According to data from the Vietnam Securities Depository (VSD), as of the end of October 2023, the number of domestic securities accounts dropped to more than 7.4 million trading accounts, compared to nearly 7.78 million accounts at the end of September.
The number of foreign trading accounts meanwhile increased slightly, from 44,706 accounts to 44,952 accounts.
Thus, in October, 378,137 domestic securities trading accounts were closed. This is an unprecedented phenomenon in the Vietnamese stock market in its 23 years of operation.
It can be seen that the number of closed securities trading accounts last month was higher than the total number of newly opened accounts in the previous two months.
The number of domestic securities accounts decreased sharply in October in the context of the Ministry of Public Security's conclusion on the Trinh Van Quyet case and proposal to strengthen supervision of the stock market.
Specifically, according to the Ministry of Public Security's Investigation Police Agency, there are loopholes and shortcomings in legal regulations on securities activities, allowing criminals to take advantage of them and commit crimes.
Accordingly, currently, opening a securities account is easy and uncontrolled, and subjects have taken advantage of renting or asking others to open accounts in their names to buy and sell, creating fake supply and demand, pushing prices up, and selling for illegal profits.
In addition, the control of loans in the form of investment cooperation still has many loopholes. Subjects have taken advantage of securities companies and third-party companies to circumvent the law, signing contracts for customers to borrow (in the form of other investment cooperation capital contribution) with fixed interest rates to gain profits; from there, subjects have sources of money to trade, buy and sell, push up prices, manipulate stock codes, and gain illegal profits.
The Investigation Police Agency also believes that the crime of "Stock Market Manipulation" is very sophisticated, organized, complicated, involving many subjects, greatly affecting the market and causing great damage to investors and the management policies of state management agencies.
However, the current Penal Code stipulates low penalties for this type of crime: the highest fine is 4 billion VND, the highest prison sentence is 7 years in prison, it is a serious crime, the maximum investigation period is 8 months, the maximum detention period for investigation is 5 months, causing difficulties for investigation work and not ensuring deterrence and prevention.
The Ministry of Public Security has requested the State Securities Commission to strengthen supervision of the stock market. In particular, it will focus on trading stocks with signs of strong price fluctuations that meet the supervision criteria due to stock exchanges transferring weak business operations of enterprises or turning losses into profits.
At the same time, the Securities Commission is required to promptly identify stocks with unusual transactions and detect transactions of stocks that are attracted and promoted through online groups, forums, and social networks, with price fluctuations under the supervision criteria of the stock exchange for strict handling.
The Investigation Police Agency also requested the Ministry of Finance to regularly exchange information with professional units of the Ministry of Public Security on developments in the financial, monetary and securities markets; registration, listing, issuance, investment and trading of shares.
According to a representative of a securities company, the reason for the sharp decrease in the number of accounts is that recently securities companies have stepped up the application of eKYC technology - a form of electronic customer identification. Therefore, duplicate or virtual accounts have recently been scanned and closed.
In mid-October, the Government requested the State Securities Commission to connect with the national population database to clean up data on securities trading participants, which must be completed by November this year.
According to state management agencies, user data cleaning is the process of comparing user information to ensure consistency and eliminating incorrect, duplicate or virtual data.
In October, the VN-Index decreased by nearly 11%.
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