Decision 2014/QD-TTg 2025 on approval of the Scheme on Upgrading Vietnam’s Securities Market

DECISION

On approval of the Scheme on Upgrading Vietnam’s Securities Market

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THE PRIME MINISTER

Pursuant to the Law on Organization of the Government dated February 18, 2025;

Pursuant to the Law on Securities dated November 26, 2019, amended and supplemented under Law No. 56/2024/QH15 dated November 29, 2024;

Pursuant to the Political Bureau’s Resolution No. 50-NQ/TW dated August 20, 2019, providing orientations for completing institutions and policies, and improving the quality and efficiency of foreign investment cooperation by 2030;

Pursuant to Resolution No. 29-NQ/TW dated November 17, 2022 of the 13^th Party Central Committee, on further promoting national industrialization and modernization toward 2030, with a vision to 2045;

Pursuant to the Political Bureau’s Resolution No. 59-NQ/TW dated January 24, 2025, on international integration in the new context;

Pursuant to the Party Central Committee’s Resolution No. 68-NQ/TW dated May 04, 2025, on private economic development;

Pursuant to the Government’s Decree No. 29/2025/ND-CP dated February 24, 2025, defining the functions, tasks, powers and organizational structure of the Ministry of Finance, amended and supplemented under Decree No. 166/2025/ND-CP;

Pursuant to the Government’s Resolution No. 86/NQ-CP dated July 11, 2022, on development of a safe, transparent, efficient and sustainable capital market for stabilizing the macro-economy and mobilizing resources for socio-economic development;

At the proposal of the Minister of Finance;

DECIDES:

Article 1. To approve the Scheme on Upgrading Vietnam’s Securities Market (hereinafter referred to as the Scheme) with the following principal contents:

I. DIRECTIONS AND OBJECTIVES

1. Directions for formulation of the Scheme

- To ensure full adherence to and effective implementation of viewpoints, guidelines and policies of the Party, laws of the State, and Resolutions of the National Assembly and the Government, as well as Decisions of the Government and the Prime Minister concerning international economic integration, restructuring of the economy and financial system, and the development of the capital market and securities market;

- The upgrading of the securities market shall be approached through a comprehensive and system-wide framework. Measures for market upgrading must be embedded within the broader roadmap for capital market development, aligned with the objectives of the national credit rating enhancement program and the overall socio-economic development orientations of the Party and the State;

- To safeguard the stability and soundness of the national financial system in the course of implementing measures for securities market upgrading; the process of upgrading the securities market shall be accompanied by appropriate solution and policy instruments to ensure safe and sustainable securities market development.

2. Objectives

a) General objectives

To contribute to the implementation of the Party’s and the State’s guidelines and policies on developing the securities market into a key medium- and long-term capital mobilization channel for economic growth; to improve the socialist-oriented market economy institution under state management; and to enhance regional and international economic integration.

b) Specific objectives

- Short-term objective: To fully satisfy the criteria for the market status upgrade from frontier market to secondary emerging market as classified by FTSE Russell in 2025, and to maintain the secondary emerging market status under the FTSE Russell classification.

- Long-term objective: To meet the criteria for an upgrade to emerging market status under MSCI classification and to advanced emerging market status under FTSE Russell classification by 2030.

II. TASKS AND SOLUTIONS

1. Group of tasks and solutions for achieving short-term objectives

a) Group of tasks and solutions for achieving the criteria for secondary emerging market status under FTSE Russell classification:

- Addressing the issue of “Pre-funding requirement” by removing the restriction that requires foreign investors to pre-deposit cash before trading, during the period of pending the implementation of the Central Counterparty Clearing (CCP) mechanism for Vietnam’s equity market;

- Ensuring transparency regarding the maximum foreign ownership limits in specific sectors, thereby ensuring equal access to information for foreign investors.

b) Group of tasks and solutions to maintain the classification in the short term:

- Simplifying procedures for the registration and opening of accounts for foreign investors, facilitating and reducing documentation requirements for the opening of indirect investment capital accounts;

