Decision No. 128/2007/QĐ-TTg on approving the Project for the development of the capital market in Vietnam until 2010 and vision until 2020

Article 1.Approves the Development Plan for the Capital Market of Vietnam until 2010 and with a vision to 2020 with the main contents as follows:

A. Objectives

1. General Objective

To develop rapidly, synchronously, and firmly the capital market of Vietnam, in which the securities market plays a leading role; gradually transform the capital market into an important component of the financial market, contributing significantly to the mobilization of funds for investment development and economic reform; ensure transparency, maintain order, safety, efficiency, strengthen management and supervision of the market; protect the rights and legitimate interests of investors; gradually enhance competitiveness and proactively integrate into the international financial market. Strive to reach by 2020, the development level of the capital market of Vietnam will be equivalent to that of countries in the region.

2. Specific objectives

Develop a diverse capital market to meet the demand for fund mobilization and investment of all entities in the economy. Strive to reach by 2010, the market capitalization of the securities market will account for 50% of GDP and by 2020, it will reach 70% of GDP.

B. Views and Principles of Developing the Capital Market

1. Forming and developing a synchronous structure of the capital market, in which the securities market plays an important role, ensuring effective mobilization and allocation of investment funds for economic growth; closely coordinating with the money market in controlling inflation and stabilizing currency; successfully integrating with the international capital market.

2. Building and developing a capital market with a reasonable structure, ensuring transparency in market operations, enhancing the competitiveness of organizations and individuals participating in the market.

3. Organizing the operation of the capital market to be safe, efficient, and healthy; ensuring national financial security.

C. Implementation Measures

1. Long-term measures

a) Developing the capital market towards modernity, completeness in structure (including stock market, bond market, derivatives market, centralized market, decentralized market...), operating according to best international practices, capable of linking with regional and international markets.

b) Strengthening domestic and foreign channels for providing capital to the market; expanding the system of investors, especially organized investors; fully developing intermediary institutions; diversifying services provided, ... ensuring all elements necessary for a developed capital market in the region.

c) Closely combining monetary policy with fiscal policy; harmonizing the goal of mobilizing funds for economic growth and sustainable development of the capital market with macroeconomic stability, controlling inflation, and ensuring national financial security.

d) Strengthening state management, effectively performing the function of inspecting, supervising compliance with laws by organizations and individuals participating in market activities.

2. Short-term measures

a) Expanding scale, improving quality, and diversifying types of goods to meet market needs:

- Expanding the scale and diversifying types of bonds, methods of issuing government bonds, local government bonds, corporate bonds on the capital market; developing convertible corporate bonds and project bonds for investment in national key infrastructure projects;

- Accelerating the program of shareholding of state-owned enterprises, state-owned joint-stock companies, economic groups, and state-owned commercial banks, linking shareholding with listing on the stock exchange; expanding the issuance of new shares to raise funds from the market. For those enterprises that have been privatized and meet the conditions, they must list their shares; simultaneously conducting reviews and selling off the remaining state-owned shares in enterprises where the state does not need to hold controlling stakes or significant shares. Converting foreign-invested enterprises to joint-stock companies and listing them for trading on the stock exchange;

- Developing derivative securities such as: call options, put options on stocks; futures contracts; forward contracts; linked products (stocks-insurance, stocks-loans, savings-stocks...); products derived from securitization of assets and debts...

b) Gradually perfecting the structure of the capital market to ensure the ability of state management and supervision:

- Separating the bond market from the stock market to form a specialized bond market. Gradually studying the formation and development of a futures trading market for derivatives, a securitized loan market for medium and long-term bank loans...

- Developing the stock market at multiple levels to meet the needs of issuing stocks, listing, and trading by various types of enterprises and ensuring the ability of state management and supervision through separating centralized trading markets, decentralized trading markets (OTC), registration and trading markets for small and medium-sized enterprises;

- Transforming the Securities Trading Center into a Stock Exchange operating under the company model in accordance with the spirit of the Securities Law. The Stock Exchange and the Securities Trading Center perform the functions of organizing and supervising centralized securities trading. Upgrading the technical infrastructure of the market comprehensively to ensure connectivity with markets in the region.

