Under the draft regulation, individual investors would have to register with the Securities Depository Centre, while institutional investors with the SSC.

SSC would grant a certificate of investment registration to investors within seven days of receiving regular papers from investors.

The draft regulation has immediately raised two opposite opinions. Those, who protest the regulation, say that the requirement on investment registration would create ‘sub-licences’ that cause inconveniences for investors. It would take foreign investors too much time to get confirmation from diplomatic agencies, and be associated with many complicated procedures.

Meanwhile, others think that it is the right time to keep stricter control over foreign investment capital. To date, Vietnam still cannot reckon the total foreign capital flow that has come into Vietnam so far. Strict control over foreign investment capital will also help prevent dirty money from being washed in Vietnam.

Bui Thi Thanh Huong, Head of the Securities Business Management Division under SSC, said that the SSC would grant investment registration certificates if it found the papers lawful, while the inspection of papers would be carried out later. It would take three days on average to grant certificates, and after that investors would be given trading codes.

Mrs Huong acknowledged that it would be very difficult to examine the papers provided by foreign investors as it would require the SSC to check information in foreign countries. But SSC is considering taking full advantage of the relationships between SSC and the securities commissions which have signed cooperation agreements with SSC and use their databases.

Regarding the control over foreign capital, experts have pointed out that if SSC, the central bank and securities depository centre can cooperate well, they will succeed in controlling the capital and there would be no need to set up new procedures.

Under the current procedures, foreign investors have to apply for trading codes at the securities depository centre, and sign contracts on securities deposits with banks. In order to make transactions, foreign investors have to remit foreign currencies into their accounts and convert them into VND. Therefore, the central bank knows exactly how much foreign currencies have been injected in Vietnam. Meanwhile, the three agencies can share databases to keep control over foreign capital flow.

Source: DTCK.