Vietnam Drafts Securities Law Update with Fintech Sandbox, Bond Guarantees

HANOI – Vietnam’s Ministry of Finance has unveiled a draft law to amend and supplement several articles of the Securities Law, proposing new mechanisms aimed at completing the legal framework for the nation's capital market, enhancing investor confidence, and managing risk. The proposed changes, which are currently open for public comment, include the introduction of a regulatory sandbox for financial technology and the establishment of bond payment guarantee organisations.

Under the draft law, the sandbox is defined as a testing environment for the application of new technologies and the deployment of new products, services, and business models within the securities sector, with participation limited by scope, subjects, space, and time. Organisations participating in the mechanism must meet specific conditions for approval and will be subject to supervision by competent state agencies. The Government will provide detailed regulations on this matter.

The ministry stated that adding regulations for a sandbox aims to meet the needs of businesses and investors for new products and business models, while aligning with the rapid development of information technology and financial technology in the securities sector. As this is a new field with high innovation potential lacking a sufficient practical basis for a long-term roadmap, the law will only stipulate general principles. Specific details will be left to the Government to ensure flexibility in management and operation.

In a separate proposal, the ministry seeks to add the concept of bond payment guarantees and create a dedicated section regulating organisations that provide this service. According to the ministry, fully developing intermediary organisations that support the bond market is necessary to enhance investor confidence and control risks, especially amid the increasing need to raise capital for strategic infrastructure projects. The current Securities Law does not have specific regulations on bond payment guarantees, creating a lack of legal basis for guiding documents.

Under the draft, a business licence for guaranteeing bond payments would be granted to joint-stock companies or limited liability companies established under the Enterprise Law. The State Securities Commission is designated as the competent authority to issue, reissue, amend, and revoke licences for these organisations. The Government will regulate in detail the scope of operation, conditions, procedures for licensing, and the organisation, operation, reorganisation, dissolution, and bankruptcy of these entities. The draft also stipulates that the name of a bond payment guarantee organisation must comply with the Enterprise Law and include its enterprise type, the phrase “bond payment guarantee,” and its proper name. The addition of these regulations is seen as necessary to create a legal basis for the Government to develop a specific framework, thereby promoting the safe and transparent development of the capital market, particularly the corporate bond market.

Additionally, the draft law proposes amending the concept of exchange-traded funds (ETFs) to allow funds to receive and exchange other types of assets for fund certificates, as prescribed by the Government. It also seeks to amend the conditions for the legal representative of securities business organisations to be similar to those applied to the general director.

The law is expected to take effect from March 1, 2027. However, the regulations on the sandbox in the securities sector are slated to take effect from March 1, 2028.