The current Securities Law needs changing in order to more effectively offer legal protection to every member of the stock market, according to securities analysts.

Over the past year that the law has been in effect, they have analysed its effectiveness, and released the findings earlier this week.

Foremost among concerns, is the need for a legal framework for stock retailing by public firms, as well for the auctioning and listing shares of foreign-invested firms.

Nguyen Van Thanh, an analyst from Da Nang Securities, said, "The number of foreign-invested firms in our country is significant. There should be a regulation allowing them to sell shares in our local stock market."

The opening up of such firms would make the market more active, providing investors with more chances to invest, he added.

The problem however, is that many foreign-invested companies are unsure how to proceed. According to Nguyen Vu Quang Trung, deputy director of Ha Noi Securities Trading Centre, one of the most frequently asked questions by foreign-invested companies in Viet Nam, is how to list shares in the local stock market.

As there is no regulation covering this, the process of listing shares in the market is difficult, Trung said, noting that demands for clearer guidelines are increasing from all sides.

"The rules for stock retailing should be tightened so as to avoid the dilution that occurs when firms offer too many shares at a time," said John Nolan, an analyst from a HCM City fund management company.

He added that strict regulations would help manage the volume of shares in the stock market, preventing it from the share-overload that is currently evident.

The Securities Law also regulates derivatives such as options, margin trading, and future contracts. However, these instruments have not been implemented yet.

Le Ho Khoi, director of Trang An Securities, said that these instruments were the basis of defining a securities company as a real financial institute, not simply by the activities of brokers in each trading session.

These derivatives also help investors reduce risk in securities investment, Khoi added, noting them as an important lever for the future development of the exchange.

Nguyen Trong Nghia, head of the Legislation Division at the Ministry of Finance, said that the Vietnamese stock exchange was young and would naturally experience ups and downs, but these help highlight important matters to the regulators.

As a result, changes in the Securities Law are necessary as it has only been in existence for a year, he added.

Vu Thi Kim Lien, vice chairman of the State Securities Commission, said it would collect the ideas from market members to complete the draft of the revised Securities Law by the end of this year.

She added that those elements which are legally adjustable will be drafted and sent to the Ministry of Finance for permission to implement this year.