CIRCULAR

PROVIDING GUIDANCE ON OPERATION OF SECURITIES INVESTMENT FUND MANAGEMENT COMPANIES

Pursuant to the Law on Securities dated November 26, 2019;

Pursuant to the Law on Enterprises dated June 17, 2020;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Finance;

At the request of the Chairman of the State Securities Commission of Vietnam (“SSC”);

The Minister of Finance promulgates a Circular providing guidance on operation of securities investment fund management companies.

Chapter I

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Article 1. Scope and regulated entities

1. This Circular provides regulations on operation of securities investment fund management companies (hereinafter referred to as “fund management companies") in Vietnam.

2. This Circular applies to:

a) Fund management companies;

b) Any entities involving in operation of fund management companies.

Article 2. Definitions

For the purposes of this Circular, the terms below are construed as follows:

1. “Executive Board” is comprised of General Director (Director) and Deputy General Directors (Deputy Directors).

2. “valid copy” means a copy that is extracted from the master register or authenticated by a competent authority or organization or that has been compared and certified to correspond with its original.

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4. “trustor” means a securities investment fund or securities investment company or any entity whose capital and/or assets is/are managed by a fund management company under a trust agreement.

5. “Personal records” include a document providing personal information made according to the form in Appendix II enclosed herewith and a valid copy of passport of the foreigner or other valid personal identification paper.

6. “beneficiaries” refer to any entities whose names are not registered as owners of assets but such assets are totally under their ownership in accordance with regulations of law.

7. “trust asset” means a list of assets, including cash, securities and other assets of the trustor.

Chapter II

ADMINISTRATION AND ORGANIZATIONAL STRUCTURE OF FUND MANAGEMENT COMPANIES

Article 3. Charter and rules for administration of fund management companies

1. Charter of a fund management company shall be formulated in conformity with its organizational and operational model, and contain the primary contents of the sample charter in Appendix XII enclosed herewith. The fund management company that is a public company shall formulate its charter by referring to the sample charter of a public company.

2. Fund management companies must comply with regulations of the Law on Securities, the Law on enterprises, this Circular and relevant laws on company administration.

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1. Organizational structure, rights, obligations and operations of the Board of Directors, Board of Members, Board of Controllers, audit committee, internal audit unit, Executive Board; eligibility requirements, election, dismissal, rights and obligations of members and Chairperson of the Board of Directors, members and Chairperson of the Board of Members, Company’s President, Chief Controller, Controllers, Chairperson and members of the audit committee shall be specified in the company’s charter, conformable with regulations on company administration applicable to public companies and regulations on enterprises, and not contrary to regulations herein.

2. A member of the Board of Directors or Board of Members of a fund management company may not act as a member of the Board of Directors, Board of Members, or Executive Board or fund management practitioner of another fund management company or a member of the Board of Directors, Board of Members, or Executive Board or employee of the depository bank or supervisory bank providing services to securities investment fund or securities investment company managed by the fund management company.

Article 5. Internal audit

1. The fund management company that is a public company or manages a public fund or a public securities investment company is required to establish an internal audit unit. The internal audit unit is affiliated to the Board of Directors or Board of Members or company’s owner.

2. The internal audit unit shall:

a) inspect and evaluate the organizational structure, company administration, management and cooperation of each department and holder of each working position in order to prevent conflicts of interest and protect benefits of clients;

b) inspect and evaluate the adequacy, effectiveness, efficiency and compliance with regulations of law and the company’s charter; internal control system; internal policies and procedures, including rules of professional ethics, business process, risk management system and procedures, information technology system, accounting, reporting system and procedures, information disclosure, procedures for receiving and settling denunciations and complaints from clients and other internal regulations;

c) inspect the validity, legitimacy, truthfulness, prudency and compliance with business process and risk management procedures;

d) perform operational audit according to the annual internal audit plan. The annual internal audit plan must be approved by the Board of Directors or Board of Members or company’s owner before it is implemented. The annual internal audit plan must comply with the following rules:

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- The level of risks to operation, procedures and departments must be assessed according to the company’s internal regulations. The audit of operation, procedures and departments with high risks shall be given priority and performed every year;

- The annual audit plan must be adjusted upon the occurrence of change in the level of risks to operation, procedures and departments;

dd) perform audit of operations of all departments in the company every two years;

e) propose solutions for enhancing operational efficiency and effectiveness of the company; monitor the implementation of recommendations after the audit which have been approved by the Board of Directors or the Board of Members or company’s owner.

3. The internal audit must comply with the following rules:

a) Independence: The internal audit unit and its operations must be independent from other departments and operations of the fund management company, and shall not bear the management of its Executive Board. Employees of the internal audit unit are not allowed to concurrently hold any other working positions in the fund management company;

b) Objectivity: internal auditors must be objective, unbiased and unprejudiced, and not be influenced and tampered when performing their tasks;

c) Truthfulness: The internal audit must be performed in an honest, discreet and responsible manner;

d) Cooperation: The internal audit unit is entitled to access all information and documents of the company. Members of the Executive Board and all employees of the fund management company shall cooperate and provide adequate, timely, truthful and accurate information and documents at the request of the internal audit unit. Departments in the company shall notify the internal audit unit when detecting any weaknesses, shortcomings, violations, risks or loss of assets of the company or its clients;

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4. When being appointed, an employee of the internal audit unit shall:

a) Not be facing criminal prosecution, serving an imprisonment sentence or being banned from securities trading as prescribed by law;

b) Not incur any administrative penalties for securities- and securities market-related offences in the last 06 months prior to the appointment date;

c) Have an asset management practicing certificate issued in a member State of the Organization for Economic Cooperation and Development (OECD) or an international certificate in investment analysis such as CFA (Chartered Financial Analyst) level II or higher, CIIA (Certified International Investment Analyst) - Final Level, or securities practicing certificate, or possess certificate of fundamentals of securities and securities market, and certificate of law in securities and securities market.

5. The internal audit unit must be composed of at least an employee who possesses an auditor’s certificate or certificate of accountant issued in Vietnam, or an international audit or accounting certificate such as ACCA (Association of Chartered Certified Accountants), CPA (Certified Public Accountants), CA (Chartered Accountants), or ACA (Associate Chartered Accountants), or who has at least 03 years’ experience in legal department, inspection, management and supervision of financial institutions in finance, banking, insurance, securities or state audit authorities.

6. Within 07 working days from the date of appointment, dismissal or replacement of an employee of the internal audit unit, the fund management company shall send a notification thereof and the following documents to SSC:

a) The resolution or decision of the Board of Directors or Board of Members or the owner’s decision on appointment, dismissal or replacement of an employee of the internal audit unit;

b) The personal records and judicial record issued within the last 06 months prior to the application date (for a new employee), valid copies of documents proving that the employee and organizational structure of the internal audit unit meets the conditions in Clause 4 and Clause 5 of this Article.

7. The internal audit unit must promptly send the report on annual internal audit to the Board of Directors or Board of Members or the company’s owner and SSC. The report on internal audit must include opinions and conclusions given by the internal audit unit, grounds for auditor’s opinions, explanations of the subject of the audit, remedial measures and actions against violations.

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1. The fund management company must establish an internal control system suitable for its organizational structure, establish an internal control unit affiliated to the Executive Board, and issue regulations on internal control, including internal mechanisms, policies, procedures and rules.

2. The internal control unit shall:

a) Supervise the compliance by each working position holder, each department and all operations of the company with relevant laws, policies, business process and the company’s internal regulations;

b) Supervise the fulfillment of assigned/authorized tasks by all employees in the company. Principles of power decentralization and authorization in the company must comply with the following provisions:

- The mechanism for power decentralization and authorization must be clear, explicit and transparent, and ensure the clear division of tasks and powers between employees and departments in the company. The business process must ensure the clear division of functions and tasks between working position holders and departments in the company, including analysis, appraisal, acceptance, approval or decision, implementation, reporting and supervision of investments;

- An individual may not hold multiple working positions that allow him/her to perform acts with conflicted or overlapped purposes/interests. Personnel is arranged to ensure that an individual cannot independently make his/her own decision and perform two or more operations in the business process without consulting other departments/individuals;

c) Engage in the formulation and supervision of implementation of the company's internal policies, procedures and rules in order to prevent the conflict of interest; supervise the compliance with the code of professional ethics; consolidate, retain and supervise business operations of the company and personal transactions conducted by the company’s employees;

d) Engage in the formulation and implementation of procedures for management of risks to the company and each trustor; punctually identify and evaluate risks, establish investment limits and adopt measures for preventing and managing potential risks in investments of the company and its trustors;

dd) Supervise to ensure that the net asset values (NAV) of the trust portfolios, securities investment funds and securities investment companies are assessed in conformity with regulations of law and internal regulations; the company’s assets and sources are managed safely and effectively; assets of trustors are managed separately and independently; financial statements, operational reports, reports on financial safety indicators and other reports of the company are truthfully, accurately and punctually prepared, and adequately updated in accordance with regulations of law;

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g) Propose plans for settling disputes, conflict of interests or claims from clients or partners, and contingency plans for remedying consequences when problems occur;

h) Perform internal audit functions in case the fund management company is not required to establish the internal audit unit.

3. An employee of the internal control unit shall:

a) Meet the conditions in Clause 4 Article 5 hereof;

b) Have at least 02 years’ experience of working in specialized departments of fund management companies, securities companies, credit institutions, insurance firms, audit organizations or finance, banking, insurance, securities or state audit authorities;

c) Be not a related person of the member of the Executive Board and not concurrently hold other working positions in specialized departments directly related to licensed securities activities.

4. The internal control unit must be composed of at least:

a) a compliance control employee who possesses bachelor’s degree in law or higher and has at least 01 year's experience of working in law;

b) an employee who possesses an accounting or audit certificate as prescribed in Clause 5 Article 5 hereof, or bachelor’s degree in accounting or audit or higher and has at least 01 year’s experience of working in accounting or audit;

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5. Within 07 working days from the date of appointment, dismissal or replacement of an employee of the internal control unit, the fund management company shall send a notification thereof and the following documents to SSC:

a) The decision issued by General Director (Director) on appointment, dismissal or replacement of an employee of the internal control unit;

b) The list of employees, enclosed with personal records and judicial record issued within the last 06 months prior to the application date (for a new employee), valid copies of other documents proving that the employee and organizational structure of the internal control unit meets the conditions in Clause 3 and Clause 4 of this Article.

6. The fund management company must send the report on annual internal control to SSC. The report must indicate potential risks in operations of the company, management of trust assets, and inspection/supervision of each unit/department and each licensed operation.

Article 7. Executive Board and employees of a fund management company

1. The fund management company must appoint General Director (Director), and Deputy General Directors (Deputy Directors) in charge of securities trading operations (if any) who meet the conditions in Clause 5 Article 75 of the Law on Securities.

2. In addition to General Director (Director) and Deputy General Directors (Deputy Directors), the fund management company must have at least 05 employees possessing fund management practicing certificate during its operation.

3. The fund management company must arrange persons having securities practicing certificate to hold the following working positions:

a) Executives of the fund; managers and deputy managers of specialized departments in investment analysis, investment appraisal and investment decision-making; employees directly taking charge of investment analysis, investment appraisal and investment decision-making must possess fund management practicing certificate;

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4. The fund management company must dismiss General Director (Director), and Deputy General Directors (Deputy Directors) in charge of securities trading operations, and executives of the fund within 07 working days when they commit any of the violations in Article 12 and Clause 2 Article 98 of the Law on Securities or in case they are facing criminal prosecution or serving an imprisonment sentence or being banned from securities trading as prescribed by law.

