HA NOI (VNS) — Securities companies are likely to get a jump start over other types of businesses in having their foreign ownership limits increased, according to the State Securities Commission.
"Lifting foreign ownership in all eligible businesses is not likely to take place as quickly as we think. The regulation may be applied to securities companies first," the commission's chairman Vu Bang told The Saigon Times.
Bang said the Government has assigned the Ministry of Planning and Investment (MPI) to classify eligible industries and sectors where the foreign ownership limit can be raised. The commission is awaiting a final decision from the Government, he said.
He explained the likelihood of an earlier raise in ownership limits for securities companies saying it would be a simpler process than for other businesses.
The commission plans to separate securities business from the general scheme and submit an early implementation request to the MPI, he added.
Under the proposed plan, securities companies willing to increase their foreign holdings only need endorsement of their shareholders to submit a request for the commission's approval.
Bang said stressed the importance of raising the foreign holdings limit in securities companies soon in order to abide by commitments as a World Trade Organization (WTO) member.
Currently, foreign investors can hold either 49 per cent or 100 per cent of the stake in brokerages or establish a wholly-owned securities firm. However, many foreign firms only want to have controlling stakes.
Since the issuance of a decree (58/2012/ND-CP) that allows foreigners to take full ownership of brokerage firms, Maybank Kim Eng is the only one wholly foreign-invested firm among the 90 securities companies operating in Viet Nam's stock market.
Forty companies have foreign ownership ranging from 5-49 per cent.
However, Bang warned that investors should be watchful as many traders use false information to drive stock prices up. — VNS