immediate trading, therefore, it is necessary to overcome the technical system and innovate technology by increasing the value of each trading session to three or four times higher than the current time. From there, it helps the management work of State agencies not to be interrupted or to have incidents that strongly affect the efficiency of the capital market.
Fifth, in the process of modernizing the technology system, in addition to investing in infrastructure, it is also necessary to set clear, comprehensive, and logical development criteria; this will help balance the factors of efficiency and cost. For example, in order to attract domestic investors, including small investors, China has built smart software to support entities in declaring simplified information because it has been integrated with the national database system. Therefore, it helps to systematize information and helps state management agencies to extract declaration results quickly and accurately.
Thereby, the modernization of the information technology system in the innovation of capital market management not only helps the market develop stronger and more stable in the face of the impacts of the economic crisis or the Covid-19 pandemic, but also has a reverse impact on the work of building a more complete legal system. It can be said that for the task of improving the efficiency of capital market management, the development and application of smart and modern technology infrastructure is a comprehensive, long-term and sustainable solution.
3.2.3 Perfecting supervision, inspection and sanctioning work
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3.2.3.1. Perfecting supervision work
Before 2021, the supervision of Vietnam's capital market activities was carried out in a two-line process with close coordination. First, the Stock Exchange will be the direct supervisor and detect violations. Next, the State Securities Commission will supervise the capital market in the second line and is the unit that carries out in-depth supervision and clarifies signs of violations. However, after the Securities Law 2019 came into effect from January 1, 2021, the supervision work has been
Adjust, change. Specifically, it will be implemented at three different levels. The first level of supervision is the securities companies, which will be the units participating in the direct role. Next will be the Stock Exchange; the Securities Depository and Clearing Corporation will be the two organizations performing the supervision function at the second level and finally at the third level will be the State Securities Commission. From the clear division into three levels of supervision, it will entail the work of ensuring transparency and information security in accordance with the criteria prescribed by law.
In addition, as the Vietnamese capital market continues to develop and expand, integrating with the international community, it is inevitable that violations will become more diverse and difficult to identify. With the development of science and technology in the context of the 4.0 network, it requires management agencies to make greater efforts in supervision. Accordingly, there are a number of technological solutions to improve the effectiveness of capital market supervision, including:
Firstly, upgrade and develop the current three-level capital market monitoring system as well as orient the construction of infrastructure according to the four-level model in the future. At the same time, the monitoring system, monitoring activities taking place in the capital market, integrates the feature of providing early warnings to management agencies, thereby protecting investors from risks from illegal acts originating from the issuer. Specifically, using a number of high-tech technical measures to prevent and minimize market manipulation. At the same time, issue public warnings to the public, so that investors can consider carefully before making buying or selling transactions in the capital market. Upgrading the monitoring system combined with early warnings will become a powerful assistant for the State Securities Commission, contributing to checking that transactions in the capital market comply with legal regulations. Along with that, it will limit transactions with unusual developments and thereby improve transparency in the capital market, contributing to creating trust from domestic and foreign investors.
Second, it is necessary to focus on upgrading the information security system to create a foundation for the development of new information technology applications in the capital market. Currently, the information technology infrastructure has been deployed and meets the capacity.
With the ability to store core market data, the server system has met the requirements for the existing applications of the State Securities Commission. However, it is still necessary to upgrade the system in connecting the local network from the State Securities Commission to the wide area network of the Ministry of Finance, the Stock Exchanges, and the Securities Depository Center; in order to easily manage, operate, and regulate the capital market in a unified and fast manner. At the same time, it is necessary to build and deploy a security system between management agencies in accordance with the standards set by the Ministry of Finance.
Third, perfecting the infrastructure for systematic data storage of information in the capital market, to serve as a basis for decentralization and specialization in supervision work. Specifically, through the system, it is possible to automate the regular monitoring level classification and at the same time provide macro-supervision criteria for the entire market to upgrade the system. Thereby, contributing to building an early warning system for unusual developments in the capital market.