5. Within 05 working days from the date of ratification of the decision on appointment, dismissal or replacement of General Director (Director), Deputy General Director (Deputy Director) in charge of securities trading operations, or an executive of the fund, the fund management company shall send a notification thereof and the following documents to SSC:

a) The decision on appointment or dismissal of General Director (Director), Deputy General Director (Deputy Director) in charge of securities trading operations, or executive of the fund;

b) The list of General Director (Director), Deputy General Directors (Deputy Directors) in charge of securities trading operations, and executives of the fund, made according to the form in Appendix I enclosed herewith; valid copies of documents proving that General Director (Director), Deputy General Directors (Deputy Directors) in charge of securities trading operations, and executives of the fund meet the conditions laid down in the Law on Securities.

Article 8. Representative offices

1. Name of a domestic representative office of the fund management company shall consist of the name of the fund management company and the phrase “representative office” and comply with regulations on naming of representative offices in the Law on enterprises.

2. The domestic representative office of the fund management company shall have its establishment decision revoked in the following cases:

a) The fund management company is dissolved, declared bankrupt or has its securities trading license revoked;

b) The application for approval of establishment of the representative office contains inaccurate information;

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3. Within 15 days from the receipt of SSC’s written notification of revocation of the decision to establish the representative office, the fund management company shall shut down its representative office and report it to SSC in accordance with regulations of the Law on Securities.

Article 9. Branches

1. Name of a domestic branch of the fund management company shall consist of the name of the fund management company and the phrase “branch” and comply with regulations on naming of branches in the Law on enterprises.

2. The domestic branch of the fund management company shall have its establishment decision revoked in the following cases:

a) The fund management company is dissolved, declared bankrupt or has its securities trading license revoked;

b) The application for approval of establishment of the branch contains inaccurate information;

c) The branch operates for wrong purposes or against its establishment decision;

d) It fails to meet requirements for headquarters and equipment serving the performance of licensed securities operations after a maximum duration of at least 03 months for remedying unsatisfactory requirements;

dd) The branch fails to operate within 03 months from the issue date of the decision to establish the branch.

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Chapter III

OPERATIONS OF FUND MANAGEMENT COMPANIES

Section 1. GENERAL PROVISIONS

Article 10. Obligations of a fund management company

1. The fund management company acts as an authorized representative and/or on behalf of its trustors to exercise the rights of ownership of their assets in a truthful and prudent manner.

2. The fund management company shall promulgate procedures for management of securities investment funds, procedures for securities portfolio management, procedures for securities investment consulting and other operational procedures in conformity with the company’s securities trading operations; internal control procedures; valuation manual; conditions and procedures for conducting meetings and ratifying decisions of General Meetings of Investors of funds or General Meetings of Shareholders of securities investment companies; code of professional ethics for each working position. With regard to derivative investment trustors, the procedures for management of securities investment fund must include specific regulations on principles and methods for using derivatives to prevent risks to the fund/securities investment company; the procedures for securities portfolio management must include specific regulations on principles and methods for using derivatives to prevent risks to underlying securities held by trustors. Such procedures must be consistently applied in operations of the company.

3. The fund management company must comply with the code of professional ethics, be voluntary, impartial and truthful, and do for the best interests of its trustors. Regulations on compliance with the code of professional ethics are compulsory terms of employment contracts signed between the company and its employees.

4. The fund management company must establish the risk management system and promulgate risk management procedures, strategies and policies in conformity with the organizational structure and operation of the company, types of securities investment funds, securities investment companies and trustors managed by the company. The risk management system and promulgate risk management procedures, strategies and policies must be formulated according to international practices, in conformity with conditions of Vietnam’s market and guidelines of SSC.

5. When managing trust assets, the fund management company shall:

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b) Enter into depository or supervisory contract with the depository bank for member fund, private securities investment company, and trust portfolio; enter into supervisory contract with the supervisory bank for public fund or public securities investment fund;

c) Deposit all assets acquired in the territory of Vietnam, adequately, punctually and accurately keep information and data about asset ownership, and retain originals of legal documents proving asset ownership at the depository bank/supervisory bank.

- In case of investment in deposits/deposit certificates for trustors: the fund management company shall only make deposits at credit institutions on the list of credit institutions approved by the trustor; provide adequate information about deposit contracts and deposit accounts to the depository bank/supervisory bank so that they can check balances of deposit accounts or values of deposit contracts with relevant credit institutions, keep the originals of deposit contracts and provide them at the request of the depository bank/supervisory bank;

- In case of investment in stakes in limited liability companies, shares which are not yet listed or registered for trading or unlisted bonds for trustors: the fund management company must deposit the originals or valid copies of transaction contracts/receipts or the original of the shareholder register or member register or asset ownership certificates at the depository bank/supervisory bank that shall make direct verification with investment receiving organizations;

d) Develop an information system to manage trustors’ accounts at the company in a manner that ensures the independent and separate management of assets of trustors; manage trust assets separately from the company’s assets; adequately and punctually retain accounting books, transaction documents and other documents related to transactions and ownership of assets of trustors; adequately, accurately and promptly consolidate information about assets of each trustor and depository where such assets are kept;

dd) Establish a mechanism for regular verification between three parties in order to ensure the consistency between data on assets of trustors on the system of trustor accounts managed by the company, the depository system of trustors’ assets at the depository bank/supervisory bank with issuers, Vietnam Securities Depository and Clearing Corporation (VSDCC), the organization managing shareholder register, project owner, investment receiving organization and depository institution.  The fund management company shall establish a mechanism that allows the depository bank/supervisory bank to actively and directly make verification with the aforesaid organizations in order to inspect and consolidate adequate and accurate information about depositing, registration and management of trust assets;

e) Assign at least 02 fund executives to manage and administer investments of each securities investment fund or each securities investment company. A fund executive is required to have the fund management practicing certificate, has at least 02 years’ experience of working in asset management and has not yet faced any administrative penalties for securities- and securities market-related offences. In case the securities investment fund or securities investment company managed by the fund management company invests in derivatives for the purpose of risk prevention, the fund executive is also required to have professional certificate in derivatives and derivatives market. Information about the qualifications, skills and experience in asset management of fund executives must be specified in the prospectus.

6. The fund management company must promulgate procedures for rational and impartial allocation of trading orders and assets when conducting transactions for trustors and the company’s transactions. Asset allocation procedures must indicate the allocation principles, valuation method and volumes of assets allocated to each trustor which must be conformable with investment objectives and level of risks accepted by each trustor. Procedures for allocation of trading orders and assets must be available to trustors, supervisory bank, depository bank and must be consistently applied.

In case the fund management company buys or sells the same type of assets for different trustors and itself in the same day, assets and transactions shall be allocated and conducted in the following order of priority:

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b) The company’s transactions shall be conducted only after trading orders of trustors are met. If the fund management company knows internal information or believes that trust asset trading orders may considerably influence the price of a type of assets, the fund management company is not allowed to conduct transactions in such type of assets or reveal such asset transactions to a third party;

c) The depository bank/supervisory bank must be notified of such asset allocation within the same trading day.

7. When conducting asset transactions for trustors, the fund management company shall comply with the following provisions:

a) Regarding public funds/public securities investment companies:

- The value of securities transactions conducted in the year through brokers of a securities company does not exceed 50% of total value of securities transactions conducted in the year of the public fund or that public securities investment company;

- The value of securities transactions conducted in the year through brokers of a securities company that is a related person of the fund management company does not exceed 20% of total value of securities transactions conducted in the year of the public fund or that public securities investment company;

The regulations in this Point shall not apply to the public fund or public securities investment company whose operating period counting from the issue date of the certificate of fund registration or the establishment and operation license to the end of the year in which that fund or securities investment company is established is less than 06 months, and open-end bond fund whose total trading value in the year is less than VND 300 billion;

b) Regarding other trustors, the fund management company must comply with the regulations in Point a of this Clause, unless information about benefits of the fund management company has been adequately provided for the securities company and the trustor has given a written consent that such regulations must not apply.

8. With regard to the fund administration and operations of transfer brokers, the fund management company shall:

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b) Prepare, store and promptly, adequately and accurately update the investor register/shareholder register. Contents of the investor register/shareholder register shall comply with relevant regulations on securities investment funds, the fund’s charter, and charter of the securities investment company;

c) The fund management company may authorize the fund administration and operations of transfer brokers. Such authorization must comply with Article 12 hereof and the fund’s charter and charter of the securities investment company.

9. When managing investments of a securities investment company, the fund management company shall:

a) Bear the supervision of the General Meeting of Shareholders/Board of Directors of the securities investment company and the supervisory bank and assume responsibility before the General Meeting of Shareholders/Board of Directors for performance of assigned powers and tasks, regulations in the charter of the securities investment company and the trust agreement;

b) Establish, operate and implement risk management system/procedures which must be conformable with investment policies, invested assets and report the risk management to the General Meeting of Shareholders and Board of Directors;

c) Make daily investment/disinvestment decisions of the securities investment company without obtaining resolutions of the General Meeting of Shareholders/Board of Directors of the securities investment company according to its charter and trust agreement;

d) Implement investment policies/resolutions of the General Meeting of Shareholders/Board of Directors of the securities investment company according to the charter of the securities investment company; conduct asset transactions within the scope of licensed investment limits, asset types, trading volumes and subjects prescribed in the charter of the securities investment company and trust agreement;

dd) Propose plans for dividend payment, increasing/decreasing of charter capital; plans for restructuring of securities investment company;

e) Sign contracts in the name of the securities investment company within its competence prescribed in the charter of the securities investment company and trust agreement;

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10. When managing voluntary pension funds, the fund management company must comply with regulations on voluntary pension programs.

11. The fund management company shall promptly and adequately provide information about trustors, list of trust assets, trust asset-related transactions, investment-receiving organizations, related persons of the fund management company and other relevant information for the depository bank/supervisory bank. The fund management company shall provide information at the written request of the depository bank/supervisory bank and facilitate their performance of rights and obligations as prescribed by law. The fund management company is required to monthly check each trustor’s list of trust assets with the depository bank/supervisory bank.

12. Within 15 days from the day on which the supervisory bank detects and notifies the fund management company of trust asset transactions conducted inconsistent with regulations or beyond the competence of the fund management company as prescribed in law, the fund’s charter, the charter of the securities investment company and trust agreement, the fund management company shall cancel such transactions or conduct transactions to restore investment portfolios for trustors. In this case, the fund management company shall incur the costs of these transactions and any losses.  If these transactions generate profits, all profits shall be accounted for trustors.

13. The fund management company shall be liable to losses incurred by trustors due to the faults of its employees, problems or errors of its technical system or business process or because it fails to fulfill its obligations as prescribed in law, the fund’s charter, charter of the securities investment company and trust agreement. Compensation for open-end funds and their investors shall be made in accordance with law regulations on securities investment funds and agreements between relevant parties. Compensation for closed-end funds, member funds, securities investment companies and other trustors shall be made according to agreements between relevant parties.

14. The fund management company shall purchase professional liability insurance for employees of securities trading departments if necessary or establish the risk management fund which shall be used for making compensation for trustors in the cases prescribed in Clause 13 of this Article.

15. The fund management company must comply with regulations and laws on anti-money laundering in force. The fund management company shall implement and request its distribution agents to formulate, promulgate and implement internal regulations on anti-money laundering.