- Strengthening the straight-through processing (STP) information linkage system between custodian banks and securities companies to support investors’ securities trading activities;

- Deploying the omnibus trading account (OTA) mechanism;

- Proposing appropriate foreign exchange market stabilization measures to address fluctuations in foreign investment capital flows;

- Enhancing the capacity of trading and settlement systems to accommodate high transaction volumes;

- Strengthening the supervisory management capacity of the securities management agencies (the State Securities Commission) in terms of human resources and information technology system upgrading for supervision and management. Intensifying intra-sectoral coordination within the securities industry and inter-agency coordination among the Ministry of Finance, the State Bank of Vietnam, and the Ministry of Public Security in monitoring activities in the securities market, thereby improving the effectiveness of sectoral management, enhancing crime prevention and deterrence, and ensuring market integrity, security, and system safety.

2. Group of tasks and solutions for achieving long-term objectives

a) Group of tasks and solutions to meet the criteria for advanced emerging market status under FTSE Russell classification and emerging market status under MSCI classification:

- Reviewing legal provisions on foreign ownership limits to raise the maximum permissible foreign ownership limit and remove from the list those business sectors for which restrictions on foreign ownership are no longer necessary;

- Developing an advanced payment and clearing infrastructure capable of supporting settlement mechanisms that do not require full prefunding, a Central Counterparty Clearing (CCP) framework;

- Studying and implementing, according to a prescribed roadmap, mechanisms for securities borrowing and lending and regulated short selling through the introduction of “sell pending receipt” and intraday trading mechanisms;

- Developing the foreign exchange market and allow the deployment of hedging instruments in the foreign exchange market to serve indirect investment activities;

- Maintaining macro-financial stability by strengthening coordination among fiscal, monetary, and other macroeconomic policies to sustain macroeconomic stability.

b) Group of tasks and solutions to maintain the classification in the long term:

- Strengthening coordination among agencies in charge of foreign exchange management and securities market supervision in regular monitoring of the movement of foreign indirect investment capital flows;

- Continuing the modernization of trading and settlement systems in the securities market, enhancing system capacity to accommodate large transaction volumes. Studying and gradually applying new technologies to securities market operations;

- Improving the regulatory mechanisms, policies, and legal provisions on supervision and management to ensure the security and safety of the securities market and the financial system.

c) Group of long-term supporting tasks and solutions:

- Enhancing market liquidity, deploying new order types and trading mechanisms in the equity market, particularly those suited to investors’ needs. Developing a system of market makers consistent with international practices;

- Improving transparency in the securities market: Strengthening inspection of the quality of operations conducted by audit firms and auditors; implementing the Scheme on the Adoption of International Accounting Standards, and encouraging large listed enterprises to disclose their financial statements in accordance with the International Financial Reporting Standards (IFRS); enhancing corporate governance for public companies in conformity with the Organisation for Economic Co-operation and Development (OECD) principles;

- Developing, diversifying, and restructuring the investor base: Strengthening training and dissemination of investment knowledge to domestic investors; encouraging individual investors to participate through professional investment institutions (such as securities investment funds) toward expanding the base of institutional investors and investment funds, ensuring the balanced and stable development of the securities market;

- Diversifying the market’s underlying assets: Studying and introducing new products such as infrastructure development bonds, green bonds, options contracts, new futures contracts, structured products, depository receipts, new types of securities investment fund certificates, and green financial instruments, etc. consistent with the market’s level of development. Improving the quality of existing indices, diversifying benchmark indices, and developing additional underlying indices to serve as underlying assets for the derivatives market.

(Details of the tasks and solutions are provided in the Appendix to this Decision approving the Scheme).

