Strictly legalize stock market manipulation

(CPV) - In recent years, the excitement of the Vietnamese stock market has led to the risk of manipulation, causing the market to lose transparency and weakening investor confidence. In this context, the draft amended Securities Law was issued, focusing on legalizing manipulation to create a strong legal foundation, improving the effectiveness of monitoring and handling violations.

Illustration photo (Photo: TL)

Recently, Deputy Prime Minister and Minister of Finance Ho Duc Phoc, authorized by the Prime Minister, submitted to the National Assembly a draft law amending and supplementing 7 laws, including the Securities Law. Of particular interest are the provisions prohibiting manipulation of the stock market, in order to enhance legality and consistency with current regulations, contributing to improving the effectiveness of monitoring, inspection and handling of violations.

The draft amended Securities Law supplements Clause 3, Article 12, clearly defining 6 acts of stock market manipulation. This is an important step to specify the forms of manipulation, helping management agencies easily identify and handle:

One is to use one's own or another person's trading account, or collude to continuously buy and sell securities to create artificial supply and demand.

Second, placing buy and sell orders for the same securities on the same trading day or colluding in buying and selling without actually transferring ownership. This creates artificial securities prices, deceiving other investors.

Third, trading in large volumes at the opening or closing of the market to manipulate the opening or closing price of that security. This is a common form of price manipulation in the market.

Fourth, enticing others to continuously place buy and sell orders to influence supply, demand and stock prices.

Fifth, making statements in the media to influence the price of a security after having traded or held a position in that security.

Sixth, using methods of providing false information or spreading rumors to create artificial supply and demand, manipulating stock prices.

Although these acts have been regulated since 2012 in Decree 58/2012/ND-CP and in the 2015 Penal Code, they have not yet reached the desired level of uniformity and effectiveness. Legalizing these six acts not only helps management agencies to easily detect but also enhances the legality and deterrence of violations.

Securities manipulation acts are now regulated in Decree 156/2020/ND-CP and the 2017 amended Penal Code, but only at the descriptive level. Meanwhile, manipulation methods are increasingly sophisticated and complex, requiring management agencies to handle violations with a stricter and more effective regulatory system.

The inclusion of manipulation provisions in the Securities Law not only synchronizes with the Penal Code but also ensures stronger legal deterrence. This helps to overcome the previous situation where manipulation acts were only regulated in decrees or sub-law documents, causing inconsistency and hindering the handling of serious violations. According to Resolution No. 101/2023/QH15, the National Assembly also requested the implementation of synchronous solutions to effectively manage and supervise the securities market. The Government issued Report No. 587/BC-CP dated October 20, 2023, proposing to amend and legalize manipulation acts in detail, creating consistency between the 2019 Securities Law and the 2017 amended Penal Code.

In the process of monitoring trading activities, the regulatory agencies have noticed many market manipulation behaviors taking place with increasingly sophisticated methods, from creating fake supply and demand to influencing prices through large volume transactions at sensitive times. These behaviors disrupt stock values, create risks for investors and negatively affect market transparency.

To meet practical requirements, legalizing manipulative behaviors not only helps protect investors but also contributes to building a healthy investment environment and enhancing market confidence. In addition, adding detailed regulations also supports management agencies to be more proactive in monitoring, handling violations and preventing manipulative behaviors early.

The draft amended Securities Law also aims to enhance the effectiveness and efficiency of law enforcement with stronger sanctions. Accordingly, manipulative acts may be subject to administrative sanctions or criminal prosecution depending on the severity of the violation. This expands the authority of the management agency, allowing them to implement strong deterrent measures against serious violations, thereby protecting the fairness and safety of the market.

Although the current decrees have provided for the handling of manipulative behavior, to be truly effective, close coordination between relevant agencies is needed. Increasing the application of technology in transaction monitoring, such as developing databases or applying artificial intelligence, can help detect signs of manipulation early, creating a basis for timely intervention measures.

According to experts, the amended Securities Law not only aims to deal with manipulation but also contributes to building a transparent and fair stock market. When there is synchronization between the Securities Law and the Penal Code, the market will operate with greater transparency, minimizing risks, thereby creating a foundation to attract domestic and foreign investors.

Many countries have issued detailed regulations on stock market manipulation, setting strict management standards. Including these regulations in the Securities Law will help Vietnam approach international standards, create an attractive investment environment and promote sustainable development.

The draft amended Securities Law, with its legalization of stock market manipulation, is an important step forward, not only improving the effectiveness of supervision but also protecting the rights of investors and creating fairness in the market. The detailed regulation of manipulation not only helps to handle violations effectively but also contributes to building a solid legal foundation.

Aiming for a healthy, fair and efficient stock market, the amended Securities Law will facilitate the attraction of investment capital flows, helping the digital economy develop sustainably. This is an important step for Vietnam to move closer to international standards in financial market management. With stricter monitoring measures and a comprehensive legal system, the Vietnamese stock market will not only attract investors but also build sustainable trust.

In the future, to ensure the effectiveness of new regulations, it will be necessary to strengthen the capacity of management agencies through specialized training and technology application. In addition, investor education programs on identifying manipulative behavior and protecting rights in securities transactions should also be promoted to contribute to building a strong and intelligent investor community.

Source: https://dangcongsan.vn/kinh-te/luat-hoa-chat-che-hanh-vi-thao-tung-thi-truong-chung-khoan-682095.html