Vietnam’s Ministry of Finance has issued a circular that will lift pre-funding requirements for foreign institutional investors when it comes into force in November, per the State Securities Commision of Vietnam. The removal of these requirements was one of several issues listed by key stock market classification firms FTSE Russell and MSCI needed to see the local bourse upgraded from a frontier market to an emerging market.
Of note, the circular appears to only address foreign institutional investors and not foreign individual investors which account for about 42,446 registered trading accounts in Vietnam. Neither FTSE Russell or MSCI, however, appear to make a distinction between the two in terms of the need to remove pre-funding requirements. With this in mind, this latest announcement should be viewed with cautious optimism.
See also: Vietnam’s Stock Market Upgrade Opportunity: Unpacked