The Hanoi Securities Trading Center (HaSTC) will continue to operate as a continuous order-matching system for the time being but will develop and implement international standard technology over the next two years, according to Jonathan Katz of the US Trade Development Agency.

”Eventually, there should be two tiers of listed companies. Tier one companies are large, liquid companies that will be trading using an order matching system that exists today. And the second are less liquid with fewer shareholders, which have lower listing requirements in terms of size and number of shareholders,” said Katz.

Katz and a team of consultants have conducted a feasibility study and issued a report offering suggestions on modernising the Hanoi stock exchange.

Public disclosure of all company reports delivered to the HaSTC should be made as soon as the reports are received and in the form filed by the company, the report said.

If the reports were filed electronically, an electronic copy should be made available on the website of the bourse or the website of the company as soon as it is filed.

Staff of the HaSTC should closely monitor listed company disclosures and stress the importance of timely filling of reports.

The State Securities Commission should undertake to increase audit standards and improve the capacity of auditing firms, the report stated. The Hanoi bourse should also develop an investigative procedures manual that defines the type of trading activity to be monitored and that identifies the investigative steps.

In addition, the HaSTC needed to take steps to ensure a sufficient number of order entry terminals to accommodate demand and the development of a remote access system for order entry should be a priority.

The bourse needed to expand IT capacity to handle ever-increasing trade volume, more listed companies, increased number of IPOs and increased surveillance activities.

”The bourse should continue with the current system of price collars on individual stocks. The main reason is that the market is very concentrated with four or five stocks making up a large part of the market index. As a result, movement in the index is driven by a few stocks, and it is better to have individual limits. The 10 percent band of daily price limits should be widened over the time as the market develops,” Katz said.

Source: VNA