Foreign currency sales on the table for bourse investors

The commission (SSC) has suggested the State Bank allow local securities companies to trade foreign currencies to attract foreign investors into the bourse.
“The SSC is working closely with the State Bank’s foreign currency management department,” said SSC deputy chairman Nguyen Doan Hung.
“If [the proposal is] approved, the move could be applied by the end of this month,” he told Vietnam Investment Review last week.
He said allowing local securities companies or non-banking institutions to trade foreign currencies was a “breakthrough”, aimed at creating a one-door policy and simplifying procedures for foreign investors who wished to inject their money into the bourse.
Most domestic securities firms in Ho Chi Minh City applauded the SSC initiative, which would offer foreign investors more leeway.
Under Decision 998/2002/QD- NHNN dated September 13, 2002 by the State Bank, foreign currencies that foreign investors transfer to Vietnam in order to trade shares must be sold to foreign banks specialising in custodial and clearing services.
“Local securities firms are now allowed to take custody of stocks for foreign investors in accordance with the Ministry of Finance’s Decision 51/2003/QD-BTC.
“If they have more rights to trade foreign currencies, they will be able to provide a wider range of services for foreign investors,” said ACB Securities Company general-director Ly Xuan Hai.
Local securities companies will also be able to cooperate with domestic commercial banks that have already been licensed to trade foreign currencies to buy foreign currencies of foreign investors, he said.
Other local securities brokers agreed with Hai, calling on the SSC and the State Bank to allow local securities firms and commercial banks to buy or sell foreign currencies to foreign investors.
“In a bid to open up the sector, local securities and commercial banks should be allowed to offer custodial and foreign exchange services to foreign investors,” said First Securities Company director Tran Thien The.
Phi Dang Minh, deputy head of the State Bank foreign currency management department, said the bank would consider it in order to facilitate foreign investors.
But, Minh and other State Bank officials raised concerns over the supervision of accounts and speculation from securities investors, urging domestic securities firms to prepare carefully before applying the new rule.
Most brokers, meanwhile, said computer software utilised at the Ho Chi Minh City Trading Centre and the Bank for Investment and Development (BIDV) – the clearance bank for share transactions – allowed the SSC to supervise trading accounts from any bank offering custodial services.