Understand about Securities law is an important factor for F0 investors to be able to shape and manage risks effectively. HVA will take you on a journey to explore Vietnamese securities law, from the basics to more complex aspects, to help new investors have an overview and deeper understanding of this stock market.
1. Basic introduction to Securities Law
Vietnam Securities Law is a system of regulations and rights applicable to securities trading activities in Vietnam. Having a thorough understanding of the basic regulations in securities law is an important first step to becoming a knowledgeable investor.
Securities Law No. 54/2019/QH14, passed by the National Assembly on November 26, 2019, brings many new breakthroughs. Points such as raising the conditions for public offering of securities, improving the quality of financial reports, and enhancing information transparency, all aim to elevate the Vietnamese stock market to a new level.
Vietnam Securities Law plays an important role in managing and regulating securities trading activities in this country. With the constant changes in the market and the increasing demand for transparency and security in transactions, a thorough understanding of the basic provisions in securities law is the first key to becoming a savvy investor.
Securities Law was introduced in 2006 and after 4 years, the Government has proposed to supplement and amend a number of articles in this Law, at the same time providing a relatively complete legal framework. In 2010, on the basis of the amended Securities Law, the Government and the Prime Minister issued a series of decrees and decisions, while the Ministry of Finance also issued many circulars guiding implementation.
These measures not only create a stable legal basis for securities activities but also comprehensively regulate and synchronize regulations in this field. The securities market is increasingly becoming an important channel to attract medium and long-term investment capital for the economy, helping to reduce the gap between bank credit and the capital market, and contributing to increasing social investment capital.
2. The process of perfecting the Securities Law from 2006 to 2019
During the period from 2006 to the end of 2019, Vietnam stock market (TTCK) has witnessed significant development. The number of listed companies and market capitalization have increased sharply, while capital mobilization through the issuance of shares and bonds has also increased dramatically. The market has supported the equitization of state-owned enterprises and has become increasingly transparent and public. Market areas such as share, bond and derivative has been formed and developed. Market liquidity has also been significantly improved. The system of securities organizations has developed professional and financial capacity, and at the same time, the diversification of investor composition has increased significantly. However, there are still challenges to be overcome such as improving the quality of listed companies and perfecting the market organization system.
As of now, Vietnam Stock Market has recorded significant progress, but still faces many limitations and challenges. Some of the main causes of these limitations are the incomplete legal framework on securities and the securities market. Specifically, some provisions of the Securities Law are still vague and unclear, leading to different interpretations and difficulties in implementation.
In addition, issues such as the charter capital size of public companies, organization of the securities trading market, measures to ensure the safety of the securities market, information disclosure on the securities market, policies to attract foreign investment, and the authority of the State Bank of Vietnam are also discussed. State Securities Commission There are still many limitations and have not been thoroughly resolved.
The provisions of Securities Law are also not yet synchronized and adapted to new legal documents, especially in the context of a strongly developing market and economy. This poses an urgent need to perfect the legal system on securities and the stock market, to effectively protect the rights and legitimate interests of organizations and individuals participating in the stock market.
3. Securities Law creates legal foundation for new development stage
Securities Law The newly amended law has played an important role in creating a solid and necessary legal basis for the new development stage of Vietnam's financial market. Below are the main points that this law has promoted:
- Securities Offering: The Law has adjusted the conditions and procedures for public offering of securities, aiming to improve the quality of listed enterprises and minimize risks for investors.
- Private offering of securities: Clearly define the subjects participating in private securities offerings to avoid abuse and create fair conditions for investors.
- Public company: Improve conditions on shareholder structure and charter capital for public companies, create favorable conditions for corporate governance and improve business quality.
- Stock exchange market: Clearly stipulate the organizational and management structure of organizations such as the Vietnam Stock Exchange and the Vietnam Securities Depository and Clearing Corporation, to increase transparency and professionalism in securities trading activities.
- Securities and fund management company: Adjust the licensing and business operations process for these organizations, expand the scope of operations and create more favorable conditions for securities companies.
- Information Disclosure: Improve regulations on information disclosure on the stock market, more in line with international standards and facilitate market transparency and openness.
- Inspection, examination and handling of violations: Supplementing the authority and clearly defining the responsibilities of supervisory agencies, in order to strengthen the prevention and strict handling of violations in the stock market.
4. Conclusion
Measures applied in Securities Law 2019 to enhance deterrence and prevention of violations in the securities market. The maximum administrative fine has been significantly increased, especially for acts such as market manipulation and insider trading. This emphasizes the seriousness in handling violations, while also creating a clear impact on individuals and organizations intending to violate.
In addition to increasing the level of penalties, the Securities Law 2019 also focuses on adding measures to ensure security and safety for the securities market. This includes clearly defining the responsibilities of the securities market management agency in implementing preventive measures and promptly handling arising issues, thereby minimizing risks and protecting the interests of investors.
Overall, the amendments and supplements to the Securities Law 2019 have created a stronger legal framework, while demonstrating the commitment of the government and regulatory agencies to improving the quality and transparency of the securities market. This also contributes significantly to attracting investment capital, enhancing confidence and stability for the economy.
