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Securities firms share risk management do's and don'ts

Update: April, 22/2015 - 08:16

Local securities companies exchange risk management experiences in the securities industry in Ha Noi.— VNS Photo

HA NOI (VNS) — Local securities companies exchanged their risk management experiences in the securities industry at a seminar held in the capital city yesterday.

The seminar, which was co-organized by the Ha Noi Stock Exchange and the Techcom Securities Company, was aimed at improving risk management, considering it is crucial for business survival, especially when Viet Nam's stock market has developed better in the past years.

Nguyen Van Dung, HNX's deputy director, said the State Securities Commission had recently issued guidelines for local brokers on risk management. However, he added it was not easy to implement the management as many firms had not paid enough attention to the matter.

Lim Ming Wee, 56, director of the E-securities project at the Techcom Securities Company, shared his own risk management experience after working in top positions in Singapore, Hong Kong, Thailand and Japan.

He divided the management levels from international organizations, such as IOSCO, IMF, World Bank, down to the national company level.

At securities firms, he said, there were a lot of potential risks present, especially in Viet Nam, where the competition in the market was growing.

Wee said market volatility demanded greater vigilance for managing risk effectively, adding that firms should be more cautious while watching and managing risks when the market was growing faster with more competitors.

The firms must also pay attention to the speed of the market reaction to events, as well as the system and process failures and fraud risks.

Furthermore, Wee said it was very dangerous to have incomplete or incorrect implementation of laws.

Thus, firms should build the market both in the depth and to a certain level of sophistication.

Clear authorisation limits and procedures, clear identification of responsibilities in the firms would also boost management quality. With well-trained staff, the firms could be informed about potential risks before any special team recognize it.

Firms should also exercise their own disaster plan, which would be used to improve them.

Wee said if the attendees could follow all these suggestions, they would definitely have a good platform to raise capital and ramp up their profile and attract investors with investing opportunities in the capital markets. — VNS

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