Circular 68/2024/TT-BTC: approved by the Ministry of Finance on September 18, allows foreign institutional investors to place orders to buy stocks without requiring sufficient funds (Non Pre-funding solution - NPS). This regulation will officially take effect from November 2. This means that foreign institutional investors can place orders to buy securities on the same day (T+0) and pay on the following days (T+1 or T+2).
According to securities companies, this new regulation is an important step for Vietnam to be considered for upgrading to an emerging market by FTSE Russell, expected in September 2025.
Foreign institutional investors are officially allowed to buy stocks without having enough money.
An analysis report from Mirae Asset Vietnam Securities Company said that this change helps reduce financial costs and increase flexibility for investors, while removing obstacles from pre-transaction margin requirements. After being upgraded, Vietnam can attract cash flows from large funds such as Vanguard FTSE Emerging Markets ETF. Assuming an estimated weight of about 0.6% (equivalent to FTSE's investment weight in the Chilean market, when this market has a similar capitalization to Vietnam), Vietnam can receive about 474 million USD from Vanguard FTSE Emerging Markets ETF. In addition, the company also said that foreign cash flows into Vietnam not only come from funds using the FTSE Emerging Markets Index as a reference, but also from other funds when the market is upgraded.
Meanwhile, SSI Securities Company commented that this is a step closer for the Vietnamese stock market to meet the requirements for upgrading the stock market to a new market of FTSE Russell. At the same time, SSI said that with the upgrade to an emerging market, according to preliminary estimates, capital flows from ETF funds could reach up to 1.7 billion USD, not including capital flows from active funds (FTSE Russell estimates that total assets from active funds are 5 times higher than those from ETF funds)...
Circular of the Ministry of Finance stipulates that securities companies shall assess the payment risk of foreign institutional investors to determine the amount of money required when placing an order to buy shares (if any) according to the agreement between the securities company and the investor or authorized representative. In case the foreign institutional investor fails to pay in full for the stock purchase transaction, the obligation to pay for the transaction with insufficient money shall be transferred to the securities company where the investor places the order through the self-trading account, except for the case specified in Clause 5 of this Article.
Source: https://thanhnien.vn/moi-nha-dau-tu-to-chuc-ngoai-duoc-mua-co-phieu-ngay-t0-va-thanh-toan-sau-185240919082056614.htm
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