Securities companies will be banned from trading shares on the over-the-counter (OTC) market effective January 28, under a new order from the State Securities Commission.
Before the ban, securities firms offering OTC brokerage services were acquiring or disposing of shares on behalf of investors who, in some instances, were defaulting on the transactions, adversely affecting investor interests and distorting share prices.
VNDirect Securities Co has asked its investors to withdraw their unlisted shares from the brokerage accounts and repurchase shares pledged as collateral before 12pm on January 28. Investors who have sold shares without receiving payment before 11am on that date will have to buy back the shares.
A number of brokerages said the order would not affect their business performance because unlisted shares were not a large part of their services and the brokerage fees from these trades were insignificant.
Vu Lan Anh, a veteran trader in OTC shares, said the new rule was consistent with how the market was developing.” Sooner of later shares will have to be listed on the official stock exchange or on UPCoM [the unlisted public companies market],” she said. “As it is, the OTC market is attracting fewer and fewer players and transactions are modest.”
Trades on the OTC market take place via brokers instead of a physical trading floor. Trust plays an important role in the transactions which are executed without a formal written agreement./.
Before the ban, securities firms offering OTC brokerage services were acquiring or disposing of shares on behalf of investors who, in some instances, were defaulting on the transactions, adversely affecting investor interests and distorting share prices.
VNDirect Securities Co has asked its investors to withdraw their unlisted shares from the brokerage accounts and repurchase shares pledged as collateral before 12pm on January 28. Investors who have sold shares without receiving payment before 11am on that date will have to buy back the shares.
A number of brokerages said the order would not affect their business performance because unlisted shares were not a large part of their services and the brokerage fees from these trades were insignificant.
Vu Lan Anh, a veteran trader in OTC shares, said the new rule was consistent with how the market was developing.” Sooner of later shares will have to be listed on the official stock exchange or on UPCoM [the unlisted public companies market],” she said. “As it is, the OTC market is attracting fewer and fewer players and transactions are modest.”
Trades on the OTC market take place via brokers instead of a physical trading floor. Trust plays an important role in the transactions which are executed without a formal written agreement./.
