Circular No. 105/2016/TT-BTC guiding the indirect foreign investment activities of securities trading organizations, investment funds, securities investment companies, and insurance businesses.

CIRCULAR

GUIDELINES ON THE ACTIVITIES OF INDIRECT FOREIGN INVESTMENT BY SECURITIES BUSINESSES, SECURITIES INVESTMENT FUNDS, SECURITIES INVESTMENT COMPANIES, AND INSURANCE ENTERPRISES

 

On the basis of the Investment Law dated November 26, 2014;

Pursuant to the Securities Law dated June 29, 2006;

Pursuant to the Law Amending and Supplementing Certain Provisions of the Securities Law dated November 24, 2010;

Pursuant to the Insurance Business Law dated December 9, 2000;

Pursuant to the Law Amending and Supplementing Certain Provisions of the Securities Law on November 24, 2010;

Pursuant to the Foreign Exchange Ordinance No. 28/2005/PL-UBTVQH dated December 13, 2005;

Pursuant to Ordinance No. 06/2013/PL-UBTVQH13 dated March 18, 2013 amending and supplementing certain provisions of the Foreign Exchange Ordinance;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 135/2015/NĐ-CP dated December 31, 2015 of the Government on indirect foreign investment;

At the proposal of the Chairman of the State Securities Commission, the Director of the Insurance Management and Supervision Department,

The Minister of Finance issues this Circular guiding the activities of indirect foreign investment by securities businesses, securities investment funds, securities investment companies, and insurance enterprises.

 

Chapter I GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates the self-operating activities of indirect foreign investment by securities businesses, securities investment funds, securities investment companies, and insurance enterprises, and the entrusted investment activities of fund management companies.

Article 2. Applicability

This Circular applies to securities businesses, securities investment funds, securities investment companies, insurance enterprises, and other relevant agencies, organizations, and individuals involved in indirect foreign investment.

Article 3. Explanation of Terms

In addition to terms defined in Decree No. 135/2015/NĐ-CP dated December 31, 2015 of the Government on indirect foreign investment (hereinafter referred to as Decree No. 135/2015/NĐ-CP), the following terms in this Circular shall be understood as follows:

1. Securities business organization includes securities companies and fund management companies established and operating under Vietnamese law.

2. Insurance enterprise refers to life insurance enterprises, non-life insurance enterprises, health insurance enterprises, and reinsurance enterprises.

3. Valid dossier means a dossier containing all required documents according to this Circular, with complete information declared in accordance with the law.

4. Entrusted organization refers to an economic entity conducting indirect foreign investment through entrusting its foreign currency capital to a domestic fund management company permitted to manage entrusted investments.

Chapter II PROCEDURES FOR ISSUING AND WITHDRAWING CERTIFICATES OF REGISTRATION FOR INDIRECT FOREIGN INVESTMENT, APPROVAL DOCUMENTS FOR REGISTRATION OF INDIRECT FOREIGN INVESTMENT

Section 1 SECURITIES BUSINESSES

Article 4. Procedures for Issuing Certificates of Registration for Indirect Foreign Investment

1. The application dossier for issuing certificates of registration for indirect foreign investment by securities businesses includes:

a) An application form for issuing certificates of registration for indirect foreign investment according to the model prescribed in Appendix No. 01 issued together with this Circular;

b) Minutes of meetings and resolutions of the Shareholders' Meeting or Board of Directors or decisions of the owner approving indirect foreign investment and the plan for indirect foreign investment;

c) Plan for indirect foreign investment, including details about the intended country, expected investment capital, sources of investment capital, expected assets to be invested, expected investment outcomes, and other relevant information;

d) A document from the tax authority confirming that all financial obligations to the Vietnamese state have been fulfilled, and there is no outstanding tax debt to the state budget up to the date of submission of the dossier;

đ) Internal procedures for indirect foreign investment, including details about internal control mechanisms, internal audit, identification and management of risks related to self-operating indirect foreign investment activities;

e) A detailed description of the technical infrastructure of the securities business organization, including the order transmission system and storage systems serving indirect foreign investment activities;

g) Copies of international CFA (Chartered Financial Analyst) certificates, employment contracts, financial analyst practice certificates (for securities companies) or fund management practice certificates (for fund management companies) of at least one (01) employee of the securities business organization;

h) Report on compliance with laws governing the management and use of state capital (for securities business organizations with state-owned capital) in the year immediately preceding the year of dossier submission.

2. The dossier as prescribed in Clause 1 of this Article shall be prepared in one (01) set and submitted directly or sent via postal service to the State Securities Commission.

3. Within thirty (30) days from the date of receipt of a valid dossier as prescribed in Clauses 1 and 2 of this Article, the State Securities Commission shall issue certificates of registration for indirect foreign investment to securities businesses and send the certificates to the State Bank of Vietnam. In case of refusal, the State Securities Commission shall provide a written response stating the reasons.

