National Assembly delegates propose to clarify stock market manipulation behavior

Kinhtedothi - Giving opinions on amending the Securities Law, Deputy Head of the Hanoi National Assembly Delegation Pham Thi Thanh Mai proposed that it is necessary to review, clarify, and detail concepts and definitions related to determining stock market manipulation.

On the morning of November 7, continuing the 8th Session, the National Assembly discussed in the hall the Draft Law amending and supplementing a number of articles of the Securities Law, the Accounting Law, the Independent Audit Law, the State Budget Law, the Law on Management and Use of Public Assets, the Tax Administration Law and the National Reserve Law (1 law amending 7 laws).

Review of individual corporate bond policy​​

Commenting on the Securities Law (Article 1 of the draft Law), Deputy Head of the Hanoi National Assembly Delegation Pham Thi Thanh Mai said that regarding prohibited acts in securities activities and the securities market (Clause 4, Article 1 of the draft Law, amending and supplementing Article 12 of the current Law), delegates agreed on adding the authority of the State Securities Commission in collecting, gathering information, detecting acts of stock market manipulation; rights, responsibilities, and coordination procedures with investigation agencies related to crimes in the stock market, including acts of stock market manipulation, are necessary.

Commenting on the amendment of the Securities Law, Deputy Head of the Hanoi National Assembly Delegation Pham Thi Thanh Mai proposed that it is necessary to review, clarify, and detail concepts and definitions related to determining stock market manipulation. Photo: Nhu Y

At the same time, the Government will review to ensure that the provisions of the Draft Law are consistent with relevant legal provisions in handling violations of the law in the securities sector. At the same time, it is necessary to review, clarify, and detail concepts and definitions related to determining acts of stock market manipulation. In addition, the use of modern information technology to carry out acts of stock market manipulation is widespread, so it is necessary to study the provisions of the Draft Law to ensure that the provisions are capable of covering acts carried out by many tools.

Regarding the conditions for public offering of securities (Clause 5, Article 1 of the Draft Law, amending and supplementing Article 15 of the current Law), Deputy Head of the Hanoi National Assembly Delegation Pham Thi Thanh Mai said that it is necessary to add Point g, Clause 3, Article 15 of the current Law in the direction that one of the conditions for public offering of securities is "Meeting the Government's regulations on bondholder representatives, debt ratio, issuance value on equity and credit rating". However, "credit rating" needs to be clearly regulated, and it is recommended that the Government have clear implementation regulations to ensure the effectiveness of credit rating.

Regarding the private offering of securities by public companies, securities companies, and securities investment fund management companies (Clause 8, Article 1 of the Draft Law, amending and supplementing Article 31 of the current Law), regarding the proposed content of increasing the time limit for transferring privately offered shares, privately offered convertible bonds, and bonds with warrants that are restricted from a minimum of 1 year to 3 years for professional securities investors, Deputy Head of the Hanoi National Assembly Delegation Pham Thi Thanh Mai said that it is not appropriate, because privately offered bonds, especially bonds issued by unlisted enterprises, are a type of product with a high level of risk.

Although the laws of some countries in the world do not prohibit professional individual investors from participating in this market, in reality, trading, buying and selling, and investing in individual bonds are often only carried out between professional investment organizations such as securities companies, investment funds, and investment banks. It is recommended to review and further study the policy on individual corporate bonds, along with perfecting and unifying regulations related to corporate bonds of public companies and non-public companies to promote the healthy development of the corporate bond market, and expand businesses' access to and mobilization of other sources of capital for economic development.

8th session, 15th National Assembly. Photo: Nhu Y

From the above contents, Deputy Head of the Hanoi National Assembly Delegation Pham Thi Thanh Mai proposed to amend and supplement Clause 2 (offering additional shares to the public of a public company) as follows: "Except for offering to existing shareholders according to the ownership ratio, it is not necessary to reach the minimum ratio of 70% of the shares offered in the case of offering to the public for the purpose of mobilizing capital to implement the project of the issuing organization".

At the same time, amend and supplement Clause 3 (offering bonds to the public): "add the condition that bonds offered to the public must have collateral or be guaranteed by a bank according to the provisions of law, except in cases where credit institutions offer bonds as secondary debt that satisfy the conditions to be counted in tier 2 capital and have a representative of bondholders according to the provisions of the Government".

Regarding the suspension and cancellation of private securities offerings (Clause 9, Article 1 of the Draft Law, supplementing Article 31a after Article 31 of the current Law), according to Deputy Head of the Hanoi National Assembly Delegation Pham Thi Thanh Mai, it is necessary to supplement regulations on suspension and cancellation of private securities offerings; however, it is necessary to review, develop and supplement the process, procedures, and responsibilities of the issuing organization that is suspended, sanctions, and responsibilities towards investors. At the same time, it is necessary to stipulate the conditions for overcoming the suspension or terminating the suspension.

National Assembly Representative Pham Duc An (National Assembly Delegation of Hanoi) warned that the size of the mortgage lending market is currently quite large. Photo: Quochoi.vn

Need more risk management tools

Discussing at the hall about the securities sector, National Assembly delegate Pham Duc An (National Assembly Delegation of Hanoi) warned that the size of the mortgage lending market is currently quite large (the latest statistics of FiinTrade from the financial reports of the third quarter of 2024 of 68 securities companies - representing 99% of the equity scale of the entire industry) showed that the outstanding balance of margin trading loans reached more than VND 228,000 billion as of September 30, 2024) and needed more risk management tools.

According to delegate Pham Duc An, commercial banks already have a Credit Information Center (CIC) to assess the risk level of borrowers, while securities companies do not have a similar model. This leads to a customer being able to borrow from many securities companies. In case this customer is sold off by a securities company, it will affect the debt quality at the remaining securities companies. Therefore, a credit information company in the securities sector (similar to CIC) is needed to help securities companies manage risks better...

Source: https://kinhtedothi.vn/dai-bieu-quoc-hoi-de-xuat-lam-ro-hanh-vi-thao-tung-thi-truong-chung-khoan.html