The Government aims this year to complete the legal framework governing the securities market, says Deputy Minister of Finance Tran Xuan Ha.


"We intend to revise all regulations, from decrees to circulars, creating a complete system of regulations at the second level of legal effect for the stock market," Ha said earlier this week, as the stock market reopened following the week-long Tet (Lunar new year) holiday.
Earlier, Nguyen Son, Head of the market development division of the State Securities Commission, had also said that provisions which would improve the liquidity of shares on the market would be included in the draft circular on securities transactions, including provisions allowing investors to open multiple trading accounts and permitting margin trading (Securities to be bought and sold within a single trading day).
"The commission is currently editing the circular and will soon submit it to the Ministry of Finance for approval and issuance," Son said.
Changes in the Law on Securities, recently passed by the National Assembly, might help increase the level of investor participation in the market, agreed Sai Gon Asset Management General Director Louis Nguyen.
However, although there had been many improvements, the regulatory framework still lacked provisions allowing for open-ended funds and large-scale exchange-traded funds (ETFs), Nguyen said.
As the global economy strengthened, the Vietnamese stock market would once again become a popular destination for foreign investment, especially from Japan, Taiwan and South Korea, said MBCapital General Director Phan Anh. Therefore, market regulators needed to improve the legal framework, introduce new products, as well as boost market transparency and increase investor confidence in the market.
"To create favourable conditions for investment funds to attract foreign capital, State administrative agencies should revise the legal framework to allow for new products in the asset management market such as open-ended funds, securities investment companies and real estate funds," Anh said.
Foreign investors pulled US$1.9 billion out of the market in 2008 and $230 million in 2009, but they poured $900 million back in 2010, said State Securities Commission Chairman Vu Bang, who pointed to the latter figure as a positive sign that foreign capital inflows could further increase this year.
"While foreign capital inflows tended to shrink worldwide in 2010, they rose in Viet Nam," Bang said.