Policy boost paves way for Việt Nam's stock market upgrade

Policy boost paves way for Việt Nam's stock market upgrade

Circular 08/2026/TT-BTC is regarded as a crucial step in addressing existing technical barriers and advancing Việt Nam's stock market ranking.

Two investors watching the market's movements at a securities firm trading office. — VNA/VNS Photo

The Ministry of Finance (MoF) has announced a new circular earlier this month that introduces significant amendments to regulations concerning information disclosure, trading securities and the operations of securities companies.

Circular 08/2026/TT-BTC is regarded as a crucial step in addressing existing technical barriers and advancing Việt Nam's stock market ranking.

According to analysts, the circular represents a critical milestone in enabling the Vietnamese stock market to meet the criteria set by FTSE Russell. This positions Việt Nam towards inclusion in the FTSE Russell Emerging Markets Index during the anticipated restructuring period in September 2026. 

Circular 08 focuses on resolving structural bottlenecks that international organisations, particularly FTSE Russell, have repeatedly pointed out in their evaluations of the Vietnamese market, say experts from SSI Securities Corporation.

Notably, the new circular allows foreign institutional investors to trade through global brokers, eliminating the previously mandatory requirement of opening direct accounts at domestic securities firms. 

This adjustment is expected to significantly enhance accessibility for foreign investors, addressing one of the key obstacles flagged by FTSE Russell in its October 2025 market assessment.

In addition, Circular 08 further refines the legal framework for non-prefunding (NPF) trading products aimed at foreign institutional investors. 

Although NPF products have been in operation for over a year, issues surrounding transaction failure management and information disclosure needed alignment with international standards. The new regulations stipulate that reports on failed transactions will be handled internally, rather than being publicly disclosed.

Moreover, penalties for NPF transaction violations will now involve suspensions ranging from seven to 180 days.

The amendments extend the scope of NPF to include acceptance of NPF orders for shares by the brokerages themselves or related parties. This provision is particularly advantageous for index-tracking funds as they adjust their portfolios in line with the upgrade process.

Another change permits foreign fund management firms to maintain both proprietary trading accounts and customer asset management accounts concurrently, optimising their management operations. 

This move aligns with the broader reform spirit reflected in Decree 245/2025/ND-CP, which updates certain provisions of Decree 155/2020/ND-CP regarding the implementation of the Securities Law.

Maybank Investment Bank remarks that Circular 08 is not merely a technical document, but a strong confirmation of the Government's commitment to upgrading the market. 

The resolution of pre-funding issues and the relaxation of trading mechanisms for leading financial institutions are anticipated to catalyse substantial foreign capital inflows into Việt Nam's market in the near future.

The return of foreign capital

As regulatory obstacles are gradually dismantled through this new circular, the outlook for foreign capital returning to the Vietnamese stock market appears increasingly positive. 

With FTSE Russell officially upgrading Việt Nam to primary emerging market status, set to take effect in September 2026, the country is poised for significant financial transformation.

Experts from BIDV Securities Company forecast that once the upgrade process is activated, the Vietnamese stock market could witness an influx of about US$0.5-1 billion from passive investment funds. 

Over the entire upgrade cycle, total foreign inflows, including those from active funds, could reach between $5 and $6 billion.

Nonetheless, as noted by BSC, the current behaviour of foreign capital has not fully reflected the upgrade expectations, with net selling trends continuing despite the announcement. 

In 2025, foreign investors recorded net sell-offs exceeding VNĐ135 trillion ($5.2 billion), largely due to increasing exchange rate pressures and a shift in global capital flows towards developed markets.

Michael Kokalari, chief economist at VinaCapital, said that foreign investors would begin to reallocate funds once Việt Nam is officially upgraded by FTSE.

Meanwhile, analysts at VPBank Securities conservatively project a return to net buying by foreign investors in 2026, anticipating a favourable exchange rate environment and ongoing reforms bolstering the country's appeal as an investment destination. 

Bizhub