The plan aims to transform the stock market into a vital channel for medium- and long-term capital mobilization, supporting economic development, refining the state-managed market economy, and enhancing regional and international economic integration.
As per short-term goal, by 2025, Vietnam aims to meet all criteria for upgrading from a Frontier Market to a Secondary Emerging Market by FTSE Russell and maintain that status.
Meanwhile, in the long-term goal, the Southeast Asian country aims to meet the criteria for an Emerging Market by MSCI and an Advanced Emerging Market by FTSE Russell by 2030.
To achieve these goals, the plan identifies several critical tasks and solutions, particularly those needed to meet FTSE Russell's criteria. Firstly, the plan seeks to resolve the pre-funding issue, which currently requires foreign investors to deposit 100 percent of the funds before trading. This barrier will be removed by implementing a central counterparty (CCP) clearing mechanism for the Vietnamese stock market. Secondly, the Government will increase transparency regarding foreign ownership limits in various sectors to provide foreign investors with equal access to information.
Thirdly, the Government will streamlining procedures. The process for foreign investors to register and open accounts will be simplified, making it easier to establish indirect investment capital accounts.
Last but not least, the Government will improve information systems between depository banks and securities companies to better support trading activities. It will also implement a master trading account mechanism and propose solutions to stabilize the foreign exchange market against fluctuations in foreign investment flows. The capacity of trading and settlement systems will be enhanced to handle large transaction volumes.
The plan also calls for strengthening the regulatory capacity of the State Securities Commission (SSC). This includes increasing staff and upgrading IT systems for better oversight. The Government will also enhance inter-agency coordination among the Ministry of Finance, the State Bank of Vietnam, and the Ministry of Public Security to improve crime prevention and ensure the security of the market system.
In the long term, the Government plans to:
Review Foreign Ownership Rules: Review current laws to increase foreign ownership caps and remove unnecessary restrictions in some sectors.
Develop Advanced Clearing Systems: Implement modern clearing and settlement infrastructure to support transactions without the 100 percent pre-funding requirement and enable a central counter-party clearing mechanism.
Introduce New Trading Mechanisms: Gradually introduce securities lending and controlled short selling through mechanisms like "waiting-for-securities-to-be-available" trading and intraday trading.
The Government also aims to modernize the trading and settlement systems, enhancing their capacity to handle larger trading volumes and gradually integrating new technologies.
Furthermore, other key initiatives include:
Increasing Liquidity: Enhancing market liquidity by introducing new order types and trading mechanisms tailored to investor needs. The development of a market-maker system, in line with international practices, is also a priority.
Diversifying Products: Expanding the range of financial products to include infrastructure development bonds, green bonds, new options and futures contracts, structured products, new types of depository receipts, investment fund certificates, and other green financial instruments suitable for the market's development level.
