Need a mechanism to protect investors according to the level of risk of the product

CAO NGUYÊN |

The Standing Committee of the Economic and Financial Committee proposed that there should be a mechanism to protect investors according to the level of risk of the product and the investor's risk tolerance.

On the morning of September 22, the National Assembly Standing Committee gave opinions on the draft Law on Transactions of Derivatives.

Presenting the report, Deputy Minister of Industry and Trade Nguyen Viet Son said that the draft Law consists of 8 chapters and 54 articles.

This Law stipulates activities on derivative goods and derivative goods markets, including: rights and obligations of organizations and individuals participating in the derivative goods market; organization of the derivative goods market; state management of derivative goods and the derivative goods market.

This law does not regulate activities related to the trading of derivative products in securities, currency, foreign exchange, gold and other derivative products in the financial sector.

The draft Law applies to organizations and individuals participating in the trading of derivative goods; state management agencies and other relevant agencies, organizations and individuals.

According to the draft law, the derivative commodity trading market includes: the centralized derivative commodity market and the OTC derivative commodity market.

Preliminary appraisal, Member of the Party Central Committee, Chairman of the Economic and Finance Committee Phan Van Mai said that the Standing Committee of the Economic and Finance Committee agreed with the necessity of studying and building a Law to contribute to the development of a transparent, modern, and safe derivative commodity trading market...

Regarding state management of derivative goods and the derivative goods market, Mr. Phan Van Mai proposed to continue to improve market development policies, standardize and deliver physical goods and list derivative goods based on basic goods manufactured in Vietnam.

This is aimed at connecting with the international market where market makers, investors and international buyers can access, ensuring compliance with the market mechanism and ensuring the freedom of business of organizations and individuals.

Regarding the centralized derivative goods market and the OTC derivative goods market, the Chairman of the Economic and Financial Committee proposed to continue to improve regulations on the OTC derivative goods market.

Clearly classify transactions and corresponding regulations on subject conditions, types of products provided, risk declaration obligations, margins, valuation, collateral management, confirmation and comparison of transactions.

At the same time, review regulations on state-owned enterprises participating in derivative commodity transactions in accordance with the overall approach of law on management and investment of state capital in enterprises.

Continue to study the classification of professional investors, non-professional investors to ensure feasibility in implementation.

Along with that, there needs to be a mechanism to protect investors according to the level of risk of the product and the investor's risk tolerance.

Concluding this content, Member of the Party Central Committee, Vice Chairman of the National Assembly Nguyen Thi Hong said that this draft Law will be discussed for the first time at the second session and approved at the third session.

CAO NGUYÊN
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