Vietnam Plans Comprehensive Financial Market Reform

Regulators aim to make capital raising through equity and bond issuance more effective while strengthening the capacity of financial intermediaries.

Vietnam is moving towards a comprehensive reform of its financial market, with the goal of turning it into an effective capital-raising channel for the economy that operates on market principles.

The direction is set out in the master plan for reforming Vietnam's financial market to 2045, signed by Deputy Prime Minister Nguyen Van Thang on 27 July.

Under the plan, Vietnam aims to develop all components of the financial market in a coordinated way, spanning banking, securities, insurance, capital markets and new financial products.

By 2045, the financial market is expected to operate on market principles, with institutions, infrastructure, products, investor composition and supervisory mechanisms meeting international standards.

Within that picture, the stock market is designated as the economy's main channel for medium- and long-term capital. The banking system will continue to develop along safe and modern lines, the insurance sector will grow sustainably, and Vietnam's international financial centre will gradually become a hub connecting capital flows across the region.

Capital market development is one focus of the reform. The market is to be developed in an open and transparent manner, expanding in both scale and depth to improve the mobilisation of medium- and long-term funding for businesses and the wider economy.

Regulators also aim to make capital raising through share and bond issuance more effective while strengthening the capacity of securities firms and other financial intermediaries.

Alongside this, the investor base is to be restructured to give greater weight to institutional investors such as investment funds, pension funds and insurers, gradually reducing reliance on individual investors.

By 2030, foreign investors' assets in the capital and securities markets are expected to reach about 15% of GDP. Total net assets of securities investment funds are targeted at 5% of GDP, while pension fund assets are expected to grow by an average of 11.5% a year between 2026 and 2030.

In step with capital market development, the banking system will be further modernised by expanding digital banking, broadening financial inclusion, improving credit quality and reinforcing system safety.

On market infrastructure, Vietnam aims to complete the connection of its payment system with regional and international partners by 2028 at the latest. A central counterparty (CCP) mechanism for the underlying securities market is expected to be introduced in 2027. Between 2030 and 2035, a shared database will be built to support financial market management and supervision.

New products and markets will also be brought into operation step by step, with breakthrough mechanisms to increase the size and liquidity of the capital market.

To achieve these goals, the government has set out eight groups of key measures.

On the institutional front, regulators will review and amend existing rules while studying the development of a law on the management and supervision of financial markets and financial services to unify the regulatory framework.

On products, Vietnam will gradually develop a tokenised asset market alongside the equity, bond, derivatives, currency, credit and insurance markets. Green capital markets will also be promoted through green equities, green bonds, ESG funds and a set of green stock indices.

On investors, the government will encourage the development of long-term funds for infrastructure, real estate, innovative startups and green projects. Regulators will also make it easier for individual investors to access the market through professional investment institutions.

For foreign investors, procedures for opening accounts, converting foreign currency and repatriating profits will be further simplified, alongside improvements in market access.

In banking, Vietnam aims to build several banks with regional scale and competitiveness. Large banks are encouraged to adopt safety ratios approaching Basel III standards early, accelerate the resolution of bad debt, curb cross-ownership and shift decisively to risk-based supervision.

The remaining measures focus on modernising payment infrastructure, strengthening market supervision, promoting a stock market upgrade, developing the international financial centre and training high-quality personnel in fields such as artificial intelligence (AI), big data, cybersecurity and risk management.

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Source: TheLeader — theleader.vn. Republished to share knowledge with founders and investors in the HCM VIF ecosystem.