Curtailing the unofficial securities market and strengthening the official one is a major task the Ministry of Finance and the State Securities Commission have set themselves to improve transparency.
Currently there are around 600 companies listed in HCM City and Ha Noi plus another 100 on the UPCoM board.
Around 1,000 others have registered with the SSC for listing.
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| Online trading board of an over-the-counter online market which unlisted shares are traded_VNS Photo |
Compared to this, however, there are almost 3,000 unlisted joint-stock companies whose shares are traded on the over-the-counter market.
Draft amendments to the Securities Law, scheduled to be tabled at the National Assembly on October 20, stipulate that companies registering for an initial public offering should also apply for listing.
This will increase the responsibility of companies going public, protect investors' rights, and create a legal base for regulatory agencies to monitor and crack down on violations related to share deals.
The committee tasked with amending the securities law says since the statute does not make it mandatory for joint-stock companies to list, they are traded on the black market.
But since these transactions are usually based on insufficient, unofficial and opaque information, investors face a lot of risk.
Further, the black market is not controlled by regulatory bodies, leading to risk of fraud related to prices, payments and ownership, which could have a knock-on effect on the official markets, especially at a time when they are falling.
Other countries require businesses registering for IPOs to also register for listing.
