Collaboration between Hanoi Stock Exchange and Vietnam Securities Depository
London, Hanoi, 10th August 2017. GMEX Technologies, a wholly owned subsidiary of GMEX Group, is pleased to announce the go-live of the first Derivatives market and fully integrated central counterparty (CCP) clearing house in Vietnam. GMEX Technologies has delivered a state of the art multi-asset, multi-language exchange trading system and market surveillance solution with a real-time clearing and settlement system. The project, which also provided GMEX Group’s global business and operational expertise, was delivered in collaboration with FPT Information System (FPT) based in Hanoi, who provided local implementation support and project management.
The launch announcement was made at an event in Hanoi in the presence of Prime Minister Nguyen Xuan Phuc, members of his cabinet and authorities from related agents including Minister of Finance, Governor of State Bank of Vietnam, Major of Hanoi city People Committee, Chairman of State Securities Commission. The Ministry of Finance has entrusted Hanoi Stock Exchange and Vietnam Securities Depository (VSD) to operate the derivative market’s transaction and settlement activities.
The new derivatives market will make it attractive for institutional investors to enter the Vietnamese market by providing hedging facilities for risk management; the ability to leverage, extend their investment period and keep market volatility low. It will also help investors predict the future movement of securities and turn profits on their invested assets. This aligns with the government’s objectives to encourage foreign investment, create a capital markets environment to support this and ultimately move Vietnam from MSCI frontier market status to MSCI emerging markets status.
With a market membership that includes settlement banks, intermediaries and investors from both enterprises and investment funds, the first traded instruments will be the VN30-index™, which tracks the performance of the 30 largest companies by market capitalization and liquidity basis on the Ho Chi Minh City Stock Exchange. This will be then followed by Government bond futures. Seven securities companies — HCM City Securities, Saigon Securities, VietCapital Securities, BIDV Securities, VNDIRECT, MBS (Military Bank Securities) and VPBank Securities — have currently been approved as authorized traders on the market. International trading and brokerage firms including those from Japan and South Korea have shown an interest in the market’s products.
The derivatives market and CCP have been set up to the highest international standards aligned with the CPMI-IOSCO Principles for Market Infrastructures (PFMIs). A strict, comprehensive legal framework has been developed for the market operation by drawing lessons from the international financial crises.
Hirander Misra, Chairman & CEO of GMEX Group, commented, “We are delighted to be in Hanoi at the launch of the first Derivatives exchange and clearing house and excited to be supporting the development of the capital markets in Vietnam.” He added, “This initiative highlights our continued focus on delivering innovative new products and emerging market solutions as well as growth through a unique sustainable partnership-driven model.”
VSD commented that the derivatives clearing and settlement system, developed in collaboration with FPT and solution provider GMEX Group, is a modern system built in line with current international practices. The solution also complies with Vietnam’s specific legal framework, namely the management of position limits, surveillance and calculation of margin deposits up to the level of individual investor. In combination with synthesized functions of effective risk management, the system will serve as a fundamental base for a safe and sound operation of Vietnam’s derivatives market.
About GMEX Group
GMEX Group is a set of companies that offer sustainable and innovative solutions for a new era of global financial markets. Providing business expertise, the latest technology, connectivity & operational excellence delivered through an aligned partnership driven approach. We use our extensive market infrastructure experience and expertise to create an appropriate strategic master plan with exchanges, clearing houses, depositories, registries and warehouse receipt platforms.
Our key business solutions enable the creation and operation of cost effective electronic exchanges and post trade infrastructure in multiple asset classes including equities, debt, FX, derivatives and commodities. We operate in both developing and developed markets through the establishment of cohesive business and technology ecosystems. GMEX offers the added benefit of interconnection to multiple partner exchanges, to create global networks of liquidity.
GMEX Group: ensures a cohesive strategic direction is maintained
GMEX Technologies: provides a single point of contact, incorporating account management and commercial & contractual services for all client and partner activities
GMEX Innovation: delivers technologically advanced product solutions for exchange trading and clearing & settlement.
GMEX Services: supplies strategic consultancy, implementation services and global support. This includes exchange business, product and technology strategy, project management and pre- and post- implementation support.
GMEX Investments: enables selective seed and early stage strategic investments into market infrastructure and related FinTech companies.
About FPT Information System (FPT)
FPT Information System (FPT IS) is a member of the FPT Corporation, with 10 subsidiaries and a joint venture in Vietnam. The company has also established representative companies in Singapore, Laos, Cambodia and the US. We specialize in software application, ERP, IT services, as well as systems integration.
We have worked side by side with clients for twenty years to provide comprehensive information systems, which has affirmed our effort to help enterprises and organizations improve their management capability, competiveness and business performance.
Our experts, with thorough understanding of client’s profession and in-depth knowledge in specific domains, are willing to share experience for mutual development of FPT IS and the client’s company, which has become a recognized value of FPT IS for years. We are committed to maintaining the long-term dedicated relationship with clients because it is their success that motivates and inspires us to develop and move forward.
For more information, visit www.fpt-is.com
About Hanoi Stock Exchange (HNX)
Hanoi Stock Exchange (HNX) was born in accordance with Decision No.01/2009/QĐ-TTg by the Prime Minister on the basis of transforming and restructuring Hanoi Securities Trading Center which was established upon Decision No. 127/1998/QĐ-TTg and launched on 08/03/2005. On 24/06/2009, the HNX was inaugurated as a State-owned single – member limited liability company with the Ministry of Finance as a representative.
Being an organizer and regulator of the securities market, the HNX has organized share auctions, Government Bond biddings to mobilize capital for the State budget. In parallel, the HNX has operated three secondary trading markets on a modern technological structure, including listed stock market, Government Bond market, and UPCoM (Unlisted Public Company Market).
The optimal goal of the HNX is to operate a transparent, equitable and efficient market, develop new products, attract domestic and foreign investments, and prove itself as an important capital mobilizing channel of the economy, ensuring the interest of investors and market participants.
For more information, visit www.hnx.vn
About Vietnam Securities Depository (VSD)
For nearly 10 years since the official launch, VSD has always been striving to fulfill the assigned tasks including securities registration, depository, clearing and settlement, as well as other trade supporting services. VSD is proud to work closely with the regulators, market operators and market participants to support the safety, smoothness and efficiency of market operations, contributing significantly to the growth of Vietnam securities market.
For more information, visit www.vsd.vn
Notes to Editors:
GMEX Technologies has provided the following solutions to HNX:
Exchange and Trading Venue solutions
- ForumMatch Order Book Platform – encompasses order flow and Matching / Execution on a central limit order book.
- ForumTrader front-end – a fully functioning web deployable multi-asset, multi-lingual trader workstation and order management system facilitating order routing to the exchange and market data dissemination supported by partner uTrade Solutions (http://utradesolutions.com).
- ForumDetect Market Surveillance Platform – Designed for trading venues and trading firms, it provides an In-Tray for alert/case management, a real-time Replay screen for market event analysis and a set of surveillance reports for post-event review.
GMEX Technologies has provided the following solutions to VSD:
Clearing House solution
- AvenirClear Clearing House Platform – This innovative product has been designed from the ground up to be an efficient, versatile and cost-effective solution for Central Counter Party Clearing Houses (CCPs). The product provides a solid and robust real-time clearing and risk management framework.