16. The fund management company shall implement and request its distribution agents to formulate, promulgate and implement procedures for identifying clients, verifying and updating information about clients in accordance with regulations of the Law on securities, the Law on anti-money laundering and relevant laws. When identifying clients, the fund management company and its distribution agents shall decide whether to meet clients in person or not.

a) If the fund management company and its distribution agents decide not to meet their clients in person, they must adopt measures, methods and technologies for identifying clients, adequately collecting clients’ information and verifying clients in accordance with regulations of the Law on securities, the Law on anti-money laundering, the Law on electronic transactions and relevant laws on security and confidentiality of clients’ information;

b) The fund management company and its distribution agents must adequately retain information and data about their clients in accordance with regulations of the Law on securities, the Law on anti-money laundering and relevant laws. Client identification information must be retained, protected and provided at the request of competent authorities;

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d) SSC may request the fund management company and its distribution agents to suspend or terminate their identification of clients without meeting them in person.

17. The fund management company must ensure that investments with assets of trustors that are foreigners or foreign organizations must be made in accordance with law regulations on foreign exchange management and foreign holdings in Vietnamese enterprises.

18. When making outward investments with trust assets raised in Vietnam, the fund management company must comply with regulations of the Law on indirect outward investment, the Law on foreign exchange management and relevant laws. Such indirect outward investments shall be made if permitted by the fund’s charter, charter of the securities investment company and trust agreement.

19. The fund management company shall keep confidentiality of information about clients, their asset transactions and investment portfolios, and other relevant information, unless such information is provided at the request of SSC or competent authorities.

20. The fund management company shall:

a) Separate its headquarters and information technology infrastructure with those of other entities. If the fund management company is using information technology infrastructure of its parent or subsidiary company  or an organization that is its related person, it must adopt a mechanism for decentralization of powers and information confidentiality in order to ensure that the parent or subsidiary company or the organization that is its related person cannot access its computer and database system;

b) Separate material facilities, personnel and database among operations with potential conflict of interests in the company, including the separation between trust asset management, investment research and analysis, investment execution and securities investment consulting. The rights to use the computer and database system shall be decentralized to every individual and every department depending on their working position according to regulations on internal control;

c) Separate material facilities, personnel and database between its financial investments and management of securities investment funds, management of securities portfolios and securities investment consulting.

21. When making financial investments with the owner's equity, the fund management company shall:

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b) Not use its capital, loans and other lawful funding sources to make investments in derivatives;

c) Not lend or allocate the company’s capital to any entities in any forms, except deposits at credit institutions as prescribed by the Law on banking, investments in deposit certificates, treasury bills or listed bonds issued in accordance with regulations of law;

d) Perform economic contracts/transactions between the company and its related persons after obtaining approval from the General Meeting of Shareholders or Board of Directors or Board of Members or the company’s owner in accordance with the company’s charter and the Law on enterprises;

dd) Use lawful funding sources, including loans, to invest in the company’s headquarters. The fund management company may lease the unused area of its headquarters;

e) The fund management company shall submit reports to SSC on investments in its subsidiary companies, joint-venture or associate companies and increase/decrease in these investments within 30 days from the completion of investment procedures, occurrence of changes in the investment value or disinvestment. Such reports shall be prepared according to the form in Appendix X enclosed herewith;

g) The fund management company and its related persons (excluding related persons that are securities investment funds or companies it manage) may make an investment of up to 5% of voting shares of a securities company listed or registered on Stock Exchanges (SEs).

22. The fund management company must obtain an approval from SSC and have the investment limit set by the State Bank of Vietnam (SBV) before making any indirect outward investments. Indirect outward investment must comply with Point a Clause 21 of this Article, regulations of the Law on investment, the Law on banking and the following rules:

a) The investment made by the fund management company shall not exceed 20% of its owner's equity recorded on the latest audited annual financial statements, reviewed semi-annual financial statements and quarterly financial statements and the investment limit confirmed by SBV. The fund management company shall only make indirect outward investments in investment vehicles prescribed by SBV;

b) If the investment portfolio of the fund management company exceeds the prescribed limit due to the price fluctuation of assets or inheritance of asset-related rights, the fund management company shall take appropriate corrective measures to ensure its compliance with the investment limit prescribed in Point a of this Clause within 03 months from the occurrence of such excess.

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24. When submitting ownership reports and disclosing information about transactions on securities market, the fund management company shall:

a) The fund management company and its trustors must comply with law regulations on ownership reporting and disclosure of information on securities market by major shareholders of public companies, investors holding at least 5% of fund certificates of a closed-end fund, internal actors and their related persons;

b) The obligation to report ownership and disclose information shall be performed when:

- The quantity of shares/fund certificates held by the fund management company and its trustors is accounted for at least 5% of voting shares of a public company or at least 5% of total fund certificates of a closed-end fund, except trustors that are exchange-traded funds (ETFs);

- The fund management company is a related person of an internal actor as prescribed by law, except exchange transactions of ETFs and periodic portfolio restructuring according to ETF benchmarks;

- Ownership reporting, information disclosure, methods and time of disclosing information, ownership report and information disclosure forms shall comply with law regulations on disclosure of information on securities market;

c) Perform other obligations to report ownership and disclose information in accordance with law regulations on disclosure of information on securities market.  In case trust assets are held in the names of trustors, the trustors shall fulfill the obligation to report ownership and disclose information as prescribed by law.

25. The fund management company shall provide annual training for its employees or appoint certified securities professionals to attend training courses provided by SSC (if any) in order to ensure that its employees are fully updated with skills, professional operations and knowledge about law.  Report on the company’s training must be enclosed with its annual report on operations sent to SSC.

26. The fund management company shall promptly and adequately update changes in its organizational structure and operation in the fund management company database managed by SSC.

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1. The fund management company must not be a related person, owner, lender or borrower of the supervisory bank or depository bank of the securities investment fund or securities investment company that it manages. Members of the Board of Directors or Board of Members, internal audit unit, Board of Controllers, company’s president, Executive Board, and employees of the fund management company are not allowed to work at departments providing depositing, fund supervision and administration services at these banks and vice versa.

2. The fund management company and its related persons may contribute capital and make investments in the securities investment fund or company that it manages if permitted by the fund’s charter and charter of the securities investment company, except unlicensed operations specified in Point b Clause 6 of this Article.

3. The fund management company, its parent company, subsidiary companies, joint-venture and associate companies, members of the Board of Directors or Board of Members, Board of Controllers, Executive Board, and employees may be buyers or sellers of trust assets it manages according to the following rules:

a) Transactions are made according to the order matching method at SEs;

b) Transactions that are not made according to the order matching method must be approved in writing by trustors or their representatives. A written approval given by a trustor must specify the type of traded assets, trading partners or criteria for determining trading partners, transaction price or rules for determining transaction price, and time of transaction.

4. Before and after every securities transaction, members of the Executive Board and employees of the fund management company must report it to the company’s internal control unit.  A report on personal transaction must specify name of traded securities, transaction quantity, price, total value, transaction time, trading account number, and securities company where trading account is opened. Reports on personal transactions must be kept and managed by the company’s internal control unit and provided at the request of SSC.

5. Members of the Board of Directors or Board of Members, Executive Board, and employees of the fund management company are not allowed to request, claim or receive, whether in their personal name or in the company’s name, any remunerations, profits or benefits, except service charges and bonuses specified in Clause 9 of this Article according to the fund's charter, charter of the securities investment company and trust agreement.

6. When managing trust assets, the fund management company shall:

a) Not use assets of a securities investment company or fund to make investments in that securities investment company or fund;

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c) Not use assets of a public fund or public securities investment company to make investments in the fund management company itself; not make investments in organizations that are its related persons in case assets of an ETFs are used to invest in securities on the list of component securities of benchmarks; not make investments in organizations of which members of the Board of Directors or Board of Members or Executive Board or employees of the fund management company are shareholders or own more than 10% of charter capital.

The fund management company may use capital of member funds, private securities investment companies, assets of trustors to make investments in the abovementioned organizations if the fund’s charter, charter of the private securities investment company, trust agreement or capital contribution agreement allows the fund management company to make such investments at a suitable service charge and in conformity with Point b of this Clause;

d) Not lend trust assets in any forms, or use them as a security for any loans or debts of the fund management company, its related persons or any other entities. This regulation does not apply to the trustor that is a foreigner or foreign organization duly established under the law of a foreign country and has approved the abovementioned transactions or trustors that are also owners of trust assets;

dd) Use assets of trustors to invest in derivatives listed at SEs with the aims of preventing risks to underlying securities held by trustors. The use of assets of securities investment companies/funds to invest in derivatives must comply with law regulations on securities investment funds;

e) Not comment on or guarantee income or profit on the trustors’ investments and not make no-loss guarantee, except investment in fixed-income securities; not enter into trust agreements to make investments in bonds whose interest rate is not conformable with the actual market status and the company’s investment analysis results; not make any direct or indirect compensation for partial or entire losses on trustors’ investments;

g) Not conduct transactions to increase profit of a trustor by reducing profit of another trustor; not enter into contracts and conduct transactions containing terms and conditions unfavorable for trustors.

7. The fund management company may only use the owner's equity and capital of trustors to buy and own (excluding shares of trustors that are ETFs) at least 25% of voting shares of a public company, or outstanding fund certificates of a closed-end fund if:

a) It has obtained written consent of trustors or their representatives to tender offer, offered price, volume of assets to be purchase and methods for distributing assets after tender offer;

b) The fund management company shall perform the tender offer in accordance with regulations on tender offers laid down in the Law on securities.

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9. Except open-end funds, the fund management company may receive performance bonus as prescribed in the fund’s charter, charter of the securities investment company and trust agreement. The performance bonus shall comply with the following rules:

a) It is calculated on the basis of the annual profit of the securities investment fund or securities investment company in excess of the reference profit determined according to the market growth rate, structure of the investment portfolio and other criteria defined in the fund’s charter, charter of the securities investment company and trust agreement;

b) It must be used to offset or not be paid if there are losses on investments in previous years which are not yet offset.

Article 12. Operational authorization

1. During its business, the fund management company may:

a) Authorize the depository bank, supervisory bank, and VSDCC to provide fund management services or act as transfer agent for securities investment funds and securities investment companies;

b) Authorize foreign organizations to provide consulting services and manage assets abroad of trustors.

2. When giving authorization as prescribed in Clause 1 of this Article, the fund management company must ensure that:

a) The fund management company is allowed to give authorization as prescribed in the fund’s charter, charter of the securities investment company and trust agreement. In case of authorization prescribed in Point b Clause 1 of this Article, the foreign organization must be licensed by the foreign securities authority to perform authorized operations and bear the supervision and inspection of this authority;

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c) The authorized party must be capable and have appropriate system, personnel and experience to perform authorized operations;  

d) The personnel, operational procedures, reporting and report approving system of the department in charge of providing relevant authorized services of the authorized party must be separated from those of its other departments;

dd) The authorized party shall provide the fund management company with independent audit reports on authorized operations and documents to serve the inspection by the fund management company as prescribed in Point c Clause 3 and Clause 4 of this Article;

e) The operational authorization and authorized parties in Point a Clause 1 of this Article must be specified in the fund’s charter/charter of securities investment company. The operational authorization and authorized parties in Point b Clause 1 of this Article must be approved in writing by the General Meeting of Investors of the securities investment fund, the General Meeting of Shareholders of the securities investment company, and trustors.

