A stock broker watches share prices and indices on FPT Securities Co's trading platform. (Source: tinnhanhchungkhoan.vn) Hanoi (VNS/VNA) -A new code of conduct will be introduced in 2020 to improve the ethicalstandards of brokerage firms and brokers, according to the Vietnam Associationof Securities Businesses (VASB).
The need for a new code comesfrom the fact that some foreign-invested securities firms have tried to offerfree trading fees for investors and pay high salaries to attract high-qualityemployees, causing unfair competition in the market.
Securities firms areconcerned that without a new code, companies with strong support from bigfinancial institutions will cause some instability in the securities market.
If foreign-invested firms areable to keep their trading fees at zero percent, local brokerages will have tocut their rates. Therefore, they worried their main income from the collectionof trading fees will be hampered.
Some companies with zero percenttrading fees include KB Securities Co, Yuanta Securities Co and KIS SecuritiesCo.
Under Circular 128/2018/TT-BTCissued by the Ministry of Finance on December 27, 2018, the maximum trading feefor share and fund certificate transactions is only 0.5 percent of the value ofthe deal.
According to VASB members, therate of 0.5 percent proves the connection between securities companies andpolicymakers is weak as the former are not always asked for feedback when aregulatory document is written.
VASB vice chairman and generaldirector of MB Securities Co Tran Hai Ha said at the VASB’s recent year-endmeeting that securities companies must have better linkage with each other andthe VASB must be the bond between companies and market regulators.
Zero percent trading fees willonly benefit the Vietnamese market in the short term as they may attract ahigher number of retail, or individual, investors, he said. But in the longterm, the market sustainability will be affected.
A policy will work moreproperly if securities firms are consulted when it is developed, Ha said.
After two rough years in2018-19, there may be more opportunities for the Vietnamese market in 2020, andsecurities firms must work closely with the State Securities Commission andother market regulators to develop new rules and standards for the market,especially when the new Law on Securities has been approved by the NationalAssembly, Ha said.
Among the new rules, VASBexpects its members to discuss the possibility of the new code of conduct toimprove professional standards for firms and individual brokers and deliverclear punishments for violations, thus protecting investors and ensuring thetransparency of the market.
According to VASB generalsecretary Nguyen Thanh Ky, a code of conduct was released 13 years ago, butstakeholders have paid little attention to it. A code of conduct helps minimiserisks in the securities sector.
Hoang Hai Anh, vice chairman ofthe board of directors at PetroVietnam Securities Inc, said that all traineesmust qualify for the standards of conduct and behaviour if they want to becomebrokers.
This is common in othereconomies with much more developed securities markets, Anh said, adding thatVASB will compile required documents and curricula for the training.
VASB will also develop adatabase that tracks the performance of brokers regarding their professionaland ethical features, which will help securities firms in recruitment, she said.
In addition, VASB and SSC willwork together to check securities companies on how they comply with the code ofconduct if it is approved, she said./.
VNA
