Circular No. 227/2012/TT-BTC guiding the establishment, organization of operations, and management of investment securities companies

CIRCULAR

Guidelines for Establishing, Organizing Operations, and Managing Investment Securities Companies

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 Enterprise Law dated November 29, 2005;

Pursuant to Decree No. 58/2012/NĐ-CP dated July 20, 2012 of the Government detailing and guiding the implementation of certain provisions of the Securities Law and the Law Amending and Supplementing 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 guiding the establishment, organization of operations, and management of investment securities companies.

PART I

GENERAL PROVISIONS

Article 1. Scope of regulation, applicable subjects

1. This Circular stipulates the raising of capital, establishment, management, and supervision of public investment securities company and individual investment securities company operations in Vietnam.

2. The subjects to which this Circular applies include:

a) Fund management companies, depository banks, supervisory banks;

b) Public investment securities companies, individual investment securities companies;

c) Board of directors, board members of investment securities companies, shareholders of investment securities companies;

d) Related organizations and individuals.

Article 2Definitions

In addition to terms defined in Decree No. 58/2012/NĐ-CP dated July 20, 2012 of the Government detailing and guiding the implementation of certain provisions of the Securities Law and the Law Amending and Supplementing Certain Provisions of the Securities Law (hereinafter referred to as Decree No. 58/2012/NĐ-CP) in this Circular, the following terms shall be understood as follows:

1. Distributor means a securities company or a fund management company.

2. Liquidation Value of a share is determined by dividing the net asset value of the issuer by the total number of shares outstanding.

3. Individual dossier includes the information provision form prescribed in Appendix No. 21 issued together with this Circular, a certified copy of the identity card, passport still valid, or other legally recognized personal identification.

4. is a dossier containing all required documents with complete and accurate declarations in accordance with the law. is a complete set of documents in accordance with this Circular, containing fully disclosed information as required by law.

5. Valuation Date is the date designated by the fund management company to determine the net asset value of the investment securities company.

6. Fund Manager is a fund manager appointed by the fund management company to manage and operate the investment securities company.

7. Group of Companies with Ownership Relationships refers to organizations related to each other as follows:

a) Parent-Subsidiary Company (holding fifty-one percent (51%) or more of the charter capital);

b) Joint Venture Company (holding fifty percent (50%) of the charter capital);

c) Associated Company (holding thirty percent (30%) or more of the charter capital).

8. Charter Capital of Investment Securities Company is the actual contributed capital of shareholders recorded in the charter of the investment securities company.

Article 3. General Provisions on Investment Securities Companies

1. Investment securities companies include public investment securities companies and individual investment securities companies.

2. The name of an investment securities company must comply with legal regulations on enterprises, be written in Vietnamese, may include numbers and symbols, be pronounceable, and contain at least two elements:

a) The phrase “investment securities company”;

b) Specific name.

3. A public investment securities company must entrust its capital to a fund management company for management. This capital management activity is supervised by a supervisory bank.

An individual investment securities company may entrust its capital to a fund management company for management or manage it itself. In the case of entrusting capital to a fund management company for management, at least two-thirds (2/3) of the board members of the individual investment securities company must be independent members as stipulated in Clause 1, Article 80 of Decree No. 58/2012/NĐ-CP.

4. All assets of the investment securities company must be registered in the name of the investment securities company and deposited with a supervisory bank or depository bank (in the case of self-management). If they are cash, they must be deposited in a bank account in the name of the investment securities company.

The assets of the investment securities company belong to the shareholders corresponding to their contribution ratio and are not the property of the fund management company, supervisory bank, or depository bank. The fund management company can only use these assets to settle the financial obligations of the investment securities company and cannot use them to settle or guarantee the settlement of the financial obligations of the fund management company, supervisory bank, or any other organization or individual under any circumstances.

5. An investment securities company shall not establish branches or representative offices. An investment securities company that entrusts its capital to a fund management company for management may use the headquarters of the fund management company as its main office.

6. An investment securities company that entrusts its capital to a fund management company for management shall not recruit staff. The Director (General Director), Deputy Director (Deputy General Director) of such company is the fund manager appointed by the fund management company and must comply with the regulations applicable to securities business practitioners and fund managers under the laws on establishing, organizing, and operating fund management companies.

7. An investment securities company shall issue only one type of share and has no obligation to repurchase issued shares, except when purchasing for cancellation in mergers or acquisitions with another investment securities company.

8. Where the charter of the investment securities company provides for foreign investors to hold more than 49% of the charter capital, the investment securities company must register a trading code for securities and be subject to legal restrictions on ownership applicable to foreign investors.

9. The articles of incorporation of the securities investment company and the prospectus, summary prospectus shall be prepared according to the model prescribed in Appendix 03, 04, and 05 issued together with this Circular. Any amendments or supplements to the articles of incorporation must be approved by the shareholders' meeting of the securities investment company. In cases where the articles of incorporation permit, the fund management company (if any) and the board of directors of the securities investment company may correct grammatical, typographical, or stylistic errors that do not affect the content of the articles of incorporation without having to seek the opinion of the shareholders' meeting. After making such corrections or supplements, the fund management company (if any) and the board of directors of the securities investment company must notify the shareholders of the contents of the amendments or supplements.

10. The disclosure of information by the securities investment company shall be carried out through one of the following means:

a) On the website of the fund management company, securities investment company (in case it manages its own capital). Information on the issuance, additional issuance, and other cases deemed necessary must also be disclosed simultaneously on the website of the supervisory bank, depositary bank, and distribution agent;

b) Through the mass media of the Securities Depository Center, Stock Exchange (for public securities investment companies);

c) Other mass media as prescribed by laws on the disclosure of information in the securities market.

Chapter II

PUBLIC SECURITIES INVESTMENT COMPANY

Section 1. ESTABLISHMENT OF THE COMPANY

Article 4. Registration for offering and issuing shares of public securities investment companies

1. The offering and issuance of shares of public securities investment companies to the public includes the initial offering to raise funds for establishment and additional issuance to increase capital.

2. The initial offering of shares to the public must be registered with the State Securities Commission and comply with the following provisions:

a) The total value of shares registered for offering must reach at least fifty billion Vietnamese dong;

b) The fund management company must have sufficient capital as prescribed by laws on the establishment, organization, and operation of fund management companies; it must not be placed under operational control, special control, temporary suspension of operations, cessation of operations, or undergoing merger, consolidation, dissolution, or bankruptcy;

c) The fund management company must not be in a state of being penalized for violations in the securities sector without fully implementing the sanctions and remedying the consequences as decided by the competent state agency.

3. Additional issuance of shares of securities investment companies must be registered with the State Securities Commission through the fund management company and comply with the following provisions:

a) Meeting the conditions stipulated in Clause 1 and Clause 2 of Article 94 of the Securities Law;

b) Having a share issuance plan and capital usage plan that has been approved by the most recent shareholders' meeting of the securities investment company. The approved plan must include the following contents:

- Information on the subscription ratio; principles and methods for determining the issue price; the expected degree of dilution of shares after issuance; methods for determining the issue price; the successful issuance rate or minimum amount raised in the issuance round and the handling plan in case the successful issuance rate is not achieved or the minimum amount is not reached as planned; criteria for selecting investors for issuance and methods for determining issuance conditions in case the expected additional shares are not fully distributed;

- Information on the capital usage plan; objectives, plans, and disbursement schedules (if applicable);

c) The issuance documents, issuance time, specific issue price, criteria for determining and the target audience for the offering in case the expected subscription rights are not fully distributed must be approved by the board of directors of the securities investment company;

d) Only existing shareholders of the securities investment company can subscribe to new shares through the issuance of subscription rights. Subscription rights are transferable. If existing shareholders do not exercise their subscription rights, the securities investment company may offer the shares to other investors.

4. The registration documents, procedures, and formalities for offering shares to the public of securities investment companies shall be implemented according to the provisions of Article 78 of Decree No. 58/2012/ND-CP. The registration form for offering and additional issuance of shares to the public shall be in accordance with the model prescribed in Appendix 01 issued together with this Circular.

5. The registration documents for additional issuance of shares include:

a) Documents as prescribed in point a, point b, point c of Clause 1 of Article 78 and other related documents as prescribed in Article 82 of Decree No. 58/2012/ND-CP;

b) Minutes and resolutions of the shareholders' meeting of the securities investment company approving the additional issuance of shares, issuance plan, and capital usage plan; minutes and resolutions of the board of directors of the securities investment company approving the registration documents and the contents prescribed in point c of Clause 3 of this provision;

c) Annual financial report of the year immediately preceding the proposed additional issuance of shares, audited by an approved auditing organization, ensuring that the profit of the securities investment company in that year must be positive.

