For example:
When the Futures Exchange was first established, KRX only listed 7 stocks as underlying assets, mainly based on liquidity and volume of outstanding shares... After a period of development, KRX gradually added more stocks to this asset portfolio. Up to now, KRX has a portfolio of 30 stocks. This asset portfolio has changed very little due to the very stable and sustainable development of listed companies.
1.4.5.5. Regulations on management and supervision mechanism:
Supervision activities in the Korean stock market are carried out according to a two-tier model similar to the Vietnamese stock market. Including the supervisory level carried out by the Korean Financial Supervisory Commission and the supervisory level of the self-regulatory organization carried out by the KRX. The supervisory system includes the following components:
Surveillance Department : KRX uses an Electronic Surveillance System to monitor the market, synthesizing information from many sources such as Market Bulletin, Quest-DT system (CIBORS), MPA, Reuters Alerts & Bloomberg, special reports to provide mandatory enforcement to investors. This department is responsible for detecting abnormal price movements and trading volumes, fraudulent trading behaviors, separation between stocks and derivative products, etc.
Investigation Department : Responsible for investigating cases transferred from the department.
monitor.
Enforcement department : Has the authority to take enforcement measures against each
specific cases when there is a conclusion of violation from the supervisory or investigation department.
1.4.5.6. Regulations on information disclosure:
KRX publishes information electronically through the KIND system - the Korean investor information disclosure network at http://engkind.krx.co.kr, the information is updated continuously every day, including online information such as trading prices, price changes, trading volume, bid and offer prices. Investors can follow the daily trading progress of securities derivative products on the Exchange's information page.
The KRX Futures Exchange will announce information about changes in index constituent products, intraday trading prices, price steps, contract expiration dates, and final settlement dates of each specific contract. Unusual information related to the trading of securities derivative products will also be announced by the Exchange on the same day to investors, such as fluctuations related to underlying assets...
In addition, information is also disclosed through Members, publications in English, Chinese and Korean.
Basic information about an options contract:
Underlying assets
Samsung Electronics | |
Option Type | Buy/Sell |
Option code | |
Contract size | 10 shares |
Transaction time | |
Price unit | |
Price fluctuation range | |
Last trading day | |
Final payment date | |
Payment method | Share |
Type of exercise of rights | Europe |
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![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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div.maincontent .s40 { color: black; font-family:Times New Roman, serif; font-style: normal; fo](https://tailieuthamkhao.com/uploads/2022/06/06/dich-vu-phi-tin-dung-tai-ngan-hang-thuong-mai-co-phan-dau-tu-va-phat-8-1-120x90.png)
Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services".
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Legal regulations of traders in tourism business in Vietnam - 4 -
Regulations on the Production of Indochinese Silver Coins According to Denominations -
Current Status of Business Registration Regulations According to the 2014 Enterprise Law
1.4.5.7. Regulations on clearing and settlement: to ensure payment capacity
According to the Korean Futures Trading Act, in order to protect investors in the event of a Member's insolvency, financial instability of the Member, or emergencies occurring in the KRX futures market, the following provisions are in place:
For KRX Members:
- When an investor makes a deposit, the Member must separate the investor's assets from the Member's assets.
- Members must re-deposit investors' money at the Korea Securities Finance Corporation (KSFC) and investors' securities at the Korea Securities Depository (KSD).
- Must contribute to the Compensation Fund, the current value of the Fund is 100 billion KRW.
For KRX:
- KRX monitors the daily margin balance of Members based on daily trading results (T+0). Members must make margin deposits no later than noon on T+1 day.
- In addition to the Compensation Fund, KRX always maintains a credit level of up to 100 billion KRW at the bank to prevent emergencies that may occur in the futures market.
When a Member becomes insolvent, KRX shall:
- Use the Compensation Fund portion of the contributing Member, the amount that the relevant Member deposits at KRX and the relevant cash flows of the Member.
- Use the Compensation Fund contributed by other Members.
- Uses KRX's own assets, including gradually accumulated liquid reserves.
1.4.6. Transaction and clearing process
Diagram 1.1 : Trading and clearing model at KRX
Payment
Notification
Notification
Notification
Place an order
Place an order
Escrow and securities freezing
Notification
Escrow and securities freezing
Deposit money
KRX
Payment Member
Trading Member
Deposit money
KSD
KSFC
Home
invest
Notification
Put
command
Notification
Pay
Payment Member
Payment Bank
Home
invest
Put
command
Trading Member
Management system
account
Traffic system
pandemic
Futures trading member
KRX Connected Stock Network
and Members
Management system
account
Traffic system
pandemic
System
monitor
Trading system
Product:
-KOSPI 200 Futures
-KOSPI 200 Options
-KOSTAR Futures
-Stock Options
-USD, YEN, EURO
Futures and Options
-Gold Futures
- …..
Investor Community
Information disclosure system
Stock information system
System
safe
Depository System
Payment Bank
The system
try
Futures Exchange
1.4.6.1. Transaction process:
Stock investor
Futures Market Investor
Diagram 1.2 : Trading process at KRX
- Open an account: Investors go to KRX Members to open a trading account.
- Placing orders: When placing buy/sell orders, investors must deposit according to regulations. Members conduct margin checks and block the deposit before executing orders for investors, then transfer the buy/sell orders to the trading system at the KRX Futures Exchange.
