Vietnam Ministry of Finance Orders to Review VN30 to Limit Negative Impact on Markets

Huynh Quang Hai, Deputy Minister of Finance, requested review of the VN30 index to complete and reduce the negative impact on the inter-markets ( futures and based).

At the H1/2018 review and H2/2018 work program of the State Securities Commission (SSC), Deputy Minister of Finance Huynh Quang Hai has directed 7 key points of management and supervision of the stock market as follows:

Firstly, the Deputy Minister requested the SSC to complete the mechanism and policies for the operation of the market focusing on a number of major policies such as the draft of Law on Securities Amendment; the plan to restructure the stock market in the period of 2018-2020 with a vision to 2025 and the project on establishment of Vietnam Stock Exchange, the SSC will continue to cooperate with other units under the Ministry to soon complete the project on establishment of Vietnam Stock Exchange.

Secondly, the SSC should focus on reviewing and consolidating the process of approval for profiles of IPO public company registration, share listing, trading registration to enhance the quality of products in the market and intensify inspection, especially overseeing the process of increasing capital and using the proceeds before registering for listing and trading; ensuring the transparency. The SSC should closely coordinate with the Department of Enterprise Finance and relevant units in order to well implement the equitisation and divestment programs in accordance with Decree 126 and Decree 32; attaching the equitisation and divestment with the listing / registration for trading on the stock market. The SSC will soon submit to the Ministry the draft circular guiding the method of book building.

Thirdly, on the futures market: The State Securities Commission will take the lead in coordinating with HNX and VSD to complete the report on the implementation of the futures market after one year of operation and report to the Ministry and the Prime Minister on the results, remaining issues and policy recommendations; coordinate with the Price Management Department to immediately issue the circulars on service fees applicable to products on the futures market ; and direct stock exchanges to review the VN30 index in order to complete and reduce the negative impact on the markets.

SSC continues to study to soon introduce more products based on other indexes to diversify products on the futures market; coordinate with the State Bank of Vietnam to remove obstacles and create mechanisms for commercial banks to invest, do business and provide services for G-bond futures; and try to put G-bond futures into operation at the end of the third quarter or beginning of the fourth quarter of 2018.

Fourthly, for CW (Covered Warrant) products, SSC continues to work with HOSE and VSD to be ready to launch the products into trading.

Fifthly, regarding the corporate bond market, SSC should closely coordinate with the Finance and Banking Department on the organizational model and delegate the Stock Exchange and VSD to complete preparation and try to operate the market in the first half of 2019.

Sixth, the restructuring of securities companies and fund management companies will be continued, the SSC classifies the securities companies and fund management companies by financial capacity and ability to provide services to speed up the restructuring process.

Finally, regarding supervision, inspection and handling of violations on the stock market, the SSC should intensify inspection delegations especially to focus on deployment of unexpected inspection missions to promptly identify and strictly handle violations in the stock market; The stock exchanges in Hanoi and Ho Chi Minh City continue to strengthen the role of overseeing and improve the effectiveness of stock market supervision and dealing with violations according to its competence to ensure publicity and transparency of the stock market.

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