The Ministry of Finance is soliciting feedback on a draft Circular that mandates facial biometric authentication for online securities trading. This proposal introduces several provisions aimed at enhancing security, transparency, and combating manipulative practices in Vietnam's stock market.

Under the draft regulations, investors will be required to authenticate their facial biometric information at least once during the initial transaction of each login session for online securities trading. If an investor fails authentication 10 times, the securities service provider will temporarily lock the function, reactivating it only after customer verification. This measure is also mandated for opening and closing securities accounts, and for withdrawing or transferring over 10 million dong. This regulation mirrors banking practices, safeguarding customer assets.

Service providers must implement technical measures to ensure that both authentication and securities trading are conducted on the same device. This requirement aims to curb fraud and confirm that the trader and the account holder are the same person. The draft outlines six forms of electronic transaction authentication: one-time passwords (OTP), digital signatures, biometric information matching, and two-factor authentication. Customer biometric data must be verified against information stored on their citizen identification card chip, VNeID account, or within the service provider's database.

Investors monitor an electronic price board at Yuanta Vietnam Securities Company. *Photo: Quynh Tran*

Many securities and fund management companies currently use biometrics for online customer identification and verification (eKYC) when opening accounts. For online transactions, they use OTP or biometric authentication based on transaction risk. However, these practices are voluntary due to a lack of mandatory regulations.

The Ministry of Finance states that the upgrade of Vietnam's stock market to secondary emerging market status by FTSE Russell from 9/2026 necessitates legal provisions for electronic transactions, aligning with international practices. The new regulation is expected to take effect from 8/2026. This framework is designed to ensure convenient and transparent market access for foreign investors and to enhance the online trading system's stability and risk resilience.

Vietnam currently has over 12,9 million securities accounts. Domestic individual investors constitute the majority with 12,83 million, while domestic institutions and foreign investors hold fewer.

Phuong Dong