government bonds whose interest is settled once every 6 months:

+ In case payment date of the first trade occurs before or on the final registration date of the subsequent interest payment period, price of a government bond is determined as follows:

+ In case payment date of the first trade occurs after the final registration date of the subsequent interest payment period, price of a government bond is determined as follows:

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GG: Price of a government bond (rounded down to VND).

MG: Face value of government bonds.

L_c: Nominal interest of government bonds (%/year).

d: Number of days from the date on which payment for the first trade is made and the subsequent date of interest settlement.

E: Number of days during the period of interest settlement where government bonds are eligible for term repurchase.

t: Number of times the interest of government bonds is settled from the payment date of the first trade and the maturity date of government bonds.

Lt: Interest rate of government bonds (%/year), refers to interest until maturity (YTM) publicized by the Stock Exchange on the date on which term repurchase of government bonds is performed for code of government bonds used in trade on website of the Stock Exchange (section of the curve yield).

b) Identify price of a government bond with fixed nominal interest, periodic settlement of interest, and the first interest payment period shorter or longer than the subsequent interest payment periods:

c.1) For government bond with the remaining term of at least 1 year:

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+ In case the actual number of days from the payment date of the first trade to the interest payment date of the first interest payment period that is shorter than one (01) normal interest payment period, the price of one (01) government bond is determined as follows:

+ In case the actual number of days from the payment date of the first trade to the interest payment date of the first interest payment period that is longer than or equal to one (01) normal interest payment period, the price of one (01) government bond is determined as follows:

In which:

GG = Price of a government bond (rounded down to VND).

GL1 = The interest payment amount of one (01) government bond for the first interest payment period according to the terms of the government bond upon initial issuance.

MG = Face value of government bonds.

Lt = Interest rate of government bonds (%/year), refers to interest until maturity (YTM) publicized by the Stock Exchange on the date on which term repurchase of government bonds is performed for code of government bonds used in trade on website of the Stock Exchange (section of the curve yield).

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k = Number of periodic interest payments in a year.

a1 = The actual number of days between the payment date of the first trade and the first government bond interest payment date according to the terms of the government bond upon initial issuance.

a2 = Actual number of days from the payment date of the first trade to the assumed normal interest payment date.

E = Actual number of days in the normal interest payment period under the terms of government bonds when first issued.

t = Number of times the interest of government bonds is settled from the payment date of the first trade and the maturity date of government bonds.

- In case the payment date of the first trade is after the last registration date to receive interest on government bonds of the first interest payment period, the price of one (01) government bond is determined according to the Item b.1 point b of this clause.

c.2) For government bonds with the remaining term of one (01) year or less, the price of one (01) government bond is determined according to Item b.2 point b of this Clause.

d) Ministry of Finance shall publicize methods of determining price including nominal interest in case nominal interest of government bonds is floating interest rate when it occurs.

2. Included nominal interest:

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a.1) For a government bond with fixed nominal interest, periodic settlement of interest, and equal interest payment periods:

In which:

Cc: Nominal interest on the date of trade eligible for right transfer.

MG: Face value of government bonds.

Rc = Lc/k, in which Lc: nominal interest of bonds (%/year); k: number of times the interest is settled in the year.

Dn: Number of days from the date on which payment for the first trade is made until the nearest subsequent date on which nominal interest is paid or from the date on which payment for the first trade is made until the maturity date of bonds.

E: Actual number of days of the current government bond interest payment period.

a.2) Identify price of a government bond with fixed nominal interest, periodic settlement of interest, and the first interest payment period shorter than the subsequent interest payment periods:

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In which:

Cc: Nominal interest on the date of trade eligible for right transfer.

MG: Face value of government bonds.

Rc = Lc/k, in which Lc: nominal interest of bonds (%/year); k: number of times the interest is settled in the year.

D1: Number of days from the date of initial issuance of government bonds to the nearest next nominal interest payment date.

