Resolution 86/NQ-CP 2022 development of a safe and efficient capital market for stabilizing the macro-economy

RESOLUTION

On development of a safe, transparent, efficient and sustainable capital market for stabilizing the macro-economy and mobilizing resources for socio-economic development^[1]

THE GOVERNMENT

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration;

Pursuant to the Government’s Decree No. 39/2022/ND-CP of June 18, 2022, promulgating the Working Regulation of the Government;

At the proposal of the Minister of Finance and based on the conclusions of the Prime Minister at the Conference on development of a safe, transparent, efficient and sustainable capital market in order to stabilize the macro-economy and ensure major balances of the economy, which was organized on April 22, 2022,

RESOLVES:

The capital market plays an increasingly important role and serves as a channel of medium- and long-term capital for the economy. The 2021-2030 ten-year Strategy for socio-economic development (according to the Documents of the 13^th National Party Congress) has affirmed: “To continue scrutinizing, restructuring, and raising the operational efficiency of, the finance, securities, stock and bond markets; to strictly manage organizations participating in the markets; to ensure the high liquidity and safety of the system; to scale up, and raise the operational efficiency of, the securities market to really become a major channel of capital raising of the economy”.

The National Assembly’s Resolution No. 31/2021/QH15 of November 12, 2021, on the Plan on restructuring the economy in the 2021-2025 period, states: “To strongly develop assorted markets. The stock market capitalization will reach at least 85% of GDP; the outstanding balance of the bond market will make up at least 47% of GDP, of which the outstanding balance of the corporate bond market will represent about 20% of GDP, etc. To restructure and develop the securities market; to expand capacity of the capital market; to heighten publicity and transparency and protect the lawful rights and interests of investors; to promote the development of professional investors; to develop infrastructure facilities and build the capacity to manage and supervise system risks.”

The National Assembly’s Resolution No. 16/2021/QH15 of July 27, 2021, on the 2021-2025 five-year socio-economic development plan, defines the major tasks and solutions, including: “To raise the operational efficiency of the securities market.”

Over the recent time, the capital market and monetary market have witnessed fast developments in scale and liquidity, mobilizing great financial resources for the Government, enterprises and local administrations. The monetary market has been kept stable, contributing to macro-economic stability and continuing to serve as a major channel for supplying capital for the economy. The fast development of the stock market and corporate bond market has given rise to matters that need to be tackled, such as the manipulation of stock prices, and violations relating to frauds in dossiers and disclosure of inaccurate information on the financial status of enterprises. On the corporate bond market, there have existed the phenomena that capital was used not according to the issuance scheme; and not a few individual investors lacked legal knowledge while making bond investment and transactions. On the monetary market, non-performing loans after the Covid-19 pandemic have become latent and difficulties have been encountered in the restructuring and handling of weak credit institutions with cross ownership.

In the above circumstances, in order to build a more transparent and efficient capital market under the Party’s and the State’s guidelines, thus consolidating the confidence of subjects participating in the market and of domestic and foreign investors, and making it a channel of medium- and long-term capital for the economy, the Government requests ministries, ministerial-level agencies, government-attached agencies and provincial-level People’s Committees to further study and synchronously, uniformly, promptly and efficiently realize the following focal viewpoints, objectives, tasks and solutions:

I. VIEWPOINTS 

1. To deeply grasp the viewpoints, objectives, tasks and solutions on development of the capital market and monetary market in documents of the Party and resolutions of the National Assembly, staying persistent in achieving the objectives of stabilizing the macro-economy, controlling inflation and effectively implementing the Program on socio-economic recovery and development; to stabilize the investment environment, ensuring policy consistency and stability for investors to feel secure when operating in Vietnam’s capital market.

2. To inherit and promote achievements attained, early addressing current problems and shortcomings, focusing on development of a safe, public, transparent, efficient and sustainable capital market to step by step become a major channel for raising medium- and long-term capital for the economy in accordance with the Resolution of the 13^th National Party Congress and the National Assembly’s Resolutions No. 16/2021/QH15 and No. 31/2021/QH15.

