Scientific Conference "Introduction of Covered Warrants"

On November 2, 2018, University of Economics - University of Da Nang, Securities Training Center (SRTC) in co-operation with VietinBank Securities JSC (CTS) to hold the conference on introducing "Covered Warrants”, a new financial product, at Danang University of Economics. The conference was honored to welcome Dr. Ta Thanh Binh - Director of Market Development Department - State Securities Commission, MSc. Nguyen Thi Thanh Huong - Deputy Director of SRTC, Assoc. Prof. Vo Thi Thuy Anh - Vice Rector of University of Economics, Dr. Dang Tung Lam - Head of the Faculty of Finance. The conference also welcomes guests from securities companies, public companies, investors, lecturers and students of the University of Economics and other universities in Danang city.

Assoc.Prof.Dr. Vo Thi Thuy Anh - Vice Rector of the University of Economics speaking at the conference

Speaking at the conference, the representative of University of Economics expressed her joy to welcome scientists from the State Securities Commission, representatives of securities companies, commercial banks, companies, and investors. The discussions at the conference will help investors have an overview of covered warrants so that they can make reasonable investment decisions on the stock market. The University of Economics hopes to further cooperate with the State Securities Commission, securities companies to organize more conferences and scientific seminars as well as to coordinate in training for students.

MSc. Nguyen Thi Thanh Huong also wished that through this conference, investors could understand the benefits and risks related to covered warrants, grasp the method of warrant issuance, transaction, and settlement. The representative of the State Securities Commission expected that covered warrants would meet the increasingly diverse needs of investors and reflect the extent of Vietnam market development in the trend of international integration.

Dr. Ta Thanh Binh - Director General of Market Development Department talked about covered warrants, its benefits and its risks.

At the conference, Dr. Ta Thanh Binh introduced “covered warrants” and talked about its risk and benefits. She also presented the issuance process, the transaction and payment method related to covered warrants. According to a representative from the State Securities Commission, covered warrants are defined in Decree 60/2015 / CP-ND as securities with collateral issued by securities companies. Investors will pay a premium to own the warrants and have the right to buy or sell the underlying securities to the securities issuer at a pre-determined price at or before the specified time, or receive the difference between the strike price and the underlying security at the time of execution.

For investors, Covered Warrants provide an additional hedging tool as well as increase the available choices of investment products at a lower cost compared to traditional stocks or fund certificates. For securities companies, the participation in the issuance of secured warrants will create opportunity to expand business activities and increase their own revenue.

Despite its many advantages and potential for growth, Covered Warrants always present certain risks that investors should be aware of. One of the risks is that Covered Warrants are issued by securities companies. Payments to investors can be affected if the issuers are in financial trouble.