VIETNAM – SECURITIES MARKET – REMOVAL OF PRE-FUNDING REQUIREMENT – WHAT YOU MUST KNOW

On 3 February 2026, the Ministry of Finance issued Circular No. 08/2026/TT-BTC (“Circular 08“), which amends and supplements several articles of Circular 96, Circular 120, and Circular 121 regarding the securities market.

Circular 08 effectively removes the requirement for 100% pre-funding for foreign institutional investors, a long-standing bottleneck in Vietnam’s market upgrade journey. This legal instrument is the direct response to the technical criteria set by FTSE Russell, aiming for an official Emerging Market upgrade in September 2026.

Key Highlights

1. Removal of Pre-Funding Requirement (Non-Prefunding)

• Non-resident foreign institutional investors are now permitted to purchase securities without having 100% of the funds available in their account prior to placing the order.
• Investors can place orders through foreign securities firms (Global Brokers). These orders are then executed by local Vietnamese securities companies.
• If the foreign investor fails to pay by the settlement deadline, the obligation to settle the trade falls on the local securities company. Investors who fail to settle obligations will be suspended from using the non-pre-funding mechanism for 7 consecutive trading days.

2. Global Broker Connectivity

• Foreign investors no longer need to open a direct trading account with a Vietnamese securities company to place orders. They can utilize their existing relationships with global brokers, who will route orders to Vietnam. This aligns Vietnam’s trading infrastructure with international standards.

3. Separation of Trading Accounts

• Foreign securities companies and foreign fund management companies are now explicitly permitted to open two separate trading accounts at each domestic securities company:
  1. One account for proprietary trading (Self-trading).
  2. One account for brokerage/client management.

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Please do not hesitate to contact Dr. Oliver Massmann under [email protected] if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.