OTC Transactions to Be Carried Out at Securities Companies

As of July 2007, transactions of unlisted shares on the OTC market (over the counter) must be carried out through securities companies. Thus, OTC securities will have their own trading floor, which will help increase the liquidity of OTC shares and minimise risks for investors.

Bui Nguyen Hoan, Chief Representative of State Securities Commission (SSC), said there would be new regulations on the operation of the stock market in July. The Ho Chi Minh City Securities Trading Centre (HSTC) will be transformed into the Ho Chi Minh City Stock Exchange, and there will be two main changes consequent of the restructuring.

Firstly, the scheme on periodic order matching will be replaced with the real-time order matching scheme from May 7, 2007. Second, shares of public companies must make securities deposits at securities companies. According to Mr Hoan, the new regulations aimed to minimise risks for OTC investors. Mr Nguyen Ho Nam, Director General of SBS - a securities company - said these regulations will help raise the liquidity of OTC shares and stabilise the market.