Radical shift floated for bourse development

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While the State Securities Commission (SSC) is responsible for studying and drafting legislation for securities market, only the Ministry of Finance (MoF) can approve and introduce such legal documents, which has led to a tardiness in building a sufficient legal framework for the market, according to the Vietnam Business Forum’s Capital Markets Working Group.

“We must admit that these actions [the government’s policies] were made with a delay and more importantly without an effective communication between the policy makers and business community which might have caused some shocks to entrepreneurs,” stated the working group’s report.

In fact, the business community had proposed and repeated throughout recent years the problems outstanding on local market to regulators, but little advance were showed.

Of the regulators’ movements within this year, SSC chairman Vu Bang notably mentioned the July 2011 landmark of issuing a mass of new decrees and circulars on executing the new Law on Securities 2010, which will theoretically activate open-ended funds, real-estate funds along with some new instruments for local stock market.

Among them, the circular on trading securities already got approval from MoF and is set to be introduced after SSC completes “a few technical steps”.

Besides, those new legal documents are hoped to lift quality for the market, in which public companies are to take more responsibilities in disclosing information while listed companies having to meet higher standards for their listing.

Bang also said that the two stock exchanges were developing additional indexes for reflecting the market more closely in accordance with its requirement.

“Some 20 per cent of the problems related to the capital market development stated in last year’s business forum was dealt,” head for the working group cum Dragon Capital’s chairman Dominic Scriven told VIR.

“To be honest, SSC urgently collected ideas from the market participants and drafted legal documents,” said an expert.

Within this year’s VBF framework, the Capital Markets Working Group suggested the market regulators to build up some derivative tools, which so far are not activate in Vietnam, and might begin with “VN-Index future.”

Besides, it proposed extending the trading hours as well as price limits and simplifying the procedures in opening trading accounts for foreigners.

During the first haft of this year, Vietnam has suffered many economic problems including accelerating inflation, an instable gold and foreign exchange market, too high interest rates and a low-liquid banking system. That fact together strongly weighed on the stock market, dragged the benchmark VN-Index down the most among emerging markets.