Vietnam introduces new regulations on securities and banking ownership restrictions
On November 29, 2024, the National Assembly passed the Amendment to 09 Laws, which includes changes to the Law on Securities 2019. These amendments are set to come into effect on January 1, 2025, with some specific provisions to be effective from April 1, 2025, or January 1, 2026. The objective of these amendments is to attract more foreign investment into the securities market and to improve market transparency and investor protection in light of recent cases of stock manipulation.
One of the key changes introduced by the Amendment to 09 Laws is the inclusion of a clear definition of “securities market manipulation” in the Law on Securities 2019. This definition combines elements from Decree No. 156/2020/ND-CP and the Penal Code 2015. Activities such as artificially creating supply and demand by continuously buying and selling securities, trading securities without transferring ownership, or colluding to influence prices are now explicitly prohibited. Additionally, spreading false rumors or providing misleading information to manipulate securities prices is also considered a form of market manipulation.
Another significant amendment relates to the classification of foreign individuals and entities as “professional securities investors.” Under the new rules, foreign investors are automatically designated as professional investors without the need to fulfill additional requirements. Institutional professional investors are now allowed to trade privately-placed corporate bonds, while individual professional investors will have access to such bonds starting from January 1, 2026, provided that the issuers meet specific criteria, such as credit ratings and backed securities.
The Amendment to 09 Laws also expands the responsibilities of organizations and individuals involved in preparing files and reports related to the securities market. These include ensuring the legality, accuracy, truthfulness, and completeness of documents, certifying the accuracy of reports, and conducting thorough reviews of information. Moreover, consulting organizations and professionals must act honestly, diligently, and in compliance with legal regulations during the advisory process, taking legal responsibility for their actions. Similarly, auditing organizations and approved auditors must fulfill their responsibilities within the scope of auditing related to documents and reports.
Overall, the newly-promulgated rules provide a comprehensive framework to regulate securities trading and market activities in Vietnam. By defining and prohibiting securities market manipulation, classifying foreign investors as professional securities investors, and expanding the responsibilities of relevant parties, these amendments aim to create a more transparent and investor-friendly environment for market participants. With the implementation of these regulations, it is expected that foreign investment in Vietnam’s securities market will increase, boosting market integrity and investor confidence in the long run.
