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VIETNAM - New Securities Law passed by the National Assembly, officially taking effect in 2021
On 26 November, the National Assembly officially gave the green light to the new Securities Law after it was voted by elected deputies. The amended Law on Securities will replace the previous version and take effect from the 1st January 2021. It consists of 10 chapters and 135 articles regulating securities and securities market activities, the rights and obligations of institutions and individuals operating in this field and the organization of the stock market
Delegates of the National Assembly vote on the amended Securities Law at the eighth session of the 14th National Assembly on 26 November 2019. © Finance Magazine of Vietnam
The approval of the new law comes after years of hard work that the local authorities put into the revision of the old law, taking into account both the recommendations of both local and foreign experts and the lessons learnt from other international capital markets.
It is also important to acknowledge the contributions of international experts mobilized within the framework of the Support Vietnam’s Securities Market Consolidation and Improve Training Capacities Project, VIE/032, as well as the support received from financial institutions based in Luxembourg and other European countries.
Project VIE/032 in particular, has provided the State Securities Commission (SSC) with appropriate advice and recommendations on the new Securities Law including on key policy areas such as public offering and private placement, securities intermediaries, information disclosure, and corporate governance. This will ultimately help Vietnam to build financial sector capacity by upgrading the stock market’s legal and governance framework.
The National Assembly decided that there shall be only one stock exchange responsible for the administration and risk management of the stock market and the organization of securities transactions. However, as the restructuring and merging of the two exchanges will not happen immediately, the government will progressively redefine the functions and tasks of the Hanoi Stock Exchange (HNX) and the Ho Chi Minh City Stock Exchange (HSX). For now, both stock exchanges will be managed and operated separately in a bid to strengthen their operational efficiency prior to a future merger.
Accordingly, all bond and derivative securities transactions will now be conducted at HNX, while all stock transactions will be handled by HSX, which will subsequently help to establish a single index across the system.
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