CIRCULAR

GUIDANCE ON ESTABLISHMENT AND MANAGEMENT OF THE OPEN-ENDED FUND

The Circular No. 183/2011/TT-BTC dated December 16, 2011 of the Minister of Finance on providing guidance on establishment and management of the open-ended fund, taking effect as of March 01, 2012, has been amended and supplemented by:

The Circular No. 15/2016/TT-BTC dated January 20, 2016 of the Minister of Finance amending and supplementing several articles of the Circular No. 183/2011/TT-BTC dated December 16, 2011 on providing guidance on establishment and management of the open-ended fund, taking effect as of March 15, 2016.

Pursuant to the Law on Securities dated June 29, 2006;

Pursuant to the Law on Enterprises dated November 29, 2005;

Pursuant to the Law dated November 24, 2010 on amending and supplementing a number of articles of the Law on Securities;

Pursuant to the Government’s Decree No. 118/2008/ND-CP dated November 27, 2008 defining the functions, tasks, powers and organizational structure of Ministry of Finance;

...

...

...

Chapter I

GENERAL PROVISIONS

Article 1. Scope and regulated entities

This Circular guides the mobilization of capital for the establishment and management of open-ended funds, and the operation of the fund management companies, supervisory banks, distributors and providers of services related to the management of open-ended funds within the territory of the Socialist Republic of Vietnam.

Article 2. Interpretation of terms

In this Circular, these terms are construed as follows:

1. Soft commission refers to the expenses which are not directly paid in cash and are included in other valid expenses.

2. Nominee agents are the distributors which open nominee accounts in their names and trade fund certificates on behalf of investors in the secondary ledger.

3. Distributors are securities trading organizations, depository banks, commercial banks, insurers and other economic organizations that have registered the distribution of open-ended fund certificates.

...

...

...

5. Liquidation value of a share is determined by the value of owner’s equity of the issuer divided by the total number of outstanding stocks.  

6. Major investment portfolio of the fund are the investments in valuable papers and securities issued by the same issuer (including money market instruments, negotiable instruments, and securities as prescribed in Point b, d, and e Clause 2 Article 15 of this Circular) of which the total value makes up at least five percents (5%) of the total value of assets of the fund.

7. Fund consolidation is the consolidation of two open-ended funds or more (hereinafter referred to as consolidating funds) into a new open-ended fund (hereinafter referred to as consolidated fund) by transferring all assets, rights and legal interests, debts and obligations of the consolidated fund, and at the same time terminating the existence of the consolidating funds.

8.  Personal profile includes a document providing information on the standard form prescribed in Annex 07 together with a certified copy of the ID card, passport or other identity papers.

9. (abrogated)

10. Valuation date means the date on which the fund management company determines the NAV of the fund as prescribed by the Law on securities.

11. Fund certificate trading day means the valuation date on which the fund management company, on behalf of the fund, issues and redeems open-ended fund certificates.

12. Supervisory bank is a commercial bank having Certificate of registration for securities depository, appointed by a fund management company to provide depository services and supervise the fund management.

13. Beneficiaries refer to organizations and individuals whose names are not registered as owners of assets, but such assets are totally under their ownership.

...

...

...

15. Investment portfolio management of a fund comprises the investment research and analysis; formulation and implementation of investment strategies and tactics; decisions on the structure of the investment portfolio and types of assets for capital investment and divestment, and decisions on the time of making the investments and divestments.

16. Fund means an open-ended fund as defined in Clause 30 Article 6 of the Law on securities in 2006.

17. Bond funds are the open-ended funds that invest in various kinds of treasury bills, bonds, and other fixed-income valuable papers and instruments with the proportion of investment in such assets that makes up at least eighty percents (80%) of the NAV.   

18. Fund merger means the form whereby one or several open-ended funds (hereinafter referred to as merged funds) merge into another open-ended fund (hereinafter referred to as merging fund) by transferring all assets, rights and legal interests, debts and obligations to the merged fund, and at the same time terminating the existence of the merged funds.

19. Primary ledger of investors (hereinafter referred to as primary ledger) means data in the form of a document or electronic data file or both, recording information about investors who own fund certificates.

20. Secondary ledger of investors (hereinafter referred to as the secondary ledger) is the ledger of investors made and managed by distributors under the authorization from the fund management company.

21. Quarterly average number of the fund units is the total number of outstanding fund units determined after each fund certificate trading day divided by the number of such trading days in the quarter.

22. Open-ended fund certificate trading account means the account via which an investor buys, sells and owns certificates of one or more open-ended funds, which are managed by a fund management company. The open-ended fund certificate trading accounts shall be opened and managed by providers of transfer agent services. There are two types of these accounts:

a) Investor’s account is the account owned by an investor and opened in such investor's name;

...

...

...

24. Independent member of the board of representatives of the fund refers to a member unrelated to the fund management company or supervisory bank.

25. The time of closing the order book is the deadline for distributors to receive trading orders from investors that shall be executed on the trading day. The time of closing the order book shall be specified in the fund’s charter and publicly announced in the prospectus or summary prospectus which is not allowed to exceed the time of closing the securities market of the Stock Exchange on the latest day before the fund certificate trading day.

26. Quotation service provider refers to a securities trading organization or a credit institution which is authorized to conduct foreign exchange services, and/or a bond quotation system selected by the fund management company to provide the quotation of price of assets other than listed securities or registered securities.

27. Related service provider refers to the depository bank or the Vietnam Securities Depository authorized by the fund management company to provide one or more of the following activities:

a) Investment fund management services:

- Making accounting entries for the fund’s transactions: recording changes of cash inflows and outflows of the fund;

- Preparing financial statements of the fund, and coordinating with and assisting the fund's auditing firm during the fund auditing;

- Determining the NAV of the fund and the NAV of one fund certificate unit in accordance with law and provisions in the fund’s charter; 

- Performing other activities in accordance with the law and provisions in the fund’s charter.

...

...

...

- Preparing and managing the primary ledger; opening, monitoring and managing investor’s accounts and nominee accounts; certifying ownership of open-ended fund certificates;

- Recording buy orders, sell orders, switching orders made by investors; transferring the ownership of the fund certificates; updating the primary ledger;

- Supporting investors in exercising their rights related to their ownership of fund certificates;

- Organizing meetings of the board of representatives of the fund, general meetings of investors of the fund; maintaining the contact channel with investors, distributors, regulatory authorities and other competent agencies;

- Providing investors with financial statements and operational reports of the fund, prospectus, summary prospectus, trading account statements, transaction certifications, and other documents.

28. Average annual profit rate of the fund is the pre-tax profit of such fund during a year divided by its average annual NAV.

29. Charter capital of the open-ended fund means the amount of capital raised during the initial public offering of fund certificates.

30. Index funds are open-ended funds investing in stock portfolios as the basis for constituting the market index in which the market index is constructed and managed by Stock Exchanges in Vietnam in accordance with laws on the exchange-traded funds (ETFs).

Chapter II

...

...

...

Section I: THE OPEN-ENDED FUND ESTABLISHMENT

Article 3. Type and name of the fund

1. The name of a fund must be in Vietnamese and may include numbers and symbols; it must be pronounceable and contain at least the two following elements:

a) The phrase “Investment Fund”;

b) The type of the fund, suitable for the investment objectives and policies, and the structure of the investment portfolio and assets.

2. The name of the fund must comply with the laws on enterprises.  The State Securities Commission of Vietnam (SSC) is entitled to require fund management companies to change the fund names in accordance with related laws.

Article 4. Application for registration of initial public offering of open-ended fund certificates

1. Application for registration of initial public offering of open-ended fund certificates includes:

a) Application form for the public offering of fund certificates according to the form stated in the Annex 01 enclosed with this Circular;

...

...

...

c) The fund’s prospectus and summary prospectus;

d) The list of the fund managers, enclosed with their personal profiles;

e) The principle contract on the supervision; the principle contracts signed with related service providers (if any), including contents prescribed in Annex 32 enclosed with this Circular; the principle contracts signed with nominee agents; the principle contracts on the distribution of fund certificates.  In case an organization proposed to act as a distributor or nominee agent who has been not issued with certificate of registration of the fund certificate distribution, such organization must supplement the application for registration of the fund certificate distribution as prescribed in Clause 3 Article 39 of this Circular;

f) The fund’s advertising and introduction documents as prescribed in Clause 1 Article 42 of this Circular (if any);

g) In case the fund management company does not propose to hold the first general meeting of investors, it must provide additional documents for consulting the investors, including:

- The list of representatives of the fund, enclosed with their personal profiles and other valid documents proving that the board of representatives of the fund has satisfied all requirements in Clauses 2 and 3 Article 28 of this Circular;

- Documents related to other issues that need to be consulted by the investors.

2. Application for registration of initial public offering of open-ended fund certificates shall be made into one (01) original attached with electronic files. The original set of the application shall be sent by post or directly to the SSC’s administrative department.

3. The information in the application must be correct, accurate, unequivocal, and contain sufficient important information which may affect investors' decisions. The fund management company is liable for the information and documents in the application.

...

...

...

6. The certificate of registration of the public offering of open-ended fund certificates issued by the SSC to the fund management company is also the document certifying that the application for such initial public offering has satisfied all conditions and procedures stipulated by law.

7. While the SSC is considering the application for registration for the offering of open-ended fund certificates, the fund management company and related persons are only permitted to use, in an honest and accurate manner, the information in the prospectus already submitted to the SSC for market survey purposes, and they must clearly state that the information is unofficial. The information for market survey purposes must not be provided via the mass media.

8. In the absence of any additional contents or information in the application for registration of the follow-on offering of fund certificates, the fund management company shall not be obliged to provide written evidence that supervisory banks, related service providers or fund managers have met stipulated conditions which has already been submitted in the application for registration of the previous offerings of fund certificates.  Where new funds that are planning offerings share the same fund’s charter and prospectus, the fund management company shall not be required to submit these documents in the application for registration of the offering of new fund certificates.

Article 5. Offering of fund certificates

1. The initial public offering of fund certificates is only permitted to be implemented:

a) After the SSC has issued a certificate of registration of the offering of fund certificates; and

b) The fund management company ensures that buyers are able to access the prospectus and summary prospectus in the application for the offering of fund certificates at distributors mentioned in the notice of issuance.

2. The fund management company must, at least fifteen (15) days prior to the initial public offering of fund certificates, send to the SSC and publicly announce the notice of issuance with contents regulated by the Ministry of Finance on the application for registration of the public offering of securities via the mass media as prescribed in Clause 3 of this Article.

3. The announcement of information shall be carried out through the following means of mass media:

...

...

...

b) Other means of mass media in accordance with law;

4. The fund management company, distributors and the underwriter (if any) must distribute fund certificates fairly and publicly, ensuring that investors have a minimum period of twenty (20) days in which to register to purchase fund certificates, and this time-limit must be recorded in the notice of issuance.

5. The proceeds from the initial public offering of fund certificates must be transferred into the escrow account opened at the supervisory bank and kept there until the SSC issues a certificate of fund establishment registration. The supervisory bank must pay interest at least equal to the demand deposit interest rate during the period the capital raised for the fund is held in the escrow opened at such bank.

6. The fund management company must finish the distribution of fund certificates within ninety (90) days from the effective date of the certificate of registration of the public offering of fund certificates. If the fund management company is unable to complete the distribution within this time-limit, it must submit the application to the SSC for an extension of distribution period of fund certificates.

Within seven (07) days as of the receipt of the application submitted by the fund management company, the SSC shall consider to grant an extension of the time-limit for distributing fund certificates but such extension must not exceed thirty (30) days.  In case of refusal to grant an extension of this time-limit, the SSC shall specify its reasons in writing.

7. The suspension or cancellation of the offering must comply with Article 22 and 23 of the Law on securities.

Article 6. Application for fund establishment registration  

1. The fund management company must send the SSC an application for the fund establishment registration within ten (10) days as of the end of the initial public offering of fund certificates. The application shall include:

a) The application for the fund establishment registration according to the form prescribed in the Annex 09 enclosed with this Circular;

...

...

...

c) List of nominee agents and investors, including investors conducting transactions via nominee accounts, according to the form prescribed in Annex 11 of this Circular and enclosing the following information:

- For nominee agents: full names, abbreviated names and trading names, number of the licenses for the establishment and operation/ certificates of business registration of nominee agents; the number of investors registering for trading via nominee accounts and the number of fund units in nominee accounts;  

- For investors: full name, ID number or unexpired passport number, address (if the investor is an individual) or full name, abbreviated name, number of the certificate of business registration, head office’s address (if the investor is an organization), number of the trading account of open-ended fund certificates and trading method (via nominee agents or distributors); the number of fund units owned, ownership ratio, and date of purchase;

d) Record of investors’ opinions on relevant contents as regulated in Point g Clause 1 Article 4 of this Circular.

2. The application for the fund establishment registration prescribed in Clause 1 of this Article shall be made into one (01) original attached with electronic files.  The original set of the application shall be sent by post or directly to the SSC’s administrative department.

3. The SSC shall, within ten (10) days as from the receipt of complete and valid application, issue a certificate of the fund establishment registration. In case of refusal, the SSC shall specify its reasons in writing.4. The fund management company is permitted, immediately after the certificate of the fund establishment registration takes effect, to obtain release of the capital held in the escrow account at the supervisory bank in order to make investments. The supervisory bank must pay interest on the capital amount held in the escrow account in accordance with the contract signed by the supervisory bank and the fund management company.

5. The fund management company must, within fifteen (15) days as from the end of the offering, disclose information in accordance with Clause 3 Article 5 of the Circular, report to the SSC, pay fees and discharge financial obligations arising from the capital mobilization and refund in full to investors their cash contributions and the interest (if any) upon the occurrence of one of the following events:

a) Less than one hundred (100) investors, excluding institutional securities investors, purchased fund certificates;

b) Total value of capital mobilized was less than fifty (50) billion Vietnamese dongs or less than the estimated minimum capital value according to the fund’s charter (if any);

...

...

...

Article 7. Ledger of investors and the ownership certification

1. Within five (05) days as from the effective date of the certificate of registration of the fund establishment, the fund management company shall itself or grant powers to a related transfer agent service provider to establish and manage a ledger of investors (primary ledger) and confirm with investors their ownership of fund certificates. The fund management company may authorize a nominee agent in a foreign country to establish and manage the secondary ledger and to confirm with investors in such foreign country their ownership of fund certificates. The authorization to related service providers must be made on principles and on the basis of a contract containing contents prescribed in Annex 32 enclosed with this Circular.

2. The primary ledger includes the following information:

a) The name and head office’s address of the fund management company, of the supervisory bank, and of the depository bank (if any); the full name of the fund;

b) Investors’ information, including:

In the case of individuals: full name, ID number or unexpired passport number, contact address, contact telephone number, and email address (if any);

In the case of organizations: full name, abbreviated name, trading name, head office’s address, number of license for the establishment and operation/ certificate of business registration; full name, ID number or unexpired passport number, contact telephone number and email address of the individual who is authorized by such organization to trade fund certificates;

c) Account numbers of investors; or sub-account numbers, attached with the numbers of nominee accounts; securities trading codes (applicable to foreign investors);

d) The quantity of fund units owned; and dates of registration of ownership.

...

...

...

4. Within three (03) days from the day on which the transaction is made or at the request of an investor according to the form in Annex 12 enclosed with this Circular, the fund management company, nominee agents, and related service provider shall adjust the information about the investor in the primary ledger and secondary ledger in one of the following cases:

a) There is a fund certificate transaction implemented between the fund and the investor on a fund certificate trading day;

b) There is a non-commercial transaction such as a change of name of owner in a case of donation, inheritance or transfer of ownership pursuant to a court decision or in another case as stipulated by law; or there is a transfer of fund certificates from a nominee account to an investor’s account or vice versa;

c) There is a change of information about an investor.

5. The fund management company and related service providers must always have sufficient information about the ownership of each investor, including those conducting transactions via nominee accounts (except for the investors performing transactions via overseas nominee accounts). The information about assets of investors in the primary ledger, including the investors trading via nominee accounts, is the proof of the investors' ownership of the fund certificates. The Investor's ownership shall be established when the information about investor's ownership is updated in the primary ledger.

Article 8. Fund’s charter, prospectus and summary prospectus

1. The fund’s charter is initially issued by the fund management company according to the form in Annex 02 enclosed with this Circular. Investors that register for purchasing fund certificates are considered having approved the fund’s charter. The fund management company must obtain opinions from the general meeting of investors prior to amending or supplementing the issued fund’s charter. If the general meeting of investors authorizes, or if it is set forth in the fund's charter, the following contents may be amended or supplemented without obtaining opinions from the general meeting of investors:

a) Any amendment or addition or adjustment due to a change in legal provisions;

b) Grammatical or spelling errors in the fund's charter.

...

...

...

3. The prospectus must contain all information in the form provided in Annex 03 enclosed with this Circular. The prospectus shall be updated when significant information arises, or periodically updated according to the frequency specified in the fund’s charter. If the SSC does not provide any written objection within fifteen (15) days from the date on which the prospectus is lodged with the SSC, the fund management company is permitted to provide the prospectus to related service provider, distributors and investors.

4. The fund management company shall make a summary prospectus that contain fundamental contents as prescribed in Annex 04 enclosed with this Circular.

5. The prospectus and the summary prospectus must be easily understandable, must not use too many technical expressions, and must be published on the websites of the fund management company, related service provider and distributors, and be provided free of charge to investors on request.

6. Supervisory banks and related service provider shall be allowed to clearly state that, in their prospectus and advertisements for open-ended funds, only information regarding these banks or providers is accredited, and shall be held liable within their scope of operations agreed upon in contracts signed with fund management companies and in consistence with laws and regulations as well as information that they have provided in order to create prospectuses and advertisements for open-ended funds.

Section II: OPEN-ENDED FUND CERTIFICATE TRANSACTIONS

Article 9. Investor’s accounts and nominee accounts

1. In the case of any investor trading fund certificates for the first time, the fund management company or distributor must collate identification information about the investor and beneficiary (if any) and must open a fund certificate trading account for the investor on the basis of the investor's request for registration of the fund certificate trading according to the form in Annex 20 enclosed with this Circular. Investors have the right to select the following fund certificate trading accounts:

a) Personal account, in the name of the investor (referred as the investor’s account as prescribed in Point a Clause 22 Article 2 of this Circular);

b) A sub-account to trade within the account in the name of the nominee agent as prescribed in Point b Clause 22 Article 2 of this Circular (referred as the investor’s sub-account).

...

...

...

3. An investor’s account or sub-account must contain the following particulars:

a) The number of the trading account or sub-account;

b) The quantity of fund units;

c) The quantity of increased or reduced fund units and the reasons for such increase or reduction;

d) Other personal information about the investor as regulated in Clause 2 Article 7 of this Circular.

4. Management of investor’s accounts and nominee accounts must satisfy the following principles:

a) The fund management company or related service provider must open and manage a separate and independent account for each nominee agent and for each investor. The distributor shall provide updated information on the opening and closure of investor’s accounts to the fund management company or related service provider;

b) Nominee agent must open and manage sub-accounts independently and separately of each investor. The total balance of sub-accounts of investors must match the balance of the nominee account, and the balance of each sub-account must match the data about the investor's ownership of the fund certificates in the primary ledger;

c) A nominee agent must provide information about sub-accounts of each investor to the fund management company or related service provider, and must regularly check to ensure that the balance in any sub-account is consistent with the data and status of ownership of such investor in the primary ledger.  This provision does not apply to foreign nominee agents.

...

...

...

6. A foreign investor, before opening a fund certificate trading account or sub-account, must register a securities trading code in accordance with the Ministry of Finance’s regulations on activities of foreign investors in the securities market.  This provision does not apply to an investor outside the territory of the Socialist Republic of Vietnam that makes transactions via the nominee account of a foreign nominee agent.

7. A foreign nominee agent must, before opening a nominee account, apply for a securities trading code in accordance with the Ministry of Finance’s regulations on activities of foreign investors in the securities market.

8. A transfer agent service provider and nominee agent must promptly and accurately update complete information about securities trading codes of foreign investors and their ownership status, and promptly provide complete information to state competent authorities upon written requests. This provision shall not apply to foreign nominee agents that open the nominee accounts as prescribed in Clause 7 this Article.

Article 10. General provisions on fund certificate trading

1. Within thirty (30) days from the effective date of the Certificate of registration of the fund establishment, the fund management company shall arrange the fund certificate trading for investors. Trading activities must be arranged on a periodical basis in accordance with the provisions in the fund’s charter and as announced in the prospectus and summary prospectus. The trading frequency must be no less than twice per month.

2. Trading orders must be sent to a distributor announced in the prospectus and summary prospectus or announced on the website of the fund management company, or must be sent to the fund management company or related service provider. The fund management company or related service provider must establish a system for receipt of trading orders from investors in Vietnam, enabling them to place orders with any distributor announced in the prospectus and summary prospectus or announced on the website of the relevant fund management company.

3. Distributors may only receive trading orders from investors when order forms are filled with complete and accurate information according to the form provided in Annex 21 enclosed with this Circular. Order forms shall be kept by distributors in accordance with the laws on securities, and ensure inclusion of the time of receipt of orders and receivers of trading orders obtained from investors in a sufficient, accurate, timely and evident manner.    Delivery of investor’s trading orders via telephone, fax, internet connection or electronic devices and other transmission lines must be consistent with regulations on electronic transactions and order forms must be stored in the form of electronic data folder.

4. Fund management companies and related service providers are only permitted to implement orders received prior to the time of closing the order book. Depending on the provisions in the fund’s charter and prospectus, orders received after the time of closing the order book shall either be cancelled or may continue to be valid for implementation on the next fund certificate trading day.

5. The fund management company, related service provider or nominee agent shall, within three (03) days from a fund certificate trading day, update information about post-trade ownership of investors in the primary ledger and also send investors trading confirmation according to the form defined in Annex 22 enclosed with this Circular.

...

...

...

7. The fund management company, related service provider and nominee agents must keep an order book containing the information according to the form defined in Annex 23 enclosed with this Circular, in which they record complete information about fund certificate trading orders from investors.

8. Investors are permitted to switch between funds if the fund management company has two or more funds and there is a relevant provision in the charters of the funds and in the prospectuses. The switching order shall be executed as follows:

a) The sell order of sold fund certificates shall be executed first, then the order to purchase target fund certificates shall be executed;

b) Orders shall be executed on fund certificate trading days of corresponding funds;

c) Investors are only required to make settlement of switching fees (if any) in accordance with provisions in charters of relevant funds, and are not required to pay fees for buying and selling on orders implemented in accordance with Points a and b of this Article.

9. A fund management company and its related individuals are permitted to contribute capital to establish the fund and trade open-ended fund certificates which is currently managed by such company at the trading prices applicable to other investors as regulated in Article 14 of this Circular.

Article 11. Fund certificate buy orders

1. Implementation of a buy order of an investor or nominee agent must comply with the following principles:

a) A buy order must be sent together with valid documents certifying that the investor has made full settlement into the fund’s account or there must be confirmed by the supervisory bank as prescribed in Point c this Clause. Nominee agents shall make settlement on the basis of the difference between the buy order and the sell order, and the time-limit for settlement shall accord with the contract between the transfer agent service provider and the nominee agent;

...

...

...

c) The supervisory bank must confirm with the fund management company, distributor or related service provider that complete purchase monies for the fund certificates have been received from the investor or from nominee agents;

d) The transaction value of a buy order must not be less than the minimum buying value (if any) stipulated in the fund's charter and announced in the prospectus;

e) The quantity of fund units sold to investors or nominee agents may be an odd number in the form of figures containing a decimal fraction which shall be rounded up to the second figure after the decimal point.

2. A fund management company must open a cash account at the supervisory bank in order to receive settlement from investors and nominee agents for the purchase of fund certificates. A nominee agent must open an account for making settlement of fund certificate transactions at the supervisory bank as prescribed in Point e Clause 3 Article 40 of this Circular in order to receive settlement from investors trading via nominee accounts.

3. Sums earned by purchasing fund certificates after being transferred to the cash account of the fund at a supervisory bank shall be promptly used for investment on the trading day of such fund certificates. The supervisory bank are responsible for paying interest to the fund at the currently applicable rate of interest on demand deposit from the date on which the fund receives such sums from the investors.

4. Where buy orders of fund certificates and settlement for such orders are performed by individuals or organizations other than investors, order forms and written confirmation of such settlement must clearly include name, account number and settlement value of the interested investor.

Article 12. Fund certificate sell orders

1. Implementation of a sell order of an investor or nominee agent must comply with the following principles:

a) A sell order is only permitted to be implemented when the fund management company, distributor, nominee agent or related service provider ensures that the investor has a sufficient quantity of fund units to sell as requested, and that the remaining quantity of fund units owned by the investor will not be less than the minimum quantity (if any) prescribed in the fund’s charter and announced in the prospectus for maintaining an account or sub-account;

...

...

...

c) Settlement shall be made by remittance or by some other forms upon written request of the investor or nominee agent;

d) The time-limit for making settlement shall be implemented as stipulated in the fund’s charter and as announced in the prospectus but may not be later than seven (07) days from the fund certificate trading day. In the cases in Clause 3 of Article 13, and after the board of representatives of the fund issues the written approval, the settlement may be delayed but not later than thirty (30) days as from the fund certificate trading day.

2. The nominee agent is responsible to complete settlement to the investor within three (03) days from the date of settlement made as prescribed in Point d Clause 1 of this Article.

3. If fund's charter or the prospectus allows, the fund management company may transfer a part of the investment portfolio instead of paying cash to investors.  The transfer of investment portfolio must satisfy the following conditions:

a) It may only be conducted when the fund management company considers it necessary in order to avoid a negative impact on the NAV of the fund. The transfer must be approved in writing by the board of representatives, and reports must be provided at the next general meeting of investors;  

b) The investor (the transferee) issues a written approval;

c) It may only be conducted in respect of a sell order with a total settlement value in excess of fifty (50) billion dongs or some other high value as stipulated in the fund’s charter and announced in the prospectus;

d) The structure of the part of the investment portfolio transferred to the investor must be completely the same as the structure of the investment portfolio of the fund, ensuring the consistency between asset types, structure and asset ratio in the investment portfolio of the fund.

4. The supervisory bank is responsible for checking and certifying that the transfer is conformable with Clause 3 of this Article.

...

...

...

