ON APPROVAL OF THE SCHEME FOR UPGRADING THE SECURITIES MARKET OF VIETNAM

Article 1. The approved scheme for upgrading the securities market of Vietnam (hereinafter referred to as "Scheme”) include the following contents:

1. I. Guiding principles for development of the scheme

- Thoroughly understand and properly implement the viewpoints, guidelines, and policies of the Communist Party of Vietnam  (CPV), the laws of the State, the Resolutions of the National Assembly, the Government, and the Decisions of the Government and the Prime Minister regarding international economic integration, restructuring of the economy and financial market, development of the capital market, and the securities market;

- The upgrading of the securities market requires a comprehensive solution across the entire system. Solutions for upgrading the securities market must be part of the overall capital market development strategy, aligned with the objectives of the Scheme for national credit rating improvement and the general socio-economic development orientation of the CPV and the State;

- Ensure the safety of the national financial system during the implementation of solutions to upgrade the securities market; the upgrading process must be linked with appropriate policies and measures to ensure the safe and stable development of the securities market.

2. Objectives

a) Overall objectives

Contribute to the implementation of the CPV’s and State’s guidelines, policies on developing the securities market into an important channel for raising medium- and long-term capital for economic development, perfecting the market economy institutions under the State’s management, and intensifying regional and international economic integration.

b) Specific objectives

- Short-term objective: fully meet the satisfy criteria to upgrade from FTSE Frontier Market to FTSE Secondary Emerging Market in 2025; maintain the ranking as a FTSE Secondary Emerging Market.

- Long-term objective: fully meet the satisfy criteria to upgrade to MSCI Emerging Markets and to FTSE Primary Emerging Market by 2030.

1. Tasks and solutions to achieve short-term objectives

a) Tasks and solutions to satisfy the criteria for upgrading to the FTSE Russell Secondary Emerging Market:

- Remove “prefunding requirements” foreign investors during the period before the Central Counterparty Clearing (CCP) mechanism is implemented for the underlying securities market of Vietnam.

- Ensure transparency of information about the maximum foreign holdings in various sectors, enable equal access to information for foreign investors.

b) Tasks and solutions to maintain the ranking in the short term:

- Simplify procedures for registration and account opening for foreign investors, enable and simplify paperwork for opening indirect investment capital accounts.

- Strengthen the information system between custodian banks and securities companies to support investors’ securities trading activities (STP - Straight Through Processing).

- Implement the omnibus trading account mechanism (OTA).

- Propose solutions to stabilize the foreign exchange market in response to fluctuations in foreign investment capital flows.

- Improve the capacity of the trading and payment systems to handle large transaction volumes.

- Enhance supervisory and management capacity of the securities market authorities (State Securities Commission of Vietnam) in terms of personnel and upgrade IT systems to support supervision and management. Promote coordination within the securities sector and inter-sectoral cooperation between the Ministry of Finance, the State Bank of Vietnam, and the Ministry of Public Security in market supervision to better support management in each sector, improve efficiency in crime prevention and control, and ensure system security and safety.

2. Tasks and solutions to achieve long-term objectives

a) Tasks and solutions to meet the criteria for upgrading to the FTSE Russell Advanced Emerging Market and MSCI Emerging Market:

- Review regulations on foreign holdings to increase the maximum foreign holdings and remove unnecessary restrictions on foreign holdings in certain sectors industries.

- Develop advanced payment and clearing infrastructure to remove prefunding requirement, implementing the central counterparty clearing (CCP) mechanism.

- Research and apply a phased approach to allow controlled securities borrowing and lending, and short selling through mechanisms of sales of securities pending settlement and intraday trading.

- Develop the foreign exchange market, allowing deployment of risk hedging tools in the foreign exchange market for indirect investment activities.

- Stabilize macro-financial policies through intensifying close cooperation between expansionary policy, monetary policies and other macroeconomic policies to maintain macroeconomic stability.

b) Tasks and solutions to maintain the ranking in the long term:

- Intensify cooperation between foreign exchange authorities and securities market authorities in regularly monitoring the circulation of foreign indirect investment capital flows.

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b) Regularly gather petitions, acknowledge, and provide solutions for difficulties related to securities and the securities market encountered by foreign investors in Vietnam. Implement investment promotion programs to enhance the image of the securities market of Vietnam with the global investment community and major investors and organizations worldwide.  Take advantage of foreign investors' support for the objective of upgrading the securities market of Vietnam.

c) Cooperate with the State Bank of Vietnam in intensifying information exchange and supervision of capital flows between the securities market and the money market, and foreign investment capital sources.

d) Take charge and cooperate with relevant ministries and agencies in reviewing and increasing foreign investors’ access to industries/sectors currently restricted in terms of foreign holdings.

dd) Direct implementing units to:

- Direct the State Securities Commission of Vietnam and Stock Exchanges to improve management and supervision capabilities, improve efficiency in trading supervision, and intensify inspection, supervision of the market to promptly prevent and strictly handle violations, protecting the lawful rights and interests of market participants; cooperate with relevant authorities in ensuring the security and safety of securities market operations, preventing and mitigating security risks and crimes in the securities market.

- Direct the State Securities Commission, Stock Exchanges, and Vietnam Securities Depository and Clearing Corporation to develop advanced trading, payment, and clearing infrastructure; take measures to ensure smooth, safe operation of systems of trading, depository, and payment of transaction of securities to satisfy increased transaction demands associated with securities market upgrading.

e) Monitor capital flows from foreign investors in the securities market of Vietnam; intensify cooperation and information sharing with relevant regulatory authority in response to capital flow fluctuations that may affect the securities market.

g) Cooperate with media authorities in intensifying information dissemination to the public and promote policies and guidelines on securities and the securities market, including implementing solutions for upgrading the securities market.

2. State Bank of Vietnam shall

a) Cooperate with the Ministry of Finance in reviewing and proposing amendments to banking legal and operational regulations (if necessary) to ensure a complete legal basis for commercial banks and foreign bank branches to participate in providing clearing and settlement services for securities transactions.

b) Conduct research to simplify documentation and procedures for opening and using checking accounts and indirect investment capital accounts for foreign investors conducting indirect investment activities in Vietnam, making account opening easier and more convenient to attract more investment capital into Vietnam.

c) Study and propose measures to mitigate the impact of large foreign investment capital inflows and outflows in the securities market on the foreign exchange market.

d) Cooperate with the Ministry of Finance (State Securities Commission) in resolving difficulties related to custodial banks providing utilities and services to foreign investors; study expansion of financial instruments in a suitable roadmap to allow financial institutions and foreign institutional investors to implement risk hedging operations, contributing to the development of a comprehensive financial system.

3. Ministry of Public Security shall

a) Cooperate with the Ministry of Finance in ensuring the security and safety of securities market operations, prevent, and mitigate risks and threats related to security, safety, and crimes in the securities market.

b) Cooperate with the Ministry of Finance and State Bank of Vietnam in preventing risks related to money laundering, cybercrime, and cross-border crimes associated with the securities market of Vietnam.

4. Ministries, ministerial agencies, government agencies and People's Committees of provinces and centrally affiliated cities shall cooperate with the Ministry of Finance and relevant agencies in directing and participating in the implementation of relevant contents of this Scheme within their prescribed jurisdiction.

Funds for Implementation of the scheme are provided by the state budget capital in accordance with the state budget management hierarchy, private capital sources, and other legitimate sources in accordance with law.

Article 2. This Decision comes into force from the date on which it is signed.

Article 3. Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Chairperson of People’s Committees of provinces and centrally affiliated cities, heads of agencies and relevant organizations and individuals are responsible for the implementation of this Decision.