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Vietnam's stock market eyes MSCI emerging market status sooner than expected
๐Ÿ‡ป๐Ÿ‡ณ Vietnam /Economy & Trade

Vietnam's stock market eyes MSCI emerging market status sooner than expected

From Tuแป•i Trแบป · () Vietnamese

Translated from Vietnamese, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Vietnam's stock market is working towards being upgraded by MSCI, a major global index provider, potentially by 2028 or 2029.
  • The State Securities Commission is implementing reforms, including amending the Securities Law and reducing administrative procedures, to meet MSCI's criteria.
  • Key requirements include establishing a central counterparty clearinghouse (CCP) and implementing an omnibus account model, with progress being made on both fronts.

Vietnam's stock market is on track for a potential upgrade by MSCI, a prominent global index provider, with aspirations to achieve emerging market status as early as 2028 or 2029. This follows a recent upgrade by FTSE Russell, signaling growing international recognition of the Vietnamese market.

We are noting unprecedented interest from major funds such as Vanguard, BlackRock, and national funds in the Vietnamese market.

โ€” Bรนi Hoร ng HแบฃiHighlighting the growing international attention on Vietnam's stock market.

The State Securities Commission (SSC) is actively pursuing reforms to meet the stringent criteria set by MSCI. Bรนi Hoร ng Hแบฃi, Vice Chairman of the SSC, stated that the commission is collaborating on amendments to the Securities Law and aims to cut administrative procedures and compliance costs by 50%. A crucial step is the planned operationalization of a central counterparty clearinghouse (CCP) by early 2027, a prerequisite for MSCI's consideration.

Furthermore, Vietnam is implementing measures such as a consolidated account trading model and the removal of pre-funding requirements, alongside efforts to enhance global brokerage connectivity. Hแบฃi noted "unprecedented interest" from major funds like Vanguard and BlackRock, as well as sovereign wealth funds, in the Vietnamese market.

With MSCI's standards, they require an independent legal entity for the CCP to handle operational risks and protect the interests of the members.

โ€” Nguyแป…n SฦกnExplaining one of MSCI's key requirements for market upgrades.

Nguyแป…n Sฦกn, Chairman of the Vietnam Securities Depository and Clearing Corporation (VSDC), highlighted that MSCI's standards revolve around investor confidence in market infrastructure, corporate quality, transparency, and technical infrastructure. He specifically pointed to the requirement for an independent legal entity for the CCP to manage operational risks and protect member interests, and the adoption of the omnibus account model. VSDC has already established a subsidiary for the CCP and is finalizing software integration, with regulatory frameworks expected by the first quarter of 2027.

Secondly, they set requirements related to the omnibus account model.

โ€” Nguyแป…n SฦกnIdentifying another critical requirement from MSCI.
DistantNews Editorial

Originally published by Tuแป•i Trแบป in Vietnamese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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