At the Conference on publicizing Decree 51/2018/ND-CP amending and supplementing a number of articles in Decree 158/2006/ND-CP stipulating the Commercial Law on commodity trading through Mercantile Exchange held by the Ministry of Industry and Trade on 9th May in Hanoi, Mr. Nguyen Loc An, Deputy Director of Domestic Market stated that the model of the Mercantile Exchange in Vietnam has been implemented for many years.
However, until now, few Mercantile Exchanges have been established in the country. Commodities traded in Mercantile Exchanges are still not diversified and are mainly agricultural products, typically coffee and products such as steel are still negligible. In addition, commodity trading through the Mercantile Exchange is still weak and has not attracted many investors, leading to the low liquidity.
Regarding legal framework, Mr. An said that previously, Vietnam has no regulations on the commodity trading through the Mercantile Exchange from foreign countries; the capital contribution by foreign investors to establish the Mercantile Exchange in Vietnam; buying shares and capital contribution; and regulations on the list of goods permitted to be traded through the Mercantile Exchange, which is time-consuming for enterprises to apply for each additional license.
In order to develop the model of the Mercantile Exchange, on 9th April, the Government issued Decree No. 51 /2018/ND-CP amending and supplementing a number of Articles of the Government’s Decree 158/2006/ND-CP dated 28th December stipulating the law on Commercial Law on Commodity trading through the Mercantile Exchange.
Regarding new contents in Decree 51, the representative of the Legal Department, Ministry of Industry and Trade said that Decree 51 expanded the form of trading orders. Besides written orders, other forms such as telex, fax, data and other forms as prescribed might be accepted, allowing Mercantile Exchanges to connect with each other in the country and abroad. In addition, the Decree 51 also expanded the List of commodities listed in the Mercantile Exchange.
Decree 51 has supplemented a key content related to regulations on foreign investors who are permitted to contribute capital to establish the Mercantile Exchange in Vietnam; buy shares and contribute capital to the Mercantile Exchange in Vietnam with a rate of not more than 49% of the charter capital.
Mr. An assessed that Decree 51 removed the shortcomings in the operation of the Mercantile Exchanges over the past years and created a more favorable legal framework for enterprises and farmers.
Mr. Nguyen Viet Vinh, General Secretary of the Vietnam Coffee – Cocoa Association said that “according to Decree 51, Vietnam connected the exchanges in the country with each other (if any) and towards connecting with the foreign exchanges. This will create favorable conditions, typically enterprise will grasp information on volume of exported goods and price. Thereby, evaluation on the market is more effective”.
“Although mechanisms are provided in Decree 51, the most important thing is effective operation of the Mercantile Exchanges . For example, issues related to infrastructure, information dissemination and capacity must be ensured. Currently, commodities listed on the Mercantile Exchanges are not restricted. Therefore, the Mercantile Exchanges need to apply standards to have a basis to evaluate the goods before being listed by an enterprise”. Mr. Vinh said.
Source: Customs News