Hanoi (VNA) - It remains impossible for Vietnam’ssecurities market to get promoted from a frontier market to an emerging marketthis year, officials say.

Saigon Securities Incorporation Chairman Nguyen Duy Hung toldthe recent year-end meeting held by the State Securities Commission (SSC) thatthe upgrading of Vietnam’s status would boost the confidence of both domesticand foreign investors in the local market.

SSC should make a list of requirements that must be met forthe Vietnamese market to get promoted. Then market regulators, Governmentagencies and securities companies must work together to realise those targets,he said.

“If those targets are reached, Vietnam’s securities marketwill get a lift. Then the local market will become more attractive andpromising to investors, especially foreign ones,” Hung said.

However, SSC Chairman Tran Van Dung warned that investorsshould not think the Vietnamese market would be promoted soon as the localmarket had not met international standards.

In its 2017 market classification review that was carried outin late June, Morgan Stanley Capital International Inc (MSCI), the USindependent provider of research-driven insights and tools for institutionalinvestors, did not include Vietnam in the MSCI review list for a potentialreclassification to Emerging Markets status.

Thus, Vietnam remained in the MSCI Frontier Markets Index andthe decision had been widely forecast by several local brokerage firms.

There were several major factors that led to the result,including the lack of openness to foreign investors, few English-languageissuances of information disclosures made by local companies and problems withthe trading mechanism, according to local securities companies.

“The SSC hopes MSCI will include Vietnam in itsreclassification review list for the status promotion in 2018 and 2019.However, we have to wait one more year until the final decision is made,” Dungsaid.

One of the issues that brokerage firms expect the SSC toimprove in the near future is a trading mechanism that will reduce thesettlement time for securities transactions from two days (T 2) to intraday(T 0).

It means the investors would be able to receive an amount ofsecurities after they purchase it and sell it on the same day instead ofwaiting for two more days to receive and sell that amount of securities.

Previously on January 1, 2016, the SSC shortened settlementtime for securities transactions from three days (T 3) to two days (T 2).

According to VNDirect Securities Company General DirectorNguyen Hoang Giang, the intraday settlement mechanism (T 0) could helpfinancial companies improve their risk management and the quality of the markettrading could improve.

However, SSC Chairman Dung said that his agency is workingwith the Vietnam Securities Depository on the issue but they find it hard to doso due to technical problems.

Vietnam is using the T 2 settlement mechanism but the realtime is T 2.5 as investors will receive the amount of securities at the end ofthe second day after they purchase the assets, he said.

“The standard settlement time for the global markets is stillT 3, even in big markets like Japan. That proves shortening the settlementtime, even just by one day, is very challenging,” Dung said.-VNA