On Mar. 20, VIE SEC proposed to amend rules re securities firms.
VIE SEC drafted circular to amend, supplement existing regulations on securities transactions, clearing and settlement; activities of securities companies; and disclosure of information on the securities market; in accordance with Law on securities, decrees.
Aim remove obstacles for foreign institutional investors, improve information access.
Follows VIE SEC Nov. 2021 enhanced transparency with new rules, see #122447.
Also follows VIE GVT Dec. 2020 circular on operations, trading, offering, see #98073. Follows VIE GVT Dec. 2020 issued circular on rules for securities market, see #97733.
120/2020/TT-BTC
Amendments include provisions for margin trading, transactions not requiring 100% cash pre-funding for foreign institutional investors, and settlement responsibilities.
119/2020/TT-BTC
Outlines settlement process of non-100% pre-funding buy orders of foreign institutional investors, also in event of cash shortages in such investors' accounts.
121/2020/TT-BTC
Revisions proposed to ensure trading and depository members adhere to contractual obligations concerning trading orders and examination of customers' pre-funding.
Obliges securities companies to settle cash-short transactions, investment limits.
96/2020/TT-BTC
Information disclosure in securities market must be in Vietnamese, English; clarifies procedure for internal persons, related persons intending to conduct transactions.
The earliest effective date for the obligation to disclose in English is Jan. 1, 2025.
Effectiveness
VIE SEC did not clarify when the public consultation was ending.
On Jul. 5, 2024, VIE GVT said that Ministry of Finance has collected feedback on the consultation and is expected to publish the final draft in the second week of Jul. 2024.
Ministry of Finance has communicated with market members such as securities firms and depository banks, to support them to prepare for implementation of the circular.
Document dated Jul. 5, 2024, received from VIE GVT Jul. 10, summarized on Jul. 15.
Jul. 19, 2024 Final Draft
On Jul. 19, 2024, VIE SEC incorporated feedback to finalize the draft VIE GVT circular.
Allow foreign institutional investors to execute transactions without full upfront payments under specific conditions, aiming to facilitate greater flexibility, participation.
Enhanced rules for clearing, settlement of securities transactions; roles, responsibilities of securities companies, custodian banks in managing fund shortfalls are detailed.
Requires dual-language disclosures to improve transparency for international stakeholders; gradual implementation for English disclosures from 2025 to 2028.
Specifies contractual responsibilities between members to ensure execution of orders, verification of financial positions to facilitate payments and settlement.
Introduces new limitations on transaction types for securities companies, particularly concerning related parties and parent companies, to avoid conflicts of interest.
Clarifies penalties and legal responsibilities for non-compliance, focusing on ensuring proper financial reporting and transaction execution by securities companies.
The consultation period is not mentioned.
Jul. 26, 2024 VIE GVT Conference
On Jul. 26, 2024, VIE SEC said VIE GVT held a conference to discuss the draft circular amending/supplementing various provisions regulating the stock market in Vietnam.
Feedback from conference will be compiled and evaluated to refine the draft, focusing on aligning new regulations with current market practices and international norms.
Aug. 2024 Final Stages
On Aug. 8, 2024, VIE SEC attended meeting with Morgan Stanley Capital International.
Said the draft circular is going through the final stages to be submitted to the leaders of the Ministry of Finance for consideration and promulgation as soon as possible.
The relevant payment process is also being developed at the same time, to ensure that it can be effectively implemented as soon as the new regulation is promulgated.
Document dated Aug. 8, 2024, received from VIE SEC Aug. 9, summarized on Aug. 13.
Sep. 2024 Promulgation
On Sep. 18, 2024, VIE SEC, VIE GVT issued circular 68/2024/TT-BTC amending provisions on pre-funding buy orders and the need for sufficient funds when placing orders; implements the above proposals re 119/2020/TT-BTC and 120/2020/TT-BTC.