3. To enhance market management and supervision, ensuring the absolute financial and monetary security and safety; to ensure that subjects participating in the market fully comply with the provisions of law and have their lawful rights and interests protected by the State; not to criminalize civil and economic relations.

II. OBJECTIVES

1. To improve mechanisms and policies for development of a safe, healthy, efficient and sustainable capital market, aiming to stabilize the macro-economy and mobilize to the utmost resources for socio-economic development.

2. To efficiently restructure and raise the operational efficiency of the securities market and monetary market, ensuring the system safety; to develop the securities market into a major channel for raising medium- and long-term capital for the economy while further making adjustments to ensure a rational structure between the monetary market and the capital market and between the stock and bond markets.

3. By the end of 2025, to strive to achieve a number of objectives and targets under the financial strategy and the banking development strategy, specifically as follows:

a/ The stock market capitalization will reach 100% of GDP; the outstanding balance of the bond market will make up at least 47% of GDP, of which the outstanding balance of corporate bonds will account for at least 20% of GDP.

b/ To step up the modernization of information technology in the management and supervision of the securities market.

c/ To step up the restructuring of the system of credit institutions in association with settlement of non-performing loans under the Prime Minister’s Decision No. 689/QD-TTg of June 8, 2022, approving the Scheme on restructuring of the system of credit institutions in association with handling of non-performing loans in the 2021-2025 period; to strive that the ratio of non-performing loans of the entire system of credit institutions will be under 3%.

III. TASKS AND SOLUTIONS

1. Stabilizing the macro-economy

a/  To persistently implement solutions to stabilize the macro-economy, control inflation, effectively implement the Program on socio-economic recovery and development, stabilize the investment environment, and ensure policy consistency and stability for investors to feel secure when operating and investing in the capital market.

b/ To stick to reality, actively and flexibly administer and closely coordinate fiscal policies, monetary policies and other macro-policies in order to firmly maintain the macro-economic stability, ensure major balances of the economy, and facilitate the stabilization and fast, safe, efficient and sustainable development of the securities and corporate bond markets.

2. Further improving the legal framework, and reviewing and amending the regulations on securities, monetary, banking, accounting, audit, and valuation toward:

a/ Further increasing the publicity and transparency of the subjects participating in the markets;

b/ Raising the quality of the securities market, promoting the public offering of bonds in association with bond listing in order to heighten the transparency of the market; to promote the emergence and development of credit rating services, establishing the specialized bond market;

c/ Creating conditions and removing difficulties for development of the system of organized investors such as investment funds and voluntary pension funds of various forms;

d/ Increasing levels of sanctioning violations to ensure higher deterrence;

dd/ Continuing to handle existing inadequacies related to cross ownership, and speeding up the process of restructuring of credit institutions in association with settlement of non-performing loans;

e/ Approaching international practices in conformity with Vietnam’s conditions with regard to accounting, auditing and valuation standards; applying international financial reporting standards (IFRS) to improve the transparency and efficiency of the provision of information to investors; building Vietnam’s valuation standard system in conformity with reality and international practices.

3. Solutions to develop the securities market

a/ For the bond market

- To develop the Government bond market into a standard market in the financial market, meeting the demand of mobilizing capital for the state budget and supporting the budget and public debt restructure toward safety and sustainability.

- To further intensify the inspection and supervision of the process of issuance, distribution, depository, investment and trading of corporate bonds; particularly, to redress the use of capital after the issuance of corporate bonds by the issuing enterprises, ensuring transparency, proper purposes and compliance with law, thereby to protect the lawful rights and interests of investors and boost the mobilization of medium- and long-term capital.

