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Brokerages face in-house investment-disclosure rule
Securities companies may have to disclose the details of their own investment portfolios if the Ministry of Finance ratifies a proposal to reform financial reporting.
The proposal would aim to make stock brokerages more transparent at a time when many investors have become skeptical about the self-interested investments of these firms.
"Brokerage activities enable securities companies to get the latest reliable news before other investors, which supports their in-house investments," said Le Minh Tuan of the EGAM Investment Fund. "In order to make it fair for all investors, securities companies need to disclose information about these investments".
Released for public comment late last week, the proposal would require securities companies to disclose on-hand securities, including shares, Government and corporate bonds, and fund certificates, as well as matured bonds and other financial investments. Securities companies would also be required to disclose investment portfolios in member companies and joint ventures.
The disclosure statement would also be required to state the book and market values of these investments and any increase or decrease in value since the beginning of the year.
Viet Nam has 105 securities companies with total charter capital of VND30 trillion (US$1.56 billion), many of which handle their own investments.
Dang Tu, a client of Bao Viet Securities Company, said that concealing information about these investments was unfair because these firms managed investor accounts and offered consulting services in competition with their own investments.
More than once, he said, securities companies had delivered an analysis on a listed share then traded their own holdings in the shares immediately after.
A number of figures in the securities industry, however, decried the burden of additional regulations.
"I haven't seen many countries applying such regulations," said the deputy head of the securities business department of the State Securities Commission, Nguyen Thuc Anh.
"Requiring securities companies to disclose details of their own business and investments is unreasonable and unfair because it may release business know-how," said Lien Viet Securities Comapny General Director Hoang Xuan Quyen.
Some other investors urged policy-makers to require companies to disclose only trading values rather than full day-to-day information on trades.
Sai Gon- Ha Noi Fund Mangement Company Deputy Director Luu Nguyen Chi Nhan suggested that securities companies report quarterly or twice a year on the proportion of their revenues that come from in-house investments and the risk-provision funds they set aside to cover any losses.
The Ministry of Finance is collecting public comment on the proposal which, if approved, would require compliance as early as this year.
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