Circular No. 213/2012/TT-BTC guiding the activities of foreign investors in the Vietnamese securities market

CIRCULAR

GUIDELINES FOR FOREIGN INVESTORS' ACTIVITIES ON THE VIETNAMESE SECURITIES MARKET

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 Pursuant to the Securities Law dated June 29, 2006;

Pursuant to the Enterprise Law dated November 29, 2005;

Based on the Law Amending and Supplementing Certain Provisions of the Securities Law dated November 24, 2010;

BASED ON THE GOVERNMENT DECREE NO. 58/2012/NĐ-CP OF JULY 20, 2012 DETAILING AND GUIDING THE IMPLEMENTATION OF CERTAIN PROVISIONS OF THE SECURITIES LAW AND THE LAW AMENDING AND COMPLEMENTING CERTAIN PROVISIONS OF THE SECURITIES LAW;

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

At the proposal of the Chairman of the State Securities Commission;

THE MINISTER OF FINANCE ISSUES THIS CIRCULAR TO GUIDE FOREIGN INVESTORS' ACTIVITIES ON THE VIETNAMESE SECURITIES MARKET.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. THIS CIRCULAR GUIDES FOREIGN INVESTORS' TRADING AND SECURITIES INVESTMENT ACTIVITIES ON THE VIETNAMESE SECURITIES MARKET.

2. FOREIGN INVESTORS' INVESTMENT ACTIVITIES NOT COVERED BY THIS CIRCULAR INCLUDE:

a) DIRECT INVESTMENTS AS PROVIDED FOR IN ARTICLE 21 OF THE INVESTMENT LAW;

b) STOCK TRANSACTIONS OF COMPANIES THAT ARE NOT PUBLIC COMPANIES UNDER THE LAWS ON SECURITIES AND THE SECURITIES MARKET, AND SHAREHOLDINGS OF JOINT STOCK COMPANIES.

3. This Circular applies to the following subjects:

a) FOREIGN INVESTORS AS DEFINED IN CLAUSE 6, ARTICLE 2 OF THIS CIRCULAR;

b) DEPOSITORY BANKS, SECURITIES FIRMS, AND OTHER ORGANIZATIONS AND INDIVIDUALS RELATED TO FOREIGN INVESTORS' ACTIVITIES ON THE VIETNAMESE SECURITIES MARKET.

Article 2. Interpretation of Terms

In this Circular, the following terms are understood as follows:

1.  Certified copy IS A CERTIFIED COPY IN ACCORDANCE WITH VIETNAMESE LEGAL PROVISIONS.

2. AUTHORIZED REPRESENTATIVE OF FOREIGN ORGANIZATIONS IS:

a) THE CHAIRMAN OF THE BOARD OF MANAGEMENT, THE CHAIRMAN OF THE BOARD OF MEMBERS, OR THE DIRECTOR (GENERAL DIRECTOR) OF THE FOREIGN ORGANIZATION;

b) AN INDIVIDUAL WHO HAS THE AUTHORITY ACCORDING TO THE CHARTER, CAPITAL CONTRIBUTION AGREEMENTS, OR EQUIVALENT DOCUMENTS OF THE FOREIGN ORGANIZATION TO SIGN DOCUMENTS AND PERFORM TASKS AS PROVIDED FOR IN THIS CIRCULAR;

c) AN INDIVIDUAL AUTHORIZED IN WRITING BY THE FOREIGN NOTARY PUBLIC, OR CONFIRMED BY THE FOREIGN NOTARY PUBLIC OR LAWYER AS HAVING THE AUTHORITY TO REPRESENT THE FOREIGN ORGANIZATION IN ACCORDANCE WITH FOREIGN LEGAL PROVISIONS.

3. TRANSACTION AGENT IS AN INDIVIDUAL IN VIETNAM MEETING THE REQUIREMENTS SET OUT IN CLAUSE 9, ARTICLE 3 OF THIS CIRCULAR, AUTHORIZED BY FOREIGN INVESTORS TO CONDUCT SECURITIES TRANSACTIONS, INVESTMENTS ON THE VIETNAMESE SECURITIES MARKET, DISCLOSE INFORMATION, AND REPORT TO RELEVANT STATE AUTHORITIES IN ACCORDANCE WITH VIETNAMESE LEGAL PROVISIONS.

