Derivatives market coming to Vietnam in early 2017


Viet Nam’s first derivatives market is expected to become operational next year, according to a top stock market official.

Nguyen Thi Hoang Lan, vice chairwoman of the Ha Noi Stock Exchange, told a seminar on risk prevention in the derivatives market held in HCM City yesterday that next month the results of the market’s trial run would be reported to the Government and official trading would begin in the first quarter of 2017.

“In the initial stage the products will be simple ones like futures contracts for indexes and Government bonds, and more complicated products will be introduced later,” said Lan.

Dang Tai An Trang of the State Securities Commission said there were market, counter-party and liquidity risks as well as interconnection risks.

Prevention solutions include separating brokerages’ money and securities from that of clients, and not allowing brokerages to use clients’ money or securities for proprietary trading, he said.

Securities companies need to be professional and their employees need to be ethical, regulations stipulate.

“The market must be operated with fairness, effectiveness and transparency,” Trang said, adding that financial safety should be closely monitored.

Tran Thi Thu Ha, director of the Ha Noi exchange’s derivatives market department, said the choice of products would help prevent price manipulation.

An important factor is that the price fixing mechanism must ensure fairness and follow international practices.

Trinh Hoai Giang, deputy general director of HCM Securities Company (HSC), said his company had developed a risk management structure made up of inspection and governance, risk management and finance sections.

“We also have regulations on compliance and report management, plans for funds use and experiments in risk tolerance levels.” 


Photo: CBR Investment AG