Securities regulator studies new stock market mechanisms

Securities regulator studies new stock market mechanisms

These include the possibility of extending trading through the lunch break, widening daily price fluctuation bands and considering the removal of periodic order-matching sessions.

SSC Vice Chairman Hoàng Văn Thu speaks at the press briefing on Tuesday afternoon. — Photo courtesy of the organiser

The State Securities Commission (SSC) is studying a series of changes to the operation of the stock market alongside a plan to transfer all stocks currently listed on the Hanoi Stock Exchange (HNX) to the Hochiminh Stock Exchange (HoSE) later this year.

Speaking at the Ministry of Finance's regular press briefing for the third quarter on October 6, SSC Vice Chairman Hoàng Văn Thu said the transfer was part of a plan to restructure the market for listed equities, with completion targeted within 2026.

The specific timing of the transfer will be determined based on an assessment of its impact and the results of technical testing between the two stock exchanges and the Vietnam Securities Depository and Clearing Corporation.

According to Thu, the testing process is currently proceeding smoothly and in line with the planned schedule.

The securities regulator is also studying a classification system for listed products based on their characteristics and quality to better serve investors with different investment needs and risk appetites.

Classification would be based on four main criteria: a company's charter capital, foreign ownership ratio, free-float ratio and compliance status of its shares.

The foreign ownership ratio would reflect the accessibility of a stock to foreign investors, while the free-float ratio would indicate the proportion of shares available for public trading.

Based on these four criteria, stocks could be arranged into two or three boards, allowing investors to more conveniently assess, select and manage their portfolios.

The regulator is also directing the stock exchanges to study several new trading policies and mechanisms. These include the possibility of extending trading through the lunch break, widening daily price fluctuation bands and considering the removal of periodic order-matching sessions.

The proposed changes are being considered as part of efforts to improve trading arrangements and facilitate greater convenience for investors.

However, Thu said ensuring the safety of the trading system, smooth market operations and overall market stability would remain the top priorities regardless of which new mechanisms are adopted.

The proposals will undergo impact assessments before implementation. Once the assessment process is completed, the regulator will announce a specific roadmap to give market participants sufficient time to prepare for and transition to the new arrangements.

Deputy Minister of Finance Nguyễn Đức Chi also stressed the need to balance expectations for new policies with requirements for safe, stable and sustainable market development.

"The market always has expectations for new policies, but putting policies into practice must ensure the principles of safety, stability and sustainability," Chi said.

He instructed the SSC to urgently assess the impacts of the proposed policy changes. Once the necessary conditions are in place, the regulator will prepare the required technical infrastructure to allow the new policies to be introduced into operation.

"The study of new mechanisms such as lunch-break trading, shortening the T+2 settlement period and considering trading bands are necessary steps towards a healthier and more modern stock market. However, the consistent requirement remains to ensure system safety, market stability and smooth operation when new policies are applied," Chi said.

Leadership at the finance ministry also asked the SSC and market operators to strengthen their responsibilities and prepare the technical infrastructure and other necessary conditions to carry out the Government-approved strategy on stock market development and upgrading. 

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