The new decree marks the first time the Ministry of Finance (MoF) has set criteria for managing the performance of both national bourses and the VSD.—Photo vtv

HA NOI (Biz Hub)— A new draft decree from the Ministry of Finance (MoF) will see tighter supervision of the country's bourses, and the Viet Nam Securities Depository Centre (VSD).

The draft "Guidelines for the financial management and evaluation of performance of stock exchanges and VSD" will replace Circular 29/2010 which provides current guidelines for the regulatory and commercial functions of each market.

The new decree marks the first time the Ministry of Finance (MoF) has set criteria for managing the performance of both national bourses and the VSD.

The criteria will include revenue and profit targets, debt, compliance with tax codes, financial reporting and professional performance, including transaction volumes for each exchange and the number of securities registered at the VSD each year.

Evaluations will be based on comparisons between targets set by MoF and actual performance. In periods of market volatility, stress factors will be excluded from the criteria to provide an objective assessment.

Performance will be classified into three grades: A (exceeding targets), B (achieving targets) and C (failing to meet targets).

Transparency

Market insiders have cited cases of unfair treatment when it comes to the duty of public companies to disclose information to market regulators.

Under current regulations, the two exchanges and VSD monitor the compliance of listed companies, securities firms and fund managers and oblige them to frequently disclose information.

The rule applied by all three regulators is only a general obligation in Circular 29, with no specific requirements for disclosure.

It is intended that the requirement for both bourses and the VSD to disclose the financial information like listed companies will increase the transparency of all three markets.

All three bodies will be required to provide quarterly and annual statements, capital reports, investment reports and additional reports when required.

Market insiders are also calling for the three bodies to publish information to the market under a specific timeframe and list of contents.

MoF is consulting with market participants on the new draft. If adopted, it will take effect from January 1 next year. — VNS