“Vietnam’s Efforts Recognized: MSCI Acknowledges the State Securities Commission’s Initiatives to Advance Market Classification”

Continuing the series of activities during the working trip to Singapore, on the morning of August 8, 2024, the Chairman of the State Securities Commission of Vietnam (SSC) Vu Thi Chan Phuong and the SSC delegation had a working session with Morgan Stanley Capital International (MSCI), a market index provider, on solutions to upgrade the Vietnamese stock market from a frontier market to an emerging market.

Representing MSCI were Mr. Miguel, Head of Index Research; Mr. Neeraja Kumar, Director of Research; and Mr. Shanhbogue Ramesh, Head of Government and Regulatory Affairs.

At the working session, Chairman Vu Thi Chan Phuong provided an update on the development of Vietnam’s stock market and the latest information on the market upgrade process. Nearly a year has passed since the meeting with MSCI in Hong Kong, and the Ministry of Finance and SSC have implemented additional solutions to facilitate investors’ participation in Vietnam’s stock market.

The SSC has drafted a circular amending and supplementing four circulars related to trading, registration, custody, and payment; securities companies’ operations; and information disclosure. The draft is currently in the final stages of completion before being submitted to the Ministry of Finance for consideration and issuance as soon as possible. The relevant payment processes are also being developed simultaneously to ensure effective implementation once the new regulations are issued. During the policy-making process, the SSC has held several meetings with market participants and consulted experts from international organizations to propose feasible and optimal solutions.

At the working session, in response to MSCI’s interest in attracting foreign securities companies to operate in Vietnam, the Chairman of SSC affirmed that Vietnam always welcomes foreign securities companies, and Vietnamese law does not restrict their activities. Currently, there are eight foreign securities companies in Vietnam from various countries, and large domestic securities companies also have the participation of many foreign strategic investors.

Regarding the desire to share information on amending regulations to simplify the procedure for opening indirect investment capital accounts in Vietnam, the representative of the Foreign Exchange Management Department of the State Bank of Vietnam (SBV) said that the SBV is studying this content to amend and supplement Circular No. 05/2014/TT-NHNN guiding the opening and use of indirect investment capital accounts for foreign indirect investment activities in Vietnam.

On behalf of MSCI, Mr. Miguel, Head of Index Research, highly appreciated the efforts and solutions of the SSC to promote the market upgrade process, as well as the achievements of Vietnam’s stock market development in the past time.

MSCI representatives affirmed that the solutions of the Vietnamese authorities are heading in the right direction, creating more favorable conditions for foreign investors to participate in the market. They will share this new information with their members and clients so that they can grasp, experience, and provide feedback for the classification of the Vietnamese stock market in the coming time.

Concluding the working session, both sides agreed to continue coordinating, exchanging, and updating information during the process of considering and evaluating the upgrade of the Vietnamese stock market. The Chairman of SSC invited MSCI representatives and their clients to visit and work in Vietnam. The SSC is ready to engage in direct discussions and receive feedback to develop the Vietnamese stock market.