Developing new products: Legal problems of Vietnam's capital market

Vietnam's stock market does not lack the need for capital mobilization, but there is still a lack of many financial structures capable of converting that demand into medium- and long-term capital. While the economy needs capital for infrastructure, green transformation, technology and innovation, products in the market still mainly revolve around stocks, bonds and some basic derivatives.

Securitization allows for the conversion of future cash flows or financial assets into securities.

The gap is therefore not only in the number of products. The more fundamental problem is that the law has not yet formed a synchronous enough architecture to establish the nature of assets, transfer rights, separate risks, protect investors, and supervise new financial structures. Completing that architecture is a condition for the stock market to move from a place of asset trading to a system of allocating capital to the economy.

The market is lacking products or legal foundations

After more than two decades of development, Vietnam's stock market has formed basic components including stocks, bonds, fund certificates, secured warrants and index futures. The scale, liquidity and number of investors have all increased significantly. However, bank credit still plays a central role; many businesses and projects with long life cycles have not yet found a capital mobilization tool that is suitable for their cash flow and risk level.

The problem is not that Vietnam lacks ideas. Securitization, real estate investment funds, infrastructure funds, green bonds, new derivative products, private credit and digital securities have all been discussed. The bottleneck lies in the fact that some products have been named by law but lack operating conditions; some have not been clearly defined in nature; and some are located at the intersection of many laws, so no agency can fully solve them.

The Prime Minister's Decision No. 1413/QD-TTg dated July 27, 2026[1] on the overall reform of the financial market to 2045 has established many important orientations such as tokenization of real assets, development of REITs[2], infrastructure bonds and ESG bonds, diversification of derivatives, building a sandbox in the field of securities and market research for innovative enterprises. Therefore, the current question is no longer only whether to develop new products or not, but how to design laws and organize enforcement so that those policies become products that can be safely traded.

Four product groups that need to be prioritized

Securitization of assets

Securitization allows for the conversion of future cash flows or financial assets into securities. The underlying asset can be receivables, home loans, leases, cash flows from infrastructure projects, or commercial real estate. If designed correctly, this tool helps banks free up their balance sheets, businesses convert illiquid assets into capital, and investors have more fixed-income products.

But the most difficult point does not lie in the issuance procedure. The law must answer whether the transfer of assets to specialized legal entities is a real transfer or just a security measure; whether the transferred assets are included in the bankruptcy assets of the originator; how cash flow is controlled; and what is the priority of investors when the structure fails. If separation from bankruptcy risk is not ensured, securitization only changes the form of debt without creating a reliable investment asset.

REITs and infrastructure funds

The bottlenecks of these products do not necessarily need to be solved by sandboxing. They mainly require synchronous reforms in asset transfer conditions, taxation, valuation, profit distribution, borrowing limits, stakeholder transactions, and disclosure of information about the underlying asset. If the inclusion of assets in the fund incurs too large tax costs or the right to exploit assets cannot be transferred stably, the fund is unlikely to compete with direct ownership. Therefore, REITs and infrastructure funds need an interdisciplinary reform program and a pilot mechanism by asset type, rather than being seen merely as a new product of the fund management company.

Green finance and carbon credits

Green bonds, sustainable bonds, and ESG funds will play an increasing role as Vietnam needs funding for energy transition and emissions reduction. But calling labels do not make a financial instrument green. The market needs a project classification system, an independent verification mechanism, an obligation to monitor the use of capital, post-issuance reporting, and sanctions for misleading or greenwashing disclosures.

For carbon credits, it is necessary to distinguish credits that are validated under environmental law, transferable property rights, and financial products that have a reference value to carbon credits. Not every carbon credit is a security. Only when an instrument has the characteristics of a security or is structured to raise capital from investors, securities law needs to be involved in a corresponding role. This delineation is the premise for building a mechanism for registration, trading, custody, payment, accounting, taxation and dispute resolution.

