On September 11, 2025, the Vietnamese government issued Decree No. 245/2025/ND-CP (“Decree 245”), which amends and supplements key provisions of the existing Securities Law. Decree 245 introduces several reforms specifically addressing the criteria of international index providers such as FTSE Russell and MSCI. These changes are intended to attract foreign capital by making the market more accessible, transparent, and secure for international investors. The decree represents a significant reform step to align the Vietnamese capital market with international standards and thus facilitate its upgrading to an emerging market status.
Key Points of Decree 245:
- Simplified Procedures for Foreign Investors
Decree 245 facilitates and accelerates the participation of foreign investors in the Vietnamese securities market. Of particular note, the Central Bank of Vietnam (“SBC”) recently issued Circulars No. 03/2025/TT-NHNN and No. 25/2025/TT-NHNN to simplify the procedures for opening indirect investment accounts and payment accounts, reducing the cost and time for market access.
- Simplified Trading Codes: Foreign investors can now obtain an electronic securities trading code (E-STC) and begin trading immediately without first submitting physical documents for an official certificate.
- Dual Trading Codes for Fund Managers: Foreign fund management companies can now obtain two trading codes—one for proprietary trading and one for managing client transactions. This corresponds to the Omnibus Trading Account (OTA) model, a key criterion for market classification.
- Improved Market Infrastructure and Security
The new regulations create a legal foundation for a modern and secure trading environment.
- Central Counterparty Clearing (CCP): The decree creates the legal basis for the introduction of a CCP mechanism – a crucial element of a mature market. This system reduces risks for domestic and foreign investors by guaranteeing the settlement of trades and minimizing counterparty and exchange rate risks. The State Securities Supervision (SSC) plans to implement it by the first quarter of 2027.
- Simultaneous IPO and Listing: Companies can now register for an initial public offering (IPO) and a listing simultaneously. The time from IPO approval to the start of trading will be reduced from 90 days to just 30 days. This will improve market liquidity and strengthen investor protection. Overall, the IPO process can be shortened by 3–6 months, increasing the attractiveness of the issue.
- Other Important Reforms
- Credit Ratings for Bonds: All organizations that publicly offer or register bonds must now obtain a credit rating from an independent agency. This increases transparency and protects investors by ensuring that only financially sound companies can raise capital from the public market.
- Mandatory English-Language Disclosure: On September 18, 2024, the Ministry of Finance issued Circular No. 68/2024/TT-BTC, which requires listed companies to disclose information in both Vietnamese and English. Decree 245 reaffirms this requirement and obligates affected companies to comply with applicable disclosure rules.
- Abolition of Lower Foreign Participation Limits: Decree 245 abolishes the rule that previously allowed public companies to set a foreign participation limit (FOL) below the legally or internationally permitted maximum in their articles of association or through general meeting resolutions. This change opens up more opportunities for foreign investors to acquire shares in Vietnamese companies.
***
For questions or further information, please contact Dr. Oliver Massmann at [email protected]. Dr. Oliver Massmann is Managing Director of Duane Morris Vietnam LLC.
