Vietnam's stock market officially upgraded to secondary emerging status

The upgrade of Vietnam's stock market to secondary emerging market status marks the beginning of a new phase of development.

The IGB Council confirmed the decision to upgrade Vietnam from Frontier market to Secondary Emerging market. Photo: Vietnam+

On October 8 (at 3:00 a.m. Hanoi time), market rating organization FTSE Russell announced that Vietnam's stock market has met all official criteria and has been upgraded from a frontier market to a secondary emerging market.

According to the representative of the State Securities Commission, this event is an important milestone marking the strong development of the Vietnamese stock market, recognizing the comprehensive reform efforts in recent times of the entire securities industry in accordance with the Party and State's policies to develop a transparent, modern, and effective stock market according to the highest international standards.

The results were achieved thanks to the strong direction of the Government, the Prime Minister, the Ministry of Finance ; the close coordination of the State Bank and relevant ministries and branches; the support of the Stock Exchanges, VSDC, market members, news agencies, and the press; as well as the valuable support from the World Bank, FTSE experts and global investment institutions.

The representative of the State Securities Commission affirmed that the upgrading of the Vietnamese stock market to a secondary emerging market is the beginning of a new development phase, requiring deeper and broader reforms to achieve long-term goals in the future.

As the state management agency for securities and the securities market, the State Securities Commission representative said that the Commission will continue to closely coordinate with FTSE Russell to ensure the official transition process is on schedule. In addition, the State Securities Commission is committed to continuing to implement comprehensive solutions to create maximum conditions for domestic and foreign investors to access the market. The Commission also completes the legal framework, modernizes and digitizes the infrastructure, aiming to develop the Vietnamese securities market to be increasingly transparent and effective, promoting deeper integration into the global financial market.

According to the announcement from FTSE Russell, Vietnam is classified as a Frontier market and has been on the Watch List since September 2018 for consideration of upgrading to a Secondary Emerging market.

When being included in the Watchlist, Vietnam did not meet two criteria: “Delivery cycle (DvP)” and “Method - Cost of processing failed transactions”, both of which were rated as “Restricted”.

By November 2024, the Vietnam Securities Regulatory Authority had implemented a Non-Prefunding trading model, allowing domestic securities companies to secure the necessary capital to support foreign institutional investors in executing securities purchase orders. This officially eliminated the pre-margin requirement for foreign institutional investors. In addition, a formal process for handling failed transactions was also established.

On that basis, the FTSE Russell Index Governing Board (IGB) recognizes the achievements that the Vietnamese market management agency has made in the process of market development and confirms that Vietnam now meets all the criteria to be classified as a secondary Emerging market under the FTSE Equity Country Classification Framework.

FTSE Russell said the IGB Board had carefully considered feedback from FTSE Russell’s Advisory Committees regarding the restrictions on the role of global brokers in trading activities in Vietnam. While the use of a global broker as the sole counterparty is not a mandatory condition for upgrading to Secondary Emerging Market status, the IGB recognised that index investors should be able to “mirror the index” under the second principle of the Statement of Principles.

FTSE Russell will continue to closely monitor market developments and encourage stakeholders to provide feedback ahead of the mid-term review in March 2026 to ensure the upgrade is implemented as planned in September 2026. Photo: Vietnam+

Given the importance of the above issue to index investors, IGB determined that addressing the role of global securities companies in trading activities is necessary for the upgrade process to be implemented. FTSE Russell acknowledged the current efforts of the Vietnamese securities market management agency in building a model that allows foreign institutional investors to trade through partners who are global securities companies.

This effort is expected to bring the Vietnamese market closer to international standards, minimize counterparty risks and increase investor confidence through establishing relationships with reputable intermediary organizations.

Accordingly, the IGB Council confirmed the decision to upgrade Vietnam from Frontier market to Secondary Emerging market, with the expected effective date of September 21, 2026, with a mid-term review taking place in March 2026. This schedule is set to assess progress in expanding the role of global securities companies - an important factor in simulating the index and meeting the needs of the international investment community. The upgrade of Vietnam's market to Secondary Emerging market is expected to be implemented in stages.

In addition, FTSE Russell will continue to closely monitor market developments and encourage stakeholders to provide feedback ahead of the March 2026 mid-term review to ensure the upgrade is implemented on schedule in September 2026. Details of the phased implementation plan will be published in the March 2026 announcement following consultation with FTSE Russell’s Advisory Committees and market participants.

According to VNA

Source: https://baohaiphong.vn/thi-truong-chung-khoan-viet-nam-chinh-thuc-nang-hang-len-moi-noi-thu-cap-522903.html