Dn: Number of days from the date on which payment for the first trade is made until the nearest subsequent date on which nominal interest is paid or from the date on which payment for the first trade is made until the maturity date of bonds.

E2: Actual number of days from the normal government bond interest payment period under the assumption that the 1st transaction settlement date takes place.

- Determine the accumulated nominal interest on the date of the subsequent interest payment periods according to the formula at Item a.1 of this point.

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- In case the 1st transaction settlement date occurs before or coincides with the assumed nominal interest payment date of the first interest payment period, the accumulated nominal interest of the first interest payment period is determined as follows:

In which:

Cc: Nominal interest on the date of trade eligible for right transfer.

MG: Face value of government bonds.

Rc = Lc/k, in which Lc: nominal interest of bonds (%/year); k: number of times the interest is settled in the year.

D2: Number of days from the date of initial issuance of government bonds to the date of payment of assumed nominal interest.

Dn: Number of days from the payment date of the first trade to the next payment date of assumed nominal interest.

E1: Actual number of days from the normal government bond interest payment period under the assumption that the 1st transaction settlement date takes place.

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In which:

Cc: Nominal interest on the date of trade eligible for right transfer.

MG: Face value of government bonds.

Rc = Lc/k, in which Lc: nominal interest of bonds (%/year); k: number of times the interest is settled in the year.

D2: Number of days from the date of initial issuance of government bonds to the date of payment of assumed nominal interest.

E1: Actual number of days from the normal government bond interest payment period under the assumption that the 1st transaction settlement date takes place.

Dn: Number of days from the date on which payment for the first trade is made until the nearest subsequent date on which nominal interest is paid or from the date on which payment for the first trade is made until the maturity date of bonds.

E2: Actual number of days from the normal government bond interest payment period under the assumption that the 1st transaction settlement date takes place.

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b) Identify included nominal interest on the date of trade ineligible for right transfer:

b.1) For a government bond with fixed nominal interest, periodic settlement of interest, and equal interest payment periods:

In which:

Cx: Nominal interest on the date of trade ineligible for right transfer.

MG: Face value of government bonds.

Rc = Lc/k, in which Lc: nominal interest of bonds (%/year); k: number of times the interest is settled in the year.

Dn: Number of days from the date on which payment for the first trade is made until the nearest subsequent date on which nominal interest is paid or from the date on which payment for the first trade is made until the maturity date of bonds.

E: Actual number of days of the current government bond interest payment period.

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- Identify included nominal interest on the date of trade eligible for the first interest payment period as follows:

In which:

Cx: Nominal interest on the date of trade ineligible for right transfer.

MG: Face value of government bonds.

Rc = Lc/k, in which Lc: nominal interest of bonds (%/year); k: number of times the interest is settled in the year.

Dn: Number of days from the date on which payment for the first trade is made until the nearest subsequent date on which nominal interest is paid or from the date on which payment for the first trade is made until the maturity date of bonds.

E2: Actual number of days from the normal government bond interest payment period under the assumption that the 1st transaction settlement date takes place.

- Determine the accumulated nominal interest on the date of the subsequent interest payment periods according to the formula at Item b.1 of this point.

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3. Posted price of government bond

a) Determine posted price on the date of trade eligible for right transfer:

G = GG - Cc

In which:

G: Posted price (rounded down to VND).

GG: Price included nominal price of a government bond.

Cc: Nominal interest on the date of trade eligible for right transfer.

b) Determine posted price on the date of trade ineligible for right transfer:

G = GG + Cx

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G: Posted price (rounded down to VND).

GG: Price included nominal price of a government bond.

Cx: Nominal interest on the date of trade ineligible for right transfer.

c) Determine posted price in case payment date of the first trade overlaps with payment date of nominal interest:

G = GG

In which:

G: Posted price.

GG: Price included nominal price of a government bond.

d) For government bonds whose interest is not settled on a periodic basis:

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In which:

G: Posted price.

