FTSE Russell has retained Vietnam on its Watch List for possible reclassification from Frontier to Secondary Emerging market status, citing ongoing progress but noting that key market access criteria are still unmet, according to the FTSE Equity Country Classification March 2025 Interim Announcement.

Key details

Recent reforms include the non-prefunding (NPF) model, removing the pre-funding requirement for foreign institutional investors, but FTSE Russell says it is still seeking feedback from key stakeholders.
Vietnam has not yet met two critical criteria:
– Settlement Cycle (Delivery vs. Payment)
– Settlement costs related to failed trades
Additional improvements are still needed in:
– Foreign investor account registration, which remains slow
– Mechanisms for trading at/near foreign ownership limits (FOLs)
Vietnam has been on the FTSE Watch List since September 2018.
Vietnam’s Watch List status will be reviewed again in September 2025.

An upgrade to Secondary Emerging market status would likely boost Vietnam’s attractiveness to global institutional investors and potentially increase capital inflows. While the removal of pre-funding requirements is a significant step forward, based on this latest announcement it looks like there is still some way to go.

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