6. The registration documents for additional issuance of shares of securities investment companies as prescribed in Clause 5 of this provision shall be compiled into one (01) original set accompanied by an electronic data file. The original set of documents shall be directly submitted to the State Securities Commission or sent via postal service.

7. Within thirty (30) days from the date of receiving complete and valid registration documents as prescribed in Clause 5 of this provision, the State Securities Commission shall issue a certificate of registration for additional issuance of shares to the securities investment company. In case of rejection, the State Securities Commission must provide a written response stating the reasons.

8. The fund management company shall be responsible for and ensure that the information in the application file is accurate, truthful, not misleading, and contains all important contents affecting the investor's decision-making process. During the period when the application file is being reviewed, the fund management company has the obligation to update, amend, and supplement the application file if inaccurate information is discovered, significant new information arises, or important information required to be included in the application file is omitted, or if it deems necessary to clarify issues that may cause misunderstanding. Any amended or supplemented document must bear the signature of those who signed the registration application or of persons holding the same position as those individuals or of the legal representative of the company.

In the case of issuing additional shares of a securities investment company, the fund management company and the board of directors of the securities investment company shall jointly be responsible for ensuring that the issuance application file is accurate and truthful. In this case, any amendments, supplements to the application file, and newly arising information must be announced by the fund management company in accordance with Clause 10, Article 3 of this Circular.

9. During the period when the State Securities Commission reviews the application file, the fund management company, the board of directors of the securities investment company, and related parties of these entities may only use the information in the prospectus submitted to the State Securities Commission truthfully and accurately to survey the market, clearly stating that all information is merely anticipated. Such information provision shall not be made through mass media.

10. The certificate of registration for share offering and the certificate of registration for additional share issuance issued by the State Securities Commission is a confirmation document indicating that the securities investment company's share offering and additional share issuance registration application files meet the conditions and procedures stipulated by law.

Article 5. Offering and Distribution of Shares of Public Securities Investment Companies

1. The offering of shares of a securities investment company to the public can only be carried out after the State Securities Commission issues the certificate of registration for share offering.

2. Within seven (07) days from the date the registration certificate becomes effective, the fund management company shall submit to the State Securities Commission and simultaneously announce the offering notice in accordance with Clause 10, Article 3 of this Circular. The offering notice must contain all contents according to the model specified in Appendix No. 02 attached to this Circular.

3. The fund management company, distribution agents, and underwriting organizations (if any) must distribute the shares of the securities investment company fairly and publicly, ensuring a minimum subscription period of twenty (20) days for investors. This period must be recorded in the offering notice.

If the number of shares subscribed exceeds the number of shares offered, the fund management company must allocate all permissible shares to investors proportionally based on each investor's subscription ratio.

4. All capital contributions of investors must be frozen in a separate account opened at a supervisory bank and can only be released after the establishment and operation license of the securities investment company becomes effective. The supervisory bank is responsible for paying interest to the securities investment company at a minimum rate equal to the current non-interest-bearing rate during the capital freezing period.

5. The fund management company must complete the distribution of the securities investment company's shares within ninety (90) days from the date the registration certificate for public share offering becomes effective. If unable to complete the distribution within this period, the fund management company must submit a request to the State Securities Commission for an extension of the distribution period.

Within seven (07) days from receiving the request from the fund management company, the State Securities Commission will consider extending the share distribution period, but not exceeding thirty (30) days. If rejected, the State Securities Commission must provide a written response and specify the reasons.

6. Within three (03) days from the end of the offering period or the expiration of the registration certificate, the fund management company and the board of directors of the securities investment company must notify the State Securities Commission and simultaneously announce the information in accordance with Clause 10, Article 3 of this Circular regarding the failure of the securities investment company to meet the establishment conditions in any of the following cases:

a) Less than one hundred (100) investors purchase shares, excluding professional securities investors; or

b) The total value of funds raised is less than fifty (50) billion Vietnamese dong or lower than the minimum capital amount expected to be raised as stipulated in the company's charter (if applicable).

7. In the event that the securities investment company fails to meet the establishment conditions as prescribed in Clause 6 of this Article, within fifteen (15) days from the end of the offering period or the expiration of the registration certificate, the fund management company must refund all contributed amounts, including accrued interest (if any), to investors while bearing all costs incurred from raising capital.

8. Suspension and cancellation of the offering period shall be implemented in accordance with Articles 22 and 23 of the Securities Law.

9. In the case of issuing additional shares to increase capital, the procedures and requirements for announcing the issuance and distributing subscription rights for shares shall be carried out in accordance with Clauses 1, 2, 3, 4, and 5 of this Article and other relevant laws on securities and enterprises applicable to listed organizations.

Article 6. Conditions, Documents, Procedures and Formalities for Establishing a Public Securities Investment Company

The conditions, documents, procedures, and formalities for establishing a securities investment company shall be carried out in accordance with the provisions of Article 79 of Decree No. 58/2012/NĐ-CP. The application for a license to establish and operate a securities investment company, and the summary report on the results of the offering shall be prepared according to the forms specified in Appendix No. 06 and Appendix No. 23 issued together with this Circular.

Article 7. Confirmation of Share Ownership Rights

1. Within five (05) days from the date the establishment and operation permit or the adjusted establishment and operation permit for a securities investment company becomes effective, the fund management company and the board of directors of the securities investment company shall be responsible for confirming ownership rights for shareholders of the securities investment company regarding the shares purchased and registering the shareholder ledger with the following main contents:

a) Name and principal address of the fund management company; name and principal address of the supervisory bank; full name, abbreviated name, and English name (if applicable) of the securities investment company; stock code of the listed securities investment company (if applicable);

b) Total number of shares authorized for sale; total number of shares sold and the amount of capital raised;

c) List and information about the ownership of shareholders according to the form prescribed in Appendix No. 15 issued together with this Circular;

d) Date of registration of the shareholder ledger.

2. Information in the shareholder ledger serves as evidence to certify the share ownership rights of that shareholder.

3. The fund management company and the board of directors of the securities investment company must register and deposit the securities investment company's shares in accordance with the laws on registration and deposit of securities.

Article 8. Listing Shares

1. Within thirty (30) days from the date the establishment and operation permit or the adjusted establishment and operation permit for a securities investment company becomes effective, the fund management company and the board of directors of the securities investment company must complete the necessary documents and list the securities investment company's shares on the Stock Exchange in accordance with the law.

2. Investors who register to purchase shares of a securities investment company are deemed to have approved the listing of these shares. In cases where the articles of association of the securities investment company provide for and have been published in the prospectus, the initial listing and additional listing of the securities investment company's shares do not require the approval of the general meeting of shareholders.

3. The provisions of Clause 1 and Clause 2 of this Article apply to the listing of shares issued for exchange in mergers and acquisitions of securities investment companies.

Section 2. INVESTMENT ACTIVITIES OF PUBLIC SECURITIES INVESTMENT COMPANIES

Article 9. Portfolio and Investment Activities of Public Securities Investment Companies

1. Securities investment companies must comply with the restrictions on activities as stipulated in Article 81 of Decree No. 58/2012/NĐ-CP.

2. Securities investment companies are permitted to invest in the following types of financial assets in Vietnam:

a) Depositing money at commercial banks in accordance with banking laws;

b) Money market instruments including negotiable instruments and transferable instruments as defined within the banking sector;

c) Government bonds, government-guaranteed bonds, local government bonds;

d) Listed stocks, registered trading stocks, listed bonds on the Vietnam Stock Exchange;

đ) Unlisted stocks, unregistered trading stocks of public companies; unlisted bonds issued by organizations operating under Vietnamese law; stocks of joint-stock companies that are not public companies; equity contributions in limited liability companies;

e) Other types of securities as prescribed by law and guidelines of the Ministry of Finance.

3. Securities investment companies may only deposit money and invest in money market instruments as provided for in point a and point b of Clause 2 of this Article at commercial banks that have been approved by the board of directors.