4. Within twenty-four (24) hours from the effective date of the certificate of registration for indirect foreign investment, the securities business organization shall publish information on its electronic website regarding the certificate of registration for indirect foreign investment.

Article 5. Procedures for Revoking Certificates of Registration for Indirect Foreign Investment

1. In cases where securities trading organizations voluntarily request the revocation of certificates of registration for indirect foreign investment, the application dossier shall include:

a) An application form for revoking certificates of registration for indirect foreign investment as prescribed in Appendix No. 02 issued together with this Circular;

b) Minutes of meetings and resolutions of the Shareholders' Meeting or Board of Members or decisions of the owner approving the termination of indirect foreign investment activities;

c) Documentation explaining the termination of indirect foreign investment activities, including the reasons for termination, the results of investment implementation, the possibility of recovering invested capital, the expected date to terminate investment activities, plans to settle all indirect foreign investments, and related issues;

d) The original certificate of registration for indirect foreign investment.

2. The dossier as prescribed in Clause 1 of this Article shall be prepared in one (01) set and submitted directly or sent via postal service to the State Securities Commission.

3. Within seven (07) working days from the date of receiving a complete and valid dossier as stipulated in Clause 1 and Clause 2 of this Article, the State Securities Commission shall issue a decision to revoke the certificate of registration for indirect foreign investment and simultaneously send the decision to the State Bank of Vietnam.

4. Securities trading organizations shall be compelled to have their certificates of registration for indirect foreign investment revoked in the following circumstances:

a) Failure to meet the provisions at point d, Clause 2, Article 14 of Decree No. 135/2015/NĐ-CP. Within thirty (30) days from the expiration of the deadline for rectification as prescribed by current laws, if the securities trading organization still fails to meet the provisions at point d, Clause 2, Article 14 of Decree No. 135/2015/NĐ-CP, the State Securities Commission shall issue a decision to revoke the certificate of registration for indirect foreign investment and simultaneously send the decision to the State Bank of Vietnam;

b) The application dossier for certificates of registration for indirect foreign investment contains false information, or does not maintain the conditions for establishment and operation licenses as prescribed by current laws, or becomes an entity subject to the provisions at Clause 4, Article 2 of Decree No. 135/2015/NĐ-CP. Within thirty (30) days from the date the securities trading organization is compelled to have its certificate revoked, the State Securities Commission shall issue a decision to revoke the certificate of registration for indirect foreign investment and simultaneously send the decision to the State Bank of Vietnam.

5. From the date the Decision to Revoke Certificates of Registration for Indirect Foreign Investment takes effect, securities trading organizations shall be responsible for:

a) Announcing the revocation decision on their electronic information website within twenty-four (24) hours;

b) Not making additional indirect foreign investments; not extending existing indirect foreign investments;

c) Settling all indirect foreign investments (including all rights and interests arising from overseas investments);

d) For incomplete settlements of investments, securities trading organizations shall report monthly to the State Securities Commission on the settlement progress according to the forms prescribed in Appendices No. 09 and No. 10 issued together with this Circular until all investments are settled.

Section 2 INVESTMENT FUNDS AND SECURITIES INVESTMENT COMPANIES

Article 6. Procedures for Approval to Indirectly Invest Abroad

1. Investment funds and securities investment companies shall submit an application through a fund management company to the State Securities Commission for approval to indirectly invest abroad. The application package includes:

a) A request for approval to indirectly invest abroad according to the form prescribed in Appendix No. 03 issued together with this Circular;

b) A copy of the Charter of the investment fund or securities investment company that provides for indirect investment abroad;

c) A copy of the principle deposit agreement between the domestic deposit bank, supervisory bank of the investment fund or securities investment company and the foreign depositary institution, accompanied by a copy of the certificate of registration for securities depositary activities or equivalent documentation of the foreign depositary institution;

d) A copy of the international CFA certificate and employment contract of at least one (01) fund manager or securities investment company employee;

đ) Documentation as specified in points đ and e of Clause 1, Article 4 of this Circular.

2. Individual securities investment companies managing their own capital shall submit an application to the State Securities Commission for approval to register for indirect investment abroad. The application package includes:

a) Documentation as specified in points a, b, and c of Clause 1 of this Article;

b) Internal procedures for indirect investment abroad, including content on internal control mechanisms, internal auditing, identification and risk management related to indirect investment abroad activities;

c) A detailed description of the technical infrastructure of the securities investment company regarding the order transmission system and storage system serving indirect investment abroad activities;

d) A copy of the international CFA certificate, fund management qualification certificate, and employment contract of at least one (01) securities investment company employee.

3. The application packages as stipulated in Clauses 1 and 2 of this Article shall be prepared in one (01) set and submitted directly or sent via postal service to the State Securities Commission.