3. When giving authorization, the fund management company shall:

a) Before entering into service contracts with the authorized party, the fund management company must carry out the due diligence and examine material facilities of such authorized party in order to ensure that it has adequate material facilities, technical solutions, operational process, and experienced and qualified personnel for performing authorized operations;

b) Enter into the authorization contract with the authorized party. The authorization contract shall be prepared according to the form in the Appendix IX enclosed herewith;

c) Carry out regular inspections to ensure that authorized operations have been prudently and safely performed in conformity with regulations of law, the fund's charter, charter of the securities investment company, trust agreement, and the quality of services provided by the authorized party is conformable with criteria and requirements of the company and trustors. The fund management company is entitled to employ independent consultants or services provided by other professional organizations that are operating under the law to fulfill its responsibility in this Point.   The fund management company is required to prepare monthly report on inspection of authorized operations;

d) Maintain employees with experience, qualification and skills appropriate for supervising, identifying and managing risks arisen from authorized operations;

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e) The authorization shall neither reduce nor change responsibilities of the fund management company towards its trustors. The fund management company shall accept any financial and legal liabilities arising from its authorization, except legal liabilities and service charges/fees which are agreed upon and paid directly to the authorized party under the trust agreement, supervisory contract or depository contract, as prescribed in the fund’s charter, charter of the securities investment company and relevant laws. The fund management company must ensure the continuity of authorized operations, and avoid causing any interruption and influence on investments and provision of services to trustors;

g) Provide relevant information to the authorized party in a sufficient, timely and accurate manner in order that the authorized party can fully and promptly fulfill its rights and duties within the scope of authorization;

h) Adequately, punctually and accurately keep instructions, requests and documents sent to the authorized party for performing authorized operations, the authorization contract and record of assessment of capacity and material facilities of the authorized part. These documents must be provided at the request of SSC;

i) Within 10 days from the conclusion of the authorization contract with the authorized party to perform the authorized operations in Point b Clause 1 of this Article, the fund management company shall notify SSC of this authorization and provide it with documents proving the authorized party’s fulfillment of the requirements in Clause 2 of this Article.

4. Inspection reports prescribed in Point c Clause 3 of this Article and other relevant documents must be provided for the Board of Directors, Board of Members or owner of the fund management company, the fund’s representative board, Board of Directors of the securities investment company, relevant supervisory bank and SSC within 30 days from the reporting date.

Article 13. Termination of the fund management company’s rights and obligations to its trustors, and replacement of the fund management company

1. The fund management company shall terminate its rights and obligations to its trustors in the following cases:

a) The fund management company voluntarily requests its rights and obligations to its trustors according to the fund’s charter, charter of the securities investment company and trust agreement;

b) Rights and obligations of the fund management company are terminated at the request of the General Meeting of Investors of the securities investment fund, the General Meeting of Shareholders of the securities investment company, and trustors;

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d) The fund management company is re-structured;

dd) The licensed operating duration of the securities investment fund/ securities investment company has expired or the trust agreement ceases to have effect.

2. The fund management company must hold the General Meeting of Investors of the securities investment fund, the General Meeting of Shareholders of the securities investment company, or meeting of trustors to get their opinions about the asset settlement plan and the substitute fund management company in the case in Point a, c or d Clause 1 of this Article.

3. Within 05 working days from the date on which the decision on replacement of the fund management company is approved by trustors, the substitute fund management company shall:

a) With regard to trustors, the fund management company shall notify and provide SSC with the following documents, including: the principle contract on termination of rights and obligations signed between the trustor and the replaced fund management company; the principle contract on investment trust signed between the trustor and the replaced fund management company; methods for transferring rights and obligations between two fund management companies, principle contract on depositing of assets and relevant contracts/documents. Within 07 working days from the notification date, the replaced fund management company shall disclose information about the receipt of transferred trust assets on its website, notify it to the depository bank, and fund management companies shall implement the plan for transfer of rights and obligations with the trustor;

b) With regard to securities investment funds/companies, the fund management company shall apply to SSC to modify the certificate of fund registration or establishment and operation license of the securities investment company with respect to replacement of the fund management company.

4. The replaced fund management company’s rights and obligations to a trustor shall be terminated from the time of completion of registration or transfer of ownership of trust assets, or when assets, ownership certifications, receipts, books and information about trust assets, rights and obligations to the trustor are fully transferred to the substitute fund management company. Transfer of assets must be completed within 06 months from the date on which the decision on replacement of the fund management company is approved by the trustor. The termination of fund management company’s rights and obligations to the trustor shall comply with Clause 1 Article 27 hereof.

5. Within 07 working days from the date of completion of transfer works, the substitute fund management company shall provide SSC with the record of transfer of responsibilities and assets between two fund management companies. This record must be certified by the trustor or its representative and the depository bank/supervisory bank.

6. The replaced fund management company shall take full responsibility for debts and asset liabilities to the trustor which are not yet transferred to the substitute fund management company. In this case, the replaced fund management company shall settle and remedy consequences that occur within 05 years from the date of completion of transfer of assets to the substitute fund management company as prescribed in Clause 5 of this Article.

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Section 2. MANAGEMENT OF SECURITIES INVESTMENT FUNDS

Article 14. Establishing and managing funds under the law of Vietnam

1. The fund management company is entitled to raise funds domestically and overseas to establish and manage securities investment funds and securities investment companies.

2. Conditions, procedures and application for offering, establishment and operation of securities investment funds and securities investment companies shall comply with the Law on Securities.

Article 15. Establishing and dissolving funds under a foreign country’s law

1. The fund management company is entitled to raise funds in a foreign country to establish a fund under the law of that foreign country.

2. Within 30 days from the date of completion of application for establishment or dissolution of a fund with a foreign competent authority, the fund management company shall notify and provide SSC with the following documents:

a) Valid copies of the certificate of offering of fund certificates, certificate of fund registration as prescribed by the foreign country’s law or other documents of equivalent validity; or documents certifying the fund dissolution issued by foreign competent authorities;

b) Valid copies of documents included in the application for fund registration or fund dissolution as required by foreign competent authorities, including minutes of meetings of or resolutions of the General Meeting of Investors or the fund representative board of equivalent organization of the fund on the fund dissolution.

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Section 3. MANAGEMENT OF INVESTMENT PORTFOLIOS

Article 16. General provisions on management of investment portfolios

1. The fund management company shall manage a trustor's investment portfolio on the fund management company’s account or the trustor’s account under terms and conditions of the trust agreement signed with the trustor and in accordance with law regulations. In case the trustor is an organization, the trust agreement must be signed by the trustor’s legal representative or authorized representative, enclosed with the letter of authorization made in accordance with regulations of law.

2. The trust agreement must contain basic contents as prescribed in Appendix III enclosed herewith and shall:

a) Not have any terms that facilitate the fund management company’s avoidance of legal liability to pay compensation for damage caused by its mistake or deliberate commission of violations;

b) Not have any terms that limit the scope of compensation or financial liabilities to the trustor without legitimate reasons; or transfer the risks to the trustor in case it has mistakes or deliberately commits violations;

c) Not have any terms of unfair treatment to the trustor.

3. The trust agreement, the trustor's approvals that allow the fund management company to act as the owner of trust assets and conduct transactions, notifications of investment limits, investment orders, orders for exercise of rights of asset ownership prescribed in this Article shall be prepared either in physical or electronic form. Electronic documents must comply with the Law on e-transactions and its guiding documents. The fund management company must develop its own technological infrastructure to ensure security and confidentiality of clients’ information, store and provide data at the request of SSC and competent authorities.

4. When using a trustor’s assets to make investments, the fund management company shall comply with the following provisions:

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b) The fund management company may use the trustor's assets to make capital contribution, purchase shares/stakes in unlisted or unregistered enterprises; make investments in privately placed corporate bonds, unlisted bonds, projects, real estate and assets other than listed and registered securities; conduct repo transactions in assets other than the Government’s debt instruments, Government-backed bonds and municipal bonds if such activities are permitted under the trust agreement. Such investments and transactions must comply with the following rules:

- The asset ownership is registered in the trustor’s name, unless otherwise requested in writing by the trustor. If the fund management company is requested to act as the asset’s owner on behalf of the trustor, before conducting any transaction, the fund management company must obtain the trustor’s written consent to the transaction and report transaction results to the trustor after completing the transaction. Transaction asset, originals of legal documents certifying asset ownership or originals or valid copies of the transaction contract/payment receipts must be adequately deposited and kept at the depository bank appointed by the trustor;

- With regard to repo transactions in assets other than the Government’s debt instruments, Government-backed bonds and municipal bonds, the trustor must act as a party of the transaction;

c) If the fund management company is requested to act as the asset’s owner on behalf of the trustor that is an insurer, credit institution, securities company or public company, the fund management company shall request the trustor to specify investment limits in writing and assume legal responsibility for type and volume of invested asset, investment value and methods in conformity with regulations on operations of the trustor, the Law on securities and charter of the trustor, especially in the following cases:

- Investments are made in the trustor: Investment in shares issued by the trustor must comply with regulations of the Law on enterprises and relevant laws;

- Investments are made in parent company, subsidiaries, joint-venture companies, associate companies and other organizations that are related persons of the trustor; organizations that are related persons of members of the Board of Directors or Board of Members or company’s president of the trustor;

- Investments are made in real estate, investment projects developed and managed by the trustor, its parent company, subsidiaries, joint-venture companies or associate companies, or organizations that are related persons of members of the Board of Directors or Board of Members or company’s president of the trustor;

- The trustor must notify, report and disclose information, get approval from competent authorities for the abovementioned transactions and investments in accordance with regulations on operations of the trustor, and approval from the General Meeting of Shareholders, Board of Members, Board of Directors and company’s owner for the abovementioned transactions and investments in accordance with the charter of the trustor;

d) If the ownership of the trust asset is in the name of the trustor, neither the fund management company nor the trustor may lend the trust asset or use it as a security for any loans, or for pledging, mortgaging, depositing or as a collateral in secured transactions for any entities, including the fund management company or trustor;

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5. In case the fund management company manages investment portfolio on the trustor’s account, the trustor shall notify the securities company and depository members of entrustment of management of the investment portfolio to the fund management company, and also provide them with the trust agreement or another letter of authorization allowing the fund management company to conduct transactions on the trustor’s account.

6. During the validity of the trust agreement allowing the conduct of transactions on the trustor’s account prescribed in Clause 5 of this Article, the securities company and depository members shall only receive and perform trading orders, investment orders and payment orders from the fund management company and make certification of the trustor’s deposited assets on periodical reports on management of investment portfolios of the fund management company.   The fund management company shall assume responsibility to fulfill its obligations to manage the investment portfolio, deposit assets, make ownership reports and disclose information and fully exercise rights of ownership in order to fully perform rights, benefits and obligations of the trustor according to regulations hereof.

7. In case investments are made as requested by the trustor, the fund management company shall:

a) Have an investment order given by the trustor in which the type of invested asset or investment-receiving organization, investment value or volume of invested asset, investment time and period, and name of owner of the invested asset must be specified;

b) In case the fund management company is requested to act as the asset's owner on behalf of the trustor:

- The fund management company shall request the trustor to provide adequate information ensuring that the trustor and its transaction partner, investment-receiving organization meet all transaction conditions laid down in Clause 4 of this Article and comply with regulations on operations of the trustor and the investment-receiving organization, and relevant laws;

- In case of investment in securities of a public company, public fund or public securities investment company, the trustor shall directly perform or authorize the fund management company in writing to perform ownership reporting and information disclosure obligations as prescribed in the Law on securities as internal actors and their related persons (if the trustor is an internal actor or its/his/her related person as defined in the Law on securities) or a major shareholder (if the trustor is a major shareholder) or investor holding at least 5% of fund certificates as prescribed in the Law on securities (in which the number of shares or fund certificates owned by the trustor includes those in the trustor’s name and those invested and owned in the name of the fund management company on behalf of the trustor).

Article 17. Investment policies

1. The fund management company shall consolidate client identification information, including information about their beneficiaries (if any); financial health, investment experience, investment duration, investment objectives, acceptable level of risks, investment limits, sample investment portfolio and other requirements (if any) of the client; other necessary information concerning investment limits prescribed in Clause 4 Article 16 hereof.