4. The portfolio structure of securities investment companies must comply with the provisions of the articles of association of the securities investment company and must ensure:

a) Not investing more than fifteen percent (15%) of the total value of circulating securities of one issuer, except for government bonds;

b) Not investing more than twenty percent (20%) of the total assets of the securities investment company in securities and assets as provided for in point a and point b of Clause 2 of this Article issued by the same entity, except for government bonds;

c) Not investing more than thirty percent (30%) of the total assets of the securities investment company in assets as provided for in point a, b, d, đ, and e of Clause 2 of this Article issued by one entity or a group of companies with related ownership;

d) Not investing more than ten percent (10%) of the total assets of the securities investment company in real estate or financial assets as provided for in point đ of Clause 2 of this Article;

đ) Not using the capital and assets of the securities investment company to lend or guarantee loans, except for deposits as provided for in point a of Clause 2 of this Article; not using the assets of the securities investment company to conduct asset purchase transactions, margin trading transactions, lending assets for sale, lending securities for sale (short selling);

e) Not investing in the shares of the securities investment company itself, nor in other securities investment funds or securities investment companies established and operating in Vietnam;

g) In cases where the securities investment company registers as a foreign investor in accordance with Clause 8 of Article 3 of this Circular, during its investment activities, the securities investment company must also comply with relevant laws concerning restrictions on foreign investors' ownership;

5. Securities investment companies may not borrow to finance their operations, except for short-term borrowing to cover essential expenses for the company. The total value of short-term borrowings of securities investment companies may not exceed five percent (5%) of the net asset value of the company at any time, and the maximum loan term is thirty (30) days.

6. Except for the cases provided for in points d, e, and g of Clause 4 of this Article, the investment structure of a securities investment company may deviate but not more than fifteen percent (15%) from the investment restrictions set forth in Clause 4 of this Article, and only due to the following reasons:

a) Price fluctuations on the market of assets in the securities investment company's portfolio;

b) Legal payments made by the securities investment company;

c) Consolidation, merger, share buyback, or public tender offer of securities by issuers;

d) A newly established securities investment company or a securities investment company that has been adjusted in capital or merged with another securities investment company within six (06) months from the date the establishment and operation permit or the permit adjusting the establishment and operation permit becomes effective;

e) The securities investment company is in the liquidation period for dissolution.

7. Within three (03) months from the date the deviation occurs due to the reasons specified in points a, b, and c of Clause 6 of this Article, the fund management company must complete the adjustment of the securities investment company's portfolio to ensure compliance with the provisions of Clause 4 of this Article.

8. In case the deviation arises due to the fund management company's non-compliance with the investment restrictions stipulated by law or the articles of association of the securities investment company, the fund management company must adjust the portfolio within fifteen (15) days from the date of discovering the deviation. The fund management company shall compensate any losses suffered by the securities investment company (if any) and bear all related costs incurred in adjusting the portfolio. If profits arise, they must be immediately recorded for the benefit of the securities investment company.

9. Within five (05) days from the completion of the portfolio adjustment, the fund management company must disclose information in accordance with Clause 10 of Article 3 of this Circular, and simultaneously notify the State Securities Commission about the deviations that have occurred, their causes, the time of occurrence or discovery, the extent of loss and compensation for losses suffered by the securities investment company (if any) or profits generated for the securities investment company (if any), measures taken to address the issue, implementation timeframe, and results achieved. The notification must include confirmation opinions from the supervisory bank.

10. When conducting asset transactions for the securities investment company, the fund management company must comply with the following regulations:

a) For listed or registered securities traded at the Stock Exchange, transactions must be conducted through the Stock Exchange's trading system;

b) For assets that are not listed or registered securities, or in negotiated transactions, the fund management company must obtain written approval from the board of directors of the securities investment company regarding the expected price range, transaction time, transaction counterparties, or prohibited counterparties (if any), and the type of asset being traded before executing the transaction.

Article 10. Net Asset Value

1. The fund management company shall be responsible for determining the net asset value of the securities investment company and the net asset value per share of the securities investment company at least once a week, including:

a) The net asset value of the securities investment company is determined by subtracting the total liabilities from the total assets of the securities investment company. The total assets of the securities investment company are determined based on market price or fair value of the assets (in cases where the market price cannot be determined). The total liabilities of the securities investment company include debts or payment obligations as of the day immediately preceding the valuation date. The methods for determining market prices, fair values of assets in the portfolio, and the values of debts and payment obligations shall be carried out according to the principles and methods prescribed in Appendix No. 07 issued together with this Circular and internal regulations in the valuation handbook;

b) The net asset value per share equals the net asset value of the securities investment company divided by the total number of shares in circulation.

2. The fund management company must develop a valuation handbook that includes at least the following contents:

a) Principles and criteria for selecting and changing organizations providing quotations. These principles must also be clearly stipulated in the charter of the securities investment company;

b) Principles, procedures, and appropriate valuation methods in accordance with the law, provisions in the charter of the securities investment company, and approved by the shareholders' meeting of the securities investment company. The principles, procedures, and valuation methods must be clear, reasonable, and consistent with international practices to apply uniformly under different market conditions.

3. The valuation handbook must be approved by the board of directors of the securities investment company and provided to the supervisory bank to confirm the calculation of the net asset value. A list of at least three (03) organizations providing quotations, which are not related parties of the fund management company and the supervisory bank, must also be approved by the board of directors of the securities investment company.

4. The net asset value of the securities investment company and the net asset value per share of the securities investment company must be confirmed by the supervisory bank. Confirmation of the value is done in writing or through electronic information systems of the supervisory bank that have been approved by the fund management company. On the next working day after confirmation by the supervisory bank, information about the net asset value of the securities investment company and the net asset value per share of the securities investment company shall be published in accordance with Clause 10, Article 3 of this Circular.

5. The fund management company may authorize the supervisory bank to determine the net asset value of the securities investment company and the net asset value per share. In this case, the fund management company and the supervisory bank must have mechanisms and procedures for cross-checking, reviewing, inspecting, and monitoring to ensure that the determination of the net asset value complies with legal regulations and that the net asset value is calculated accurately.

6. In the event of incorrect valuation, within twenty-four (24) hours from the time of discovery, the supervisory bank or the fund management company (in the case where the supervisory bank provides the service of determining the net asset value) must notify and request the fund management company or the supervisory bank to promptly adjust.

7. Within five (05) days from the date of discovering the incorrect valuation of the net asset value, the fund management company or the supervisory bank (in the case where the supervisory bank provides the service of determining the net asset value) must readjust and publish information in accordance with Clause 10, Article 3 of this Circular, and simultaneously report to the State Securities Commission about the incorrect valuation, including the cause of the incident, the period during which the incorrect valuation occurred, and measures taken. The content of the notification must be jointly confirmed by the fund management company and the supervisory bank.

Article 11. Dividend Payment of Public Securities Investment Companies

1. A securities investment company may pay dividends to shareholders according to its profit distribution policy stipulated in the company's articles of association and in accordance with the dividend distribution plan approved by the most recent general meeting of shareholders of the securities investment company. The dividends paid to shareholders shall be drawn from profits for the period or accumulated profits after fully establishing the required funds (if any) as prescribed in the company's articles of association and completing all tax and financial obligations (if any) as provided by law.

2. Dividends may be paid in cash or through additional share issuance. At least fifteen (15) days before distributing profits, the fund management company must notify the registered address of the investor. The dividend payment notice must include at least the contents specified in Appendix 22 issued together with this Circular.

3. The payment of dividends by a securities investment company shall ensure the following principles:

a) Consistency with the profit distribution policy stipulated in the securities investment company's articles of association and disclosed in the prospectus or summary prospectus;

b) Implementation after the securities investment company has completed its tax obligations and other financial obligations as prescribed by law and fully established the required funds as stipulated in the securities investment company's articles of association (if any);

c) After payment, the securities investment company must still ensure sufficient capital to settle all due debts and other asset liabilities and maintain net asset value not less than fifty (50) billion VND;

d) The level of dividend payment shall be decided by the general meeting of shareholders or the board of directors of the securities investment company, consistent with the investment objectives and the profit distribution policy of the securities investment company as stipulated in the securities investment company's articles of association.

Section 3. GENERAL MEETING OF SHAREHOLDERS AND BOARD OF DIRECTORS OF PUBLIC SECURITIES INVESTMENT COMPANIES

Article 12. Rights and Obligations of Shareholders

1. Shareholders have the following rights and obligations:

a) Right to fair treatment. Each share creates equal rights, obligations, and interests for the holder;

b) Right to freely transfer shares, except where restricted by law and the securities investment company's articles of association;

c) Right to receive full periodic and extraordinary information about the activities of the securities investment company;

d) Right and responsibility to participate in general meetings of shareholders and exercise voting rights directly or through authorized representatives or remote voting;

đ) Obligation to fully pay the purchase price of shares within the time limit stipulated in the securities investment company's articles of association, prospectus, and only be liable for the company's asset obligations within the scope of the fully paid amount when purchasing shares;

e) Other rights and obligations as prescribed by securities laws and the securities investment company's articles of association.

