Vietnam Proposes Amending Credit Law to Let Banks Distribute Fund Certificates

Overview

A proposal to amend the Law on Credit Institutions would permit Vietnamese commercial banks to directly distribute fund certificates, a move that could accelerate the development of the fund management industry and increase institutional investor participation in the stock market. The proposal, advocated by VCBF CEO Nguyen Thi Hang Nga, targets a structural shift from a retail-dominated market to one with deeper institutional involvement.

Key Facts

• The proposal seeks to amend the Law on Credit Institutions to allow commercial banks meeting capital, personnel, and process conditions to directly distribute fund certificates.
• Current regulations require banks to establish a separate subsidiary for fund distribution, which the proposal deems impractical.
• Institutional investors account for only 10-15% of trading value in Vietnam, compared to 60-80% in developed markets.
• The amended Personal Income Tax Law, effective July 1, 2026, exempts capital gains tax on open-ended fund certificates held for over two years.
• Circular 136, amending Circular 98, has created a legal framework for new fund types such as money market funds and infrastructure funds.
• VCBF is the fund management subsidiary of Vietcombank (VCB), which trades on HOSE.

What Happened

In a recent commentary, Nguyen Thi Hang Nga, CFA, CEO of Vietcombank Fund Management (VCBF), outlined key measures to transform Vietnam’s stock market from a retail-driven, short-term market into a deeper, institutionally anchored one. She emphasized that the current requirement for banks to set up a separate company to distribute fund certificates is a major bottleneck.

Nga proposed amending the Law on Credit Institutions to allow commercial banks that meet specific conditions—such as capital adequacy, qualified personnel, and robust risk management—to directly distribute public fund certificates issued by reputable fund management companies. This change, she argued, would significantly expand the distribution network for funds and boost the role of institutional investors.

Market Context

Vietcombank (VCB) closed at VND 61,500 on June 9, 2026, up 0.33% with a volume of 2.56 million shares. As Vietnam’s largest listed bank by market capitalization, VCB is well-positioned to benefit from regulatory changes that expand fee-based income opportunities. The banking sector has been a key driver of the VN-Index, and any move to deepen capital markets aligns with the government’s long-term strategy to reduce reliance on bank credit.

Strategic Significance

The proposed amendment directly addresses a structural weakness in Vietnam’s capital markets: the underdevelopment of the fund management industry. By allowing banks to leverage their extensive branch networks for fund distribution, the change could rapidly increase retail investor access to professionally managed funds. This would not only boost the asset base of fund managers like VCBF but also reduce market volatility by increasing the share of long-term institutional capital. For VCB, the move could generate additional fee income without significant capital outlay, enhancing its non-interest income profile.

What to Watch

• The timeline for the Law on Credit Institutions amendment to be submitted to the National Assembly.
• Any specific conditions (capital adequacy ratio, risk management standards) that banks must meet to qualify for direct distribution.
• The response from other major banks (e.g., BID, CTG) and their fund management subsidiaries.
• Q3 2026 earnings reports from VCB for any early impact on fee income from fund distribution.
• Regulatory updates on the Personal Income Tax Law implementation and its effect on fund inflows.