FTSE Russell enters review phase: Vietcap bets 100% on Vietnam

Providing an update on FTSE Russell’s reclassification of Vietnam to Emerging Market status, Vietcap (VCI) stated that Vietnam’s potential upgrade to Secondary Emerging Market status is now entering a critical phase as FTSE Russell begins its interim review in March 2026.

After the Ministry of Finance issued Circular No. 08/2026, effective February 3, 2026, Vietcap noted that regulators have implemented the necessary adjustments to roll out the Global Broker Model—an important factor in facilitating efficient index replication. September 2026 remains Vietcap’s base-case scenario for Vietnam’s official upgrade to Secondary Emerging Market status to take effect.

According to Vietcap, FTSE Russell will hold two committee meetings. The FTSE Equity Country Classification Advisory Committee meeting will take place on Tuesday, March 3. The FTSE Russell Policy Advisory Board meeting will be held on Thursday, March 19. Official results will be announced on Tuesday, April 7.

What Is the Most Important Advancement in Circular No. 08/2026?

Foreign institutional investors are now allowed to place orders with domestic securities companies through a foreign securities company (global broker) without having to open a trading account directly with the domestic securities company (i.e., removing the requirement for foreign institutional investors to register documentation directly with local brokers).

This change significantly reduces administrative procedures for foreign institutional investors when accessing the Vietnamese market. For example, index-tracking funds such as Vanguard will no longer need to conduct KYC procedures to establish trading relationships with a domestic securities company, a process that typically requires considerable time and resources. Instead, they can rely on a global broker that has already completed due diligence and approval of selected domestic securities firms to execute trades.

What Other Issues Will Be Discussed During the March 2026 Interim Review?

The non-prefunding (NPF) trading capacity of domestic securities firms has recently been a topic of discussion by FTSE Russell. Based on the regulatory NPF cap (twice a securities firm’s equity capital minus outstanding margin loans), the total maximum NPF capacity of the five largest domestic securities companies (including Vietcap) is close to USD 5 billion. This figure significantly exceeds the estimated NPF demand of index-tracking funds to purchase at least USD 1.5 billion worth of Vietnamese equities.

In addition, index-tracking funds are expected to disburse capital in multiple tranches (for example, approximately USD 300 million per tranche over five tranches rather than a single USD 1.5 billion transaction), thereby alleviating concerns about NPF capacity. The official number of disbursement tranches will be announced on April 7.

Is There Any Possibility That Vietnam Will Fail the March 2026 Interim Review?

Vietcap believes the probability of Vietnam failing the review is 0%. The Ministry of Finance has issued Circular No. 08/2026, effective February 3, 2026, implementing necessary adjustments to meet the requirements of index-tracking funds. The March 2026 interim review is considered procedural in nature, allowing FTSE Russell to complete its assessment process.

Which Stocks Qualify for the FTSE Global All Cap Index?

FTSE Russell released a Vietnam FAQ document in November 2025. Vietnam’s expected weightings are as follows: 0.04% in the FTSE Global All Cap, 0.34% in the FTSE Emerging All Cap, 0.02% in the FTSE All-World, and 0.22% in the FTSE Emerging.

Vietnamese stocks that preliminarily meet the criteria for inclusion in the FTSE Global All Cap Index include VIC, VHM, HPG, MSN, VCB, VNM, SSI, STB, VIX, VJC, VRE, VCI, SHB, VND, GEX, KBC, KDH, FRT, DGC, EIB, HUT, DXG, DPM, PLX, PDR, SAB, DIG, and KDC.

FTSE Russell screens stocks based on multiple criteria, including remaining foreign ownership room, market capitalization size, liquidity, and free float ratio.

Vietcap also notes that this reference list was screened by FTSE Russell based on data as of December 31, 2024 (which is now relatively outdated). FTSE Russell will publish the official list of eligible Vietnamese stocks in August 2026.