Transactions on foreign exchange (forex) trading floors are illegal in Vietnam and violators can face administrative fines of up to 100 million VND, or 4,760 USD.
Nguyen Quang Huy, Director of the State Bank of Vietnam (SBV)'s foreign exchange management department, announced this on the central bank's website on March 16.
While the Government has set no specific regulations for such transactions, many organisations and individuals are taking part in the activities via online accounts, he noted.
This way of trading forex, including the trading of foreign currencies and gold, does not help to meet the domestic forex demand, but only gives rise to speculations that are based on the continuously fluctuating exchange rates as well as the prices of commodities and gold in the global market.
"The forex market is considered the most unpredictable, with the most rapid fluctuations noted among the financial and monetary markets. It is highly sensitive to global economic news, and thus, the potential risks are great," he claimed, adding that investors will not be protected by the law in case they incur losses.
According to Ordinance No. 06/2013/UBTVQH13 issued by the National Assembly's Standing Committee in March last year, the SBV is authorised to decide which credit institutions, foreign bank branches, and other authorised organisations can deal in forex services in Vietnam and abroad.
Institutions and individuals interested in carrying out foreign exchange activities other than spot, term, swap, and options transactions will have to seek permission from the Prime Minister and the SBV, the central bank stipulated.
The Government has assigned the central bank to co-ordinate with the Ministry of Public Security and people's committees to inspect violations in banking and monetary areas. It has currently set fines of 50-100 million VND, or 2,380-4,760 USD, for violators involved in forex and gold trading.
Some forex floors in Vietnam can be found through a Google search, such as www.easy-forex.com, www.fxemvietnam.com, and www.fxpro-vn.com, but they lack information about the floor owners as well as website administrators.
Banking expert Nguyen Tri Hieu informed Lao Dong (Labour) online that trading on forex floors is tricky. There are many forex trading floors in the US, but floor owners must have the requisite licences from the authorities, he added.