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3. The fund management company shall establish investment rules and policies to meet trustors’ demand based on consolidated information prescribed in Clause 1 of this Article. An investment policy must be clear and detailed, and fully indicate basic information about the level and type of risks, sample investment portfolio, administrative expenses, rights and responsibilities of the parties and other relevant important information. The investment policy is an integral part of the trust agreement.

4. In case the fund management company does not comply with the investment policy specified in the trust agreement, it shall adjust the investment portfolio within 15 days from the date of detection of such difference, incur all expenses related to this transaction and not charge management service for the part of investment portfolio that is unconformable with the investment policy.

5. With regard to any losses or profits from the investment which is unconformable with the investment policy or investment objectives, the fund management company shall pay compensation to the trustor under the written agreement between two parties or include all profits into the trustor’s portfolio immediately after adjusting the investment portfolio.

6. Regulations in Clause 4 and Clause 5 of this Article shall not apply in case the difference in the investment portfolio is caused by:

a) Price fluctuation of the assets in the trustor’s investment portfolio;

b) Payments made at the request of the trustor;

c) Consolidation, merger, full or partial division of the issuers;

d) The difference arises within 06 months from the effective date of the trust agreement.

Article 18. Investment implementation

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2. The fund management company shall conduct transactions in assets between investment portfolios of trustors according to the following rules:

a) Any transactions in assets which are not listed securities or securities registered for trading on SEs require prior written approval from transaction parties.  Such written approval must include the price, volume and time of transaction;

b) With regard to assets that are listed securities or securities registered for trading on SEs:

The transaction requires the prior approval given by the transaction parties or must be notified to relevant parties under the signed contract; additionally, the buying (selling) price shall not be higher (lower) than the closing price at the trading day or the trading price determined by the fund management company within the price margin at the trading day under the signed contract.

Article 19. Depositing assets of trustors

1. When managing investment portfolios, the fund management company is allowed to open depository accounts in its name at different depository banks to deposit trust assets according to the following rules:

a) Only a depository account for domestic trustors and a depository account for foreign trustors are opened at a depository bank;

b) A trustor may select one or several depository banks where the fund management company opens its depository accounts as prescribed in Point a of this Clause to deposit trust assets;

c) Assets of a trustor must be fully and punctually registered and deposited at the depository bank(s) selected by the trustor, separately and independently managed according to the following rules:

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With regard to assets which require ownership registration but are not yet registered in the name of the fund management company, the fund management company shall deposit the originals or valid copies of the transaction contract and transaction documents at the depository bank. The depository bank shall give certification of registration and depositing of these assets on periodical reports on management of investment portfolios of the fund management company until completing the ownership registration;

- With regard to assets of which the ownership must not be registered as prescribed by law, the fund management company shall deposit the originals or valid copies of the transaction contract and transaction documents at the depository bank;

- With regard to bank deposits and deposit contracts, the fund management company shall provide adequate information about such deposits and values of deposit contracts for the depository bank that shall monthly verify them with depository institutions;

- The fund management company shall request the issuers, investment-receiving organizations, depository institutions or organizations managing shareholder registers to carry out monthly verification and certification of asset ownership with the depository bank;

d) The settlement for the transactions of listed or registered securities must comply with the rule of transfer of securities on the settlement date, and rules of clearing and settlement as prescribed by laws.  The payment for transactions of other assets shall be made in accordance with the legitimate orders and directives of the fund management company and other relevant laws.  Bank transfers, payments and transfer of securities must be made correctly to transaction partners of trustors/accounts of trustors. Each payment must be conformable with the volume of assets/securities and the amounts specified in the payment receipt. Invoices, accounting records, electronic information and documents certifying payment and completion of transactions for trustors must be fully and accurately retained. Except transactions in assets between investment portfolios of trustors as prescribed in Clause 2 Article 18 hereof, the fund management company and depository bank/supervisory bank shall not make internal transfer of any amounts of money and assets between accounts of trustors;

dd) The fund management company must sign depository contract with the depository bank, deposit all assets acquired in Vietnam, and separately manage assets of trustors. The depository contract must be conformable with the trust agreement and, inter alia, contain the primary contents specified in Appendix IV enclosed herewith.

2. Trust assets, whether tangible or intangible, shall be registered and deposited on depository accounts in the name of the fund management company but still under the ownership of trustors and shall be considered as assets of neither the fund management company nor depository bank. Neither the fund management company nor depository bank may use these assets to make payments or as security for their debts or debts of a third party or the trustor.

3. The fund management company ensures that the trustor shall inherit the entire ownership of its/his/her assets on the trust account according to the following rules:

a) The fund management company shall only be the authorized representative of the trustor and shall only perform authorized operations as specified in the trust agreement;

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c) The fund management company shall exercise the voting right and other rights of ownership according to the trustor’s written directive; punctually, fully and accurately notify the trustor of rights and benefits arising from the trustor’s assets.

Article 20. Receiving and returning assets of trustors

1. When managing investment portfolios, the fund management company may receive nonmonetary assets for management. An asset received and managed by the fund management company must meet the following requirements:

a) It is under the ownership of the trustor; there are adequate legal documents proving the trustor’s ownership of that asset;

b) It is freely transferable and not restricted from transfer at the effective date of the trust agreement;

c) It is not pledged, mortgaged, put up as collateral, security, guarantee or deposit in secured transactions as prescribed by the Civil Code.

2. The trustor shall transfer the ownership of assets on the trust portfolio to the fund management company according to the following rules:

a) With regard to assets whose ownership is registered, the trustor shall carry out procedures for transfer of asset ownership to the fund management company in accordance with regulations of law. Where the trust assets are securities which have been listed, registered or deposited, the transfer of asset ownership shall be performed through VSDCC without incurring service charges. The transfer of ownership of other assets will be carried out in accordance with regulations of relevant laws;

b) With regard to assets whose ownership is not registered, the capital entrustment shall be made by transfer of the trust asset which must be duly recorded. The record of transfer of trust asset must specify:

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- Number of enterprise registration certificate or establishment decision or another document of equivalent validity of the trustor that is an organization; full name, contact address, number of ID card, citizen identity card or passport or other valid personal identification papers of the legal representative or authorized representative of the trustor that is an organization; enclosed with the minutes of meeting or resolution of the General Meeting of Shareholders, Board of Members, Board of Directors, or owner’s decision on entrustment of asset to the fund management company in conformity with the charter of the trustor;

- Type and volume of trust asset; value of trust asset; transfer date; signature of the trustor or the trustor’s representative and signature of legal representative of the fund management company.

c) An asset shall be treated as entrusted to the fund management company when the lawful ownership of asset has been transferred to the fund management company.

d) The value of the trust asset specified in the trust asset shall be determined by adopting the method of determination of net asset value in accordance with regulations on securities investment funds. With regard to assets other than listed securities, registered securities or negotiable instruments, the valuation of the trust asset may be carried out by the valuation enterprise in accordance with regulations on pricing.

3. The fund management company shall return the trust asset to the trustor at its/his/her written request according to the trust agreement. The transfer of asset ownership shall be made according to the trustor’s directive and the rules in Clause 2 of this Article. In case of return of assets which are registered or deposited securities, VSDCC shall carry out the transfer of asset ownership outside the securities trading system at the written request of the fund management company, trustor and depository bank.

Article 21. Management of indirect outward investment portfolios

1. The fund management company shall manage indirect outward investment portfolios after obtaining approval from SSC and indirect outward investment limits set by SBV.

2. Management of indirect outward investment portfolios must comply with regulations on management of securities investment portfolios herein, the Law on investment and the Law on banking.

3. The fund management company must enter into an indirect outward investment trust agreement with the trustor; such agreement must indicate the trust amounts, trust duration, indirect outward investment vehicles, rights and obligations of the parties, and comply with Clause 1 and Clause 2 Article 16 hereof and relevant laws. Indirect outward investment trust agreements must be separated from domestic investment trust agreements.

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5. The fund management company shall enter into a depository contract with a foreign depository institution to deposit assets used to make indirect outward investments. The foreign depository institution must be licensed to provide depository services in accordance with regulations of the foreign country’s law.

The fund management company shall enter into a contract with a depository bank in Vietnam; the depository bank in Vietnam may authorize a foreign depository institution to deposit assets used for making indirect outward investments and shall be fully responsible for such authorized depository service.

6. Within 05 working days from the date on which the fund management company enters into a depository contract with a foreign depository institution or the depository bank in Vietnam enters into an authorization contract with the foreign depository institution, or from the replacement of the foreign depository institution, the fund management company shall notify and provide SSC with the depository contract, authorization contract, copy of certificate of securities depository registration or another document of equivalent validity of the foreign depository institution.

7. Depositing and authorization to deposit assets used for making indirect outward investments must comply with regulations herein, regulations on securities investment funds and relevant laws.

Section 4. SECURITIES INVESTMENT CONSULTING

Article 22. Securities investment consulting

1. Securities investment consulting includes:

a) Providing advice to clients about investment policies and trading strategies, including investment allocation structure; invested assets and asset valuation methods; investment/transaction forms; investment times, volumes and prices which must be conformable with investment objectives and policies as well as levels of risks accepted by clients;

b) Publishing printed materials on securities investment after obtaining permission as prescribed by the Press Law; formulating and organizing the provision of programs for improving knowledge and disseminating information about securities investment and advanced training programs in securities investment.

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3. When providing securities investment consulting services, the fund management company must arrange its consultants having securities practicing certificate to provide advice directly to each client.

4. At least 05 working days before replacement of a consultant, the fund management company shall notify it in writing to the client and provide the client with information about the substitute consultant.

5. The fund management company must sign securities consulting contract with each client. The contract must include the following information:

a) Scope of securities investment consulting, methods of service provision, and assets;

b) Contract term, service price;

c) Full name and resume of the consultant’s experience;

d) Rights and duties of the contract parties.

Article 23. Regulations on securities investment consulting provided by fund management companies

1. Consulting service must be provided to clients in a voluntary, fair and truthful manner; clients must be provided with adequate, timely and accurate information to make investment decisions.

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3. When providing consulting for investment in an asset, the fund management company must ensure that investment is conformable with investment objectives, acceptable risk level and financial capacity of the trustor; additionally, the fund management company and its consultant must disclose their benefits related to that asset if it is owned by the company or its consultant.

4. The consultant shall clearly imply that his/her advice about investments given to the client is only for reference purposes and the client shall incur any risks from its/his/her investment decision.

5. When providing securities investment consulting, the fund management company and its consultants shall:

a) Not provide advice to the client for making investment in an asset without providing adequate information about that asset and its issuer;

b) Not act as a broker for a sale or purchase between the client and a third party; not act as a broker for asset borrowing or lending between the client and the fund management company or between the client and a third party;

c) Not provide unverified or false information or rumors to clients; not provide untruthful or misleading information, forecasts or persuade, entice, incite or induce clients to trade in assets which are not conformable with their investment objectives, investment experience, awareness of risks, acceptable risk levels and financial capacity; not provide information that causes misunderstanding about profits and risks of an asset;

d) Not offer gifts or use material benefits in any forms to induce or incite clients to trade in a certain type of assets; not claim or receive, whether in personal name or in the name of any entity, remuneration or material benefits, in addition to service charges prescribed in the signed consulting contract, from clients, the fund management company or any third party to induce clients to trade in a certain type of assets;

dd) Not make investments on behalf of clients, or receive money or assets of clients to make investments or conduct transactions, unless a trustor has entered into a trust agreement with the fund management company;

e) Not forecast prices of assets in the future or guarantee investment returns, except investments in fixed-income securities or investment products with capital preservation; not enter into any agreement on sharing of profits or losses with clients.

