Investors watch stock price fluctuations (Photo: VNA) Hanoi (VNA) - The Ministry of Finance is drafting a document for the nextgeneration Law on Securities in an effort to complete legislation for thesecurities market in line with the overall development scheme of the broaderfinancial sector.
The 2006 Securities Law took effect on January1, 2007 and was amended in 2010. After 10 years of modifications, experts havecalled on more amendments to meet demand for more sophisticated securitiesmarket.
The new paper drafted by the Finance Ministryoutlines the objectives and content of the new legislation as well as measuresto implement the policy.
One of its highlights is that the StateSecurities Commission (SSC) will be given the full authority to enforce the keyfunctions of monitoring, inspecting and managing the market as well as handlingviolations.
Under the new law, SSC may ask agencies,organisations and individuals to provide information and documents related tothe subjects with signs of violations, or require credit institutions toprovide information on bank account transactions.
The new law also obliges stricter disclosureregulations, following which disclosure obligation will be based on the capitalsize of public companies. Process, objects and content of informationdisclosure by big shareholders owning over 5 percent of the company’s capitaland disclosure of employees have also been clarified.
Regarding the market restructuring, the twostock exchanges will be merged into one and operate under the specific businesstype which manages three market segments including stock market, bond marketand derivatives market.
Market transactions will be under three-tiersupervision including securities companies, the stock exchange and SSC. Thus,the new law adds securities firms to be the first tier of supervision and askthese firms to build their supervision mechanism.
The new law also sets targets to diversifyproducts on the securities market and improve conditions for offeringsecurities.
In an effort to attract more foreign capital,the Ministry of Finance is expected to approve the 100 percent foreignownership in domestic public companies which are included in the list ofconditional business lines to foreign investment without specific ratio offoreign ownership.
The Vietnamese Government last year issuedDecree 60, which lifted limits on foreign holdings in domestic public companiesand triggered new foreign capital inflows in the stock market. However, thespillover effect of this regulation is limited, due to complicated rules ofdifferent authorities which are beyond the power of the SSC and the FinanceMinistry.
SSC chairman Vu Bang in a meeting early thisyear said the new generation Securities Law are expected to facilitate foreigninvestments and overcome obstacles from Law on Investment.
The new law is calling consultation fromministries and sectors which are subjects to the policy.-VNA
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