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Vietnam set to follow China’s lead in stock market settlement procedures


Vietnam is set to reform its stock market settlement procedures, aiming to secure an upgrade to emerging market status and attract substantial foreign investment. Emulating China’s approach, the new plan permits brokers to endorse foreign investors in share acquisitions, a move praised by the FTSE index provider. This could potentially dismantle long standing regulatory barriers at the Ho Chi Minh City Stock Exchange, currently classified as a frontier market by MSCI and FTSE indices. Following recent constructive talks with FTSE experts, Vietnam anticipates an upgrade by September 2025, contingent on FTSE’s formal announcement by September 2024. The proposed payment settlement mechanism, inspired by China, would facilitate transactions, reducing costs and risks for foreign investors, and potentially ushering in an estimated USD800m from passive funds alone.

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