1,200 foreign investors have applied for Non-Pre-funding.

Over 1,200 foreign investors have implemented and applied the new mechanism at securities companies, and their transaction value accounts for over 11% of the total transaction value of foreign investors in general.

Over 1,200 foreign investors have implemented and applied the new mechanism at securities companies, and their transaction value accounts for over 11% of the total transaction value of foreign investors in general.

In 2024, statistics showed that foreign investors accounted for only about 0.6% of the total accounts in the market. The value of portfolios held by foreign investors was approximately 7.35% of the total value of securities in the entire market.

Sharing her views in the recent Financial Street Talk Show, Ms. Ta Thanh Binh, General Director of the Vietnam Securities Depository and Clearing Corporation (VSDC), stated that, looking at the number of securities held by foreign investors as well as the value of their securities portfolios, there is still a growth of approximately 4% and 3% respectively compared to 2023.

In particular, the Ministry of Finance issued Circular 68 in 2024, which stipulates a solution allowing foreign investors to place buy orders for securities without having the funds at the time of placing the order , also known as the Non-Pre-funding Solution (NPS) . After 3 months of implementation, VSDC surveyed several large securities companies with many foreign investors opening trading accounts, and the results showed positive results.

Under this new mechanism, if foreign investors are unable to deposit funds to settle transactions on time, the securities company will assume responsibility for payment. In practice, there have been cases where the payment obligation had to be transferred to the securities company; however, all have been handled smoothly according to established procedures.

Ms. Binh stated that the Non-Pre-funding solution, which allows foreign investors to conduct transactions according to FTSE criteria, is only the beginning. Looking at MSCI's upgrade criteria, implementing a CCP payment mechanism will be a more important and long-term solution.

The amended Securities Law has allowed for the establishment of a legal framework that enables VSDC to set up a subsidiary and implement CCP (central clearing counterparty) operations in accordance with international practices, and VSDC is urgently implementing this project.

Through its work with foreign investors, VSDC is also implementing another solution to support foreign investors: upgrading the existing electronic communication portal. This will allow securities companies and custodian banks to exchange information related to receiving orders and transactions from foreign investors in a more unified, secure, and faster manner than the current manual method. The upgrade is expected to be completed by March 2025.

Regarding the restructuring of the investor base in the stock market development strategy, Ms. Binh shared that VSDC will encourage institutional investors, especially foreign institutions, to participate in the Vietnamese stock market through investment funds. In 2025, VSDC will upgrade its services to support investment funds, especially foreign investment funds, anticipating the trend when the stock market is upgraded.

Source: https://baodautu.vn/1200-nha-dau-tu-ngoai-da-ap-dung-non-pre-funding-d247459.html