Journalist:
“Transparency” and “effective operation” are the keywords that members on the stock exchange are most concerned about in the past year. Could the Minister please tell us what measures the Ministry of Finance has implemented to bring the Vietnamese stock market closer to these goals?
Minister Ho Duc Phoc:
Enhancing transparency in information to ensure fair and efficient operation of the stock market has always been one of the top priorities of the Ministry of Finance. In the past year, the Ministry of Finance has directed the State Securities Commission (SSC) to implement measures to improve the transparency of the stock market. Specifically:
For public companies and listed companies, the Ministry of Finance has directed the SSC to focus on strengthening inspection, examination, and supervision of the disclosure of information by businesses. This includes conducting inspections, monitoring, and authorizing auditors to audit public interest entities in the securities sector to improve the quality of financial statement audits of public companies and to enforce strict measures for violations.
For intermediaries in the stock market, the Ministry of Finance is directing the SSC to continue implementing solutions to restructure securities companies, fund management companies, and carrying out restructuring and liquidation of weak securities companies and fund management companies that are ineffective and unable to mobilize assets for management, ensuring that the restructuring does not disrupt the stable operation of the company. Additionally, they are reviewing and classifying companies to establish specific measures for each group of companies according to legal regulations.
In 2023, the Ministry of Finance directed the SSC to conduct regular inspections of securities companies and fund management companies and take enforcement action against 6 securities companies; put 1 securities company under control, and issue warnings to 2 securities companies. Currently, 6 securities companies have ceased operations and 1 securities company has been ordered to suspend its operations. In addition, to stabilize and develop a healthy and efficient stock market, in the past year, the Ministry of Finance has directed the SSC to intensify inspection and enforcement of violations in the stock market with a total of 67 inspection teams, issuing 412 penalty decisions with a total fine amount of 37.2 billion VND, including fines for 2 cases of stock manipulation totaling 2.05 billion VND.
Journalist:
Does the Ministry of Finance have any plans to promote the healthy development of the stock market and raise the stock market from the frontier to emerging market in the near future, Minister?
Minister Ho Duc Phoc:
In recent times, we have actively coordinated with relevant ministries and departments, directly instructing the SSC to implement various solutions to overcome obstacles in upgrading the stock market. Specifically, we have focused on the following core solutions:
Firstly,
focusing on addressing obstacles related to requirements for transferring and settling payments after transactions for foreign investors. Currently, in most stock markets around the world, foreign investors are not required to deposit reserves before the transaction but only need to make payment upon successful transactions. However, the Vietnamese stock market requires all investors to ensure that they have sufficient funds and securities in their accounts before making transactions. To address this issue, the Ministry of Finance has instructed the SSC to work with the Vietnam Securities Depository and Clearing Corporation (VSDC) to work with market participants (securities companies) to find solutions to address the issue. Additionally, the SSC has been assigned to proactively review legal documents in the securities field to make necessary amendments and supplements if necessary, to create conditions for foreign investors to trade without the need for prior reserves.
In the long run, the Ministry of Finance will coordinate with the State Bank of Vietnam and relevant ministries to review the Securities Law 2019 and related documents to submit proposals for amendments and supplements in order to clarify the role, responsibilities, and participation of commercial banks when becoming clearing members in the Central Counterparty (CCP) system – a system that allows investors to trade without the need for reserves for the entire transaction, ensuring consistency and compliance with current laws and regulations on credit institutions.
Secondly,
addressing issues related to access to information about listed companies. The Ministry of Finance has instructed the SSC to regularly update information about the stock market on the Ministry of Finance’s website in bilingual (Vietnamese and English) to facilitate foreign investors’ access and understanding, and to propose amendments to regulations on information disclosure by public companies, requiring large-scale listed companies (expected to be companies listed in the VN100 index) to disclose information in both Vietnamese and English, as well as implementing notifications of maximum foreign ownership ratios in all public companies so that foreign investors can access information about their ability to participate in these companies.
Thirdly,
actively and proactively coordinating with relevant ministries and proposing to the Prime Minister specific solutions to overcome difficulties in managing foreign ownership ratios and capital account liberalization, regulations on foreign exchange management.