4. Within thirty (30) days from the date of receipt of complete and valid applications as stipulated in Clauses 1, 2, and 3 of this Article, the State Securities Commission shall issue a document approving the investment fund or securities investment company to indirectly invest abroad, and simultaneously send the approval document to the State Bank of Vietnam. In case of rejection, the State Securities Commission shall respond in writing and specify the reasons.

5. Within twenty-four (24) hours from the time the investment fund or securities investment company is permitted to indirectly invest abroad, the fund management company or individual securities investment company managing its own capital shall publish information on its website regarding the State Securities Commission's approval for the investment fund or securities investment company to indirectly invest abroad.

Article 7. Procedures for Terminating Indirect Investment Abroad

1. In cases where the investment fund or securities investment company voluntarily terminates indirect investment abroad, the application package for terminating indirect investment abroad shall include:

a) A request to terminate indirect investment abroad according to the form prescribed in Appendix No. 04 issued together with this Circular;

b) Minutes of meetings and resolutions of the investors' assembly or members' assembly or shareholders' meeting regarding the termination of indirect investment abroad;

c) Documentation explaining the termination of indirect investment abroad activities, including the reasons for termination, investment results, capital recovery potential, expected termination date, liquidation plan for indirect investments abroad, and related issues.

2. The dossier as prescribed in Clause 1 of this Article shall be prepared in one (01) set and submitted directly or sent via postal service to the State Securities Commission.

3. Within seven (07) working days from the date of receipt of complete and valid applications as stipulated in Clauses 1 and 2 of this Article, the State Securities Commission shall issue a document terminating indirect investment abroad for the investment fund or securities investment company, and simultaneously send the document to the State Bank of Vietnam.

4. The investment fund or securities investment company shall be compelled to terminate indirect investment abroad in the following cases:

a) If the fund management company managing the investment fund or securities investment company engaged in indirect investment abroad no longer meets the requirements specified in point d, Clause 2, Article 14 of Decree No. 135/2015/ND-CP. Within thirty (30) days from the expiration of the deadline for rectification under current laws, if the fund management company still does not meet the requirements specified in point d, Clause 2, Article 14 of Decree No. 135/2015/ND-CP, the State Securities Commission shall issue a document terminating indirect investment abroad for the investment fund or securities investment company, and simultaneously send the document to the State Bank of Vietnam;

b) If the application package for approval to register for indirect investment abroad of the investment fund or securities investment company contains false information, or if the securities investment company fails to maintain the conditions for establishment and operation as prescribed by current laws, or becomes an entity subject to Clause 4, Article 2 of Decree No. 135/2015/ND-CP. Within thirty (30) days from the date the investment fund or securities investment company is compelled to terminate indirect investment abroad, the State Securities Commission shall issue a document terminating indirect investment abroad, and simultaneously send the document to the State Bank of Vietnam.

5. From the effective date of the termination of indirect investment abroad of the investment fund or securities investment company as per the document of the State Securities Commission, the fund management company or individual securities investment company managing its own capital shall be responsible for:

a) Publishing information within twenty-four (24) hours on its website regarding the investment fund or securities investment company's termination of indirect investment abroad;

b) Not making additional indirect foreign investments; not extending existing indirect foreign investments;

c) Implementing the liquidation of indirect investments abroad (including all rights and interests arising from overseas investments).

d) For outstanding investment commitments, the fund management company and individual securities companies managing their own capital shall report to the State Securities Commission on a monthly basis regarding the liquidation status of indirect overseas investments made by securities investment funds and securities companies, according to the form prescribed in Appendix 13 attached hereto until all investments are fully liquidated.

Section 3 INSURANCE BUSINESSES

Article 8. Procedures for Issuing Certificates of Registration for Indirect Overseas Investment

1. The application dossier for issuing certificates of registration for indirect overseas investment for insurance businesses includes:

a) An application form for a certificate of registration for indirect overseas investment in accordance with the model prescribed in Appendix 5 attached hereto;

b) A written approval from the competent authority as stipulated in the Articles of Association of the insurance business through the implementation of indirect overseas investment activities;

c) Plan for indirect foreign investment, including details about the intended country, expected investment capital, sources of investment capital, expected assets to be invested, expected investment outcomes, and other relevant information;

d) A document from the tax authority confirming that all financial obligations to the Vietnamese state have been fulfilled, and there is no outstanding tax debt to the state budget up to the date of submission of the dossier;

đ) Internal procedures for indirect foreign investment, including details about internal control mechanisms, internal audit, identification and management of risks related to self-operating indirect foreign investment activities;

e) A description of technical facilities serving the indirect overseas investment activities;

g) A copy of the international CFA (Chartered Financial Analyst) certification, and employment contracts of at least one (01) staff member directly involved in the company's investment activities;

h) A report on compliance with laws governing the management and use of state-owned capital (for insurance businesses with state-owned capital as provided for under the Law on Management and Use of State Capital for Production and Business Operations at Enterprises) in the year immediately preceding the submission of the application dossier.

2. The dossier prescribed in Clause 1 of this Article shall be compiled into one (01) set and submitted either directly or sent via postal service to the Ministry of Finance.

