On May 5, 2025, the KRX information technology system, including the trading system of 2 SGDCK and the registration, storage, and clearing and settlement system of Vietnam Securities Depository and Clearing Corporation (VSDC) officially came into operation after nearly 10 years of implementation.
The system provides an integrated and synchronized technology platform for the entire Vietnamese stock market, helping to improve the competitiveness of the domestic market with international stocks as well as contributing significantly to the successful implementation of the Vietnamese stock market development strategy to 2030.
Up to now, after nearly three months of operation, the KRX system has initially operated stably, without any serious errors affecting market operations.
On the VSDC side, the connection between VSDC's system and the system of 2 SGDCKs, payment banks and depositors, clearing members has basically been ensured to be continuous, smooth, without information interruptions and accuracy in time and process.
This can be said to be an extremely important initial success, creating a premise for VSDC and the 2 SGDCK to continue researching and implementing new payment products integrated on the KRX system to better meet the development needs of the market. Including the central clearing partner mechanism (CCP) for the exchange rate of the assets as well as some new trading mechanisms such as day trading, waiting for stock sales.
On implementing the CCP mechanism for grassroots exchange-traded exchanges
Regarding the clearing, payment, clearing and payment method according to the Central Counter Party (CP) model, it is a popular method applied by many SGDCKs due to the superiority in risk management of this model.
Especially on derivatives with the characteristics of using high financial leverage, large contract scale, long payment time and high risk of partner inability to pay, this model plays a very important role because it is equipped with a multi-layered multi-layered risk management system.
In this model, through the positioning mechanism, CCPs become the subject standing between the transaction parties, the seller of all buyers and the buyer of all sellers, accordingly, CCPs ensure payment for transactions even in cases where one party in the initial transaction (original transaction) cannot fulfill payment obligations.
After the 2008 financial crisis, the role of CCPs in clearing and settling securities transactions was assessed by exchange rates as very important and essential in managing system risks, limiting chain failure, and ensuring safety for the financial market.
Most exchange rates in the world (about 80%) have applied the CCP mechanism to clearing and settling securities transactions (basic stocks and CKPS), currently only a few exchange rates have not developed to apply the non-CCP payment mechanism. Regarding market organization, members participating in the CCP model are CCPs and NHLKs that meet the prescribed conditions as payment gatewers, responsible for CCPs and paying on behalf of investors in case the investor is unable to pay.
For Vietnam's stock market, the CCP model has been successfully deployed for derivatives since August 10, 2017 when Vietnam's derivatives stock market officially came into operation with the first product being the VN30 stock index. After nearly 7 years of operation, the CCP model has contributed to the rapid growth of derivatives, promoting its role as a risk-off channel, contributing to the stable development of grassroots CCPs.
On the basis of successfully implementing the CCP model for derivatives exchange rates and implementing the direction of the management agency, since 2019, VSDC has researched and built a CCP model for clearing and settlement of securities transactions based on the functions of the KRX system as well as in accordance with the legal characteristics of Vietnam.
According to this model, VSDC, through the positioning mechanism, will participate in transactions and establish many risk-off layers for grassroots securities in accordance with general practices and current legal regulations, thereby attracting the attention of domestic and foreign investors as well as creating a sense of security and protecting the rights of investors when participating in the market.
In addition, through the deposit mechanism when implementing the CCP and TVBT models, the deposit collection level for investors is decided based on the results of the credit assessment, the market expects to thoroughly resolve the pre-funding barrier, aiming to upgrade and increase liquidity for Vietnam's stock market.
Regarding implementation preparation, legally, this CCP mechanism has been regulated and specified in legal documents in the field of securities, the 2024 Securities Law; the 56th Law amending and supplementing and guiding documents (Decree 155/2020/ND-CP, Circular 119/2020/TT-BTC and a number of other related documents).
At the same time, the technical guidance contents will also be completed by VSDC in the coming time.
In terms of system functions, clearing and settlement activities for securities transactions will continue to be carried out on the KRX system with certain adjustments in the system's configuration and parameters to comply with this mechanism.
On July 17, 2025, the State Securities Commission also announced a plan to deploy the CCP mechanism for grassroots exchange-traded exchanges with the goal of putting this mechanism into operation from the first quarter of 2027.
According to the plan, in the coming time, VSDC will continue to closely coordinate with the State Securities Commission and related units to carry out assigned work contents such as reviewing, amending and supplementing to complete the legal framework; establishing a subsidiary of VSDC to perform the function of CCP to accommodate risks arising when implementing the CCP mechanism for the entire exchange, ensuring safety for professional activities of registering and storing securities for investors at VSDC; training and propaganda...
Regarding day-to-day transactions, stock sellers wait to return
As we all know, to successfully deploy any new product or business in the market, it is necessary to ensure the readiness of the system functions not only of VSDC but also of market members, the completion and synchronization of mechanisms and policies, especially the mechanism to allow relevant parties to handle and overcome risks that may arise during the implementation process.
For day-to-day transactions and stock sales, there are currently legal regulations in Circular 120/2020/TT-BTC, and in terms of system functions, the KRX system is also being integrated.
However, the biggest issue that management agencies are currently concerned about is the ability to manage risks on the market members' side when annual statistics show that there are still many cases that need to correct errors after transactions and handle errors.
There are even cases where payment deadlines have to be delayed or payments must be eliminated due to poor control of customer deposits (according to current regulations, securities companies (TSCs) must ensure that customers have enough securities and money before receiving a trading order, except for the stock purchase transaction that does not require enough money when placing an order by a foreign investor as an organization) and the above cases are also not excluded for the leading securities companies in Vietnam today.
That reality shows that the potential risk of payment loss when implementing transactions on the day, selling securities waiting to return is present and needs to be carefully considered when comparing with the benefits brought by day transactions.
This also requires market members to build a serious and strict risk management process as well as ensure resources to fulfill payment obligations on behalf of customers in case of poor risk control. For management agencies, it is also necessary to continue to improve the monitoring mechanism and handle possible risks. In addition, sanctions are also needed for securities exchanges that do not comply with or do not comply well with regulations on risk management for transactions during the day.
In terms of international experience, implementation practices in other stock exchanges show that day-to-day trading has many potential risks for investors and the market if not well controlled. As in the US stock market, despite setting high financial and experience requirements for investors, only over 10% of investors make a profit when making these transactions.
The Singapore market is in a similar situation. In the Taiwan market (China), although the market was established in 1961 but it was not until 2014 that the regulatory agency allowed the application of transactions on the day. The practical experience of international markets is a valuable lesson for the Vietnamese market and the time of trading implementation on the day will not be an immediate decision, and will be carefully considered by the management agency based on the most favorable calculations for the market when conditions allow.
With the expected roadmap, after the KRX IT system comes into stable operation, new features will be upgraded to meet the market's rapid growth requirements when Vietnam is upgraded from a frontier market to an emerging market, the consideration of putting the stock-opening application into operation will be considered first, followed by stock trading on the day.
On deploying applications to conduct transactions through the noon
This is also a content in the post-golive plan of the KRX IT system, putting it into operation through the noon trading session allows investors to have more trading time, share the pressure to increase orders at the beginning of the day and is also in line with international practices.
