Vietnam’s State Securities Commission is set to inaugurate a new stock trading system this May or June in a bid to boost liquidity and develop the market infrastructure of the country’s stock markets.

The long-awaited KRX system, co-developed by the Korea Exchange ( KRX ), aims to enhance the trading and settlement capabilities of the market. It will introduce advanced features such as same-day trading ( T+0 ), short selling, reduced settlement time, options contracts, and a central counterparty clearing system.

In 2012, the Ho Chi Minh Stock Exchange ( HoSE ), the country’s main bourse, signed a deal with KRX for the development of its market infrastructure. Once operational, the KRX system is expected to benefit not only the HoSE but also the Hanoi Stock Exchange and the Vietnam Securities Depository and Clearing Corporation.

Inaugurated in 2000, the Vietnamese stock market has been categorized as a frontier market. However, it is being evaluated by London-based FTSE Russell for a possible upgrade to a secondary emerging market. The results of the assessment are expected to be announced on the morning of April 9 ( Vietnam time ).

Vietnam has been on the FTSE Russell upgrade watchlist since 2018. New York-based MSCI may also consider putting the market on its watchlist this June, according to BSC, a securities firm under state-run bank BIDV.

The country’s classification as a frontier market has prevented many funds, family offices and institutional investors from investing in companies listed in the country. According to estimates by Saigon Securities, an upgrade to an emerging market status could attract additional capital flows of up to US$1.7 billion from exchange-traded funds alone, not to mention other sources.