It can be said that for the Vietnamese stock market to be upgraded, in addition to the efforts of the Ministry of Finance, strong guidance from the Prime Minister, the Government, and the participation of many ministries, sectors, and businesses are needed. As the lead agency, the Ministry of Finance is urgently and firmly implementing solutions and hopes that the Vietnamese stock market will be upgraded in the near future.
Journalist:
2024 is expected to face many difficulties and challenges in the economy. To overcome these difficulties and challenges, what specific policies and measures will the Ministry of Finance advise the Government, Minister?
Minister Ho Duc Phoc:
The implementation of the state budget and finance tasks in 2024 is expected to take place in a context where the economy and society have both favorable and unfavorable conditions, mixed with challenges. Among them, the forecast is that challenges will be more than favorable conditions. The task set for the Ministry of Finance is extremely heavy: The estimated state budget revenue is 1.7 quadrillion VND; the estimated state budget expenditure is 2.1 quadrillion VND; the over-budget expenditure is 399.4 trillion VND, equivalent to about 3.6% of GDP.
The difficulty posed for 2024 is the need to use fiscal policies effectively to promote the economy while ensuring stability in the macroeconomy, inflation control, and national financial security. In that context, the main objective of the Ministry of Finance is to proactively and flexibly build and organize the operation of fiscal policies, focusing on key areas and core issues. Ensuring resources for implementing economic and social development tasks, security, national defense, and social security, especially focusing on resources to quickly implement important infrastructure investment projects, regional and inter-regional connectivity; reforming salary and social insurance policies associated with streamlining and restructuring the public sector. To achieve the set goals, we will implement resolute groups of solutions:
First,
regularly monitor and accurately forecast the global and domestic economic situation, not being passive or surprised. Focus on actively and reasonably managing fiscal policies, coordinating closely fiscal policies with other economic policies to maintain the macroeconomic foundation, inflation control, ensuring major balances, promoting sustainable growth and development in the economic and social fields.
Second,
continue to improve the legal framework and policies on state budget revenues, strengthen the management of revenues, and strive to achieve the highest revenue estimates, ensuring resources for implementing economic and social development goals. Specifically, research and improve the tax system towards facilitating taxpayers, expanding the tax base, ensuring the consistency of laws and regulations, and in line with international practices; resolutely carry out tax management, prevent tax losses, combat transfer pricing, and fully recover tax debts, in line with the requirements arising from the practice in the digital economy, cross-border transactions, etc.
Third,
tighten the management of state budget expenditures, increase efficiency in managing, allocating, and using state budget resources; strictly implement financial discipline; continue restructuring public investment expenditures; allocate resources for important tasks, national key projects, and strive to disburse public investment higher than the previous year, minimizing resource transfers. Innovate regular expenditure management, strengthen decentralization, delegate authority, encourage the use of resources suitable for the specific tasks of ministries, sectors, and localities. Allocate sufficient resources to implement the salary reform policy from July 1, 2024.
Fourth,
closely control over-budget spending, public debt, and provisions for contingent debt to ensure compliance with limits on safe debt as regulated; continue to implement solutions to restructure the public debt portfolio in a safe and sustainable manner.
Fifth,
ensure the stable and safe operation of the financial market and financial services; strictly handle violations, promote fair competition among economic entities.
Improve and perfect legal regulations to ensure rigor and consistency; remove difficulties, and promote sustainable development in banking, credit, securities markets, corporate bond issuances, insurance. Continue to improve the legal framework, enhance the quality of accounting, auditing, valuation services, and other financial services to meet social needs and international standards.
In addition, implement resolute, substantive, and effective corporate restructuring, equitization, state divestment associated with modernizing management following advanced standards; improve the substantial business investment environment, administrative procedure reform, and enhance national competitiveness. Actively and proactively integrate international finance, enhance the effectiveness of foreign affairs. At the same time, continue to innovate, reorganize the organizational apparatus, streamline the apparatus, innovate the financial mechanism of public career units along with strengthening financial discipline, and budget implementation in performing tasks.
Pay attention to managing financial tasks – the state budget during the Lunar New Year of Giap Thin 2024 to ensure that production and business activities before, during, and after Tet occur normally. Implement the state budget revenue and expenditure tasks in 2024 from the beginning of the year to ensure the implementation of the set objectives.
Journalist:
Thank you, Minister!