2. Shareholders, or groups of shareholders holding more than ten percent (10%) of the total outstanding shares continuously for at least six (06) months or another ratio smaller as stipulated in the company's articles of association, have the following rights:

a) Nominate persons to the board of directors. The nomination procedures and formalities shall be carried out in accordance with relevant laws on enterprises and securities for public companies;

b) Review and extract minutes and resolutions of the board of directors, annual financial reports, and related reports from supervisory banks concerning the activities of the securities investment company;

c) Request the fund management company to convene an extraordinary general meeting of shareholders in the following cases:

- There is evidence confirming that the fund management company or supervisory bank violates shareholder rights of the securities investment company, or the obligations of the fund management company or supervisory bank, or makes decisions exceeding the authority stipulated in the securities investment company's articles of association, supervision contract, or delegated by the general meeting of shareholders, causing losses to the securities investment company;

- The board of directors has exceeded its term by more than six (06) months without being re-elected;

- Other cases as prescribed in the securities investment company's articles of association.

d) Request the fund management company or supervisory bank to explain unusual issues related to assets and asset management and trading activities of the securities investment company. The fund management company or supervisory bank must respond in writing to the shareholder within fifteen (15) days from receipt of the written request.

đ) Propose issues to be included in the agenda of the general meeting of shareholders. Proposals must be in writing and submitted to the fund management company no later than three (03) days prior to the opening date, unless the securities investment company's articles of association prescribe a different deadline;

e) Other rights and obligations as prescribed in the securities investment company's articles of association.

3. Requests and proposals of shareholders or groups of shareholders as stipulated in Clause 2 of this Article must be made in writing and must include the name, address of permanent residence, identification card number, passport number, or other valid personal certification for individual shareholders; name, main office address, nationality, establishment decision number, or business registration number for organizational shareholders; the number of shares held by each shareholder, the holding period, the total number of shares held by the group of shareholders, and the ownership ratio in the total outstanding shares of the securities investment company; the content of the request or proposal; basis and reasons. In case of convening an extraordinary general meeting of shareholders as stipulated in point c Clause 2 of this Article, it must be accompanied by verification documents for the reason of convening the extraordinary general meeting of shareholders; or documents and evidence of violations by the fund management company or supervisory bank, the extent of violation, or decisions exceeding authority as stipulated in the securities investment company's articles of association, supervision contract.

Article 13. Shareholders' Meeting

1. The shareholders' meeting of the securities investment company shall be convened by the fund management company and decide on the following matters:

a) Amending and supplementing the charter of the securities investment company and the supervisory contract;

b) Changing the investment policy and objectives; deciding on the foreign investor's ownership ratio at the securities investment company; changing the profit distribution plan; increasing the fee paid to the fund management company and the supervisory bank; replacing the fund management company and the supervisory bank;

c) Merger, consolidation; dissolution; capital increase; extending the operating period of the securities investment company;

d) Approving contracts and transactions between the securities investment company and shareholders holding more than thirty-five percent (35%) of the outstanding shares, their authorized representatives, and members of the board of directors of the securities investment company. In this case, related shareholders are not entitled to vote. Contracts and transactions are approved when a minimum of sixty-five percent (65%) of the remaining voting shares agree;

đ) Electing, appointing, and dismissing the chairman and members of the board of directors; determining the remuneration and operational costs of the board of directors; approving the selection of the auditing organization for annual financial report audits, independent valuation organizations (if any); approving financial reports and annual asset and activity reports of the securities investment company;

e) Reviewing and handling violations by the fund management company, the supervisory bank, and board members causing losses to the securities investment company;

g) Other issues within the authority stipulated by laws on enterprises and securities and in the charter of the securities investment company.

2. The agenda and content of the shareholders' meeting of the securities investment company are established by the fund management company in accordance with the law on enterprises. The annual shareholders' meeting must be held within thirty (30) days from the date of receipt of the audited annual financial report by the approved auditing organization.

3. The fund management company is responsible for convening extraordinary shareholders' meetings of the securities investment company in the following cases:

a) At the request of the supervisory bank or the board of directors of the securities investment company if they consider it necessary for the benefit of the securities investment company;

b) At the request of shareholders or groups of shareholders as provided for in Clause 2, Article 12 of this Circular;

c) Other cases as provided for in the charter of the securities investment company.

4. The extraordinary shareholders' meeting shall be convened within thirty (30) days from the date the fund management company receives the request to convene the extraordinary shareholders' meeting. At least fifteen (15) days before the meeting, the fund management company must submit all the agenda, content, and related documents to the State Securities Commission and publicly announce the call for the extraordinary shareholders' meeting, clearly stating the reasons and objectives of the meeting.

5. If the fund management company fails to convene the shareholders' meeting of the securities investment company as prescribed in Clauses 3 and 4 of this Article, the fund management company shall bear legal responsibility and compensate for any resulting damages to the securities investment company (if any). If the fund management company does not convene the shareholders' meeting of the securities investment company as prescribed in Clause 3 of this Article within thirty (30) days, the board of directors or the supervisory bank shall replace the fund management company to convene the shareholders' meeting in accordance with this Circular.

Article 14. Conditions and procedures for convening and passing resolutions at the shareholders' meeting

1. The fund management company shall be responsible for establishing and publishing on its corporate website internal procedures regarding conditions, sequence, and procedures for convening meetings, and conducting meetings and passing resolutions at the shareholders' meeting of the securities investment company in accordance with the laws on enterprises and the charter of the securities investment company, including the following main contents:

a) Notification of the call to convene the meeting, including the deadline for sending notifications and receiving voting ballots in cases where shareholders' opinions are solicited in writing; registration procedures for attending the meeting;

b) Voting methods; sequence and procedures for counting votes; notification of voting results;

c) Drafting and approving the minutes of the shareholders' meeting; announcing the resolutions of the shareholders' meeting to the public; sequence and procedures for opposing the resolutions of the shareholders' meeting.

2. The shareholders' meeting of the securities investment company shall be convened when there are shareholders representing at least fifty-one percent (51%) of the total number of shares in circulation. Forms of participation may include direct attendance, proxy attendance, or online participation through other audiovisual means as stipulated in the charter of the securities investment company.

3. A resolution of the shareholders' meeting shall be passed when it is approved by investors representing at least sixty-five percent (65%) of the total number of shares of all attending shareholders.

4. In case the first meeting does not meet the conditions for convening as prescribed in Clause 2 of this Article, the second meeting shall be convened within thirty (30) days from the date the first meeting was scheduled to open. In this case, the shareholders' meeting can proceed regardless of the number of participants.

5. Except for the annual shareholders' meeting or the shareholders' meeting to discuss issues specified in Points b, c, and d of Clause 1, Article 13 of this Circular, the fund management company may solicit shareholders' opinions in writing instead of organizing a shareholders' meeting. The principles, content, sequence, and procedures for soliciting opinions in writing must be clearly stipulated in the charter of the securities investment company, consistent with the principles set forth in the laws on enterprises. In such cases, the fund management company must comply with the deadlines for sending ballots and meeting materials to shareholders as if they were calling a shareholders' meeting.

6. When soliciting opinions of the shareholders' meeting in writing, a resolution of the shareholders' meeting shall be passed when it is approved by shareholders representing at least seventy-five percent (75%) of the total number of voting ballots.

7. The fund management company and the board of directors of the securities investment company shall be responsible for reviewing and ensuring that the resolutions of the shareholders' meeting of the securities investment company comply with the provisions of the law and the charter of the securities investment company. In case the resolution of the shareholders' meeting does not comply with the provisions of the law and the charter of the securities investment company, a shareholders' meeting must be convened again to re-solicit opinions or solicit shareholders' opinions in writing.

8. Within seven (07) days after the conclusion of the shareholders' meeting, or after the end of the period for soliciting shareholders' opinions in writing as prescribed in Clause 5 of this Article, the fund management company must submit the minutes and resolutions of the shareholders' meeting of the securities investment company to the supervisory bank, provide them to shareholders, and publish information in accordance with Clause 10 of Article 3 of this Circular.

Article 15. Board of Directors of Public Securities Investment Companies

1. The Board of Directors of Public Securities Investment Companies must comply with the provisions set forth in Article 80 of Decree No. 58/2012/NĐ-CP.

2. The Board of Directors of Public Securities Investment Companies must have:

a) At least one independent member with specialized expertise and experience in accounting and auditing.

b) At least one independent member with specialized expertise and experience in securities investment analysis or asset management.

c) At least one member with expertise in law.

