Activity

Vietnam is actively pursuing an upgrade of its stock market from frontier to emerging status, with optimism from government officials that this could be achieved by September 2025. This initiative is in line with the Prime Minister’s Decision No. 1726/QD-TTg dated December 29, 2023.
Key Efforts and Progress:
* Improved Legal Framework: The State Securities Commission (SSC) has made significant strides in this area.
* The Ministry of Finance has issued Circulars No. 68/2024/TT-BTC and No. 18/2025/TT-BTC to regulate securities registration, depository, clearing, and settlement activities.
* Circular No. 96/2020/TT-BTC, governing market information disclosure, has also been issued.
* Amendments to Decree No. 155/2020/ND-CP are being finalized to address legal obstacles for foreign investors, including simplifying administrative procedures, clarifying ownership ratios, and ensuring investment security. These amendments also aim to expand the Central Counterparty (CCP) model beyond derivatives to cover the spot market.
* Enhanced Foreign Investor Experience: A key priority is to improve the investment experience and evaluation process for foreign investors in Vietnam to ensure the long-term maintenance of upgraded market status. This includes streamlining account opening procedures.
* Commitment to Foundational Reforms: Nguyen Duc Chi, Deputy Minister of Finance, emphasized that the SSC will focus on foundational reforms to sustain the new ranking, highlighting the importance of clear, transparent, and efficient processes for foreign investors.
* Operational Readiness: The effective deployment of the KRX trading system, a new technology platform, is crucial for improving trading efficiency and risk management for foreign investors.
Challenges and Remaining Issues:
While significant progress has been made, some challenges remain that are being addressed:
* Foreign Ownership Restrictions: MSCI has noted that restrictions on foreign ownership continue to pose challenges, with some listed companies having low foreign ownership thresholds.
* Information Transparency: Not all corporate disclosures are adequately published in English, which can limit transparency for international investors.
* Foreign Exchange Market Infrastructure: The foreign exchange market still lacks adequate infrastructure, and domestic regulations impose additional constraints.
* Payment and Settlement: While measures have been introduced to address pre-funding issues by permitting securities firms to guarantee transaction payments, MSCI will require more time to evaluate their effectiveness. Delays in processing transaction requests by the Vietnam Securities Depository and Clearing Corporation (VSDC) have also been observed.
Public Asset Management and Administrative Restructuring:
In a separate but related development, concerns have been raised regarding unused public office spaces following administrative restructuring into a two-tier local government model. Nguyen Thi Thoa, Deputy Director of the Department of Public Asset Management, clarified that these vacant buildings are temporary as localities reorganize assets and will be repurposed for essential public services such as healthcare, education, libraries, parks, or cultural and sports centers. This administrative restructuring aims to streamline government and improve efficiency, bringing services closer to the people.

Video courtesy of Eurex

Video courtesy of Eurex