Brokers Booming

International securities brokers are rushing to set up shop in Viet Nam to be ready for when the country joins the World Trading Organization and the Securities Law comes into effect.

Many institutions wanting to start securities firms in Viet Nam are rushing to get their licenses before January 2007 when the Securities Law comes into effect.(Photo:TK)

When Viet Nam joins the WTO, foreign stock brokers and underwriters will be able to establish joint ventures with an ownership limit of 49%, a cap that will be raised to 100% over the following five years.

Last month, the State Securities Commission licensed South Korea’s Tong Yang Investment Bank and Mirae Asset Maps Investment Management to open representative offices in Viet Nam.

They will join other foreign brokers also intending to establish representative offices like Nomura International of Hong Kong and Blackhorse Asset Management of Singapore, who got their licenses a bit earlier.

The locals are in there too, with Dai Viet Securities becoming an official member of the Ho Chi Minh City Securities Trading Center late September with charter capital of nearly VND10 billion.

Also in the domestic arena, Sai Gon Thuong Tin Joint-stock Commercial Bank was given a license in July and An Binh Commercial Joint-stock Bank in early August.

More are on the way, with the Viet Nam Commercial Joint-stock Bank for Private Enterprise and the Viet Nam Export-Import Commercial Joint-stock Bank finalizing their license applications at the moment.

By the end of 2006, Viet Nam is forecast to have more than 20 licensed brokerage firms.

Securities Law to benefit foreigners

Viet Nam is forecast to have more than 20 licensed brokerage firms working in the domestic stock market by the end of 2006. (Photo:TK)

According to financial experts, more and more institutions wanting to start securities firms in Viet Nam are rushing to get their licenses before January 1, 2007, when the Securities Law comes into effect.

From that date, the future minimum requirements of capital for each service will be much higher than at present. 

For instance, in order to provide a brokerage service, a firm will need minimum capital of VND10 billion instead of the VND3 billion currently required. For underwriting, it will be VND70 billion instead of VND22 billion.

Of the 14 securities firms currently in operation, only five have the necessary financial ability to cover the market. The rest only provide retail and other small services.

Foreign securities companies or fund management companies, who are considered as having a strong financial capacity and experience in financial consulting, will participate actively in this kind of business.

By M.D – Translated by Trong Khuong

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