Upgrading the market's status is a key goal for the Vietnamese government. At the Ministry of Finance's (MOF) second quarter press conference on 2/7, Hoang Van Thu, Vice Chairman of the SSC, reiterated Vietnam's aim to achieve a market upgrade this year.
From a regulatory perspective, Thu stated, "The SSC has been working diligently to achieve this goal in the upcoming FTSE review in September,".
FTSE Russell is one of the three leading global index providers, alongside MSCI and S&P Dow Jones Indices, which serve as benchmarks for international investors.
According to the MOF representative, rating agencies like FTSE, MSCI, and international investors have expressed confidence in the progress of Vietnam's stock market upgrade.
Recently, the market operator has implemented several solutions to facilitate trading for foreign investors and meet the rating agencies' criteria. Specifically, the SSC has improved the legal and technical framework and engaged with rating agencies and foreign investors to discuss the current state and development of the market.
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Hoang Van Thu, Vice Chairman of the State Securities Commission, speaking at a press conference on 2/7. Photo: MOF |
Hoang Van Thu, Vice Chairman of the State Securities Commission, speaking at a press conference on 2/7. Photo: MOF
On the legal front, the MOF issued Circular 68 on uncovered short selling, which has been well-received by foreign institutional investors. This also lays the groundwork for establishing a central clearing counterparty (CCP) mechanism. In addition, the market operator has also issued Circular 18, amending Circulars 119 and 96 for greater compatibility with the upgrade objectives.
The KRX system has been operating smoothly and securely, with no reported issues. The SSC collaborated with the State Bank of Vietnam to issue Circular 3, simplifying administrative procedures for foreign investors, particularly in opening trading accounts.
Furthermore, the regulatory body is amending Decree 155 to clarify new provisions in line with the Securities Law No. 56. A key aspect is confirming that the CCP model will apply not only to derivatives but also to the underlying securities market.
Decree 155 is expected to adjust regulations on foreign ownership ratios in listed companies. According to SSC leadership, the amendments demonstrate Vietnam's openness, transparency, and equal treatment of foreign investors, aligning with the government's strategic direction.
Technically, the SSC has implemented support solutions such as designing omnibus accounts in clearing and settlement to facilitate the operations of foreign investment funds. They have also increased dialogue with international investors through investment promotion delegations, collaborating with the World Bank and rating agencies to provide updates on Vietnam's reforms and efforts.
A market upgrade is seen as a significant boost for Vietnam's capital market, enhancing access to foreign investors. This will increase market capitalization, bringing liquidity levels on par with similarly developed countries. This could attract 25 billion USD in new investment from international investors into the Vietnamese market by 2030, according to World Bank estimates.
According to Deputy Minister of Finance Nguyen Duc Chi, the stock market upgrade is a technical milestone and a strategic step towards developing a modern, transparent financial market that balances the interests of the state, investors, and businesses. Conversely, the upgrade also benefits global investors by providing them with another quality market.
"In our interactions with foreign investors, we always emphasize the principle that a stock market upgrade should benefit all parties involved," he said. The MOF leadership affirmed Vietnam's goal of rapid, sustainable market development in line with the government's approved strategic direction.
Echoing this view, the SSC Vice Chairman noted that while achieving an upgrade is important, maintaining it is even more challenging. Therefore, all reforms aim for long-term sustainability and meeting investors' practical expectations.
Phuong Dung