1. The fund management company has the right to cover only a part of a buy order, sell order or switching order from an investor in any one of the following cases:

a) The total value of sell orders (including sell orders from switching activities) less the total value of buy orders (including buy orders from switching activities) on a fund certificate trading day is more than ten percents (10%) of the NAV of the fund; or

b) The complete execution of the investor’s orders might lead to the fact that:

- The NAV of the fund goes down below fifty (50) billion dongs; or

- The value of remaining fund units or the total number of remaining fund units in the investor’s account is lower than the minimum value or the minimum number of fund units required to maintain the account of such investor as prescribed in the fund's charter and announced in the prospectus (if any); or

- The remaining NAV or the number of remaining fund units is lower than the minimum NAV or the minimum number of outstanding fund units prescribed in the fund's charter and announced in the prospectus (if any); or

- The number of outstanding fund units exceeds the maximum amount (if any) prescribed in the fund’s charter and announced in prospectus; or

c) Other cases prescribed in the fund's charter and announced in the prospectus.

2. Regarding the redemption of the remaining part of sell orders or switching orders with respect to the orders have been satisfied partially as prescribed in Clause 1 of this Article, the fund management company must apply either of two principles defined in the fund's charter and announced in the prospectus as follows:

...

...

...

b) The principle of ratio parity: the unexecuted part of order will be coupled with later arriving orders for implementation, ensuring the ratio between the value of orders implemented and the value registered for trading are the same.

3. In the cases in Point a Clause 1 of this Article, if there is a relevant provision in the fund’s charter and prospectus, the fund management company is permitted to extend the time-limit for settlement but not beyond thirty (30) days after the fund certificate trading day.

4. The open-ended fund certificate trading may be suspended in one of the following cases:

a) The fund management company is unable to redeem open-ended fund certificates as requested due to an event of force majeure;

b) The fund management company is unable to determine the NAV of the open-ended fund on the date of determining the price for redeeming open-ended fund certificates because the Stock Exchange decides to suspense securities transactions in the fund’s investment portfolio.

c) Other cases as stipulated in the fund’s charter or as considered necessary by the SSC.

5. The fund management company must report to the board of representatives of the fund and the SSC within twenty four (24) hours of the occurrence of any event specified in Clause 4 of this Article, and must continue to redeem open-ended fund certificates immediately after such event terminates.

6. The duration of any suspension of fund certificate trading shall be as prescribed in the fund’s charter but must not be longer than ninety (90) days from the last trading day of fund certificates.

7. The fund management company must, within thirty (30) days as of the end of the suspension of fund certificate trading as prescribed in Clause 6 of this Article, arrange a meeting to obtain opinions from the general meeting of investors on dissolution or division of the fund, or on continuing to extend the duration of suspension of fund certificate trading.

...

...

...

Article 14. Initial public offering price, sell price and redemption price of open-ended fund units

1. The initial public offering price of an open-ended fund unit shall be prescribed by the fund management company in the fund’s charter and announced in the prospectus.

2. The sell price of a fund unit, meaning the price which the investor must pay to the fund management company, shall equal the NAV of a fund unit calculated on the fund certificate trading day, plus the issuance fee (if any).

3. The price of redeeming a fund unit, meaning the price which the fund management company must pay to an investor, shall equal the NAV of a fund unit calculated on the fund certificate trading day minus the redemption fee (if any).

4. The redemption, issuance and switching fees can be set at various rates, based on the period of holding fund certificates, investment objectives, or investment values. Maximum fee rates must be provided for in the fund’s charter and prospectus. Specific fee rates must be announced in the prospectuses, summary prospectuses, or on websites of fund management company, distributors or in other forms.  The issuance fee is not allowed to exceed five percents (5%) of the transaction value. The redemption and/or switching fee is not allowed to exceed three percents (3%) of the transaction value.

5. When trading fund certificates, investors must not be required to pay any other fees to the fund management company, authorized organization or distributor apart from the fees which the fund must pay as prescribed in the fund’s charter and the issuance fee, redemption fee (if any) or switching fee (if any) as prescribed in the fund’s charter and announced in the prospectus.

6. These fee rates shall be increased to the extent that the increased rates do not exceed the maximum rates prescribed in paragraph 4 of this Article. The soonest day to apply the increased fee rates is the 90^th day from the date on which the fund management company announces new fee rates on its website.

Section III: INVESTMENT OF OPEN-ENDED FUNDS

Article 15. Investment limits of an open-ended fund

...

...

...

2. The fund may invest in the following assets:

a) Deposits at commercial banks as prescribed by the laws on banking;

b) Foreign currency, money market instruments including valuable papers and negotiable instruments in accordance with relevant laws;

c) Government bonds, Government-guaranteed bonds, and local authority bonds;

d) Listed stocks, stocks registered for trading, and listed bonds of issuers operating in accordance with the law of Vietnam;

e) Stocks, bonds to be listed or registered by the issuers that operate as per Vietnam’s law; corporate bonds issued by listed organizations for which settlement guarantee is provided by credit institutions or which issuers undertake to repurchase;  

f) Derivative securities listed and traded on the Stock Exchange, but with the sole objective of avoiding risks;

g) Rights that may arise in connection with securities that the fund is holding.

3. The investment in the assets prescribed in Point e Clause 2 of this Article must satisfy the following conditions:

...

...

...

b) The board of representatives of the fund has provided written consent to the type and code of the securities, to the quantity and the transaction value, and to the time for implementing same;

c) There is adequate proof that the issuer will complete its application for trading registration or listing such securities on the Stock Exchange within twelve (12) months from the trading date.

4. The structure of the investment portfolio of open-ended fund must adhere to the following rules:

a) Except for deposits in the demand account of the fund opened at a supervisory bank, it is not allowed to invest more than forty-nine percents (49%) of the fund’s total asset value in the assets referred to in Point a and b Clause 2 of this Article. This provision shall not be applied to bond funds;
b) Do not invest more than thirty percents (30%) of the fund’s total asset value in the assets prescribed in Point a, b, d, e and f Clause 2 of this Article, which are issued by the same company or by a group of companies having mutual ownership relations, including the investment in derivatives which is the value agreed upon in the contract defined in Annex 13 to this Circular;

c) Do not invest more than twenty percents (20%) of total asset value of the fund in outstanding securities of an issuer, including valuable papers, negotiable instruments, bonds (except government bonds), voting stocks, non-voting stocks, and convertible bonds;  

d) Do not invest in securities of an issuer more than ten percents (10%), or fifteen percents (15%) (in respect of an index fund or exchange-traded fund) of the total value of outstanding securities of that issuer, except for government bonds;

e) Do not invest more than ten percents (10%) of the total asset value of the fund in the assets provided for in Point e Clause 2 of this Article;

f) The total value of major investment portfolio in the fund’s investment portfolio must not exceed forty percents (40%) of the fund’s total asset value, except in the case of the bond fund;

g) At any time, the total value agreed upon in derivatives trades, outstanding loans and other payables of the fund must not exceed the net asset value of the fund; 

...

...

...

i) Do not directly invest in real property, precious stones and metals;

j) Hold securities issued by at least six (06) issuers, except in the case of the bond fund.

5. Except for the cases referred to Point g, h, i Clause 4 of this Article, the investment structure of the open-ended fund may vary due to the objective causes:

a) The fluctuation of the market prices of assets in the fund’s investment portfolio;

b) Making legitimate settlement of the fund;

c) Executing trading orders of investors;

d) Consolidating and merging issuers;

e) The fact that the new fund has just been licensed, or has operated for a maximum period of six (06) months from the date on which the certificate of the fund establishment registration is issued due to the division, consolidation, or merger of the funds;

f) The fact that the fund is in the process of dissolution.

...

...

...

7. In case variation is caused by the inconformity with the investment limits prescribed by law or the fund’s charter, the fund management company is responsible for adjusting the investment portfolio within fifteen (15) days from the date on which the variation occurs and shall incur the expenses of these transactions and losses (if any). If the variation resulted in a profit, such profit must be immediately be accounted for as profit of the fund.

8. Fund management companies may only invest in deposit and money market instruments as prescribed in Point a, b Clause 2 of this Article, issued by credit institutions approved in writing by the board of representatives of the fund.

Article 16. Lending and borrowing, repurchase, and margin trading

1. The fund management company is not permitted to use capital and assets of the fund to provide loans or to provide guarantees for any loan, except for investment in deposits as prescribed in Point a Clause 2 Article 15 of this Circular.

2. The fund management company may not take out loans for investment activities, except for short–term loans to defray necessary costs of the fund or make settlement for fund certificate transactions with investors. The total value of short–term loans, exclusive of advances and payables, must not exceed five percents (5%) of the NAV of the fund at any time and the longest loan term is thirty (30) days.

3. The fund management company is not permitted to use assets of the fund to conduct margin trading (i.e. lending for the purchase of securities) for such fund or any other organization or individual; and is not permitted to use assets of the fund to conduct the short selling of securities or to lend securities. 

4. If there is a relevant provision in the fund’s charter, the fund is permitted to conduct sale and purchase of government bonds in accordance with regulations of the Ministry of Finance on management of government bond transactions.

Article 17. Asset trading methods

1. The purchase and sale of securities which are listed or registered for trading on the Stock Exchange for the fund must be conducted via the centralized trading system on the Stock Exchange.

...

...

...

a) The estimated price range, time of execution, trading partners, type of traded assets are approved in writing by the board of representatives of the fund before the transaction is made;

b) If the actual buy price is higher or the actual sell price is lower than the reference price of quotation service provider, or is in excess of the approved price range as stipulated in Point a of this Clause, the fund management company must explain the reasons so that the board of representatives of the fund may consider and decide.

Section IV: NET ASSET VALUE (NAV) OF OPEN-ENDED FUND

Article 18. General provisions on determination of the NAV

1. The fund management company is responsible for determining the NAV of the fund and the NAV of a given fund unit on the basis of the market price, or the fair value (if there is no market price) of the assets in the investment portfolio of the fund.

2. The board of representatives of the fund must pass a list of at least three (03) quotation service providers, excluding party related to the fund management company or supervisory bank.

3. The fund management company must prepare a valuation handbook containing the following contents:

a) The principles and criteria for selecting and replacing quotation service providers, and these principles must be clearly specified in the fund’s charter;

b) Principles and detailed procedures for conducting valuation methods in consistent with the law, and as prescribed in the fund’s charter and in accordance with international practice.  

...

...

...

5. The supervisory bank shall confirm the NAV of the fund and the NAV of one fund unit. The confirmation must be provided in writing or by computer read-out via the electronic information system of the supervisory bank approved by the fund management company. If the valuation was not conducted correctly, the supervisory bank must notify and request the fund management company to amend such valuation within twenty-four (24) hours.

6. Within a maximum three (03) days as of the valuation date, the NAV of the fund and the NAV of one fund unit must be announced on the websites of the fund management company and distributors, and on other means of mass media in accordance with the regulations on disclosure of information on the securities market. The information about the NAV must be provided as prescribed in Annex 24 of this Circular.

7. The fund management company is permitted to authorize a related service provider to determine the NAV of the fund and the NAV of one fund unit. And the fund management company must check and supervise such valuation, ensuring it is in consistent with law and that the NAV is determined accurately.

8. The fund management company must, within three (03) days from any day on which the NAV of the fund reduces by fifty percents (50%) compared to the initially mobilized capital, or reduces to below thirty (30) billion dongs, report to the SSC and propose a plan for remedial measures. If the NAV of the fund reduces to below ten (10) billion dongs within a period of six (06) consecutive months, the fund management company must liquidate assets in order to dissolve the fund in accordance with Article 33 of this Circular.

Article 19. Fund's net asset value (NAV)

1. The NAV of a fund shall be determined as equal to the total market value of assets in the portfolio less total debts payable by the fund, including the fund’s debts and settlement obligations up to the trading day closest to the valuation date.  If there were no market prices on the most recent trading day, or if market prices have fluctuated as stipulated in the fund’s charter or internal rules of the company, the fund management company shall use the fair value determined in accordance with principles, methods or theoretical models for determinate the values of assets prescribed in the fund’s charter or in the valuation handbook of the fund or after the board of representatives of the fund has provided the written approval.

2. The NAV of one fund unit shall equal the NAV of the fund divided by the total number of outstanding fund units on the latest trading day before the valuation date.  The NAV shall be rounded up in accordance with provisions of law in the accounting and auditing sector. Any balance arising from rounding up the NAV of the fund shall be accounted for as assets of the fund.

3. The determination of the market value of the fund’s assets must comply with the method prescribed in Annex 13 of this Circular. In which:

a) With regard to listed bonds: The market price is the end-of-day quoted price (or otherwise called according to the regulations adopted by the Stock Exchange), plus accrued interest (to the extent that the quoted price has yet to include the accrued interest, of an ordinary transaction made on the latest trading date before the valuation date;

...

...

...

c) With regard to non-interest instruments including treasury bills, bonds, valuable papers and any instruments of the like kind: The market price is the quoted price posted on the trading system of the Stock Exchange; in the absence of the quote price, the price level is determined according to the discounted cash flows model in reliance on the bid-awarding interest rate or another designated by the board for representatives of the fund and the period of holding such instruments;  

d) With regard to assets which are permitted for investment, are not listed or registered for trading on the Stock Exchange: The market price is the mean price of successful transactions performed on the nearest trading date before the valuation date which is provided by quotation service providers. In the absence of a quotation, the price level is determined according to the theoretical model approved by the board for representatives of the fund.

Article 20. Indemnifying investors and the fund for losses

1. The fund management company is liable to indemnify the fund and investors for losses sustained from the fund certificate trading when the NAV of the fund is determined incorrectly in a significant level of variation, which is deemed to occur as follows:    

a) There is a variation of 0.75% or more in the NAV in the case of a bond fund;

b) There is a variation of 1.00% or more in the NAV in other cases.

2. If the NAV of one fund unit is determined incorrectly and the variation is deemed to be significant as stipulated in Clause 1 of this Article, the fund management company shall plan the remedial measures and pay compensation in the following orders:    

a) Re-determine the NAV on fund certificate trading days during the period when the variation is significant until it falls below the levels prescribed in Clause 1 of this Article (hereinafter referred to as the incorrect valuation period);

b) Determine compensations given to the fund and investors who suffer damage for the incorrect valuation of the fund’s assets.  The fund management company or the fund does not have to pay compensation to the investors that suffer a loss smaller than one hundred thousand (100,000) dongs or another smaller value as prescribed in the fund's charter, but the settlement of the fund management company must be included in the fund, unless otherwise decided by the general meeting of investors or the board of representatives of the fund;

...

...

...

3. If the fund was undervalued, the amount of compensation payable to the fund and investors shall be determined as follows:

a) If the investor purchased fund certificates before the incorrect valuation period and sold them within such period, the amount of compensation shall be based on the level of variation and the number of fund units sold by such investor;

b) For the fund, the amount of compensation shall be based on the level of variation and the number of fund units which have been issued in the incorrect valuation period by the fund and are still in circulation.

4. If the fund was overvalued, the level of compensation payable to the fund and investors shall be determined as follows:

a) If the investor purchased fund certificates within the incorrect valuation period and maintains his ownership of such fund certificates after the incorrect valuation period, the level of compensation shall be based on the level of variation and the number of fund units which have been purchased and are under the ownership of such investor after the incorrect valuation period;

b) For the fund, the amount of compensation shall be based on the level of variation and the number of fund units which have been issued before the incorrect valuation period but redeemed within such period by the fund.

5. All expenses for compensation to investors and to the fund must be accounted for as operational expenses of the fund management company. If the fund’s charter contains a relevant provision and if it is passed by the general meeting of investors, expenses for compensation to investors as prescribed in Point a Clause 3 and Point a Clause 4 of this Article shall be accounted for as expenses of the fund.

6. The fund management company is liable to pay compensation for loss to the fund in the following cases:

a) Failure to comply with the investment policy, or investing assets which are restricted by the fund’s charter; or

...

...

...

c) Making investments that exceed the investment limits, except for the cases in Clause 6 Article 15 of this Circular.

9. Settlement of compensation for loss to investors and the fund must be reported by the fund management company in the annual operational report of the fund in accordance with Clause 2 Article 44 of this Circular, including an explanation of the causes or reasons for the loss, the levels of loss, the numbers of investors whose rights were adversely affected and who have been compensated, the amount of compensation paid to each investor, the amount of compensation paid to the fund, the form which such compensation took, the settlement method and other remedial actions (if any).

Article 21. Policy on distribution of profit of the fund

1. The fund management company shall distribute profit of the fund to investors in accordance with provisions in the fund’s charter and the policy on profit distribution announced in the prospectus. The profit distributed shall be extracted from the remaining profit of the fund. The fund management company is only permitted to distribute profit of the fund after it has completed or has adequate financial capacity to complete tax obligations and other financial obligations as required by law; has established sufficient funds in accordance with the fund’s charter; and even after the proposed amount of profit is distributed, the fund will still be able to ensure the settlement of debts and other financial obligations when they fall due. The schedule and plan on profit distribution must be publicly announced in the prospectus and on the website of the fund management company.

2. Profit may be distributed in cash or by fund units. The profit distribution made in the form of fund units must be agreed by the general meeting of investors or the board of representatives of the fund (if the latest general meeting of investors authorized the board of representatives of the fund to decide in accordance with the fund's charter) or allowed by the fund’s charter and the prospectus. Fund units are divided based on the NAV of a fund unit on the date on which the investor list is closed, or another value prescribed in the fund’s charter.

3. The fund management company must deduct all taxes, fees and charges in accordance with laws before distributing profits to investors.

4. After distributing profits, the fund management company shall send reports to each investor on the fund profit distribution, including the following contents:

a) The form of profit distribution (in cash or in fund units);

b) Total profit during the period and accumulated profit, details of each profitable item;

...

...

...

d) The NAV of a fund unit before and after the profit distribution;

e) Impacts on the NAV of the fund after the distribution.

5. If there is a relevant provision in the fund’s charter and prospectus, the fund management company is permitted to distribute assets of the fund to investors more than the actual realized profit, but must ensure that after doing so the NAV of the fund will not be less than 50 billion dongs. The plan, schedule and assets to be distributed, source of the funds must be approved by the general meeting of investors.

6. Information on the profit and asset distribution that were carried out must be updated in amended prospectuses.

7. If the investor has transferred his fund units during the period between completion of the list of investors and the time of settlement, the transferor shall receive the profit.

Article 22. The fund’s operating expenses

1. The fund’s operating expenses shall include the following after-tax expenses:

a) Asset management fee, paid to the fund management company;

b) Depository and supervision fees, paid to the supervisory bank;

...

...

...

d) Auditing expenses, paid to auditing firms;

e) Expenses of legal consultancy service, quotation service and other reasonable services, and remuneration paid to the board of representatives of the fund;

f) Expenses of drafting, printing and sending the prospectus, summary prospectus and financial statements, transaction confirmations, account statements and other documents to investors; expenses of disclosing information by the fund and expenses of holding general meetings of investors and meetings of the board of representatives of the fund;

g) Expenses related to conducting the fund’s asset transactions.

2.  Within forty-five (45) days from the end of the second and fourth quarters in each year, the fund management company must disclose information about the fund’s operating expense ratio and portfolio turnover rate on the websites of the fund management company and distributors after these figures have been certified as accurate by the supervisory bank.

a) Operating expense ratio of the fund is determined by the following formula:

Operating expense ratio  (%)=

Total operating cost x 100%

Annual average NAV

...

...

...

Operating expense ratio  (%)=

Total operating cost × 365 x 100%

Average NAV of the fund in the reporting period × number of operating days of the fund (from the licensing date)

b) The fund’s portfolio turnover rate is determined as follows:

Portfolio turnover rate (%) =

(Total purchase during the period + total sales during the period) x100%

2 x Annual average NAV

In case the fund has been operated under one year, the fund’s portfolio turnover rate shall be determined as follows:

Portfolio turnover rate (%) =

...

...

...

2 x Average NAV during the reporting period × number of operating days of the fund (from the licensed date)

3. Brokerage and transfer fees on asset transactions of the fund must be paid to the securities company, excluding other types of fee such as fee for another service or fee paid to third parties (soft commission).

4. The fund management company and distributors are liable to make settlement of expenses of printing publications and issuing advertisements and information about fund products.

Chapter III

THE GENERAL MEETING OF INVESTORS, AND THE BOARD OF REPRESENTATIVES OF THE FUND

Section 1: THE GENERAL MEETING OF INVESTORS

Article 23. Rights and obligations of investors participating in the open-ended fund

Investors have the rights and obligations as prescribed in the Law on securities and relevant guidelines. Investors are liable to make full settlement for fund certificates purchased within the time-limit prescribed in the fund’s charter and prospectus, and are only liable for debts and other asset obligations of the fund up to the amount paid when purchasing the fund’s certificates.

Article 24: General meeting of investors

...

...

...

a) The amendment and supplementation of the fund's charter and supervision contracts; profit distribution plans;

b) The fundamental changes in the fund’s investment policies and objectives; the increases in the level of fees paid to the fund management company and the supervisory bank; the changes of the fund management company and the supervisory bank;

c) The consolidation and merger of the funds;

d) The fund certificate trading suspension; the fund division;

e) The fund dissolution;

f) Appointment, dismissal or removal of the chairman and members of the board of representatives of the fund; decisions on the amount of remuneration and operating costs of the board of representatives of the fund; selection of an approved auditing firm to audit the annual financial statements of the fund; passing reports on financial and asset status and annual operation of the fund;

g) Other matters within its authority as prescribed in Article 85 of the Law on securities, the law on enterprises and the fund’s charter.

2. The fund management company shall prepare the agenda and contents of the general meeting of investors in accordance with the law on enterprises. At least fifteen (15) days prior to holding the general meeting of investors, the fund management company must send the agenda, contents of the general meeting and relevant documents to the SSC.

3. The annual general meeting of investors shall be held within thirty (30) days from the date on which the annual financial statements are audited by an approved auditing firm.  The annual general meeting of investors is not permitted to be held in the form of obtaining written opinions, unless the fund’s charter contains some other provisions.

...

...

...

a) The fund management company, or the supervisory bank, or the board of representatives of the fund considers it necessary in the interests of the fund;  

b) At the request of investors or a group of investors representing at least ten percents (10%) of total outstanding fund units for six (06) consecutive months prior to the time of convening the general meeting of investors, or a smaller ratio if so prescribed in the fund’s charter;

c) Other cases prescribed in the fund's charter.

5. The extraordinary general meeting of investors as prescribed in Clause 4 of this Article must be held within thirty (30) days from the date on which the fund management company receives a request to convene such meeting, in which reasons and objectives of convening such extraordinary general meeting of investors must be specified.

6. Except in a case where it is compulsory to hold a meeting in order to obtain the opinion of the general meeting of investors on the matters prescribed in Point b, c Clause 1 of this Article, in other cases, if there is a relevant provision in the fund’s charter and if it has been announced in the prospectus, the fund management company is permitted to obtain written opinion from investors instead of holding a meeting. Principles, contents and procedures for obtaining written opinions from investors must be specified in the fund’s charter. In such a case, the fund management company must comply with the time-limits on sending voting slips and meeting documents to investors which is the same as in a case of inviting investors to attend a general meeting of investors as prescribed in the law on enterprises and the law on securities.

Article 25. Requirements and procedures for holding a general meeting of investors

1. The general meeting of investors shall be held when the number of investors that attend the meeting represents at least fifty-one percents (51%) of the total outstanding fund units. Investors may attend the meeting directly or appoint their authorized representatives to attend the meeting or in other forms prescribed in the fund's charter.

2. If the first meeting does not take place because the conditions prescribed in Clause 1 of this Article were not satisfied, the second meeting shall be convened within thirty (30) days from the date on which the first meeting was intended to be opened. In this case, the general meeting of investors shall be conducted irrespective of the number of attending investors.3. The procedures and form of holding the general meeting of investors must comply with the fund's charter, the law on enterprise and the law on securities.

Article 26. Approving decisions of general meeting of investors

...

...

...

2. For the contents in Point b and c Clause 1 Article 24 of this Circular, the decision made in the general meeting of investors shall be ratified if the number of participating investors that represent at least sixty five percents (65%) of the total amount of such investors’ fund units votes for it; the specific ratio is specified in the fund’s charter.

3. (abrogated)

4. When seeking written opinions in the general meeting of investors, decisions are approved when they are approved by the number of investors that represent at least fifty-one percents (51%) of the total amount of such investors’ fund units; the specific ratio is specified in the fund’s charter.

5. The fund management company and the board of representatives of the fund shall consider and ensure that all decisions made in the general meeting of investors are conformable with laws and the fund's charter. In case the decision is not conformable with laws and the fund's charter, another general meeting of investors shall be held to obtain opinions of investors or obtain writing opinions from investors.

6. Within seven (07) days as of the end of the general meeting of investors, or the deadline for obtaining investors’ written opinions as mentioned in Clause 4 of this Article, the fund management company shall make the minute of meeting and the resolution of the general meeting of investors, and send them to the supervisory bank and the investors, or post them on the company’s website as prescribed by laws.

Article 27. Objection to decisions made in the general meeting of investors

1. The investor who objects to the decision approved by the general meeting of investors on certain issues prescribed in Point b and Point c Clause 1 of Article 24 has the right to require the fund management company to redeem or switch fund certificates owned by such investor to another open-ended fund of such fund management company. The investor’s request must be made in writing, specifying the name and address of the investor, the number of fund units, and the reason for such request for redemption or switching to another fund managed by such fund management company. The investor’s request must be sent to the head office of the fund management company or the nominee agent within fifteen (15) days from the date on which the decision on the above-mentioned issues is approved by the general meeting of investors.

2. The fund management company must, within forty-five (45) days from the announcement of results of the general meeting of investors, complete the redemption or switching of fund certificates of the investor objecting to the decision of the general meeting of investors as prescribed in clause 1 of this Article. In this case, the redemption price shall be determined on the basis of the NAV determined on the date of the general meeting of investors and the investor shall not pay redemption or switching fees.

Section II: THE BOARD OF REPRESENTATIVES OF THE FUND

...

...

...

1. The board of representatives of the fund represents the investors and is selected in the general meeting of investors, or voted in writing by investors.  The tenure, criteria, number of members, appointment, dismissal, removal and addition of the board members, appointment of the chairman of the board of representatives of the fund, the conditions and procedures for holding meetings and passing resolutions of the board of representatives of the fund are prescribed in the fund's charter and other provisions of law.

