The Ministry of Finance has recommended empowering the State Securities Commission (SSC) to investigate stock-market fraud.
But some analysts oppose the move saying the SSC has many other issues to tackle in a stock market which is just a thirteenth the size of the Singapore bourse.
The SSC's current role is restricted to supervising the market and slapping fines on violators.
In the first eight months, it imposed fines of VND40-80 million (US$1,900-3,800) in 12 cases for fraud. Last year there were 180 cases that attracted total fines of VND11 billion ($521,360).
In amendments to the Criminal Procedure Code it sent to the Supreme People's Procuracy, the finance ministry said the SSC should be authorized to probe complaints related to: misleading and false information about one's activity in the stock market, using inside information for speculation, and manipulating the market.
Le Dat Chi of the University of Economics Ho Chi Minh City said it would be good news for the market.
The government should give the SSC even greater powers, he said, adding that securities watchdogs in countries like the US and Thailand play an independent role. He wanted the SSC to only issue regulations and the stock exchanges to haul up and penalize violators.
Le Tham Duong of the HCMC Banking University said giving SCC more powers would bring about better oversight of the market.
The benchmark VN-Index at the larger HCMC Stock Exchange has gained 15 percent this year as the country made three cuts to the refinancing rate to spur lending in the sluggish economy, which grew at a 13-year low rate last year.
Trinh Van Quyet, general director of SMiC Law Firm, told Thoi Bao Kinh Te Vietnam (Vietnam Economic Times) that the market has seen major changes since 1996 when the commission was established and its role envisaged.
Since 2000, when the main bourse, the HCMC Stock Exchange, was set up, the SSC has been merely helping the government "create" the market rather than "manage" or "supervise" it.
Its authority remains "quite limited," he said.
But many analysts said conferring greater powers on the SSC was not important for helping the market develop.
Nguyen Hoang Hai, general secretary of the Vietnam Association of Financial Investors, said the biggest concerns were transparency and providing a level playing field for portfolio investors, who injected over VND3.194 trillion ($151.43 million) in the first eight months. He said that the SSC should keep a closer eye on the stock markets and encourage investors and others to report scams.
Tran Minh Hai, director of the Basico Law Firm, said investigating stock-market fraud is the job of law-enforcement agencies. Giving greater powers to the SSC would distract the commission from its main task.
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