3. The Board of Directors of Public Securities Investment Companies has the following rights and obligations:

a) To represent the interests of shareholders; to carry out activities in accordance with the law to protect the interests of investors;

b) To approve the pricing manual, list of organizations providing quotations as stipulated in Clause 3, Article 10 of this Circular; list of banks receiving deposits from securities investment companies as stipulated in Clause 3, Article 9 of this Circular; to approve transactions as stipulated in Point b, Clause 11, Article 9 of this Circular; to approve the issuance of additional shares and related contents within the assigned authority;

c) To decide on the dividend distribution rate according to the profit distribution plan stipulated in the charter of the securities investment company or approved by the General Meeting of Shareholders; the time of implementation, method, and form of profit distribution;

d) To decide on issues not yet resolved between the fund management company and the supervisory bank based on legal regulations;

đ) To require the fund management company and the supervisory bank to promptly provide complete documentation and information about asset management activities and supervision; and to exercise other rights and fulfill other obligations as prescribed by securities laws regarding corporate governance applicable to public companies and in the charter of the securities investment company;

e) Other matters within the authority as prescribed by business and securities laws and in the charter of the securities investment company.

4. A meeting of the Board of Directors shall be convened when at least two-thirds (2/3) of the members are present, including independent members who must constitute a majority (at least 51% of the members present). Members who are not directly present may vote through written ballots. A decision of the Board of Directors is adopted if it is approved by a majority of the members and a majority of the independent members.

Section 4. APPROVAL REQUIRED FOR CHANGES AND RESTRUCTURING

Article 16. Increase or decrease in registered capital and changes requiring approval for public securities investment companies

The increase or decrease in registered capital and the implementation of changes requiring approval for securities investment companies must comply with the provisions set forth in Article 82 and Article 86 of Decree No. 58/2012/NĐ-CP and other relevant legal regulations.

Article 17. Merger and consolidation of public securities investment companies

1. In addition to the principles stipulated in Clause 1, Article 83 of Decree No. 58/2012/NĐ-CP, mergers and consolidations of securities investment companies must ensure:

a) Information about the merger and consolidation process must be fully, timely, accurately, and truthfully provided by the fund management company and the Board of Directors of the securities investment company to shareholders;

b) Rights and obligations are resolved through agreements among the parties involved on a voluntary basis and in compliance with the law.

2. Shareholders opposing the merger or consolidation have the right to request the securities investment company to repurchase their shares. The repurchase price is agreed upon by both parties based on the net asset value per share at the time of repurchase. Creditors have the right to demand the securities investment company repay loans before implementing the merger or consolidation.

3. Within sixty (60) days from the date of the last shareholders' meeting of the participating securities investment company approving the merger or consolidation decision, the securities investment company must submit an application for the State Securities Commission to issue a license for establishment and operation for the merged securities investment company or adjust the license for establishment and operation for the securities investment company receiving the consolidation.

4. The procedures, formalities, and application documents for the State Securities Commission to issue a license for establishment and operation for the merged securities investment company or adjust the license for establishment and operation for the securities investment company receiving the consolidation follow the provisions set forth in Clause 2 and Clause 3, Article 83 of Decree No. 58/2012/NĐ-CP. The merger and consolidation plans and merger and consolidation contracts must include the contents specified in Appendices 09 and 10 issued together with this Circular.

5. The merger date and consolidation date are the effective date of the establishment and operation license or the adjusted establishment and operation license. From this point onward:

a) The securities investment company being merged or consolidated ceases to exist, while the merged or consolidating securities investment company inherits all assets, debts, legal rights, and other obligations of the merged or consolidated securities investment companies;

b) Shareholders of the merged or consolidated securities investment companies receive assets in the form of shares of the merged or consolidating securities investment company according to the conversion ratio determined on the merger or consolidation date;

c) Shares of the merged or consolidated securities investment company are canceled on the merger or consolidation date.

6. Within seven (07) days from the merger or consolidation date, the fund management company must publish information about the completion of the merger or consolidation in accordance with Clause 10, Article 3 of this Circular. The published information includes:

a) The merger date and consolidation date;

b) The principle for determining the net asset value per share of the merged or consolidated securities investment company on the merger or consolidation date; the share conversion ratio; the cash payment ratio per share (if any).

7. From the merger or consolidation date onward, the fund management company and the supervisory bank are responsible for:

a) Receiving and taking over all books, vouchers, securities portfolios, and other assets and related documents of the merged or consolidated securities investment company.

b) Receive, inherit all legitimate rights and benefits, be responsible for financial obligations, including tax debts, and other financial obligations to the State; continue to perform economic contracts of securities investment companies being merged or acquired.

c) Complete the registration procedures for assets received from securities investment companies being merged or acquired in accordance with relevant laws.

d) Represent the merged securities investment company to fulfill the company's obligations according to relevant laws.

8. Publicly-traded securities investment companies must report the results of mergers and acquisitions as stipulated in Clause 4, Article 83 of Decree No. 58/2012/NĐ-CP. The report on the results of mergers and acquisitions shall be made in the form prescribed in Appendix 12 attached to this Circular.

Article 18. Extension of Operating Period, Dissolution of Securities Investment Companies

1. The extension of the operating period of securities investment companies shall comply with the following provisions:

a) The extension of the operating period of securities investment companies has been approved by the shareholders' meeting of the securities investment company.

b) The net asset value of the securities investment company at the most recent valuation period before submitting the extension application is not less than fifty billion (50) billion VND.

2. At least thirty (30) days prior to the end of the operating period, the fund management company must complete the extension procedures. The application for extending the operating period of the securities investment company includes the following documents:

a) Notification of the extension of the operating period of the securities investment company in the format prescribed in Appendix 13 attached to this Circular.

b) Minutes and resolutions of the shareholders' meeting of the securities investment company regarding the extension of the operating period of the securities investment company, specifying the extended operating period of the securities investment company.

c) Contract signed with the supervisory bank regarding the extension of service provision and supervision for the securities investment company.

d) Detailed investment portfolio and report on the net asset value of the securities investment company (confirmed by the supervisory bank) at the most recent valuation date up to the submission of the extension application.

3. The application for extending the operating period of the securities investment company shall be prepared in one (01) original copy accompanied by an electronic data file. The original file shall be directly submitted to the State Securities Commission or sent via postal service.

4. Within fifteen (15) days from the date of receiving a complete and valid application as stipulated in Clause 2 of this Article, the State Securities Commission shall issue an amended license for the establishment and operation of the securities investment company. In case of refusal, the State Securities Commission must provide a written response stating the reasons.

5. The liquidation and dissolution of securities investment companies shall be carried out in the following cases:

a) The net asset value of the securities investment company falls below ten billion (10) billion VND continuously for six (06) months.

b) Cases as stipulated in Clause 1, Article 84 of Decree No. 58/2012/NĐ-CP.

6. The shareholders' meeting has the right to appoint an independent auditing organization as stipulated in Clause 3, Article 84 of Decree No. 58/2012/NĐ-CP to conduct inspections, evaluations, and oversight of the entire liquidation process, revaluation, and distribution of assets to shareholders of the securities investment company; or maintain the current board of directors to oversee the liquidation and distribution of assets of the securities investment company.

7. The shareholders' meeting agrees on the date of dissolution of the securities investment company. From the date of the dissolution decision, the fund management company and the supervisory bank shall not:

a) Carry out investment activities or purchase assets for the securities investment company.

b) Convert unsecured debts into secured debts guaranteed by the assets of the securities investment company.

c) Gift or donate the assets of the securities investment company to other organizations or individuals.

d) Settle contracts where the value of the obligation of the securities investment company exceeds the value of the obligation of the other party; or settle debts to creditors who are also debtors of the securities investment company without offsetting.

đ) Engage in other transactions aimed at dissipating the assets of the securities investment company.

e) Other prohibited actions as stipulated by business laws.

8. The procedure, formalities, and application for the State Securities Commission's approval to initiate the dissolution process of the securities investment company shall be implemented according to the provisions of Clause 4 and Clause 5, Article 84 of Decree No. 58/2012/NĐ-CP. The application for dissolving the securities investment company shall be in the format prescribed in Appendix 13 attached to this Circular.

9. Within twenty-four (24) hours after receiving the approval to initiate the liquidation and dissolution process of the securities investment company, the fund management company and the supervisory bank shall have the responsibility to disclose information as stipulated in Clause 10, Article 3 of this Circular. Simultaneously, the fund management company shall proceed with the procedures and formalities for voluntary delisting and deregistration of the securities investment company's shares in accordance with the guidance of the Stock Exchange and the Securities Depository Center.