2. The board of representatives of the fund consists from three (03) to eleven (11) members, at least two-thirds (2/3) among which are independent members.

3. The board of representatives of the fund must include:

a) At least one independent member with qualifications and experience in accounting and auditing;

b) At least one independent member with qualifications and experience in securities investment analysis or asset management;

c) At least one member with qualifications and experience in laws on securities.

4. In case the board’s structure or any member of the board of representatives of the fund no longer satisfies the conditions specified in Clauses 2 and 3 of this Article, or a member is forced to resign, the board of representatives of the fund and the fund management company shall select a member that satisfy the conditions in Clause 3 of this Article for temporary substitution within fifteen (15) days from the discovery of such event. The new member shall provisionally exercise the rights and obligations of the official member of the board of representatives of the fund until the general meeting of investors officially appoints the new official member.

5. The rights and obligations of the board of representatives of the fund shall be specified in the fund's charter, including compulsory duties as follows:

a) Representing investors’ interests; take actions in accordance with the law to protect the fund’s and investors’ interests;

...

...

...

c) Deciding the amount of distributed profit, the schedule and procedures of profit distribution, or the settlement of losses during the operation; making decisions on the issues in disagreement between the fund management company and supervisory bank;

d) The board of representatives of the fund is entitled to make decisions on the issues prescribed in Point b, c, d, e, f and g Clause 1 Article 24 of this Circular upon the provision in the fund’s charter and the authorization of the latest general meeting of investors;

e) Requesting the fund management company and the supervisory bank to adequately provide documents and information about the asset management and supervision;

f) Perform other duties as prescribed in the fund's charter.

6. Within fifteen (15) days from the date on which the board of representatives of the fund makes decisions on the issues prescribed in Point b, c, d, e Clause 1 Article 24 of this Circular in accordance with Point d Clause 5 of this Article, the board of representatives of the fund must, through the fund management company, send the meeting minutes and the resolution of the board of representatives of the fund to the SSC and the supervisory bank, and provide information about its decisions to investors in the form specified in the fund's charter.
In this case:

a) The SSC is entitled to request the board of representatives of the fund to change their decision if such decision is contrary to law or the change is considered necessary to ensure the investors' interests. Within seven (07) days from the reception of the meeting minutes, the decisions of the board of representatives of the fund and relevant documents, if the SSC does not give any written opinion, the fund management company and relevant organizations may implement decisions made by the board of representatives of the fund in accordance with law;

b) Investors who object decisions on the issues prescribed in Points b and c Clause 1 Article 24 of this Circular made by the board of representatives of the fund are entitled to request the fund management company to redeem or switch their fund certificates in the cases and in accordance with procedures regulated in Article 27 of this Circular.

7. Decisions of the board of representatives of the fund are approved by voting at the meetings, via conference by phone, internet or other audio/video devices, or via written opinions and other methods as prescribed in the fund's charter. Each member of the board of representatives of the fund has one vote. The meeting of the board of representatives of the fund shall be held if at least two-thirds (2/3) of the board’s members attend the meeting, and the number of independent members among which must make up at least fifty-one percents (51%). The members who do not directly attend the meeting may vote by sending written opinions. The decision of the board of representatives of the fund shall be passed if it is supported by at least fifty-one percents (51%) of participants and at least fifty-one percents (51%) of independent members.

8. During the performance of its functions and duties, the board of representatives of the fund must comply with the law, the fund’s charter and the decision of the general meeting of investors.  In case the decision passed by the board of representatives of the fund is contrary to the law or the fund’s charter and cause damage to the fund, the members who passed such decision jointly bear personal liability for such decision, and the member who objected to the passing of such decision is exempt from liability.

...

...

...

a) Members of the board of representatives of the fund are entitled to enjoy the remuneration in accordance with their work and other benefits as prescribed in the fund’s charter or a decision of the general meeting of investors. The general meeting of investors shall decide annual amount of remuneration and operating budget of the board of representatives of the fund based on the number of proposed working days, the workload and the nature of work and daily average remuneration of each member. The fund management company is responsible for withhold tax on non-regular income of members of the board of representatives of the fund in accordance with current law;
b) The members of the board of representatives of the fund shall have their reasonable expenditures on meals, accommodation, travel, and other expenditures covered as prescribed in the fund's charter. The total amount of such remuneration and expenses must not exceed the total annual operating budget allocated to the board of representatives of the fund that is passed by the general meeting of investors as prescribed in the fund's charter;

c) The remuneration and operating costs of the board of representatives of the fund shall be included in the management cost of the fund and they shall be separately listed in the fund’s annual financial statements.

10. Clause 9 of this Article is not applicable if the members of the board of representatives of the fund are concurrently employees of the fund management company.

Chapter IV

RESTRUCTURING OF THE FUND

Section I: CONSOLIDATION AND MERGER OF THE FUND

Article 29. General provisions on the consolidation and merger of the fund

1. The fund management company shall establish a continuous information channel, updating information on the consolidation or merger of the fund in an accurate, complete and prompt form for investors.

2. The fund management company shall hold the general meeting of investors to consult the investors about the fund consolidation and merger according to the form in Annex 16 enclosed with this Circular. At least thirty (30) days before the general meeting of investors, the fund management company shall provide their investors with the documents about the fund consolidation and merger, including:  

...

...

...

b)  The draft of consolidation or merger contract in accordance with Annex 17 of this Circular;

c) The audited annual financial statement, audited quarterly financial statements of all consolidated or merged funds until the latest quarter;

d) The drafts of the charter, prospectus, summary prospectus of the consolidated fund; or drafts of charter, prospectus, summary prospectus of the merged fund;

3. The fund management company may suspend fund certificate transactions within thirty (30) days in order to complete the consolidation or merger, except for the redemption or switching of the fund certificates as requested by the investors who object to the consolidation or merger.

4. Consolidation or merger day means the effective date of the amended certificate of fund establishment registration.  The consolidating or merged funds shall terminate their existence as from the consolidation or merger day. And as from such date, the consolidated or merging fund shall inherit the entire assets, liabilities, lawful rights and interests and other obligations of the consolidating or merged funds in accordance with the following principles:

a) Ownership of all assets of the consolidating or merged funds must be registered for transferring into the consolidated or merging fund and must be deposited at the supervisory bank of such consolidated or merging fund;

b) All debt obligations of the consolidating or merged funds shall be transferred to the consolidated or merging fund that shall inherit and continue the execution of settlement obligations. This provision does not apply if the consolidating or merged funds have already completed all debt obligations prior to the consolidation or merger in accordance with the consolidation or merger plan;

c) Investors of the consolidating or merged funds who are named in the primary ledger as on the consolidation or merger day shall become investors of the consolidated or merging fund and shall receive assets in the form of units of the consolidated or merging fund at the conversion ratio determined on consolidation or merger day;

d) Depending on the terms and conditions of the consolidation or merger contract in accordance with the consolidation or merger plan, in addition to the number of fund units received as prescribed in point d of this Clause, investors of the consolidating or merged funds may also receive an additional settlement in cash. The value of which for one fund unit shall not exceed 10 percents (10%) of the NAV of one fund unit calculated at the consolidation or merger day;

...

...

...

Article 30. Order and procedures for conducting the fund consolidation or merger

1. Within sixty (60) days from the date on which the final general meeting of investors of the fund involved in the consolidation or merger approves the consolidation or merger, the relevant fund management companies shall submit the application to the SSC for the certificate of the fund establishment registration (in case of fund consolidation), or adjust the certificate of the fund establishment registration (in case of the fund merger).  The application shall include:

a) The application for the issue or adjustment of the certificate of the fund establishment registration according to the Form in Annex 14 enclosed with this Circular; attached with the original certificate of the fund establishment registration of consolidating funds or merged funds;

b) The plan for the consolidation or merger enclosed with the report on the consolidation or merger and the consolidation or merger contracts approved by general meeting of investors. The consolidation or merger contracts shall be signed by the chairman of the board of representatives of the funds together with the legal representatives of the relevant fund management companies;

c) The assessment reports made by the supervisory banks of contents stated in the consolidation or merger plan and the consolidation or merger contract related to the plan for determining debts, assets and the NAV on the date of consolidation or merger; the plan for conversion and determination of the conversion ratio; the plans and principles for asset transfer among funds;

d) Minutes and resolutions of the general meeting of investors about the fund consolidation or merger;

e) Documents applicable to the consolidated or merged fund (if there are changes) as prescribed in Points b, c, d, e, and f Clause 1 Article 4 of this Circular and other relevant documents.

2. The application for issuance or adjustment of certificate of fund establishment registration shall be made into one (01) original attached with electronic files.  The original set of the application shall be sent by post or directly to the SSC’s administrative department.

3. The SSC shall, within ten (30) days as from the receipt of a complete and valid application, adjust the certificate of the fund establishment registration.   The fund management company shall, within seven (07) days from the consolidation or merger day, disclose information on the consolidation or merger in accordance with law.   Contents of such disclosure shall include:

...

...

...

b) The principles for determining the NAV of one unit of the consolidating or merged funds as at the consolidation or merger day; the conversion ratio of fund units; and the ratio of settlement made to investors of the consolidating or merged funds (if any).

4. Immediately after the consolidation or merger day, the fund management company, supervisory bank and other related organizations must coordinate to register the ownership of assets received from the consolidating or merged funds in accordance with law, and update information about investors' ownership in the primary and the secondary ledgers.  

5. The fund management company shall, within fifteen (15) days as of the consolidation or merger day, receive and implement sell orders, buy orders and switching orders of the consolidated or merged fund. 

6. The supervisory bank must, within fifteen (15) days as from the consolidation or merger day, verify the accuracy and submit reports to the SSC on the results of the consolidation or merger according to the form at Annex 15 enclosed with this Circular with the following contents:

a) Details of the investment portfolio, total asset value, total value of debts and the NAV at the consolidation or merger day; actual conversion ratio of fund units at the consolidation or merger day; and ratio of settlement in cash on one fund units (if any);

b) The quantity and value of fund units redeemed from investors who objected to the fund consolidation or merger; and value of loans repaid at the request of creditors according to the form at Annex 18 enclosed with this Circular.

7. Within six (06) months as of the consolidation or merger day, fund management companies shall retain documents relating to the fund consolidation or merger at the head offices of the fund management companies and locations for distribution of fund certificates, and on the websites of fund management companies. Such documents shall also be supplied to investors at their request.  Documents relating to the fund consolidation or merger include:

a) Consolidation or merger plan and contract;

b) Contents relating to the profit distribution and issuance of certificates of the consolidated or merged fund to investors of consolidating or merged funds;

...

...

...

Section II: FUND DIVISION

Article 31. General provisions on the fund division

1. In case the fund’s investment portfolio is illiquid as prescribed in Points b and c Clause 4 Article 13 of this Circular, the fund management company may divide the fund according to the plan approved in the general meeting of investors.

2. At least thirty (30) days before the general meeting of investors, the fund management company must provide investors with documents related to the fund division, including:

a) The plan for the fund division according to the provisions prescribed in Annex 16 enclosed with this Circular;

b) The drafts of charters of the funds established after division.

3. The fund management company shall act on behalf of the fund to repay all debts and perform all financial obligations of the fund before its division.

4. The funds expected to be established after the fund division shall have the NAV of at least fifty (50) billion dongs on the latest valuation date before date on which the general meeting of investors approves the decision on the fund division.

Article 32. Order and procedures for conducting the fund division

...

...

...

a) The application for the issuance of the certificate of the fund establishment registration according to the Form in Annex 14 enclosed with this Circular; attached with the original certificate of the fund establishment registration of the divided fund;  

b) The plan for the fund division passed by the general meeting of investors;

c) The report of supervisory bank on the plan for the division of the investment portfolio; the plan for transferring ownership and assets;

d) The supervision contracts signed by and between the fund management company and supervisory banks;

e) Minutes and resolutions of the general meeting of investors about the fund division;

f) The charters, the prospectuses and summary prospectuses of new funds established after the fund division (if they are changed and new funds are established).

2. The application for the fund division shall be made into one (01) original attached with electronic files.  The original set of the application shall be sent by post or directly to the SSC’s administrative department.

3. Within fifteen (15) days as from the receipt of a complete and valid application, the SSC shall issue the certificate of the fund establishment registration to funds established after the fund division. The date of division is the effective date of the certificate of the fund establishment registration.

4. Within seven (07) days from the date of the fund division, the fund management company, related service providers and nominee agents shall bear responsibility for:

...

...

...

b) Announcing the date of the fund division, confirming the completed contents under the plan for the fund division, the NAV of a fund unit of the funds established after the fund division, confirming the asset ownership of each investor.

c)  Announcing the information about the fund division as required by the law.

5. Within fifteen (15) days from the date of the fund division, the supervisory bank and related service providers shall divide the investment portfolio of the divided fund, and carry out the procedures for registering the ownership of assets for the funds established after the fund division as prescribed by law.

6. Within six (06) months as from the date of the fund division, the fund management company shall retain documents relating to the fund division at the head office of the fund management company and locations for distribution of fund certificates, and on the websites of fund management company. Such documents shall also be supplied to investors at their request.  Documents relating to the fund division include:

a) The fund division plan and progress;

b) The portfolio structure of the divided fund on the date of the fund division and of the funds established after the fund division;  

c) Contents related to the profit distribution, the issuance of the fund certificates of the funds established after the fund division.

Section III: FUND DISSOLUTION

Article 33. General provisions on the fund dissolution

...

...

...

a) The fund management company is dissolved, declared bankrupt or its license for the establishment and operation is revoked and the board of representatives of the fund fails to establish a replacement fund management company within two (02) months from the date on which one of such events happens;

b) Supervisory bank is dissolved or declared bankrupt; or unilaterally terminates its supervision contract or the same is terminated by the fund management company; or the certificate of registration of the securities depository operation of the supervisory bank is revoked and the fund management company fails to establish a replacement supervisory bank within two (02) months from the date on which one of such events happens;

c) The operating period of the fund as prescribed in the fund's charter and in the certificate of the fund establishment registration expires without extension (if the fund’s operating period is determined);

d) The fund is dissolved according to the decision made in the general meeting of investors;

e) The NAV of the fund falls below ten (10) billion dongs in six (06) consecutive months;

f) Other cases as prescribed in the fund's charter.

2. Within thirty (30) days from the date of the compulsory dissolution of the fund as prescribed in Clause 1 of this Article, the board of representatives of the fund shall convene the general meeting of investors for approving the fund dissolution plan.

3. The general meeting of investors is entitled to appoint an independent auditing firm to inspect, assess, and supervise the liquidation process, and verify the distribution of the fund’s assets to investors, ensure the fair and transparent liquidation and dissolution of the fund.

4. The fund management company shall liquidate and distribute the fund’s assets to investors as prescribed in the liquidation and dissolution plan which has been approved in the general meeting of investors, and in accordance with the fund's charter and the law. In case it is impossible to liquidate all assets in the period specified in the dissolution and liquidation plan, the fund management company shall distribute and transfer remaining assets to investors in accordance with Point c Clause 10 of this Article.  

...

...

...

6. From the date of the compulsory dissolution, the fund management company shall not:

a) Make investments, and purchase securities and other assets for the fund;

b) Convert unsecured debts into debts secured by the fund’s assets;

c) Give or donate fund’s assets to other organizations and individuals;

d) Finalize contracts in which the value of the fund’s obligations is greater than that of the other party; or pay debts to the creditors who are also the fund’s debtors without offsetting performance;

e) Perform other transactions for the purpose of illegally liquidating the fund’s assets.

7. The assets of the fund being dissolved include:

a) The assets and rights relating to the assets of the fund at the time of compulsory dissolution;

b) The profits, assets and rights relating to the assets that the fund will have by making transactions before the fund is compulsorily dissolved;

...

...

...

9. After being confirmed by the supervisory bank, the result of the liquidation of assets of the dissolved fund shall be verified and approved by the board of representatives of the fund or an auditing firm appointed by the general meeting of investors as prescribed in Clause 3 of this Article, before making paying the debts to creditors and investors as required.

10. The proceeds from the liquidation of the fund’s assets and remaining assets shall be paid in the following order:

a) Financial obligations to the State;

b) The payables to the fund management company and the supervisory bank, other payables and fund dissolution costs. In case the fund is compulsorily dissolved as prescribed in points a, b under Clause 1 of this Article, the fund is exempted from making settlement to the fund management company and the supervisory bank of contractual fees from the date on which relevant event happens;

c) The rest shall be used to pay investors corresponding to the ratio of their capital contribution to the fund.

Article 34. Order and procedures of the fund dissolution

1. Within seven (07) days from the date of the compulsory dissolution as prescribed in Clause 1 Article 33 of this Circular, or from the date on which the dissolution decision is passed in the general meeting of investors, the fund management company or the supervisory bank (in the absence of the fund management company) shall send reports to the SSC on the fund dissolution.

2. The reports on the fund dissolution shall include:

a) The notice of the fund dissolution, specifying the reasons for the fund dissolution, its impact, and the proposed dissolution day;

...

...

...

c) Written commitment of the fund management company and the supervisory bank on the completion of the procedures for the asset liquidation to dissolve the fund.

3. The reports on the fund dissolution shall be made into one (01) original attached with electronic files.  The original set of reports shall be sent by post or directly to the SSC’s administrative department.

4. Within fifteen (15) days as from the receipt of a complete and valid set of reports, the SSC shall issue an official dispatch certifying the reports submitted by the fund management company on the fund dissolution. Within thirty (30) days from the receipt of the SSC’s official dispatch, the fund management company shall disclose the information about the liquidation of assets and the fund dissolution in accordance with the Ministry of Finance’s regulations on disclosure of information on the securities market. The announced contents must include the information about the duration of the liquidation of assets.

5. Within five (05) days from the date on which the fund dissolution is finished, the fund management company and the supervisory bank must send reports to the SSC on the results of the fund dissolution. Such report includes:  

a) Report on the fund’s asset liquidation, on settlement of debts and fulfillment of other financial obligations to creditors and other individuals having related rights and obligations, including financial obligations to the State. The report must be enclosed with the list of creditors and amount of debts paid, including tax liabilities;

b) Report made by the fund management company, certified by the supervisory bank and the board of representatives of the fund, on the asset liquidation, the liquidation methods and total receipts after the liquidation; the total debt payable and the remaining assets distributed to shareholders;

c) The original of the certificate of the fund establishment registration;

d) The audited financial statement for the period from the end of the latest audited financial year to the date of expiration of the fund’s operating period or the date on which the fund dissolution is approved;

e) The report on the verification of the asset liquidation results made by the auditing firm (if any) that is appointed by the general meeting of investors as prescribed in Clause 3 Article 33 of this Circular.

...

...

...

7. In case the results of assets liquidation and fund dissolution are incorrect or forged, the fund management company, the supervisory bank and relevant individuals shall be jointly responsible for settling unpaid debts and bear liability before the law for the consequences arising within three (03) years from the date on which the reports on the dissolution results are submitted to the SSC.

Chapter V

ACTIVITIES OF RELATED ORGANIZATIONS IN THE OPEN-ENDED FUND MANAGEMENT

Section I: SUPERVISORY BANK

Article 35. General provisions on the supervisory bank

2. Members of the board of directors, members of the executive board, and supervisors must not be buyers or sellers of the fund’s assets. The supervisory bank may be a buyer or seller in the foreign exchange transactions or securities transactions which are made via the trading system of the stock exchange.3. For supervising the operation of an open-ended fund, the supervisory bank must have at least 02 supervisors who hold the following certificates:

a) Fundamental certificates in securities and the securities market; or international qualifications in securities such as CFA (Chartered Financial Analyst) level I or higher, CIIA (Certified International Investment Analyst) level I or higher; or practice certificates in securities issued in the member States of the Organization for Economic Cooperation and Development (OECD);

b) Certificates in the Laws on securities and securities market;

c) Certificates in accounting or auditing, or Chief Accountant Certificates or Certificates in accounting analysis, or ACCA (Association of Chartered Certified Accountants), CPA (Certified Public Accountants) international qualifications in accounting.

...

...

...

Article 36. Activities of depository of the fund’s assets by the supervisory bank

1. The supervisory bank may appoint domestic and foreign financial institutions with the function of asset depository to act as secondary depository institutions, conducting the depository of the fund’s assets in Vietnam and foreign countries. The authorization for depository of assets must comply with the following regulations:

a) The secondary depository institution must be a depository member in accordance with Vietnamese law or foreign law;

b) The authorization for depository of assets must be carried out on the basis of the contract signed by and between the supervisory bank and the secondary depository institution. The contract must specify rights, obligations and responsibilities between the supervisory bank and the secondary depository institution. The secondary depository institution shall only follow legitimate orders or instructions from the supervisory bank;

c) The supervisory bank shall inspect and supervise the operation of the secondary depository institution and incur the cost of the authorization for performing the supervision and depository of the fund’s assets;

d) The secondary depository institution in foreign country may re-deposit assets at securities depository organization of which the former is a member in accordance with the law of the home country. The fund’s ownership of the assets must be registered by the secondary depository institution in accordance with relevant laws;  

e) The supervisory bank must adequately obtain information about all assets under the fund’s ownership, including types and quantity of such assets, the place where such assets are deposited and depository organization. The supervisory bank must ensure that the fund's assets are registered, deposited and recorded in the form that they are always recognized as under the fund’s ownership.

2. The depository of the fund’s assets shall ensure that:

a) The fund management company acts on behalf of the fund to register the fund’s assets under the terms and conditions of the economic contract between the fund (through the fund management company) and partners in accordance with relevant laws; assure that all of the fund’s assets arising within the territory of Vietnam are registered as the fund’s property and duly deposited at the supervisory bank according to the following rules:  

...

...

...

To the extent that registration for ownership of assets is not allowed, or the ownership of such assets has not been completed by the deadline stipulated in issuance agreements, the assignment contract, investment contract or economic contracts of the equivalent value, the supervisory bank shall be responsible for expressly certifying the asset depository and registration status in periodic reports of the fund management company and supervisory bank, and concurrently send a written notification to the board of representatives of the fund.

- In respect of assets of which registration of ownership is not required, the supervisory bank shall be responsible for checking with investment receivers, issuers and shareholder register management organizations, or others of the same sort, volume and value of the fund’s assets on a monthly basis, and ensuring the compliance of asset depository with Point e Clause 1 of this Article.

- In respect of bank deposits, the supervisory bank shall have rights and responsibilities for requesting the fund management company to provide adequate information about the fund’s deposit agreements and deposit accounts. The supervisory bank shall be responsible for checking deposit account balances, value of deposit agreements with banks receiving the fund’s deposits on a monthly basis.

b) The settlement for listed or registered securities transactions must comply with the principle of handover of the securities at the same time as the settlement of money, as well as the rules of offsetting and settlement as prescribed by laws.  The settlement for other asset transactions shall be made in accordance with the legitimate orders and instructions of the fund management company and other relevant laws.  The settlement for securities transactions and asset transactions must be consistent with the quantity of assets and securities and match the amount specified in the settlement receipts;

c) Completely exercise the rights and fulfill the duties related to fund's ownership of assets, complete the procedures for settling taxes of the fund;

d) Comply with rules of depository of assets in accordance with the regulations on the establishment and management of securities investment fund. 

3. Tangible or intangible assets of the fund, whether or not registered under the name of the fund, deposited at the supervisory bank and secondary depository institutions (if any), are under the ownership of that fund, not the supervisory bank or the fund management company. The supervisory bank may not use such assets to make settlement or guarantee the settlement of debts of the bank itself or of a third party.

Article 37. The operation of the supervisory bank

1. The supervision is limited to the fund management company's activities relating to the fund over which the bank exercises its supervisory function. During the supervision, the supervisory bank shall:

...

...

...

b) Supervise investment activities and asset transactions of the fund, including assets that are not securities centrally registered at the Vietnam Securities Depository; supervise the asset transactions made between the fund and the fund management company, and relevant individuals.  When violations of law are discovered, the supervisory bank shall immediately report them to the SSC and notify the fund management company within twenty-four (24) hours from the discovery of the violations, and concurrently request the correction or take action to remedy the consequences caused by such violations within a limited period of time;

c) Supervise the process and verify results of the merger, consolidation, dissolution of the fund and liquidation of the fund's assets;

d) Supervise and ensure the legitimacy, and only use the fund’s assets to make settlement for costs in accordance with the law and provisions of the fund’s charter;

e) Supervise other activities of the fund management company during its management of the fund’s assets in accordance with Article 98 of the Law on securities and the fund’s charter.

2. The supervisory bank must prepare and archive documents in both hard copies and electronic files for a period of ten (10) years for certifying that the compliance of the supervisory bank during its supervision over the fund management company with law as prescribed in Annex 19 enclosed with this Circular.  These documents must be provided at the written request of the SSC.

3. The supervisory bank must adequately, promptly, and accurately provide necessary information to the fund management company and approved auditing firm so that they can sufficiently exercise their rights and fulfill their obligations to the fund in accordance with law and the fund's charter.

4. The supervisory bank shall reserve the right to inspect the fund management company, examine and appraise the capacity of the computer system and computer software, request the fund management company to promptly provide their procedures for asset management, internal control, risk management, valuation handbook, procedures of receiving and executing orders from investors and necessary information related to the management of the fund’s assets in order that the supervisory bank may fulfill their rights and obligations to the fund as prescribed by the law.

5.  The supervisory bank may use the services provided by the auditing firm and other organizations to implement provisions in Clause 4 of this Article. The supervisory bank, organizations and individuals in charge of supervising the operation of the fund management company as requested by the supervisory bank shall be responsible for keeping secret of all information of the fund management company, the fund and investors in accordance with the law.  The report on the inspection certified by relevant parties and documents enclosed therewith must be provided to the board of representatives of the fund and the SSC at their written requests. 

6. The supervisory bank is entitled to provide fund management services to the fund management company.  The personnel and the electronic database system of the department in charge of providing fund management service at the supervisory bank must be separated from those of the supervisory department and those of other business departments of the supervisory bank. In case the supervisory bank provides fund management services as prescribed in Point a Clause 27 Article 2 of this Circular, the department in charge of providing such fund management services must contract individuals who possess chief accountant certificates or auditing or accounting certificates, or ACCA (Association of Chartered Certified Accountants), CPA (Certified Public Accountants) certificates.

...

...

...