4.  is a dossier containing all required documents with complete and accurate declarations in accordance with the law. IS A FILE CONTAINING COMPLETE DOCUMENTS AS REQUIRED BY THIS CIRCULAR, WITH CONTENT FULLY DECLARED IN ACCORDANCE WITH LEGAL PROVISIONS.

5. DESIGNATED INVESTMENT CONTRACT IS A CONTRACT BETWEEN THE INVESTOR AND THE SECURITIES FIRM WHERE THE INVESTOR AUTHORIZES THE SECURITIES FIRM TO ACT ON BEHALF OF THE INVESTOR AND ON THE INVESTOR'S ACCOUNT TO PERFORM INVESTMENT ACTIVITIES AT A PREDETERMINED PRICE AND TIME AGREED UPON BY BOTH PARTIES, OR PARTICIPATE IN AUCTIONS TO PURCHASE SECURITIES, OR TO PRIVATIZE STATE ENTERPRISES.

6. Foreign investor INCLUDES THE FOLLOWING ENTITIES:

a) FOREIGN INDIVIDUALS WHO DO NOT HOLD VIETNAMESE CITIZENSHIP, RESIDING ABROAD OR IN VIETNAM;

b) ORGANIZATIONS ESTABLISHED AND OPERATING UNDER FOREIGN LAWS AND THEIR BRANCHES, INCLUDING THOSE OPERATING IN VIETNAM;

c) DOMESTIC ORGANIZATIONS ESTABLISHED AND OPERATING UNDER VIETNAMESE LAWS WITH 100% FOREIGN CAPITAL AND THEIR BRANCHES;

d) SUB-FUNDS, SINGLE SECURITIES INVESTMENT COMPANIES WHERE FOREIGN PARTIES HAVE MORE THAN 49% OF THE CAPITAL CONTRIBUTIONS AS STATED IN THE FUND CHARTER OR SECURITIES INVESTMENT COMPANY CHARTER;

e) OTHER CASES AS PROVIDED FOR BY THE PRIME MINISTER.

7. GROUPS OF RELATED FOREIGN INVESTORS INCLUDE FOREIGN ORGANIZATIONS RELATING TO EACH OTHER AS FOLLOWS:

a) FUNDS MANAGED BY THE SAME FUND MANAGEMENT COMPANY, INCLUDING DOMESTIC AND FOREIGN FUND MANAGEMENT COMPANIES;

b) FUNDS OF THE SAME PARENT FUND (MASTER FUND), SUB-FUNDS OF THE SAME FUND, FUNDS FUNDED BY THE SAME FEEDER FUND;

c) PORTFOLIO INVESTMENTS MANAGED BY DIFFERENT FUND MANAGEMENT COMPANIES (MULTIPLE INVESTMENT MANAGERS FUND - MIMF);

d) FUNDS WITH THE SAME TRANSACTION AGENT.

8. Securities Trading Organization INCLUDE SECURITIES COMPANIES, FUND MANAGEMENT COMPANIES, AND FOREIGN FUND MANAGEMENT COMPANY BRANCHES OPERATING IN VIETNAM.

9. Depositary member ARE SECURITIES COMPANIES AND COMMERCIAL BANKS THAT HAVE BEEN ISSUED REGISTRATION CERTIFICATES FOR DEPOSITORY SERVICES BY THE SECURITIES COMMISSION AND REGISTERED AS MEMBERS OF THE SECURITIES DEPOSITORY CENTER.

Chapter II

SECURITIES INVESTMENT ACTIVITIES

Article 3. Foreign investors' securities investment activities

1. Foreign investors shall carry out investments on the Vietnamese securities market in the following forms:

a) Directly conducting securities investment transactions through buying and selling shares, bonds, various types of securities, capital contributions... in accordance with securities laws, securities market regulations, and related legal documents;

b) Indirectly investing in the Vietnamese securities market through entrusting funds to fund management companies or branches of foreign fund management companies operating in Vietnam in compliance with relevant legal provisions.

2.  Prior to implementing investment activities as stipulated in point a, Clause 1 of this Article, foreign investors must register their securities trading codes with the Securities Depository Center in accordance with Article 4 of this Circular.

