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Centre denies manipulation of OTC market
The Ha Noi Securities Trading Centre has denied the possibility of manipulation of the over-the-counter (OTC) market by stock brokerages once the centre takes responsibility for the OTC market this year.
The denial followed doubts raised by some foreign experts at a recent conference over the proposed practice that would give securities companies the power to report final OTC prices to the centre.
Centre director Tran Van Dung reassured doubters, noting that brokers would have to report all buy and sell prices, as well as share volumes, along with closing prices.
"The centre would then have a collective result of trading on the OTC market from all brokers which it would then send back to securities firms. The results would be printed immediately on an automated board," Dung said, eliminating opportunities for manipulation.
"Prices and trading volume will be displayed on the screen everytime an order is matched," Dung said.
The centre would also put other mechanisms in place to analyse and monitor actions by securities companies, he added.
Some experts also pointed to me lack of legal enforcement mechanisms, but Nguyen The Tho, head of the Department for Securities Issue Management of the State Securities Commission, pointed out that the Law on Securities and related regulations already forbid any manipulation of stock market trading and provided for penalties.
"Last year, we uncovered 70 violations in official markets and issued penalties in each situation. There will be no exception for trading on the OTC market as it is also subject to the law," Tho said.
Bao Viet Securities deputy director Pham Quang Huy said the Government should shorten the time between initial public offerings (IPOs) and listings in order to avoid an overload of companies trading on the OTC market, e.g., Vietcombank, shares of which are currently only traded on the OTC market.
Foreign owner caps
State Securities Commission chairman Vu Bang said that the commission was calculating foreign ownership caps that would apply in the newly-controlled OTC market being set up at the Ha Noi Securities market Trading Centre.
"The cap could be 30-49% for overseas investors, or we might divide the stocks in this market into specific groups among which foreigners would not be limited," Bing said.
Under the current plan for the OTC market, investors would trade via securities firms with results displayed on automated board at the firms and the centre.
The project to set up the OTC market was approved in December, and the centre expected to launch the market in the first quarter of this year.
VNN
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