- To expeditiously complete and develop modern infrastructure facilities in order to promote the healthy and sustainable bond market, organize a market for trading in privately placed bonds, raise the quality of information disclosure and quality of financial statements of bond-issuing companies; to separate bonds put for public offering from those put for private placement.

b/ For the stock market

- To promptly detect and strictly handle violations related to the stock market in order to make the market healthy, intensifying measures to strictly sanction violations on the securities market in order to protect investors and restore confidence in the market, particularly to strictly and promptly handle acts of market manipulation and price fixing, ensuring healthy, transparent and sustainable development.

- To ensure safe and smooth operation of the trading system; to invest in technological innovation and application of digital technology, expeditiously apply necessary measures to raise the rank of Vietnam’s securities market from frontier market to emerging market so as to attract investment capital, particularly foreign investment capital.

c/ Solutions to raise the quality of commodities, develop investors, and organize the provision of services and infrastructure of the securities market

- To diversify, and raise the quality of, assorted securities traded on the market; to scrutinize the disclosure of information by capital-mobilizing enterprises and enterprises listed and registering for stock trading.

- To develop organized investors and professional securities investors and attract the participation of foreign investors toward a rational structure between individual investors and organized investors and between domestic investors and foreign investors, and raise the capacity and quality of investors in order to promote the sustainable development of the capital market.

- To raise the operation efficiency, service provision quality, financial capacity and professional ethics of organizations providing services on the market, particularly securities companies, organizations being issuance agents or account management agents, underwriting organizations and credit rating agencies; to scrutinize dealing, market research and market information provision and service provision activities related to securities offering and issuance of securities companies.

- To raise the quality of accounting, auditing and valuation services; to improve the quality of the contingent of accountants, auditors and valuators and individuals practicing other financial services.

- To attach importance to the connection of national databases among sectors and fields, particularly the databases on capital market, monetary market, insurance, tax, enterprises and population; to step up the digital transformation for the securities market.

4. Developing the monetary and banking market

a/ To boost digital transformation in the banking sector and apply new technologies to banking service products for consolidating the connection between the capital market and the monetary market, thus facilitating the efficient use of capital of the economy and transparentizing cash flows on the market in order to monitor risks.

b/ To raise the quality and efficiency of inspection and supervision activities in order to restrict the improper use of borrowed capital while continuing to closely control credit flowing into fields prone to latent risks.

c/ To intensify market surveillance activities so as to stabilize interest rates and exchange rates, and direct credit institutions to reduce expenses for rationally lowering lending rates to effectively implement the Program on socio-economic recovery and development under the National Assembly’s Resolution No. 43/2022/QH15 and the Government’s Resolution No. 11/NQ-CP.

5. Regarding communication activities

a/ To intensify appropriate, prompt and continuous information and communications activities for improving the awareness of enterprises and investors; to ensure the stability of market psychology.

b/ Media and press agencies shall ensure the provision of timely, accurate and honest information, disclose official information on violations subject to handling in order to increase the deterrence, and provide accurate information on market development for investors to feel secure and confident in state management agencies’ guidelines, policies and orientations on development of the securities market.

IV. ORGANIZATION OF IMPLEMENTATION

1. The Ministry of Finance, State Bank of Vietnam, Ministry of Planning and Investment, Ministry of Public Security and related agencies shall, within the ambit of their assigned functions and tasks, closely monitor the developments of domestic and international capital markets and monetary markets so as to proactively and promptly apply measures to stabilize the markets; closely coordinate with one another in administering fiscal policies, monetary policies and other macro-policies to ensure the macro-economic stability and major balances of the economy, thereby facilitating the stability and sustainable development of the securities, monetary and credit markets; study and propose measures to promote the development of institutional investors and professional investors and involve foreign investors in the markets.