8. If the fund management company must pay compensation for losses to investors, the supervisory bank must coordinate with the fund management company to promptly and completely carry out settlement procedures in accordance with lawful instructions from the fund management company. The supervisory bank shall jointly bear liability and make compensation to investors and the fund for losses arising from its failure to fully and promptly supervise the fund’s investment activities and the determination of the fund’s NAV and other supervisory activities as regulated by the law.  The rate of compensation depends on the civil agreements between the fund management company and the supervisory bank.

9. The supervisory rights and obligations to the fund shall be terminated in accordance with the regulations on the establishment and management of securities investment funds.

10. The mechanism for cooperation between the supervisory bank and the fund management company in assessing activities of transfer agents shall be consistent with agreements entered into by both parties whereby liabilities of the fund management company comply with laws and regulations.

Article 38. Report policy of the supervisory bank

1. The supervisory bank must periodically send the report on its supervisory performance on a monthly, quarterly, semi-annual and annual basis under the instructions of the SSC.  The report must assess the compliance of the fund management company in terms of its investments, transactions and determination of the NAV in accordance with the fund's charter, the laws on securities and the securities market.

2. Reports must be attached with electronic files and sent to the SSC within the following time-limits:

a) Within five (05) days from the end of the month;

b) Within twenty (20) days from the end of the quarter;

c) Within thirty (30) days from the date on which the annual financial statements are audited.

...

...

...

a) The fund management company or distributors violate the fund's charter and the laws on securities and the securities market.

b) If loss as a result of the asset management by the fund management company is very high and the expenses of remedying consequences would also be very high.

4. Except for the cases specified in Clause 1 and Clause 3 of this Article, if necessary, the SSC is entitled to request the supervisory bank to provide extraordinary reports on other relevant activities within its operating scope related to the fund.

5. The supervisory bank must submit report to the SSC within forty-eight (48) hours from the receipt of the request for reports prescribed in Clause 4 of this Article.

6. The policies on the supervisory bank's report to the fund management company in accordance with this Article shall be limited to only the open-ended fund's scope of operations and relevant information that the bank obtains during its performance of supervisory functions as defined in Clause 1 Article 37 of this Circular.

Section III: FUND CERTIFICATE DISTRIBUTORS

Article 39. Registration for the distribution of open-ended fund certificates

1. Requirements on the registration for acting as a distributor of open-ended fund certificates:

a) The applicant for the distribution of open-ended fund certificates is a securities company licensed to broker securities, a fund management company, a depository bank, an insurer, a commercial bank or another economic organization.  A commercial bank, an insurer or another economic organization is required to submit the application for the distribution of fund certificates to the SSC as prescribed in Clause 3 of this Article;

...

...

...

c) There is a process of fund certificate distribution, including the process and procedures identifying, updating information and verifying information about investors and beneficiaries (with contents regulated in Annex 33 enclosed with this Circular), the rules of professional ethics applied to the staff in charge of performing the fund certificate distribution, internal rules for prevention of late transaction and speculation by taking advantage of time spreads, market timing in accordance with the international practice. 

2. The location for the distribution of open-ended fund certificates must satisfy the following requirements:

a) It is the legal business location of the distributor as prescribed by the Law on Enterprises, and may be the head office, branch, transaction office or representative office;

b) It must have at least two (02) employees who possess securities brokerage certificates, or have passed the test on securities brokerage held by the SSC, or are legitimate securities practitioners in foreign countries and possess certificates in the laws on securities and securities markets of Vietnam;

c) It must have the necessary material and technical facilities serving the distribution of fund certificates as follows:

- Office equipment and the computer system to support the distribution of fund certificates and the management of investors’ information. The information about investors must be separately stored and maintained without being shared with other departments. - The safe system to preserve and store documents, materials, trading orders, and settlement orders of investors;

- The backup system ensuring the ability to receive and transfer orders during the existence of any breakdowns.

3. The application for registration as a distributor, applicable to insurers and commercial banks, includes:

a) The application for registration as a distributor of open-ended fund certificates according to the form in Annex 05 enclosed with this Circular;

...

...

...

c) The authenticated copy of the establishment and operation license of organization that registers the open-ended fund certificate distribution; the authenticated copies of establishment and operation licenses of branches, transaction offices, registration certificates of representative offices; or equivalent documents of the locations where open-ended fund certificates are distributed;

d) The description of technical facilities and personnel at the locations where fund certificates are distributed according to the form in Annex 08 enclosed with this Circular, enclosing with the list and information of the employees who possess Certificates in securities brokerage according to the form in Annex 07 of this Circular, and authenticated copies of their ID cards or unexpired passports;

e) The technical process prescribed in Point c Clause 1 of this Article;

f) The written approval or opinion made by a specialized authority for the distribution of open-ended fund certificates (if any).  

4. The application for the registration as a distributor shall be made in one (01) original set attached with electronic files.  The original set of the application shall be sent by post or directly to the SSC’s administrative department.

5. The SSC shall, within fifteen (15) days as from the receipt of a complete and valid application, issue the certificate of registration of fund certificate distribution. In a case of refusal to grant such certificate, the SSC shall specify its reasons in writing.

6. When adding locations for fund certificate distribution, the distributor shall notify the SSC, and send the documents specified in Points a, b, c and d Clause 3 of this Article within seven (07) days before providing services of fund certificate distribution.

7. The distributor’s certificate of registration of fund certificate distribution shall be revoked in the following cases:

a) Voluntary termination of the fund certificate distribution;

...

...

...

c) If during the operation, the distributor fails to maintain satisfaction of conditions for the operation as prescribed in Clause 1 of this Article; or fails to satisfy the conditions prescribed in Article 40; or violates any of regulations on the distributor as prescribed in Article 41 of this Circular.

8. The distributor’s location for fund certificate distribution shall have its operation terminated in the following cases:

a) Comply with the distributor’s decision;

b) The distributor shuts down branches, transaction offices, or representative offices;

c) The distribution location fails to maintain necessary conditions for the fund certificate distribution as prescribed in Clause 2 of this Article;

d) The distribution contract expires.

9. The fund management company must evaluate the facilities before selecting distributors and distribution locations to provide relevant services to investors. The reports on such evaluation of facilities shall be stored at the head office of the fund management company and provided to the state competent authorities at their request. The fund management company must regularly inspect and ensure that the operations of its distributors shall comply with the law and the terms and conditions in distribution contracts.

10. If any distributor terminates its operations as prescribed in Clause 7 of this Article, the fund management company must give a prior notice to investors of replacement distributor. If a distribution location terminates its operations as prescribed in Clause 8 of this Article, the distributor shall give a prior notice to the fund management company and investors, and appoint a replacement distribution location. 

11. The fund management company may distribute open-ended fund certificates under its management.  In this case, the company shall ensure that:

...

...

...

b) The employees in charge of conducting the fund certificate distribution shall not concurrently work at the asset management department, investment analysis department and internal control department.

Article 40. Distributors' activities

1. Activities of a distributor shall include:

a) Collect complete information about investors and beneficiaries in accordance with the law on securities and regulations on anti-money laundering and counter-terrorism financing;

b) Receive and send trading orders from each investor to the fund management company and related service providers in a sufficient, timely and accurate manner. The distributor is not permitted to collate and settle trading orders, receive money directly and make settlement for the fund certificate transactions to investors;

c) Support investors in completing the procedures for adjusting information in the primary ledger, certifying the investor’s ownership of fund units and transferring the ownership as prescribed in Article 7 of this Circular;

d) Maintain a continuous and smooth contact channel with investor, accurately, sufficiently and promptly update the information for investors, and answer questions of investors about the offered fund products; make statistics and provide account statements and trading certifications to investors; provide investors with the prospectus, summary prospectus, the fund’s financial statements, documents about the general meeting of investors and other information; disclose information and make reports under the authorization of the fund management company;

e) Support the fund management company or related service providers in organizing the general meeting of investors; receive authorization to participate and vote at general meetings of investors according to written instructions from investors;

f) Summarize and store detailed information about investors and their transactions. Provide such information to the fund management company, related service providers and the SSC at their requests.

...

...

...

a) Perform functions of a distributor as prescribed in Clause 1 of this Article with regard to investors who register for conducting transactions on their accounts;

b) Make and manage the secondary ledger of investors who register for trading via nominee accounts; establish and manage the system of sub-accounts; update and provide sufficient information about investors, including the information about the transactions and ownership of the fund management company or related service provider; 

c) Execute trading orders for the nominee account on the basis of the collation of trading orders from investors, ensuring that buy orders are completely executed, sell orders are fairly distributed and the settlement are made in accordance with law;

d) Perform other functions, duties and activities of distributors as prescribed in this Circular.

3. Functions of nominee agents must be clearly specified in the prospectus and summary prospectus.  Nominee agents must comply with the following regulations:

a) Assets on the nominee account are not under the ownership of the nominee agent but under the ownership of investors in the secondary ledger of investors.  These investors are entitled to lawful rights and benefits of the owners in proportion to the fund units being held in the nominee accounts.  The investor may ask the nominee agent to transfer the fund units under such investor’s ownership on the nominee account to such investor’s account (if any);

b) Nominee agents must separate the money and assets of each investor; separate the money and assets of investors from their own ones.  A nominee agent that wish to trade fund certificates on its own behalf must open an account for trading fund certificates which is independent from the nominee account as prescribed in Point a Clause 1 Article 9 of this Circular;

c) A nominee agent is not permitted to use the money or assets of investors in any form; is not permitted to deposit, withdraw, transfer or conduct transactions relating to assets of investors on the nominee account; is not permitted to receive authorization from investors to transfer money or assets between sub-accounts of investors.  Any transaction relating to assets of an investor is conducted if it conforms to the law and follows lawful orders and instructions in writing from the investor;  

d) A nominee agent must open a deposit account for paying fund certificate transactions as prescribed in Clause 23 Article 2 of this Circular at the supervisory bank in order to receive and make settlement for the fund certificate transactions made by investors. The nominee agent shall only use this account to make settlement for fund certificate transactions made by investors or refund money to the investor who transferred such amount money if requested. The supervisory bank, related service providers, the fund management company and the nominee agents must formulate a system or co-coordinating regime for frequently inspecting and monitoring activities of this account, ensuring:

...

...

...

- Money (if any) of investors is not used or appropriated without their written authorization. In case of discovery of any indication of a breach of this provision, the supervisory bank, the fund management company and relevant service provider must report to the SSC and notify investors concerned within 24 hours;

e) Within three (03) days from the receipt of the settlement from the fund or investors, the nominee agent has to complete the settlement to investors according to lawful orders and instructions from the fund management company, the supervisory bank, or complete the settlement to the fund according to the instructions of concerned investor.

4. The distributor that is not securities trading organization, insurer or commercial bank shall not be eligible for:

a) Acting as a nominee agent;

b) Acting as a distributor of another fund management company if this is not approved in writing by fund management company of which it is acting as a distributor.

Article 41. General provisions on the fund certificate distribution

1. The distributor and its staff must act voluntarily, fairly and honestly with investors, and provide information to investors in a sufficient and timely manner in order that such investors can make their own investment decisions. Information, data and economic forecasts provided to investors must be based on actual events and must be accompanied by reference materials which have been issued and publicly disclosed by professional finance and economic organizations. Distribution staff shall not supply unverified information, incorrect information or rumours to investors.

2. Distribution staff shall only offer fund certificates for sell after investors have already been provided with the fund’s charter, the prospectus, summary prospectus, contracts referred in the prospectus and the latest reports on the fund's operation. Distribution staff must explain the contents defined in the fund's charter and prospectus, especially the fund’s investment objectives and policies, the fund’s investment strategies to achieve such objectives, characteristics of risks and profit, policies of profit distribution, taxes, fees, charges and other expenses, and the mechanism for trading fund certificates, to investors.

3. Distribution staff must provide adequate and accurate information to investors regarding the fund’s operating results, implying that previous information about operating results is only for reference purposes and may be changed depending on the market situation.

...

...

...

5. Distributors and their distribution staff must keep the information about investors and their transactions confidential; do not use such information for any purpose, except for the cases agreed by the investors or requested by the state competent authorities.

6. Distributors are not allowed to discount or reduce trading prices of fund certificates in any form. They are not allowed to make donations or use material or financial benefits in any form to offer fund certificates to investors or induce investors to purchase fund certificates. They are not allowed to ask for, demand or receive remuneration, profit or benefit in their own name or the organization’s name from the fund management company for the purpose of persuading investors to buy fund certificates, except for the fees announced in the prospectus and the distribution contract signed with the fund management company.

7. Distributors may not distribute fund certificates at business locations which have not yet been registered or licensed as prescribed by law, or not yet notified to the SSC.  Distributors are entirely responsible for activities of their locations for distributing fund certificates and their distribution staff during the process of distribution of fund certificates to investors.

8. The fund management company and its distributors must annually provide training to enhance knowledge and capability of their distribution staff.  The information about annual training of the fund management company and distributors must be attached to the annual reports of such fund management company.

Chapter VI

INFORMATION PROVIDED TO INVESTORS

Section I: INFORMATION, ADVERTISING AND INTRODUCTION OF OPEN-ENDED FUNDS

Article 42. Provisions on information, advertising and introduction of the fund

1. The fund management company may advertise, provide information and introduce the fund via the mass media; via means of communicating information and all kinds of publications; via all kinds of boards, signs, panels, posters, fixed objects, means of transportation or other mobile objects and commercial means.

...

...

...

3.  The written and spoken language used in any information, advertisement and introduction of any fund in the territory of the Socialist Republic of Vietnam shall be Vietnamese, except for the case of words which have become internationally known, commercial names, or words which are unable to be translated into Vietnamese.  The language presented must be easily understandable, must not contain words with double meanings, and must not be misleading.  Technical concepts and terms must be interpreted and must be minimized.  The smallest font size must be readable in normal conditions but must not be smaller than size 12.

4.  The fund’s advertising or introduction documents must be clear and must not cause misunderstanding that fund certificates are deposit certificates, negotiable instruments or valuable papers as stipulated in the banking sector or financial instruments with fixed income or profit achieved on secured investments.  The fund’s advertising or introduction documents must not include any statement causing investors to misunderstand that the value of investments increase perpetually, nor guarantee or forecast the future investment results of the fund. The provisions in this clause shall not apply if the open-ended fund invests entirely in bonds or securities with fixed income and capital preservation funds.

5. Where a fund management company applies special trading techniques or property management tactics which may cause the NAV of the fund to change drastically or abnormally, the advertising documents or information, including the prospectus, must specify the reasons thereof and clearly explain such techniques or tactics.

The comparison must comply with the following principles:

a) The comparison must include uncertainty about the investment results, implying that investment results may change depending on the market situation;

b) The comparison must be reasonable and accurate on the basis of actual operating results in the same period.  The comparison results shall be objectively assessed by the third party as prescribed in Clause 7 of this Article.

7. Upon use of any evaluation or comment of a third party or the results of selection or ranking operating results to advertise or introduce a fund, the following must be ensured:

a) Such evaluation, comment or result of selection or ranking must be reliable and objective on the basis of the comparison between operating results, data and actual events;

b) Such evaluation, comment or result of selection or ranking must be publicly announced or must be publicized by a recognized provider of financial information and statistical services;

...

...

...

d) Such result of selection or ranking is only used to advertise or introduce the fund within one (01) year from the date on which the fund is selected, ranked or received an award;

e) Such result of selection or ranking must be based on the comparison of operating results of at least five (05) funds with the same investment objectives or within the same group of funds with relatively identical portfolio structure during a comparative period of no less than one (01) year.

8. If contents of any information, advertisement or introduction of the fund refer to state regulatory authorities, they must clearly specify that such authorities only certify the legality during the establishment and operation of the fund, not implying that the contents of the information or advertisement, investment objectives or strategies of the fund, the assets of the fund, the value of one fund unit, profitability and risk levels of the fund are guaranteed.  The fund’s advertising or introduction documents must not use the name, logo, image, position, reputation or letter of the state regulatory authorities and their officials and employees, or thank-you letters of investors to advertise or introduce the fund or offer fund certificates for sale.

9. Contents of the information, advertisement or introduction of the fund must be honest, objective, accurate and clear without causing misunderstanding. The information must be up-to-date.  The fund management company, related organizations and individuals are responsible for the contents and legitimacy of the information provided during the advertisement and introduction of its fund certificates.  

10. At least fifteen (15) days before the advertisement or introduction of the fund to the public, the fund management company must send report to the SSC on the time of commencement of advertising accompanied by the following documents:

a) A set of documents on the fund’s product advertisement or introduction.  Where it is a program to be broadcasted on radio or television, the fund management company must send a script, video or audio tape. The script must clearly describe the images, wordings and music;

b) In case the document contains the comparison between operating results and other indices or funds, evaluations, comments or awards, ranking or selection, the fund management company must enclose documents issued by approved professional evaluation providers.

Article 43. Reminders of caution

1. Documents providing the information, advertisement or introduction of the fund must contain the following reminders of caution:

...

...

...

b) Trading prices of fund certificates may vary depending on the market situation, and investors may suffer losses on their capital invested in the fund;

c) Previous information about operating results of the fund (if any) is for reference only and does not mean that the investment will make profit for investors.

2. Documents providing the information, advertisement or introduction of the fund must provide investors with reminders of caution of types of risks when they make investment in the fund.

3. Contents of reminders of caution must be printed in bold, must be clear with the font size not smaller than that of other contents of information or advertising publications.

Section II: INFORMATION PROVISION

Article 44.  Provision of documents and information to investors

1. On a monthly, quarterly and annual basis, fund management company must send investors the statistics on their transactions, balances of trading accounts and sub-accounts, and reports on the change of the NAV of the fund according to the form in Annex 25 and 26 of this Circular.

If investors conduct trading via nominee accounts, the fund management company shall send the statistics on their transactions, balances of sub-accounts to investors at their written requests. The period for providing the information shall not exceed five (05) days from the receipt of the investor’s written request.

2. The fund management company has to announce or provide investors with the following documents:

...

...

...

b) Reports on the fund’s activities on a semi-annual and annual basis, comprising the basic contents stipulated in Annex 28 of this Circular;   

c) Statistical reports on transaction fees in investment activities of the fund on a semi-annual and annual basis, using the form stated in the Annex 27 of this Circular;  

d) Reports on criteria for assessing operating results of the fund on a semi-annual and annual basis, using the form stated in the Annex 34 of this Circular;  

3. Documents stipulated in Clause 2 of this Article must be provided free of charge to investors on the website of the fund management company or sent directly by email to investors or in other forms as prescribed in the fund's charter and the prospectus. The announcement must be made within thirty (30) days from the end of the first half of the fiscal year; and within ninety (90) days from the end of the fiscal year. Investors may refuse to receive documents in Clause 2 of this Article.

4. When being requested by investors, the fund management company shall provide investors with the process of risk management, specifying investment limits, measures for preventing and controlling risks for managing the fund’s assets.

5. On a weekly basis, the fund management company must post levels of the NAV deviation of the index fund as against the tracking error (TE) on the company’s website in which such deviation is determined in accordance with the law on securities providing for exchange-traded funds.    Where the aforesaid deviation exceeds the maximum limit stipulated in the fund’s charter, the fund management company shall be responsible for giving explanations for this, temporarily ceasing fund certificate transactions or adapting their investment portfolios as remedial actions in accordance with the fund’s charter.

Article 45. Regulations on reporting, document retention and information management

1. The fund management company must send the SSC the following documents:

a) Reports on investment activities of the fund on a monthly, semi-annual and annual basis, using the form stated in the Annex 34 of this Circular;  

...

...

...

c) Reports on the fund’s asset transactions as stipulated in Article 16 of this Circular on a monthly, quarterly and annual basis, using the form stated in the Annex 31 of this Circular;

d) Statistical reports on transaction fees in investment activities of the fund on a semi-annual and annual basis, using the form stated in the Annex 27 of this Circular;  

2. Reports must be attached electronic files within five (05) days from the end of the month, within fifteen (15) days from the end of the quarter, within thirty (30) days from the end of the first half of the fiscal year, and within ninety (90) days from the end of the fiscal year of the fund.

3. The fund management company and the supervisory bank shall retain all documents related to the fund’s investment activities in accordance with regulations on the organization and operation of the fund management company.

4. The fund management company, the supervisory bank, distributors, related service providers, auditing firm, the board of representatives of the fund, related organizations and individuals are responsible for keeping the information about the fund’s activities and investors confidential; not revealing such information to any third party unless requested by the state competent authorities.

Chapter VII

IMPLEMENTATION

Article 46. Conversion of the close-ended fund into the open-ended fund

1. A close-ended fund established before the effective date of this Circular may be converted into an open-ended fund when the following conditions are satisfied:

...

...

...

b) The investment portfolio only comprises stocks listed or registered for trading on the Stock Exchanges, cash and cash equivalents with the investment restriction ratio satisfying the requirements in Article 15 and Article 16 of this Circular;

c) The fund conversion plan has been approved by the general meeting of investors. The resolution of the general meeting of investors must be approved by the number of investors representing at least seventy-five percents (75%) of the total number of outstanding fund units.

The fund management company must obtain opinions from the general meeting of investors on the fund conversion. At least fifteen (15) days before the date of the general meeting of investors, the fund management company must provide investors with documents relating to the fund conversion, including:

a) The conversion plan, specifying the conversion cost;

b) Audited annual financial statements and the latest audited quarterly financial statements.

3. Within seven (07) days from the date on which fund certificates are delisted or suspended from trading in order to implement the conversion, the fund management company must complete procedures and application submitted to the SSC for amending the certificate of fund establishment registration for the new fund.    The application shall include:

a) The application for amending the certificate of the fund establishment registration according to the form in Annex 14 enclosed with this Circular; attached with the original certificate of the fund establishment registration of the converted fund; 

b) Minutes and the resolution of the general meeting of investors passing the fund conversion, enclosing the fund conversion plan which has been passed in the general meeting of investors;

c) The confirmation made by the supervisory bank and auditing firm of investment portfolio; the NAV of the fund on the last trading day; the NAV of one fund unit on the last trading day according to the form of reports on the asset and investment portfolio of the fund in Annex 34 enclosed with this Circular;

...

...

...

e) Other documents as prescribed in Points b, c, d, e, and f Clause 1 Article 4 of this Circular.

4. The SSC shall, within fifteen (15) days from the receipt of the complete and valid application as regulated in Clause 3 of this Article, amend the certificate of fund establishment registration. The date of the fund conversion shall be the effective date of the amended certificate of fund establishment registration.

5. Within three (03) days from the date of the fund conversion, the fund management company or related service providers shall notify its investors of the following contents:

a) The date of the fund conversion;

b) The NAV on the conversion date;

c) The list of distributors, related service providers (if any), supervisory banks, depository banks (if any);

d) The time of commencement of trading open fund certificates;

e) Certification of the number of fund units of investors; numbers of accounts or sub-accounts for trading fund certificates; 

f) The procedure for trading fund certificates.

...

...

...

7. The converted fund shall inherit all legitimate rights and interests of the converting fund.  Investors shall not incur any conversion cost.

Article 47. Implementation  

1. This Circular shall take effect as of March 01, 2012.

2. The SSC, fund management companies, supervisory banks, distributors, related service providers, other organizations and individuals related to the operation of open-ended funds shall implement this Circular.

3. The amendment and supplementation of this Circular shall be decided by the Minister of Finance./.

CERTIFICATION OF CONSOLIDATED DOCUMENT
FOR THE MINISTER
DEPUTY MINISTER




Tran Xuan Ha

...

...

...

FORM OF THE APPLICATION FOR THE PUBLIC OFFERING OF FUND CERTIFICATES
(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
-----------------------

.........………[place], …………..[date]

APPLICATION FOR INITIAL PUBLIC OFFERING OF OPEN-ENDED FUND CERTIFICATES

To: The State Securities Commission of Vietnam

We are: The fund management company…….

License for establishment and operation No. …. Issued by the State Securities Commission of Vietnam (SSC) on...............................[date]

Head office’s address:

We do submit this application to the SSC for registering the initial public offering of open-ended fund certificates with the following contents:

...

...

...

2. Type of the fund:

3. Name in English (if any):

4. Abbreviated name:

5. Operating duration:

6. Total fund units which will be offered for sale:

7. Face value of fund certificate:

8. Total amount of capital planned to be mobilized:

9. Maximum amount of fund certificates issued (if any):

10. Supervisory bank:

...

...

...

12. Head office’s address: …………….

13. Transfer agent service provider (if any):

14. Certificate of registration of securities depository operation No. …. issued by the State Securities Commission of Vietnam (SSC) on...............................[date]/License for the establishment and operation No…………………issued by……………….on………………….[date]15. Head office’s address: …………….

16. Fund management services provider (if any):

17. Certificate of registration of securities depository operation No. …. issued by the State Securities Commission of Vietnam (SSC) on...............................[date]

18. Head office’s address: …………….

19. Other organization (specify authorized activities)

20. Certificate of registration of securities depository operation No. …. issued by the State Securities Commission of Vietnam (SSC) on...............................[date]/ License for the establishment and operation No…………………issued by……………….on………………….[date]21. Head office’s address: …………….

We undertake to be liable for the integrity and accuracy of contents of this application for the public offering of fund certificates.

...

...

...

Enclosed documents

(Specify all documents)

(General) Director of the fund management company…….

(Signature, specify full name and seal)

Annex No. 02

FORM OF THE CHARTER OF THE OPEN-EDNED FUND
(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

OPEN-ENDED FUND’S CHARTER

I. LEGAL GROUNDS

...

...

...

2. Decree……………

3. Circular

4. Decision …………….

II. DEFINITIONS

“Fund”

Means the Investment Fund………, performing the public offering of fund certificates and being established under the law on securities and the fund's charter.

“Fund management company”

Means the Fund management company…….which is established under the License for the establishment and operation No........ issued by the State Securities Commission of Vietnam (SSC) on………. [date]. The fund management company is appointed to manage the fund ……………… (name of the fund) and shall have rights and obligations as regulated in ……. of this Charter.

“Supervisory bank”

...

...

...

“Auditing firm”

Refers to the auditing firm in charge of performing auditing works for the fund which is appointed by the general meeting of investors, that is the auditing firm…………………., an independent auditing firm, approved..........., performing annual auditing of assets of the investment fund.........    .

“Charter of the fund….” 

Includes this document, attached annexes and legal amendment documents (if any).

“Prospectus”

Refers to document or electronic file that publicly announces the information about the offering and issue of fund certificates of the fund in an accurate, honest and objective manner.

