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Derivatives market framework in progress
In an effort to run the derivatives market more safely and efficiently, the State Securities Commission (SSC) has started building a legal framework, SCC vice chairman, Nguyen Thanh Long, said on September 26 at a seminar in Ha Noi.
Long said Viet Nam's stockmarket was one of the fastest growing in the world, and current developments called for new products to satisfy investor demand. To assist, the Government issued Decision 366/QD-TTg to advance the derivatives market.
The SCC and the Viet Nam News Agency held the seminar to discuss the legal framework for derivatives and the market's development in Viet Nam.
Long said this was because derivatives were complicated and potentially risky, so the State Securities Commission needed to help manage the market to minimise risks.
Director of the SSC's Market Development Department, Nguyen Son, presented an unfinished draft decree on the derivatives market. It has provisions that include listing requirements for participants, trading rules, clearing, disclosure obligations, management, supervision and dispute resolution.
According to the draft decree, derivatives must be standardised, listed, and transacted on and through stock exchanges. They must be paid through a Central Counter Party (CCP) system to avoid risks.
The draft decree allows securities companies and commercial banks that meet certain capital and financial security standards to function as members of the derivatives market.
The public may submit suggestions or ideas regarding the draft decree until October 30 on the SSC's website: ssc.gov.vn.
The SSC expects to submit its decree to the Government by the end of the year.
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