2. The Ministry of Finance

a/ To review and evaluate the implementation of the Law on Securities and the Law on Enterprises so as to propose to the Government the necessity to amend and supplement the Law on Securities and the Government’s Decree No. 155/2020/ND-CP of December 31, 2020, detailing a number of articles of the Law on Securities. To proactively review existing regulations and propose the revision of inadequate regulations related to information transparency of enterprises, rights and responsibilities of subjects managing or participating in the market, such as state management agencies, enterprises, securities companies and investors; to intensify solutions and sanctions for strictly handling violations on the securities market and for protection of investors. In the immediate future, to expeditiously scrutinize and submit to the Government a draft decree amending the Government’s Decree No. 153/2020/ND-CP of December 31, 2020, providing the offering and private placement of corporate bonds in the domestic market and the offering of corporate bonds to the international market in order to raise standards and conditions on issuance of corporate bonds, contributing to making the market healthy and transparent.

b/ To direct the State Securities Commission of Vietnam to request the Stock Exchanges and Vietnam Securities Depository to scrutinize procedures and regulations related to securities activities and professional activities of the Stock Exchanges and Vietnam Securities Depository, ensure the smooth operation of the market and invest in technological innovation and application of digital technology, and expeditiously apply necessary measures to raise the rank of Vietnam’s securities market from frontier market to emerging market for attracting investment capital, especially foreign investment capital; to review documents providing professional guidance promulgated by the State Securities Commission of Vietnam according to competence.

c/ To expeditiously complete and develop modern infrastructure facilities in order to promote a healthy and sustainable bond market and credit rating activities.

d/ To reorganize, and intensify examining and supervising, activities of organizations providing services on the market, including companies providing accounting, auditing, credit rating and valuation services.

dd/ To scrutinize for reporting to competent authorities to scrutinize, assign and increase human resources for the State Securities Commission of Vietnam, Stock Exchanges and Vietnam Securities Depository for the latter to properly perform the functions of examining and supervising activities on the securities market while ensuring the neat, effective and efficient organizational apparatuses of their units. To enhance the managerial and supervisory capacity of the State Securities Commission of Vietnam, Stock Exchanges and Vietnam Securities Depository so as to ensure the stable, safe and transparent operation of the securities market.

e/ To closely coordinate with the State Bank of Vietnam, related agencies, Associations and market members in completing mechanisms and policies and handling inadequacies, difficulties and hurdles, and in the inspection, supervision, and handling of violations in the field of securities and the securities market. To attach special importance to the connection of national databases among sectors and fields, particularly the databases on capital market, monetary market, insurance, tax, enterprises and population; to step up digital transformation for the securities market.

g/ To intensify public communication activities, ensuring their timeliness and continuity; to provide education for raising the awareness of enterprises and investors, particularly individual investors, about the securities market and products on the market.

h/ To further review and appraise dossiers of organizations applying for certificates of eligibility for provision of credit rating services, ensuring that certificates are granted to organizations which meet the law-specified conditions and criteria and according to the approved master plan on development of credit rating services for each period; to intensify monitoring and supervising the provision of credit rating services by credit rating enterprises licensed in Vietnam.

3. The State Securities Commission of Vietnam

a/ To scrutinize, manage and supervise the disclosure of information and quality of information disclosure by enterprises under its management which mobilize capital on the market. To strictly handle those breaching the obligation to report on information disclosure, and proactively disclose information related to violations and apply measures to stabilize the psychology of domestic and foreign investors and protect their lawful interests in accordance with law.

b/ To review the licensing process and public offering of securities on the  basis of intensified application of information technology, reduction of administrative procedures and arising risks. To appraise and strictly supervise the issuance of securities and corporate bonds; to enhance the examination and supervision to see whether capital is used for proper purposes in accordance with law.

c/ To heighten the capacity to manage, supervise, inspect and examine securities companies and subjects participating in the market so as to early identify the market’s risks and operate the market stably, safely and transparently, proceeding to apply information technology and digital technology to data analysis, management of supervision, inspection, examination, and handling of violations.

d/ To intensify inspection, examination and supervision activities and reorganize the market’s activities so as to promptly stop violations and protect the lawful rights and interests of subjects participating in the market, thereby making the market healthy and unclogging capital flows for the economy. To enhance the management and supervision of professional securities operations of the Stock Exchanges and Vietnam Securities Depository in accordance with the Law on Securities.

dd/ To study and propose competent authorities to approve solutions to promote the development of institutional investors and professional securities investors toward a rational structure between institutional investors and individual investors.

e/ To proactively carry out and intensify public communication activities and give early warnings to investors about risks (if any) of the market and work out plans to promptly deal with possible risks, ensuring the market safety.

