Some 50 applications for the establishment of securities trading companies have been sent to the competent agencies but the Vietnam Association of Securities Businesses has asked for the temporary halt of the licencing of new securities trading firms.
Representatives of securities trading companies, meanwhile, have said that stopping the licencing of new securities trading companies is a measure contrary to the Enterprise Law and harms the business environment.
Phan Vu Tuan, Deputy Director of the International Securities Trading Company said: “The stock market is developing and administrative measures should not be used to control the development of securities trading companies.”
Tran Thien The, General Director of the De Nhat securities trading company, said that the Enterprise Law stipulated clearly that any company that met conditions must be licenced.
“We should not create a narrow market by restricting the establishment of securities trading companies. In the free market that we are building, it is necessary to have newly born and dying businesses because it is not known if existing securities trading companies run better than the ones that are asking for licences,” said Nguyen Chi Thanh, Chairman of the Board of Directors of the Quoc Gia securities trading company.
One of the reasons that the Vietnam Association of Securities Businesses cited in its proposal to halt licencing is: “Compared with other countries in the region, the number of securities trading companies in Vietnam is now sufficient.”
But operating securities trading companies said that the market was still wide and only the HCM City Securities Trading Centre lacked space for representatives. They also said that the slow development in terms of technology of the centre was a hindrance to the development of securities trading companies.
An official of the ACBC securities trading company said that if 20% of the Vietnamese population invested in stocks and if the technological infrastructure was good and ACBS could freely develop its branches to be able to serve 1 million investors, the Vietnamese stock market would only need 20 companies like ACBS. But ACBS currently has only 50,000 accounts.
In fact, the stock market is only developing in big cities of Vietnam like Hanoi and HCM City. Recently, some securities trading companies have opened branches in Hai Phong and Can Tho. While securities trading companies are keen on developing their market in big cities, who will develop the stock market in other provinces if not the newly established ones? It is noted that the ratio of people investing in stocks in Vietnam is very low compared to Hong Kong, Thailand, Taiwan.
If the state worries about the collapse of securities trading companies leading to adverse impacts on society and if the number of securities trading companies is enough, as the state wants to direct investment in more effective fields of investment, what can it do instead of stopping the licencing of new securities trading companies?
According to operating securities trading companies, the state can increase the requirements for establishing securities trading companies and control the operating quality of securities trading companies.
However, despite any solution, the bankruptcy of securities trading companies should be considered objectively as the rules of the market economy, under which potential companies will develop while small ones will have to merge or go bankrupt. This rule has unfolded thusly in many economies and will in Vietnam as well and what the country can do to diminish its adverse impacts should not go against the rules of the market economy.
Source: VNE
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