- Notification of transaction results: According to the pre-determined transaction method and time, KRX will notify the transaction results to each Member to notify investors.
Besides the trading system, there are many other systems that support it and each system has its own
has its own functions to ensure the transaction process is safe and smooth:
- Monitoring system: monitoring fair and transparent transactions.
- Depository system: ensures the registration, deposit, and clearing process is safe and uninterrupted. Calculates the margin ratio and notifies after each trading day, ensuring sufficient account balance for the next trading day. Deposits and releases investor assets (securities).
- Payment Bank: Deposit and release payment and reserve (money).
- Information disclosure system: publishes information to the market.
- Securities information system: includes information about securities.
- Security system: control problems during transactions, ensure the
operations are safe.
- Incident system: always ready to handle any problems that arise.
1.4.6.2. Clearing and payment process:
For normal sales transactions:
At the end of each trading session, KRX reports the transaction results to the Settlement Bank and the KRX Clearing House (KSD). After receiving the transaction results:
- The paying bank and KSD compare the results of clearing cash and securities with
Members.
- After comparison, the Paying Bank will clear the money and KSD will transfer securities between the Member's payment accounts opened at the Paying Bank and KSD.
- When the Member receives the money and securities, the Member will allocate the money and securities to the investor's account.
The total settlement time of KRX in the futures market is T+2.
For the exercise of rights:
On the option contract expiration date, unexercised contracts will be cancelled.
for investors exercising the option:
- The investor notifies the Company where the account is opened about the exercise of rights.
your choice
- The company is responsible for synthesizing and sending notifications to KSD.
- KSD randomly selects a Member whose investor issued this option to
make clearing payments according to predetermined principles.
- If a Member has more than one qualified investor to perform the obligation, the issuer is selected according to the first in – first out rule.
- The designated option issuer must deliver or receive the underlying shares or cash depending on the type of option contract exercised. On this basis, KSD and the Paying Bank will transfer cash and shares from the account
payments between Members and Members are responsible for transferring money
and shares to the investor's account.
1.4.7. Comments on the model of the Korean Stock Exchange
Each country with its conditions, policies and socio-economic development characteristics will have different market structures. In Korea, with the unified Stock Exchange model to organize and manage the CKPS trading market, only one place organizes and manages the trading of all types of securities, demonstrating professionalism, correctness and rationality, suitable for the level of development and scale of the stock market.
However, regarding the clearing model, on the basis of the Korea Stock Exchange (KRX) taking on this function by establishing a clearing agency (KSD) directly managing the settlement of all transactions on the stock market, the structure of the Korea Stock Exchange (KRX) has become massive, not showing independence and difficult to demonstrate autonomy. Establishing a clearing agency independent of the transaction organization will enhance specialization, standardize the supporting operations completed on the stock market and enhance the ability to control risks related to each operation of different nature.
1.4.8. Lessons learned for Vietnam
1.4.8.1. Transaction organization and management model:
Like most small-scale and underdeveloped stock markets, in order to develop step by step, Ho Chi Minh City Stock Exchange should not establish a subsidiary to organize and manage the options market but should establish an additional board for options trading(similar to the Korean model).
The Ho Chi Minh City Stock Exchange unifies the organization and management of trading of listed options on the Exchange. Trading of options on the Exchange must go through the system of securities companies that are members of the Exchange (all of these companies are currently payment companies). The system of member securities companies performs the basic functions of consulting and brokerage of buying and selling options for customers. At the same time, some companies can act as market makers when meeting the conditions of a market maker.
1.4.8.2. Clearing payment model:
The Korean model does not have an independent depository, but the Korea Exchange (KRX) performs this function through a system of Payment Members, securities depositories and payment banks.
In Vietnam, the Ho Chi Minh City Stock Exchange can study the establishment of a Clearing House under the Department to perform the function of a Clearing House for the options trading market or the Securities Depository Center can be the first choice in performing the function of margin and clearing for options transactions because currently in Vietnam there is an independent Securities Depository Center that is responsible for clearing all transactions on the Vietnamese stock market.
1.4.8.3. Listing, information disclosure and monitoring systems
Depending on the level of development and conditions of each stock market, appropriate regulations are issued.
CONCLUSION OF CHAPTER 1
Chapter 1 presents the most basic issues about options, stock options and the development of the options trading market; as well as the role and significance of applying options to the development of the stock market. The objective of this chapter is to provide basic theory as a foundation for research and learning from the experience of organizing derivatives exchanges in Korea as well as research and application of stock options trading to the Vietnamese stock market in the following chapters.
In addition, in this chapter, the model of organization and management of derivative securities trading at the Korea Stock Exchange, the Korean Stock Exchange is one of the few most developed stock exchanges in Asia, has been described. Researching, learning and applying experiences in organizing stock options trading floors in some countries in the world plays an extremely important role in building and developing the stock options market in Vietnam. At the same time, the author delves into research and understanding the organizational structure, operating mechanism of the derivatives market, details of the issues of the trading system and basics of other related systems such as members, listing, supervision, information disclosure and clearing at KRX.
From the results of the model research, we have had an overview of the structure and operating mechanism of a derivatives market and drawn basic experiences for building a derivatives market in Vietnam, specifically building a stock options trading model at the Ho Chi Minh City Stock Exchange.