“Supervision contract”

Refers to the contract that is signed between the fund management company and the supervisory bank and passed by the general meeting of investors of the fund.

“Investors”

...

...

...

“General meeting of investors”

Refers to the general meeting of investors who have the rights to vote, organized on the periodical or extraordinary basis to vote important issues relating to the fund. The general meeting of investors is the highest decision-making body of the fund.

“The board of representatives of the fund”

Includes representatives of investors who are appointed by the general meeting of investors to act on behalf of investors in supervising the operation of the fund, the fund management company and the supervisory bank. 

“Charter capital”

Refers to total amount of capital in cash which has been actually contributed by all investors during the initial public offering of fund certificates and recorded in this charter.

“Fund unit” 

Means the charter capital divided into equal portions. Face value per a fund unit of the initial public offering is VND 10,000/ unit. Each fund unit presents the same amount of profit and capital of the fund.

“Certificate of the investment fund…..”

...

...

...

“Sell price/Offering price”

Refers to the amount that the investor must pay to buy a fund unit.  The sell price/offering price shall be equal to the face value (determined in the initial public offering); or equal to the net asset value (NAV) of a fund unit added to the issuance fee regulated in the fund's charter.

“Redemption price”

Refers to the amount that the fund management company must pay to the investor for redeeming a fund unit.    /The redemption price is equal to the NAV of a fund unit minus the fee for redeeming a fund unit regulated in the fund’s charter.

“Fund management fee”

Is the payment made to the fund management company that provides fund management services regulated in the fund’s charter.

“Issuance fee/redemption fee”

Refers to the amount that the investor must pay to the fund for buying/selling a fund certificate unit.  Issuance fee/redemption fee shall be calculated according to the percentage of the NAV per one fund certificate unit as regulated in Article ..... of this charter.

“Fund dividends”

...

...

...

“Fiscal year” 

Is the period of twelve months, starting on the 01^st of January and ending on the 31^st of December of a calendar year. The first fiscal year of the fund shall starts from the date on which the certificate of fund establishment registration is issued by the SSC and ends in December 31^st of that year.

“The fund's net asset value (NAV)”

Is the total value of assets and investments owned by the fund minus all debt obligations of the fund on the valuation date.

“Valuation date”

Means the date on which the fund management company determines the net asset value of the fund as prescribed by the Law on securities and the fund’s charter.

“Fund certificate trading date”

Refers to the valuation date on which the fund management company, on behalf of the fund, issues and redeems fund certificates.

“Time of closing the order book”

...

...

...

“Other definitions”

Other definitions (if any) shall be construed in accordance with the law on securities and other relevant documents.

Chapter I

GENERAL PROVISIONS

Article 1. Name and address

Name inn Vietnamese:

Name in English (if any):

Abbreviated name:

Address:

...

...

...

Article 3. The fund’s organization principles

Article 4. Total capital mobilized and the quantity of fund certificates offered

1. The charter capital mobilized in the initial public offering of the fund is:……………. This amount is divided into ….. fund units. Face value of each fund unit is VND 10,000.

2. Investors contribute capital in VND by transfer to the fund or the fund’s account opened at the supervisory bank.

3. Maximum quantity of fund units circulated (if any):

4. The change of the maximum value of assets mobilized or the maximum quantity of fund units mobilized must be decided by the general meeting of investors and reported to the State Securities Commission of Vietnam.

Article 5. Appointment of the representative in charge of performing the capital mobilization and offering of fund certificates

The legal representative of the fund management company shall be appointed act as the representative in charge of performing the capital mobilization and offering of certificates of the fund...... for sale.

Article 6. Fund management company

...

...

...

- License for establishment and operation No.:

- Head office:

- Telephone:                                                      Fax:

Article 7. Supervisory bank

- Bank……….

- Number of the establishment license issued by the State Bank of Vietnam:

- Certificate of registration of depository operation No.:  

- Head office:

- Telephone:                                                      Fax:

...

...

...

1. Transfer agent service provider (if any):

- Certificate of registration of securities depository operation No. …. issued by the State Securities Commission of Vietnam (SSC) on...............................[date]/ License for the establishment and operation No…………………issued by……………….on………………….[date]- Head office’s address: …………….

2. Fund management services provider (if any):

- Certificate of registration of securities depository operation No. …. issued by the State Securities Commission of Vietnam (SSC) on...............................[date]  

- Head office’s address: …………….

3. Other organization (specify authorized activities):

- Certificate of registration of securities depository operation No. …. issued by the State Securities Commission of Vietnam (SSC) on...............................[date]/ License for the establishment and operation No…………………issued by……………….on………………….[date]

- Head office’s address: …………….

Chapter II

...

...

...

Article 9. Investment objectives

Article 10. Investment strategies

1.  Investment strategies

2. Fields and sectors of investment

3. Types of assets in which the fund is permitted to invest

a) Deposits at credit institutions as prescribed by the laws;

b) Money market instrument, foreign currency, valuable papers and negotiable instruments in accordance with the law on banking sector;

c) Government bonds, Government-guaranteed bonds and local authority bonds;

d) Listed stocks, stocks registered for trading, and listed bonds of issuers that operate in accordance with the law of Vietnam;

...

...

...

f) Derivatives listed and traded on the Stock Exchanges but with the sole objective of avoiding risks;

4. In case the fund invests in assets as regulated in Point e clause 3, the board of representatives of the fund must provide written consent to the types (codes) of securities, the quantity and the time for performing such investments.  In addition, it also requires the issuer’s commitment or documents proving that the issuer will complete its application for trading registration or listing such securities on the Stock Exchange within twelve (12) months from the trading date.

Article 11. Investment limits

1. Invested capital and assets of the fund must comply with the following provisions:

a) Do not invest more than 49% of the total asset value of the fund in the assets regulated in Point a and Point b Clause 3 Article 10 of this charter;

b) Do not invest more than thirty percents (30%) of the fund’s total asset value in the assets prescribed in Point a, b, d, e and f Clause 3 Article 10 of this charter, which are issued by the same company or a group of companies having mutual ownership relations, in which the value of derivatives regulated in Point f Clause 3 Article 10 of this charter is the value agreed in the contract;

c) Do not invest more than twenty percents (20%) of total asset value of the fund in outstanding securities of an issuer.    Securities regulated in this point include valuable papers, negotiable instruments, bonds, voting stocks, non-voting preference stocks;

d) Do not invest in securities of an issuer more than ten percents (10%) of the total value of outstanding securities of that issuer;

e) Do not invest more than ten percents (10%) of the total asset value of the fund in the assets prescribed in Point e or Point g Clause e Article 10 of this Charter;

...

...

...

g) At any time, the total value agreed in derivatives transactions, outstanding loans and other payables of the fund must not exceed the NAV of the fund; 

h) Do not invest in securities investment funds or stocks of securities investment companies that are established and operated in Vietnam;

i) Do not directly invest in real property, precious stones or metals.

2. Except for the cases regulated in Point g, h, i Clause 1 of this Article, the investment structure of the open-ended fund may vary from investment limits depending on the following causes:

a) The fluctuation of the market prices of assets in the fund’s investment portfolio;

b) Making legitimate payments of the fund;

c) Executing trading orders of investors;

d) Consolidating and merging issuers;

e) The fact that the new fund has just been licensed, or has operated for a maximum period of six (06) months from the date on which the certificate of the fund establishment registration is issued due to the division, consolidation, or merger of the funds;

...

...

...

3. Within a period of three (03) months from the date the variation arises, the fund management company must adjust the investment portfolio to ensure the compliance with the investment limits as prescribed in Clause 1 of this Article.

4. In case the fund management company fails to comply with the investment limits prescribed by law or the fund’s charter, the fund management company is responsible for adjusting the investment portfolio within fifteen (15) days from the date on which the variation occurs. In this case, the fund management company shall incur the costs of these transactions and losses (if any). If the variation resulted in a profit, such profit must be immediately be accounted for as the profit of the fund.
Article 12. Lending and borrowing and margin trading

1. The fund management company is not permitted to use the capital and assets of the fund to provide loans or guarantees for any loan, except for the investment in deposits as prescribed in Point a Clause 3 Article 10 of this Charter.

2. The fund management company may not take out loans for investment activities, except for short–term loans to defray necessary costs of the fund.  Total value of short-term loans of the fund shall not exceed five percents (5%) of the fund’s NAV at any time and the duration of a loan shall not exceed thirty (30) days.

3. The fund management company is not permitted to use assets of the fund to conduct margin trading (i.e. lending for the purchase of securities) for such fund or any other organization or individual; and is not permitted to use assets of the fund to conduct the short selling of securities or lending of securities.    

Article 13. Investment selection methods

1. Methods for selecting investments in money market instruments.

2. Methods for selecting investments in debt instruments.

3. Methods for selecting investments in stocks.

...

...

...

5. Methods for selecting investments in other instruments.

Chapter III

INVESTORS, LEDGERS OF INVESTORS AND FUND CERTIFICATE TRANSACTIONS

Article 14. Investors

1. Investors of the fund include domestic and overseas judicial persons and individuals. Investors shall not bear legal liability or other obligations to the fund other than liabilities for the number of fund certificates which they own.

2. Investors that are judicial persons include economic and social organizations that are recognized by the law of Vietnam. The investor that is a judicial person shall appoint a representative to represent the number of fund certificates under its ownership.  The appointment, dismissal or replacement of the authorized representative must be approved in writing with the signature of the legal representative of such investor that is a judicial person.

Article 15. Rights and obligations of investors 

1. The investors shall have the following rights:

a) Receive profit from the fund’s investment activities in proportion to the number of fund units under the ownership of each investor;

...

...

...

c) Request the fund management company, on behalf of the fund, to redeem or switch fund certificates.

d) Perform their own rights through the general meeting of investors;

e) Other rights as regulated by the law and the fund’s charter.

2. Investors shall discharge the following obligations:

a) Comply with decisions made by the general meeting of investors;

b) Fully make settlement for buying fund certificates and bear liability for debts and other obligations relating to assets of the fund within the scope of the amount paid for buying such fund certificates;

c) Other obligations as regulated by the law and the fund’s charter.

Article 16. Ledgers of investors 

1. The fund management company shall itself or grant powers to a related service provider to establish the primary ledger of investors (primary ledger), or nominee agents shall prepare and manage secondary ledgers, and confirm the ownership of fund certificates of investors.

...

...

...

a) If the investor is an individual, full name, ID number or unexpired passport number, contact address, contact telephone number, and email address (if any) are specified;

If the investor is an organization, the following information is required: full name, abbreviated name, trading name, head office’s address, the number of license for the establishment and operation/ certificate of business registration; full name, ID number or unexpired passport number, contact telephone number and email address of the individual who is authorized by such organization to trade fund certificates;

b) Account numbers of investors; or sub-account numbers, attached with the numbers of nominee accounts; securities trading codes (applicable to foreign investors);

c) The quantity of fund units owned; and dates of registration of ownership (entered into the primary ledger).

3. The fund management company and related service providers must always have sufficient information about the ownership of each investor, including those trading via nominee accounts.  The information about assets of investors in the primary ledger is the proof of the investors' ownership of fund certificates.  The investor's ownership shall be established when the information about investor's ownership is updated in the primary ledger.

Article 17. Fund certificate transactions

1. The fund management company must arrange fund certificate transactions for investors. Trading activities must be arranged on a periodical basis.

The trading frequency of the fund…………  (not less than twice per month)
3. Buy order

4. Sell order

...

...

...

6. Time of closing order book

7. Method of settlement

Article 18. Partial redemption or open-ended fund certificate trading suspension

1. The fund management company has the right to cover only a part of a buy order, sell order or switching order from an investor in any one of the following cases:

a) The total value of sell orders (including sell orders from switching activities) minus the total value of buy orders (including buy orders from switching activities) on a fund certificate trading day is more than ten percents (10%) of the NAV of the fund; or

b) The complete execution of the investor’s orders might lead to the fact that:

- The NAV of the fund goes down below fifty (50) billion dongs; or

- The value of remaining fund units or the total number of remaining fund units in the investor’s account is lower than the minimum value or the minimum number of fund units required to maintain the account of such investor as prescribed in the fund's charter (if any); or

- The remaining NAV or the number of remaining fund units is lower than the minimum NAV or the minimum number of outstanding fund units prescribed in the fund's charter and announced in the prospectus (if any); or

...

...

...

2. Regarding the redemption of the remaining number of sell orders or switching orders with respect to the orders which have been satisfied partially as prescribed in Clause 1 of this Article, the fund management company must apply either of two principles as follows:

a) The principle of time-based priority: The order which is transferred first to the fund management company, related service provider or distributor will be implemented first; or

b) The principle of ratio parity: the unexecuted part of the order will be coupled with later arriving orders for implementation, ensuring the ratio between the value of orders implemented and the value registered for trading are the same.

3. In the cases in Point a Clause 1 of this Article, the fund management company is permitted to extend the time-limit for making settlement provided that such time-limit shall not exceed thirty (30) days as of the fund certificate trading day.

4. Trading open-ended fund certificates may be suspended in one of the following cases:

a) The fund management company is unable to redeem open-ended fund certificates as requested due to an event of force majeure;

b) The fund management company is unable to determine the NAV of the open-ended fund on the date of determining the price for redeeming open-ended fund certificates because the Stock Exchange decides to suspense securities transactions in the fund’s investment portfolio.

c) Other cases as stipulated in the fund’s charter or as considered necessary by the SSC.

5. Duration of the fund certificate trading suspension …………… (not longer than ninety (90) days from the last trading day of fund certificates)

...

...

...

7. If the event causing the trading suspension terminates while convening a general meeting of investors, the fund management company is permitted to rescind the organization of the general meeting of investors.

Article 19. Sell price and redemption price 

1. Initial public offering price

2. The sell price of a fund unit shall be determined by the NAV of a fund unit calculated on the fund certificate trading day minus the redemption fee (if any).

3. The buy price of a fund unit shall be determined by the NAV of a fund unit calculated on the fund certificate trading day plus the issuance fee (if any).

4. Redemption fee

5. Issuance fee

6. Switching fee

Article 20. Inheritance of fund certificates

...

...

...

2. The fund management company shall enter the names of lawful heirs into the ledger of investors after such heirs have provided sufficient documents proving their lawful inheritance.

Chapter IV

GENERAL MEETING OF INVESTORS

Article 21: General meeting of investors

1. The general meeting of investors is the highest decision-making body of the investment fund and all investors whose names have been registered in the list of investors before convening the general meeting are entitled to participate in the general meeting of investors.

2. The annual general meeting of investors shall be held within ………days from the date on which the annual financial statements are audited by the approved auditing firm.  The annual general meeting of investors is not permitted to be held in the form of obtaining written opinions, unless the fund’s charter contains some other provisions.

3. Extraordinary general meetings of investors shall be held in the following circumstances:

a) The fund management company, or the supervisory bank, or the board of representatives of the fund considers it necessary in the interests of the fund;  

b) At the request of investors or a group of investors representing at least ………..of total outstanding fund units for six (06) consecutive months prior to the time of convening the general meeting;

...

...

...

4. The extraordinary general meeting of investors as prescribed in Clause 3 of this Article must be held within ……… days from the date on which the fund management company receives the request to convene such meeting, in which reasons and objectives of convening such extraordinary general meeting of investors must be specified.

Article 22. Powers and duties of the general meeting of investors 

1. Make decision on the amendment and supplementation of the fund's charter and supervision contracts;

2. Decide fundamental changes in the fund’s investment policies and objectives; profit distribution plans; the increase in the level of fees paid to the fund management company and the supervisory bank; the changes of the fund management company and the supervisory bank;

3. Make decision on the consolidation and merger of funds;

4. Make decision on the fund certificate trading suspension; the fund division;

5. Make decision on the fund dissolution;

6. Appoint, dismiss or remove the chairman and members of the board of representatives of the fund; decide the amount of remuneration and operating costs of the board of representatives of the fund; pass the selection of the approved auditing firm to audit the annual financial statements of the fund; pass reports on financial and asset status and annual operation of the fund;

7. Decide other matters within its authority as prescribed in Article 85 of the Law on securities, the law on enterprises and the fund’s charter.

...

...

...

1. The planned time, program and contents of the general meeting of investors must be notified to investors and reported to the SSC within …… days before the date planned to hold such general meeting.

2. Investors may directly attend in the general meeting of investors or appoint their authorized representatives to attend in the general meeting or attend in other forms.

3. The general meeting of investors shall be held when the number of participating investors represents at least ………….. of the total outstanding fund units.

4. If the first meeting does not take place because the conditions prescribed in Clause 3 of this Article were not satisfied, the second meeting shall be convened within ………… days from the date on which the first meeting was intended to be opened.  The general meeting of investors shall be held when the number of participating investors represents at least ………….. of the total outstanding fund units.

5. The procedures and form of the general meeting of investors.

Article 24. Decisions of the general meeting of investors

1. Each fund unit shall have one voting right. The supervisory bank, the fund management company, the auditing firm and law firms providing services to the fund are entitled to attend the general meeting of investors but they do not have voting rights.

2. The general meeting of investors shall approve decisions under its competence by voting, taking written opinions or other voting forms as regulated in the fund’s charter.

3. Principles, contents and procedures for obtaining written opinions from investors.  

...

...

...

a) The voting is conducted with the participation of investors who represent at least ………….. of total circulating fund units;

b) Total votes for passing such decision as regulated in point a of this clause shall not fewer than ……….. of total circulating fund units at the voting time.

5. Decisions of the general meeting of investors on the matters prescribed in Clause 2 and Clause 3 Article 21 of this charter shall be approved if the following requirements are satisfied:

a) The voting is conducted with the participation of investors who represent at least ………….. of total circulating fund units; and 

b) Total votes for passing a given decision as regulated in point a of this clause shall not fewer than ……….. of total circulating fund units at the voting time.

6. If the general meeting of investors is organized as regulated in Clause 3 Article 21 of this Charter and the number of investors participating in such general meeting represent under ………. of total circulating fund units, the decision of the general meeting of investor shall be approved if all requirements stated in point a clause 4 of this article have been satisfied. Decisions of the general meeting of investors on the matters prescribed in Clause 2 and Clause 3 Article 22 of this charter shall be approved if all requirements stated in point a clause 4 of this article have been satisfied.

7. When seeking written opinions in the general meeting of investors, decisions of the general meeting of investors are approved when they are approved by the number of investors that represent at least …….. of the total votes.

8. The fund management company and the supervisory bank shall consider and ensure that all decisions of the general meeting of investors are conformable with the laws and the fund's charter.  

9. Within seven (07) days as of the end of the general meeting of investors, the fund management company and the board of representatives of the fund shall make the minute and the resolution of the general meeting of investors, and send them to the SSC.

...

...

...

1. The investor who objects to the decision approved by the general meeting of investors on certain issues prescribed in Clause 2 and Clause 3 of Article 22 has the right to require the fund management company to redeem or switch fund certificates owned by such investor to another open-ended fund of such fund management company that has the same investment policies. The investor’s request must be made in writing, specifying the name and address of the investor, the number of fund units, and the reason for such request for redemption or switching to another fund which has the same investment policies and is managed by such fund management company. The investor’s request must be sent to the fund management company within fifteen (15) days from the date on which the decision on the above-mentioned issues is approved by the general meeting of investors.

Chapter V

THE BOARD OF REPRESENTATIVES OF THE FUND

Article 26. The Board of representative of the fund

1. The Board of representative of the fund includes……….members, in which at least two thirds among which are independent members.

2. The Board of representative of the fund must include:

a) At least ………. independent member(s) with qualifications and experience in accounting and auditing.

b) At least ………. independent member(s) with qualifications and experience in securities investment analysis or asset management;

c) At least ………. member(s) with qualifications in the law and regulations on securities.

...

...

...

Article 28. Rights and obligations of the board of representatives of the fund

1. Represent the interests of investors; perform activities in conformable with the law to protect interests of the fund and investors.

2. Approve the list of quotation service providers, the principles and methods for determining the NAV; approve the list of the banks receiving fund’s deposits, money instruments and assets that the fund is allowed to invest in as prescribed in Points a, b, e Clause 3 Article 10 of this Circular; approve fund's asset transactions within its competence with respect to transactions through the agreement method, sale and purchase of securities that have been not yet listed or registered for trading.   

3. Decide the amount of distributed profit; the schedule and procedures of profit distribution, or the settlement of losses during the business process; make decisions on the issues in disagreement between the fund management company and supervisory bank on the basis of regulations of the law.

4. The board of representatives of the fund is entitled to make decisions on the issues prescribed in Points 2, 3, 4, 5, 6 and 7 Article 22 of this charter upon the provision in the fund’s charter and the authorization of the latest general meeting of investors.

5. Request the fund management company and the supervisory bank to adequately provide documents and information about the asset management and supervision.

6. Other rights and duties………….

7. Within fifteen (15) days from the date on which the board of representatives of the fund makes decisions on the issues prescribed in Clause 4 of this Article, the board of representatives of the fund must, through the fund management company, send the meeting minutes and the resolution of the board of representatives of the fund to the SSC and the supervisory bank, and provide information about its decisions to investors in the form specified in the fund's charter.

8. During the performance of its rights and duties, the board of representatives of the fund must comply with the law, the charter’s fund and decision of the general meeting of investors. In case the decision passed by the board of representatives of the fund is contrary to the law or the fund’s charter and cause damage to the fund, the members who passed such decision jointly bear personal liability for such decision, and make compensation to the fund; the member who objected to the passing of such decision is exempt from liability.

...

...

...

1. The general meeting of investors shall appoint one of members of the board of representatives of the fund to the position of chairman of the board. Chairman of the board of representatives of the fund must be an independent member.

2. Chairman of the board of representatives of the fund shall have the following rights and duties:

a) Establish program and action plans of the board of representatives of the fund;

b) Prepare program, contents and documents used in the board’s meeting; convene and chair the meeting of the board of representatives of the fund;

c) Follow the implementation of decisions of the board of representatives of the fund;

d) Perform other rights and duties as regulated in the fund's charter.

Article 30. Procedures for management of the board of representatives of the fund

If the chairman of the board of representatives of the fund is absent or incompetent to perform assigned duties, the member of the board of representatives of the fund who is authorized by the chairman of the board of representatives of the fund shall perform rights and duties of the chairman of the board of representatives of the fund.  In case of the absence of the authorized member, other members of the board of representatives of the fund shall appoint one of independent members to temporarily act as the chairman of the board of representatives of the fund on the principle of unanimity. The appointment of a new chairman of the board of representatives of the fund shall be conducted in the upcoming annual general meeting of investors.

Article 31. Suspension and deposition of members of the board of representatives of the fund

...

...

...

Article 32. The meeting of the board of representatives of the fund

1. Chairman of the board of representatives of the fund is entitled to convene the meeting of the board of representatives of the fund.  The meeting of the board of representatives of the fund is required to be held quarterly. Extraordinary meetings may be held in case of need.

2. The meeting of the board of representatives of the fund shall be held if at least two-thirds (2/3) of the board’s members attend the meeting.

3. Decisions of the board of representatives of the fund are approved by direct voting at the meetings, via conference by phone, internet or other audio/video devices, or via written opinions and other methods as prescribed in the fund's charter. Each member of the board of representatives of the fund has one vote. The members who do not directly attend the meeting may vote by sending written opinions.

4. The decision of the board of representatives of the fund shall be passed if it is passed by at least …….of total participants in the meeting and at least …………. of independent members.

5. Contents of the meeting of the board of representatives of the fund must be sufficiently recorded in the minutes. The chairman and the secretary of the meeting shall jointly bear liability for the accuracy and integrity of the minutes of the meeting of the board of representatives of the fund.

Chapter VI

FUND MANAGEMENT COMPANY

Article 33. Criteria for selecting the fund management company

...

...

...

1. Obligations of the fund management company

2. Rights of the fund management company

Article 35. Termination of the fund management company’s rights and obligations to the fund

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

a) At the request of the board of representatives of the fund which has been approved by the general meeting of investors;

b) The fund management company’s license for the establishment and operation is revoked;

c) Amalgamating or merging with another fund management company;

d) Operating duration of the fund ends.

2. The fund management company must hold a general meeting of investors to take ideas about the termination of its rights and obligations to the fund at least six (06) months before the time planned to terminate such rights and obligations.     

...

...

...

Chapter VII

SUPERVISORY BANK

Article 37. Criteria for selecting the supervisory bank

The supervisory bank selected by the fund management company must satisfy all requirements as provided in Clause 1 Article 98 of the Law on securities and have no involvement in the fund management company.

Article 38. Rights and obligations of the supervisory bank

1. Obligations of the supervisory bank

a) Always act for the best interests of the fund’s investors;

b) Bear liability for damage caused to the fund from the bank’s mistake;

c) Supervise the management of the fund’s assets by the fund management company in accordance with the law on securities, relevant regulations and the fund's charter.

...

...

...

e) Separate assets of the fund from those of the fund management company, those of other funds, those of other customers of the supervisory bank and those of the supervisory bank;

f) Ensure and bear liability for assets of the fund in case of the appointment of secondary depository institutions;

g) Supervise or calculate the NAV of the fund [frequency] in conformable with the law and the fund’s charter, ensuring that the fund's NAV is accurately calculated.

h) Settle securities transactions in conformity with lawful instructions from the fund management company. The supervisory bank is entitled to refuse such instruction if it has reasonable grounds for determining that such instructions are unlawful or contrary to the fund’s charter. In case of refusal, a written notice must be sent to the fund management company, specify reasons of such refusal, and a copy of which shall be sent to the SSC;

i) Perform the comparison between assets of the fund and those of the fund management company in  a regular basis;

k) Make settlement for legitimate costs of the fund according to lawful instruction of the fund management company, ensuring such costs are in accordance with the law and provisions of the fund’s charter;

l) Make settlement to the fund’s investors when the fund management company redeems fund certificates from investors, or when the fund distributes profits to investors, or the fund liquidates its assets in case of dissolution, or in other cases as regulated by the law and the fund’s charter. Such settlement shall be made according to legitimate instructions of the fund management company provided that it must be in conformity with provisions of the fund’s charter;

m) Keep a separate record book on changes of total issued certificates, the number of fund certificates owned by each investor, name, address, nationality, and other address and identification information of such fund certificate holder, and update any changes (if any) in a timely manner;  

2. Rights of the supervisory bank

...

...

...