3.  In addition to the transaction forms prescribed in Clause 1 of this Article, foreign investors who have registered their securities trading codes may:

a) Authorize a representative to conduct investment and trading activities on their behalf. Such authorization does not include asset management, account management, investment decision-making, divestment, selection of security types, transaction volumes, prices, and timing of transactions;

b) Authorize a securities company to manage their securities trading accounts in accordance with laws governing the establishment, organization, and operation of securities companies. This provision applies only to individual foreign investors;

c) Entrust a fund management company or branch of a foreign fund management company in Vietnam to manage their securities investment portfolios on customer trading accounts or conduct investment activities on behalf of customers.

4. Foreign investors engaging solely in investment activities as stipulated in point b, Clause 1 of this Article are not required to register their securities trading codes. In such cases, the fund management company or branch of a foreign fund management company providing asset management services for foreign investors will be issued a securities trading code registration certificate by the Securities Depository Center.

5. Foreign investors must ensure that transactions as prescribed in Clause 1 of this Article and those conducted by related parties or groups of related foreign investors do not aim to create artificial supply and demand, manipulate security prices, or engage in other prohibited trading activities as stipulated by law.

6. Foreign investors shall fulfill tax declaration, payment, and settlement obligations related to securities activities in Vietnam in accordance with Vietnamese laws, or authorize members of the depository, securities business organizations, or their representative offices, or trading representatives to fulfill these obligations in accordance with Vietnamese laws.

7. Foreign investors, trading representatives, and securities business organizations providing services to foreign investors under designated investment contracts or investment management contracts must comply with current legal provisions regarding the foreign ownership ratio in Vietnamese enterprises.

8. Foreign investors and groups of related foreign investors are responsible for fulfilling reporting and disclosure obligations concerning securities transactions in accordance with securities market information disclosure laws based on the following principles:

a) Foreign investors shall either conduct the reporting and disclosure obligations themselves or designate one (01) depository member or one (01) securities business organization or their representative office (if any) or another organization, or authorize one (01) individual to perform the reporting and disclosure obligations as prescribed by law;

b) Groups of related foreign investors shall designate one (01) depository member or one (01) securities business organization or their representative office (if any) or another organization, or authorize one (01) individual to perform the reporting and disclosure obligations concerning transactions that require reporting and disclosure as prescribed by law applicable to related persons;

Notifications regarding the designation of organizations or authorizations of individuals to perform reporting and disclosure obligations must be prepared according to the form specified in Appendix 19 attached to this Circular and submitted to the State Securities Commission, Stock Exchange, and Securities Depository Center at least five (05) days before the designation or authorization takes effect, accompanied by a valid copy of the establishment and operation permit or business registration certificate or fund registration certificate or equivalent document (of the designated organization); or a valid copy of the identity card or passport still in effect or other legal personal identification (of the authorized individual), and Vietnamese translations of the aforementioned documents in accordance with point c, Clause 2 of Article 4 of this Circular;

c) Foreign investors and groups of related foreign investors are responsible for providing complete information about their securities holdings to enable the designated organization or authorized individual to fully perform the reporting and disclosure obligations as prescribed by law.

9. Trading representatives for foreign investors in Vietnam must meet the following conditions:

a) Having full civil and legal capacity; not being in a situation where they are serving a prison sentence or are prohibited from engaging in business by a court;

b) Holding a securities business practice certificate;

c) Not simultaneously being an employee of a securities business organization or a securities depositary bank operating in Vietnam;

d) Being the sole trading representative in Vietnam for the foreign investor and authorized in writing by the foreign investor.

Article 4. Registration of Trading Code for Securities

1. Foreign investors shall directly or authorize depositary members to register the trading code for securities at the Securities Depository Center. The registration dossier for the trading code for securities includes the following documents:

a) A registration form for the trading code for securities established by foreign investors or depositary members according to the model prescribed in Appendix 1 or Appendix 2 issued together with this Circular. In case foreign investors authorize depositary members to handle the registration procedures for the trading code for securities, the accompanying documents include the registration form for the trading code for securities established by depositary members according to the model prescribed in Appendix 3 issued together with this Circular and a valid copy of the authorization document for depositary members;

b) For organizational investors: Identification documents of foreign investors as prescribed in Appendix 15 issued together with this Circular.