3. Within thirty (30) days from the date of receipt of a complete and valid dossier as prescribed in Clauses 1 and 2 of this Article, the Ministry of Finance shall issue a certificate of registration for indirect overseas investment for insurance businesses, and simultaneously send the certificate to the State Bank of Vietnam. In case of refusal, the Ministry of Finance shall provide a written response stating the reasons.

4. Within twenty-four (24) hours from the effective date of the certificate of registration for indirect overseas investment, insurance businesses shall publish information about the certificate of registration for indirect overseas investment on their electronic websites.

Article 9. Procedures for Revoking Certificates of Registration for Indirect Overseas Investment

1. In cases where insurance businesses voluntarily request the revocation of certificates of registration for indirect overseas investment, the application dossier shall include:

a) An application form for the revocation of a certificate of registration for indirect overseas investment in accordance with the model prescribed in Appendix 6 attached hereto;

b) A written approval from the competent authority as stipulated in the Articles of Association of the insurance business through the termination of indirect overseas investment activities;

c) Documentation explaining the termination of indirect foreign investment activities, including the reasons for termination, the results of investment implementation, the possibility of recovering invested capital, the expected date to terminate investment activities, plans to settle all indirect foreign investments, and related issues;

d) The original certificate of registration for indirect foreign investment.

2. The dossier prescribed in Clause 1 of this Article shall be compiled into one (01) set and submitted either directly or sent via postal service to the Ministry of Finance.

3. Within seven (07) working days from the date of receipt of a complete and valid dossier as prescribed in Clauses 1 and 2 of this Article, the Ministry of Finance shall issue a decision to revoke the certificate of registration for indirect overseas investment, and simultaneously send the decision to the State Bank of Vietnam.

4. Insurance businesses shall be compulsorily required to have their certificates of registration for indirect overseas investment revoked in the following circumstances:

a) If the insurance business no longer meets Point d, Clause 2, Article 14 of Decree No. 135/2015/ND-CP. Within thirty (30) days from the expiration of the deadline for rectification as prescribed by current laws, if the insurance business still fails to meet Point d, Clause 2, Article 14 of Decree No. 135/2015/ND-CP, the Ministry of Finance shall issue a decision to revoke the certificate of registration for indirect overseas investment, and simultaneously send the decision to the State Bank of Vietnam;

b) If the application dossier for a certificate of registration for indirect overseas investment of the insurance business contains false information that directly affects the decision-making process of the Ministry of Finance or becomes an object regulated under Clause 4, Article 2 of Decree No. 135/2015/ND-CP. Within thirty (30) days from the date of being compelled to revoke the certificate of registration for indirect overseas investment, the Ministry of Finance shall issue a decision to revoke the certificate of registration for indirect overseas investment, and simultaneously send the decision to the State Bank of Vietnam.

5. From the effective date of the Decision to Revoke the Certificate of Registration for Indirect Overseas Investment, the insurance business shall be responsible for:

a) Publishing information within twenty-four (24) hours about the decision to revoke the certificate of registration for indirect overseas investment on its website;

b) Not making additional indirect foreign investments; not extending existing indirect foreign investments;

c) Liquidating all outstanding indirect overseas investments (including all rights and interests arising from foreign investments) within a maximum period of one (01) year from the effective date of the decision to revoke the certificate of registration for indirect overseas investment;

d) For outstanding investments not yet fully liquidated, the insurance business shall be responsible for reporting to the Ministry of Finance quarterly on the liquidation status according to the form prescribed in Appendix 14 attached hereto until all investments are fully liquidated.

Chapter III PROCEDURES FOR ISSUING AND REVOKING LICENSES FOR ACTIVITIES OF FUNDS MANAGEMENT COMPANIES IN RECEIVING INDIRECT FOREIGN INVESTMENT TRUSTS

Article 10. Procedures for Issuing Licenses for Activities of Funds Management Companies in Receiving Indirect Foreign Investment Trusts

1. The application dossier for issuing a license for activities of funds management companies in receiving indirect foreign investment trusts includes:

a) An application form for issuing a license for activities of funds management companies in receiving indirect foreign investment trusts according to the model prescribed in Appendix No. 07 issued together with this Circular;

b) Internal procedures for receiving indirect foreign investment trusts, including contents on identification and risk management related to activities of receiving indirect foreign investment trusts;

c) Documents as prescribed at points d, e, and g of Clause 1 of Article 4 of this Circular.

2. The dossier as prescribed in Clause 1 of this Article shall be prepared in one (01) set and submitted directly or sent via postal service to the State Securities Commission.

3. Within thirty (30) days from the date of receipt of a complete and valid dossier as prescribed in Clauses 1 and 2 of this Article, the State Securities Commission shall issue a license for activities of funds management companies in receiving indirect foreign investment trusts, and simultaneously send the license to the State Bank of Vietnam. In case of refusal, the State Securities Commission shall reply in writing and specify the reasons.