III. IMPLEMENTATION ORGANIZATION

1. The Ministry of Finance

a) To assume the prime responsibility for and organize the implementation of the Scheme; to formulate an implementation plan and roadmap; to direct and supervise the implementation of the Scheme; to organize evaluation of the implementation; and to promptly report to the Prime Minister for consideration of adjustments and supplements to this Scheme in order to meet practical requirements.

b) To regularly monitor recommendations, record and take measures to address difficulties related to the securities and securities market sectors faced by foreign investors when investing in Vietnam. To implement investment promotion programs to enhance the image of the Vietnamese securities market among the global investment community and major institutional investors worldwide. To seek the support of foreign investors for the goal of upgrading Vietnam’s securities market.

c) To coordinate with the State Bank of Vietnam to strengthen the exchange of information and the supervision of capital flows between the securities market and the monetary market, as well as foreign investment capital sources.

d) To assume the prime responsibility for, and coordinate with relevant ministries and sectors in, reviewing and enhancing foreign investors’ access to business lines currently subject to restrictions on foreign ownership limits.

dd) To direct subordinate entities to:

- Direct the State Securities Commission, the Stock Exchanges to enhance their management and supervisory capacity, improve the effectiveness of market surveillance, and strengthen inspection, examination, and supervision of market activities in order to promptly prevent and strictly handle violations, thereby protecting the lawful rights and interests of market participants; coordinate with functional agencies in ensuring the security and safety of securities market operations, and in preventing and mitigating risks, threats to security and safety, and criminal acts in the securities market.

- Direct the State Securities Commission, the Stock Exchanges, and the Vietnam Securities Depository and Clearing Corporation to develop advanced trading, settlement, and clearing infrastructure; adopt measures ensuring the smooth and secure operation of trading, depository, and settlement systems, capable of meeting the increasing transaction volume upon the market’s reclassification upgrade.

e) To monitor the investment capital flows of foreign investors in the Vietnamese securities market; to strengthen coordination and information sharing with relevant management agencies; and to respond to fluctuations in investment capital flows that may affect the securities market.

g) To coordinate with communication agencies in enhancing public information dissemination and promoting the guidelines and policies on securities and the securities market, including the implementation of solutions for upgrading the securities market classification.

2. The State Bank of Vietnam

a) To coordinate with the Ministry of Finance in reviewing and proposing amendments and supplements to legal and professional regulations in the banking sector (where necessary) to ensure a sufficient legal basis for commercial banks and branches of foreign banks to participate in providing clearing and settlement services for securities transactions.

b) To study the simplification of dossiers, order, and procedures for the opening and use of payment accounts and indirect investment capital accounts by foreign investors conducting indirect investment activities in Vietnam, thereby facilitating the easy and convenient opening of such accounts and further attracting investment capital inflows into Vietnam.

c) To study and formulate preventive measures to mitigate potential impacts of large foreign investment capital inflows and outflows in the securities market on the foreign exchange market.

d) To coordinate with the Ministry of Finance (State Securities Commission) in resolving obstacles faced by custodian banks in providing utilities and services to foreign investors; to study the expansion of financial instruments in line with an appropriate roadmap, thereby enabling financial institutions and foreign institutional investors to undertake hedging transactions and contributing to the development of a comprehensive financial system.

3. The Ministry of Public Security

a) To coordinate with the Ministry of Finance in ensuring the security and safety of securities market operations; to prevent and mitigate risks and threats to market security, safety, and integrity, as well as criminal acts in the securities market.

b) To coordinate with the Ministry of Finance and the State Bank of Vietnam in preventing risks of money laundering, cybercrime, and cross-border crimes related to the Vietnamese securities market.

4. Ministries, ministerial-level agencies, Government-attached agencies, and People’s Committees of provinces and centrally-run cities shall coordinate with the Ministry of Finance and relevant agencies, based on their respective functions and state management responsibilities as prescribed by law, to direct and participate in the implementation of relevant contents of this Scheme.

IV. FUNDING FOR IMPLEMENTATION

Funding for the implementation of this Scheme shall be allocated from the state budget in accordance with the state budget management decentralization, from socialized funding sources, and from other lawful funding sources as prescribed by law.

Article 2. This Decision takes effect on the date of its signing.

Article 3. Ministers, Heads of ministerial-level agencies, Heads of Government-attached agencies, chairpersons of People’s Committees of provinces and centrally-run cities, and heads of related agencies, organizations and individuals shall implement this Decision./.