3.2.3.2. Perfecting inspection and sanction work
Although, in 2021, the State Securities Commission has proactively implemented inspection and supervision and sanctioned violations in the capital market. At the same time, the State Securities Commission has deployed 01 periodic inspection team, 06 periodic inspection teams and 31 unscheduled inspection teams. However, with the development of the capital market and violations that are constantly recurring with increasing scale and impact, in the coming time, the State Securities Commission needs to strengthen the deployment of unscheduled inspection teams for unusual transactions, thereby strictly handling signs of law violations.
Inspection and sanctioning are identified as one of the key tasks in the coming time, especially in the period when Vietnam's capital market is on the rise, as well as integrating with the international market. Accordingly, it is necessary to focus on implementing inspection and sanctioning of violations in the capital market associated with high-tech systems, in order to contribute to the stable, sustainable, open and transparent development of the market, specifically:
Firstly, build risk warning software that is linked to criteria to quantify the level of influence and direct impact on the capital market, so that inspections can be carried out promptly. At the same time, integrate with capital market monitoring software, so that there is a basis to clearly define management authority and assign corresponding powers and responsibilities. For example, through a system to quantify the level of influence on the capital market, it will help management agencies clearly identify violations of the law at different levels and thereby propose appropriate measures to overcome incidents and sanctions.
Second, for the inspection and supervision of service provision activities in the capital market in general and corporate bond issuance services in particular, in order to minimize the inspection and verification steps in the inspection work of the State Securities Commission, it is necessary to focus on developing software with the ability to identify signs of violations. Specifically, when connecting to the infrastructure for managing activities in the capital market, it will help the management agency immediately detect enterprises that intend to issue securities in large volumes and at high interest rates through information disclosure software. At the same time, it will detect companies with poor "health" but want to mobilize long-term capital from issuing bonds to the public through software that stores quarterly and annual financial reporting data of that company.
Therefore, the urgent issue now is to perfect the inspection and sanctioning work but linked to high-tech infrastructure. This will contribute greatly to the purification and help the capital market to be built and developed in accordance with the direction set by the Party and the State, including: fairness, information transparency and maintaining stable operations. At the same time, focusing on building and applying software to support inspection and sanctioning work will help the Government save the national budget in terms of personnel costs, because manual steps such as researching, collecting information, checking, and monitoring unusual activities in the capital market have been supported by the system. In addition, this solution will help the Government solve the problem of limited and inadequate professional capacity of officials; while still being able to complete inspection and sanctioning work with the right subjects and the right violations.
3.2.4 Perfecting the coordination mechanism
In order to provide comprehensive solutions in the management, supervision, inspection and sanctioning of violations against entities participating in transactions in the capital market, it is impossible not to mention the coordination mechanism between management agencies and organizations.
Although there is currently a coordination mechanism in management, supervision and inspection between the State Securities Commission and the Stock Exchanges (including: HNX and HOSE) and the Securities Depository Center; but it cannot stop at the scale of State management agencies but must also build a coordination mechanism with self-governing organizations and intermediary organizations. For example, securities companies, banks and in the future, according to the capital market management model, there will be more subsidiaries under the Vietnam Stock Exchange. Therefore, in order to build a comprehensive coordination mechanism between units, organizations and management agencies, the role of information technology is indispensable, specifically:
Firstly, to minimize the costs arising from software development, the first thing to do is to upgrade the existing database system to ensure a solid foundation for management. Specifically, the State Securities Commission needs to carry out a comprehensive upgrade of the entire core database system, including: securities company management system, fund management; investor database; securities practitioner database. In addition, do not forget to develop systems including: market information disclosure system (IDS); stock, bond, derivative securities transaction monitoring system (MSS).
Second, completing the entire information technology storage system as well as building a coordination mechanism between the State Securities Commission and organizations directly and indirectly involved in capital market management requires a lot of time and effort. Therefore, the first step is for the Government to focus on upgrading hardware to increase the capacity to store and process data and implement a digital economic system on a comprehensive and highly applicable scale. Upgrading the current storage database infrastructure will contribute to expanding the implementation of developing a reporting and software platform.
sharing information between organizations and agencies. At the same time, supporting the coordination mechanism between agencies and organizations in the management, supervision, and detection of violations and market manipulation quickly and accurately.