For individual investors: A valid copy of a passport still in effect or other lawful personal identification documents;

c) A valid copy of the principle agreement on opening a securities trading account (if any); a valid copy of the agreement or principle agreement on depositing assets with domestic depositary members or a valid copy of the authorization document for depositary activities in Vietnam (if any); a valid copy of the agreement on opening an indirect investment capital account or the agreement on opening a contribution account to purchase shares at commercial banks (if any);

d) In case foreign investors have transaction representatives, additional documents include:

-  A document appointing transaction representatives according to the model prescribed in Appendix 13 issued together with this Circular;

-  An Information Form about Transaction Representatives according to the model prescribed in Appendix 14 issued together with this Circular;

-  A valid copy of the identity card or passport still in effect or other lawful personal identification documents of transaction representatives;

-  A valid copy of the securities business license certificate;

2.  The dossier prescribed in Clause 1 of this Article shall be established in two (02) sets, one original set and one duplicate set. Each set consists of two (02) copies, one (01) copy in Vietnamese and one (01) copy in the original language, and shall be sent directly or via postal service to the Securities Depository Center; Where:

a) Except for documents extracted from the electronic information page of the competent authority of a foreign country, other documents issued by the competent authority of the original country must be notarized, certified according to foreign laws and legalized consular according to relevant Vietnamese laws;

b) Documents prescribed in Points b, c, d of Clause 1 of this Article, if established by foreign investors themselves, only need to be notarized and certified according to foreign laws;

c) Foreign language documents must be translated into Vietnamese by depositary members, or by legitimate translation organizations operating in Vietnam or abroad. If depositary members perform the translation, they must attach a written confirmation from the depositary member regarding the accuracy and truthfulness of the translation;

d) Foreign language documents must be notarized and certified within a period not exceeding nine (09) months from the date of submission of the dossier to the Securities Depository Center;

3. Investors are responsible for the legality, accuracy, and truthfulness of all documents and information contained in the dossier. During the time the Securities Depository Center reviews the registration dossier for the trading code for securities, investors must amend and supplement when requested by the Securities Depository Center. Amendments and supplements must bear the signatures of those who signed the dossier submitted to the Securities Depository Center or persons authorized in writing by those who signed the dossier or persons holding the same position and authority as those who signed the dossier;

4. Within five (05) days for organizational investors and three (03) days for individual investors, starting from the day of receiving the complete dossier as prescribed in Clauses 1 and 2 of this Article, the Securities Depository Center will issue the trading code for securities to investors. In case of refusal, the Securities Depository Center must provide a written response and clearly state the reasons;

5. In case investors meet all the conditions below, the Securities Depository Center may issue a registration certificate for the trading code for securities to investors before having all documents fully legalized consular as prescribed in Point a of Clause 2 of this Article:

a) Having all foreign language documents authenticated and notarized according to foreign laws and translated into Vietnamese as prescribed in Point c of Clause 2 of this Article;

b) Being customers of depositary members and having been thoroughly assessed and compiled with full customer due diligence (KYC) information according to their internal regulations, accompanied by the investor's commitment regarding full responsibility for the legality, accuracy, and truthfulness of foreign language documents as well as their legal status, and the depositary member's commitment regarding thorough assessment and compilation, provision of full KYC information according to internal regulations, and submission of all documents provided by foreign investors;

6. Within a maximum of nine (09) months from the date of issuance of the registration certificate for the trading code for securities, investors are responsible for completing and providing to the Securities Depository Center, through depositary members, all valid documents as prescribed in Clauses 1 and 2 of this Article;

7.  Foreign investors shall not be considered for issuance of a registration certificate for the trading code for securities in any of the following cases:

a)  Currently under investigation or previously penalized by the competent authority in Vietnam or abroad for prohibited acts as stipulated in Article 9 of the Securities Law, money laundering acts; or other serious violations penalized with fines or higher in the financial, banking, foreign exchange management, and tax sectors that have not yet expired the administrative penalty processing period or have not fully implemented the administrative penalty decision;

b) Having had the trading code for securities revoked within two (02) years prior to the date of submitting the registration dossier for the trading code for securities.

8. The application dossier for registering the securities trading code for the investment portfolio managed by foreign fund management companies or their branches in Vietnam includes the following documents: The documents specified in point a, Clause 1 of this Article;

a) A certified copy of the deposit agreement signed between the foreign fund management company or its branch in Vietnam and the domestic depositary bank;

b) A certified copy of the establishment and operation permit for the foreign fund management company or its branch in Vietnam;

c) According to the provisions of Clause 8 of this Article, the application dossier shall be prepared in two (02) sets, one (01) original set and one (01) duplicate set, to be submitted directly or sent via postal service to the Securities Depository Center.

