Minister of Finance Dinh Tien Dung.
Dung made the statement while presenting the draft law at a hearing held by the National Assembly (NA) on June 6, adding the current mechanism is suitable for Vietnam’s situation and ensures consistency with international practices.
Dung referred to the fact that the stock market watchdogs in Malaysia and Portugal are under the administration of their respective finance ministries, or under central bank in case of Singapore, Russia, or under a government financial supervisory agency as in the case of Japan or the US.
Whatever the case is, the SSC or any similar agencies in other countries must operate independently, have sufficient resources and capability to regulate and operate the stock market, Dung asserted.
According to Dung, the SSC under the MoF has been essential in supporting the privatization process of state-owned enterprises, as well as capital mobilization, among others, Dung said.
Amid unfavorable global economy, Vietnam’s stock market has been maintaining healthy growth rate level with high market capitalization, including the stock market capitalization-to-GDP ratio meeting the target.
At the hearing, Nguyen Duc Kien, deputy chairman of the NA’s Economic Committee, said the operation of the SSC must be in compliance with the Securities Law, ensuring the entity has the necessary authorization to address unexpected situation in the market.
Instead of timely intervening an issue occurring in the stock market, the SSC is required to seek approval from the MoF for such matter may lead to a delay in the process, Kien added.
Finance Minister Dung replied that the law would allow the SSC to have full authorization in addressing volatility in the market and being proactive in protecting the rights of investors and preventing any risks to the system, if any.
More importantly, the structure of the SSC is in line with principles set out by the International Organization of Securities Commissions (IOSCO).
Meanwhile, members of the Committee said instead of the MoF, the SSC under direct management of the government would help solve current shortcomings, including the simplification of administrative procedures in dealing with emergencies.
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