The Vietnam Association of Financial Investors (VAFI) has sent a document to the Ministry of Finance proposing to change existing securities trading centres into joint stock companies. According to VAFI, the current mode of operation of the trading centres proves to be unsuitable, and can cause information to leak, paving the way for the development of insider trading.
Under the current regulations, listing companies are not allowed to make public information about themselves prior to securities companies. They must send the information to securities trading centres, so that the centres can make public the information first. The mechanism on information declaration can generate information leaks, which is taboo for the stock market.
In many share auctions, the lists of the foreign and domestic institutional investors are known beforehand, which puts investors who do not have relations with management agency officials at a disadvantage.
Nguyen Hoang Hai, Secretary General of VAFI, said that it would be better if listing companies sent information to securities trading centres and press agencies at the same time.
However, Mr Hai’s suggestion proves to be unfeasible, according to Tran Van Dung, Director of the Hanoi Securities Trading Centre (HASTC).
Mr Dung said that HASTC, as the market regulatory body, must keep strict control over information declarations: It must filter information before making it public. There may be ‘sensitive’ information, and it could happen that the trading centre has to stop transactions and then declare the information. He said that although this had not yet occurred in Vietnam it could happen in the future.
According to Mr Dung, under the current procedures, the information from listing companies is transferred to the transaction registration division first, where the staffs make reports for submission to the centre’s leaders before the information is made public.
Source: VNE
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