Foreign investors should be allowed to hold a larger stake in listed domestic companies to better attract investment for the country’s stock market, local securities businesses said Friday.

Vietnam currently caps foreign shareholding at listed brokerages at 49 percent, which many industry insiders said prevented them from mobilizing more foreign forces for their development.

They thus urged for a higher limit at a conference held by the State Securities Commission (SSC) in Ho Chi Minh City on Friday.

“Giving more room for foreign investors to own a bigger stake in the listed securities firms is essential and should be done soon,” Nguyen Bang Tam, deputy chairman of the city-based club of listed companies, was quoted by Dau Tu Chung Khoan (Stock Investment) newspaper as saying.

Tam said the move will enable Vietnam to attract more money flows from foreign investors for its stock market, particularly “at this time of economic integration.”

Nguyen Thanh Long, SSC deputy chairman, also believed a higher foreign shareholding cap will only benefit Vietnam’s bourses.

“It will fortify the stock market’s strength and sustainable development,” he said.

According to Decision No.55 issued by the Prime Minister in 2009, a foreign investor is allowed to own a maximum stake of 49 percent in a listed company. The same regulation is applicable for unlisted companies that have at least VND10 billion (US$466,027) in charter capital and more than 100 shareholders, according to Dau Tu Chung Khoan.

But many Vietnamese businesses see the 49 percent limit as not enough for their development, and thus find ways to attract bigger investment without violating the regulation.

These companies set up subsidiaries, refuse to get them listed, and attract strategic foreign investors to buy majority stakes in them.

“So whether a company is listed or not is the only factor that makes the difference,” Dau Tu Chung Khoan commented, referring to the fact that non-listed companies can attract foreign shareholding without worrying about the 49 percent limit.

In 2013 and 2014, the Ministry of Finance and the SCC proposed lifting the cap to 60 percent, but the bid eventually failed.

“It was because the relevant ministries and industries had different opinions on the issue,” Dau Tu Chung Khoan quoted Deputy Finance Minister Tran Xuan Ha as saying.

The SSC has reportedly proposed allowing foreign investors to own 100 percent of listed domestic securities firms, according to Reuters.

Foreigners could be permitted to buy shares of brokerages "without limit,” Reuters said, citing an SSC proposal.

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