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Vietnam approves plan to upgrade stock market status

To deliver on the goal, the document highlighted the need to remove such barriers as pre-funding requirement for foreign investors ahead of trades while the central counterparty clearing (CCP) is being developed. Transparency on foreign ownership limits should be enhanced across all areas, together with streamlined registration procedures for account opening and indirect capital registration.
Vietnam sets the target of transforming its stock market into an important channel for medium- and long-term capital mobilisation. (Photo: VNA)
Vietnam sets the target of transforming its stock market into an important channel for medium- and long-term capital mobilisation. (Photo: VNA)

Hanoi (VNA) – Prime Minister Pham Minh Chinh recently issued a decision, giving a go-head for a project to upgrade the stock market, aiming at transforming it into an important channel for medium- and long-term capital mobilisation, completion of a market mechanism with state management, and deeper international integration.

In short term, the plan sets the target of meeting all criteria required for an elevation from frontier market to secondary emerging market status under FTSE Russel in 2025, while maintaining this classification once obtained.

To deliver on the goal, the document highlighted the need to remove such barriers as pre-funding requirement for foreign investors ahead of trades while the central counterparty clearing (CCP) is being developed. Transparency on foreign ownership limits should be enhanced across all areas, together with streamlined registration procedures for account opening and indirect capital registration.

Vietnam will also strengthen straight-through-processing between banks and security firms, put in place omnibus trading accounts (OTA), and improve the transaction system to handle large transaction volumes.

The State Securities Commission of Vietnam will receive enhanced staffing and IT systems to improve supervision. Besides, cooperation among the Ministry of Finance, the State Bank of Vietnam, and the Ministry of Public Security to ensure market security.

༒ In long term, Vietnam eyes meeting MSCI emerging market criteria and FTSE Russell's advanced emerging market standards by 2030.

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Vietnam will work to improve the transaction system to handle large transaction volumes. (Photo: VNA)

Vietnam will review foreign ownership limits and introduce advanced clearing and settlement infrastructure under the CCP model. The government is considering controlled short selling, securities lending, and same-day trading. Foreign exchange market will be developed, with the introduction of hedging tools for indirect investors. Meanwhile, macro-economic stability will be assured through close coordination between fiscal and monetary policies.

Moreover, the Government is seeking to diversify the investor base by encouraging the growth of institutional and professional investors while enhancing education and protection for retail participants, ensuring the stock market will develop in a balanced and stable manner.

🎃 Diversifying financial products will be paid due heed. Vietnam aims to launch new instruments such as infrastructure bonds, green bonds, options, futures, structured products, depository receipts, and investment fund certificates, while also improving and diversifying stock indices to support the derivatives market./.

VNA

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