reparing to meet the criteria for upgrading the stock market is one of the significant tasks this year assigned by the government to the securities industry. Time is running short, from a regulatory perspective.

Ta Thanh Binh, head of Market Development State Securities Commission

One of the major barriers that makes the Vietnamese stock market less attractive than others in the region is the requirement for foreign investors to pre-fund 100 per cent before conducting transactions in the Vietnamese stock market, while not being allowed to borrow margin as per banking laws.

To address this issue, the State Securities Commission is carefully reviewing solutions, setting conditions so that only securities companies that meet the requirements can allow foreign investors to place orders without requiring 100 per cent funds.

Regarding this issue, there are two documents that need to be amended: the aforementioned Decree 155 and the Ministry of Finance’s Circular No.120/2020/TT-BTC on trading listed stocks. At this point, we have received the consensus from securities companies on amending the two documents.

Additionally, what foreign investors are concerned about is the ability to buy stocks on the Vietnamese market. Foreign investors, especially large investment funds, are truly interested in their ability to invest in stocks of large companies.

In fact, regulations related to foreign ownership restrictions are not unique to Vietnam. Many stock markets around the world have barriers to foreign investors, especially for business sectors that affect national security or fall under the jurisdiction of state management agencies.

However, a current limitation is that regulations on the sectoral ownership limit of foreign investors are scattered in many different documents. Meanwhile, companies tend to register multiple business sectors, even though they are not actively operating in those sectors.

While businesses are confused about determining the maximum ratio, foreign investors have no official and comprehensive access to this information.

Therefore, an additional aspect in the draft amendment to Decree 155 is to extend the deadline for foreign ownership ratio notification procedures. Companies need to determine the maximum foreign ownership ratio. Many of their registered sectors, while not actually in operation, are causing restrictions in terms of foreign ownership.

Furthermore, it is important for companies to avoid situations where the AGM sets a maximum foreign shareholder limit that is lower than what is legally permitted. While it is within the rights of shareholders and businesses to ensure investor interests, it is crucial to avoid scenarios where companies unintentionally hinder foreign investor access.

Of all the criteria for market upgrading, quantitative measures like market capitalisation and the value of listed companies have already met the standards, and market liquidity is generally satisfactory. It is important to further enhance qualitative aspects, particularly focusing on improving the quality of listed companies, strengthening corporate governance practices, and ensuring transparency in the market.

Also according to the draft, the requirement for mandatory information disclosure in English and Vietnamese will be implemented according to a particular roadmap. For large public companies with contributed capital of $4.8 million or more, regular disclosure in English will start from 2025, and disclosure of both regular and irregular information in English from 2026. Then, this requirement will be implemented across the entire market from 2028, for all types of information.

We are drafting amendments to circulars to address the above issues and have reported to the minister of finance on the main amendments and has been approved for the amendment schedule.