THE PRIME MINISTER | | THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness |
No. 1191/QD-TTg | | Hanoi, August 14, 2017 |
DECISION
Approving the bond market development roadmap during 2017-2020, with a vision toward 2030[1]
THE PRIME MINISTER
Pursuant to the June 19, 2015 Law on Organization of the Government;
Pursuant to the July 12, 2006 Law on Securities and the November 24, 2010 amended Law on Securities;
Pursuant to the November 26, 2014 Law on Enterprises;
Pursuant to the Government’s Resolution No. 51/NQ-CP of June 19, 2017, promulgating the Government’s action program to implement the Political Bureau’s Resolution No. 07-NQ/TW of November 18, 2016, on policies and solutions for restructuring the state budget and managing public debts to ensure a secure and sustainable national financial system;
Pursuant to the Prime Minister’s Decision No. 128/2007/QD-TTg of August 2, 2007, approving the capital market development roadmap through 2010, with a vision toward 2020;
At the proposal of the Minister of Finance,
DECIDES:
Article 1. To approve the roadmap for development of Vietnam’s bond market during 2017-2020, with a vision toward 2030, with the following principal contents:
1. Development viewpoints:
a/ To build and develop the bond market in conformity with the economic development level and in synchrony with other components of the financial market, including the stock market and monetary-credit-banking market;
b/ To develop the bond market both extensively and intensively, ensuring systemic safety, gradually approaching international practices and standards and modernizing the market’s infrastructure, thus turning it into a crucial channel for raising medium- and long-term capital at reasonable capital costs;
c/ To continue focusing on developing the government bond market as a basis for developing the bond market; to further develop the corporate bond market to create favorable conditions for enterprises to raise capital, especially medium- and long-term capital, thereby enhancing their corporate governance and information disclosure;
d/ To increase openness and transparency and protect the lawful interests of market participants.
2. Objectives:
a/ Overall objectives
- To develop a stable bond market with a complete structure and synchronous supply-demand factors; to expand investor base and increase the scale and quality of operation of the market, and diversify its products and operations, ensuring its open, transparent and effective operation.
- To proactively integrate into the international market and step by step approach international standards and practices;
b/ Specific targets
- The outstanding balance of the bond market will reach around 45% of GDP by 2020 and some 65% of GDP by 2030, with the outstanding balance of the market of government bonds, government-guaranteed bonds and municipal bonds to reach about 38% by 2020 and approximately 45% of GDP by 2030, and that of the market of corporate bonds to reach about 7% of GDP by 2020 and around 20% of GDP by 2030.
- The average maturity term of domestically issued government bonds will be 6-7 years during 2017-2020 and 7-8 years during 2021-2030.
- The average trading volume of government bonds, government-guaranteed bonds and municipal bonds per session will increase to 1% and 2% of the outstanding balance of listed bonds by 2020 and 2030, respectively.
- The rate of government bonds held by insurance companies, social insurance organizations, pension funds, investment funds and non-bank financial institutions will reach 50% by 2020 and 60% by 2030.
3. Solutions
a/ Improving framework policies on the bond market
- For laws and resolutions of the National Assembly:
+ To study and include specific provisions on instruments to prevent and handle risks of public debts (including government debts), funding sources for risk handling, and the deciding competence in the future amendments to the Law on Public Debt Management, aiming to enhance the proactiveness of the Government, Prime Minister and Ministry of Finance in performing the tasks of swapping and redeeming government bonds to manage government debt risks at the same time with developing the bond market.
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