There are only two weeks left to March 1, 2008 when banks and stock companies will have to comply with the finance ministry’s Decision No 27/2007/QD-BTC ruling that stock investors must open accounts at banks instead of securities brokerages at present. However, it is seemed that both banks and brokerages have not had good preparation to reach Decision 27.
In order to carry out the decision, technology is the high priority given problem because the linkage between banks and brokerages must base on technological solutions while technology background of most securities companies and banks as well have not yet been synchronistic, said Duong Dung Trieu, deputy general director of FPT Information System (FPT-IS).
As the time when Decision 27 takes effect was fixed, banks and brokers had their own certain preparation such as selecting partner banks, calculate and choose the most effective implementation plans and upgrade technology and human resources. Some banks including Bidv, ACB, EAB invested a large capital amount in technological layer upgrading, building up open information gates and actively accessing securities companies who are willing to connect.
Yet, the aforementioned preparation could not satisfy worries of investors, banks and brokers because the technology background of banks and stockbrokerages, banks to each other remains very different. While a lot of banks themselves equipped core-banking system, built open gates to be ready for connection, not all securities firms can access the connection.
There is needed to have a technology solution that is enough strong to connect with banks’ core system independently to carry out Decision 27, according to Nghiem Trung Hieu, technical director of Tan Viet Securities Co.
A Hanoi based securities company’s deputy director stated that in principle, if the system of brokers and banks is connected thoroughly smoothly, balance of investors’ transaction accounts will be updated fully and securities transactions of investors through securities companies will be unchanged in comparison with paying money straight to brokers like present. The question is now raised how banks and stock companies will ensure investors’ transactions if account balance is not updated frequently due to technological glitches.
Technological specialists supposed, if the connection between banks and brokers is broken, by that time investors will have to shift to offline transactions and their all accounts will be blocked until the session closes. Therefore, investors will have to suffer losses due to they cannot carry out securities transactions in that session and withdraw money out of their accounts. Who will bear the responsibility for the case?
According to current regulations, after three days from transaction finishes (T+3), money will be transferred back to assigned banks, factually four days from transaction closes (T+4) investors can see the change in their account at other banks. In addition, investors who pay 70% of total value of their buying order can carry out transaction and the remaining 30% will be paid after two days from transaction finishes (T+2). Therefore, in the next time, brokers and banks will have to urge investors to complete their payment.
In fact, to date there have not been any guidance for the implementation of Decision No 27.