Although using a global securities firm as the sole partner is not a mandatory condition for upgrading to a secondary emerging market, Vietnamese regulators have successfully met this requirement…

On February 3, 2026, the Minister of Finance issued Circular No. 08/2026/TT-BTC regulating certain provisions in the securities market.

One of the key points of Circular 08 is the addition of a new trading method: allowing foreign investors to place securities trading orders with domestic securities companies through global brokerage firms without having to open a foreign investor trading account at domestic securities companies.

Under this method, foreign investors still register for a securities trading code and open a securities custody account with the custodian members. After the funds and securities are paid to the custodian member by VSDC and the clearing bank, the custodian member will allocate them to the foreign investor’s custody account opened at the custodian member.

This is one of the conditions, although not mandatory, that is important for FTSE to announce the upgrade to emerging market status, which will take effect this September.

In its October 2025 announcement, FTSE Russell, a market rating organization, stated that the Vietnamese stock market had met all the official criteria and was upgraded from a frontier market to a secondary emerging market.

FTSE emphasizes that while using a global brokerage firm as the sole counterparty is not a requirement for an upgrade to the Secondary Emerging Market, IGB recognizes that index investors need to be able to “mimic the index” in accordance with the second principle in the Statement of Principles.

Given the importance of the aforementioned issue to index investors, IGB has determined that addressing the role of global brokerage firms in trading is necessary for the upgrade process to proceed.

Previously, Vice Chairman of the State Securities Commission Bui Hoang Hai stated that one of the key focuses is the Central Counterparty Clearing and Settlement (CCP) mechanism, with the goal of putting it into operation from the first quarter of 2027. This mechanism will contribute to strengthening confidence among foreign investors and enhancing the resilience of the entire financial system. “Only when the CCP mechanism is fully operational can we control systemic risk and limit the spread of risk in the securities market,” Mr. Hai emphasized.

The Vice Chairman of the State Securities Commission also affirmed the regulatory body’s commitment to further expanding market access for foreign investors, including allowing direct trading through global brokerage firms and improving the information connectivity mechanism between market infrastructure organizations.

Mr. Nguyen The Minh, Director of Research and Analysis for the Individual Clients Division at Yuanta Securities, believes that the issuance of Circular 08 could help the Vietnamese stock market achieve positive results in March 2026 and increase confidence that the upgrade of the Vietnamese stock market will take effect in September 2026.

Besides allowing foreign investors to buy and sell through global brokerage firms, some other notable provisions include: If a foreign institutional investor fails to make full payment, their “no full payment required” mechanism will be suspended for 7 consecutive trading days. If they violate this rule 3 times within 30 days, the suspension period will be extended to 180 days.

The securities company where the foreign investor placed the order must immediately report the settlement violation to the State Securities Commission and the exchanges on the day it occurs. The faulty shares will be transferred to the securities company’s proprietary trading account or to another securities company as agreed.

According to Yuanta’s observations, capital inflows from active funds typically precede those from passive funds in September 2026. Therefore, expectations for foreign capital inflows are expected to be more positive following this development. Since the beginning of the year, foreign investors have been net sellers of VND 9 trillion in the Vietnamese stock market.

From another perspective, SGI Capital believes that FTSE’s approval for Vietnam’s upgrade in September 2026 is great news, but one should not expect a massive influx of foreign capital into the market.

The VN-Index remains stable even as foreign investors have net sold 80 trillion VND since the beginning of August and 110 trillion VND since the beginning of the year. If Vietnam is officially upgraded in September 2026, passive funds tracked by FTSE EM will allocate approximately $1.5 billion starting in March 2027.

The amount of capital allocated from FTSE-tracked active funds could be even larger, depending on the attractiveness of the market. While this is positive, given the current market capitalization and liquidity of the Vietnamese stock market, the purchase of several billion USD by foreign investors over the next 6-12 months may no longer be as significant to the overall market trend.

The most important factor for an upward trend in the stock market is always the stability of the macroeconomic foundation, which facilitates business expansion and delivers sustainable profit growth for shareholders. Upgrading the market status is a necessary condition, but the quality and attractiveness of the products are the sufficient conditions to attract foreign capital.

Source: vneconomy.vn