Central counterparty clearing mechanism key to facilitating Vietnam stock market upgrade: exec

A central counterparty clearing (CCP) mechanism is key to removing prefunding hitches and drawing more foreign investors to Vietnam’s stock market, says Ta Thanh Binh, general director of Vietnam Securities Depository and Clearing Corporation (VSDC).

She noted at the Vietnam Investment Forum 2025 held in Ho Chi Minh City on Friday that the finance ministry’s Circular 68, which took effect on November 2, allows foreign institutional investors to purchase Vietnamese stocks without prefunding.

Not requiring prefunding is a crucial factor for the potential upgrade of Vietnam’s stock market, she said.

Global index provider FTSE Russell is expected to announce the result of its review of Vietnam's stock market classification in September 2025; and VSDC anticipates positive feedback from foreign investors on the new rule, she added.

However, Circular 68 only offers technical solutions to the prefunding issue, Binh noted, emphasizing that launching a CCP mechanism is critical for addressing the problem. She suggested establishing a VSDC subsidiary dedicated to deploying this mechanism.

Securities regulators are collaborating with listed firms to begin information disclosures in English starting in 2025, the VSDC executive affirmed.

Some foreign institutions like MSCI and FTSE Russell have assessed that Vietnam’s stock market is underperforming relative to its potential, Binh noted.

Last month, FTSE Russell retained Vietnam on its watch list for possible reclassification to “secondary emerging” market status. Vietnam was added to the watch list in September 2018 for a possible upgrade from its current “frontier” market status.