The State Securities Commission asked the Government to extend thedeadline for a draft decree on the derivatives market from the end ofthis year to next year, according to Viet Nam News.
Although Vietnam urgently needs derivatives regulations, the complicatedtopic requires careful consideration and consultation with people fromrelevant organisations, the commission said.
Whilethe country's stock market has been operating for more than 13 years,there is not yet a derivatives market. Such a market is expected to beintroduced in 2015.
Derivatives include four maininstruments: forward contracts, swap agreements, futures contracts andoption contracts. Currently, only stocks, bonds and fund certificatesare traded in Vietnam.
Derivatives transactionsbecome essential in Vietnam when unpredictable changes in the prices ofcommodities, interest rates, exchange rates and stocks poses risks toinvestors.
Several commercial banks provide currencyderivatives, but not enough to meet market demand and prevent risks fromexchange rate and interest rate fluctuations.
Theestablishment of the derivatives market is in line with therestructuring of the stock market and the Stock Market DevelopmentStrategy to 2020, according to director of the Market DevelopmentDepartment under the commission Nguyen Son.
Chairman of the State Securities Commission Vu Bang was quoted by Dau TuChung Khoan newspaper as saying that the derivatives market wouldoperate under the management of the Vietnam Stock Exchange merged fromthe two existing bourses.
The commission proposedthat only securities companies with minimum equity of 500 billion VND(23.8 million USD) and good financial status be allowed to join thederivatives market.
Well-trained human resources, aconsistent and transparent legal framework and risk control managementare critical for the derivatives market's success, experts said.-VNA
Although Vietnam urgently needs derivatives regulations, the complicatedtopic requires careful consideration and consultation with people fromrelevant organisations, the commission said.
Whilethe country's stock market has been operating for more than 13 years,there is not yet a derivatives market. Such a market is expected to beintroduced in 2015.
Derivatives include four maininstruments: forward contracts, swap agreements, futures contracts andoption contracts. Currently, only stocks, bonds and fund certificatesare traded in Vietnam.
Derivatives transactionsbecome essential in Vietnam when unpredictable changes in the prices ofcommodities, interest rates, exchange rates and stocks poses risks toinvestors.
Several commercial banks provide currencyderivatives, but not enough to meet market demand and prevent risks fromexchange rate and interest rate fluctuations.
Theestablishment of the derivatives market is in line with therestructuring of the stock market and the Stock Market DevelopmentStrategy to 2020, according to director of the Market DevelopmentDepartment under the commission Nguyen Son.
Chairman of the State Securities Commission Vu Bang was quoted by Dau TuChung Khoan newspaper as saying that the derivatives market wouldoperate under the management of the Vietnam Stock Exchange merged fromthe two existing bourses.
The commission proposedthat only securities companies with minimum equity of 500 billion VND(23.8 million USD) and good financial status be allowed to join thederivatives market.
Well-trained human resources, aconsistent and transparent legal framework and risk control managementare critical for the derivatives market's success, experts said.-VNA
