Vietnam's stock market is on the brink of a transformative shift, but will these changes truly level the playing field for all investors? Recent updates to the Securities Law promise to revolutionize the financial landscape, yet they’ve already sparked debates about fairness and feasibility. Here’s what you need to know—and why it matters more than you might think.
Passed in November 2024, Law No. 56/2024/QH15 is Vietnam’s bold move to elevate its securities market to global standards. Aimed at fostering transparency, tightening oversight, and streamlining operations, these amendments are designed to attract both domestic and foreign investors while safeguarding market integrity. But here’s where it gets controversial: the new rules impose stricter equity requirements on public companies, raising the bar for entry and survival in the market.
One of the most talked-about changes? Public companies must now maintain a minimum shareholder equity of VNĐ30 billion (US$1.1 million). Previously, firms could retain their public status even if their equity had plummeted—say, from VNĐ30 billion to VNĐ10 billion due to losses. Now, such companies would fail to meet the threshold, potentially facing delisting. This shift aims to weed out underperforming entities, but critics argue it could disproportionately affect smaller businesses struggling to recover from economic downturns.
And this is the part most people miss: the law also tightens free float requirements. If a company’s shares held by minority shareholders fall below 10% or fewer than 100 shareholders, the State Securities Commission (SSC) will issue a warning and a 12-month grace period to comply. Failure to do so could result in delisting—though state-owned firms get a pass, remaining under heightened scrutiny instead. Is this a fair exception, or does it perpetuate inequality in the market?
Governance reforms are equally eye-opening. Board members of public companies are now limited to serving on no more than five other boards, capping their total concurrent roles at six. The goal? To minimize conflicts of interest and ensure more dedicated oversight. But does this restriction stifle experienced leaders’ ability to contribute across industries?
Transparency measures have also been ramped up. Issuers must now disclose the use of all raised funds, not just those tied to specific projects. This move makes capital allocation fully traceable, empowering investors with clearer insights. Yet, some argue this could burden companies with excessive reporting requirements.
One of the most investor-friendly changes is the accelerated approval-to-listing timeline, slashed from 90 days to just 30. However, securities failing to list within this window risk delisting—a double-edged sword that could either boost efficiency or penalize companies facing unforeseen delays.
Crucially, the amendments open the door for foreign-invested enterprises (FIEs) to participate in IPOs and listings under the same rules as domestic firms. This levels the playing field, deepens market liquidity, and positions Vietnam as a more attractive destination for global capital. But will local companies be able to compete with international giants?
If successfully implemented, these reforms could propel Vietnam’s stock market toward greater fairness, transparency, and sustainability. They also aim to secure an upgrade to FTSE standards—a milestone for the nation’s financial reputation. But the question remains: Are these changes too aggressive, or just what Vietnam needs to thrive in a competitive global economy?
What do you think? Do these reforms strike the right balance, or do they favor certain players at the expense of others? Share your thoughts in the comments—let’s spark a conversation that could shape the future of Vietnam’s financial landscape.
