Vietnam steps up market reforms as FTSE Russell reviews upgrade progress

Vietnam steps up market reforms as FTSE Russell reviews upgrade progress

On February 5 at the Ministry of Finance (MoF), Deputy Minister Nguyen Duc Chi received a working delegation from FTSE Russell, led by CEO Fiona Bassett.

Deputy Minister of Finance Nguyen Duc Chi

Deputy Minister of Finance Chi highly appreciated FTSE Russell’s role in monitoring, assessing, reviewing and accompanying Vietnam’s stock market throughout its recent market reclassification journey.

In particular, FTSE Russell’s announcement in October 2025 to reclassify Vietnam’s stock market was seen as recognition of the country’s sustained efforts to develop a market that is more sustainable, transparent and attractive to foreign investors.

Sharing the latest developments in Vietnam’s stock market, Chi said that a few days ago, the MoF had issued Circular No.08/2026/TT-BTC, introducing some groundbreaking amendments aimed at significantly improving market accessibility for foreign investors.

One notable provision allows foreign investors to trade through global brokerage firms without being required to open a direct trading account at a Vietnamese securities company. “This regulation streamlines trading procedures, enabling foreign investors to participate in Vietnam’s market with convenience comparable to that of regional and international markets,” he said.

The circular also removes restrictions on eligible stocks for non-prefunding trading. Securities firms are permitted to conduct transactions for foreign investors in their own shares as well as those of related parties.

In addition, Circular 08 introduces more open and flexible mechanisms for handling failed trades. Specifically, Vietnam will no longer disclose the identities of foreign investors involved in failed transactions. Instead, such cases will be handled through internal reporting only, in order to protect investor identity and transaction confidentiality. These requirements are particularly stringent for major financial institutions.

During the meeting, the vice minister also shared updates on issues related to foreign ownership limits and the central counterparty (CCP) clearing model, two topics of particular interest to FTSE Russell.

Regarding foreign ownership limits, Deputy Minister Chi said that in 2025, the MoF had fully updated the list of enterprises subject to foreign ownership restrictions on the National Investment Portal, available in both Vietnamese and English.

“We are instructing relevant units to continue reviewing and minimising, to the greatest extent possible, the number of enterprises and conditional business sectors applicable to foreign investors,” he added.

On the implementation of the CCP model, the deputy minister stated that Vietnam is urgently upgrading its market infrastructure to align with international standards. The rollout of the CCP mechanism is progressing in accordance with the roadmap set out in legal documents and market development plans. “This is not expected to face obstacles, as it has already been incorporated into Vietnam’s securities market regulations and planning frameworks,” he said.

Chi also provided additional information on the roadmap for introducing more advanced market practices as the market matures, including securities lending, controlled short selling and intraday trading.

In response, Fiona Bassett, CEO of FTSE Russell, praised the clarity, transparency and consistency of Vietnam’s policies, as well as the country’s efforts to develop market infrastructure and systems.

She particularly welcomed the timely issuance of Circular 08 by the MoF, including the provision allowing foreign investors to trade through global brokers. “This is a very important step in supporting foreign investors’ access to the market,” she said.

Regarding the evaluation timeline, Bassett noted that FTSE committees are scheduled to meet in March for their periodic review, with an official announcement expected in early April. Current feedback from FTSE’s Advisory Committee on Vietnam, including foreign investors and domestic market participants, has been highly encouraging.

The two sides also held in-depth discussions on opportunities for technical cooperation between FTSE Russell and the Vietnam Stock Exchange.

Bassett proposed addressing legal issues to enable FTSE Russell to cooperate in distributing Vietnam’s stock indices to international markets, as well as developing a derivatives product ecosystem to meet foreign investors’ hedging needs. FTSE Russell is currently in discussions with the State Securities Commission of Vietnam (SSC), Vietnam Stock Exchange, and the Singapore Exchange regarding the listing of Vietnam’s derivatives products in Singapore.

Expressing strong support for these proposals, Deputy Minister Chi tasked the leadership of the stock exchanges and the SSC with closely coordinating with FTSE Russell to develop cooperation frameworks and procedures.

Concluding the meeting and looking ahead to the important review in March, he made a proposal that, if possible, Vietnam would like and is ready to be right alongside FTSE’s evaluation committee meetings in order to promptly exchange views and clarify any necessary information.

“This would help ensure that all efforts by all parties are assessed in an accurate, objective and up-to-date manner,” he said.

VIR