HÀ NỘI — The Government has approved an ambitious project to upgrade the country’s stock market, aiming to transform it into a more transparent, liquid and internationally competitive platform capable of drawing in greater foreign capital. 

The plan, endorsed under Decision 2014/QĐ-TTg and signed by Deputy Prime Minister Hồ Đức Phớc on September 12, sets out a comprehensive roadmap for both short and long-term reforms.

In the near term, policymakers are targeting an upgrade to secondary emerging market status under FTSE Russell within 2025, while seeking to maintain that position in subsequent years. 

Looking ahead to 2030, Việt Nam is determined to meet the criteria for MSCI’s emerging market designation and to progress further toward advanced emerging market status under FTSE Russell.

To reach these targets, the plan outlines sweeping reforms to strengthen the legal framework, streamline market procedures and modernise infrastructure.

One of the immediate priorities is addressing restrictions that have long discouraged foreign participation, such as the requirement for overseas investors to pre-fund securities trades. 

The Government intends to ease this condition until the Central Clearing Counterparty (CCP) mechanism becomes fully operational, a move that will align Việt Nam’s settlement practices with global standards.

Greater transparency on foreign ownership limits across different sectors is also a focal point, ensuring that overseas investors have equal access to clear and accurate information. 

At the same time, administrative procedures will be simplified, particularly those related to opening trading accounts and managing cross-border investment flows. 

The plan also calls for strengthening infrastructure to support more efficient market operations. 

Strengthening information systems between custodial banks and securities firms is critical for enhancing transaction efficiency, while implementing an omnibus trading account mechanism (OTA) simplifies and streamlines operations.

Improving transparency and governance is another cornerstone. Listed firms and public companies will gradually be required to adopt International Financial Reporting Standards and apply OECD principles of corporate governance. 

The project further emphasises the need to improve audit quality and supervision capacity within regulatory bodies, equipping the State Securities Commission (SSC) and other agencies with upgraded IT systems, stronger enforcement powers and skilled human resources.

Moreover, the Government is seeking to diversify the investor base by encouraging the growth of institutional and professional investors while enhancing education and protection for retail participants. 

At the same time, new financial products are expected to be introduced, ranging from infrastructure and green bonds to derivatives, structured instruments and foreign exchange hedging tools, providing investors with a broader range of opportunities.

In the longer term, authorities will review and, if appropriate, raise legal thresholds for foreign ownership, expand short-selling and securities lending mechanisms under a controlled framework and improve coordination of macroeconomic policies to stabilise the investment environment. — BIZHUB/VNS