1. The supervision is limited to the fund management company's activities relating to the fund over which the bank exercises its supervisory function.  During the supervision, the supervisory bank shall:

a) Cooperate with the fund management company to periodically check internal process on principles and methods for determining the NAV of the fund; inspect and supervise the determination of the fund’s NAV; and ensure that the NAV of one fund unit is calculated correctly and accurately in compliance with the law and the fund’s charter.

b) Supervise investment activities and asset transactions of the fund, including assets that are not securities centrally registered at the Vietnam Securities Depository; supervise the asset transactions made between the fund and the fund management company, and relevant individuals.  When violations of law are discovered, the supervisory bank shall immediately report them to the SSC and notify the fund management company within twenty-four (24) hours from the discovery of the violations, and request the correction or take action to remedy the consequences caused by such violations within a limited period of time;

c) Supervise the process and verify results of the merger, consolidation, dissolution of the fund and liquidation of the fund's assets;

d) Supervise and ensure the legitimacy, and only use the fund’s assets to make settlement for costs in accordance with the law and provisions of the fund’s charter;

e) Supervise other activities of the fund management company during its management of the fund’s assets in accordance with Article 98 of the Law on securities and the fund’s charter.

2. The supervisory bank must prepare and archive documents in both hard copies and electronic files for a period of ten (10) years for certifying that the compliance of the supervisory bank during its supervision over the fund management company with law as prescribed in Annex 19 enclosed with this Circular.  These documents must be provided at the written request of the SSC.

3. The supervisory bank must adequately, promptly, and accurately provide necessary information to the fund management company and approved auditing firm so that they can sufficiently exercise their rights and fulfill their obligations to the fund in accordance with law and the fund's charter.

4. The supervisory bank shall reserve the right to inspect the fund management company, examine and appraise the capacity of the computer system and computer software, request the fund management company to promptly provide their procedures for asset management, internal control, risk management, valuation handbook, procedures of receiving and executing orders from investors and necessary information related to the management of the fund’s assets in order that the supervisory bank may fulfill their rights and obligations to the fund as prescribed by the law.

...

...

...

6. If the fund management company must pay compensation for losses to investors, the supervisory bank must coordinate with the fund management company to promptly and completely carry out settlement procedures in accordance with lawful instructions from the fund management company.  The supervisory bank shall jointly bear liability and make compensation to investors and the fund for losses arising from its failure to fully and promptly supervise the fund’s investment activities and the determination of the fund’s NAV and other supervisory activities as regulated by the law.  The rate of compensation depends on the civil agreements between the fund management company and the supervisory bank.

Article 40. Termination of the supervisory bank’s rights and obligations to the fund

Chapter VIII

RELATED SERVICE PROVIDERS

Article 41. Authorized activities (outsourcing services)

Article 42. Criteria for selecting related service providers 

1. Criteria on competence, system, personnel, experience and professionalism.

2. Criteria on organizational structure of the unit in charge of providing related services of the authorized provider, operational procedures, and the system for reporting and approving reports;

Article 43. Responsibilities of related service providers 

...

...

...

2. Scope of operation, functions and duties of authorized parties.

3. Requirements on documents, records and database;

4. The authorized party must perform authorized works in an effective and careful manner, and keep information relating to investors and other partners of the fund management company confidential;

5. The authorized party shall provide the fund management company with independent auditors’ reports on authorized contents to serve the inspection by the fund management company.

Article 44. Responsibilities of the fund management company for authorized activities

1. The authorization shall not reduce or change responsibilities of the fund management company towards the fund.

2. Before entering into service contracts with any authorized party, the fund management company must carry out the due diligence, examine facilities and information technology system of such authorized party, ensuring that it has operational process, personnel and systems capable for performing authorized works, including the internal control system, facilities, technical solutions, disaster recovery system, hot stand-by system, experienced and skilled staff, etc.;

3. Carry out the inspection in a regular basis to ensure that the authorized contents have been prudently and safely performed in conformity with the law and this charter, and the quality of services provided by the authorized party is in conformity with criteria and requirements of the fund.

4. 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 this regulated duty.

...

...

...

6. Establish process and system to ensure that the fund management company, independent auditing firms and the state competent authorities are able to access necessary information for supervising the authorized activities, appraising and managing risks arisen from such activities at any times.

7. The fund management company shall be liable for its authorization.  The fund management company must ensure the continuity of authorized activities, avoiding the interruption and influence on investment activities of investors;

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

9. Store instructions, requests and documents sent to the authorized party for performing authorized activities in a sufficient, prompt and accurate manner.

10. On the annual basis, the fund management company must prepare reports on the evaluation of results of authorized activities with the following contents:

a) Costs paid to the authorized parties in comparison with profit, income and total operating costs of the fund;

b) Effects (if any) of authorized activities on profit and level of risks of the fund;

c) Total costs for performing authorized activities paid to the authorized party (if there are many services provided to the fund management company);

d) Evaluate the maintenance of the internal control system, risk management system, information security, facilities, hot stand-by system, disaster recovery system, etc. of the authorized party, ensuring that the authorized activities shall be thoroughly performed, not causing the influence on investment activities of investors.  

...

...

...

Chapter VIII

DISTRIBUTORS AND NOMINEE AGENTS

Chapter IX

AUDITING, ACCOUNTING AND REPORTING

Article 46. Criteria for selecting and changing auditing firm

Article 47. Fiscal year

The fiscal year is the period of twelve months, starting on the 01st of January and ending on the 31st of December of a calendar year. The first fiscal year of the fund shall starts from the date on which the certificate of fund establishment registration is issued by the SSC and ends in December 31^st of that year.

Article 48. Accounting policy

The fund shall apply the accounting policy of Vietnam and comply with other regulations promulgated by the competent authorities on the accounting affair of the fund.

...

...

...

Article 50. Other reports

Chapter X

 THE NET ASSET VALUE (NAV) OF THE FUND

Article 51. Determination of the NAV 

1. The fund management company is responsible for determining the NAV of the fund and the NAV of a given fund unit on the basis of the market price, or the reasonable price (if there is no market price) of the assets in the investment portfolio of the fund.

2. The supervisory bank shall confirm the NAV of the fund and the NAV of one fund unit.  The confirmation must be provided in writing or by computer read-out via the electronic information system of the supervisory bank approved by the fund management company.  If the valuation was not conducted correctly, the supervisory bank must notify and request the fund management company to amend such valuation within twenty-four (24) hours.

3. Within two (02) days as of the valuation date, the NAV of the fund and the NAV of one fund unit must be announced on the websites of the fund management company and distributors, related service providers and distributors, and on other means of mass media in accordance with the regulations on disclosure of information on the securities market.  

4. The fund management company is permitted to authorize a related service provider to determine the NAV of the fund and the NAV of one fund unit on the basis of prices provided by quotation service providers. The fund management company must supervise and ensure the valuation made by the related service provider is in consistent with law and that the NAV is determined accurately.

5. The determination of the NAV of the fund must be made on the periodical basis of…….. and the NAV must be announced on means of mass media for investors’ reference after the supervisory bank has granted the confirmation of such determination of the NAV and valid until a new notice is granted.

...

...

...

Article 52. Methods for determining the NAV of the fund

Article 53. Procedures for determining the value of assets of the fund   

The NAV must be determined by a rational valuation principles in conformity with provisions of the SSC [specify the method for valuation as regulated]

Article 54. Indemnifying investors and the fun for losses

1. The fund management company is liable to indemnify the fund and investors for losses sustained from fund certificate transactions when the NAV of the fund is determined incorrectly in a significant level of variation, which is deemed to occur as follows:  

a) There is a variation of 0.75% or more in the NAV in the case of a bond fund;

b) There is a variation of 1.00% or more in the NAV in other cases.

2. If the fund was undervalued, the amount of compensation payable to the fund and investors shall be determined as follows:

a) If the investor purchased fund certificates before the incorrect valuation period and sold them within such period, the amount of compensation shall be based on the level of variation and the number of fund units sold by such investor;

...

...

...

3. If the fund was overvalued, the level of compensation payable to the fund and investors shall be determined as follows:

a) If the investor purchased fund certificates within the incorrect valuation period and maintains his ownership of such fund certificates after the incorrect valuation period, the level of compensation shall be based on the level of variation and the number of fund units which have been purchased and are still under the ownership of such investor after the incorrect valuation period;

b) For the fund, the amount of compensation shall be based on the level of variation and the number of fund units which have been issued before the incorrect valuation period but redeemed within such period by the fund.

Article 55. Principle and criteria for selecting or changing quotation service providers

Chapter XI

PROFIT AND MANAGEMENT COSTS

Article 56. The fund’s profit

1. The fund management company shall distribute profit of the fund to investors in accordance with provisions in the fund’s charter and the policy on profit distribution announced in the prospectus.  The profit distributed shall be extracted from the remaining profit of the fund.  The fund management company is only permitted to distribute profit of the fund after it has completed or has adequate financial capacity to complete tax obligations and other financial obligations as required by law; has established sufficient funds in accordance with the fund’s charter; and even after the proposed amount of profit is distributed, the fund will still be able to ensure the settlement of debts and other financial obligations when they fall due.  The schedule and plan on profit distribution must be publicly announced in the prospectus and on the website of the fund management company.  

2. Profit may be distributed in cash or by fund units. The profit distribution made in the form of fund units must be agreed by the general meeting of investors or the board of representatives of the fund (if the latest general meeting of investors authorized the board of representatives of the fund to decide in accordance with the fund's charter) or allowed by the fund’s charter and the prospectus.

...

...

...

4. After distributing profits, the fund management company shall send reports to each investor on the fund’s profit distribution, including the following contents:

a) The method of profit distribution (in cash or by fund units);

b) Total profit during the period and accumulated profit, details of each profitable item;

c) The value of profit distributed, the number of fund units issued for the purpose of profit distribution (if profit distribution is made in form of fund units);

d) The NAV of a fund unit before and after the profit distribution;

e) Impacts on the NAV of the fund.

5. Other cases as prescribed in the fund's charter.

Article 57. The fund’s operating expenses

1.  Asset management fee, paid to the fund management company.

...

...

...

3.  Fund management service expense, transfer agent service expense and other expenses which the fund management company must pay to related service providers.

4.  Auditing expenses, paid to auditing firms.

5.  Expenses of legal consultancy service, quotation service and other reasonable services, and remuneration paid to the board of representatives of the fund.

6. Expenses of drafting, printing and sending the prospectus, summary prospectus and financial statements, transaction confirmations, account statements and other documents to investors; expenses of disclosing information by the fund and expenses of holding general meetings of investors and meetings of the board of representatives of the fund;

7. Expenses related to conducting the fund’s asset transactions.

Chapter XII

  FUND RESTRUCTURING

Article 58. Requirements on the fund consolidation and merger   

1. The fund consolidation and merger shall be performed in the cases regulated by the law and approved by the general meeting of investors.

...

...

...

Article 59. Requirements on the fund division  

1. The fund division must be approved by the general meeting of investors and performed in the following cases:

a) The fund management company is unable to determine the NAV of the open-ended fund on the date of determining the price for redeeming open-ended fund certificates because the Stock Exchange decides to suspense securities transactions in the fund’s investment portfolio;

b) Other cases as stipulated in the fund’s charter or as considered necessary by the SSC.

2. The fund division must be approved by the SSC.

Article 60. Requirements on the fund dissolution

1. A fund shall be liquidated and dissolved in the following cases:

a) The fund management company is dissolved, declared bankrupt or its establishment and operation license is revoked and the board of representatives of the fund fails to establish a replacement fund management company within two (02) months from the date on which one of such events happens;

b) The supervisory bank is dissolved or declared bankrupt; or unilaterally terminates its supervision contract or the same is terminated by the fund management company; or the certificate of registration of the securities depository operation of the supervisory bank is revoked and the fund management company fails to establish a replacement supervisory bank within two (02) months from the date on which one of such events happens;

...

...

...

d) The fund is dissolved according to the decision of the general meeting of investors;

e) The NAV of the fund falls below ten (10) billion dongs in six (06) consecutive months;

f) Other cases as prescribed in the fund's charter.

2. The fund liquidation and dissolution shall be performed as regulated by law.

Chapter XV

SETTLEMENT OF CONFLICT OF INTEREST

Article 61. Managing the conflict of interest between this fund and other funds, entrustment investors of the fund management company, and between the fund and the fund management company.     

1. The fund management company must:

- Separate investment strategies and objectives of each fund managed by the fund management company;

...

...

...

2. All securities transactions made by members of the board of directors, members of the executive board, president of the fund management company, members of the board of directors, members of the board of controllers, controllers, fund managers and employees of the fund management company must be reported and controlled in accordance with the fund’s charter and current laws;

3. Establish internal control system, risk management system and system for supervising the conflict of interest in the fund management company.

Chapter XVI

INFORMATION ANNOUCEMENT AND AMENDMENT, SUPPLEMENTATION OF THE FUND’S CHARTER

Article 62.  Information announcement and provision of information to investors

Article 63. Amendment, supplementation of the fund’s charter

Article 64. Registration of the fund’s charter 

Article 65. Implementation 

The fund’s charter is enclosed with the following annexes:

...

...

...

Annex No. 1.2. COMMITMENT OF THE SUPERVISORY BANK

Annex No. 1.3. GENERAL COMMITMENT OF THE FUND MANAGEMENT COMPANY AND THE SUPERVISORY BANK

Annex No. 1.1

COMMITMENT OF THE FUND MANAGEMENT COMPANY

The fund management company …..

License for establishment and operation No. …. Issued by the State Securities Commission of Vietnam (SSC) on...............................[date] The fund management company undertakes to fulfill the following commitments to the fund………….:

1. Strictly comply with the law and the fund’s charter regarding fund management activities.

...

...

...

3. Ensure that a supervisory bank is employed at all times to work for the fund’s interests.

4. Pay fees to the supervisory bank and other related service providers as prescribed in the fund's charter.

5. Provide the following information to the supervisory bank on a periodical basis:

a. Reports on operating situation and financial statements of the fund, ledgers of investors and the quantity of fund certificates owned by investors;

b. Reports relating to the fund or assets and investment portfolio of the fund;

c. Evaluation of the NAV of the fund and the NAV of one fund unit;

d. Information relating to the fund’s operation and other obligations.

6. Provide free of charge or with reasonable fees copies of the fund’s charter (and enclosed annexes and the prospectus (and enclosed annexes) to investors at their request.

7. Not to make investment in securities or assets from which the fund management company or individuals related to the fund management company shall directly gain or involve in interests, except for the cases as permitted by the law.  

...

...

...

9. Fulfill the valuation and accounting works of the fund in a honest, accurate and timely manner.

10. Provide free of charge or with reasonable fees copies of annual reports and other reports of the fund to investors at their request.

11. Provide free of charge or with reasonable fees copies of annual reports of the supervisory bank on the evaluation of the fund management by the fund management company to investors at their request.

12. Ensure that the information announced by the fund management company or its representative is sufficient, genuine and accurate, not missing out events affecting investors’ rights and benefits and those affecting contents of announced information, not missing out the information required to be announced as regulated by law and not causing misunderstanding to investors.

13. Sufficiently provide necessary information to the independent auditing firm for fulfilling auditing works in an effective and timely manner.

14. Promptly report to the SSC if there is a difference between the result of the fund management company and that of the supervisory bank in the comparison of credits/debits of the fund.    

15. Convene the general meeting of investors in accordance with the law.

...

...

...

(Signature, specify full name and seal)

Annex No. 1.2

COMMITMENT OF THE SUPERVISORY BANK

Supervisory bank:…….

Number of the operation license:………………….. Issuing authority:………………. Issued date:………….

Certificate of registration of securities depository operation No. …. issued by the State Securities Commission of Vietnam (SSC) on...............................[date]

The supervisory bank undertakes:

1. To strictly comply with the law and the fund’s charter regarding its supervision activities.

...

...

...

3. Perform duties of the supervisory bank to the fund in a wholehearted, honest and cautious manner.

4. Deposit, make settlement, maintain and supervise assets and securities of the fund on behalf of investors; compare the supervisory bank's record of credits/debits with that of the fund management company on monthly basis and report to the SSC if there is a difference between records of credits/debits.

5. Separate assets of the fund from those of the supervisory bank, those of the fund management company and those of other funds, and those of other customers of the supervisory bank;

6. Supervise the investment portfolio of the fund, the valuation of assets of the fund, determination of the NAV of the fund and that of a fund certificate unit in accordance with the applicable law and provisions in the fund’s charter.

7. Ensure the fulfillment of supervision duties so that the fund management company cannot misuse its position to perform activities that generate direct or indirect interests to the fund management company or relevant individuals or cause damage to legitimate interests of investors. 

8. Ensure that the fund is annually audited by an independent auditing firm.

(General) Director of the supervisory bank

...

...

...

Annex No. 1.3

GENERAL COMMITMENT OF THE FUND MANAGEMENT COMPANY AND THE SUPERVISORY BANK

The fund management company …..

License for establishment and operation No. …. Issued by the State Securities Commission of Vietnam (SSC) on...............................[date]

Supervisory bank:…….

Number of the operation license:………………….. Issuing authority:………………. Issued date:………….

Certificate of registration of securities depository operation No. …. issued by the State Securities Commission of Vietnam (SSC) on...............................[date]

1. Jointly commit to fulfill all obligations to protect legitimate interests of investors.  

...

...

...

3. Jointly commit to exercise voting rights for issues relating to the ownership of stocks/capital contributed by the fund for the benefits of investors in general meetings of shareholders of issuers or boards of members of companies to which the fund contributed capital.

4. Jointly undertake not to receive any remuneration, profit or interest from the performance of transactions related to the fund’s assets or other assets, which are not regulated in the fund's charter or prospectus.     

(General) Director of the fund management company

(Signature, specify full name and seal)

Authorized representative of the supervisory bank

(Signature, specify full name and seal)

Annex No. 03

...

...

...

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

(cover page)

The fact the State Securities Commission of Vietnam (SSC) grants the license for issuance of fund certificates means the application for the fund establishment and issuance of investment fund certificates has been carried out in accordance with regulations of relevant law, and does not imply that contents of the prospectus, and investment objectives and strategies of the fund are guaranteed.

THE PROSPECTUS OF THE OPEN-ENDED FUND

1. Name of the fund, number of the establishment license;

2. Type of the fund:

...

...

...

4. Effective period of the prospectus

5. Heading of the prospectus

6. The prospectus announces the following contents:

“The securities investment fund described in this prospectus is established under the law on securities No. 70/2006/QH 11 approved by the National Assembly of the Socialist Republic of Vietnam on June 29, 2006, and guidance documents.  This prospectus is registered at the SSC on………………. [ date]

7. Full name, position and address of the individual in charge of announcing information.

8. Places where the prospectus, periodical reports on operating results and financial statements are provided, and form of providing these documents (head office, company’s branches, website, etc);

(cover page)

...

...

...

Page

 Individuals who bear primary responsibility for the contents of the prospectus

Terms/definitions

Investment opportunities

Information about the fund management company

...

...

...

Information about the supervisory bank planned   

Information about related organizations

Information about the investment fund

General information about the fund

Summarized fund’s charter

...

...

...

Investment objectives, policies and limits

Fund certificate transactions

Fees, charges

Profit distribution and tax policies

General meeting of investors

...

...

...

The board of representatives of the fund

The fund management company

The supervisory bank

Management of risks of the fund

Initial public offering and follow-on offering

...

...

...

The fund’s operating situation

Financial statements

Fees, charges and bonuses due to satisfactory operating results

Operational targets

Forecast of business results of the fund

...

...

...

Conflict of interest

Report regulations

Contact address for replying to queries of investors 

Commitment

Enclosed annexes

...

...

...

  CONTENTS OF THE PROSPECTUS

I. INDIVIDUALS WHO BEAR PRIMARY RESPONSIBILITY FOR THE CONTENTS OF THE PROSPECTUS

1. The fund management company

Mr./Mrs.: ……………………….. Position: Chairman/Chairwoman of the board of directors
Mr./Mrs.: ……………………….. Position: (General) Director

Mr./Mrs.: ……………………….. Position: Chief accountant

We undertake that the information and figures in this prospectus are conformable with reality which we have known, or investigated and collected in a proper way.

2. Supervisory bank

Legal representative: Mr./Mrs.:……………………….Position:

...

...

...

II. TERMS/DEFINITIONS

Terms/definitions used in the prospectus shall be explained in this part.

III. INVESTMENT OPPORTUNITIES

1. Overview of the economy of Vietnam

2. Financial markets in Vietnam and investment opportunities 

IV. INFORMATION ABOUT THE FUND MANAGEMENT COMPANY

1. General information about the fund management company

Name of the company:

Establishment and operation license No.:

...

...

...

Telephone:                                                        Fax:

Address of branch or representative office (if any):

Operating duration (if any):

Charter capital:

Shareholders/members of the fund management company:

- Description of founding shareholders/members;

- Description of shareholders/members who hold 5% or more of charter capital;

Description of the board of directors/the board of members (organizational structure, brief description of its members);

Description of the executive board of the fund management company (organizational structure, brief description of its members)

...

...

...

2. Information about the operating situation of the fund management company.

- Summarize the operating situation of the fund management company (business results, financial situation, etc.) in five (05) latest years up to the date on which the information is recorded in the prospectus;- Funds managed by the company (specify the list of funds, name and type of each fund, etc.);

- Requirements: specify origin, time of providing the aforesaid information; specify information about the operating situation of the fund management company in the past, and such information does not imply that the operating capacity of the fund management company in the future is guaranteed;

- The information, both in the past and present, about the operating situation and managerial experience of the fund management company and the operating situation of other funds managed by such fund management company shall be not provided in the prospectus to serve for any separate purpose, or with the tendency to exaggerate achievements and conceal failure.  

V. SUPERVISORY BANK

Name of the bank:

Establishment license No.: (enclosed with the copy thereof)

Certificate of registration of depository operation No.: 

Head office:

...

...

...

Operating duration (if any):

Main sectors of operation

(Enclosed with the supervision contract signed by and between the fund management company and the supervisory bank)

VI. AUDITING FIRM

Name of the auditing firm:

Establishment license No.: (enclosed with the copy thereof)

Place of establishment:

Head office:

Telephone:                                                        Fax:

...

...

...

(enclosed with auditing contract signed by and between the fund management company and the auditing firm).

VII. FUND CERTIFICATE DISTRIBUTORS

The list of fund certificate distributors includes:

Name:

Address:

Number of certificate of authorized distributor:

Locations for the distribution of fund certificates:

VIII. AUTHORIZED ORGANIZATION

(authorized services include: investment fund management service, transfer agent service and other services as regulated by the law)

...

...

...

- Name and address of the head office;

- Establishment and operation license No.:

- Operating duration:

- Main sectors of operation

- Scope of authorized service (specify provisions of relevant contract)

- Expenses payable…………………………. Method of payment

(enclosed with the service contract signed by and between the fund management company and the authorized organization).

IX. INFORMATION ABOUT THE INVESTMENT FUND

1. General information about the fund

...

...

...

1.2. Registration form of issue.

1.3. The fund’s establishment and operation license.

1.4. Nature and operating duration of the fund (if any).

2. The fund's charter in the initial public offering and the fund’s charter updated in the following announcement of prospectus (in case of change).

Summary of the fund’s charter with the following main contents:

2.1. General provisions

2.2. Provisions on investment objectives, policies and limits

- Investment objectives

- Investment strategies

...

...

...

- Investment structure

- Investment limits

- Lending and borrowing, resale and repurchase, and margin trading

- Investment selection methods

- Principles and methods for determining the NAV of the fund

2.3. Specific characteristic of investment fund certificates

- Investors

- Rights and obligations of investors 

- Ledgers of fund certificate ownership

...

...

...

- Consolidation, merger, liquidation and dissolution of the fund, and rights of investors in cases of the fund liquidation and dissolution

2.4. Regulations on fund certificate trading:

- Procedure for receiving sell orders, and requirements on the execution of sell orders

- Procedure for receiving buy orders, and requirements on the execution of buy orders

- Procedure for receiving switching orders, and requirements on the execution of switching orders

- The fund certificate trading suspension and the execution of a part of trading orders

2.5. Principle for determining trading price of fund unit

- Frequency for valuation and methods for determining trading price of a fund unit

- Types of the announcement of the information about trading prices, Place and frequency of the information announcement

...

...

...

2.6. Information about fees paid by the fund

- Management fees

- Supervision fees

- Other fees in conformity with the law

- Fees and costs recorded as fund-related items; fees and costs paid by investors

2.7. Profit distribution and tax policies- Methods for determining and distributing profits of the fund;- Tax policies: tax rate applied to the fund, personal income tax of investors (method of payment: deducted at source or paid by relevant investor).

2.8: General meeting of investors

- Annual general meeting of investors and extraordinary general meetings of investors

- Rights and duties of the general meeting of investors;

...

...

...

- Decisions made by the general meeting of investors.

2.9. The board of representatives of the fund

- Organizational structure of the board of representatives of the fund (list of members of the board of representatives of the fund);

- Criteria for appointing members to the board of representatives of the fund;

- Rights and duties of the board of representatives of the fund;

- Chairman of the Board of representatives of the fund;

- Procedures for management of the board of representatives of the fund;

- Suspension and deposition of members of the board of representatives of the fund;

- Representatives of members to the board of representatives of the fund;

...

...

...

2.10. Criteria for selecting the fund management company, rights and responsibilities of the fund management company

- Criteria for selecting the fund management company;

- Rights and responsibilities of the fund management company;

- Termination of rights and obligations of the fund management company;

- Limitations on the operation of the fund management company.

2.11. Criteria for selecting the supervisory bank, rights and responsibilities of the supervisory bank

- Criteria for selecting the supervisory bank;

- Rights and responsibilities of the supervisory bank;

- Termination of rights and responsibilities of the supervisory bank.

...

...

...

3. Risks of investing in the fund

3.1. Market risk

3.2. Interest rate risk

3.3. Inflation risk

3.4. Liquidity shortage risk

3.5. Legal risk

3.6. Credit risk

3.7. Risk of conflict of interest 

3.8. Risks related to specific investment products (depending on types of assets in which the fund planned to invest).

...

...

...

3.10. Other risks

4. Other investment information 

X. INITIAL PUBLIC OFFERING AND FOLLOW-ON OFFERING OF FUND CERTIFICATES

1. Legal grounds

2. Initial public offering plan

- Name of the fund:

- Type of the fund:

- Operating duration of the fund:

- Investment objectives/strategies:

...

