Ministry eases stock trading restrictions

The Ministry of Finance has made several changes to stock trading regulations to improve liquidity.

Circular 74, which it issued last week and will take effect in August, will lift the ban on investors having more than one account.

It will, among other things, also lift the ban on buying and selling a security in the same session, according to Vu Bang, chairman of the State Securities Commission.

“The two stock exchanges will be able to make decisions on price fluctuations after the commission’s approval,” Bang said.

“In case of necessity, the commission will have the right to adjust the price band.”

However, the settlement would remain T+3 [three days from the transaction date] due to technical factors, he said.

Though late, the much-anticipated changes are welcome and will have a positive effect on the market that is almost 11 years old but still lacks trading options.

The changes are expected to make the market more transparent since despite being illegal, it is common for investors to have multiple accounts and use margin trading.

“The circular will revive investor confidence and take away the advantage from some securities companies that allow margin trading, creating a fair, competitive environment,” Tran Thien Ha, general director of An Phat Securities Company, said.

Once the circular takes effect, he said, investors would be able to save costs and minimise risks.

The new regulations will also enable the market watchdog to monitor the market better.

However, for sustainable growth, the stock market also requires the healthy development of listed companies, transparent corporate governance, and a transparent and favourable legal framework, which are all in the works.

Tags: vietnam stock, Vietnam stock market, VNindex