9. Within three (03) working days from the date when the dossier is complete and valid, the Securities Depository Center will issue

10. a certificate of registration for the securities trading code to the foreign fund management company or its branch in Vietnam. In case of rejection, the Securities Depository Center must provide a written response stating the reasons. Within seven (07) working days after appointing or supplementing depositary members in accordance with the law, the foreign investor or the foreign fund management company or its branch in Vietnam must notify the Securities Depository Center about the depositary member according to the form prescribed in Appendix 4 issued together with this Circular, along with a certified copy of the account opening agreement or authorization document for depositary activities. This provision does not apply in cases of changing the depositary bank as stipulated in Article 5 of this Circular.

11. A foreign securities company is granted two (02) securities trading codes: one (01) code for the proprietary account and one (01) code for the brokerage account of the company.

12. If a foreign securities company has already been granted one (01) securities trading code, the application dossier for registering an additional securities trading code includes the documents specified in point a, Clause 1 of this Article, accompanied by a certified copy of the previously issued securities trading code registration certificate.

Foreign investment funds managed by multiple fund management companies (Multiple Investment Managers Fund - MIMF) can register multiple securities trading codes based on the principle that investment portfolios managed by the same fund management company shall be registered under one securities trading code. The application dossier for registering the securities trading code shall comply with the provisions of Clause 1 of this Article. For additional securities trading code registration, the dossier includes the documents specified in point a, Clause 1 of this Article, accompanied by a certified copy of the previously issued securities trading code registration certificate and related documents as prescribed in Appendix 15 issued together with this Circular.

13. Article 5. Changes to Report to the Securities Depository Center

Before implementing the changes below, foreign investors must report to the Securities Depository Center:

1. Change of transaction representative;

a) Transfer of investment portfolios among deposit accounts as stipulated in Clause 2, Article 8 of this Circular.

b) The reporting dossier for the changes specified in Clause 1 of this Article includes:

2. Reports on changes prepared by the investor and depositary member according to the forms prescribed in Appendices 5 and 6 issued together with this Circular, accompanied by the authorization document for the new depositary member to report on related changes;

a) Depending on the nature of the change, the dossier may include:

b) Relevant documents regarding the new transaction representative as specified in point d, Clause 1 of this Circular, accompanied by a notice terminating the authorization for the old transaction representative;

- Detailed reports on the investment portfolio on the old deposit account according to the form prescribed in Appendix 16 issued together with this Circular; the master agreement or notice from the old depositary member regarding the termination of the deposit agreement; the master agreement for opening a new deposit account or a certified copy of the authorization document for depositary activities in Vietnam; the application for closing the old deposit account or transferring securities as guided by the Securities Depository Center.

- The reporting dossier for the changes specified in Clause 2 of this Article shall be prepared in one (01) original set. The original dossier shall be submitted directly or sent via postal service to the Securities Depository Center.

3. Within three (03) working days from the date of receiving a complete and valid dossier as stipulated in Clause 2 of this Article, the Securities Depository Center will confirm in writing the changes requested by the foreign investor, and simultaneously transfer the securities portfolio of the foreign investor to the new depositary member. In case of rejection, the Securities Depository Center must provide a written response stating the reasons. The above changes only take effect after the Securities Depository Center issues a written response.

4. Within a maximum period of forty-five (45) days from the date of the change, the foreign investor must report to the Securities Depository Center on the following changes:

5. Change of the depositary bank where the indirect investment capital account is opened;

a) Change of name; main office address; contact address of the investor or the transaction representative (if any);

b) Change of passport number or other lawful personal identification (for individual foreign investors); business registration license number or equivalent identification documents for foreign organizational investors issued by foreign state management agencies as specified in point b, Clause 1 of this Circular (for organizational foreign investors);

c) Change in legal status, operational model related to splitting, merger, consolidation, takeover;

d)  e) Other changes in the securities trading code registration dossier.

The reporting dossier for the changes specified in Clause 5 of this Article includes:

6. The documents specified in point a, Clause 2 of this Article;

a) The documents prescribed in point a, Clause 2 of this Article;

b) Depending on the nature of the change, the supplementary documents include: the bank's confirmation document of the new indirect investment capital account; a valid copy of the new passport or other lawful personal identification; a valid copy of the documents verifying the change in the investor's name, main office, contact address, legal status, and organizational structure; other documents identifying foreign investors as prescribed in Appendix 15 issued together with this Circular.