...

...

- Investment products planned:

- Process of controlling investment risks:

- Investment structure:

- The number of fund units planned to offer (or the maximum and minimum number of fund units planned to offer):

- Period of the initial public offering, extension of the period for offering fund certificates:

- Face value:

- Offering price:

- Currency unit:

- Minimum registration quantity:

...

...

...

- Face value:

- Period for confirming transactions of investors;

- Method and form of settlement;

- The date of the follow-on offering planned upon the end of the initial public offering;

- Offering location and distributors;

- Partners related to the offering.

3. Follow-on offering of fund certificates

- Time of the follow-on offering of fund certificates after the initial public offering:

- Trading date:

...

...

...

- Sell price:

- Minimum quantity registered for buy/sell:

- Time of closing transactions:

- Period for confirming transactions:

- Period for making settlement to investors

- The fund’s trading frequency:

- Trading method:

- Cancellation of trading order:

- Fund certificate switching transactions:

...

...

...

- Locations and distributors:

3. Announcement of the net asset value and trading situation

Methods and time for determining the NAV of the fund.

Means and address for announcing the NAV, results of latest fund certificate trading and the number of outstanding fund certificates.

XI. THE FUND’S OPERATING SITUATION

1. Financial statements (updated annually)

2. Fees, charges and bonuses due to satisfactory operating results

a) Initial public offering fee.

b) Redemption fee.

...

...

...

d) Management fee.

e) Switching fee.

f) Supervision and depository fees.

g) Other fees and charges (auditing, tax consultancy, valuation fees, etc.)

h) Other information.

3. Operational targets

3.1. Operating expense ratio of the fund

3.2. The fund’s portfolio turnover rate  

4. Method for calculating earnings and plan for profit distribution of the fund

...

...

...

5. Forecast of business results of the fund

Forecast and estimation of general situation of the economy, securities market, economic development trends, etc. may be specified in the prospectus provided that such forecast and estimation do not imply that the fund's business result in the future is guaranteed. Grounds for making such forecast shall be also included in the prospectus.

6. Time and location of providing reports on operating results of the fund

XII. CONFLICTS OF INTEREST (Specify principles for settling conflicts of interest that may occur) 

XIII. PROVISION OF INFORMATION TO INVESTORS AND REPORTING REGULATIONS

Specify obligations of the fund management company and the supervisory bank in providing the prospectus, financial statements and reports on operating results on the quarterly and annual basis to investors of the fund.

XIV. CONTACT ADDRESS FOR REPLYING TO QUERIES OF INVESTORS 

Specify address and telephone number in order that investors may contact the fund management company to put queries relating to the fund.

XV. COMMITMENT

...

...

...

XVI. ENCLOSED ANNEXES

1. Annex on the procedure and guidance on the registration for trading fund certificates

2. Registration form for buying/selling fund certificates

3. Places where the prospectus is provided

4. Draft of the charter of the investment fund

5. Other annexes

(General) Director of the fund management company

...

...

...

Annex No. 04

FORM OF THE SUMMARY PROSPECTUS OF THE OPEN-ENDED FUND

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

(cover page)

The fact the State Securities Commission of Vietnam grants the license for issuance of fund certificates means the application for the fund establishment and issuance of investment fund certificates has been carried out in accordance with regulations of relevant law, and does not imply that contents of the prospectus, and investment objectives and strategies of the fund are guaranteed.

...

...

...

1. Name and type of the fund; summary of investment objectives and strategies, operating duration (if any) of the fund, types of investors that are objects of the fund’s offering.

2. Information about the fund management company, the supervisory bank, the auditing firm, the list of distributors, authorized organizations (if any) and the list of members of the board of representatives of the fund.

3. Previous investment results of the fund (if any), enclosing with reminders of caution that the information about previous investment results is used for reference only, and the profitability or capital recovery of investments in the fund is not guaranteed.

4. General guidance on making investment in the fund, including contents related to procedures for offering of additional fund certificates, redemption and switching of fund certificates; redemption of a part of the fund certificate and fund certificate trading suspension; issuance fee (if any); redemption fee (if any); and switching fee (if any).

5. Types of taxes, fees and charges paid by the fund; Types of taxes, fees and charges paid by investors.

6. Basic information about procedures, methods, schedule and time of distributing the fund's profits.

7. Basic information about potential risks when making investment in the fund.

8. Regulations on the announcement of information, forms of providing information and documents related to the fund to investors; address, time and form of contact for learning about the fund.

...

...

...

Application for the distribution of fund certificates

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
-----------------------

......., …………………..[date]

APPLICATION FOR THE DISTRIBUTION OF OPEN-ENDED FUND CERTIFICATES

To: The State Securities Commission of Vietnam

Pursuant to the law on securities;

Pursuant to the Circular No. 183/TT-BTC dated December 16, 2012 of the Minister of Finance providing the guidance on the establishment and management of the open-ended fund;

...

...

...

1. Official name in full of the bank/company

2. Trading name of the bank/company

3. Official address of the head office of the bank/company

4. Trading address, telephone number, fax number

5. Scope and contents of operation of the bank/company stated in the application for the distribution of open-ended fund certificates

6. Name, date of birth and nationality of the Chairman of the Board of Directors and General Director

General Director/ Director of the bank/insurer

(signature, seal and full name)

...

...

...

Annex No. 06

  Power of attorney granted to the head office, branch or transaction office to distribute fund certificates

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
-----------------------

  POWER OF ATTORNEY GRANTED TO THE HEAD OFFICE, BRANCH OR TRANSACTION OFFICE OF THE BANK/ BRANCH OF THE INSURER TO DISTRIBUTE FUND CERTIFICATES  

Bank/Insurer……………………….

Address:…………..

...

...

...

Head office/ Branch/ Transaction office ………………

Address:…………..

To perform the distribution of open-ended fund certificates.

Head office/ Branch/ Transaction office ………………shall fulfill the following obligations:

- Comply with the laws on securities and securities market;

- Perform authorized works and send reports to the Bank/Insurer……. on works related o the distribution of open-ended fund certificates;

- Bear responsibility before the Bank/Insurer……. for the distribution of open-ended fund certificates within the scope of authorization.

...

...

...

General Director/ Director

(Signature, specify full name and seal)

Annex No. 07

Personal information form

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
-----------------------

INFORMATION FORM

...

...

...

Alias (if any):

2. Date of birth:

3. Place of birth:

4. Number of ID Card (or passport, or other personal identity paper):

5. Nationality:

6. Place of permanent residence:

7. Place of current residence:

8. Contact address (regular):

9. Telephone, fax, email:

...

...

...

11. Professional level:

12. State official                       Public employee                      Other

13. Political attitude:

Party member               Being not yet a party member

14. Process of education and professional training

Period

Training facility

Training major

Award and commendation

...

...

...

15. Working process (detailing jobs and working positions, performance at each working position):

Period

Place of work

Position/Duties

...

...

...

Award and commendation

Discipline

16. Expected position in the section in charge of distributing fund certificates/the board of representatives of the fund:

...

...

...

18. Relatives of the informant (spouse, father, adoptive father, mother, adoptive mother, children, adopted children, siblings, etc.)

Full name

Date of birth

ID number

 Permanent residence

Occupation

Position

Spouse:

...

...

...

Father:

...

...

...

Children

...

...

...

Siblings:

I guarantee the integrity and accuracy of contents of this form and I shall be liable for the same.

...

...

...

Informant

(Signature and full name)

Annex No. 08

Description of material and technical facilities, and the personnel serving the distribution of open-ended fund certificates 

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
-----------------------

DESCRIPTION OF MATERIAL AND TECHNICAL FACILITIES, AND THE PERSONNEL SERVING THE DISTRIBUTION OF OPEN-ENDED FUND CERTIFICATES 

...

...

...

Address of the head office of the distributor:

1. List of locations for distributing fund certificates

No.

Distribution location

Head office’s address

Number of the establishment and operation license...... /Decision on the establishment of transaction office

...

...

...

2. Computer system and equipment to support the distribution of fund certificates:

No.

Distribution location (specify address)

Quantity of computers

Quantity of telephones

Quantity of fax machines

...

...

...

- Planned methods for storing and processing the information about investors;

- Methods for providing information to investors, head offices of the distributor, the fund management company, the supervisory bank and other related organizations (via the computer system, telephone, telex, fax, etc.);

- Specify features, uses, status and technological levels of employed equipment and the distribution of this computer system at the working place.

3. Personnel

No.

Full name

ID Number

Type/Number of securities practice license

...

...

...

Distribution location (specify address, telephone, fax, telex, etc.)

We undertake:

1) To be liable for the integrity and accuracy of the aforesaid contents;

...

...

...

General Director/ Director of the Bank/Insurer

(signature, seal and full name)

Annex No. 09

Form of the certificate of the fund establishment registration

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
----------------

...

...

...

CERTIFICATE OF FUND ESTABLISHMENT REGISTRATION

To: The State Securities Commission of Vietnam

We are:

- The fund management company (specify official name of the company in full in printed capital letters)

- Number of the establishment and operation license:. …. Issued by the State Securities Commission of Vietnam (SSC) on...............................[date]

- Legal representative: 

- Head office’s address:

- Telephone:……….. Fax:……

We do request the SSC to grant a certificate of the fund establishment registration with the following contents:

...

...

...

2. Name in English (if any):

3. Abbreviated name:

4. Supervisory bank:

5. Related service organizations (specify each organization and authorized activities):

6. Number of Certificate of the public offering of fund certificates: Issued by the State Securities Commission of Vietnam (SSC) on...............................[date].

7. The fund’s operating duration (if any):

8. The fund’s charter capital: 

9. The quantity of fund units:

10. The net asset value or maximum quantity of outstanding fund units (if any):

...

...

...

We undertake to bear legal liability for the integrity and accuracy of the contents of the application for the fund establishment registration and documents enclosed herewith.

Enclosed documents

(Specify all documents)

(General) Director of the fund management company

(Signature, specify full name and seal)

Annex No. 10

Report on results of the public offering of open-ended fund certificates

...

...

...

(Certificate of the public offering No……/GCNDKCB issued by the State Securities Commission of Vietnam (SSC) on...............................[date])

To: The State Securities Commission of Vietnam

We are:

- The fund management company (specify official name of the company in full in printed capital letters)

- Number of the establishment and operation license:. …. Issued by the State Securities Commission of Vietnam (SSC) on...............................[date]

- Legal representative: 

- Head office’s address: …………….                Telephone:………… Fax:……

- The supervisory bank (specify official name of the bank in full in printed capital letters)

- Certificate of registration of securities depository operation No. …. issued by the State Securities Commission of Vietnam (SSC) on...............................[date]

...

...

...

- Head office’s address:

Telephone:……….. Fax:……

I. Fund certificate offered for sell:

1. Name of the fund:

2. Name of the fund certificate offered for sell

3. Type of the fund

4. Face value

5. Offering price

6. The number of fund certificates registered for offering

...

...

...

8. Date of starting the offering

9. Date of ending the offering

10. Period for registering the buying of fund certificates: from……..[date] to…………. [date]

II. Name of underwriter (if any)

1. Name of the financial underwriter

2. Name of other underwriters and the quantity of underwritten fund certificates

3. Underwriting fees

III. Distributors 

1. List of distributors and their address

...

...

...

IV. Offering results

1. Total fund certificate units distributed:……, accounting for ….% of total fund certificate units permitted to be offered (if any) or accounting for ….% of total fund units planned to be offered in the initial public offering:

2. Total proceeds from the sale of fund certificates:

3. Total expenses:

- Underwriting fees

- Fees paid to distributors

4. Structure of investors:

No.

Trading method

...

...

...

 Quantity of fund certificates

Holding

Domestic investors

Foreign investors

Total

Held by domestic investors

Held by foreign investors

Total

Held by domestic investors

...

...

...

Total

1

Direct trading

...

...

...

2

Trading via nominee agent

...

...

...

Authorized representative of the supervisory bank………….

(Signature, specify full name and seal)

...., …….[place], on………[date]

(General) Director of the fund management company

(Signature, specify full name and seal)

...

...

...

Annex No. 11

List of nominee agents and investors

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

I. Nominee agents

No.

Full name of nominee agent

Abbreviated name

Number of the establishment and operation license 

Quantity of investors

...

...

...

Domestic investors

Foreign investors

Total

Held by domestic investors

Held by foreign investors

...

...

...

...

...

...

II. Investors

No.

Full name or name of organization

ID number/ Number of business registration certificate

Address

Account No.

Trading method

Quantity

Ownership ratio

...

...

...

...

...

...

...

...

...

(Signature, specify full name and seal)

...., …….[place], on………[date]

(General) Director of the fund management company

(Signature, specify full name and seal)

Annex No. 12

Notice of the investor’s changes 

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
-----------------------

...

...

...

NOTICE OF CHANGE OF ……………

To: The fund management company…….

I am:

Full name of the investor/name of the institutional investor (specify name of the individual or institutional investor which is recorded in ID Card/Passport or the establishment license/business registration certificate in printed capital letters):..................................

Number of owner’s certificate of registration: ………………………………………

Issuing authority:…………………………………..   Issued date:………………………………

Head office’s address (which is used in the establishment license/business registration certificate) or permanent residence (which is used in passport):…………………

Telephone:………………….. Fax………………………………………………

Email:…………………………. Website: ……………………………………

...

...

...

I am a customer of the following distributor (full name of the distributor)……………………

Distributor’s trading name:……………………………………..

Head office: ……………………………………………………………………..

Telephone:…………………………………………………………………….

Distribution location (specify full name)……………………

Head office: ……………………………………………………………………..

Telephone:…………………………………………………………………….

Fund certificate trading account number; or

Fund certificate trading sub-account number, nominee account number

...

...

...

No.

Content of change

Initial entry

Updated entry

I

Non-commercial transactions

Previous owner/ Number of account/sub-account (nominee account)

Quantity

New owner/ Number of account/sub-account

...

...

...

1.

Donation or inheritance

2.

Other types (detailing)

...

...

...

II.

Change of the investor’s personal information 

1

 The bank where the investor’s account is opened

Name of the bank

Account number

Name of the bank

...

...

...

2

Head office/ contact address

3

Other changes (Number of ID card/owner’s certificate of registration)

We undertake to be liable for the integrity, sufficiency and accuracy of the contents of this notice of change and documents enclosed herewith.

...

...

...

Confirmation of the distributor/nominee agent

(if the investor conducts trading via nominee account)

Investor

(Signature, specify full name and seal, applicable to the institutional investor)

Annex No. 13

Methods for determining values of assets

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

A – Values of assets

...

...

...

 Type of asset

  Principle for determining trading price in the market

Cash and cash equivalents, money market instruments

1.

Cash (VND)

Cash balance on the date preceding the valuation date

2.

Foreign currencies

Value exchanged to VND according to current exchange rate announced at credit institutions that are permitted to trade in foreign currencies on the date preceding the valuation date

...

...

...

Term deposits

Value of deposits, plus unpaid interests, up to the date preceding the valuation date

4.

Treasury bills, bank drafts, commercial papers, certificates of deposit, negotiable certificates of deposit, bonds and money market instruments

The purchase price, plus accrued interests, up to the date preceding the valuation date

Bonds

5.

Listed bonds

...

...

...

- In case there is no transaction over a period longer than two (02) weeks prior to the valuation date, one of the following prices shall apply:

+ The purchase price, plus accrued interest; or 

+ The face value, plus accrued interest; or 

+ The price determined by employing the method approved by the board of representatives of the fund.

6.

Unlisted bonds

- The quoted price (if any) announced on quotation systems, plus coupon interest rate, up to the date preceding the valuation date; or

+ The purchase price, plus accrued interest; or 

+ The face value, plus accrued interest; or 

...

...

...

Stocks

7.

Stocks listed on the Ho Chi Minh City Stock Exchange

- The closing price on the latest trading date prior to the valuation date;

- In case there is no transaction over a period longer than two (02) weeks prior to the valuation date, one of the following prices shall apply:

+ Book value; or

+ Purchase price; or

+ The price determined by employing the method approved by the board of representatives of the fund.

...

...

...

Stocks listed on the Hanoi Stock Exchange

- The average trading price of the latest trading day prior to the valuation date;

- In case there is no transaction made within a period of more than two (02) weeks up to the valuation date, one of the following prices shall apply:

+ Book value; or

+ Purchase price; or

+ The price determined by employing the method approved by the board of representatives of the fund.

9.

Stocks of public companies that have been registered for trading on the UpCom

- The average trading price of the latest trading day before the valuation date;

...

...

...

+ Book value; or

+ Purchase price; or

+ The price determined by employing the method approved by the board of representatives of the fund.

10.

Stocks which have been registered or deposited but not listed or registered for trading

- The average value determined on the basis of quoted prices (the average trading price during the period) of at least 03 quotation service providers that are not related to the fund on the latest trading day prior to the valuation date.

- In case it is unable to obtain quoted prices from at least 03 quotation service providers, one of the following prices shall apply:

+ The average price determined on the basis of quoted prices; or  

+ The price announced on the latest reporting period provided that it must be made within three (03) months prior to the valuation date;

...

...

...

+ Purchase price; or

+ The price determined by employing the method approved by the board of representatives of the fund.

11.

Stocks which are suspended from trading or delisted, or the registration for trading of which is cancelled.  

One of the following prices shall apply:

+ Book value; or

+ Face value; or

+ The price determined by employing the method approved by the board of representatives of the fund.

12.

...

...

...

One of the following prices shall apply:

- 80% of the liquidation value of such stocks determined at the date of preparing the latest balance sheet prior to the valuation date; or

- The price determined by employing the method approved by the board of representatives of the fund.

13.

Other shares or stakes

One of the following prices shall apply:

+ Book value; or

+ Purchase price/ value of contributed capital; or

+ The price determined by employing the method approved by the board of representatives of the fund.

...

...

...

14.

Listed derivatives

The closing price on the latest trading date prior to the valuation date

15.

Listed derivatives which are not traded over a period of longer than 2 weeks

The price determined by employing the method approved by the board of representatives of the fund.

Other assets

16.

Other types of assets in which the fund is permitted to invest

...

...

...

Notes:

- Accrued interest refers to the amount of interest that has accumulated from the last interest payment up to, but not including, the valuation date; 

- Book value of a share is determined on the basis of the latest audited or reviewed financial statements.

- The organization in charge of conducting the valuation can refer prices on bond quotation systems (Reuteurs/Bloomberg/VNBF, etc.);

- The date stated in this part of the annex is construed as the calendar date.

B- Global exposure from derivative contracts

1) Global exposure refers to the value exchanged to cash in which the fund is liable for performing the contract. The global exposure is determined on the basis of the market value of underlying asset, settlement risk, market fluctuations and period for liquidating positions. 

2) When calculating the global exposure, the fund management company can apply:

- Principle of offsetting against net derivative position (opposite) of the same underlying security, for example, the long position of call option on security XYZ shall reduce (offset against) the global exposure of the short position of call option on security XYZ;

...

...

...

- Other principles in accordance with the international practice, ensuring the risk management.

No.

 Type of asset

Global exposure

1

Stock option (buying put option, selling put option, selling call option)

2

The market value of option position is adjusted by the option’s delta = Quantity of contracts x Face value x Current market value of bonds x Delta ratio

3

...

...

...

The market value of futures position = Quantity of contracts x Value per index point x Current index rate

4

Bond futures contracts

The market value of futures position = Quantity of contracts x Notional value x Market value of cheapest to deliver bond

5

Other contracts

Employing the model which is jointly selected and agreed by the fund management company and the supervisory bank, and approved by the board of representatives of the fund

Annex No. 14

...

...

...

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
----------------

Application for amending Certificate of fund establishment registration due to fund consolidation, merger or division

We are: name of the fund management company

Number of the establishment and operation license+…. …. Issued by the State Securities Commission of Vietnam (SSC) on...............................[date]

Kindly request the SSC to amend the Certificate of fund establishment registration No………………….. Issued by the State Securities Commission of Vietnam (SSC) on...............................[date]

I. Reason

...

...

...

II. Causes

III. Merged/consolidating/divided funds (detailing)

1. Name of securities investment fund: ……………

2. Charter capital:  ……………….

3. The quantity of outstanding fund units (determined at the date on which the last general meeting of investors of the fund makes decision on the fund consolidation, merger or division):…………

4. Maximum/minimum quantity of fund units (if any)

5. The net asset value (determined at the date on which the last general meeting of investors of the fund makes decision on the fund consolidation, merger or division):………

6. The net asset value per a fund unit (determined at the date on which the last general meeting of investors of the fund makes decision on the fund consolidation, merger or division):………

7. The fund management company ….. …..

...

...

...

9. Related service providers (specify name of each service provider and authorized activities):…….

10. Role of the fund: (Merging fund/ merged fund/ consolidating fund/ divided fund) 

11. Conversion ratio (determined at the date on which the last general meeting of investors of the fund makes decision on the fund consolidation, merger or division)

IV. The fund established from the merger/consolidation/division

1. Name of securities investment fund: ……………

2. Charter capital:  ……………….

3. The net asset value (determined at the date on which the last general meeting of investors of the fund makes decision on the fund consolidation, merger or division):………

4. The number of outstanding fund units (determined at the date on which the general meeting of investors of the fund makes decision on the fund consolidation, merger or division):…………

5. Maximum/minimum quantity of fund units (if any)

...

...

...

7. The net asset value per a fund unit (determined at the date on which the last general meeting of investors of the fund makes decision on the fund consolidation, merger or division):………

8. The fund management company ….. …..

9. Supervisory bank:…….

10. Related service providers (specify name of each service provider and authorized activities):…….

We hereby kindly request the SSC to amend the Certificate of fund establishment registration with the aforesaid contents.

…….[place], on………[date]

General Director/Director of the fund management company

...

...

...

Annex No. 15

Report on the fund’s assets before and after the fund consolidation, merger or division

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

REPORT ON THE FUND’S ASSETS BEFORE AND AFTER THE FUND CONSOLIDATION, MERGER OR DIVISION

1. Name of the fund management company:

2. Name of the supervisory bank:

...

...

...

4. Reporting date:

I – Consolidation or merger

Unit: ……..VND

No.

Items

Before the fund consolidation/merger

After the fund consolidation/ merger/ division

Different amount

...

...

...

Fund…

Fund…

Fund…

Fund…

(1)

(2)

...

...

...

(n)

(n+1) = (n)-(1)-

(2)-(3)-...

ASSETS

I.1

Cash and cash equivalents

...

...

...

Cash

...

...

...

Cash equivalents

...

...

...

I.2

Investments (detailing)

...

...

...

I.3

Dividend receivables

...

...

...

I.4

Interests received

...

...

...

I.5

Unsettled sales of securities (detailing)

I.6

Other receivables

...

...

...

I.7

Other assets

...

...

...

I.8

Total value of assets

LIABILITIES

...

...

...

Unsettled purchase of securities (detailing)

II.2

Other payables

...

...

...

II.3

Total liabilities

...

...

...

 The net asset value of the fund (I.8-II.3)

10

Total quantity of fund units

11

...

...

...

II – Fund division

No.

Items

After the fund division

...

...

...

Difference (if being determined)

Fund…

Fund…

Fund…

Fund…

...

...

...

(1)

(2)

(3)

(n)

 (n+1) = (1) + (2) + (3) +..-(n)

ASSETS

I.1

Cash and cash equivalents

...

...

...

Cash

...

...

...

Bank deposits

Cash equivalents

...

...

...

I.2

Investments (detailing)

...

...

...

I.3

...

...

...

I.4

Interests received

...

...

...

I.5

Unsettled sales of securities (detailing)

...

...

...

Other receivables

I.7

Other assets

...

...

...

I.8

Total value of assets

...

...

...

LIABILITIES

II.1

Payable by securities (detailing)

...

...

...

II.2

Other payables

...

...

...

II.3

Total liabilities

 The net value asset of the fund (I.8-II.3)

...

...

...

Total quantity of fund units

11

The  net asset value per fund unit

...

...

...

Authorized representative of the supervisory bank

(Signature, specify full name and seal)

(General) Director of the fund management company

(Signature, specify full name and seal)

...

...

...

Fund consolidation, merger, division, division plans

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

A – The fund consolidation or merger plan must include the following fundamental contents:

I. Information about the consolidating or merged fund and consolidated or merging fund:   

a) Name in full, abbreviated name, trading name in both Vietnamese and English of funds;

2) Name in full, abbreviated name, trading name in both Vietnamese and English of the fund management company and the supervisory bank; legal representatives; head office’s address; websites of these organizations;

3) List of members of the board of representatives of the fund and fund managers, and their resumes;  

4) Summary of operating situation of funds; investment portfolio structure; source of capital and assets before the events of consolidation or merger; charter capital; quantity of outstanding fund units of each fund;

II. Information about the fund consolidation or merger: 

...

...

...

2) Period planned for holding general meetings of investors of consolidating or merged funds;    

3) Expected date of the consolidation or merger;

4) Consolidation or merger expenses;

5) Accounting methods used in the consolidation or merger; time that investment activities shall be recorded in the accounting book of the consolidated or merging fund;   

6) Methods for determining the net asset value of each fund; methods for determining receivables and payables of each fund, and different amount (if any); methods for determining conversion ratio;  

B – Report on the fund consolidation or merger analysis

(Report must be briefly and concisely presented by using easily understandable words, and must not use too many technical terms. The report's contents may vary depending on investors of consolidating fund, merged fund or merging fund)  1. Purposes and reason of the fund consolidation or merger;

2. Effects that may occur due to the consolidation or merger.

a) Change of investment objectives or policies, level of dilution of investment efficiency and potential risks;   

...

...

...

c) Changes relating to policies on taxes, charges and fees such as issuance fees, redemption fees, switching fees; comparison of tax rates, fees and charges before the consolidation or merger and those after the consolidation or merger, enclosed with explanation thereof.

d) Changes affecting other rights and benefits of investors; comparison of rights of investors before the consolidation or merger and those after the consolidation or merger;

3. Rights and lawful benefits of investors (of consolidating or merged funds) relating to the consolidation or merger:

a) Rights to access information relating to the consolidation or merger;

b) Rights to receive documents of consolidating fund, merged fund, and merging fund, including financial statements, reports on the fund’s operating results, prospectus and summary prospectus;

c) Rights to receive reports on assessment of consolidation or merger results, made by the supervisory bank;

d) Rights to request the fund management company to redeem or switch fund certificates; principle of determining redemption price or conversion ratio; duration for redemption or switching receipt;   

e) Information about accumulated profits and distribution of such profits;

f) If making settlement to investors in case of consolidation or merger, the information about the settlement percentage or the amount paid per a fund unit; investors receiving such settlement; settlement method and duration; and source of capital for making settlement shall be specified in the report;

...

