After more than a decade in preparation, the Hồ Chí Minh Stock Exchange (HOSE) officially launched the long-anticipated KRX trading system on Monday morning. 

The system, developed with technological support from the Korea Exchange (KRX), is expected to bring significant changes to trading practices and boost market transparency and efficiency.

The trading session opened with some notable excitement. The VN-Index rose more than eight points shortly after the market opened after a long holiday, reflecting investor optimism. 

However, the session began somewhat sluggishly. According to reports from several investors, the opening auction (ATO) experienced some delays and the system was not initially smooth. These early hiccups were resolved and trading proceeded more stably as the session progressed.

The KRX system is an information technology platform designed to modernise and standardise Việt Nam’s stock market operations. 

With a total investment of approximately VNĐ900 billion (US$34.7 million), the system offers numerous new features, including updates to trading orders, enhanced functionalities for retail investors and a foundation for future reforms. 

Though originally scheduled for completion in 2021, the project encountered repeated delays and only recently completed extensive testing throughout 2024.

A key change brought by the KRX system is the modification to how ATO (At-the-Opening) and ATC (At-the-Closing) orders are handled. 

Previously, these orders were prioritised over limit orders (LO) during periodic matching phases. Under the new system, ATO and ATC orders no longer receive priority over pre-entered limit orders. They are now displayed at a specific price level, aligning more closely with LO orders, rather than being shown as 'ATO' or 'ATC'.

The system also changes the rules for modifying or canceling orders. Investors can no longer simultaneously amend both price and quantity in a single transaction. Adjusting the price or increasing the order size resets its time priority, while decreasing the volume does not. As before, order cancellations and modifications remain restricted during ATO and ATC sessions.

Another notable update is the replacement of the traditional market price order (MP) with the market-to-limit order (MTL). In cases where an MTL order is only partially matched, the unfilled portion is automatically converted to a limit order (LO) with a price adjusted by ±1 tick from the initial order - improving price control during execution.

The KRX system also enhances negotiated trades and odd-lot transactions. Both the buyer and seller may now input orders directly, with the other party confirming the trade - an improvement over the previous system, where only sellers entered orders. Once a negotiated trade is completed, it cannot be canceled or amended.

Retail investors also benefit from expanded odd-lot trading capabilities. With the new system, odd-lot limit orders (LO) can be placed continuously from 9am to 2.45pm, instead of being limited to continuous matching or negotiated trade sessions as in the past.

Ahead of the launch, HoSE and its technology partners conducted a final round of testing on May 4, including system integration, market configuration checks, database validation, server and application monitoring and storage assessments. This ensured full operational readiness among all stakeholders.

Major securities firms, including SSI, ACB Securities and Bảo Việt Securities, confirmed successful system conversions and announced readiness for the first official trading session under the new platform. 

SSI reported that its upgraded online trading system is now compatible with the KRX system and offers pre-market order placement from 7.30am. ACB Securities and Bảo Việt Securities also affirmed that their system transitions had been completed on schedule.

Other brokerage houses, such as MB Securities, Shinhan Vietnam Securities, Việt Dragon, VCBS, BVSC and DNSE, similarly reported the completion of necessary upgrades, including data reconciliation and system connectivity. 

Firms across the industry have expressed confidence in the potential of the KRX platform to improve order handling, streamline retail trading and facilitate better integration of foreign investor transactions and securities under trading restrictions.

The official rollout of the KRX system concludes a nearly 13-year journey of planning, investment and technical coordination. 

Its implementation marks a critical milestone for Việt Nam’s capital market development, laying the groundwork for future enhancements in market infrastructure, investor experience and regulatory oversight, as well as market upgrade from frontier status to emerging market. — BIZHUB/VNS

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