In the case of a name change, the document confirming the name change shall be one of the following:

- A business registration certificate or establishment and operation permit or equivalent document verifying that the foreign investor has changed its name, including the old and new names of the foreign investor; or a prospectus or equivalent document of a foreign fund published on the website of the foreign regulatory authority where the fund was registered for establishment and operation, clearly stating the name change; or a tax registration certificate of the foreign investor under the new name (with unchanged tax code); or other documents bearing the new name accompanied by a notarized certification from a foreign notary regarding the name change of the foreign investor.

7. Foreign language documents in the file specified in point b clause 2, point b clause 6 Article 4 of this Circular must be notarized or certified according to the laws of the foreign country, except when the signatories of these documents are the same individuals who signed the securities trading code registration file as stipulated in point a clause 1 Article 4 of this Circular. The translation of foreign language documents into Vietnamese shall be carried out in accordance with the provisions of point c clause 2 Article 4 of this Circular.

8. Within nine (09) months from the date of notification to the Securities Depository Center about the changes specified in clause 1, clause 5 of this Article, the investor, through the depositary member, is responsible for submitting additional documents issued by the competent foreign authority and legalized according to the law on legalization.

9. Within two (02) working days from the date of receiving a complete and valid file as prescribed in clause 6, clause 7 of this Article, the Securities Depository Center confirms in writing the requested changes of the foreign investor. These changes only take effect after the Securities Depository Center issues a written response.

Article 6. Suspension of Trading, Cancellation of Securities Trading Code

1. The State Securities Commission has the right to suspend the trading of foreign investors for a maximum of six (06) months in the following cases:

a) When discovering that the securities trading code registration file of foreign investors contains inaccurate information or omits important contents required in the file as prescribed in clause 6 Article 4, clause 8 Article 5 of this Circular; failing to supplement the file as prescribed.

b) Foreign investors or groups of related foreign investors report or provide documents containing inaccurate, incomplete, or untimely information as required by the State Securities Commission; failing to fulfill the obligation to report ownership and disclose information as prescribed by law.

c) Foreign investors engage in prohibited acts as stipulated in Article 9 of the Securities Law.

d) Foreign investors violate regulations on foreign exchange management under Vietnamese law; failing to fully perform tax obligations and other financial obligations to the State as prescribed by law.

2. The Securities Depository Center cancels the securities trading code of foreign investors upon a written request of the State Securities Commission in the following cases:

a) Exceeding the suspension period prescribed in clause 1 of this Article without rectifying the deficiencies leading to the suspension.

b) Foreign investors voluntarily request the cancellation of their securities trading code. The notice of cancellation of the securities trading code shall be implemented according to the model prescribed in Appendices 17 and 18 issued together with this Circular.

3. Foreign investors whose securities trading code is canceled as prescribed in point a clause 2 of this Article shall not be considered for reissuing the securities trading code within a period of two (02) years from the date of cancellation of the securities trading code.

Article 7. Indirect Investment Capital Account

1. Each foreign investor is allowed to open one (01) indirect investment capital account at one (01) permitted custodian bank for the purpose of conducting indirect investment activities in Vietnam.

2. All transactions for transferring funds to carry out the trading and investment activities specified in Clause 1, Article 3 of this Circular, other payments related to the foreign investor's securities investment activities; receiving and using dividends, interest income, purchasing foreign currency from credit institutions permitted to operate foreign exchange business in Vietnam to transfer abroad, and other related transactions must be conducted through this account.

3. In the business of managing investment portfolios for foreign investors, fund management companies, branches of foreign fund management companies in Vietnam may open indirect investment capital accounts to accept capital from foreign investors who do not have their own indirect investment capital accounts. In this case, the indirect investment capital account will be named after the fund management company or its branch in Vietnam.

4. The subjects implementing, conditions, procedures, formalities for opening, closing, using, and managing indirect investment capital accounts shall be carried out in accordance with the provisions of the laws on foreign exchange management.