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OPERATIONS OF FUND MANAGEMENT COMPANIES DURING REORGANIZATION, BUSINESS SUSPENSION OR DISSOLUTION

Article 24. Operations of a fund management company during reorganization

1. During reorganization, the fund management company, and its Board of Directors or Board of Members, Board of Controllers and Executive Board shall:

a) Ensure the safety of its assets, not hide or liquidate its assets in any forms and assume legal responsibility for issues which are not recorded and handed over;

b) Fund management companies involved in the reorganization are entitled to and responsible for their rights, benefits and obligations until the fund management company established after reorganization is issued with or has securities trading license modified;

c) Comply with law regulations on disclosure of information on securities market.

2. Any shareholder objecting the reorganization is entitled to request the fund management company to repurchase its shares. Creditors are entitled to request the fund management company to pay loans when undergoing reorganization. The abovementioned requests shall be made in accordance with regulations of the Law on enterprises.

3. From the effective date of the securities trading license or the modified securities trading license of the fund management company that is established after reorganization, fund management companies involved in the reorganization shall hand over all rights, benefits and obligations to the fund management company established after reorganization. The fund management company established after reorganization shall inherit all rights, benefits and obligations from fund management companies involved in the reorganization.

4. The fund management company established after reorganization must disclose information in accordance with law regulations on disclosure of information on securities market.

...

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1. During its voluntary business suspension, the fund management company must comply with the provisions in Clause 4 Article 26 hereof.

2. The fund management company must provide SSC with the documents proving its maintenance of fulfillment of requirements for issuance of the securities trading license prescribed in Clause 1 Article 85 of the Law on Securities before its business resumption. These documents must comply with regulations on required documents for application for the securities trading license of the fund management company.

3. Within 15 days from the receipt of documents, SSC shall notify such receipt of documents for business resumption from the fund management company.

4. SSC shall disclose information about business suspension of the fund management company on its website.

Article 26. Operations of a fund management company during compulsory business suspension

1. SSC shall issue a decision to suspend business of the fund management company in the cases prescribed in Article 94 of the Law on Securities.

2. The maximum duration of compulsory business suspension is 60 days from the suspension date in the case prescribed in Point a or Point c Clause 1 Article 94 of the Law on Securities, or 06 months from the suspension date in the case prescribed in Point b or Point d Clause 1 Article 94 of the Law on Securities.

3. Within 15 days from the effective date of the business suspension decision, the fund management company shall notify trustors of such business suspension; carry out procedures for getting opinions from the General Meeting of Investors of the securities investment fund, the General Meeting of Shareholders of the securities investment company, and trustors about the plan for settlement of securities investment fund, securities investment company and trust agreements, and opinions about the substitute fund management company (if any).

4. During the compulsory business suspension, the fund management company shall:

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b) Not raise funds for establishing new securities investment funds or new securities investment companies; not increase charter capital of the managed securities investment fund or securities investment company;

With regard to effective trust agreements and operating securities investment funds and securities investment companies, the fund management company shall conduct transactions after obtaining written approval from trustors or their representatives (single authorization). Trustors shall assume responsibility for its authorization to the fund management company to conduct these transactions;

c) Not pay dividends or share profits; not convert unsecured debts into debts secured with its assets; not purchase shares or stakes; not establish any new branches or representative offices, expand its business or make outward investments; not contribute capital to or make investments in subsidiaries or associate companies; not perform any business operations or investments which require SSC’s approval as prescribed by law;

d) Comply with regulations of the Law on securities regarding management of securities investment portfolios and securities investment funds; assure lawful rights and interests of trustors and assume the full responsibility for trust asset transactions in accordance with regulations of law;

dd) Prepare a rectification plan and report the implementation thereof at the request of SSC;

5. The fund management company shall provide SSC with the documents mentioned in Clause 2 Article 25 hereof and those proving its rectification of the causes of suspension before its business resumption.

6. Within 15 days from the receipt of adequate documents, SSC shall notify such receipt of documents for business resumption from the fund management company.

7. SSC shall disclose information about the compulsory business suspension of the fund management company on its website.

Article 27. Operations of a fund management company during dissolution

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1. Regarding management of securities investment portfolios:

a) Within 30 days from the date of the written approval for dissolution given by SSC, the dissolved fund management company shall return assets to trustors at their written request; suspend buying/selling of securities; suspend withdrawal/payment of money for trustors, and close money and asset balances of each trustor;

b) Within 05 working days from the closing date of trust asset balances, the fund management company shall submit reports to SSC on investment portfolios of each trustor; notify and send the investment portfolio account statement to each trustor. The investment portfolio account statement of each trustor must bear the depository bank’s certification of money and securities balances maintained at the depository bank. The notification sent to the trustor must include information about the proposed substitute fund management company; instructions for transfer of assets and rights, responsibilities of the trustor to the substitute fund management company; or proposal for liquidation of the investment portfolio; or return of assets to the trustor;

c) From the closing date of money and securities balance on the investment portfolio account, the depository member shall not perform any trading orders or payment orders from the fund management company in respect of assets of trustors, except liquidation of assets, transactions conducted to exercise a trustor’s ownership or other transactions conducted at the written request or order from the trustor;

d) After 60 days from the date of the written approval for dissolution given by SSC, if a trustor cannot select a substitute fund management company or submits a request for liquidation of investment portfolio, the dissolved fund management company shall transfer the entire assets and money of the trustor to the investment portfolio depository account of the substitute fund management company selected by the dissolved fund management company.

2. Regarding management of securities investment funds:

a) The fund management company is required to get opinions from the General Meeting of Investors of the securities investment fund, or the General Meeting of Shareholders of the securities investment company about the replacement of the fund management company. If the dissolved fund management company and General Meeting of Investors or General Meeting of Shareholders cannot reach an agreement on the substitute fund management company, the securities investment fund or securities investment company shall be dissolved in accordance with regulations on securities investment funds;

b) The transfer of rights and obligations towards the securities investment fund or securities investment company into the substitute fund management company shall comply with the provisions in Article 13 hereof.

3. Regarding securities investment consulting: The fund management company shall finalize securities investment consulting contracts within 06 months from the date of written approval for dissolution given by SSC.

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5. During the resolution, the fund management company shall continue fulfilling its obligation to submit reports on management of investment portfolios and management of securities investment funds as prescribed in Article 29 hereof and regulations on securities investment funds, enclosed with information about the status of contract finalization, return of assets to each trustor and transfer of rights and responsibilities to the substitute fund management company.

Chapter V

INFORMATION PROVISION, REPORTING AND DOCUMENT RETENTION

Article 28. Information provision

1. The fund management company must adequately retain the following documents at its headquarters, representative offices, branches, distribution agents and on its website, and provide them free of charge at the request of investors, including:

a) The fund’s charter, charter of the securities investment company, prospectus or summary prospectus, documents, reports and contracts referred to in the prospectus or summary prospectus of the securities investment fund or company;

b) Audited annual financial statements of the securities investment fund or company in at least the last 05 years; semi-annual financial statements and quarterly financial statements of the securities investment fund or company;

c) Periodical operational reports of the securities investment fund or company prepared according to regulations on securities investment funds in at least the last 05 years;

d) Reports on NAV of the securities investment fund or company prepared according to regulations on securities investment funds.

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3. With regard to trustors, the fund management company shall:

a) Provide trustors with monthly reports on their investment portfolios which are made according to the form in Appendix V enclosed herewith. These reports must be provided for trustors in physical form or electronic form if permitted in the trust agreements. Electronic documents must comply with regulations of the Law on e-transactions.

b) Provide trustors with trust agreements, depository contracts and enclosed documents at their request;

c) Provide trustors with investment portfolio account statements and transaction statements bearing the depository bank’s certification and information about management of investment portfolios, and answer any questions of trustors.

4. The fund management company shall provide trust agreements for SSC at its request. When providing indirect outward investment trust agreements, the fund management company must also provide documents proving trustors’ fulfillment of requirements for making indirect outward investments as prescribed by law.

Article 29. Reporting

1. The fund management company shall send the following periodic reports to SSC:

a) Monthly and annual reports on operations of the fund management company which are made according to the form in Appendix VI enclosed herewith;

b) Monthly reports on management of investment portfolios of the fund management company, which must bear the certification of the depository bank where the fund management company opens depository account, certification of the depository member where the trustor’s account is opened, or certification of the foreign depository institution, and made according to the form in Appendix VII enclosed herewith;

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d) Reports on annual internal audit and reports on annual internal control of the fund management company;

dd) Quarterly financial statements; reviewed semi-annual financial statements, annual financial statements audited by approved audit organizations of the fund management company, which are made according to regulations of the Law on accounting regarding fund management companies;

2. The periodical reports mentioned in Clauses 1 of this Article shall be sent within the following time limits:

a) Monthly reports: within 05 working days from the end of the reporting month;

b) Quarterly reports: within 20 days from the end of the reporting quarter;

c) Biannual reports: within 45 days from the end of the first six months;

d) Annual reports: within 90 days from the end of the reporting year.

3. The closing dates of the periodical reports mentioned in Clauses 1 of this Article are provided for as follows:

a) A monthly report shall include data from the first day to the last day the reporting month (except data reflected at a given time);

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c) A biannual report shall include data from January 01 to June 30 of the reporting period (except data reflected at a given time);

d) A annual report shall include data from January 01 to December 31 inclusively of the reporting year (except data reflected at a given time);

dd) The reporting period of a fund management company whose operating period is less than a reporting period shall commence from the issue date of its securities trading license to the last day of the reporting period as prescribed in Points a, b, c and d of this Clause.

4. The fund management company shall send required reports to SSC whether in physical or in electronic form.

5. The fund management company shall notify SSC of the following events:

a) Replacement, appointment or dismissal of a member of the Board of Directors or Board of Members. The notification must be enclosed with the resolution or decision on appointment, dismissal or replacement of a member of the Board of Directors or Board of Members, other valid documents proving that the new member of the Board of Directors or Board of Members meets all requirements laid down in the company’s charter, the Law on securities and the Law on enterprises;

b) Replacement of chief of a domestic representative office or replacement of Director of a domestic branch. The notification must be enclosed with the appointment decision and valid documents proving that the substitute meets all requirements laid down in the Law on securities;

c) Modification of the company’s charter. The notification must be enclosed with the amended charter;

d) Completion of transfer of shares/stakes of a shareholder or capital-contributing member of the fund management company, except the fund management company’s shares listed on SEs. The notification will be made according to the form in Appendix XI enclosed herewith and enclosed with the valid copy of the contract for share/stake transfer. If the fund management company is a public company and such transfer results in the transferee holding at least 25% of voting shares of the fund management company, the transferee must comply with law regulations on tender offers of shares of public companies;

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6. The events in Clause 5 of this Article must be notified to SSC within 03 working days from the occurrence of the event.

7. The fund management company shall send reports to the fund’s representative board, Board of Directors of the securities investment company or trustors in case the supervisory bank or depository bank is detected to commit violations against the fund's charter, charter of the securities investment company, supervisory contract or depository contract; send reports to SSC if any of these organizations commits violations against laws within 03 working days from the date on which the violation is detected.

8. Apart from the reporting cases prescribed in this Article, SSC may request the fund management company to submit reports on its operations for the purposes of protecting common interests as well as investors’ interests. The fund management company must submit reports to SSC within 48 hours from the receipt of the request from SSC.

Article 30. Information and document retention

1. The fund management company must adequately, accurately, punctually and systematically documents and update information/data on its operations in accordance with regulations of the Law on enterprises. Documents and information on the company’s operations must be backed up at a location outside the company’s headquarters.