4. Within twenty-four (24) hours from the date the license for activities of funds management companies in receiving indirect foreign investment trusts becomes effective, the funds management company shall publish information on its website regarding the license for activities of funds management companies in receiving indirect foreign investment trusts.

Article 11. Procedures for Revoking Licenses for Activities of Funds Management Companies in Receiving Indirect Foreign Investment Trusts

1. In case a funds management company voluntarily requests revocation of a license for activities of funds management companies in receiving indirect foreign investment trusts, the application dossier shall include:

a) A request for revocation of a license for activities of funds management companies in receiving indirect foreign investment trusts according to the model prescribed in Appendix No. 08 issued together with this Circular;

b) Minutes of meetings and resolutions of the Shareholders' Meeting or Board of Members or decisions of the owner approving the termination of activities of receiving indirect foreign investment trusts;

c) Documentation explaining the termination of activities of receiving indirect foreign investment trusts, including the reasons for termination, results of investment implementation, ability to recover invested capital, expected termination period of activities of receiving indirect foreign investment trusts, liquidation plans for indirect foreign investment trust contracts, and related issues;

d) Original copy of the license for activities of funds management companies in receiving indirect foreign investment trusts.

2. The dossier as prescribed in Clause 1 of this Article shall be prepared in one (01) set and submitted directly or sent via postal service to the State Securities Commission.

3. Within seven (07) working days from the date of receipt of a complete and valid dossier as prescribed in Clauses 1 and 2 of this Article, the State Securities Commission shall issue a decision to revoke the license for activities of funds management companies in receiving indirect foreign investment trusts, and simultaneously send the decision to the State Bank of Vietnam.

4. A funds management company shall be compulsorily required to revoke a license for activities of funds management companies in receiving indirect foreign investment trusts in the following cases:

a) Not meeting the provisions at point e of Clause 2 of Article 23 of Decree No. 135/2015/ND-CP. Within thirty (30) days from the expiration date of the deadline for rectification as prescribed by current laws, if the funds management company still does not meet the provisions at point e of Clause 2 of Article 23 of Decree No. 135/2015/ND-CP, the State Securities Commission shall issue a decision to revoke the license for activities of funds management companies in receiving indirect foreign investment trusts and simultaneously send the decision to the State Bank of Vietnam. From the date of non-compliance with the provisions at point e of Clause 2 of Article 23 of Decree No. 135/2015/ND-CP, the funds management company shall not enter into new or extend indirect foreign investment trust contracts.

b) The application dossier for issuing a license for activities of funds management companies in receiving indirect foreign investment trusts contains false information, or fails to maintain conditions for establishment and operation licenses as prescribed by current laws. Within thirty (30) days from the date the funds management company is compulsorily required to revoke the license for activities of funds management companies in receiving indirect foreign investment trusts, the State Securities Commission shall issue a decision to revoke the license for activities of funds management companies in receiving indirect foreign investment trusts and simultaneously send the decision to the State Bank of Vietnam.

5. From the date the Decision to Revoke the License for Activities of Funds Management Companies in Receiving Indirect Foreign Investment Trusts becomes effective, the funds management company shall have the responsibility to:

a) Publish information within twenty-four (24) hours on its website regarding the decision to revoke the license for activities of funds management companies in receiving indirect foreign investment trusts;

b) Not enter into new or extend indirect foreign investment trust contracts (applicable to the case prescribed in Clause 1, point b of Clause 4 of this Article);

c) Terminate transactions and asset management abroad, except for transactions aimed at settling customer investment portfolios;

d) Liquidate indirect foreign investment trust contracts, settle investment portfolio accounts (close or transfer funds), transfer all remaining balances of money and securities according to customer requirements or hand over responsibilities to replacement funds management companies that have been issued licenses for activities of funds management companies in receiving indirect foreign investment trusts;

đ) For indirect foreign investment trust contracts not yet fully liquidated, the funds management company shall report monthly to the State Securities Commission on the liquidation status according to the model prescribed in Appendix No. 12 issued together with this Circular until all contracts are fully liquidated.

Chapter IV FOREIGN INDIRECT INVESTMENT ACTIVITIES

Section 1 FOREIGN INDIRECT INVESTMENT ACTIVITIES BY ENTERPRISES

Article 12. General Provisions on Foreign Indirect Investment Activities by Enterprises

1. Insurance enterprises, securities trading organizations, securities investment funds, and securities investment companies shall carry out foreign indirect investment activities in accordance with laws on investment and banking regulations after the Ministry of Finance and the State Securities Commission issue certificates of registration for foreign indirect investment, and the State Bank of Vietnam issues confirmation documents for self-operated foreign indirect investment limits.

2. Securities trading organizations, securities investment funds, securities investment companies, and insurance enterprises shall register self-operated foreign indirect investment limits in accordance with the regulations of the State Bank of Vietnam.