Digital assets and private capital markets

Tokenization is not synonymous with cryptocurrency. Shares, bonds, fund certificates, receivables, or asset beneficiaries can all be expressed as tokens if the law recognizes the corresponding rights and the infrastructure ensures authentication, transfer, custody, and payment. The appropriate approach is to classify them according to their economic nature: tokens with the characteristics of securities are subject to the principles of securities law; payment tokens, utility tokens, and decentralized crypto assets need a regulatory framework that corresponds to their functions and risks.

Sandboxes are best suited to technology models or service delivery methods that do not yet have a full framework, such as the issuance, custody, and transfer of digital securities on a distributed ledger platform. The test should be limited to the size, duration, investor audience, asset class, reporting obligations, and regulatory authority to intervene. The sandbox should not become an exemption zone or a pathway to bring risky products to the public before investor protection principles are established.

For private credit, the first requirement is to define the boundary between private capital investment, bond purchase, civil loans and credit extension activities of a business nature. The law must clarify the subject to be provided with capital, the source of capital used, the leverage limit, the conditions for distribution to investors and the mechanism for handling when the borrower becomes insolvent. Without this boundary, the private capital market can continue to be structured abroad or develop in a gray zone, reducing both the efficiency of capital mobilization and the ability to supervise.

The legal architecture must be interdisciplinary and risk-based

The above products show that amending the Securities Law alone is not enough. Securitization related to civil, banking, bankruptcy, tax and accounting; REITs related to land, real estate and valuation; carbon credits related to the environment and property rights; digital securities related to electronic transactions, data, cybersecurity, and money laundering prevention and control. The legal architecture is therefore not a single document, but the ability of different documents to jointly recognize a transaction and consistently allocate rights, obligations, and risks.

Along with that, it is necessary to shift from management by name to management according to function and level of risk. Products sold to the public are subject to strict requirements on information disclosure, distribution and supervision. Products for professional investors can be more flexible but must still ensure transparency and accountability. The identification of professional investors should also not stop at the value of assets; it is necessary to combine financial criteria, investment experience, suitability assessment process, risk warnings and limits for complex products.

Overview of the working session on the implementation of key tasks during the first five months of 2026. Source: SSC

The reform roadmap must start from the basic conditions

The roadmap should not only be divided by timeline but must reflect the dependencies between reforms. The first stage needs to determine the legal nature of the asset, the effect of the transfer, the mechanism for separating assets, the bankruptcy handling, valuation standards and information disclosure. This is the common foundation for securitization, REITs, carbon credits and digital securities.

Once the platform is established, some products can be piloted in a narrow range. Securitization should start from a group of assets with stable cash flows. REITs and infrastructure funds should be tested with assets with complete legal records and independent governance mechanisms. Digital securities should be limited to professional investors and licensed service providers. Each program should have evaluation criteria, a mechanism to stop testing, and a plan to handle investor interests.

The new role of the regulator

In the new period, the regulator will not only license, inspect and sanction. The regulator must have the capacity to classify products according to function, unify supervision of the financial group, analyze transaction data, and intervene early when the risk exceeds the limit.

The coordination mechanism must also be institutionalized. When a product is simultaneously related to securities, banking, insurance, tax, environment, and technology, it is not enough to exchange ideas on a case-by-case basis. There needs to be a coordination point, a data sharing process, interdisciplinary risk handling authority, and clear accountability if management gaps cause damage.

Crises of trust in the capital market often do not start from a lack of products, but from products being sold to the wrong audience, incomplete information or hidden conflicts of interest. Therefore, product expansion must come with the responsibility of the issuer, management, consulting and distribution organization.

Conclusion

The capital market does not develop by simply adding product names. It is more important for the law to clearly define which assets are created, what rights are transferred, where the risks lie, and who is responsible when the financial structure fails.

Therefore, the task of the next period is not only to amend the Securities Law or open some more products. Vietnam needs an interdisciplinary legal architecture, managing according to the nature and level of risk, and ensuring the ability to conduct controlled testing. Once that platform is formed, the upgrade will not just change the name of the market; it will reflect a substantive change in the ability to bring long-term capital to areas that are likely to generate growth.