The amended Securities Law was ratified by the National Assembly in late 2019. What SSC has to do now is issue necessary legal documents to bring the law into life.

SSC chair Tran Van Dung

According to SSC chair Tran Van Dung, this will be a big workload in 2020: one decree and one circular must be completed each month.

The second priority task is putting the new transaction system into operation after many years of waiting. The new system is believed to have many modern features which allow the carrying out of transactions, offset payments and monitoring in a more convenient way. With the system, investors will be able to carry out many more types of transactions.

“The new system is not just about renovating transactions and increasing liquidity, but it also serves as the platform to restructure the market,” Dung said.

In addition to promulgating legal documents to ensure the enforcement of the amended Securities Law, the State Securities Commission (SSC) will put the new transaction system into operation and consolidate the corporate bond market.

When the system becomes operational, SSC will have favorable conditions to merge the HCM City Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX) into the Vietnam Stock Exchange. If so, all shares will be listed on the HCM City bourse, while the Hanoi bourse will reserve on derivatives and bonds.

The third priority task is building up the corporate bond market after the share and government bond markets performed well. Many businesses, especially real estate firms and commercial banks, issued corporate bonds in 2019. Vietnam needs a bond market with transparent regulations which allow both issuers and buyers to manage risks.

According to Dung, if all the tasks can be implemented well, the face and the structure of the stock market will reach a new level, which will have big impact on the upgrading of the Vietnamese stock market from frontier to emerging, in accordance with the stock market restructuring plan approved by the Prime Minister in February 2019.

Vietnam’s stock market now can meet the criteria in scale, capitalization value, number of listed companies and goods value. The macroeconomy, legal framework and transaction system factors are coming closers to higher standards.

With the current high GDP growth rate, the open policy, the enactment of three amended laws and the smooth operation of the new transaction system, Dung believes that the upgrading of the stock market by 2025 is within reach.

An analyst commented that the amendment of the three laws at the same time, the Securities Law, Enterprise Law and Investment Law, is an opportunity to deal with the problem of foreign ownership ratio limitations.

Chi Mai 

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