3. Self-operated organizations with foreign capital (as specified in Clause 1, Article 23 of the Investment Law) shall not carry out foreign indirect investment activities.

4. Self-operated organizations that have been issued certificates of registration for foreign indirect investment and such certificates remain valid shall not entrust other organizations to carry out foreign indirect investment activities.

5. Fund management companies shall enter into deposit agreements and supervision contracts with domestic deposit banks and supervisory banks to manage and oversee the assets of securities investment funds and securities investment companies. Domestic deposit banks and supervisory banks of securities investment funds and securities investment companies may authorize foreign deposit organizations to manage the foreign indirect investment assets of securities investment funds and securities investment companies.

6. The authorization for deposit activities stipulated in Clause 5 of this Article must comply with the following provisions:

a) Authorization activities must be stipulated in the charter of securities investment funds and securities investment companies and must conform to relevant legal provisions;

b) Authorization activities must be carried out based on authorization contracts between domestic deposit banks and supervisory banks and foreign deposit organizations. Authorization contracts must specify the rights, obligations, and responsibilities of domestic deposit banks and supervisory banks, foreign deposit organizations, and must conform to relevant legal provisions;

c) Domestic deposit banks and supervisory banks shall bear full responsibility for authorized deposit activities, and shall have the duty to inspect, supervise, and evaluate such authorized deposit activities;

d) Domestic deposit banks and supervisory banks must ensure that overseas deposited assets are registered as belonging to the securities investment funds and securities investment companies providing services;

đ) Fund management companies, domestic deposit banks, and supervisory banks must have complete information about all overseas deposited assets owned by securities investment funds and securities investment companies;

e) Domestic deposit banks and supervisory banks must comply with deposit and asset supervision regulations under laws governing the establishment and management of securities investment funds, laws governing the establishment, organization of operations, and management of securities investment companies, and relevant legal provisions.

7. Insurance enterprises may enter into deposit agreements with foreign deposit organizations permitted to provide deposit services under foreign laws. Insurance enterprises may also enter into agreements with domestic deposit banks to manage their foreign indirect investment assets. Domestic deposit banks may authorize foreign deposit organizations to manage the foreign indirect investment assets of insurance enterprises and shall bear full responsibility for such authorized deposit activities.

8. Within five (05) working days from the date of signing a deposit agreement with a foreign deposit organization, or from the date of signing an authorization deposit agreement with a foreign deposit organization, or when changing a foreign deposit organization:

a) Insurance enterprises shall notify the Ministry of Finance of the signing of deposit agreements and authorization deposit agreements, accompanied by copies of the registration certificate for securities deposit activities or equivalent documents of the foreign deposit organization.

b) Domestic deposit banks and supervisory banks of securities investment funds and securities investment companies shall notify the State Securities Commission of the signing of authorization deposit agreements, accompanied by copies of the registration certificate for securities deposit activities or equivalent documents of the foreign deposit organization.

Article 13. Safe Investment Ratio for Securities Companies

1. Only securities companies licensed to conduct proprietary securities trading activities may invest or entrust indirect investment abroad (excluding cases stipulated in Clause 4, Article 19 of Decree No. 135/2015/NĐ-CP). Indirect investments shall be carried out by the securities company itself or its branch abroad (if any).

2. Securities companies as specified in Clause 1 of this Article may invest or entrust investment in types of investment instruments prescribed by the State Bank of Vietnam and:

a) Shall not exceed the self-trading limit registered and confirmed by the State Bank of Vietnam.

b) In case of indirect foreign investment arising, the total amount of indirect foreign investment, entrusted indirect foreign investment shall not exceed thirty percent (30%) of the equity capital based on the most recent audited or reviewed financial report at the time of investment, and the investment limits and investment ratios prescribed by laws guiding the establishment and operation of securities companies shall include domestic and foreign investments.

Article 14. Safe Investment Ratio for Fund Management Companies

1. Fund management companies are permitted to invest up to twenty percent (20%) of their equity capital as reported in the most recent audited annual financial statement or reviewed semi-annual financial statement and the most recent quarterly financial statement into investment instruments prescribed by the State Bank of Vietnam, and shall not exceed the self-trading limit registered and confirmed by the State Bank of Vietnam.

2. In case the investment portfolio of fund management companies exceeds the limit prescribed in Clause 1 of this Article due to market price fluctuations of held assets or from enjoying rights related to held assets, the fund management company must take necessary measures to comply with the investment limit prescribed in Clause 1 of this Article within three (03) months from the date of exceeding the limit.

3. When conducting indirect foreign investment, fund management companies must comply with financial investment regulations stipulated by laws governing the establishment, organization, and operation of fund management companies.

Article 15. Safe Investment Ratio for Securities Investment Funds and Securities Investment Companies

1. Securities investment funds and securities investment companies may only engage in indirect foreign investment in investment instruments prescribed in the charter of the securities investment fund or securities investment company and in accordance with the provisions of the State Bank of Vietnam.

