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Vietnam tackles obstacles to stock market upgrade

Vietnam's ambition to elevate its stock market from "frontier" to "emerging" status by 2025 faces two key hurdles, including pre-trade margin requirements for foreign investors and foreign ownership ratios in certain sectors, said Deputy Director of the Securities Market Development Department under the State Securities Commission (SSC) Pham Thi Thuy Linh.
Vietnam tackles obstacles to stock market upgrade ảnh 1Illustrative image (Photo: hanoimoi.vn)

Hanoi (VNA)♕ – Vietnam's ambition to elevate its stock market from "frontier" to "emerging" status by 2025 faces two key hurdles, including pre-trade margin requirements for foreign investors and foreign ownership ratios in certain sectors, said Deputy Director of the Securities Market Development Department under the State Securities Commission (SSC) Pham Thi Thuy Linh. 

Despite successfully meeting 7 out of the 9 established criteria for the upgrade, the two other requirements remain considerable roadblocks.
To tackle the pre-trade margin requirement challenge, Linh revealed ongoing discussions with international rating agencies are being conducted to seek viable solutions. Additionally, the SSC has proposed regulatory amendments and supplements to the Ministry of Finance (MoF). These revisions, if implemented, would eliminate the need for a 100% cash margin requirement for foreign institutional investors, provided they can demonstrate a secure payment process.
Regarding the foreign ownership ratios, the SSC is collaborating with the MoF and the Ministry of Planning and Investment (MPI) to conduct a comprehensive review across various industries. The SSC has proposed that the MPI work alongside other relevant ministries and agencies to expand foreign ownership limits in non-essential sectors. This critical information, translated into English, is expected to be publicly available soon.

The SSC is also making efforts to improve information disclosure regulations, specifically for public and large-scale listed companies. The proposed amendments, once approved by the MoF, would mandate English disclosure for both regular and irregular information updates. The implementation timeline for these changes would see English disclosures become mandatory for regular information and large-scale company listings starting January 1, 2025. Irregular information disclosures would follow suit by January 1, 2026, with the requirement encompassing all public companies by January 1, 2028.

♕ The World Bank has projected that if Vietnam's stock market achieves the coveted "emerging" status, it could attract an additional 25 billion USD in fresh investment capital from international investors by 2030./.

VNA

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