HA NOI (VNS)— The Ha Noi Stock Exchange has issued a new regulation to guide the management of certificate transactions of exchange-traded funds (ETFs), paving the way for ETFs to list fund certificates on the exchange.
Decision No 383/QD-SGDHN, issued on Wednesday, includes provisions on conditions of listing, transaction management, information disclosure and treatment of violations.
Fund certificates of eligibility must be issued by ETFs registered with the State Securities Commission (SSC) and Vietnam Securities Depository (VDS).
One of the two founding members of the funds must be a member of the exchange.
Funds must submit valid listing documents to the exchange. The body will issue approval within 10 working days of receiving the application document.
One positive score is that if funds make additional issues or buy back their certificates through swap activities, the exchange will automatically make adjustments on the number of listings within one working day after receiving the notice of VDS. ETFs do not need procedures filed.
In other cases, funds must submit applications and adjustments will be made within two working days from the date of receipt of valid documents.
The regulation lists nine cases under which ETF certificates will be put under warning and eight cases under which their certificates will be brought under control.
Notable cases include net asset value of funds declining below VND30 billion (US$1.4 million) within three and six consecutive months, or less than VND10 billion ($474,000) in one and three months; tracking error exceeding 80 per cent of the maximum deviation (15 per cent); and violations on disclosure of information.
In case of serious violation on disclosing information, the Ha Noi bourse can suspend trading of their fund certificates to protect investors.
The body will consider lifting bans when fund management companies move to overcome their shortcomings.
In addition, ETFs can make voluntary delistings and can be forced to leave the exchange if they fail to satisfy listing conditions or violate listing regulations.
Late last month, Nguyen Thi Hoang Lan, the exchange's deputy chairwoman, said the infrastructure to support ETF transactions was ready.
She expected the first ETF listing would be late in the third quarter or early in the fourth quarter of this year. — VNS