2. Securities investment funds and securities investment companies are permitted to invest up to twenty percent (20%) of their net asset value as reported in the most recent investment activity report, and shall not exceed the self-trading limit registered and confirmed by the State Bank of Vietnam.

3. The structure of indirect foreign investment, the indirect foreign investment limit, and adjustments to the indirect foreign investment limit of securities investment funds and securities investment companies must comply with investment structure regulations, investment limits, and investment limit adjustments prescribed by laws governing the establishment and management of securities investment funds and laws governing the establishment, organization, operation, and management of securities investment companies.

Article 16. Safe Investment Ratio for Insurance Enterprises

1. Insurance enterprises are permitted to invest indirectly abroad from their own capital in accordance with the provisions of the law. In all cases, the total amount of indirect investment abroad shall not exceed the value determined by subtracting: - The larger amount between the statutory capital and the minimum solvency margin; and - The amount already invested directly abroad (if any), from the enterprise's own capital.

2. Insurance enterprises may freely invest in types of investment instruments prescribed by the State Bank of Vietnam but not exceeding five percent (5%) of the total number of securities circulating of a foreign organization (excluding foreign government bonds) and not exceeding the self-dealing limit registered and confirmed by the State Bank of Vietnam.

3. Quarterly, based on financial conditions, insurance enterprises must reassess their indirect overseas investment activities. If the investment ratio of the enterprise does not meet the provisions of Clause 1 and Clause 2 of this Article, the enterprise must take necessary measures to comply with the investment limits stipulated within three (03) months from the end of the quarter.

Section 2 ACCEPTANCE OF TRUST FOR INDIRECT INVESTMENT ABROAD

Article 17. General Provisions on Acceptance of Trust for Indirect Investment Abroad

1. Fund management companies must register the trust acceptance limit for indirect investment abroad according to the regulations of the State Bank of Vietnam.

2. Fund management companies must accept trust for indirect investment abroad in accordance with the laws on investment and banking after the Securities Commission issues a certificate of registration for accepting trust for indirect investment abroad and the State Bank of Vietnam confirms the registration of the trust acceptance limit.

3. When accepting trust for indirect investment abroad, fund management companies and entrusting organizations must establish a separate contract from the domestic investment trust contract; the fund management company is responsible for ensuring that the entrusting organization meets the conditions prescribed in Article 20 of Decree No. 135/2015/ND-CP. The investment trust contract specifies the amount entrusted, the term of the trust, investment instruments, rights and obligations of the parties, and complies with current legal regulations. The investment trust contract clearly states the termination period of the contract when the fund management company is compelled to have its registration certificate for accepting trust for indirect investment abroad revoked.

4. Entrusting organizations must comply with the regulations on indirect overseas investment capital sources as stipulated in Article 10 of Decree No. 135/2015/ND-CP and bear responsibility for risks associated with the entrusted indirect overseas investment capital.

5. Entrusting organizations and fund management companies must comply with the provisions of Articles 19 and 22 of Decree No. 135/2015/ND-CP.

6. Fund management companies may enter into depositary agreements with foreign depositary organizations permitted to provide depositary services under foreign law. Fund management companies can also enter into depositary agreements with domestic banks to deposit entrusted indirect overseas investment assets. Domestic banks are authorized to delegate foreign depositary organizations to deposit entrusted indirect overseas investment assets and must bear full responsibility for the delegated depositary activities.

7. Within five (05) working days from the date the fund management company signs a depositary agreement with a foreign depositary organization, the domestic bank must sign a delegation depositary agreement with the foreign depositary organization, or when changing the foreign depositary organization, the fund management company must notify the Securities Commission along with the depositary agreement, the delegation depositary agreement, and a copy of the registration certificate for depositary securities or equivalent documentation of the foreign depositary organization.

8. Depositary activities, delegation depositary activities of entrusted indirect overseas investment assets must comply with the regulations on the establishment, organization, and operation of fund management companies and relevant legal regulations.

Chapter V INFORMATION DISCLOSURE AND REPORTING OBLIGATIONS

Article 18. Information Disclosure by Fund Management Companies

1. A fund management company must provide investors with the prospectus and summary prospectus containing information on risks associated with securities investment funds and securities companies when investing indirectly abroad, the responsibilities of custodian banks and supervisory banks in Vietnam for indirect foreign investments, the investment portfolio, and the structure of indirect foreign investments of securities investment funds and securities companies.

2. In case a trustee requests, the fund management company must provide risk management procedures, clearly stating investment limitations, preventive and management methods for risks that the company uses to manage the assets of trustees abroad.

3. For trustees, the fund management company has the responsibility to:

a) Provide deposit agreements and attached documents of indirect foreign investment trust agreements;

b) Report monthly on the status of the investment portfolio according to the laws governing the establishment, organization, and operation of fund management companies;

c) Provide account statements of the investment portfolio, transaction statements confirmed by deposit organizations, information on investment management activities, and answer any inquiries from customers.

