Investors may soon open stock accounts fully online in Vietnam

The State Securities Commission of Vietnam has released the draft law amending and supplementing several provisions of the Securities Law, with the new rules expected to take effect on March 1, 2027. Regulations on a controlled testing mechanism would take effect a year later.

ETFs to gain greater flexibility

The draft proposes two notable changes to exchange-traded funds (ETFs).

Under current regulations, investors can contribute assets to an ETF only in the form of securities included in the fund’s underlying index.

The draft would amend the definition of ETFs, allowing funds to accept and exchange assets other than those in the underlying index, subject to government regulations.

The change could pave the way for new types of ETFs, including futures-based and gold funds, drawing on models used in some other markets.

Current regulations also require ETFs to comply with a 10-percent investment limit for each individual security, as applies to ordinary public funds.

The draft would exempt ETFs from the 10-percent limit for securities that form part of the underlying index they track.

Foreign investors held about 85 percent of all outstanding ETF fund certificates in Vietnam at the end of 2025.

The draft also provides a clearer legal framework for electronic transactions in the securities market.

The current law requires securities companies to sign written contracts with customers. As a result, investors who complete procedures online still have to sign and send paper documents to their securities companies.

The draft would allow contracts to be concluded in forms compliant with laws on electronic transactions, similar to customer authentication methods already used in banking, including biometrics and one-time passwords.

The change would allow investors to open accounts and complete transaction confirmations entirely online while reducing securities companies’ costs for storing paper records.

Licensing rules for securities businesses to be streamlined

The draft would also remove or simplify a number of licensing conditions and documentation requirements for securities companies, fund management companies and securities depository services.

Legal representatives of these organizations would be required to meet higher professional standards equivalent to those applicable to chief executive officers.

The draft would also clarify the scope of services securities companies can provide, including distribution agency services, bondholder representation and collateral asset management.

Rules on securities practice certificates would also be revised, with some requirements for certificate renewal eased while annual training requirements would be tightened.

Foreign bank branches would additionally be allowed to serve as supervising banks for public funds.

According to the State Securities Commission of Vietnam, the previous amendment to the Securities Law addressed several urgent problems in practice, strengthened transparency in securities issuance and offering activities, and completed the legal framework for securities clearing and settlement under a central counterparty mechanism.

The commission also cited Vietnam’s goal of upgrading its stock market from frontier-market status to secondary emerging-market status as part of the broader context requiring stronger regulatory and supervisory capacity.