Transparency and disclosure key to sustaining Vietnam's market upgrade

That upgrade came on September 21, when FTSE Russell raised Vietnam's stock market from frontier to secondary emerging market status. Following the move, improving corporate quality, enhancing information transparency, and fostering proactive investor engagement through regulatory reforms are key to attracting and retaining long-term capital.

The Ministry of Finance (MoF) is drafting a new circular to replace Circular No.96/2020/TT-BTC, which provides guidance on information disclosure in the securities market, and has been amended and supplemented by MoF’s Circulars No.68/2024/TT-BTC, 18/2025/TT-BTC, and 08/2026/TT-BTC.

Photo; baodautu.vn

The draft adds Vietnam Securities Depository and Clearing Corporation and involved intermediary organisations to the disclosure requirements list. Disclosures will cover operational status, technology incidents, payment capacity, and issues that may affect clearing and settlement activities.

A notable change is the expansion of English-language disclosure requirements to additional entities, with full compliance required by January 1, 2028. If there were discrepancies between Vietnamese and English disclosures, the Vietnamese version would be valid, and the organisation must promptly correct and republish the information.

Additional environmental, social and governance disclosure requirements are also proposed. Companies that have yet to report certain indicators must transparently explain the reasons and outline plans to address the gaps, unless reporting required specific legislation.

The draft also finalises disclosure requirements regarding the use of mobilised capital from bond offerings, explanations in business performance’s fluctuations and responsibilities related to forced securities sales.

It also adjusts the thresholds and methods for disclosing transactions by insiders, related parties and major shareholders.

Talking to VIR, Luong Duy Phuoc, analysis director of KAFI Securities Corporation said that the market upgrade is a significant milestone, but retaining capital requires improvements in both market infrastructure and operational quality.

“Implementing central counterparty (CCP) mechanism, refining clearing payment and addressing barriers to market access for foreign investors are key priorities. Legal framework must also keep pace with fintech, data and AI developments,” Phuoc said.

The implementation of CCP, a single-point information disclosure system, expanded English-language disclosures and sustainability reporting calls for further regulatory improvements.

Phuoc noted that the market needs more large-scale companies with strong financial background and long-term growth potential to broaden investment options for funds.

However, scale is only a starting point. Phuoc said that a company’s attractiveness ultimately depends on its ability to generate sustainable profits, use capital efficiently, maintain healthy cash flows and exercise discipline in capital allocation.

“Transparency must go beyond simply meeting formal disclosure requirements,” he stressed. Companies need to explain their strategies, business outlook, capital plans and factors that could affect their valuations, enabling investors to identify risks and assess their commitment to sustainable growth.

Disclosures should reflect actual business practices and clearly outline achievements, shortcomings and plans for improvement.

Truong Hien Phuong, senior director at KIS Vietnam Securities Corporation, said that as the country enters a larger market, enterprises need to improve their quality to meet the requirements of larger funds with more stringent investment criteria.

According to Phuong, “Companies must invest systematically in investor relations. A qualified team can maintain regular dialogues, provide consistent information and help investors gain a clearer understanding of the business.”

In his words, stock liquidity is also a key consideration, as funds must assess their ability to both deploy and withdraw capital. Additionally, strict enforcement against market manipulation, insider trading and financial reporting fraud would help build investor confidence as well.

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