Article 8. Securities Custody Account

1.  In the case of depositing assets at a custodian bank:

a) After registering the securities trading code, foreign securities companies, wholly foreign-owned insurance enterprises are allowed to open two securities custody accounts at a custodian bank. Foreign investment funds managed by multiple fund management companies (MIMF) can open multiple securities custody accounts according to the principle that each securities trading code issued allows for the opening of one securities custody account at a custodian bank. Other foreign investors are only permitted to open a single securities custody account at a custodian bank.

This provision does not apply to the case where foreign investors deposit securities in trading accounts opened at securities companies.

b) Opening a securities custody account at a custodian bank shall be carried out in accordance with the provisions of the laws on registration, custody, settlement, and securities payment. All securities payment and custody entries of foreign investors must be recorded on this account.

2. Foreign investors have the right to transfer the entire portfolio of securities from one securities custody account (closing the securities custody account) to another securities custody account. In the case where foreign investors deposit assets at a custodian bank as stipulated in Clause 1 of this Article, before opening a new securities custody account at a custodian bank, foreign investors must close their current securities custody account and transfer the entire balance on this account to the new account. Procedures for transferring securities portfolios between securities custody accounts shall be carried out in accordance with Article 5 of this Circular and the provisions of the laws on registration, custody, settlement, and securities payment.

Article 9. Responsibilities of Individuals and Organizations in Providing Services to Foreign Investors

1. Securities companies providing investment services upon designation by foreign investors must ensure:

a) Compliance with the provisions of the laws on securities regarding the guarantee of margin requirements, management of customer funds and securities, and other regulations concerning brokerage and advisory services;

b) Prevention of conflicts of interest with customers; securities companies and securities practitioners must inform customers in advance about potential conflicts of interest that may arise between the company, securities practitioners, and customers;

c) Securities companies may not make investment decisions on behalf of customers. All transactions can only be executed during the validity period of the designated investment contract and after receiving valid trading orders or instructions from the investor. Trading orders or instructions are only effective once.

The designated investment contract signed with the securities company must include the main contents as set forth in Appendix 12 attached to this Circular. The designated investment contract must clearly state that the foreign investor is responsible for investment decisions, and the company only executes transactions based on the investor's instructions. The contract must also detail the scope of authorization, level of transaction authorization, duration of authorization, method of issuing investment instructions, and payment methods along with information and signature samples of authorized persons to place orders, authorize transactions, and invest;

d) The investment instruction of the foreign investor must include information on the type of securities, quantity, price of securities, and time of execution, validity period of the instruction. The foreign investor's investment instruction to the securities company must be stored for a period of five (05) years and provided to the State Securities Commission upon request.

2. Securities companies providing individual foreign investor trading account management services in accordance with the laws on the establishment, organization, and operation of securities companies.

3. Fund management companies, branches of foreign fund management companies in Vietnam providing asset management services to foreign investors may:

d) Collect information, analyze, and provide analysis results on securities and the securities market, or projects to investors; advise on investment strategies and tactics, advise on investment portfolio structure and allocation; advise on legal regulations, procedures, and processes for investment, auctions, and transactions for investors;

e) Carry out transactions and investments after being approved by the investor or after obtaining the investor's consent on the investment plan; or

Policy Bureau, General Political Department  Make investment and divestment decisions in accordance with the terms of the contract signed with the client. Investment and divestment decisions include selecting securities, investment projects, choosing prices, contribution values, timing of transactions, and investment implementation.

4. In the case where foreign investors participate in auctions to purchase securities, the securities business organization entrusted to represent foreign investors in the auction must comply with the following conditions:

g) Ensuring that the foreign investor has deposited sufficient funds in their account to participate in the auction in accordance with the provisions of the law;

h)||| Processing registration procedures for foreign investors to participate in the auction separately;

i) Ensuring that the investment in securities and the purchase of shares for foreign investors comply with the legal regulations on the proportion of ownership of foreign parties in Vietnamese enterprises;

d) Having the responsibility to allocate assets fairly and reasonably to each foreign investor in accordance with the designated investment contract and the investment management contract signed with the foreign investor;

