Index provider FTSE Russell has affirmed the upgrade of Viet Nam from a frontier market to Secondary Emerging Market status, effective September 21, 2026, subject to an interim review in March 2026 to ensure adequate progress has been made in enabling broker access globally. This marks a significant step forward for Southeast Asia’s fastest-growing capital market and reflects the country’s progress in aligning its trading infrastructure with global standards.

Source: REUTERS/Athit Perawongmetha.

FTSE Russell added Viet Nam in 2018 to its list of markets monitored for an upgrade. At that time, Viet Nam failed to satisfy two critical criteria, including "Settlement Cycle” (DvP) and the criterion "Settlement - rare incidence of failed trades". These shortcomings were primarily linked to the pre-funding rule, which required foreign investors to fully deposit cash before executing trades, limiting the efficiency and attractiveness of Viet Nam’s market.

By November 2024, Viet Namese regulators had introduced critical reforms to modernize the trading system. Notably, the implementation of a non-prefunding model allowed domestic securities companies to provide capital assurance for foreign institutional investors, effectively removing the pre-funding requirement. In parallel, a formal mechanism for handling failed transactions was established, completing a key condition for reclassification.

In its announcement, FTSE Russell commended Viet Nam’s authorities for “aligning market practices with international norms, reducing counterparty risk, and strengthening investor confidence.” The reclassification signals international recognition of Viet Nam’s commitment to market reform and transparency, paving the way for deeper integration with global financial markets.

This upgrade marks a significant milestone in the development of Viet Nam’s capital market, reflecting growing investor confidence and the country’s progress toward deeper financial integration. It is expected to unlock substantial global capital inflows, enhance market liquidity, and attract greater participation from institutional investors, thereby strengthening Viet Nam’s position within global investment portfolios.

Source: Compiled by the Multilateral Trade Policy Department, Ministry of Industry and Trade of Viet Nam