10. The fund management company and the supervising bank shall be responsible for liquidating and distributing the assets of the securities investment company to shareholders according to the plan approved by the shareholders' meeting, ensuring the highest interests of the shareholders of the securities investment company. In case the securities investment company is dissolved as prescribed in point a, Clause 1, Article 84 of Decree No. 58/2012/NĐ-CP, the supervising bank shall be responsible for liquidating and distributing the assets of the securities investment company. The asset liquidation period of the securities investment company shall be carried out according to the dissolution plan approved by the shareholders' meeting, but not exceeding two (02) years from the date of receiving the approval document for initiating the liquidation and dissolution procedures. During the time the securities investment company is liquidating its assets for dissolution, management fees, supervision fees, and other expenses shall be collected according to the fee schedule approved by the shareholders' meeting. After the dissolution of the securities investment company, on a monthly basis, the fund management company shall provide shareholders with information about the payment amount per share, expenses incurred during the period, the remaining net asset value of the securities investment company, the remaining net asset value per share, and the distributed asset value to shareholders in accordance with the form prescribed in Appendix No. 17 issued together with this Circular. The notification sent to shareholders must be provided to the State Securities Commission along with the report on assets and the investment portfolio of the securities investment company in accordance with the form prescribed in Appendix No. 18 issued together with this Circular.

The results of the liquidation of the securities investment company's assets must be confirmed by the supervising bank, the fund management company (if any), and approved by the independent auditing organization or the board of directors (if any) overseeing the liquidation process.

11. The sale of liquidation assets that are listed or registered for trading shall be conducted through the trading system of the Stock Exchange or through other trading methods ensuring the greatest benefit for the securities investment company and consistent with the dissolution plan approved by the shareholders' meeting.

In cases where an independent auditing organization or the board of directors oversees the liquidation process as stipulated in Clause 6 of this Article, the sale of assets that are not listed or registered for trading must also be approved in writing by the independent auditing organization or the board of directors (if any) in accordance with point b, Clause 10, Article 9 of this Circular.

12. In case a shareholder requests in writing, the fund management company or the supervising bank may transfer the portfolio corresponding to the shareholder's ownership ratio in the securities investment company according to the following principles:

a) The transferred portfolio to shareholders must fully include all types of assets in the securities investment company's portfolio, with each asset structure similar to the securities investment company's portfolio according to the liquidation and asset distribution plan;

b) In the case of registered and centralized depositary securities, the transfer of assets to shareholders shall be implemented by the fund management company and the supervising bank in accordance with the guidance of the Securities Depository Center;

For other assets requiring registration of ownership, the fund management company and the supervising bank shall be responsible for requesting the capital investment receiving organizations, issuing organizations, and registered shareholder management organizations to register ownership of the assets for shareholders. Payment shall only be considered complete after the assets have been registered in the name of the shareholders.

13. The proceeds from the liquidation of the securities investment company's assets and remaining assets shall be paid in the following priority order:

a) Financial obligations to the State;

b) Debts owed to the fund management company, the supervising bank, and other debts and dissolution expenses of the securities investment company. In cases where the securities investment company is compulsorily dissolved as prescribed in points a and b, Clause 1, Article 84 of Decree No. 58/2012/NĐ-CP, the securities investment company does not need to pay the fund management company or the supervising bank management fees under the contract from the date the event occurs;

c) The remaining assets shall be used to pay shareholders corresponding to their contribution ratio in the securities investment company. In cases involving registered ownership assets, the fund management company and the supervising bank shall be responsible for requesting the Securities Depository Center, registered shareholder management organizations, issuing organizations, and capital investment receiving organizations (for unregistered depositary securities, equity contributions) to allocate and register ownership of the assets for shareholders.

14. Within five days (05) from the completion of the dissolution of the securities investment company, the fund management company and the supervising bank (if there is no fund management company) shall be responsible for disclosing information about the completion of the liquidation, distribution, and dissolution of the securities investment company in accordance with Clause 10, Article 3 of this Circular, and simultaneously notifying the State Securities Commission of the dissolution results of the securities investment company, including the following documents:

a) A report confirmed by the fund management company, the supervising bank, and the auditing organization or the board of directors (if any) regarding the liquidation of the securities investment company's assets, repayment of debts, and fulfillment of other financial obligations to creditors and other interested parties, including financial obligations to the State as prescribed in Appendix No. 14 issued together with this Circular. The report must be attached with a list of creditors and amounts paid off, including tax debts.

b) A report with confirmation from the fund management company, supervising bank, and auditing organization or board of directors (if applicable) regarding the progress of asset liquidation, methods of liquidation, and distribution of assets; the total value of assets obtained after liquidation; total debts to be settled and remaining assets for distribution to shareholders. In cases where the securities investment company distributes non-cash assets, supplementary documents include confirmation from the Securities Depository Center on the completion of allocation and registration of securities for shareholders at the request of the fund management company, supervising bank, and shareholders; confirmation from the shareholder registry management organization, issuing organization, and receiving enterprise of the securities investment company on the completion of transferring ownership of shares and capital contributions to each shareholder at the request of the fund management company;

c) The original license for establishment and operation of the securities investment company;

d) An audit report assessing the results of asset liquidation by the auditing organization designated by the general meeting of shareholders or by the board of directors (if applicable);

15. In cases where the dissolution result report is inaccurate or contains false documents, the fund management company, supervising bank, and related organizations and individuals must jointly bear responsibility for settling outstanding debts and bear personal liability under the law for any consequences arising within three (03) years from the date of submission of the dissolution result report to the State Securities Commission;

Article 19. Revocation of the License for Establishment and Operation of Public Securities Investment Companies

The revocation of the license for establishment and operation of securities investment companies shall be carried out in accordance with the provisions of Article 85 of Decree No. 58/2012/ND-CP;

Chapter III

SECURITIES INVESTMENT COMPANIES WITH INDIVIDUAL SHAREHOLDER STATUS

Section 1. ESTABLISHMENT OF SECURITIES INVESTMENT COMPANIES WITH INDIVIDUAL SHAREHOLDER STATUS

Article 20. Establishment of Securities Investment Companies with Individual Shareholder Status

1. Conditions for granting licenses for establishment and operation of securities investment companies with individual shareholder status:

a) For securities investment companies with individual shareholder status that manage funds on behalf of others as stipulated in Clause 1 of Article 87 of Decree No. 58/2012/ND-CP;

b) For securities investment companies with individual shareholder status that self-manage funds as stipulated in Clause 2 of Article 87 of Decree No. 58/2012/ND-CP;

2. Where the articles of association of the securities investment company provide for it, shareholders may contribute capital in the form of listed or traded securities at the Stock Exchange. Contributions in the form of securities must ensure:

a) The shareholder contributing capital does not have restrictions on the transferability of the securities intended to be contributed to the securities investment company; they are not collateral currently pledged, mortgaged, pledged as collateral, frozen, or involved in other collateral transactions as provided by civil law;

b) The securities contributed to the securities investment company must comply with the provisions of the articles of association of the securities investment company, aligning with the investment objectives and policies of the securities investment company; they cannot be types of securities suspended from trading, delisted, or securities of issuers undergoing liquidation, dissolution, or bankruptcy;

c) The contribution of capital in the form of securities must be approved by all shareholders of the securities investment company and is only considered complete after the legal ownership of the contributed securities has been transferred to the securities investment company. The transfer of ownership shall be carried out in accordance with the guidelines of the Securities Depository Center;

d) The valuation of contributed securities must comply with the provisions of the articles of association of the securities investment company and the provisions set forth in Appendix No. 07 issued together with this Circular. The price of contributed securities in a securities investment company with individual shareholder status shall be determined by the depositary bank based on the closing price on the day the ownership transfer procedures are completed at the Securities Depository Center;

3. The dossier, procedure, and process for granting licenses for establishment and operation of securities investment companies with individual shareholder status shall be implemented in accordance with the provisions of Article 88 of Decree No. 58/2012/ND-CP. The application for a license for establishment and operation of a securities investment company shall be in the format prescribed in Appendix No. 06 issued together with this Circular. In cases of capital contribution in the form of securities, the dossier for granting a license for establishment and operation of a securities investment company must be supplemented with the following documents:

a) Confirmation from the Securities Depository Center on the list of shareholders contributing capital in the form of securities, the securities account numbers of each shareholder, detailed lists of securities contributed by each shareholder, type (code) of contributed securities, quantity;

b) A valuation record of assets established by the depositary bank.

