To realize potential cash flow from foreign investors

(Baonghean) - At the Vietnam - US financial investment promotion conference that just ended on July 6, in response to an investor interview about the stock market, Chairman of the State Securities Commission (SSC) Vu Bang affirmed that, in addition to room expansion, one of the requirements for a market like Vietnam to upgrade to an emerging market is the convenience of foreign investors (FDI) accessing the market. Nghe An Newspaper introduces to readers the content of this discussion.

Minister of Finance Dinh Tien Dung (2nd) and Chairman of the State Securities Commission Vu Bang (3rd from right to left) at the NYSE Stock Exchange (USA).

*Foreign investor:Mr. Vu Bang, Chairman of the State Securities Commission, one of the questions that investors are most concerned about right now is the room expansion for foreign investors. In your opinion, what important adjustments will the Government make to promote this room expansion?

* Chairman of the State Securities Commission Vu Bang:On June 26, 2015, the Government issued Decree 60/2015/ND-CP amending and supplementing a number of articles of Decree 58/2012/ND-CP dated July 20, 2012 detailing and guiding the implementation of a number of articles of the Securities Law and the Law amending and supplementing a number of articles of the Securities Law. One of the important contents of Decree 60 stipulates the foreign ownership ratio in the Vietnamese stock market. Accordingly, we stipulate the foreign ownership ratio in public companies, in state-owned enterprises (SOEs) implementing equitization (EI) in the form of public offering of securities; Decree 60 takes effect from September 1, 2015 and abolishes Decision No. 55/2009/QD-TTg dated April 15, 2009 of the Prime Minister on the participation rate of foreign investors in the Vietnamese stock market.

*Foreign investor:So what are the key amendments to Decree 58 that have been mentioned in Decree 60, sir? Do you think that expanding the room for foreign investors will support the equitization program of SOEs?

* Chairman of the State Securities Commission Vu Bang:That is, according to the new regulations, except for Vietnam's international commitments and specialized laws or regulations in conditional business sectors, all enterprises are not limited in the ownership ratio of foreign investors in the enterprise (except for the company's charter with other regulations). In addition, securities trading organizations are allowed to establish, conduct business and contribute 100% capital of foreign investors. In addition, there is also the improvement of the quality of securities issuance and private issuance, legalization of Decision 51 of the Government on equitization: after one year of equitization, enterprises are required to list and trade on the stock market.

Over the years, the Vietnamese Government has always identified attracting foreign investment capital as a key task, of great significance to the country's socio-economic development. In recent times, the Vietnamese Government has always paid attention to and improved the mechanism on equitization in the direction of creating favorable conditions for foreign investors to participate in investment and purchase shares. In addition, the implementation of equitization must ensure publicity and transparency, investors participating in purchasing shares must have access to full information about the business situation...

For the normal financial investment activities of foreign investors, the Vietnamese Government always creates favorable conditions for investors to participate, limiting unnecessary procedures. Every year, we regularly contact foreign investors in Vietnam directly as well as through forums such as Vietnam Business Forum, Eucharm, Eucharm, Auscharm, Cancharm to gather opinions to improve policies and better support foreign investors in Vietnam.

Dr. Vu Bang, Chairman of the State Securities Commission

* Foreign investors:Will the room expansion be a significant boost to the equitization program with the prospect of potential cash flow from foreign investors to buy companies after equitization, sir?

*Chairman of the State Securities Commission Vu Bang: In addition to the above solutions, the Vietnamese Government has also increased the rate of foreign investors participating in purchasing shares in Vietnamese enterprises. Importantly, to attract the participation of foreign investors, an issue that we have fully recognized from the highest level of the Government is the role of transparency and good corporate governance. Up to now, we have made positive progress in creating a legal framework to ensure increased transparency and the application of good corporate governance in Vietnam. State-owned enterprises are now gradually applying the same information disclosure mechanism as listed enterprises. In 2014, the Vietnamese National Assembly also issued the Enterprise Law and the new Investment Law with an open mechanism to ensure fairness among types of enterprises, applying and institutionalizing many good corporate governance practices that are accepted globally.

Currently, we are quickly listing equitized enterprises on the market, meeting the desire of investors when investing in equitized enterprises to see their investments traded in a transparent and dynamic market. According to the assessment of the 2014 production and business results of listed companies on the two exchanges, the number of profitable enterprises accounted for over 90% of the total number of enterprises. In the whole market, revenue increased by 13% compared to 2014, profit increased by 13.4% respectively. The ROA and ROE indexes were 2.26% and 13.3%, both of which increased significantly compared to 2013. Indexes such as interest expense, financial expenses and inventories all had very positive fluctuations compared to 2013. These are evidences that listed enterprises on Vietnam's exchanges have successfully restructured, escaped the crisis and started a new growth cycle.

*Foreign investor:Dear Chairman of the State Securities Commission, in addition to room expansion, one of the requirements for a market like Vietnam to be upgraded to an emerging market is the convenience of foreign investors in accessing the market. From the perspective of state management of the stock market, could you please mention some key points to help investors access the market more easily... such as procedures for opening trading accounts, setting up derivative instruments...?

*Chairman of the State Securities Commission Vu Bang:In addition to the direction of expanding the room for foreign investors, the State Securities Commission also offers other solutions to create more favorable conditions for foreign investors. Currently, the Circular amending Circular 213/2012/TT-BTC guiding the activities of foreign investors on the stock market is being finalized. Accordingly, many administrative procedures have been reduced, such as: granting online transaction codes to foreign investors, the number of days of issuance will be reduced from 5 days to 1 day. Eliminating consular legalization procedures and signature authentication procedures of authorized persons for cases where organizations have their own seals, helping foreign investors save time and costs when carrying out related procedures. Researching and considering allowing foreign investors' transaction code registration dossiers to be authenticated by the supervising bank.

Along with that, the State Securities Commission is currently studying to amend Circular 74/2012/TT-BTC guiding the removal of some obstacles for foreign investors when participating in the stock market, aiming to allow foreign investors to buy and sell the same type of securities on the same trading day. In addition, the Ministry of Finance and the State Securities Commission have studied to review tax, fee and charge policies to encourage and attract domestic and foreign investors. Particularly for pension fund products, incentive and incentive mechanisms have also been included in the provisions of the Personal Income Tax Law No. 26/2012/QH13 dated December 3, 2012 amending and supplementing a number of articles of the Personal Income Tax Law and the Corporate Income Tax Law No. 32/2013/QH13 dated June 19, 2013 amending and supplementing a number of articles of the Corporate Income Tax Law. We are currently reorganizing the large company stock trading markets, the small and medium company stock trading markets and upgrading the Upcom market for unlisted public companies.

Red River

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