|The State Securities Commission will exercise more control over the OTC market to reduce risks for investors. (Photo: TC)|
As of July 2007, the trading of unlisted shares on the OTC market (over the counter) must be done through a securities company, the State Securities Commission has ruled.
From that date, OTC securities will have their own trading floor, which will help increase the liquidity of OTC shares and minimize risks for investors.
According to Mr. Bui Nguyen Hoan, Chief Representative of State Securities Commission (SSC), there will be new regulations on the operation of the stock market.
The Ho Chi Minh City Securities Trading Centre will be renamed the Ho Chi Minh City Stock Exchange and there will be two main changes as a result of the restructuring.
First, the periodic matching of buy and sell orders will be replaced with real-time matching from May 7, 2007. Second, shares of public companies that have over VND10 billion in capital and 100 shareholders must deposit securities at securities companies.
Mr. Hoan said the new regulations aimed to minimize risks for OTC investors, adding that it was necessary to differentiate between the OTC market and the black market, a spontaneously developed market where trading deals are not supervised or witnessed by any state agency, and most are made in cafés.
The control will only be put on the real OTC market, which has been floating and has been risky for investors. The liquidity of the market proves to be very low. For example, investors find it difficult to sell shares because the market is not transparent, Hoan said.
Another expert, Mr. Nguyen Ho Nam, general director of the securities company SBS, said the trading of OTC shares will be more professional as investors will have to open accounts to advance money to buy OTC shares. Sellers will be verified enterprises. The time for transactions and trading band for securities transactions will be more flexible, and there will be no ceiling for prices.