4. Upon request, the fund management company has the responsibility to provide the State Securities Commission with the trust agreement for indirect foreign investment along with related documents of the trustee organization as follows:

a) A copy of the audited financial report for the five (5) consecutive years immediately preceding the year of indirect foreign investment, as stipulated in Clause 1, Article 20 of Decree No. 135/2015/ND-CP;

b) A document from the tax authority confirming full compliance with state financial obligations, with no outstanding taxes owed to the state budget up to the time of indirect foreign investment;

c) Documents proving that the foreign currency on the account for indirect foreign investment is self-owned foreign currency;

d) An indirect foreign investment plan approved by the competent authority of the trustee organization (general meeting of shareholders, board of directors, board of members, and equivalents) or another authorized body in accordance with the law;

đ) A report on compliance with laws regarding the management and use of state capital (for trustee organizations with state capital ownership) in the year immediately preceding the year of indirect foreign investment.

Article 19. Reporting Obligations

1. Reporting obligations for securities companies:

a) Within three (3) working days from the date the State Bank of Vietnam confirms the registration of the self-trading limit for indirect foreign investment, the securities company reports to the State Securities Commission on the self-trading limit for indirect foreign investment along with a copy of the confirmation document issued by the State Bank of Vietnam.

b) The securities company reports to the State Securities Commission monthly on the status of self-trading indirect foreign investment according to the model prescribed in Appendix No. 09 issued together with this Circular. The deadline for submitting the report is ten (10) working days from the end of the month.

2. Reporting obligations for fund management companies:

a) Within three (3) working days from the date the State Bank of Vietnam confirms the registration of the self-trading limit and the limit for accepting indirect foreign investment trusts, the fund management company reports to the State Securities Commission on the self-trading limit and the limit for accepting indirect foreign investment trusts along with copies of the confirmation documents issued by the State Bank of Vietnam.

b) The fund management company reports to the State Securities Commission monthly on the status of self-trading indirect foreign investment according to the model prescribed in Appendix No. 10 issued together with this Circular, the implementation status of the limit for accepting indirect foreign investment trusts according to the model prescribed in Appendix No. 11 issued together with this Circular, and the management status of the indirect foreign investment portfolio of the trustee according to the model prescribed in Appendix No. 12 issued together with this Circular. The deadline for submitting the report is ten (10) working days from the end of the month.

3. Reporting obligations for securities investment funds and securities companies:

a) Within three (3) working days from the date the State Bank of Vietnam confirms the registration of the self-trading limit for indirect foreign investment, the securities investment fund and the securities company through the fund management company or the individually managed securities company report to the State Securities Commission on the self-trading limit for indirect foreign investment of the securities investment fund and the securities company along with a copy of the confirmation document issued by the State Bank of Vietnam.

b) The securities investment fund and the securities company through the fund management company or the individually managed securities company report to the State Securities Commission monthly on the status of self-trading indirect foreign investment according to the model prescribed in Appendix No. 13 issued together with this Circular. The deadline for submitting the report is ten (10) working days from the end of the month.

a) Within three (3) working days from the date the State Bank of Vietnam confirms the registration of the self-trading limit for indirect foreign investment, the insurance enterprise reports to the Ministry of Finance on the self-trading limit for indirect foreign investment along with a copy of the confirmation document issued by the State Bank of Vietnam.

b) The insurance enterprise reports to the Ministry of Finance quarterly on the status of self-trading indirect foreign investment according to the model prescribed in Appendix No. 14 issued together with this Circular. The deadline for submitting the report is thirty (30) days from the end of the quarter.

5. Obligation to report to the supervisory bank in Vietnam The supervisory bank in Vietnam shall submit to the State Securities Commission a supervision report on the indirect investment activities abroad of securities investment funds and securities investment companies in accordance with the legal provisions on the establishment and management of securities investment funds and the legal provisions on the establishment, organization of operations, and management of securities investment companies.

6. Securities business organizations and insurance enterprises owned by the State with sixty-five percent (65%) or more of the charter capital that invest indirectly abroad according to approved plans must report to the competent state management agency within twenty-four (24) hours from the time they receive the document approving indirect foreign investment.

7. Within five (05) working days from the date of amending and supplementing the internal procedures for indirect foreign investment, securities business organizations, securities investment companies, and insurance enterprises must submit copies of the amended and supplemented internal procedures for indirect foreign investment to the competent state management agency.

Chapter VI IMPLEMENTATION

Article 20. Implementation Provisions

This Circular takes effect from August 15, 2016.

Article 21. Organization of Implementation

1. The Ministry of Finance, the State Securities Commission, securities business organizations, securities investment funds, securities investment companies, insurance enterprises, and related organizations and individuals are responsible for implementing this Circular.

2. Amendments and supplements to this Circular shall be decided by the Minister of Finance.