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FinTechs belonging to this category operate trading platforms or online marketplaces for investment opportunities or certain financial contracts – e.g. securities, factoring etc. and sometimes furthermore provide contact to financial experts and tools for the decision-making.
FinTech-signalling and social trading platforms provide users with the opportunity to exchange opinions on financial investments and offer signal providers and traders the possibility to make their securities portfolio publicly visible. This way the portfolios can be linked to and followed by other traders via the platform automatically, so that the trading and investment strategy of the followed traders can be copied.
The platform often cooperates with a financial services provider or a credit institution where both the trader and the follower hold their securities accounts, and which execute the orders both of the trader and the follower and to which the platform passes on the trading decisions.
Introduction
Attitude of the country towards trading, social trading or signalling platforms
Vietnam adopts a restrictive and cautious approach towards trading platforms, especially social trading and signal-following platforms. This is primarily due to recent observations and alerts issued by the SSC—the government authority responsible for regulating securities and the securities market—as well as other competent authorities, regarding the increasing presence of unauthorized securities trading platforms in the market.
Recently, in relation to securities investment under the “copy trading” model, the Hanoi Police Department has warned against scams in which individuals are lured into unlicensed investment schemes via its portal. These schemes typically advertise that users do not need any investment knowledge, but can simply copy trades, deposit funds into an account, and expect automatic profits—raising significant fraud concerns. Furthermore, from time to time, the SSC flagged several trading websites and applications operating in Vietnam showing signs of conducting unauthorized securities business on its portal. This reflects a high level of regulatory scrutiny that Vietnamese authorities apply to this type of activity. As a result, users appear to be increasingly cautious when engaging in this type of investment model.
Given the lack of explicit legal definitions for copy trading, signal-following, or portfolio mirroring in Vietnamese securities law, the classification of these services depends on the actual manner in which they are provided and the degree of control exercised by the service provider. For instance, provision of copy trading, signal-following, or portfolio mirroring may be considered (i) “entrusting the management of a securities trading account” if the service provider (such as a platform or individual) is making trading decisions and executing trades on behalf of the client, but it is purely advisory if the service provider is providing signals or recommendations, but the client executes trades independently, both of which might fall in the scope of securities business activities.
Legal affairs
Obligations and requirements to provide trading, social trading or signalling platforms described above