SSC to outline details of foreign ownership

The State Securities Commission (SSC) will hold a seminar this week to provide market participants and businesses with detailed information about Decree 60 on foreign ownership limits.

SSC Vice Chairman Nguyen Thanh Long made this announcement during an online conference on the website chinhphu.vn late last week. The meeting is expected to take place on August 13.

Decree 60, issued on June 26, 2015 and comes into force on September 1, will remove limitations on foreign ownership in the securities market.

This is a much-watched issue that has attracted attention from the investor community but, to date, the regulation on sectors that are conditional for foreign investment remain unclear. The market is awaiting the circular providing guidelines to implement the decree.

"Under the Ministry of Finance's direction, the commission has completed guiding circulars and will hold a seminar on August 13 to provide the details," Long said.

"Guiding circulars will be issued soon in the near future."

According to Decree 60, the foreign ownership ratio will adhere to specific laws and international treaties, to which Vietnam is a member. However, the breakthrough provided by this decree is the full removal of the foreign ownership cap, which is currently limited to 49 percent in public companies.

Further, companies will be allowed to determine the percentage of foreign holding in its charter of operation.

Those conditional businesses that have not specifically regulated foreign ownership limits will have the current maximum ownership of 49 percent to be temporarily applied.

Other businesses, such as banks, will continue to have foreign ownership limited by specific regulations.

"The introduction of Decree 60 is the most brilliant offer to foreign investors," said Vo Tri Thanh, Deputy Director of the Central Institute for Economic Management (CIEM).

Thanh said the decree was issued at the right time, as Vietnam is integrating more deeply into the world, which contributed to ongoing legal reforms in the country.

However, though the decree is laying a very good foundation to attract foreign capital, analysts said the core issue was still the businesses, themselves.

Long noted that foreign investors pay much attention to operations of companies, corporate transparency and efficiency.-VNA