GG: Price included nominal price of a government bond.”.

7. Clause 2 Article 15 is amended as follows:

“2. In case the State Treasury and the financial institution cannot agree on the adjustment of the payment time or once the payment deadline under Clause 1 of this Article is reached and financial institutions have not paid the State Treasury, the State Treasury shall retain government bonds until maturity and receive both principal and interest of government bonds to deduce all payment liabilities (payment for the second payment and late payment penalty by the end of the day preceding the maturity date) of the financial institutions; the remaining amount (if any) shall be returned to the financial institutions by the State Treasury within five (05) working days from the date of maturity of government bonds.”.

8. Article 15a shall be added to Article 15 as follows:

 “Article 15a. Nominal interest on government bonds

1. In case the State Treasury receives nominal interest on government bonds during the period of term repurchase of government bonds, the State Treasury is responsible for returning the nominal interest on government bonds received to financial institutions according to the government bond code for which the State Treasury received the nominal interest.  The repayment of nominal interest on government bonds is done outside the debt instrument trading system of the Stock Exchange; the time of repayment of nominal interest shall be mutually agreed upon by the two parties, but must not be later than five (05) working days from the date of actual payment of bond interest.

2. In case of late transfer of nominal interest, the State Treasury is responsible for paying the late payment fine to financial institutions for the number of days of late payment at the late payment penalty interest rate specified in Clause 2, Article 14 of this Circular.".

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“Article 17. Information disclosure

1. At the latest on the last working day of the week immediately preceding the week of trading, the State Treasury shall publish information on the website of the State Treasury about the expected schedule of term repurchase of government bonds of the next trading week; and also provide information to the Stock Exchange for posting on the Website of the Stock Exchange.

2. No later than the 10th of each month, the State Treasury shall publicize results of term repurchase of government bonds in the preceding month (weighted average of quantity, interest of term repurchase of government bonds on website of the State Treasury for each type of term); and also provide information to the Stock Exchange for posting on the website of the Stock Exchange.”.

10. Certain clauses of Article 18 is amended as follows:

a) Point c Clause 1 Article 18 is amended as follows:

“c) Provide information about the expected schedule of term repurchase of government bonds of the next trading week and the results of term repurchase of government bonds in the preceding month to the Stock Exchange according to prescribed in Article 17 of this Circular.”.

b) Points c and d Clause 2 Article 18 is amended as follows:

“c) Provide information about the expected schedule of term repurchase of government bonds of the next trading week and the results of term repurchase of government bonds in the preceding month according to Article 17 of this Circular.

d) On a monthly basis, provide information on the term repurchase of government bonds on the market (including: repurchase term of government bonds, interest rate for term repurchase of government bonds, code of government bonds, list price of government bonds, actual price of government bonds, the government bond discount rate, the 1st trade value, the 2nd trade value) for the State Treasury to serve the assessment of the market situation.”.

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Term repurchase of government bonds with the payment date of the first trade before the effective date of this Circular and the payment date of the second trade after the effective date of this Circular shall continue to be applied according to regulations of Circular No. 107/2020/TT-BTC dated December 21, 2020 of the Minister of Finance on guidelines for the term repurchase of government bonds using temporarily idle state funds of State Treasury.

Article 3. Entry in force and implementation

1. This Circular comes into force from May 4, 2023

2. The State Treasury, relevant agencies, units, organizations and individuals shall implement this Circular./.

PP. MINISTER
DEPUTY MINISTER




Cao Anh Tuan

Thông tư 12/2023/TT-BTC sửa đổi Thông tư 107/2020/TT-BTC hướng dẫn giao dịch mua lại có kỳ hạn trái phiếu Chính phủ từ nguồn ngân quỹ nhà nước tạm thời nhàn rỗi của Kho bạc Nhà nước do Bộ trưởng Bộ Tài chính ban hành