SSC To Halt Licensing New Securities, Fund Management Cos

Monday, April 28, 2008
The State Securities Commission (SSC) said Monday that it has decided to temporarily halt issuing licenses to new securities and fund management companies as part of efforts to boost the industry's performance.
"In order to support the stable development of the stock market, the State Securities Commission will temporarily halt the reception of applications for setting up new securities and fund management companies," the SSC said on its Web site.
The SSC's move follows the government's asking last week of all state-owned companies to review their operations; these entities have invested VND23.34 trillion ($1.45 billion) in securities and fund management companies in recent months, according to analysts.
"The SSC's decision is a right move because it will help existing companies to improve operations in terms of service quality, rather than by simply slashing service fees," said Phan Hong Quan, a director of Hanoi-based EuroCapital Securities.
"Viet Nam's stock market is relatively small, and licensing too many securities companies has caused unfair competition," Quan told Dow Jones Newswires.
"Many local brokerage firms, including EuroCapital Securities, are seeking foreign investors for their expertise and to help boost operations," Quan said.
There are currently 87 securities companies and 30 fund management firms licensed by the SSC, but not all of them have started operations.
Quan forecast that about half of the existing securities companies will soon close their offices because of losses, following a 44% plunge in domestic stocks so far this year. The benchmark domestic share index has fallen more than 55% since its peak in March 2007. (Dow Jones)