The concerns behind the expectations

In 2012, Ho Chi Minh City Stock Exchange (HoSE) signed a contract with the Korea Stock Exchange (KRX) for the design, supply, installation and transfer of information technology systems worth VND600 billion.

According to HoSE's initial plan, the KRX system implementation phase will last about 18 months and the system is expected to be officially put into operation in the first quarter of 2015.

However, contrary to expectations, up to now the KRX system has not been able to trade, causing investors to raise big questions about the applicability and practical implementation of the KRX system.

Most recently, on April 21, 2024, HoSE sent an urgent dispatch to securities companies regarding the official implementation of the new KRX trading technology system from May 2, 2024. This notice was sent after HoSE conducted a pilot test of the KRX system with securities companies in the first phase in the first half of March and the second phase from the second half of March 2024.

The above information has brought great hope to the investor community with the introduction of the KRX system, which will provide the infrastructure to apply new products, trading and payment solutions to the Vietnamese stock market such as: Intraday trading (T+0), short selling, shortening payment time, option contracts, applying the central clearing system (CCP).

Expectations are growing as the system has been deployed for 12 years.

However, the past repeated itself. On April 25, the State Securities Commission sent an urgent dispatch to the Stock Exchanges and the Vietnam Securities Depository and Clearing Corporation (VSDC) regarding its disapproval of the application of KRX on May 2, 2024, as submitted by HoSE, on the grounds that this application did not comply with legal regulations.

According to the above document, HoSE has not yet reported to the Ministry of Finance, Vietnam Stock Exchange (VNX) and has not received comments from beneficiaries (HNX, VSDC) on the application of KRX.

At the same time, there is currently no overall acceptance record between the investor, contractor and beneficiaries. However, HoSE's submission does not show that the KRX information technology system has been approved by the subject unit for information security level (level 4) according to regulations.

Thus, since the announcement of the implementation of the KRX system to the Vietnamese stock market, HoSE has postponed the operating schedule 8 times in 2015, 2017, 2019, 2020, 2021, 2022, 2023 and most recently on May 2, 2024.

Currently, HoSE has not received any comments from beneficiaries on the application of KRX.

Not only investors, representatives of many securities companies also expressed doubts about the official application of the KRX system. "The testing process still has many errors and there is no guarantee that serious errors will not occur, even data loss, if officially put into operation," said a securities company. They also emphasized that they had spent a lot of resources and time in the recent testing of the KRX system.

After more than a decade of implementation, the KRX system is still "on paper", with its practical value still open, leading to many concerns from investors such as whether the KRX system can be applied? After more than a decade, is this system still modern, suitable and able to meet the requirements of the Vietnamese stock market in the future?

Second, in case it cannot be applied or if the application may lead to many consequences, is it necessary to quickly look for other options, order other suppliers, possibly domestic or foreign?

In fact, the continuous delay in implementing KRX is causing the Vietnamese stock market to "lose points" in the eyes of investors, especially foreign investors and foreign funds. They also do not receive official information about the specific "deadline" for applying KRX, or options if this system is not applied.

In the market, there is a lot of information linking the application of the KRX system with upgrading the stock market. However, according to experts, the KRX trading system as well as other information technology systems are only technical, and whether the market is upgraded or not is related to the State's legal policies.

Despite many differences, in general, both major international rating organizations FTSE Russell and MSCI point out major shortcomings of Vietnam such as pre-transaction margin (Prefunding) and foreign ownership limit (foreign room ceiling). Along with that is the disclosure of information in English and transparency of information disclosure .

Source: https://www.nguoiduatin.vn/he-thong-krx-nhung-ban-khoan-dang-sau-ky-vong-a661375.html