Section 2. ACTIVITIES OF SECURITIES INVESTMENT COMPANIES

Article 21. Activities of individual securities investment companies

1. The activities of securities investment companies must comply with the provisions set forth in Clause 1, Article 89 of Decree No. 58/2012/NĐ-CP.

2. In cases where a securities investment company invests in real estate, the securities investment company must select an independent valuation organization. The independent valuation organization must meet the following criteria:

a) It is a valuation enterprise in accordance with the laws on valuation, or a real estate business organization with the function of valuing real estate as prescribed by the laws on real estate business;

b) It is not a related party of the fund management company, supervisory bank; it is not a related party to the counterparty in the transaction of the real estate item that such organization intends to value;

c) It has at least three (03) employees holding a valuation certificate or a real estate valuation certificate. These employees have at least five (05) years of experience in the activity of valuing real estate;

3. In cases where the articles of association and the prospectus of the securities investment company provide for it, the securities investment company may borrow funds from the depositary bank, supervisory bank in the following forms:

a) Margin loan transactions to purchase securities up to the credit limit approved by the shareholders' meeting;

b) Overdraft up to the usage limit approved by the shareholders' meeting;

c) Securities lending and borrowing if permitted by law;

d) Transactions of selling with a commitment to repurchase securities.

4. The securities investment company must ensure that the total amount of debts and liabilities under all forms does not exceed thirty percent (30%) of the total asset value of the securities investment company at the time of borrowing.

Article 22. Net Asset Value, Profit Distribution of Individual Securities Investment Companies

1. The securities investment company or the fund management company (if any) must determine the net asset value of the securities investment company and the net asset value per share. The determination of the net asset value of the securities investment company shall be carried out in accordance with the provisions set forth in Article 10 of this Circular.

3. The distribution of profits of individual securities investment companies shall be implemented in accordance with the provisions set forth in Article 11 of this Circular and relevant laws.

Section 3. ORGANIZATION OF INDIVIDUAL SECURITIES INVESTMENT COMPANIES

Article 23. Rights and Obligations of Shareholders

The rights and obligations of shareholders shall be implemented in accordance with the articles of association of the securities investment company, consistent with the relevant provisions in Article 12 of this Circular and the laws on enterprises.

Article 24. Shareholders' Meeting, Board of Directors

1. The shareholders' meeting and board of directors of individual securities investment companies shall be implemented in accordance with the relevant provisions in Articles 13, 14, and 15 of this Circular and the laws on enterprises.

2. The shareholders' meeting and board of directors of individual securities investment companies shall be implemented in accordance with the articles of association of the company, consistent with the laws on enterprises and the laws on securities applicable to listed companies.

Article 25. Provisions on Personnel of Self-managed Capital Securities Investment Companies

1. The General Director (Managing Director), Deputy General Director (Deputy Managing Director), and professional staff of self-managed capital securities investment companies must meet the following conditions:

a) They have at least five (05) years of work experience in positions related to securities business operations at financial, banking, insurance organizations, or in the finance, accounting, and investment departments of other enterprises;

b) They hold a fund management practice certificate, or:

- They already hold a securities trading practice certificate in countries that are members of the Organization for Economic Co-operation and Development (OECD); or they have legally practiced fund management or asset management abroad; or

- They have passed the Chartered Financial Analyst (CFA) Level II examination, or Certified International Investment Analyst (CIIA) Level II examination, or Association of Chartered Certified Accountants (ACCA), Certified Public Accountants (CPA), or Certificate in Quantitative Finance, or Quantitative Risk Management certification.

2. Individuals specified in Clause 1 of this Article shall not concurrently work for other organizations, except in cases where they are representatives authorized by the organizations receiving investment capital from the securities investment company.

3. A securities investment company with the goal of investing in real estate must have at least one employee:

a) Holding a real estate valuation certificate in accordance with the laws on real estate business and having at least two (02) years of experience in the activity of valuing real estate at real estate business organizations, real estate service organizations, valuation enterprises; or

b) Holding a valuation certificate, or having passed the following subjects in the valuation examination: (i) basis for price formation; (ii) principles and methods of valuation; (iii) real estate valuation; and (iv) enterprise value valuation.

Section 4. REQUIRED APPROVALS AND RESTRUCTURING OF INDIVIDUAL SECURITIES INVESTMENT COMPANIES

Article 26. Increase or Decrease in Registered Capital of Individual Securities Investment Companies

1. The issuance of individual shares to increase the capital of a securities investment company must meet the following conditions:

a) Approval by the shareholders' meeting on the issuance of individual shares to increase capital;

b) Having a share issuance plan for individual shares that has been approved by the most recent shareholders' meeting;

c) Complying with the provisions set out in point b, Clause 1, Article 87 of Decree No. 58/2012/NĐ-CP;

d) In cases where capital is increased through the issuance of bonus shares or dividends paid in shares, the securities investment company must have sufficient capital from surplus capital and post-tax profits as shown in the most recent audited financial report.

2. Adjustments to decrease the registered capital of a securities investment company must meet the following condition:

a) Compliance with the provisions set out in points a, b, and c, Clause 1, of this Article;

b) The amount paid out must ensure that the registered capital after adjustment and the net asset value of the securities investment company after adjustment are not less than fifty (50) billion VND;

3. The procedures for issuing individual shares and additional issues to existing shareholders shall be carried out in accordance with the laws on securities and enterprises.

4. Within ten (10) days after implementing the increase or decrease in registered capital, the securities investment company must report the results of the increase or decrease in registered capital to the State Securities Commission. The report includes:

a) A request for adjustment of registered capital;

b) Minutes of meetings and decisions of the shareholders' meeting and board of directors approving the increase or decrease in registered capital of the securities investment company;

c) Prospectus and articles of association of the securities investment company (if there are changes);

d) Confirmation from the depositary bank and supervisory bank regarding the level of capital after the change;

đ) Plan for increasing or decreasing registered capital;

e) In cases of issuing to new shareholders, supplementary documents include:

- For individuals: personal files of shareholders, certified copies of trading code registration certificates (for foreign shareholders);

- For organizations: certified copies of establishment and operation licenses, business registration certificates (if applicable), or equivalent documents; company bylaws; minutes of meetings accompanied by resolutions of the shareholders' meeting or board of directors in accordance with the company's bylaws, board of members or owner of the company regarding participation in capital contribution to the securities investment company and appointment of representatives according to authorization, authorization documents and personal files of authorized representatives; approval documents from competent state management agencies in accordance with specialized laws; certified copies of trading code registration certificates (for foreign organizations);

5. The documents specified in Clause 4 of this Article must be prepared in one (01) original copy along with an electronic data file. The original file must be directly submitted to the State Securities Commission or sent via postal service.

6. Within seven (07) days from the date of receipt of complete and valid documents, the State Securities Commission will adjust the establishment and operation license of the securities investment company. The adjusted license must clearly indicate the registered capital before and after the adjustment, including contributed or actually paid-in capital.

Article 27. Changes that must be approved by the Securities Commission

1. The change of name, change of fund management company, change of depositary bank, supervisory bank of a single securities investment company must be approved by the State Securities Commission.

2. The application dossier for approval of changes as stipulated in Clause 1 of this Article includes:

a) A request for approval of change according to the form prescribed in Appendix No. 08 issued together with this Circular;

b) Minutes of meeting and decision of the shareholders' general meeting approving the changes as stipulated in Clause 1 of this Article;

c) In case of changing the fund management company, depositary bank, supervisory bank, the securities investment company must supplement the commitments of these organizations regarding the transfer of rights and obligations to the new fund management company, depositary bank, supervisory bank.

3. The dossier as prescribed in Clause 2 of this Article shall be established in one (01) original copy accompanied by an electronic data file. The original dossier shall be directly submitted to the State Securities Commission or sent via postal service.

4. Within fifteen (15) days from the date of receipt of a complete and valid dossier, the State Securities Commission shall issue a document approving the changes of the securities investment company. In case of refusal, the State Securities Commission must reply in writing and specify the reasons.

Article 28. Merger and Acquisition of Single Securities Investment Companies

1. A securities investment company may merge or acquire another securities investment company according to the following principles:

a) It has been approved by the shareholders' general meeting on the merger or acquisition;

b) The merger plan, acquisition plan, merger contract, acquisition contract must be approved by the shareholders' general meeting. The merger plan, acquisition plan, and merger contract, acquisition contract must ensure the contents according to the forms prescribed in Appendices No. 09 and 10 issued together with this Circular.

c) In case of stock swap combined with cash payment, shareholders of the merged or acquired company shall receive an additional amount not exceeding 10% of the net asset value per share on the merger or acquisition date;

d) Shareholders who oppose the merger or acquisition have the right to require the merged or acquired securities investment company to repurchase their shares at an agreed price between both parties based on the net asset value per share at the time of repurchase. Creditors have the right to demand repayment of loans before implementing the merger or acquisition. The procedures for requesting share repurchase and loan repayment shall be carried out in accordance with the laws on enterprises;

đ) The securities investment company accepting the merger or acquisition must comply with the provisions of Clause 1 of Article 20 of this Circular.

