Decision No. 898/2006/QD-BTC Issuing the Securities Market Development Plan for Vietnam 2006-2010

Pursuant to …;

Issuing the plan for the development of the Vietnamese securities market 2006-2010

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Pursuant to Decree No. 86/2002/NĐ-CP dated November 5, 2002 of the Government stipulating the functions, tasks, powers, and organizational structure of ministries and ministerial-level agencies;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 163/2003/QD-TTg dated August 5, 2003 of the Prime Minister approving the Strategy for the Development of the Vietnamese Securities Market until 2010;

Considering the proposal of the Chairman of the State Securities Commission,

Pursuant to …;

Article 1. Issuing the plan for the development of the Vietnamese securities market 2006-2010 with the main contents as follows:

I. OBJECTIVES.

1. Expand the organized securities market, reduce the unorganized market; strive to reach a total market capitalization of the organized securities market of 10-15% of GDP by 2010.

2. Enhance transparency in securities market activities, apply best practices in corporate governance for public companies and securities business organizations.

3. Increase the scale and capacity of securities business and service organizations to meet the requirements of securities market development.

4. Implement centralized registration and custody of securities of listed public companies at the Securities Depository Center.

5. Open up the securities services market according to the integration roadmap committed to; apply principles of securities market management in line with recommendations of the International Organization of Securities Commissions suitable for each stage of market development.

II. CONTENT OF THE PLAN.

1. Develop products for the securities market

a) Improve the legal framework and policies to ensure unified State management over the issuance of securities to the public and the management of public companies; apply corporate governance provisions for public companies.

b) Based on the State Enterprise Reform Program 2006-2010, develop and implement plans to link the shareholding reform of state-owned enterprises with listing on the securities market; transform foreign-invested enterprises into joint-stock companies and list them on the securities market; sell off state shares not needed to hold in listed companies according to the sectors and industries specified by the Government.

c) Improve the method of issuing government bonds towards increasing the proportion of tendering and underwriting for different terms. Improve the legal framework, select and guide local governments and large enterprises to issue bonds to raise investment funds.

d) Develop other products on the securities market including fund certificates, derivative securities.

2. Develop the securities trading market

a) Transform the Ho Chi Minh City Securities Trading Center into a Stock Exchange to handle listing and trading of shares for large companies.

b) Improve the organization and operation of the Hanoi Securities Trading Center according to the model of a decentralized market.

c) Guide and supervise the trading of non-listed securities at securities companies.

d) Build and improve the bond trading market, initially focusing on government bonds.

3. Develop securities business and service organizations

a) Issue regulations to create a legal basis for securities companies to restructure towards increasing capital size, developing human resources, expanding service provision scope and network; strengthen the application of information technology in securities services.

b) Build and develop a system of market makers; a system of professional bond traders.

c) Expand the scope and scale of fund management companies; fund management companies perform portfolio management and fund management services. Encourage commercial banks and large insurance companies to establish fund management companies; diversify collective investment forms.

d) Apply best practices in corporate governance for securities business and service organizations; standardize internal control, risk management, and operational procedures, implement ethical business conduct rules in the securities industry.

4. Develop supporting organizations

a) Regarding the Securities Depository Center:

- Prepare necessary conditions to put the Securities Depository Center into operation from 2006 to handle registration, custody, settlement, and payment of securities currently managed by Securities Trading Centers.

- Improve the legal framework and operational procedures to implement centralized registration and custody of public company securities at the Securities Depository Center from 2007.

- Study proposals to convert the Securities Depository Center into a company model, including state ownership; diversify the operations of the Securities Depository Center.

b) Regarding custodian members:

Develop a network of custodian members (securities companies, depositary banks) providing securities custody services ensuring asset safety and exercising investor rights.

5. Develop investors

a) Develop professional securities investment organizations, encourage these organizations to establish fund management companies and securities investment funds, striving for the proportion of professional securities investment organizations' investment in the listed securities market to reach 20-25% of the total value of the listed securities market by 2010.

b) Popularize education and training on securities knowledge and the securities market for the public, enhancing public understanding of the role, benefits, and risks of investing through securities investment funds.

6. Develop information technology infrastructure for the securities market

a) Complete and put into use modern securities trading systems for Securities Trading Centers and the Securities Depository Center from 2008.

b) Develop and guide the implementation of information technology standards applicable to securities business and service organizations to ensure transparent and fair provision of market information and services to all types of investors.

c) Complete the construction of a centralized database to serve market management and operation; computerize the exchange and updating of stock market data. Strengthen the application of information technology in market management, operation, and supervision.

7. International integration in the securities market

a) Implement the ASEAN capital market integration program for the period 2006-2010, including the following contents: implement the Asian Bond Fund initiative; harmonize issuance, listing, and information disclosure standards on the securities market; connect trading and listing between ASEAN Stock Exchanges; work towards establishing a common secondary market for bond trading among ASEAN countries; strive to have companies listed in the top 100 of each ASEAN country.

b) Implement the opening of securities market services according to the commitments made in bilateral and multilateral agreements.

c) Fulfill the rights and obligations of a member of IOSCO; sign Memoranda of Understanding (MOU) for bilateral cooperation with securities commissions in the region; sign Multilateral Memoranda of Understanding (MMOU) with IOSCO members;

8. State management of the securities market

a) Draft the Securities Law and guiding documents to be submitted to competent state agencies for promulgation in 2006.

b) Transform the organization and operations of Securities Trading Centers and Securities Depository Centers in accordance with the Securities Law.

c) Enhance transparency, openness, and fairness in securities market activities based on completing and enforcing regulations on information disclosure and corporate governance for public companies.

d) Improve policy-making capacity, strengthen the effectiveness of supervision, inspection, and handling of violations of securities laws and the securities market; complete and apply criteria for evaluating the performance of securities companies and fund management companies, and criteria for warning of abnormal transactions in the securities market.

đ) Apply IOSCO's recommendations on market management principles in areas such as the management of securities issuers, collective investment schemes, market intermediaries, and the secondary market.

e) Implement the project to upgrade training for securities business practitioners and to train and promote awareness about the securities market for investors during the period 2006-2010, approved by the Ministry of Finance.

Article 2. Implementation

1. The State Securities Commission shall take the lead in coordinating with relevant units to implement this Plan, report annually to the Minister of Finance on the progress of implementation; propose solutions for implementation and adjustments to the Plan when necessary.

2. The Corporate Financial Department shall take the lead in compiling a list and plan for potential state-owned enterprises to participate in the securities market; a list and plan for selling off state shares at listed companies and those registered for trading in sectors and industries specified by the Government.

3. The State Treasury shall take the lead in developing and implementing the project to improve government bond issuance.

4. The Banking Finance Department shall take the lead in developing and directing the implementation of policies to develop the securities market; compile plans and direct the issuance of local government bonds, development support funds' bonds, and commercial banks' and large corporations' bonds.

5. Units under and affiliated with the Ministry of Finance, according to their assigned tasks, shall coordinate with the State Securities Commission, the Corporate Financial Department, the State Treasury, and the Banking Finance Department to complete the tasks outlined in this Plan.

Article 3. This Decision takes effect from the date of signature. The Chairman of the State Securities Commission, the Director of the Ministry of Finance's Office, and the heads of related organizations and units are responsible for implementing this Decision./.