5. When conducting transactions for foreign investors, the representative of the foreign investor must ensure:

j) Compliance with legal regulations in the field of securities;

k) Executing transactions and settlements strictly according to the trading orders and instructions from the foreign investor, not directly making investment decisions including the selection of types of securities, quantities, prices, and timing of transactions without receiving trading orders or investment instructions from the foreign investor. Trading orders and investment instructions from the foreign investor must comply with the provisions set out in point d, Clause 1 of this Article;

l) Not colluding with domestic and foreign investors to carry out purchases and sales of securities to create artificial supply and demand; engaging in securities transactions through collusion, enticing others to continuously buy and sell to manipulate the price of securities;

m) Participating in training courses on laws and fulfilling reporting obligations when requested in writing by the State Securities Commission;

6. The Securities Depository Center, depositary members, and securities businesses providing services to foreign investors have the responsibility to keep confidential information about foreign investors in accordance with relevant laws and provide it to competent state management authorities upon written request;

Article 10. Reporting Obligations and Record Keeping for Foreign Investor Investment Activities

1. Depositary members must establish and retain records and documents regarding deposit activities on the foreign investor's deposit account. These documents must be provided to competent authorities for inspection and audit purposes as required by the State Securities Commission, including documents within the scope regulated by the provisions on investor information and the confidentiality of such information under the law;

2. Depositary members must report to the State Securities Commission monthly statistical data on the deposit accounts and asset portfolios of foreign investors in accordance with Appendix 7 issued together with this Circular. If the depositary member is a branch of a foreign credit institution or a credit institution established in Vietnam with one hundred percent (100%) foreign capital, they must supplement reports on their investment activities and investment portfolios in accordance with the form prescribed in Part IV of Appendix 7 issued together with this Circular;

3. The bank where the foreign investor opens an indirect investment capital account or a share purchase capital contribution account must report to the State Securities Commission bi-weekly (on the 15th and 30th of each month) on the capital flow activities of the foreign investor in these accounts in accordance with the form prescribed in Part III of Appendix 7 issued together with this Circular;

4.  Securities businesses must report monthly on the management of investment portfolios and designated investments for foreign investors in accordance with the form prescribed in Appendix 8 issued together with this Circular;

5. The representative of the foreign investor has the responsibility to report on designated investments for the foreign investor in accordance with the form prescribed in Appendix 9 issued together with this Circular when requested by the State Securities Commission;

6.  The Securities Depository Center must report to the State Securities Commission monthly on the issuance of trading codes for foreign investors and changes in their status (if any) in accordance with the reporting form prescribed in Appendix 10 issued together with this Circular;

7. The Stock Exchange must report daily, monthly, and annually on the trading activities of foreign investors in accordance with the form prescribed in Appendix 11 issued together with this Circular;

8. The deadline for submitting reports as stipulated in Clauses 2, 3, 4, 5, 6, and 7 of this Article:

a) Before 16:00 every day for daily reports;

b) Within three (03) days after the 15th and 30th of each month for reports on the capital flow activities of foreign investors;

c) Within five (05) days from the end of the month for monthly reports;

d) Within ninety (90) days from the end of the year for annual reports;

9. In cases of necessity, the State Securities Commission may require the Securities Depository Center, Stock Exchange, securities businesses, depositary members, transaction representatives, or direct investors to report on the activities of foreign investors;

10. The Securities Depository Center, Stock Exchange, securities businesses, and depositary members must report to the State Securities Commission within forty-eight (48) hours from the time they receive the reporting request as stipulated in Clause 9 of this Article;

11. Reports from the Stock Exchange, Securities Depository Center, securities businesses, and depositary members as stipulated in this Article must be submitted along with electronic data files to the State Securities Commission and must be retained for a minimum period of five (05) years;

Chapter III

IMPLEMENTING PROVISIONS

Article 11. Effective Date

This Circular takes effect from February 15, 2013, and replaces Decision No. 121/2008/QD-BTC dated December 24, 2008, of the Minister of Finance on the issuance of the Regulations on the Activities of Foreign Investors in the Vietnamese Securities Market.

Article 12. Implementation Organization

1. Within six (06) months from the date this Circular takes effect, the relevant group of foreign investors shall be responsible for notifying the State Securities Commission, the Securities Depository Center, and the Stock Exchange of the authorized representative to fulfill the obligation of reporting and disclosing information in accordance with the form prescribed in Appendix 19 attached to this Circular.

2. The State Securities Commission, the Securities Depository Center, the Stock Exchange, securities business organizations, depository members, and related organizations and individuals shall be responsible for organizing the implementation.

3. Any amendments or supplements to this Circular shall be decided by the Minister of Finance.