Vietnam has further eased restrictions on foreign capital access, allowing foreign investors to trade directly through global brokers, without the need to go through Vietnamese domestic securities companies.
This move aims to enhance market access in preparation for Vietnam's stock market to be upgraded by global stock market ratings and index provider FTSE Russell to emerging market status.
According to revised regulations issued by Vietnam's Ministry of Finance, overseas investors can directly place trading orders through global brokers without needing to open trading accounts at local Vietnamese securities firms.
Pham Lieu Hung, chief economist at Vietnam's SSI Securities Corporation, said: “This addresses long-standing concerns raised by FTSE Russell and foreign institutional investors, including overly complex contracts, high entry barriers, and lack of legal clarity.”
The new regulations officially came into effect on the 3rd. Under the new rules, foreign investors are still required to apply for a securities trading code and open a securities custody account at a qualified custodian institution to ensure supervision by the regulatory authorities.
In addition, foreign securities investment fund management companies may open two trading accounts—one for proprietary trading and the other for client asset management.
In October last year, FTSE Russell upgraded the rating of Vietnam's stock market from the frontier market category to the secondary emerging market category. This rating change will officially come into effect this September, but is subject to review in March.
Since being placed on the watchlist in September 2018, Vietnam has implemented a series of comprehensive reforms to meet international standards, including removing the requirement for foreign investors to fully pre-fund stock trades, which was a key prerequisite for FTSE Russell’s market upgrade.