From May 17, 2021, banks, non-banking credit institutions and branches of foreign banks that are allowed to do business in and provide foreign exchange services (referred to as authorized credit institutions) will not be allowed to charge foreign exchange transaction fees
This is the new issued by the State Bank of Vietnam in Circular No. 02/2021/TT-NHNN issued on March 31, 2021 guiding foreign currency transactions on the foreign currency market by credit institutions licensed to operate foreign exchange.
According to this Circular, Authorized credit institutions may make FX spots, FX forwards, currency swaps and FX option transactions with other authorized credit institutions, Authorized credit institutions may make FX spots and FX forwards with residents being other organizations and individuals.
Authorized credit institutions may make FX spots with non-residents being organizations and individuals and FX forwards with non-residents mentioned in Circular, with non-residents being foreign investors holding governmental bonds in VND in the domestic market to prevent exchange rate risk for bonds held by these investors.
Circular No. 02/2021/TT-NHNN stipulates three transaction methods, which are:
First, foreign currency transactions shall be carried out directly or via transaction means, including phones and electronic means.
Second, parties to foreign currency transactions made via electronic means and phones shall agree upon and take responsibility for these transactions, ensuring security, safety, protection of data messages and confidentiality as per the law. Data messages may hold the same value as documents if they meet the requirements in Article 12 of the Law on E-Transactions. Foreign currency transactions made by electronic means must comply with regulations of the Law on E-Transactions and relevant guiding documents.
The Third, for transactions made via the phone, authorized credit institutions must stipulate and inform their partners of phone numbers that may be used for these transactions. Phones must have a voice recording function and contents of transaction agreements with partners must be extractable for the purpose of transaction confirmation and internal control by credit institutions and dispute settlement (if any).
Collected from Source
Viet Dung