SSC rejects KRX system operation
The State Securities Commission (SSC) has just issued an urgent document to stock exchanges and the Vietnam Securities Depository and Clearing Corporation (VSDC) regarding the implementation of the KRX information technology system.
The SSC expressed concerns that the Ho Chi Minh City Stock Exchange (HOSE) had proposed to the commission the official operation of the KRX system without a report from the Ministry of Finance and the Vietnam Stock Exchange (VNX), and without obtaining the opinions of beneficiary units such as the Hà Nội Stock Exchange (HNX) and VSDC.
This lack of compliance with legal regulations raised doubts about the system's operation.
According to the proposal submitted by HOSE on April 25, it has been noted that the KRX system has not undergone a comprehensive acceptance review involving investors, contractors and beneficiary units. This oversight fails to ensure compliance with the regulations governing investment management that utilises information technology and state budget capital.
The HOSE report also does not indicate that the KRX system has obtained the required Level 4 information security approval from the relevant authority as per government regulations.
The SSC also mentioned the absence of official documentation from members regarding their readiness to connect to the new system and their capability to provide securities services to investors post-connection.
On April 25, the SSC sent a letter instructing the stock exchanges and VSDC to prepare reports and propose solutions regarding the KRX system.
The commission also stated that there was not enough justification to approve HOSE'S proposal for the official operation of the system on May 2.
On April 21, HOSE issued an urgent notification to securities companies regarding their plans for transitioning to the new trading system in preparation for the official implementation.
The securities companies are scheduled to conduct a cutover test by April 30, according to the notification. The trading date on the HOSE system was expected to be May 2, with the transaction data reflecting the end-of-day data on April 26.
KRX is a Korean information technology system that governs and manages stock market transactions.
HOSE inked a technology transfer agreement with the Korea Exchange (KRX) in December 2012. The contract for designing, supplying, installing, and transferring this information technology system is valued at approximately VNĐ600 billion (US$23.7 million), with HOSE acting as the investing entity.
Initially planned for completion in 2015, the official launch of the KRX system has been postponed until now.