Independence - Freedom - Happiness
No. 20/TB-VPCP
Hanoi, January 29, 2007
On 18 January 2007 the Government Standing Committee held a meeting with the Minister of Finance, the Governor of the State Bank of Vietnam, the Chairman of the State Securities Commission and leaders of the Government Office to hear status reports and to discuss measures to strengthen control and supervision of securities market activities. At the end of the meeting, Prime Minister Nguyen Tan Dung provided the following conclusions:
Although our securities market was only formulated recently, 2006 has been a thriving year with quick development of classes and volume of securities, the numbers of investors and securities service providers and so forth, consistent with the developmental policies of the Party and the State. The total value of listed shares increased 20 times compared to the end of 2005, equivalent to 20% of GDP, and this has created an additional channel for mobilizing capital for the economy.
However the development of the securities market has also raised problems which need to be dealt with: the price of some shares constantly increasing at a high rate; the limited quality of services provided by intermediary financial institutions, and of consultancy, supervision and evaluation of shares to be listed; the quality and management of information; and insufficient and non-uniform regulations on market control and management needed to ensure sustainable development. Leadership by and co-ordination between Ministries and industries on market control and management is not good; and the capability of the State Securities Commission to manage and supervise the market remains low.
In order to facilitate stable and sustainable development of the securities market so that it will become an important channel to mobilize capital for the economy, and to protect the lawful interests of investors and to contribute to the synchronous development of the Vietnamese financial market, the Prime Minister hereby requests as follows:
1. The Law on Securities came into effect on 1 January 2007 and the Government has now promulgated a Decree regulating its implementation. Therefore the Ministry of Finance, the Ministry of Planning and Investment, and the State Bank shall, within the scope of their respective functions, duties and powers, take the initiative to promulgate or submit to the competent authority to promulgate and direct implementation of regulations on management, supervision and control of the securities market in order to ensure its stable and sustainable development.
Participation by foreign investors in the Vietnamese securities market must follow the roadmap on international commitments and the socio-economic conditions of Vietnam. For the immediate future the percentage securities ownership by foreign investors shall not be amended.
The Ministry of Finance, and the State Securities Commission directly as the body in charge of development of the securities market, must closely co-ordinate with the State Bank and other functional bodies to direct strengthening of supervision of securities market activities, primarily:
(a) Market development of official transactions, and strengthening management of public companies in accordance with the Law on Securities in order to narrow the over-the- counter (OTC) market.
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