- Organize the over-the-counter (OTC) securities trading market in a managed manner through solutions such as centralized registration and custody for joint-stock companies meeting the conditions stipulated by the Securities Law; study mechanisms for trading securities that do not meet listing conditions through negotiated models through securities companies; centralized settlement and transfer of securities transactions through the Securities Depository Center; at the same time, establish a supervision mechanism for the securities trading market to enhance transparency and disclosure of information, ensuring state management and supervision of securities transactions, and reducing activities in the free market.

c) Develop intermediary institutions and services for the market:

- Increase the reasonable number, improve the quality of operations and financial capacity of securities companies, fund management companies, stock investment companies, etc.; diversify types of services provided on the market, enhance professionalism and service quality; ensure transparency, fairness, and equality in the market;

- Expand the scope of operations of the Securities Depository Center, apply international custody standards, implement linkages for transaction settlements between the capital market and the money market;

- Gradually form a credit rating market in Vietnam. Allow the establishment of credit rating organizations meeting the conditions in Vietnam and permit some reputable foreign credit rating organizations to conduct credit rating activities in Vietnam.

d) Develop domestic and foreign investor systems:

- Encourage professional investment institutions (banks, securities, insurance...) to participate in investments on the market according to the provisions of the law. Implement a phased opening to foreign professional investors in the Vietnamese market according to the committed schedule;

- Diversify types of investment funds; create conditions allowing the Vietnam Social Security, Postal Savings, etc., to participate in capital market investments; gradually develop and diversify pension funds to attract community capital for investment; encourage the establishment of overseas investment funds investing long-term in the Vietnamese market.

đ) Improve the legal framework, enhance the effectiveness of state management and supervision:

- Complete a unified and synchronized legal framework system to meet management and supervision requirements and integrate with regional and international capital markets;

- Supplement strict civil and criminal sanctions to prevent and handle violations in capital market and securities market activities;

- Study and complete tax, fee, and charge policies for securities activities, encouraging long-term investment and limiting short-term investment; regulate profits from securities trading, and through taxes, fees, and charges, contribute to supervising the securities market and each participant (including both domestic and foreign investors);

- Apply international market supervision standards; intensify inspections, audits, and supervision of compliance with laws by market participants; inspect and supervise goods entering the market, ensuring transparency; strengthen the supervisory and enforcement capacity of market regulatory agencies;

- Consolidate the organizational structure, enhance state management and supervision capabilities for the capital market; gradually separate management functions from supervision functions of market activities; promptly research the establishment of a National Financial Supervisory Authority to assist the Prime Minister in coordinating policies and tools for warning, managing, and supervising financial and monetary activities at the macro level.

e) Proactively open up and integrate with the region and internationally:

- Gradually open the capital market to foreign investors according to the committed integration schedule, while ensuring control over inflows and outflows of capital; expand international cooperation in policy advisory, legal advisory, and market development;

- Strengthen training and human resource development for the capital market; increase public awareness about the capital market and securities market among businesses and economic organizations.

g) Ensure national financial security: effectively monitor capital transactions; apply stringent capital flow control measures; in cases where it is necessary to reduce pressure on exchange rates, prevent risks of distortion and crises in the market, appropriate solutions must be implemented. These solutions are reflected in normative legal documents and announced to investors for their knowledge and application only when there are risks affecting the financial system's security. Implement special monitoring mechanisms for weak intermediary institutions to minimize negative chain effects throughout the system.

Article 2. Implementation Organization

The Ministry of Finance shall take the lead and coordinate with ministries, ministerial-level agencies, government-affiliated agencies, provincial People's Committees under central cities to organize and implement this Decision.

Article 3. This Decision shall take effect fifteen days from the date of publication in the Official Gazette and shall replace Decision No. 163/2003/QĐ-TTg dated August 5, 2003, approving the Securities Market Development Strategy for Vietnam until 2010, issued by the Prime Minister.

Article 4.Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairpersons of provincial People's Committees under central cities, and heads of related agencies are responsible for implementing this Decision./.