3:20:40 PM | 6/22/2016
Circular 203/2015 / TT-BTC of the Ministry of Finance, which is expected to officially take in effect on July 1, is drawing great attention among investors on Vietnam's stock market because this Circular replacing Circular 74/2011 will perform the stock trading after the working day (T+ 0).
In the context that many risks appear on the stock market, the majority of investors are expecting a boost from the market. However, investors are still skeptical about the deployment of Circular on July 1st. The strong expectation about the settlement of the stock trading at the time of T+0 reflects the fact that investors are always skeptical about the possibility of unfair treatment context in which many securities companies take priorities over other investors to short sell securities. And the current mechanism at the T+2 leads to many risks for investors before the actual market movements are reversed in unpredictable ways. Therefore, the application of T+0 is seen as a guarantee for them to avoid the possibility of this risk.In the context that many risks appear on the stock market, the majority of investors are expecting a boost from the market. However, investors are still skeptical about the deployment of Circular on July 1st. The strong expectation about the settlement of the stock trading at the time of T+0 reflects the fact that investors are always skeptical about the possibility of unfair treatment context in which many securities companies take priorities over other investors to short sell securities. And the current mechanism at the T+2 leads to many risks for investors before the actual market movements are reversed in unpredictable ways. Therefore, the application of T+0 is seen as a guarantee for them to avoid the possibility of this risk.
If the transaction (T+0) is put in effect, this will also create favourable conditions for investors to revolve capital flows as quickly as possible, which can support the liquidity of the market, one important factor attracting the investors in recent time. But to this point, there is still no action taken from the authorities.
Investors' expectation for a deployment of T+0 is very plausible but according to the State Securities Commission (SSC), this is unlikely to be done starting on July 1st. Thus, the starting date of application of T+0 for the stock market is still open. According to the representatives of the SSC, the implementation of this plan is technically extremely complex, requiring time, efforts, cost and technical infrastructure investment of the relevant units, special especially securities firms and payment systems at the Vietnam Securities Depository Centre (VSSD).
The VSDC has been learning experiences from different countries, based on which new researches will be made to find an optimal solution to solve the problem complex infrastructure to deploy T+0. The relevant authorities have not made any specific plan for this process so it is hard to predict the starting date of this process.
According to many experts in the stock market, the movement of the stock market management agencies, the opportunity to deploy T+0 in this year is not feasible, especially in the context of the VSDC and other securities and stock exchange companies are focusing their efforts on improving the system of transaction, payment, and derivative securities to open this market early next year.
It cannot be denied that the deployment of T+0 will face with certain lag due to policy and technical issues. However, if there were a reasonable deployment roadmap of the T+0 process, this would be a good thing for investors at the time when most investors feel depressed.
Luong Tuan
Vietnamese
