The State Securities Commission (SSC) recently announced key provisions of a draft amendment to the Securities Law. This proposal aims to allow securities companies and branches of foreign securities companies to enter into contracts with customers electronically. This marks a significant shift, as previous regulations mandated written contracts with clients.

The SSC stated that the former regulations did not adequately cover electronic contract execution. In practice, the banking sector has already adopted biometric information, OTP codes, or in-app confirmations for contract validation. Maintaining the requirement for written contracts in some cases increases operating costs, record storage, and processing time, which is not aligned with the trend of providing fully online services.

Regulators also noted the growing development of electronic transactions in the securities market. Many operations are now conducted entirely in the digital environment, including online account opening, electronic contract confirmation, and customer authentication using biometric information. Therefore, supplementing regulations on electronic transactions is essential to facilitate digital transformation.

An investor is trading at a securities company in TP HCM. Photo: Quynh Tran

Currently, opening a securities account can be done directly at a securities company or online through an electronic know-your-customer (eKYC) process. Investors can register accounts remotely via eKYC, but the procedures vary among different entities. Some companies allow customers to complete registration, identification, and electronic contract signing directly on their application. These firms utilize e-contracts and OTP authentication to finalize online agreements.

Conversely, some providers only permit preliminary account creation via eKYC, still requiring customers to print, sign, and mail physical documents to the company. While waiting for their records to be finalized, customers cannot withdraw money or securities. This inconsistency means that online account opening does not always equate to a fully digital process.

According to data from the Vietnam Securities Depository and Clearing Corporation (VSDC), the total number of domestic accounts reached over 13,6 million by the end of July. Most of these belong to individual domestic investors. Since the beginning of the year, the market has seen approximately 1,8 million new accounts.

The Securities Law will undergo amendment and supplementation to meet the evolving demands of the capital market and the ongoing digital transformation. The Ministry of Finance stated its focus on three main areas: simplifying business investment conditions and administrative procedures; incorporating a regulatory sandbox mechanism; and enhancing regulations concerning electronic transactions, new technology applications, and the operations of securities businesses and investment funds. The draft law is scheduled for review by the National Assembly during its October session.

Tat Dat