...

...

a) Period for holding general meeting of investors or period for taking written opinions from investors about the fund consolidation or merger; form of providing information about voting results to investors;

b) Duration for funds to continue the execution of fund certificate trading orders;

c) Duration for suspending fund certificate transactions for completing the consolidation or merger;

d) Expected date of the consolidation or merger;

C – Resolution of the general meeting of investors on the fund consolidation, merger or division must comprise of the following contents:

1) Approve the fund consolidation, merger or division; name of consolidating, merged, divided funds; types of funds; planned date of consolidation, merger or division; principles and methods of consolidation, merger (fulfill debt obligations before the consolidation or merger; or transfer such debt obligations to consolidated or merging fund), principle for dividing the fund's portfolio; principles for determining the net asset value at the consolidation or merger date; conversion ratio;

2) Approve the list of the members of the board of representatives of the funds that are established from the fund consolidation, merger or division;    

3)  Approve the draft of consolidation or merger contract.

In case of the fund consolidation or merger, the minutes and resolution of the general meeting of investors must also include the following contents:

...

...

...

5) Approve the fund management company (name of the fund management company, number of the establishment and operation license issued by the State Securities Commission of Vietnam, head office’s address);

6) Approve the supervision contract signed with the supervisory bank, enclosed with the information about the supervisory bank (name of the supervisory bank, number of the establishment and operation license, number of securities depository registration issued by the State Securities Commission of Vietnam, head office’s address).

D – The fund division plan must include the following fundamental contents:

I. Information about the divided fund:

1) Name in full, abbreviated name, trading name in both Vietnamese and English of the divided fund;

2) Name in full, abbreviated name, trading name in both Vietnamese and English of the fund management company and the supervisory bank; legal representatives; head office’s address; websites of these organizations;

3) List of members of the board of representatives of the fund and fund managers, and their resumes; 

4) Summary of operating situation of funds; investment portfolio structure; source of capital and assets before the events of consolidation or merger; charter capital; quantity of outstanding fund units of each fund;

II. Information about the fund division

...

...

...

2) The investment portfolio of the divided fund at the latest valuation date; methods for dividing the fund’s investment portfolio; methods for determining the value of receivables, payables and different amount (if any), the value of debts, payables of the divided fund; methods for paying debts of the divided fund; source of capital for paying such debts and methods for liquidating assets for settling debt obligations (where necessary); the investment portfolio of each fund that shall be established from the fund division;  

3) List of amendments (if any) to the draft charters of funds established from the fund division;

4) The fund management companies, supervisory banks and authorized organizations, lists of distributors of funds established from the fund division; management fees, supervision fees and other fees of funds established from the fund division;

5) Expected date of the fund division;

6) Detailed schedule of the fund division; period for fulfilling debt obligations; period, procedure and requirements on conversion of fund units and issuance of fund units of funds that are established from the fund division to investors;

7) Plans and period planned for performing the valuation, issuance and redemption of fund certificates of funds established from the fund division.

Annex No. 17

Consolidation contract and merger contract

...

...

...

I. Information about the consolidating or merged funds and consolidated or merging fund:  

1) Name in full, abbreviated name, trading name in both Vietnamese and English of funds;

2) Name in full, abbreviated name, trading name in both Vietnamese and English of the fund management company and the supervisory bank; legal representatives; head office’s address; websites of these organizations;

II. Information about the fund consolidation or merger: 

1) Purposes and reasons of the fund consolidation or merger;

2) Effects due to the fund consolidation or merger that may occur on investors of consolidating fund, merged fund and merged fund;

3) Method and principle for determining the net asset value for conducting the conversion, conversion ratio and settlement made to investors as regulated in Clause 8 Article 31 of this Circular;

4) Expected date of the consolidation or merger;

5) Period, procedure, requirements and procedure for conducting the conversion of fund units, transferring assets from consolidating fund, merged fund to consolidated fund and merging fund;

...

...

...

Annex No. 18

List of investors objecting decision on the fund consolidation or merger

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

No.

Full name of investor, creditor (for individual investor)/ name of company (for institutional investor)

Number of ID card/ business registration certificate, issued date, issuing authority

Quantity of fund units with request for redemption/ Value of debts

Redemption price

...

...

...

(1)

(2)

(3)

(4)

(5)

(6) = (4)× (5)

Fund:…………… (name of consolidating/merged fund)

Investor requesting the fund to redeem fund certificates

...

...

...

...

...

...

A

Total

Creditor requesting for settlement

...

...

...

B1

Total

...

...

...

...

...

...

B2

Total

C

Total cash amount needed for settlement (C) = (A) + (B1)

D

...

...

...

Fund:…………… (name of consolidating/merged fund)

Investor requesting the fund to redeem fund certificates

...

...

...

A

Total

Creditor requesting for settlement

...

...

...

...

...

...

B1

Total

Creditor requesting for settlement guarantee

...

...

...

B2

Total

...

...

...

C

Total cash amount needed for settlement (C) = (A) + (B1)

D

Cash amount in the fund’s list of assets

We undertake to be liable for the integrity and accuracy of the aforesaid contents.

Authorized representative of the supervisory bank

...

...

...

(General) Director of the fund management company

(signature, seal and full name)

Annex No. 19

Main documents retained at the supervisory bank and the fund management company

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

The supervisory bank and the fund management company must retain the following documents of the supervision and management of the fund:

Open-ended fund

 The fund management company and the supervisory bank

...

...

...

a) Date of placing buy orders;

b) Detailed information about investors (Full name, contact address, ID Card number/ Name in full, abbreviated name, head office’s address, number of business registration certificate);

c) The quantity of fund units;

d) The offering price and the net asset value per fund unit;

e) Issuance fees;

f) Name of distributors, distribution locations/ Name of nominee agents;

g) Commission (if any);

h) Other relevant matters;

i) Date of signing contracts;

...

...

...

a) Date of conducting transaction

b) Date of receiving payment, individual making such payment

c) Date of transferring money to the fund’s account (supervisory bank)

d) Date of payment (supervisory bank)

e) Receiver of payment (supervisory bank)

f) Date of release from the fund’s account (supervisory bank)

Trading assets in the fund's portfolio (separately recorded for each fund)

Supervisory bank

...

...

...

a) Receivables from offerings of additional fund certificates

b) Payables for redeeming fund certificates

c) Payables to securities brokerage organizations for performing the fund’s purchase of securities;

d) Receivables from securities brokerage organizations relating to the fund’s sales of securities;  

e) Detailed information about the fund’s asset-related buy and sell orders must be recorded in the order book. The order book must include the following contents:

1. Name of the fund

2. Quantity of securities/assets placed for trading;

3. Period for placing trading orders.

When the order is matched, the following information must be updated to the order book:

...

...

...

2. Conducted trading volume;

3. Trading period;

4. Date of receiving ownership certificate or issued date of ownership certificate, issued by the depository bank;

5. Amendments/changes relating to the trading or trading errors

Investments -  Capital accounts

The fund management company and the supervisory bank

Investments-related information needed to be retained includes:

a) Quantity and price of each type of asset which has been successfully traded;

b) Total transaction expenses, including commissions and transaction fees) Following transactions related to this asset;

...

...

...

e) The execution of rights of owners of securities. The information about issuers’ activities that cause influence on the nature and quantity or value of assets (issuing call options, stock split, capital adjustment or reduction, changing nominal value, changing name, acquisition or merger, dissolution or liquidation) must be stored, including:

1. Type of activities 

2. Effective date

3. Results of change (on the value or quantity basis)

Investment incomes -  Income accounts

The supervisory bank

The information about incomes and profits must include the following contents:
Type of income

Individual paying income

Source of income;

...

...

...

Ratio (debenture, coupon, dividend)

Value

Tax deduction and deduction rate

Loans

The fund management company and the supervisory bank

Borrowings

a) Loan value

b) Loan purpose

c) Collateral (if any – specify)

...

...

...

e) Payment date

f) Interest rate

g) Loan special conditions

Determination of the net asset value (NAV) 

The fund management company and the supervisory bank

The information about process and method for determining the NAV, which shall be retained, includes:

a) The quantity of securities (stocks, bonds) or other types of assets.

b) Market price of each type of asset. If there is no market price determined, the fair value shall be employed as regulated;

...

...

...

- Valuation documents prepared by the fund management company

- Quotations provided by quotation service providers;

- Errors in calculating the NAV, checked and discovered by the supervisory bank (or the fund management company if it authorizes the supervisory bank to conduct the valuation ); the level of variation compared to the NAV.

Offering price and redemption price per fund unit

The fund management company

a) The fund’s NAV, and date and time when the NAV is determined

b) The quantity of fund units, which are issued in the offering and served the valuation;

c) Issuance fee or redemption fee, which is added to or subtracted from the NAV of a fund unit

d) Process of determining the NAV (regulated in the fund's charter which is included in the fund establishment documents, and announced in the prospectus)

...

...

...

f) Details of errors in determining the NAV of a fund unit and measures against such errors.

g) Certification of the supervisory bank, certifying the accuracy of the NAV, offering price and redemption price 

h) Documents proving the assessment and certification of the supervisory bank, and copies of notices sent to the fund management company on valuation errors (if any)

Ledgers of investors

The fund management company

Ledgers of investors of the fund must be always updated. Ledgers must be prepared according to regulated forms, both in writing and electronic files, and include the following contents:

a) Name and current address (if any) of investors, investor’s code, number of ID card of unexpired passport;

b) The quantity of fund units owned by each investor

c) Date of buying fund certificates

...

...

...

e) The investor’s special requests on fund units held on his account (relating to pledging, mortgage, depository of fund certificates, regulations on bankruptcy procedures, criminal investigation, testament, etc.);

f) Information about each investor’s transactions, including:

Type of transaction (purchase, sale or other types of transfer)Name of trading partner

Date of conducting transaction

Trading volume

Name of distributor and distribution location

Information about assets in the fund’s list of assets deposited at the supervisory bank

The supervisory bank

Information about deposited assets includes:

...

...

...

b) The fund’s investment portfolio;

c) Information about secondary depository contract for each type of asset (if any).

d) Amount of assets

e) Date of conducting transaction

f) Trading price

g) Type of ownership and depository institution (registration, certificate or accounting records)

h) The fund’s special requests in conformity with the law (relating to pledging, mortgage, depository of assets, regulations on bankruptcy procedures, criminal investigation, testament, etc.) (if any).

This information must be made under a form which is able to analyze:

a) Based on types of deposited assets;

...

...

...

Information about transactions performed includes:

a) Type and name of asset

b) Value

c) Type of transaction

d) Date of conducting transaction

e) Notice of certifying transaction results (invoice, documents, bank's certification, etc.)

f) Adjustments on asset accounts, entrustment investors.

g) The NAV and valuation methods

h) Checking and verification documents, copies of notices of certifying trading results, notices of trading errors, etc.

...

...

...

The supervisory bank

a) Location where assets are stored and maintained.

b) Authority to move or transfer assets.

c) Minutes on periodical inspection of assets, made by the depository bank or lawful auditing firm.

Annex No. 20

Application for open-ended fund certificate trading registration

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

  OPEN-ENDED FUND CERTIFICATE TRADING REGISTRATION FORM

...

...

...

1

Investor’s information

Investor’s full name:

Account number:

Number of ID Card/Unexpired passport

Place and date of issue:

Date of birth

Type of account:   

Investor

...

...

...

Investor’s mailing address

Home phone:

Office phone:

Mobile:

E-mail:

Number of deposit account

Number of bank account

Account manager

With regard to institutional investor, the following information about the individual who is authorized to place trading orders shall be specified:

...

...

...

ID Number:

Position:

Home phone:

Office phone:

Mobile:

E-mail:

Name of registered funds:

Investor’s commitment: I undertake that I have carefully learned about the prospectus and the charter of the fund (name of the fund)…………..

Other information as regulated by the fund management company

...

...

...

Beneficiary’s information

Beneficiary

Full name:

ID Number:

Place and date of issue:

Investor’s mailing address

Telephone:                                                                  E-mail:

Enclosed documents

...

...

...

Passport or Visa (photocopy)

Other information as regulated by the fund management company

3

Distributor’s information

Number of organization acting as the distributor:

Establishment and operation license No.:

Issued date:

Head office’s address:

Telephone:

...

...

...

Distribution locations:

Telephone

Fax

Full name of the employee in charge of distributing fund certificates

Number of professional practice license/Issued date

Telephone of the employee in charge of distributing fund certificates:

Email

Other information as regulated by the fund management company

Investor

...

...

...

Authorized representative of the distributor

(signature, specify full name and seal)

(General) Director of the fund management company

(signature, specify full name and seal)

…………………..[date]

…………………..[date]

Other relevant documents (letters of attorney).

...

...

...

Application for open-ended fund certificate trading  

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

APPLICATION FOR OPEN-ENDED FUND CERTIFICATE TRADING 

To: The fund management company

1

Investor

Investor’s full name:

Account number:

ID Number:

...

...

...

Type of account:   

Investor

Distributor

Type of trading order: BUY ORDER

QUANTITY OF FUND UNITS REGISTERED FOR BUYING

Fund

Quantity

For distributor

...

...

...

In words

Trading order No.

Document No.

...

...

...

Type of trading order: SELL ORDER

QUANTITY OF FUND UNITS REGISTERED FOR SELLING

Fund

Quantity

...

...

...

In figures

In words

Trading order No.

Document No.

...

...

...

Type of trading order: SWITCHING ORDER

From the fund (name of the fund)

...

...

...

QUANTITY OF FUND UNITS REGISTERED FOR SWITCHING:

Fund

Quantity

For distributor

In figures

In words

Trading order No.

Document No.

...

...

...

...

...

...

Type of order/request:

ORDER/REQUEST CANCELLATION

BUY ORDER

SELL ORDER

Fund

Quantity

For distributor

...

...

...

In figures

In words

Trading order No.

Document No.

...

...

...

Type of order/request: SYSTEMATIC INVESTMENT

QUANTITY OF FUND UNITS REGISTERED FOR BUYING ON A MONTHLY BASIS

Fund

...

...

...

For distributor

In figures

In words

Trading order No.

Document No.

...

...

...

Method of settlement

In cash

By transfer

...

...

...

Investor’s mailing address

Home phone:

Office phone:

Mobile:

E-mail:

Number of deposit account

Number of bank account

Account manager

...

...

...

(Signature and full name)

  Employee o the distributor

(Signature and full name)

…………………..[date]

…………………..[date]

Other information as regulated by the fund management company

Enclosed agreements and letters of attorney

2

For distributor

...

...

...

Order receiver  

Controller

Annex No. 22

Notice of certifying fund certificate transaction

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

...

...

...

CERTIFICATION OF FUND CERTIFICATE TRANSACTION

(sent to the investor upon the transaction completion)

Investor’s name:

Address:

Type of transaction: (purchase/sale/switching)

Date of confirming trading order:

Name of the fund: (specify full name of the fund)

Method of settlement: (in cash/by transfer)

...

...

...

Transaction code:

Trading date:

Quantity of fund units:

The net asset value per a fund unit:

Transaction fees (issuance fee/redemption fee/ switching fee):

Exercise price:

Total settlement value:

Distributor: (name of distributor)

Notes:

...

...

...

Annex No. 23

Fund certificate trading order book

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

Information about trading orders recorded in the order book.

a) Name of the fund;

b) Full name of the person placing order or switching order;

c) Full name of order receiver;

d) Date and time when the order is received;

e) Terms and method of settlement;

...

...

...

g) Date and time when the order is fulfilled; 

h) Quantity of fund units that have been traded successfully (quantity of purchased fund units and quantity of sold fund units);

i) Offering price and redemption price per a fund unit;

k) Value of purchased fund units and value of sold fund units;

l) Total settlement value (value of purchased fund units, plus issuance fee, or value of sold fund units, minus redemption fee).

Annex No. 24

Notice of the fund’s net asset value (NAV)  

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

...

...

...

 THE FUND’S NET VALUE ASSET (NAV) 

(periodical report as regulated in the fund’s charter and prospectus)

Name of the fund management company:

Name of the supervisory bank:

Name of the fund:

Valuation date/Trading date: day….month…..year…..

Name of the open-ended fund

Issuance fee (% of transaction value)

...

...

...

NAV of a fund unit at the valuation date

NAV of a fund unit at the previous valuation date

Increase/Decrease of the NAV of a fund unit in comparison with that made at previous valuation (%)

Change of the NAV per a fund unit in year

Ownership ratio of foreign investors

Highest level
(VND)

Lowest level
(VND)

Quantity of fund units

Total value at trading date

...

...

...

1

...

...

...

2

...

...

...

Authorized representative of the supervisory bank

(Signature, specify full name and seal)

(General) Director of the fund management company

(Signature, specify full name and seal)

Annex No. 25

...

...

...

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

 STATISTICS ON THE INVESTOR’S TRANSACTIONS

(on the monthly, quarterly and annual basis)

Investor’s name:

Address:

Account No.:

Reporting period: from…………[date] to…………………………..[date]

Date

...

...

...

Quantity of fund units

NAV per a fund unit

Trading price per a fund unit

Total transaction value 

(1)

(2)

(3)

(4)

(5)

...

...

...

Opening balance

Buy in

...

...

...

Sell out

...

...

...

* Based on the NAV of a fund unit at the latest valuation date

Authorized representative of the supervisory bank

(Signature, specify full name and seal)

(General) Director of the fund management company

...

...

...

Annex No. 26

REPORT ON CHANGE OF THE NET ASSET VALUE, FUND CERTIFICATE TRANSACTIONS

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

REPORT ON CHANGE OF THE NET ASSET VALUE, FUND CERTIFICATE TRANSACTIONS

(on the monthly, quarterly and annual basis)

Name of the fund management company:

Name of the supervisory bank:

...

...

...

No.

Contents

Reporting period

Previous period

Name of the fund

I

The fund's net value asset (NAV) at the beginning of period

...

...

...

Change of the NAV compared to previous period (=II.1 + II.2), in which:

II.1

Change of the NAV due to market fluctuations and trading activities of the fund during the period

II.2

...

...

...

III

Change of the NAV due to redemption or offering of additional fund certificates (=III.1 – III.2)

III.1

Receivables from offering of additional fund certificates

...

...

...

III.2

Payables for redeeming fund certificates

IV

The fund's net value asset (NAV) at the ending of period ( = I + II + III)

...

...

...

Authorized representative of the supervisory bank

(Signature, specify full name and seal)

(General) Director of the fund management company

(Signature, specify full name and seal)

Annex No. 27

 Statistics on transaction fees in the fund’s investment activities  

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

...

...

...

(on the periodical basis of 6 months and annual basis)

Name of the fund management company:

Address:

Reporting period: from…………[date] to…………………………..[date]

No.

Name (code) of securities companies (transaction value of which exceeds 5% of total transaction value in year

Relationship with the fund management company

The fund’s transaction ratio via each securities company

Average transaction fee

...

...

...

The fund’s transaction value during reporting period

Total transaction value during reporting period of the fund

The fund’s transaction ratio via each securities company during reporting period

(1)

(2)

(3)

(4)

(5)

(6)=(4)/(5)(%)

...

...

...

(8)

1

...

...

...

...

...

...

...

Total

...

...

...

(General) Director of the fund management company

(Signature, specify full name and seal)

Annex No. 28

...

...

...

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

REPORT ON THE FUND’S OPERATIONS

1. The fund’s information

a) Name and type of the fund;

b) The fund’s investment objectives;

c) The fund’s operating duration (if any);

d) Benchmark portfolio (if any);

...

...

...

f) Quantity of outstanding fund units;

g) Changes in the fund’s charter in reporting period (if any);

h) Contents of the resolution of the general meeting of investors in reporting period (if any);

i) Assessment of the supervisory bank on the contents regulated in Article 45 of the Circular on the open-ended fund establishment and management;

2. Report on operating results of the fund

a) Information about the fund’s investment portfolio and the NAV determined in December 31^st of 3 latest years (if any). To be specific:

- The fund’s investment portfolio allocated according to sectors, fields and types of products (stocks, bonds, etc.) (not detailing according to ticker symbol);

- The net asset value of the fund;

- The net asset value per a fund unit and quantity of outstanding fund certificates;

...

...

...

- Total profit of the fund, detailing profits accrued from the increase in security price (capital gains) and profits accrued from yields on securities (dividend, coupon, deposit interest rate, etc.) (Income value);

- Profit distributed per a fund unit (net value and gross value) in reporting period, including profit distribution made in cash or by fund units; Period of profit distribution; The NAV per a fund unit determined before and after the profit distribution;   

- The fund's operating expense ratio and explanation about the fund’s operating expense differences (determined at the end of the 2^nd quarter and at the end of the 3^rd quarter of the fiscal year);

- The fund's portfolio turnover rate and explanation about the fund’s portfolio turnover rate differences (determined at the end of the 2^nd quarter and at the end of the 3^rd quarter of the fiscal year);

b) The fund's profit:

The fund’s average annual profit accrued in determined reporting periods: (i) within 12 months (1 year), up to the report preparation date (or from the fund’s establishment date to the reporting date, if the fund has just operated under 1 year); (ii) within 36 months (3 years), up to the report preparation date (or from the fund’s establishment date to the reporting date, if the fund has just operated under 3 years); (iii) within 60 months (5 years), up to the report preparation date (or from the fund’s establishment date to the reporting date, if the fund has just operated under 5 years); 

c) Other comparison criteria, ensuring the compliance with the following principle:

- Methods and principles for determining the value of assets and the profit value are unanimously agreed, announced publicly and audited by another independent organization;

- Figures are provided by an independent organization.

...

...

...

3. Report on the fund management company’s management of assets Report on the fund management company’s management of assets must comprise of the following contents:

a) Explanation about the change of the fund management company (if any);

b) Explanation about the fund’s fulfillment of investment objectives (apply to the fund's annual report only);

c) Comparison between the fund’s profits and the benchmark portfolio’s profits, using basic profit indicators announced in the prospectus of the same reporting period (via graph);    

d) Comparison between the fund’s profits and the benchmark portfolio’s profits, using basic profit indicators announced in the prospectus for the period of five (05) recent years, up to the reporting date (via graph);   

e) Description of investment strategies and tactics which the fund has applied during the reporting period. If the investment strategies and tactics performed during the period are different from those announced in the prospectus, the explanation of such difference and assessment on advantages and disadvantages of investment strategies and tactics performed during the period;

f) Description of the difference between the fund’s investment portfolio at the reporting period in comparison with that in the year preceding the reporting year;  

g) Analysis on the fund's operating results on the basis of comparison between the NAV of a fund unit (after adjusting distributed profit, if any) at this reporting period and that at the latest reporting period;

h) The assessment on the market fluctuations during the reporting period, including foreign markets in which the fund makes investments, and the information about investment profit of each type of asset such as stocks, blue-chips, small-cap stocks, etc.;   

...

...

...

k) Cases in which rights and benefits of investors who hold fund certificates are influenced;

l) The information about transactions made with individuals who have related rights and benefits (if any);

m) Other information (if any).

4. Report on the supervisory bank’s operation

The supervisory bank must make assessment on the fund management company’s compliance with the law, the fund's charter and the prospectus during the operation and management of the open-ended fund with the following contents:

a) Explanation about the change of the supervisory bank (if any);

b) The compliance with investment limits and loan limits as regulated by the law, the fund's charter and the prospectus;

c) Determination of the net asset value as regulated by the law, the fund's charter and the prospectus;

d) Offering of additional fund certificates and redemption of fund certificates as regulated by the law, the fund's charter and the prospectus;

...

...

...

If the supervisory bank assesses that the fund management company has failed to comply with the law, the fund's charter and the prospectus regarding the aforesaid contents, the information of such events must be specified, in which, it must include influences that may occur on investors, including investors who have owned fund certificates in the past and potential investors at the time of such events.  The supervisory bank should suggest remedial methods and measures for limiting similar circumstances that may occur in the future.

5. Report on authorized activities 

The fund management company must prepare the report on assessment of quality of services provided by other organizations (authorized parties) such as transfer agent services, fund management services, NAV determination services, etc. with the following contents: 

a) Expenses paid to the authorized parties in comparison with profit, income and total operating expenses of the fund;

b) Effects (if any) of authorized activities on the profit and level of risks of the fund;

c) Total expenses of performing authorized activities paid to the authorized parties (if there are many services provided to the fund management company);

d) The assessment on the maintenance of the internal control system, risk management system, information security, facilities, hot stand-by system, disaster recovery system, etc. of the authorized party, ensuring that the authorized activities shall be thoroughly performed, not causing the influence on investment activities of investors. 

...

...

...

(Signature, specify full name and seal)

Annex No. 29

Report on amendments and supplements to the fund’s charter

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

Name of the fund management company
--------

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
-----------------------

No.:………. (number of document)

..........…….[place], on………….[date].

...

...

...

NOTICE OF AMENDMENTS AND SUPPLEMENTS TO THE FUND’S CHARTER

To: The State Securities Commission of Vietnam

We hereby report to the State Securities Commission of Vietnam on our amendments and supplements to the charter of the fund……………… (name of the fund) as follows:

No.

Clauses and articles of new charter

Clauses and articles of previous charter

Reasons of amendment and supplement

...

...

...

- Effective date:

We undertake that we shall complete all relevant formalities and we shall be liable for the integrity and accuracy of this report and documents enclosed thereof.

Enclosed documents:

...

...

...

- - Minutes and resolution of the general meeting of investors (if amendments and supplements must be approved by the general meeting of investors);

- Amended and supplemented charter

(General) Director of the fund management company

(signature, seal and full name)

Annex No. 30 (abrogated)

Report of the supervisory bank

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

(on the periodical basis of 6 months and annual basis)

...

...

...

Annex No. 31

Report on borrowing and repurchase transactions of the fund

(promulgated under the Circular providing for the guidance on the establishment and management of open-ended funds)

(on the monthly, quarterly and annual basis)

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
-----------------------

....,………[place], …………..[date]

REPORT ON BORROWING AND REPURCHASE TRANSACTIONS OF THE FUND

To: The State Securities Commission of Vietnam

...

...

...