Function
The Stock Trading Center of Vietnam is also the official mechanism through which new government bonds are issued, and it functions as the secondary market for a number of existing bond issues. All securities traded on the Stock Trading Center of Vietnam are denominated in Vietnamese dong (VND). Par value is standardized at VND10,000 for equities and VND100,000 for bonds. Trading is conducted daily with two matchings in a morning session, from 9 a.m. to 11 a.m.
The State Securities Commission (SSC), a body established formally in 1996, is responsible for capital markets development, licensing of participants, and the issue and enforcement of regulations. A wide range of regulations, with significant input from multilateral bodies such as the International Finance Corporation, have been promulgated, including those dealing with such issues as insider trading, take-over trigger points and margin lending. To be listed, a company must have been profitable for at least 2 years, have a minimum capitalization of VND5b (approximately US$318,000), and have at least 50 shareholders who are not employees of the company, holding at least 20% of stake. Foreign invested joint venture companies are technically qualified to list, but to do so, they must be reorganized into joint stock company status. Companies intending to list must also submit to audit by an approved, independent auditing company.
The mechanism of trading on the Stock Trading Center of Vietnam is via an automated order-matching system. The capacity of the system is 300,000 orders per day. Currently, trading limits of 5% (for bonds and equities) either side of the previous close apply. No price restrictions have been set for newly listed securities but price caps were applied in the case of the very first day of the market’s operations.
Settlement is centralized through the Stock Trading Center of Vietnam using the Bank for Investment and Development of Vietnam (BIDV), a state-owned commercial bank. Several other domestic banks and securities companies have been authorized to accept custody of securities, with Citi's, Deutsche Bank’s, HSBC’s and Standard Chartered's Ho Chi Minh City branches currently the only banks providing custody services for foreign investors. Custody is based on a central depository, central registry book entry system.
Read more about this topic: Ho Chi Minh City Stock Exchange
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