2. The fund management company, supervisory bank, depository bank, distribution agents, and relevant service providers must adequately, systematically, clearly, accurately and consistently documents concerning responsibilities and obligations of each organization in accordance with regulations of law and service contracts. To be specific:

a) Offering and distribution of fund certificates;

b) Certification of investor’s ownership of securities investment funds, securities investment companies, trustors; registration of asset ownership of securities investment funds, securities investment companies, trustors;

c) Financial statements, accounting records; chart of accounts, invoices and records which particularly, accurately and punctually reflect daily trading orders of each trustor, of the company and its employees, including information about order of trading orders placed and conducted transactions; electronic documents and information used for determining NAVs; originals of legal documents of ownership, originals or valid copies of legal documents certifying asset ownership, asset transactions and relevant documents must be kept by the fund management company and supervisory bank, depository bank during the operation of the securities investment fund, securities investment company and validity period of the trust agreement;

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dd) All documents related to operations of the securities investment fund or company.

3. Investment portfolio, documents used for trading or ownership registration, accounting records, chart of accounts, electronic documents and information related to assets or asset transactions of the securities investment fund, the securities investment company, or trustor must be periodically and regularly checked and verified by the fund management company, supervisory bank, depository bank and relevant organizations in accordance with the fund's charter, charter of the securities investment company, trust agreement and the Law on accounting.

4. Documents and information prescribed in Clauses 1, 2 and 3 of this Article must be retained for a period of 10 years. Accounting documents shall be retained in accordance with regulations on accounting and audit.

Chapter VI

IMPLEMENTATION

Article 31. Effect

1. This Circular comes into force from January 01, 2021.

2. This Circular supersedes the Circular No. 212/2012/TT-BTC dated December 05, 2012 of the Minister of Finance providing guidelines for establishment, organization and operation of fund management companies. Article 1, Clauses 1, 3 and 4 Article 7 of Circular No. 91/2019/TT-BTC dated December 31, 2019 of the Minister of Finance are abrogated.

3. Fund management companies shall formulate their charters in accordance with regulations of the Law on Securities No. 54/2019/QH14, the Law on enterprises No. 59/2020/QH14 and regulations herein. Charter of a fund management company that is a joint-stock company must be ratified by the General Meeting of Shareholders held after the effective date of this Circular. Charter of a fund management company that is a limited liability company must be ratified by its Board of Members or owner within 06 months from the effective date of this Circular.

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Article 32. Implementation organization

SSC, VSDCC, fund management companies, depository banks, supervisory banks and relevant entities are responsible for the implementation of this Circular./.

PP. THE MINISTER
DEPUTY MINISTER




Huynh Quang Hai

APPENDIX I

SAMPLE OF LIST OF MEMBERS OF BOARD OF DIRECTORS, BOARD OF MEMBERS, EXECUTIVE BOARD AND EXECUTIVES OF A FUND
(Enclosed with the Circular No. 99/2020/TT-BTC dated November 16, 2020 of the Minister of Finance)

NAME OF FUND MANAGEMENT COMPANY
--------------

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...

No.: ..............Re: List of members of Board of Directors, Board of Members, Executive Board, and executives of the Fund

……….[date & place]

To:  State Securities Commission of Vietnam 

I. List of members of Board of Directors and Board of Members

 No.

Full name

Number of ID card, citizen identity card or passport

Type of member of Board of Directors (independent/ other)

...

...

...

Other position held at the fund management company

I

Members of Board of Directors                        

1

...

...

...

...

II

Members of Board of Members                          

...

...

...

1

...

...

...

...

II. List of members of Executive Board and executives of the Fund

 No.

Full name

Number of ID card, citizen identity card or passport

Type of securities practicing certificate/ issuing authority

Working position

...

...

...

...

...

...

...

(GENERAL) DIRECTOR OF FUND MANAGEMENT COMPANY
(Signature, full name and seal)

APPENDIX II

SAMPLE OF PERSONAL INFORMATION SHEET
(Enclosed with the Circular No. 99/2020/TT-BTC dated November 16, 2020 of the Minister of Finance)

SOCIALIST REPUBLIC OF VIET NAM
Independence-Freedom-Happiness
-----------------

Photo
(4 cm x 6 cm)

.....,  [date & place]

...

...

...

1. Full name:                                              Male/ Female

2. Nationality:

3. Number of ID card, citizen identity card or passport:

4. Contact address (frequent):

5. Telephone:

6. Fax:

7. Email:

8. Professional level:

9. Occupation:

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...

 Name of training facility; city and country where it is headquartered; name of training course; training duration; name of qualification (all qualifications and training programs related to requirements for the position) are specified

Period
(Month/year)

Training facility

Training major

Name of qualification/ Number of securities practicing certificate

From …………/………. to …………/…………

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...

11. Working process (detailed information about jobs, working positions, performance at each working position/ reward and discipline, if any, is specified):

Period
(Month/year)

Place of work

Working position

In-charge tasks

Reward/ discipline

...

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...

From …………/………. to …………/…………

...

...

...

13. Current positions at other organizations:

14. Relatives of the declarant:

Full name

Year of birth

Number of ID card, citizen identity card or passport

Contact address

Occupation, working place

Position

Spouse:……,

...

...

...

Father:......

...

...

...

Mother:……

Children:……

...

...

...

Siblings:…..

I hereby guarantee the accuracy and truthfulness as well as fully assume legal responsibility for the aforesaid contents.

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a) Undertakings given by a member of Board of Directors or Board of Members:

- I have full legal capacity and incur no prohibitions on corporate management as per the Law on enterprises;

- I am not a member of the Board of Directors, Board of Members, or Executive Board, or fund management practitioner of another fund management company, and also not a member of the Board of Directors, Board of Members, or Executive Board, or employee of the depository bank or supervisory bank providing services to the securities investment fund or securities investment company managed by the fund management company;

- I fulfill all of requirements for a member/ independent member of the Board of Directors laid down in the company’s charter and relevant laws;

- I will comply with the company’s charter and internal regulations, and relevant laws;

- I assume the full responsibility for the truthfulness and accuracy of attached documents (if any).

b) Undertakings given by General Director (Director), Deputy General Director (Deputy Director) or employee possessing securities practicing certificate:

- I fulfill all of requirements for General Director (Director) or Deputy General Director (Deputy Director) in charge of securities trading operations as per the Law on Securities;

- I will comply with the company’s charter and internal regulations, and relevant laws;

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CERTIFICATION OF DECLARANT’S SIGNATURE

DECLARANT
(Signature and full name)

APPENDIX III

BASIC CONTENTS OF A TRUST AGREEMENT
(Enclosed with the Circular No. 99/2020/TT-BTC dated November 16, 2020 of the Minister of Finance)

1. Investment objectives, scope and limits, acceptable level of risks and requirements of the investor;

2. Investment rules/policies and types of assets;

3. Rights and obligations of the parties;

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5. Types of risks associated with investments made under this agreement, including failure to preserve the initial investment value;

6. Types of services;

7. Specific provisions on obligations to be discharged by the company and its employees when performing transactions for the company, its employees and investors in accordance with regulations of law;

8. Value of trusted capital, validity period of the agreement, and methods for determination of value of the investment portfolio;

9. Specific provisions on giving authorization to decide investment to the fund management company and relevant limits; mechanism for making and approving investment decision;

10. Benchmark indexes used as the basis for assessing investment results under each trust agreement (if any); service charge, calculation and payment method, payment deadline and other fees payable by the client;

11. Specific provisions on cash management and depositing/registration of ownership of investment assets and payment for the investor’s transactions; provisions on authorization to the fund management company to sign depository contract;

12. Procedures for replacing investment management officer and notifying it to the client;

13. Provisions on confidentiality of information; settlement of disputes and breach of contract, compensation for damage caused by the parties’ violations;

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15. Relationship between the fund management company and depository bank;

16. Prices of depository service and other services payable to the depository bank as prescribed by laws;

17. The fund management company’s commitments to comply with regulations of laws in force and regulations adopted by the State Securities Commission of Vietnam;

18. Signing date of the agreement;

19. Conditions for termination of agreement;

20. Mechanism for liquidating/closing the agreement and returning assets;

21. Other provisions which must be conformable with law regulations on securities and securities market.

APPENDIX IV

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1. The depository bank opens and manages depository accounts according to instructions and requests of the fund management company;

2. The depository bank shall separately manage money and assets of each investor, assets of the depository bank and other assets managed by the depository bank; in any case, an investor’s funds and assets cannot be used for lending or guaranteeing loans or paying debts for any other organization or individual;

3. The depository bank shall act on behalf of the investor to exercise rights associated with investment assets; make payment for the investor’s transactions according to regulations of law, the trust agreement and lawful order or request of the fund management company;

4. The depository bank shall make certification on reports on assets and the investor’s activities made by the fund management company; any certification or approval given by the depository bank for a report or investor’s transaction only means that the report or transaction is made or conducted in accordance with regulations of law and the trust agreement;

5. The depository bank shall fulfill reporting obligations and manage transaction documents in accordance with regulations of law and the depository contract;

6. The depository bank shall daily make statement of transactions on investors’ accounts and periodically check and verify money and asset balances of each investor with the fund management company;

7. Service charge, and relevant fees and charges;

8. The depository bank’s responsibilities in case of loss of investors’ money and assets which is caused by mistakes of the depository bank or its employee(s);

9. Obligations of the fund management company when conducting transactions for investors;

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11. Provisions on confidentiality of information, and settlement of disputes and breach of contract;

12. Conditions for termination of operations;

13. Particulars of officials and employees designated by the fund management company and depository bank to perform rights and obligations of the parties in respect to contents of the depository contract;

14. Other provisions which must be conformable with law regulations on securities and securities market and the trust agreement;

15. Signing date of the contract.

APPENDIX V

SAMPLE OF REPORT ON INVESTMENT PORTFOLIOS SENT TO THE TRUSTOR
(Enclosed with the Circular No. 99/2020/TT-BTC dated November 16, 2020 of the Minister of Finance)

NAME OF FUND MANAGEMENT COMPANY
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...

No.: ..............

……….[date & place]

REPORT

On trustor’s investment portfolio
(in…..(month))

To:………………………………………..

I. List of the trustor’s assets

Unit:  VND

 No.

...

...

...

Reporting period

Previous period

Notes

I

Assets:

1

...

...

...

2

Investment portfolios (in detail)

...

...

...

3

Dividend receivables

4

...

...

...

5

Proceeds from selling of securities (in detail)

...

...

...

6

Other receivables

7

...

...

...

Total value of assets

II

...

...

...

1

 Payables for purchased securities (in detail)

...

...

...

2

Other payables

...

...

...

Investor’s net asset value (Total assets minus total liabilities)

II. Incomes and expenses of investment portfolio during the period

...

...

...

 No.

Indicators

Reporting period

Previous period

Year-to-date accumulation

I

Income from investment activities  

...

...

...

1

Dividend receivables

2

Interests received

...

...

...

3

Other incomes

II

Expenses

...

...

...

1

Portfolio management service charges

2

Depository service charges

...

...

...

3

Other expenses

III

Net income from investment activities (I-II)

...

...

...

IV

Profit (loss) from investment activities  

1

Actual profit (loss) incurred from investment activities  

...

...

...

2

Changes in value of investments during the period

V

Change in portfolio value due to investor’s addition or withdrawal of trust assets

...

...

...

1

Value of trust assets additionally contributed in the period

2

Value of trust assets withdrawn in the period

...

...

...

VI

Change in portfolio value in the period (III + IV +V)

III. Investment portfolio at the reporting date

 No.

Type of assets/ ticker symbol

Volume

...

...

...

