The revised Securities Law, which will replace the 2019 law, focuses on upgrading the stock market, improving capital mobilization efficiency, and clearly defining responsibilities for violations in the market.

On the morning of October 8, the State Securities Commission (SSC) organized a workshop to gather input on the proposed amendments to the Securities Law.

Previously, the government submitted a proposal to the National Assembly to amend several laws, including the Securities Law, as part of the 2024 legislative agenda.

The draft law has been circulated to relevant ministries, agencies, local authorities, organizations, and individuals for feedback, with the Ministry of Justice also providing an assessment.

According to the SSC, after more than three years of implementation, the 2019 Securities Law and its guiding documents have established a relatively complete, coherent, and unified legal framework governing the stock market (TTCK).

This has contributed to ensuring the stock market operates fairly, transparently, and safely, while protecting the legitimate rights and interests of investors.

However, the rapid development of the market has revealed some shortcomings and challenges in the practical implementation of the law that need to be addressed.

Timely amendments are necessary to resolve these limitations and mitigate risks in the market's operations.

To perfect the legal framework in the securities sector, the key areas of focus for the amendments include:

1. Amending and supplementing provisions to enhance transparency and efficiency in the issuance and offering of securities.

2. Strengthening regulations to monitor and strictly handle fraudulent and deceptive practices in the issuance and offering of securities, clearly defining the responsibilities of organizations and individuals involved, and ensuring effective prevention and handling of violations in the stock market.

3. Addressing practical obstacles to promote the development of the stock market with the goal of upgrading the market’s status. Specifically, this includes finalizing the legal framework for clearing and settlement of securities transactions on the market through a central counterparty clearing mechanism on the Vietnamese stock market.

Recently, the Ministry of Finance issued Circular 68, amending four circulars related to foreign institutional investors, allowing them to buy shares without pre-funding and mandating English-language disclosures.

This move aims to remove the pre-funding bottleneck, bringing the stock market closer to being upgraded.

Specifically, Circular 68 of 2024 allows foreign institutional investors to purchase shares without pre-funding when placing orders. This means they can buy securities on the same day (T+0) and settle the payments on subsequent days (T+1/T+2). The circular takes effect on November 2.

Currently, the Vietnam Securities Depository and Clearing Corporation (VSDC), securities companies, custodial banks, and investors are working to finalize the necessary documentation.

According to SSI Research, this is a step closer to meeting the criteria for Vietnam's stock market to be upgraded to emerging market status by FTSE Russell.

This upgrade could attract an estimated USD 1.7 billion from exchange-traded funds (ETFs), not including capital from active funds, which FTSE Russell estimates to be five times the size of ETF assets.

While foreign selling pressure has eased recently, the stock market remains subdued, with several unsuccessful attempts to break through the 1,300-point level.

Manh Ha