6 measures to control securities market

The Ministry of Finance and State Securities Commission of Vietnam (SSC) have announced six measures to control the securities market to help investors understand and make correct decisions on their investment.

First, under the instruction of the Prime Minister, the room on foreign holdings in listed-entities will temporarily stay the same. Currently, foreign investors are allowed to hold a maximum of 49% stake in listed companies and 30% in listed banks.

Secondly, SSC has worked with the State Bank of Vietnam to promote co-ordination in supervising activities relating to loans for securities investment, securities mortgage by commercial banks. The two agencies shall also boost co-ordination in monitoring inward and outward foreign capital flows related to securities investment.

Thirdly, SSC shall organise delegations to investigate securities companies which are currently criticised by investors for their unfair performance in executing customers’ orders or delay depository services of shares of some listed companies. All violations shall be settled in conformity with the law.

Fourthly, SSC asks listed companies to quickly announce information on their financial activities in 2006 to help investors have reasonable decisions in their securities trading activities.
Especially, the SSC shall ask listed companies to public official information in case there are rumours on the market such as the merger and acquisition of certain listed companies.

Fifthly, SSC will require the re-registration of foreign investment funds’ representative offices operating in Vietnam. Before, these offices got operating licences by the Ministry of Trade. According to the Securities Law which became effective on January 1 2007, SSC asks these institutions to re-register with the agency.
Besides, those authorized to invest in the Vietnamese stock exchange from foreign accounts shall have to report to the SSC on their investments. This regulation is especially applicable for funds set up abroad but authorising individuals to invest in the local market.

Finally, SSC shall strengthen dissemination of public information on the market and securities, enabling people to understand the workings of the market.
Especially, SSC shall give analysis and evaluation of the market and announcement of information on financial indices, like price-earning (P/E) ratio to provide investors with necessary information to make their investment decisions.

Source: VNE