This document summarizes information about stock exchange operations and trading in Vietnam. It discusses the two main stock exchanges, HOSE and HNX, including when they were established and their number of listed stocks. It also describes the trading venues, listing rules, order types like market orders and limit orders, the trading process involving account registration, order placement, matching, clearing and settlement, and the different trading methods used including periodic order matching, continuous order matching and put-through trading. Matching is done based on price, time and quantity priorities.

1. FINANCIAL MANAGEMENT
VIETNAMESE STOCK
EXCHANGE OPERATION
Lecturer: Ms. Khong Thanh Dung
Tutor : Ms. Dao Mai Huong
Group: 5- Tut 2-FB-12
Members: Phan Thi Lan 1104040048
Nguyen Thi Kieu Oanh 1104040073
Nguyen Thuy Ly 1104040057
Phan Thi Bich Ngoc 1104040068
Nguyen Thi Van Trang 1104000118
Do Le Quyen 0907080040

2. TRADING VENUES
Trading floor: transactions of buying and selling
stocks

3. 1. HCM Stock exchange HOSE
 Established: July 20, 2000
 Started to operate under the name HOSTC
 Renamed: HOSE in Aug 8 2007
 Number of listed stocks in 2011: 284
TRADING VENUES

4. 2. Hanoi Stock exchange HNX
 First operation: March 2005
 Starting name: HASTC
 Renamed: HNX in June 2009
 Number of listed stocks in 2011: 379
TRADING VENUES

5. 3. Function of 2 stock exchange venues
 Organize, operate, regulate securities trading
activities.
 Interrupt, suspend or cancel trading activities under
the Securities Trading Regulation
 Inspect and supervise the information of listed firms
and trading members
 Supply market information related to listing stocks
 Deal with traders' problem in trading activities
TRADING VENUES

6. 4. Listing rule
 Must be licenced by SSC before publishing stocks
 Stock is allowed to be listed in only one stock
exchange venue
 SSC make decisions of listed company
TRADING VENUES

7. 5. Precedence rule
 Price priority: higher price orders will be executed
first
 Time priority: at the same price, the first entrance of
order will be matched first
TRADING VENUES

8. MARKET ORDERS
• Buy or sell the number share at the price close
to the current market price
• Available and liquidity stock
• Buy at the only lower price and sell at higher
price

9. LIMIT ORDER
 Buy or sell the stock at the price you are willing
to pay.
 A buying LO : at the given price or lower one.
 A selling LO : at the given price or higher one.

10. ATC & ATO
 Priority to Limit Order
 At-The-Opening Order (ATO)
 Buy/Sell order at the opening price of a trading day
 Valid within periodic matching time
 Unmatched volume is canceled automatically when
opening price has been determined
 At-The-Closing Order (ATC)
 Buy/Sell order at the closing price of a trading day
 Valid while closing price is being determined
 Unmatched volume is canceled automatically when
closing price has been determined

11. ATC & ATO
 Example
AAA stock, reference
price = 99. A, B and C is
the input order
Buying
volume
Buying
price
Selling
price
Selling
volume
5,000
(C)
100 ATO
(ATC)
4,000
(B)
99 2,000
(A)
 Matching result:
- Matching price: 99
- Matching volume: 5,000
of which C-B: 4,000
- ATO (ATC) had the
priority to LO in the
matching process

12. TRADING PROCESS
1. Step 1: Registering account and placing
orders
 Offline: Direct registration in stock agents
 For individuals: ID number
 For organizations: some documents are required
 Online: creating account through the stock company’s
websites (which have online registration function).
2. Step 2: Transferring the orders to security
trading center before taking transaction
Requirement:
 Investors deposit securities at securities company and ensure a sufficient
number of securities placed for sale on the securities trading account.
 When setting orders to buy securities, the investors sign
deposit funds under the agreement with the Securities company
where investors open accounts

13. STEP3. MATCHING ORDER AND INFORMING THE
RESULT
Matching order rule:
• Time priority: same price, the order entered earlier gets the
higher priority
• Price priority: two orders entered into the system, the order with
the better price gets the higher priority
• Quantity priority: same price and time, priority is given to
orders with the larger quantity of shares
Inform the result:
Inform the security company-> investor

14. STEP 4: CLEARING AND SETTLEMENT
 Data of trading results are sent to Vietnam Securities
Depository (VSD)
 Buyers will receive stock and the seller will receive
money on account
 “Delivery Versus Payment”
principal

16. Matching rule:
1st . Price priority: Buy order-high price vs. sell order- low price
2nd . Time priority: Waiting orders with same price: sooner first.
3rd . Quantity priority: orders at same price and time: highest quantity
of shares will be matched first
TRADING METHODS

17. 1. Order matching method (OM)
Periodic order
matching (POM)
Continuous order
matching (COM)
The method is made
on the basis of
comparing buy orders
and sell orders of
stocks in a specified
time at single price
The method is made on
the basis of comparing
buy orders and sell
orders immediately
when they are inputted
into the trading system.
TRADING METHODS

18. 2. Put- through trading method (PT)
The trading method in which investors negotiate
with each other regarding to trading conditions and
representative staff will enter information into the
trading system to record
During the time of negotiation, investors can
place buying and selling orders following
negotiation order matching method
TRADING METHODS

19.  Trading units: no limit
 Negotiation orders include: securities code, quantity,
price, buying order, selling order, contact phone number.
 Minimum trading volume: 5,000 shares
 Price quotation unit: no limit
TRADING METHODS

20. Time HOSE HNX UPCOM
9:00-9:15 POM (ATC,LO) COM & PT ( LO)
9:15-11:30 COM & PT ( LO)
11:30-
13:00
Intermission Intermission
13:00-
13:45
COM (LO, ATO) COM & PT (LO, ATO)
13:45-
14:45
PT
Vietnamese stock exchanges use the different method at a specific time
TRADING METHODS