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Securities dealers protest move to shut down agent networks
The Vietnam Association of Securities Business (VASB) has asked the National Assembly Finance and Budget Committee to review a Finance Ministry decision to prohibit order-taking by sub-agents.
VASD Secretary General Nguyen Thanh Ky believes the Finance Ministry’s decision to prohibit securities dealers from taking orders through sub-agents does not fit the current circumstances of the market for four reasons.
First of all, Ky says, the business model of agents belonging to securities companies receiving stock investors’ orders was clearly stipulated when the stock market began operating. To date, legal documents issued on the operation of the stock market have not contravened these institutions.
Second, this kind of agent aims to help securities companies expand their networks, especially in localities where securities companies cannot open branches or transaction offices.
Third, expanding the network of agents receiving orders for securities companies is a strategy that many securities companies have followed since the beginning of the market’s operation.
Fourth, order-taking agents have not caused any considerable losses to clients or securities companies. No big risks for investors have been reported that should force the closure of these agents.
VASB has suggested that instead of closing order-receiving agents, the Ministry of Finance should think of perfecting the legal framework for their operations.
Their operations are recognised in the regulations on the organisation and operation of securities companies released by the Ministry of Finance.
However, the Ministry at the end of 2008 promulgated Decision No 126, amending some provisions of the regulation. It required for the closure of the agencies within a year. Following the decision of the Ministry, the State Securities Commission has many times urged securities companies to obey the decision.
The Ministry’s decision has not been welcomed by securities companies or investors, who say that the decision will hinder the development of securities companies and the stock market, and that it is contrary to the policy on pushing up the equitisation of state-owned enterprises.
ACB’s Securities Company (ACBS) said that it has opened 50 agents throughout the country. Phu Gia Securities Company said it has three agents in Dong Nai, Da Lat and HCM City.
Securities companies say that they appoint agents as a way of ‘market exploration.’ After evaluating the result, they decide whether to upgrade the agencies into branches.
They have been rushing to open new branches, offices and order-taking agents, even though the stock market has fallen for a long time and has only just recovered a little.
VietNamNet, DTCK
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