Third, to build a coordination mechanism between management agencies, it is necessary to urgently complete the information technology system in cross-management work for members of the Stock Exchange, including: Securities companies, fund management companies, custodian banks, representative offices/branches of foreign fund management companies in Vietnam, and individuals practicing securities. Completing the cross-management system will help create a centralized management database for entities participating in activities in the capital market. At the same time, it will help the State management agency, represented by the Securities Commission, exploit information from many sources and easily analyze, evaluate and make practical forecasts to serve the management and supervision work of the Securities Commission more effectively.
3.2.5 Improving the capacity of management staff
Currently, with the increasing frequency and extent of damage from violations by entities participating in transactions in the capital market, it is even difficult to determine the crime to impose corresponding sanctions. Therefore, focusing on improving the capacity of personnel to conduct inspection and supervision is urgent and necessary in all periods, specifically:
Firstly, it is necessary to improve the level of expertise and grasp the Vietnamese legal system. Specifically, with a team of inspectors who have a deep understanding as well as a systematic mindset of the legal corridor, the supervision work will be applied to the right subjects and identify violations, thereby providing timely and quick inspection methods.
Second, it is necessary to focus on training professional knowledge for specialized staff, creating conditions as well as improving professional skills through domestic and foreign courses. At the same time, it is also necessary to increase the number of inspectors and supervisors by creating mechanisms to attract and encourage qualified staff to work.
Third, issue policies to attract talent in the work of building and developing information technology systems to apply to capital market management. To do this, the Government needs to change its mindset from recruiting foreign experts to calling for domestic talent. Next, set standards for selection as well as pay appropriate salaries and benefits. From there, contribute to building a sustainable capital market management technology system that is not dependent on foreign countries as well as saving on intermediary costs related to hiring experts to Vietnam.
Thereby, the continuous improvement of human resources capacity in capital market management helps the State Securities Commission to effectively perform its assigned functions and tasks and contribute greatly to market purification. Thereby, ensuring law enforcement in the capital market and ensuring publicity, transparency and fairness; helping to maintain stable market operations. At the same time, protecting the legitimate rights of investors, as well as consolidating and maintaining confidence in the capital market.
CONCLUDE
From the results of capital market research in countries in the Asian region, typically China and Singapore, it shows that most of them recognize the important role of State agencies in capital market management. For the capital market to always be in a state of development, management agencies will certainly never be lax, or create loopholes for high-risk activities, or create opportunities for illegal acts to occur. This means that whether the capital market is developed or a developing market, there will always be problems in management and therefore need to be focused on and resolved. The issues surrounding capital market management include: The legal system, the application of information technology in management, or even the internal problems in management agencies related to supervision, inspection, and punishment... These are all issues that always need to be considered and adjusted in accordance with the development of the capital market.
For the Vietnamese capital market, which is considered a young market, the management role of specialized agencies is indispensable to create unity and comprehensiveness of the capital market. However, in the process of forming and developing the Vietnamese capital market, there will inevitably be problems in management, especially in the context of the 4.0 industrial revolution. This is a very new and complicated issue and within the scope of the thesis, I have focused on researching and proposing solutions to improve capital market management as follows:
- Clarify theoretical issues related to the effectiveness of capital market management and serve as a basis for studying the following sections.
- Research on capital market management experience in some countries around the world, typically China and Singapore, through current organizational structure, monitoring mechanism and management model, but associated with the context of the 4.0 industrial revolution.
- Clarifying the current status of capital market management in Vietnam, most clearly reflected in the scale of organization, management activities, monitoring mechanism, and management model.
- Propose viewpoints to improve the efficiency of managing Vietnam's capital market through orientations and directions in accordance with the policies set forth by the Party and State.