4. The State Bank of Vietnam

a/ To continue restructuring credit institutions in association with handling of non-performing loans, enhancing the quality and efficiency of inspection and supervision activities in order to restrict the improper use of borrowed capital while continuing to strictly control credit flows into fields prone to latent risks.

b/ To boost the process of digital transformation in the banking sector and apply new technologies to banking service products. To administer monetary policies proactively and flexibly in close combination with fiscal policies and other macro-economic policies with a view to controlling inflation according to the set target, ensuring the stability of major balances of the economy, thereby facilitating the stability and sustainable development of the securities market.

c/ To supervise the credit extension, investment and capital raising in banking activities and the provision of services on the capital market by credit institutions. To promptly give early warnings and apply handling measures according to regulations, restricting the occurrence of risks and insecurity of the system of credit institutions.

6. The Ministry of Public Security

a/ To assume the prime responsibility for, and coordinate with related ministries and sectors in, promptly detecting and strictly handling violations on the stock market, securities market and monetary market, thus making the markets healthy, protecting the lawful rights and interests of investors, ensuring a transparent, stable, safe and sustainable securities market, contributing to developing production and business activities, boosting the economic growth and stabilizing the macro-economy. Not to criminalize civil and economic relations.

b/ To direct functional units and forces to investigate and verify for strictly handling violators for their violations in accordance with law, ensuring a transparent, stable and safe securities market, contributing to developing production and business activities, boosting the economic growth and stabilizing the macro-economy.

c/ To strictly handle law-breaking acts, particularly acts of spreading untrue and inaccurate information, causing the market insecurity. To promptly provide information on the handling of violations so as to ensure the market stability.

7. The Ministry of Planning and Investment shall assume the prime responsibility for reviewing, assessing and revising the Law on Enterprises’ provisions related to the private placement of bonds and stocks.

8. The Ministry of Information and Communications

a/ To coordinate with the Ministry of Finance, State Bank of Vietnam, Ministry of Public Security, State Securities Commission of Vietnam, Vietnam Television, Voice of Vietnam and Vietnam News Agency in further stepping up the public communication activities, directing news and press agencies to promptly provide official and accurate information on activities of the securities market and bond market and production and business activities of enterprises, thus creating a motive force for investors to continue participating in the capital market in conformity with law and macro-economic situation.

b/ To coordinate with the Ministry of Public Security in strictly handling acts of spreading inaccurate or unverified information, causing negative impacts on investors’ psychology and the stability of the financial market.

c/ To direct press agencies to coordinate with related ministries and sectors in intensifying timely and continuous public communication activities, raising the awareness of enterprises and people about legal provisions, knowledge and skills, transparentizing information on subjects participating in the market in order to protect investors, minimize risks and raise confidence of investors in the financial market, and balancing the proper content of information; to encourage enterprises and organizations operating on the securities market to establish full-time divisions in charge of information and communications in order to promptly receive reports of investors and stakeholders on the market, proactively settle and report to managing agencies matters related to information and communication crisis, thus establishing confidence and stabilizing the market psychology.

9. Ministries, ministerial-level agencies, government-attached agencies and provincial-level People’s Committees shall, based on their respective functions and tasks, promptly grasp the situation of sectors and fields assigned to them for management, and promptly coordinate with the Ministry of Finance, State Bank of Vietnam and Ministry of Public Security in order to ensure the sustainable, transparent and efficient development of the market.

The Ministry of Finance shall assume the prime responsibility for, and coordinate with related ministries and agencies in, monitoring, urging and summing up the implementation of this Resolution for reporting to the Government and Prime Minister.-

On behalf of the Government
For the Prime Minister
Deputy Prime Minister
LE MINH KHAI