Many stock investors are facing the risk of losing all
their money as securities companies — after illegally using funds deposited by
clients — are stuck in liquidity problems.
Economist Dinh The Hien said a
lot of stock brokerages have acted like small banks. Although they are not
allowed to, the companies continue to keep the money that stock traders put
into their accounts, which Hien described as a “risky” practice.
The companies have used the
funds to provide financial leverage for other traders, trying to attract as
many clients as possible. When leveraged traders incur losses and other
investors want to withdraw their money, the brokerages immediately face
liquidity problems.
The Vietnam Securities
Depository last month issued a warning to Trang An Securities JSC, which became
temporarily insolvent.
The agency also suspended
securities clearing and settlement operations of SME Securities Corp. because
the company has frequently violated settlement obligations. On Tuesday, many
traders could not withdraw money from their accounts at SME and were asked to
wait for several weeks.
Hien said the liquidity crisis
can spread to other firms, raising safety concerns for the whole market.
He said the authorities are the
first to blame for the situation because they were not aggressive enough in
preventing securities firm from illegally keeping and misusing their clients’
money.
It’s urgent to put an end to
this practice, he said.
The State Securities Commission
has announced plans to restructure the stock market.
Economist Le Dat Chi said
brokerages have to be completely banned from dealing with money issues and all
payments need to be made via banks.
Chi said there are 105 securities
firms and the number has to be cut down. “A housecleaning has to be conducted
to make the market healthier,” he said.
By Nguyen Khanh, Thanh Nien
News
Business & Investment Opportunities
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