Amending the Securities Law in order to develop the market in depth

	New securities law aims to clarify procedures
	Amend the Securities Law, open the Derivatives market

Mr. Le Duc Khanh, Strategic Director of Petro Vietnam Securities Company.

According to Mr. Khanh, the amendments of the revised Law on Securities aim to develop the stock market in depth, enhance the quality of this capital mobilization channel, and aim for a sustainable and transparent market.

The revised draft Law on Securities has been publicized after collecting ideas by the State Securities Commission (SSC). Do you think this is the right time to amend the regulations related to the stock market?

The State Securities Commission's drafting the revised Law on Securities is perfectly suitable in the context of economic integration, the story of upgrading the Vietnam stock market is urgent. Vietnam's economy is accelerating, for the stock market with increasing capitalization, it is necessary to take measures to promote the development of the market, including stock market, corporate bonds...

Although the current law has created a legal framework for Vietnam's nascent stock market, many provisions of the current law are outdated, requiring modifications to suit the market size as well as issues which are emerging on the stock market today.

For example, in 2006, the capitalization of the stock market accounted for only 22% of GDP, now the size of the stock market accounts for 77-80% of GDP. In 2006, the market had only about 200 companies listing and registering to trade, so far, the market has nearly 1,500 enterprises. In addition, under the current law, the charter capital of the issuers at the time of offering registration is 10 billion VND. This level is too low and not suitable for the current market.

With regard to the content of the Draft Law relating to the conditions of the offer, the conditions of issue, or the conditions for the public company… How do you rate the quality of these regulations?

Amendments of the Draft are for in-depth market development, raising the quality of this funding channel, and moving towards a sustainable, transparent stock market. The draft law stipulates that in order to be offered the securities to the public, the enterprises must have their charter capital at the time of offering registration at least 30 billion dong, a threefold increase compared to 10 billion dong as prescribed by current law. Particularly, the enterprises must have their profitable business activities of past two years, and at the same time have no accumulated losses by the year of offering registration. The value of additional issued shares at face value are not greater than the total value of outstanding shares at face value, unless there is an underwriting with a firm commitment.

These regulations have improved the conditions and value of shares issued to the public, reducing the risk for the enterprises. This also shows the efforts of the Ministry of Finance in risk management on the stock market when the widespread release, the collection of money from the share -holders can affect the interests of enterprises, especially the small businesses in the market.

However, I would like to comment further. On the inspection and handling of violations, the Draft supplements some provisions on the competence of the State Securities Commission when conducting inspection, and handling of violations… For violation level, the Draft regulates the maximum fine in the administrative violations is 3 billion VND for the organizations and 1.5 billion VND for the individuals. The maximum fine level in case of recidivism is 2 times higher than the first violation. In addition, the violation organizations or individuals shall also be subject to one or several of the handling measures prescribed in this Law. The Chairman of the State Securities Commission, Chief Inspector, and Head of specialized inspection delegations are competent to sanction the administrative violations in the securities sector.

Amending the Law on Securities: the Charter capital under 30 billion dong is not participated IPO VCN- The State Securities Commission has officially announced the draft Law on Securities (revised) and the draft ...

Otherwise, I think it is necessary to raise the ceiling of the fine to even 20 billion VND and apply the different levels to increase deterrence, to improve the efficiency and limit the mistakes in the stock market.

In your opinion, have the amendments made in the Draft met the international standards on improving quality as well as increasing the transparency and publicity of the stock market?

As I said above, the amendment under the new Draft Securities Law is meeting the international standards gradually but have not enough. It needs to be stronger and more determined. The Vietnam stock market is too young compared to other stock markets in the world. But, we are moving in the right direction as well as learning the experience of the developed securities market to improve more and more in terms of quality, scale and transparency to make the market increasingly developed.

What do you think about the stock market next time? How will the financial picture of the third quarter and the first nine months of 2018 affect the market in general and the price of stocks in particular?

In the coming time, in short-term, VN-Index could adjust around 890 (+/- 10 points) or worse in the range of 800 - 820 points. However, the market will recover soon after that and continue to return to the old peak area established in April, 2018.

I am confident in the market prospects in the long run.

In the short term, the stock speculative transactions should be cautious and minimize the use of leverage.

Thank you, Sir!