Vietnam will be reclassified from frontier to secondary emerging market status, effective September 21 2026 and subject to an interim review in March 2026, according to London-based global index provider FTSE Russell.

The provider states, in an October 8 announcement, that it recognizes the progress made by Vietnamese market authorities in evolving its stock market by removing the prefunding requirement for foreign institutional investors with the implementation of a non-refunding model and establishing a formal process for handling failed trades.

Vietnam has met all the criteria of secondary emerging market status, the provider acknowledges, under the FTSE Equity Country Classification Framework, adding that “FTSE Russell will continue to monitor developments closely and welcome feedback from index stakeholders to enable the reclassification to proceed as planned in September 2026.”

Over the past two years, the State Securities Commission – under the leadership of the government and the prime minister, and with the close guidance of the Ministry of Finance – has implemented a comprehensive reform programme, notes Vietnamese finance minister Nguyen Van Thang, to align the countrty’s securities market with the highest international standards.

“The Ministry of Finance remains committed to advancing deeper and broader reforms, maximizing accessibility for both domestic and international investors,” the finance minister adds, “while accelerating the modernization and digitalization of its market infrastructure, with the objective of establishing an increasingly transparent and efficient market.”

David Sol, the index provider’s global head of policy, points out: “The reclassification of Vietnam reflects the implementation of key market infrastructure enhancements, and we look forward to continued collaboration to ensure sustained progress ahead of the target reclassification date in September 2026.”

From Ho Chi Minh City, Vietnam’s southern economic power centre, Gary Harron, HSBC Vietnam’s head of securities services, notes: “The new status recognizes years of coordinated efforts from the government, regulators and market participants. For Vietnam, shedding the frontier label can profoundly reshape investors’ behaviour and confidence, altering the trajectory of its continued long-term economic development and reducing dependence on any single trading partner.

“HSBC Global Investment Research suggests the potential for foreign inflows could eventually range between US$3.4 billon to US$10.4 billion from active and passive funds respectively following the inclusion.”

HSBC, Harron adds, serves about half of all foreign institutional investors in Vietnam.

Although there are still several issues that need to be addressed before Vietnamese stocks can be officially included in FTSE’s emerging market group in September 2026, Ho Chi Minh City-headquartered broker SSI Securities says that it believes that these issues are highly likely to be resolved ahead of FTSE’s review deadline.”

Vietnam’s upgrade to emerging market status is not the country’s final destination, the broker reckons, but the starting point for deeper integration into the global financial system. This milestone reflects, it adds, the substantive cooperation between FTSE Russell and Vietnamese regulators on “the journey towards building a more developed capital market that supports the Southeast Asian country’s long-term economic growth goals”.

Domestic investors in Vietnam have opened nearly 11 million securities accounts, as of end-September, including 10.975 million accounts belonging to individual investors, with the rest held by institutional investors. The number of accounts now equals about 11% of the population.