A high ranking official of the State Securities Commission (SSC) has said that the legal document would be ready after September 15, when the Decree No. 58 guiding the implementation of the Securities Law takes effect.

Under the government decree, foreign investors can set up foreign securities companies in Vietnam under the two modes. They can either to buy stakes or make capital contribution to possess 49 percent of shares of a securities company, or buy stakes and establish new legal entities where they hold 100 percent of capital.

Explaining this, policy makers said that the regulation has been set up based on the current regulations on the organization and operation of securities companies and the relating regulations on listing shares on the bourse.

As for securities companies which are listing their shares on the bourse, foreigners can hold 49 percent of stakes of the companies at maximum. As for unlisted securities companies, foreigners can buy stakes to hold 100 percent of stakes of the companies.

Under the WTO commitments, foreign investors have the right to establish new 100 percent foreign owned companies in Vietnam from the beginning of 2012.

Though the Decree would take effect from September 15, foreign investors have got ready in terms of capital and organization to join the Vietnam’s stock market.

However, they still need to expect the guidance by the Ministry of Finance on the issue. Therefore, the news that the legal document would be issued soon after September 15 is really the good news for them.

Nguyen Van Manh, Deputy General Director of Kim Eng Securities Company, said he believes the 49 percent and 100 percent foreign ownership models are reasonable.

According to Manh, foreign investors tend to set up 100 percent foreign owned securities companies, while they do not want to hold the controlling stakes of 65 percent of 75 percent of stakes.

In general, foreign investors want to have the power to manage the companies in their own way. They do not want to cooperate with Vietnamese businessmen due to the differences in the way of thinking and business culture.

Also according to Manh, Malaysian Maybank is planning to buy 100 percent of stakes of Kim Eng Vietnam. The involved parties have agreed on some principles, while they would begin conducting negotiations and other procedures to implement the plan when the Ministry of Finance’s circular is released.

General Director of a securities company whose shares are being listed on the Hanoi Stock Exchange also said that the models of 49 percent and 100 percent foreign ownership come in line with Vietnam’s international commitments and fit the current market conditions.

However, he said that it would be not easy for Vietnam to attract foreign investors to set up securities companies. The Vietnamese stock market remains too small, weak in liquidity, and especially "fragile.”

Meanwhile, there are too many operational securities companies already, which now compete fiercely with each other. A lot of companies have to shut down their business after a long period of incurring loss due to the sharp falls of the stock prices.

Therefore, he believes that the stock market cannot attract foreign investors at this moment. Even foreign invested securities companies have also reported poor business performance. Despite the foreign technologies and the foreign powerful financial capability, the foreign invested securities companies have been in no way superior to domestic ones.