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SSC not strong enough to regulate market
To date, the State Securities Commission has just been acting as the ‘intermediary’ between investors and the Ministry of Finance, while it does not have enough power to regulate the market.
The stock market has been falling for a long time. State-owned enterprises find it hard to sell securities on the stock market. Too many securities companies have been established within a short time. All these are big problems of the stock market that need to be settled urgently. However, when the State Securities Commission (SSC) is asked about solutions for the problems, it is either silent or gives vague answers, which shows the limitations in the power of the “stock market regulator”.
Nguyen Dai Lai, Deputy Director of the Banking Development Strategy Department under the State Bank of Vietnam, said that the stock market, like a high-grade market, requires modern technology and a high management level. Especially, the management board of the market needs to have enough power to regulate the market.
Lai said that SSC needs to be an independent agency or an agency belonging directly to the government which can make decisions and take responsibility before the government about the operation of the market.
He said the actions taken by SSC so far in emergency cases have not satisfied the expectations of investors.
“When the stock market declines, SSC should be an entity that investors rely on and expect to rescue them. However, in fact, the agency only has limited power,” a securities expert said.
Nguyen Dinh Cung, Head of the Macroeconomic Management Division under the Central Institute of Economic Management, stressed that SSC does not have as much power to regulate the market as a market watchdog needs to have. When the stock market falls down, SSC cannot do anything except make proposals to the Ministry of Finance and wait for the ministry’s decisions. As a result, SSC cannot act quickly in an emergency. The stock market, which has been operating under the law of demand and supply, therefore, has become sluggish.
Cung said that the model of the stock market watchdog belonging to a ministry is rarely seen in the world. In general, the stock market regulating agency is always an independent unit. Vietnam’s stock market has become big enough after eight years of operation; therefore, it needs to be separated from the Ministry of Finance to take initiative in regulating the market.
Secretary General of the Vietnam Association of Securities Business (VASB) Nguyen Thanh Ky said that he has many times proposed the separation of the SSC from the Ministry of Finance, but SSC remains an ‘intermediary’ between investors and the Ministry of Finance.
The Ministry of Finance is now compiling a document which amends some regulations of the Securities Law. However, even if the state management agencies agree to separate the SSC from the Ministry of Finance, the separation would not occur till 2010, as the Law on Amending Securities Law will not take effect until that year.
VNN
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