FTSE Russell praises Vietnam for strong reform efforts

Representatives of FTSE Russell, a member of the London Stock Exchange Group, on Thursday said they highly evaluate Vietnam's strong reform efforts and commit to continue accompanying the country in the process of market modernization.

They made the statement at a meeting with Minister of Finance Nguyen Van Thang and chairwoman of the State Securities Commission (SSC) Vu Thi Chan Phuong in Hanoi, the ministry's news portal reported.

Gerald Toledano, Global Head of Equity and Multi Asset at FTSE Russell, told Minister Thang that FTSE Russell is ready to support Vietnam in developing the index system.

He said the company is ready to share international experience and enhance technical cooperation, especially in the context of many long-term investors such as pension funds expanding their strategies in the Asian region.

The FTSE Russell executive also expressed the company's wish to coordinate more closely with Vietnamese regulators to promote initiatives to facilitate Vietnam's stock market status upgrade (from "frontier" to "emerging").

In response, Thang outlined Vietnam’s ongoing reforms, noting that the Ministry of Finance has directed the SSC to engage regularly with international market rating agencies and investors to share updates on Vietnam’s stock market reforms and gather feedback.

The ministry is finalizing a draft decree amending the government's Decree No. 155/2020/ND-CP to enhance transparency in foreign ownership limits and eliminate outdated rules, such as those allowing shareholder meetings to set maximum foreign ownership levels.

It is also refining the legal framework for securities offerings to improve the quality of listed assets, expand market capitalization, and boost appeal for both domestic and foreign investors.

He said that per the Government's assignment, the ministry recently took over the role of state ownership representative in several enterprises previously managed by the Commission for the Management of State Capital at Enterprises.

"This is an important adjustment in management work, aiming to improve the effectiveness of supervision and use of state capital and assets at enterprises," he said.

The ministry will review these enterprises' performance and privatization potential. It will collaborate with ministries, agencies, and localities to accelerate divestment from businesses where state control is no longer needed and shorten the list of sectors with restricted market access. Businesses are encouraged to focus on core operations to increase foreign ownership rates.

To diversify market offerings, the SSC is exploring new financial products aligned with global standards and local demand.

Administrative reforms include a draft circular amending regulations to simplify documentation for foreign investors, reduce consular legalization requirements, and enhance flexibility in customer identification.

A new digital platform is expected to streamline document handling, licensing, and market supervision, considerably cutting processing times and boosting transparency.

On the foreign exchange market, the host said the ministry is working with the State Bank of Vietnam (SBV) to develop a legal framework for hedging instruments to address exchange rate risks, a critical need for institutional investors with long-term strategies in Vietnam.

The recently launched KRX system has laid the technical groundwork for a central counterparty clearing mechanism, with the Vietnam Securities Depository and Clearing Corporation tasked to draft a roadmap for its launch in early 2027.

Thang welcomed FTSE Russell’s proposal to expand tailored index offerings for Vietnam, pledging full support for deeper collaboration among the SSC, domestic financial market institutions, FTSE Russell, and other global financial organizations.

The ministry strongly encourages training, knowledge transfer and technological partnerships to improve the expertise of Vietnam’s financial and securities professionals, aiming to meet international investor expectations and FTSE Russell’s market classification criteria, he added.