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Vietnam tightens screws on OTC stock market   2008-11-26 - Bloomberg

The Vietnamese government is clamping down on the informal stock market, ordering companies to publish annual reports and limiting price moves to protect investors and enhance transparency.



Price moves in shares of companies traded in the so-called “over-the-counter” (OTC) market will be limited to 10 percent a day, according to a statement e-mailed Tuesday by the Ministry of Finance. Trading of the shares will move to the Hanoi Securities Trading Center, the nation’s second bourse, which will assume control of the market under the new rules.

“The over-the-counter market was out of control and investors’ interests weren’t ensured,” Tran Van Dung, director of the Hanoi bourse, said in a telephone interview Tuesday. “Once it is regulated, the government can manage the market and protect the interests of investors.”

The Ho Chi Minh Stock Exchange’s benchmark VN-Index has plunged 65 percent this year, making it Asia’s second-worst market after China’s 66 percent slump.

Forcing companies to publish annual financial reports would help reduce risks for investors, the Hanoi bourse’s Dung said. Companies must publish information within “24 or 72 hours after events occur,” the statement said, without explaining the two deadlines or detailing the kind of information that would be required.

The new measures would take effect 15 days after publication in the government gazette, the ministry’s statement said.

As of November 21, there were 1,069 companies with total capital of VND142.5 trillion (US$8.4 billion) registered with the State Securities Commission, the market regulator, to trade in the over-the-counter market, according to the agency’s website.

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