Vietnam cuts bank stake limits to curb market manipulation risks

Vietnam’s legislature passed a resolution to decrease the maximum stake investors can own in domestic banks. Coming into force in July, the law will limit the equity held by institutional investors, such as pension or investment funds, to 10%, down from the current 15%. The adjustment has been made in an attempt to mitigate the risk of market manipulation.

This regulatory adjustment comes after Vietnam’s most significant financial fraud case to date was revealed in late 2022. Real estate Mogul Truong My Lan is alleged to have drained US$12.5 billion from one of Vietnam’s largest private banks, the Saigon Joint Stock Commercial Bank (SCB), exploiting her effective control of the bank through nominees.

The latest reform has gained support from over 90% of the National Assembly deputies, who anticipate that the stricter ownership limitations will prevent similar fraudulent…