HOSE’s new transaction system runs as planned

THE HANOI TIMES — The new information technology system developed by the Korea Exchange (KRX) has been successfully connected and is operating smoothly, according to the Ho Chi Minh City Stock Exchange (HoSE).

Initial assessments by contractors and system operators showed that Vietnam's stock market, which operated under the new system on May 5, worked without interruption on the first day. In the early morning session, two securities firms contacted the HoSE for assistance with data reconciliation, which was promptly resolved through cooperation among the parties.

Most securities firms reported that the market responded positively to the long-awaited launch of the KRX system, which had been in the works for more than a decade.

VPBank Securities (VPBankS) noted that the VN Index rose nearly 14 points on the first day, with market breadth improving as gains were spread across various sectors. This performance was partly attributed to investors' confidence in the stable rollout of the new system, and partly in anticipation of the upcoming US-Vietnam negotiations scheduled for May 7.

The KRX system introduces several new features for investors. One of the most important is the handling of ATO (at the opening) and ATC (at the close) orders during periodic matching sessions. Under the new system, these orders will no longer have priority over previously entered limit orders (LO). In addition, ATO and ATC orders will now appear with a specified price, similar to limit orders, rather than being displayed with the "ATO" or "ATC" tags.

The new system also brings changes to the way orders can be modified or canceled, covering both matched and negotiated trades, as well as odd-lot trades. Furthermore, for periodic matching, the display of the top three bid and ask prices will be based on the remaining volume after order matching, rather than the initial volume in the order book.

HoSE sees this as a significant step forward for the Vietnamese stock market, enhancing its ability to meet the growing demands of market participants and better serve both companies and investors. The system also lays the groundwork for new financial products and supports the country's goal of upgrading its market classification.

HoSE originally planned to complete the system in 2021, but the project has been delayed. Over the past year, news of the system's testing and anticipated launch has repeatedly boosted securities sector stocks and the market index.

Many securities firms believe that with the KRX system now up and running, and once Vietnam meets FTSE Russell's remaining two criteria of pre-funding and costs associated with failed trades, the market could receive a favorable review in the index provider's September evaluation. Several stakeholders believe that a classification upgrade could come soon.