THE STATE BANK OF VIETNAM

Circular No. 01/2015/TT-NHNN dated January 06, 2014 of the State Bank of Vietnam stipulating trading and provision of interest rate derivative products of commercial banks, foreign bank branches
Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;
Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2014;
Pursuant to the Government's Decree No. 156/2013/ND-CP dated November 11, 2013 defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;
At the proposal of the director of the Monetary Policy Department;
The State Bank Governor promulgates the Circular stipulating trading and provision of interest rate derivative products of commercial banks, foreign bank branches.
Article 1. Scope of application
This Circular stipulates trading and provision of interest rate derivative products of commercial banks, foreign bank branches.
Article 2. Subjects of application
1. Commercial banks, foreign bank branches that trade and provide interest rate derivative products;
2. Customers using interest rate derivative products that are traded and provided by commercial banks, foreign bank branches in domestic market including:
a) Credit institutions, foreign bank branches under the Law on credit institutions;
b) Legal entity (excluding credits, foreign bank branches) that is established and operated under Vietnamese law;
c) Organizations, individuals related to trading and provision of interest rate derivative products of commercial banks, foreign bank branches as stipulated under this Circular.
Article 3. Interpretation of terms
Under this Circular, the following terms are construed as follows:
1. Interest rate derivative products are financial instruments that are estimated based on the predictable fluctuations of interest rate.
2. Trading and providing interest rate derivative products means the entry into an interest rate derivative contract by commercial banks , foreign bank branches and foreign financial organizations in the international market to prevent and minimize interest rate risk of commercial banks, foreign bank branches or means the entry into an interest rate derivative contract by commercial banks, foreign bank branches and customers in the domestic market to prevent and minimize the interest rate risk of customers;
3. Principal transaction means a transaction which bears interest rate risk, including: deposit, receive deposit; issue, buying and selling, investment in valuable papers, lending, leasing and financial leasing and other legal transactions bearing interest rate risk excluding interest rate derivative papers.
4. Counterpart transaction means commercial banks and foreign bank branches enter an interest rate derivative contract with commercial banks, foreign bank branches providing interest rate derivative products in the domestic market or with foreign financial organizations to prevent, minimize interest rate risk for interest rate derivative contracts that signed with customers.