Market price at the reporting time
(VND)

Total market price at the reporting time
(VND)

Percentage (%) of total value of the investment portfolio at the reporting time

A

Listed and registered securities

I

Listed shares

1

...

...

...

2

...

...

...

...

...

...

...

II

Shares registered for trading

1

...

...

...

2

...

...

...

...

...

...

...

III

Fund certificates

1

...

...

...

2

...

...

...

...

...

...

...

IV

Bonds

1

...

...

...

2

...

...

...

...

...

...

...

V

Other listed securities

1

...

...

...

2

...

...

...

...

...

...

...

Total value of listed and registered securities

...

...

...

B

Unlisted and unregistered securities

I

Shares

1

...

...

...

2

...

...

...

....

Total

...

...

...

II

Fund certificates

1

...

...

...

2

...

...

...

....

Total

...

...

...

III

Bonds

1

...

...

...

2

...

...

...

...

Total

...

...

...

IV

Other unlisted and unregistered securities

1

...

...

...

2

...

...

...

...

Total

...

...

...

Total value of unlisted and unregistered securities

...

...

...

C

Other assets

1

...

...

...

2

...

...

...

...

Total

...

...

...

D

Cash

1

Cash and cash equivalents

...

...

...

2

Bank deposits

Total

...

...

...

Total value of investment portfolios

...

...

...

IV. List of investment portfolio’s transactions during the period

 No.

Date

Type of securities

Volume

Transaction price
(VND)

Transaction value
(VND)

Notes

...

...

...

Sell transaction

...

...

...

Note:  This report must bear certification of the foreign depository institution if indirect outward investments are made.

AUTHORIZED REPRESENTATIVE OF DEPOSITORY BANK/DEPOSITORY MEMBER/ FOREIGN DEPOSITORY INSTITUTION
(signature, full name and seal)

(GENERAL) DIRECTOR OF FUND MANAGEMENT COMPANY
(Signature, full name and seal)

APPENDIX VI

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NAME OF FUND MANAGEMENT COMPANY
--------------

SOCIALIST REPUBLIC OF VIET NAM
Independence-Freedom-Happiness
-----------------

No.: ……..

……[date & place]

REPORT

On operations of fund management company
(in………(month, year))

To:  State Securities Commission of Vietnam 

I. Information about business operations of the fund management company

...

...

...

No.

Contents

Funds that are juridical persons

Funds that are not juridical persons

Total

Year-to-date accumulation

Public securities investment companies

Private securities investment companies

 Real estate securities investment companies

...

...

...

Open-ended funds

Real estate investment funds

Exchange-traded funds (ETFs)

 Private funds

(1)

(2)

(3)

(4)

(5)=(3)+(4)

...

...

...

1

Quantity

...

...

...

2

Total capital (VND)

...

...

...

3

Total net asset value (NAV) (VND)

...

...

...

4

Total management service charges received (VND)

...

...

...

...

...

...

...

...

...

Ratio of management service charges to NAVs of funds (%)

...

...

...

Bonuses (if any) (VND)

...

...

...

Issuance fees (VND)

...

...

...

Redemption fees (VND)

...

...

...

2. Management of investment portfolios

...

...

...

Ongoing contracts

Number of contracts

Market value of contracts (VND)

Investment portfolio management service charges (VND)

During reporting period

Year-to-date accumulation

I

Domestic investors

...

...

...

1

Individuals

2

...

...

...

Total

...

...

...

II

Foreign investors

1

Individuals

...

...

...

2

Organizations

...

...

...

III

Total (I+II)

...

...

...

3. Securities investment consulting

 No.

Ongoing contracts

Number of contracts

Securities investment consulting service charges (VND)

During reporting period

Year-to-date accumulation

I

Domestic clients

...

...

...

1

Individuals

2

Organizations

...

...

...

II

Foreign clients

1

Individuals

...

...

...

2

Organizations

III

Total (I+II)

...

...

...

4. Indirect outward investments made by the fund management company (if any)

Notes:

- Section 4 is required if monthly report is prepared;

- If the fund management company does not make indirect outward investment, the phrase “no investment” shall be specified in Section 4.

- The exchange rate shall be determined using the actual trading exchange rates available at the trading time.

4.1. Compliance with indirect outward investment limits

No.

...

...

...

Value

USD

VND

1

Indirect outward investment limit set by State Bank of Vietnam (SBV)

2

Value of investments made by the end of month

...

...

...

3

Value of investments made during the month

4

Remaining value of investments to be made (4) = (1)-(2)

...

...

...

No.

Name of organization

Address

Nationality

Number of trading accounts

1

...

...

...

...

4.3. Indirect outward investment activities  

a) Trading of securities on trading accounts

No.

Type of securities

Purchase during the month

Sale during the month

Total purchase from the beginning of year

Total sale from the beginning of year

Volume

...

...

...

Volume

Value

Volume

Value

Volume

Value

1

Shares

...

...

...

-USD

...

...

...

- VND

...

...

...

2

Bonds

...

...

...

- USD

...

...

...

- VND

...

...

...

3

Certificates

...

...

...

- USD

...

...

...

- VND

...

...

...

...

...

...

...

...

Total

...

...

...

- USD

...

...

...

- VND

...

...

...

b) Holding of securities/indirect outward investments

No.

Type of securities

...

...

...

Total outstanding securities of the issuer determined at the reporting time

Investment percentage (%)

Volume

Value at the time of purchase

Market price at the reporting time
(USD)

Growth rate in investment assets (%)

USD

VND

(1)

...

...

...

(3)

(4)

(5)

(6)

(7)=(6)/(4) *100

(8)

(9)=(3)/(8) *100

I

Investment in securities

...

...

...

1

Shares

...

...

...

…

...

...

...

2

Bonds

...

...

...

…

...

...

...

3

Certificates  

...

...

...

…

...

...

...

II

Other investments

...

...

...

…….

...

...

...

Notes:

Column (2): Type of securities is specified according to ticker symbols of securities held by the fund management company.

...

...

...

Column (4): calculated at the purchase price/contributed capital under contracts;

Column (6): closing prices or average trading prices determined at the reporting time of listed securities or fair value of unlisted securities are specified; regarding bonds, columns (8), (9) may be kept blank.

5. Other business operations conducted in accordance with laws

No.

Contents

Quantity

Value
(VND)

Accumulated value (VND)

Average service charges (%)

...

...

...

Ongoing contracts (service types are specified)

…

...

...

...

2

Contracts concluded in the month, including:

Contracts for….. (type of contract)

...

...

...

Domestic parties

...

...

...

Individuals

Organizations

...

...

...

Foreign parties

Individuals

...

...

...

Organizations

...

...

...

…

Service charges earned

...

...

...

…

Total service charges earned

...

...

...

II. Information about personnel, shareholders and capital-contributing members

1. Organizational structure

No.

Contents

During reporting period

Previous period

...

...

...

Total employees (including those working at headquarters, branches, representative offices, foreign and Vietnamese employees)

Including

Number of employees holding securities practicing certificates

...

...

...

Number of employees holding fund management practicing certificates

Number of employees holding financial analysis practicing certificates

...

...

...

Number of employees holding securities brokerage practicing certificates

II

Headquarters

1

Total employees

...

...

...

2

Number of employees holding securities practicing certificates

2.1

Number of employees holding fund management practicing certificates

...

...

...

Number of employees holding fund management practicing certificates as prescribed in Clause 3 Article 7 of the Circular providing guidance on operation of securities investment fund management companies

2.2

Number of employees holding financial analysis practicing certificates

Number of employees holding financial analysis practicing certificates as prescribed in Clause 3 Article 7 of the Circular providing guidance on operation of securities investment fund management companies

...

...

...

2.3

Number of employees holding securities brokerage practicing certificates

Number of employees holding securities brokerage practicing certificates as prescribed in Clause 3 Article 7 of the Circular providing guidance on operation of securities investment fund management companies

...

...

...

Branches (information about every branch is provided)

1

Total employees working at the branch

2

Number of employees holding securities practicing certificates

...

...

...

2.1

Number of employees holding fund management practicing certificates

Number of employees holding fund management practicing certificates as prescribed in Clause 3 Article 7 of the Circular providing guidance on operation of securities investment fund management companies

...

...

...

Number of employees holding financial analysis practicing certificates

Number of employees holding financial analysis practicing certificates as prescribed in Clause 3 Article 7 of the Circular providing guidance on operation of securities investment fund management companies

2.3

Number of employees holding securities brokerage practicing certificates

...

...

...

Number of employees holding securities brokerage practicing certificates as prescribed in Clause 3 Article 7 of the Circular providing guidance on operation of securities investment fund management companies

IV

Representative offices

...

...

...

Total employees

2. Shareholders/capital-contributing members

No.

Information about shareholders/capital-contributing members

Holdings at end of month

Individual’s full name/ organization’s name

Number of ID Card or citizen identity card or Passport (of individual)/ Number of enterprise registration certificate (of organization)

...

...

...

Contact address

Nationality

Number of shares/ value of contributed capital

Ratio of holding to charter capital (%)

1

...

...

...

...

…

...

...

...

(The fund management company that is a single-member limited liability company or public company is not required to complete this section)

3. Training programs (included in annual reports only)

 No.

Training programs/contents and duration

Number of participants

1

…

...

...

...

INTERNAL CONTROLLER
(signature and full name)

(GENERAL) DIRECTOR OF FUND MANAGEMENT COMPANY
(Signature, full name and seal)

APPENDIX VII

SAMPLE OF REPORT ON PORTFOLIO MANAGEMENT OPERATIONS
(Enclosed with the Circular No. 99/2020/TT-BTC dated November 16, 2020 of the Minister of Finance)

NAME OF FUND MANAGEMENT COMPANY
--------------

SOCIALIST REPUBLIC OF VIET NAM
Independence-Freedom-Happiness
-----------------

No.: ……

…..[date & place]

...

...

...

REPORT

On portfolio management operations
(in…….(month))

To:  State Securities Commission of Vietnam 

1. Names of depository banks where the fund management company opens depository accounts to serve its management of investment portfolios:

2. Depository accounts serving investment portfolio management activities of the fund management company:

3. Reporting date:

A. General portfolio management report

I. General information about investment portfolio management activities

 No.

...

...

...

Reporting period

Previous period

Notes

1

Total number of ongoing trust agreements

- With organizations (%)

...

...

...

- With individuals (%)

2

Total value of trust agreements (framework agreements) (VND)

...

...

...

- With organizations (%)

- With individuals (%)

...

...

...

Total value of trust agreements (actual disbursed amounts) (VND)

- With organizations (%)

- With individuals (%)

...

...

...

4

Total market value of trust agreements (VND)

- With organizations (%)

...

...

...

- With individuals (%)

5

Total portfolio management service charges earned during period (VND)

...

...

...

6

Average rate of portfolio management service charges (5/4)

II. Transactions arising from performance of portfolio management activities during the period

Buy transactions

Sell transaction

Average total transaction value / average total value of trust assets

...

...

...

Transaction value
(VND)

Volume

Transaction value
(VND)

Current period

Previous period

...

...

...

III. General information about trust agreements at each depository bank/depository member or foreign depository institution (reporting on each agreement)

1. Name of trustor A:

- Depository account:

- Name of depository bank/depository member/foreign depository institution:

No.

Types

Quantity

Market price at the reporting time
(VND)

...

...

...

Rate (%)/Total value of investment portfolios at the reporting time

A

Listed and registered securities

I

Listed shares

1

...

...

...

2

Total

...

...

...

II

Fund certificates

1

...

...

...

2

Total

...

...

...

III

Shares registered for trading

1

...

...

...

2

Total

...

...

...

IV

Bonds

1

...

...

...