Consider raising the level of penalties to ensure fairness and transparency in the stock market

Mr Pham Hong Son, Vice Chairman of the State Securities Commission.

Sir, how do you evaluate the performance of the cooperation project between the State Securities Commission (SSC) and the Japan International Cooperation Agency (JICA) on improving the capacity of Vietnam's stock market over the past time?

"The Project on Improving Equity and Transparency of Vietnam's Stock Market" is the cooperation between the State Securities Commission and JICA that started in April 2019 and ended in March 2023. The implementation period is about 4 years. With the title of the Project, the improvement of capacity in management, fairness and transparency in the stock market is the content throughout the entire Project. Up to now, 4 main components of the Project have been completed, including the legal basis of the market; strengthening inspection and examination; restructuring the Stock Exchange; the practicality in the stock market. According to the evaluation and summary of experts and the State Securities Commission, this is a very good project, helping to create a foundation for the management and supervision of the Vietnamese stock market. In the coming time, the two sides will implement a follow-up project to continue improving management and supervision capacity in the market.

As we all know, management and supervision, especially ensuring fairness and transparency in the stock market, is a cross-cutting criterion in building and developing the market. Especially in the context that the market is expanding, the number of investors has increased, the number of listed companies and organizations has also increased, the size of the school is increasing, and the capacity market surveillance must also be improved in quality and quantity.

To improve the transparency and publicity of the market, what will be the direction of the management agency in the coming time, Sir?

Currently, the Government has directed the Ministry of Finance to strengthen strict management of activities on the stock market to ensure that there are no negative phenomena in the market. However, handling negative cases in the past shows the Government's determination to make the market healthy and act as a deterrent to other cases.

In recent years, the management and supervision of the market have become more stable, transparent and fair. These are the goals of the management agency in the coming time. Along with that, there must be solutions, and the first solution is to amend legal regulations related to management and supervision. Currently, the Government is directing the Ministry of Finance to review and amend the Securities Law 2019. Although the Securities Law 2019 has just been promulgated, in the current context, it is necessary to consider the contents that need to be compatibly amended for new conditions. Or regulations and guiding documents such as decrees and circulars will also be adjusted. In particular, shortly, market supervision will be carried out automatically by artificial intelligence (AI) to help strengthen the supervision capacity of the regulator and the Stock Exchange. The supervision is carried out by securities companies, the Stock Exchange, to the State Securities Commission with many levels to ensure fair and transparent market operations.

Could you share more solutions to enhance fairness and transparency in the market, will the sanctions increase or not, Sir?

Sanctions have been increased in the Securities Law 2019. There are cases where billions of dong have to be paid. But I think the root of the problem must first be to raise awareness for investors. In case of intentional violations, they must be strictly handled, in addition to administrative sanctions, criminal sanctions should be applied to ensure seriousness in the market. Shortly, we will consider raising the penalties in the spirit that all violations must be handled following the law. This is a strong message from the Government, the Ministry of Finance, and the management agencies in ensuring fairness and transparency in the stock market, thereby building the confidence of domestic and foreign investors when participating in the stock market.

In 2023, will there be any new products or services or an increase in the supply of goods in the market, Sir?

Based on the current legal framework, we have directed the Stock Exchanges to study more products in the coming time. In particular, the products related to the index will be considered for research, modification and supplementation accordingly.

Regarding the issue of increasing the supply of goods, first of all, the view of the management agency is to attach importance to the quality of goods. The quality of goods is the most important when goods participating in the market must ensure the quality. That shows in many aspects: the quality of the financial situation, the issue of management, and governance. Second, enterprises must disclose information fully. These are two issues businesses need to strengthen in the coming time to ensure good products for the market. The root of the market is the business, the quality of the goods. If the goods are of good quality, the market will surely develop sustainably.

Recently, the Ministry of Finance and the State Securities Commission have made a lot of efforts to improve stock market trading. However, there are still many opinions that it is necessary to improve changes and improvements in this regard further. What do you think about this issue?

In the process of managing and operating the stock market for the past 23 years, we always have thought that we must go step by step, have a suitable roadmap and ensure that the root of the problem is that the market is not allowed to have big fluctuations and ensure safety and sustainability. That is the goal of the regulator. So we took it to step by step.

The first thing is to complete the legal system, then to improve the technology, and the infrastructure system, to complete the securities companies, and at the same time to improve the perception of investors participating in the market to ensure that the market is always continuous without major disturbances. Of course, the market's requirements will be high, but the management agency will consider taking steps and having an appropriate plan and roadmap in each period.

Thank you, Sir!