On 8 April 2026, FTSE Russell announced the results of its interim review under the March 2026 market classification assessment and officially confirmed that Vietnam will remain on track for its upgrade from Frontier Market to Secondary Emerging Market status, as previously announced in October 2025. This outcome reflects Vietnam’s meaningful progress in enhancing market accessibility for foreign investors, which is one of the key criteria under FTSE’s classification framework.
Regulatory Developments Under Circular 08
In the March 2026 interim review, FTSE Russell focused on (i) the accessibility of the market through the global broker mechanism, and (ii) the effectiveness of the non-prefunding (NPF) trading framework. Against this backdrop, the issuance of Circular No. 08/2026/TT-BTC by the Ministry of Finance on 3 February 2026 (“Circular 08”) represents a key regulatory step aimed at addressing the requirements of international institutional investors, with the following notable developments:
(a) Trading Orders via Global Brokers
Circular 08 establishes, for the first time, a clear legal framework for the global broker model, including:
(i) permitting the non-resident foreign investors to place trading orders indirectly through a representative foreign securities business organization (commonly referred to as a “global broker”).
(ii) introducing a regulatory framework governing this model, including the obligations of global brokers to provide information on foreign investors and their transactions upon request by competent authorities or domestic securities firms, as well as mandatory contractual terms to be agreed between global brokers and Vietnamese securities firms, particularly in relation to payment obligations and risk allocation.
(b) Refinements to NPF Trading Regulations
With the issuance of Circular 08, the NPF trading framework has been reviewed and further refined, in particular:
(i) introducing an additional mechanism to address settlement failures in NPF transactions. Under this mechanism, securities firms are permitted to request the Vietnam Securities Depository and Clearing Corporation (VSDC) to transfer ownership of NPF-purchased shares, together with any attached rights (if any), from the foreign institutional investor’s account to the proprietary trading account of another securities firms pursuant to contractual arrangements between the securities firms.
(ii) providing a more structured framework for handling violations of NPF settlement obligations. Specifically, a foreign institutional investor that fails to meet its payment obligations may be suspended from placing NPF orders for seven consecutive trading days following the first violation, or for 180 consecutive trading days following the third violation, if three violations occur within a period of 30 consecutive trading days.
Based on the above developments, FTSE Russell has assessed that the issuance of Circular 08 has effectively established a legal framework enabling foreign investors to access the Vietnamese securities market through global brokers, while also improving the operational effectiveness of the NPF trading regime. These developments directly address key technical criteria under FTSE’s classification framework and support the decision to maintain Vietnam’s upgrade timeline.
Outlook and Next Steps
Following FTSE Russell’s confirmation, Vietnamese equities are expected to be included in the FTSE Emerging Markets Index starting from September 2026, while being concurrently removed from the FTSE Frontier Index under a phased transition mechanism designed to minimize market disruption.
Under Decision No. 2014/QD-TTg dated 12 September 2025, the Vietnamese Government has set out a broader roadmap to further upgrade the market. In the 2026 – 2030 period, after the FTSE upgrade, Vietnam is expected to continue its efforts toward meeting the upgrade criteria of MSCI, as well as progressing toward a higher-tier emerging market classification under FTSE. To achieve this objective, key areas for further reform include foreign ownership limits, foreign exchange liberalization, equal treatment between domestic and foreign investors, account opening procedures, and enhanced English-language disclosure. In addition, technical aspects such as clearing and settlement infrastructure, off-exchange transactions, and the overall stability of implemented reforms will remain under review. Looking ahead, Vietnam’s capital market is expected to undergo further regulatory and operational enhancements, including the potential introduction of omnibus accounts for institutional investors, pilot implementation of midday trading sessions, expanded English disclosures, and a gradual relaxation of foreign ownership and FX restrictions.
