Việt Nam, Singapore step up capital market connectivity

Việt Nam, Singapore step up capital market connectivity

The SGX and VNX are working together to develop DR products, requiring coordinated participation from custodians, depositories and clearing and settlement organisations.

The meeting between Chairwoman of the State Securities Commission of Vietnam (SSC) Vũ Thị Chân Phương and Lim Tuang Lee, Assistant Managing Director of the Capital Markets Group under the Monetary Authority of Singapore (MAS), in Hà Nội on Wednesday. — Photo courtesy of SSC

Chairwoman of the State Securities Commission of Vietnam (SSC) Vũ Thị Chân Phương and Lim Tuang Lee, assistant managing director of the Capital Markets Group under the Monetary Authority of Singapore (MAS), discussed ways to deepen cooperation and strengthen capital market connectivity at their meeting in Hà Nội on Wednesday.

Phương spoke with Lim and the MAS delegation about their working session at the SSC and participation in the signing ceremony of a memorandum of understanding (MoU) between the Vietnam Stock Exchange (VNX) and the Singapore Exchange (SGX) on depositary receipt (DR) product development.

She appreciated MAS’s coordination and support for Vietnam’s securities market in recent years, stressing that there remains large room for cooperation as the two countries’ capital markets become increasingly connected.

Regarding DR products, Phương suggested MAS continue coordinating with and create favourable conditions to connect the two countries’ capital markets, including sharing information on legal frameworks, operating mechanisms and necessary conditions to help Vietnamese businesses gain more effective access to the Singapore market.

She said the two countries could build a stronger DR ecosystem by linking exchanges, businesses and intermediaries, giving Vietnamese firms greater access to international capital, more investment products and a broader investor base.

Noting that FTSE Russell is working with MAS to develop index products in Singapore, Phương said Vietnamese securities companies could participate as market makers, thus further strengthening capital market connectivity between the two countries.

Lim said the SGX and VNX are cooperating, particularly in researching and developing DR products, noting that their effective operation will require coordinated participation by market players, including custodian banks, depository institutions, and clearing and settlement organisations.

He added that information on DR characteristics, mechanisms and uses should also be provided fully and transparently for participants and investors.

Regarding the crypto-asset market, Phương said this is a new field that requires regulators to both facilitate innovation and market development and ensure safety, transparency and efficient management of emerging risks.

She proposed that drawing on Singapore’s experience, MAS share information and experience on legal frameworks, organisational models, crypto-asset exchange management and market surveillance, particularly measures to combat money laundering and terrorist financing.

The SSC is also interested in MAS’s experience in developing market-linked surveillance systems, selecting organisational models, managing issuance and trading, and facilitating potential links with international markets as Việt Nam gradually refines its regulatory framework for the sector, she went on.

Lim affirmed MAS’s readiness to continue working closely with the SSC and sharing experience and professional information on crypto-asset market management.

Following the meeting, the VNX and SGX signed an MoU on DR product development. The MoU provides a framework for the two exchanges to further study and promote cooperation in product development, contributing to stronger connectivity between the Vietnamese and Singaporean capital markets.

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