HANOI, Oct 29 (Reuters) - Vietnam's Finance Ministry outlined tighter regulations for the country's corporate debt market this week, proposals aimed at restoring investor confidence eroded by several high-profile frauds involving company bond sales.
Under the plans, corporate issuers would need to meet new requirements, including having their debt rated and disclosing their debt ratio, and retail investors would face more curbs - for instance, only being able to trade debt securities backed by a collateral. Institutional investors would not be affected.
The proposed reforms, which need parliament's approval, are part of a broader overhaul of the little-regulated market aimed at boosting investment in company debt, which used to be a major source of funding for the nation's weak real estate sector.
Vietnam's bond market ground to a virtual standstill in late 2022 following the arrest of real estate tycoon Truong My Lan, who earlier this month got a life sentence for misappropriating about 30 trillion dong ($1.19 billion) from investors through bond issuance.
It has partly recovered since then, and new issuance in the first nine months of the year reached 334 trillion dong, matching the total for 2023, with no new defaults reported in September, according to VIS Ratings, a Moody's affiliate.
Previous government efforts on similar reforms were poorly received by the market, delaying regulatory advances.
If passed by parliament, the amendments to the country's securities law would take effect in 2026. ($1 = 25,315.0000 dong)
(Reporting by Phuong Nguyen; Editing by Helen Popper) - Reuters
