Trade accounts to a hit

The bustling securities market has forced securities companies to act drastically by limiting the opening of new investors’ trading accounts as well as pushing the securities trading centres to speed up modernisation of information technology infrastructure.
Nguyen Duy Hung, Saigon Securities Inc (SSI) chairman and CEO, said the company has put up a barrier on opening accounts for stock trading. Under the company’s conditions initiated last week each investor must have at least VND100 million in their account before being able to trade. The move forms part of a commitment to create fair treatment to investors as the company’s network nears overload.
“Demand of investors for opening trading accounts at securities company is huge and hikes fast, exceeding the infrastructure’s capability. However, if the new barrier does not come into effect, we will raise the barrier to a higher level and even stop opening [new accounts],” said Hung.
He said SSI’s current network will reach full capacity in a month if the company continues to open around 300 new accounts for customers a day on average and transfer 3,000 orders to the bourse daily.
Securities companies have a responsibility in investing in a modern network, while Hanoi and Ho Chi Minh City securities trading centres are in charge of installing networks linking the centres and securities companies to enable instant transaction orders to the bourse.
“A decision aiming to reduce the number of customers is tough, however, it is a necessary measure to ensure all orders made by investors are transferred to the trading centres,” said Hung.
The concern stems from network delays in receiving orders at trading centres. Ho Chi Minh City Securities Trading Centre (HSTC) receives orders three times a session and forces investors to queue to import orders in the network.
HSTC aims to receive continuous orders from securities companies by April this year and targets electronic transactions by 2008.
The centre is preparing documents calling for bidding to upgrade its information technology infrastructure.
However, an official from the Centre of Informatics and Statistics under the State Securities Commission said the pressure on network upgrade is there, however the proposal for information technology modernisation of securities has still been delayed for approval for over a year due to differences in the definition of management model for information technology systems of the whole securities industry.
The official said the proposal has not yet been approved by the Ministry of Finance and each trading centre is preparing for network development, which will not create a unified system of management.
However, the commission is still pursuing the deadline to provide simultaneous connection to securities companies for e-transactions in 2008.
“There must be a centralised organisation to manage the systems for the sector and handle the current issues of securities companies,” said the official.
According to the State Securities Commission, Vietnam has around 100,000 investor trading accounts by the end of 2006, tripling that of 2005 including 1,700 accounts from foreign investors.
The country has 55 securities companies, 18 management fund companies and six banks offering custody services including four foreign banks.