Directive 08/CT-TTg on the management of the securities market

THE PRIME MINISTER

Directive No. 08/CT-TTg of March 2, 2012, on boosting the operation and enhancing the management of the securities market

Over the recent time, due to the impacts of the global financial crisis, the world economic and trade downturn as well as national economic difficulties, Vietnam’s securities market has experienced a sharp fall and challenged the confidence of investors. In this context, the Government has taken many measures to stabilize the macro-economy, rein in inflation, maintain the economic growth at a reasonable rate, and assure social security. The implementation of Resolution No. 11/ND-CP of February 2, 2011, has recorded initial results such as reducing the inflation rate, trade deficit and interest rate. However, the implementation of inflation control measures has also affected Vietnam’s securities market, resulting in a big loss in the market index for a long time.

To assure the stable and healthy operation of the securities market in synchrony with the monetary market, contributing to stabilizing the market and macro-economy, the Prime Minister directs ministries, sectors and market members in taking measures to boost the operation and enhance the management and supervision of the securities market as follows:

1. The Ministry of Finance shall:

a/ Assume the prime responsibility for, and coordinate with related ministries and sectors in, implementing the Strategy for development of Vietnam’s securities market during 2011-2020 with general and long-term solutions to improving legal institutions, restructuring the securities market and raising the quality of its operation both in breadth and depth, so that the securities market can become a truly effective channel for raising capital for the economy; enhance the market management and supervision according to international principles and standards, assuring the system safety.

b/ Assume the prime responsibility for, and coordinate with the State Bank in, implementing the Scheme on management of foreign indirect investment capital in order to attract investment and at the same time to closely supervise the capital flow; devise and implement measures to respond to abnormal developments of the capital flow and assure a safe financial system.

c/ Assume the prime responsibility for, and coordinate with related ministries and sectors in, implementing the Scheme on restructuring of the securities market after it is approved by the Prime Minister, covering: restructuring and consolidation of the Stock Exchanges; restructuring of securities companies and fund management companies in line with the policy on restructuring of the financial and banking system; and restructuring of the securities market’s commodities and investor bases.

d/ Develop the system of professional securities investors, specifically: step by step establishing and operating securities investment companies and open-end securities investment funds in accordance with law; coordinating with the Ministry of Labor, War Invalids and Social Affairs in studying and submitting to the Prime Minister a scheme on establishment of voluntary pension funds; controlling the participation of credit institutions, insurance businesses, securities companies and securities investment funds in securities investment in the capacity as institutional investors, assuring compliance with current laws.

e/ Assume the prime responsibility for, and coordinate with related agencies in, implementing the Scheme on restructuring of enterprises, focusing on state economic groups and corporations.

f/ Direct the elevation of standards for listing and registration of securities trading on the Stock Exchanges under regulations; evaluate business efficiency, financial safety ratios, corporate governance and information disclosure of listing businesses.

g/ Assume the prime responsibility for, and coordinate with related ministries, sectors, localities, state economic groups and corporations and the Central Steering Committee for Enterprise Renewal and Reorganization in, elaborating a plan and roadmap for equitization of state enterprises and withdrawal of state capital from enterprises in which the State does not need to hold shares according to the state enterprise criteria and classification list provided in the Prime Minister’s Decision No. 14/2011/QD-TTg of March 4, 2011.

h/ Restructure the bond market through performing the following specific tasks: restructuring the government bond portfolio by swapping outstanding bonds in order to reduce bond types and increase bond volume; coordinate with the State Bank of Vietnam in developing the system of market makers and professional bond investors, formulating a mechanism for linking primary and secondary bond traders to raise capital for the budget and socio-economic investment at the most reasonable cost and improve the market’s liquidity; coordinate with the State Bank of Vietnam and the Bond Market Association in re-evaluating the specialized government bond trading system, and devising and implementing solutions to improving the bond trading market in the second quarter of 2012; assume the prime responsibility for, and coordinate with related agencies in, elaborating a scheme on establishment of credit rating agencies and pilot evaluation and rating of a number of Vietnamese enterprises in 2012.

i/ Direct the development of a number of new products of the securities market on the principles of prudence, effectiveness and strict management and supervision, specifically: studying and piloting the product of global depository certificate; studying and building a derivative securities market according to the Strategy for development of the securities market during 2011-2020.

j/ Assume the prime responsibility for, and coordinate with the State Bank of Vietnam in, renovating the securities settlement and securities transaction payment system, specifically: elaborating a scheme on via-State Bank payment for (short-term and long-term) government bond transactions to be implemented in 2012; studying and elaborating a scheme on centralized management of securities payment money accounts and securities accounts of investors for supervising the payment for securities transactions by securities companies and protecting investor interests, to be implemented in 2012.

k/ Direct the State Securities Commission in coordinating with related agencies in regularly enhancing the management and supervision of the securities market, assuring its stable and effective development, specifically: finalizing and submitting to the Government for promulgation and guiding the implementation a decree guiding the amended Securities Law and a decree replacing Decree No. 85/2010/ND-CP on sanctioning of administrative violations in the field of securities and securities market; evaluating, classifying and supervising operation of securities companies and fund management companies according to the financial safety criteria promulgated by the Ministry of Finance; adopting measures to promptly handle weak securities companies while assuring the safety of the financial and banking system; re-evaluating the effectiveness of the transferability among securities trading institutions attached to credit institutions and state economic groups and corporations, thereby devising appropriate restructuring solutions; improving risk management capacity, financial safety and professional ethics in securities trading institutions, and applying measures to consolidate, merge or dissolve ineffectively operating securities companies; requesting securities companies to strictly comply with current regulations on management of securities trading deposits of their clients separately from their own money; supervising the information disclosure by issuing and listing institutions and related institutions and individuals, and strictly handling violations; supervising trading activities, preventing and promptly detecting acts of unfair, trading or price-manipulating trading, and strictly handle violations; and coordinating with law enforcement agencies in handling criminal offenses.

l/ Strictly administer the fiscal policy, organize the issuance of government bonds and government-guaranteed bonds within limits approved by the Prime Minister.

2. The Ministry of Planning and Investment shall:

Assume the prime responsibility for, and coordinate with related ministries, sectors and localities in, reviewing and evaluating the transformation of foreign-invested enterprises into joint-stock companies, and review, amend and supplement relevant legal documents to be conform to the practical implementation and legal framework, then report them to the Government in the second quarter of 2012.

3. The State Bank of Vietnam shall:

Administer the monetary policy in a strict, prudent and flexible manner, harmoniously combine the monetary policy with fiscal policy in order to curb inflation according to the set objectives; take the initiative in flexibly administering the interest rate tool and keep the ceiling interest rate at a level suitable to the decreasing trend of inflation and the positive macro-economic situation; and support the sustainable development of the securities market.

4. Organization of implementation:

a/ Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, chairpersons of boards of directors, directors general and directors of businesses shall implement this Directive.

b/ The Ministry of Finance shall assume the prime responsibility for, and coordinate with related ministries and sectors in, inspecting and urging the implementation of this Directive, and periodically reporting it to the Prime Minister.-

Prime Minister
NGUYEN TAN DUNG