Merging stock exchanges: reducing expenses and rising competitiveness

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Mrs. Binh said that currently, the model of separation of the two stock exchanges has disadvantages such as an unclear delimitation of market and goods, the difference and separation in the operations of the two exchanges, causing waste of social resources and costs for participants of the system and costs for investors. In addition, there is duplication between divisions, for example, the division for research and development, administrative division and international cooperation in 2018According to Mrs. Ta Thanh Binh, Director of Stock Market Development Department under the State Stock Commission, the scheme on merging Hanoi Stock Exchange (HNX) and Ho Chi Minh Stock Exchange (HoSE) into Vietnam Stock Exchange - holding company of HNX and HoSE, the charter capital of the Vietnam Stock Exchange will be VND3,000 billion which is to be transferred from the 2 subsidiary exchanges.

The Representative of State Securities Commission affirmed that the merging of these two exchanges will overcome the market’s internal problems to delimitate the market and reduce costs for the system and investors,

“According to world trends, the merging is to increase competiveness on the international level, to reduce costs for investors and expand the market’s scale. At the same time, the merging will maximize the support to the in-depth development,” Mrs. Ta Thanh Binh noted.

According to the State Securities Commission, the Vietnam Stock Exchange will focus on aspects such as product development; acting as a focal point to join international organizations (currently both exchanges are members of international organizations); management and development of information technology system in unified manner. Meanwhile, the two stock exchanges will focus on operating the exchanges for the goods according to the restructuring roadmap and eliminating overlapping tasks.

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Giving specific examples for the objectives of the scheme, the representative of the State Securities Commission said, Japan has the Tokyo Exchange (established in 1818) for trading of high-value stocks in the Japanese market, and Osaka Exchange (2nd largest exchange) that focuses on derivative products. In 2013, the Tokyo and Osaka Stock Exchanges were merged into the Japan Exchange Group (JPX) in the holding company – subsidiary company model, in which the Tokyo and Osaka Exchanges are still independent units and manage separate market segments.

The model of merging exchanges in countries such as Japan, Korea, Singapore has been learned by the State Securities Commission and applied to the scheme.