The amended Securities Law, if approved by the National Assembly, will likely create the legal ability for securities companies to offer portfolio management services, a long-time goal of fund management companies.


A draft of the amended law was approved by the Government and will be submitted to the National Assembly for approval during its ongoing session.
The draft proposal does not stipulate that portfolio management services are an exclusive right of fund management companies, meaning other entities, including securities companies, would be able to offer the service to investors.
"This is reasonable. Securities companies are providing investment advisory sevices and many investors ask securities firms to help them manage their investment portfolios," said Huynh Huu Dat, an officier of Au Viet Securities Co's Legal Department.
Additionally, global and Vietnamese mutual funds tended to shift from close-end to open-end in order to facilitate diversified asset management, Dat added.
"Now, securities companies will be more flexible than fund management companies in managing investment portfolios for the majority of individual investors in Viet Nam," he said.
Dat noted, however, that even if the draft was approved, this would happen only once the Ministry of Finance issued an implementation guidance document.
The draft law also entitles the Ministry of Finance to specify the financial services securities companies can provide, as well as regulate financial safety indicators which, according to many analysts, can affect the business performance of brokerage firms.
The amended law adds one new article, makes changes and additions to 16, and annuls one out of the 136 articles of existing law.
It focuses on regulations for public and private offerings, public purchase offers, corporate management, the business of securities companies, fund management companies, among others.
Despite these changes, the amended law has not set rules to regulate margin trading activities, for which the Ministry of Finance had drafted an implementation circular on these activities.