2. Within sixty (60) days from the date the shareholders' general meeting of the last securities investment company approves the merger or acquisition, the merging or acquiring securities investment company must submit an application dossier to the State Securities Commission for issuance of a license for establishment and operation of the merged securities investment company or adjustment of the license for establishment and operation of the acquiring securities investment company.

3. The dossier as prescribed in Clause 2 of this Article includes:

a) An application for issuance/adjustment of the license for establishment and operation of the securities investment company according to the form prescribed in Appendix No. 11 issued together with this Circular; accompanied by the original licenses for establishment and operation of the merged or acquired securities investment companies;

b) Decision of the shareholders' general meeting on the merger or acquisition including minutes of meeting and resolution of the shareholders' general meeting;

c) List of creditors demanding repayment of loans and amounts to be paid to creditors; list of shareholders demanding repurchase of shares, number of shares to be repurchased and amounts to be paid;

d) In case of merger, supplementary documents: charter, prospectus of the merged securities investment company, deposit agreement, supervision contract already approved by the shareholders' general meetings;

đ) List of shareholders, members of the board of directors, General Director (Chief Executive Officer) of the merged or acquired securities investment company according to the form prescribed in Appendix No. 15 issued together with this Circular and other related documents as stipulated in point e, g of Clause 1 of Article 88 of Decree No. 58/2012/ND-CP.

4. The dossier as prescribed in Clause 3 of this Article shall be established in one (01) original copy accompanied by an electronic data file. The original dossier shall be directly submitted to the State Securities Commission or sent via postal service.

5. Within fifteen (15) days from the date of receipt of a complete and valid dossier, the State Securities Commission shall issue a license for establishment and operation of the merged securities investment company or adjust the license for establishment and operation of the acquiring securities investment company. In case of refusal, the State Securities Commission must reply in writing and specify the reasons.

6. The merger date or acquisition date is the date when the license for establishment and operation or the adjusted license for establishment and operation becomes effective. From this point:

a) The securities investment company being merged or consolidated ceases to exist, while the merged or consolidating securities investment company inherits all assets, debts, legal rights, and other obligations of the merged or consolidated securities investment companies;

b) Shareholders of the merged or consolidated securities investment companies receive assets in the form of shares of the merged or consolidating securities investment company according to the conversion ratio determined on the merger or consolidation date;

c) Shares of the merged or consolidated securities investment company are canceled on the merger or consolidation date.

7. Within seven (07) days from the merger or acquisition date, the fund management company shall publish information on the completion of the merger or acquisition in accordance with Clause 10 of Article 3 of this Circular. The published information shall include:

a) The merger date and consolidation date;

b) The principle for determining the net asset value per share of the merged or consolidated securities investment company on the merger or consolidation date; the share conversion ratio; the cash payment ratio per share (if any).

8. Within thirty (30) days from the merger or acquisition date, the merged or acquired securities investment company shall report to the State Securities Commission on the results of the merger or acquisition. The report shall include:

a) Confirmation by the depositary bank, supervisory bank on the total asset value, total debt value, net asset value calculated on the merger or acquisition date, actual conversion ratio, cash payment ratio (if any) per share, number and value of shares repurchased from opposing shareholders;

b) Official document from the competent state management agency confirming that the relevant securities investment companies have returned their seals, registration certificates for seal samples, tax identification number registration certificates.

Article 29. Dissolution of a Single Securities Investment Company

1. A securities investment company shall be dissolved pursuant to the decision of the Shareholders' Meeting in the following cases:

a) The investment management contract is terminated or the fund management company is dissolved, bankrupted, or has its establishment license revoked, and the Board of Directors of the securities investment company cannot establish a replacement fund management company within sixty (60) days from the date of occurrence of the event;

b) The depositary and supervisory contracts are terminated or the depositary bank and supervisory bank are dissolved, bankrupted, or have their securities depositary activity registration certificates revoked, and the Board of Directors of the securities investment company cannot establish a replacement depositary bank and supervisory bank within sixty (60) days from the date of occurrence of the event;

c) The net asset value of the securities investment company falls below ten (10) billion VND continuously for six (06) months;

d) The end of the term of operation specified in the company's charter;

đ) In other cases as prescribed in the company's charter.

2. The Shareholders' Meeting has the right to appoint an independent auditing organization to conduct inspections, evaluations, and oversight of all liquidation activities, revaluation of asset distribution to shareholders of the securities investment company, ensuring that the liquidation and dissolution of the securities investment company are carried out fairly, openly, and transparently.

3. From the date the securities investment company decides or is compelled to dissolve, the securities investment company, the fund management company (if any), the depositary bank, and the supervisory bank may not carry out activities prohibited by laws on enterprises.

4. Within seven (07) days from the date when dissolution is required according to Clause 1 of this Article, the securities investment company shall submit a dossier requesting approval to initiate the dissolution procedure. The dossier requesting initiation of the dissolution procedure includes:

a) The application for dissolution of the securities investment company in accordance with the form prescribed in Appendix 13 issued together with this Circular;

b) Minutes of the meeting and resolutions of the Shareholders' Meeting regarding the dissolution of the securities investment company;

c) The liquidation plan and dissolution plan of the securities investment company approved by the Shareholders' Meeting;

d) Written commitments of the fund management company (if any), the depositary bank, and the supervisory bank regarding their responsibility to complete the liquidation procedures to dissolve the securities investment company.

5. The dossier as prescribed in Clause 4 of this Article shall be established in one (01) original copy accompanied by an electronic data file. The original dossier shall be directly submitted to the State Securities Commission or sent via postal service.

6. Within fifteen (15) days from the date of receipt of a complete and valid dossier, the State Securities Commission shall issue a document approving the initiation of the liquidation and dissolution procedures of the securities investment company. In case of refusal, the State Securities Commission must respond in writing and specify the reasons.

7. The Board of Directors of the securities investment company, the fund management company (if any), the depositary bank, and the supervisory bank are responsible for liquidating assets and distributing assets of the securities investment company to shareholders according to the plan approved by the Shareholders' Meeting. The period for liquidating the assets of the securities investment company shall be implemented according to the dissolution plan approved by the Shareholders' Meeting, but not exceeding two (02) years from the date of approval to initiate the dissolution procedure. The results of the asset liquidation must be confirmed and audited by the depositary bank and supervisory bank, and reviewed by the Board of Directors or the auditing organization appointed by the Shareholders' Meeting as prescribed in Clause 2 of this Article.

8. The single securities investment company, the fund management company (if any), the depositary bank, and the supervisory bank must disclose information and announce the results of the dissolution of the single securities investment company in accordance with Clauses 7 and 8 of Article 18 of this Circular.

Article 30. Revocation of the License for Establishment and Operation of a Single Securities Investment Company

1. The license for establishment and operation of a securities investment company shall be revoked in the following cases:

a) The application documents for the license contain false or misleading information regarding the conditions for establishing a securities investment company;

b) The company does not commence securities investment activities within twelve (12) months from the date the license for establishment and operation was issued;

c) The company is dissolved, merged, or taken over.

2. The State Securities Commission shall be responsible for announcing the revocation of the license for establishment and operation of a securities investment company on its electronic news website.

3. Immediately upon receipt of the decision to revoke the license for establishment and operation by the State Securities Commission, the securities investment company, fund management company (if any), depository bank, supervisory bank shall proceed with liquidation and dissolution procedures in accordance with the provisions of the law.

Chapter IV

SUPERVISORY BANKS AND DEPOSITORY BANKS

Article 31. General Provisions on Supervisory Banks

1. The supervisory bank selected by the fund management company must meet the conditions stipulated in Clause 6 of this Article, Clause 1 of Article 98 of the Securities Law, and be approved by the shareholders' meeting of the securities investment company.

2. The supervisory bank must be completely independent and separate from the fund management company that it provides supervisory services to.

3. Members of the board of directors, members of the executive board, and employees of the supervisory bank directly involved in the custody of assets of the securities investment company and the supervision of asset management activities of the fund management company (hereinafter referred to as business personnel) shall not be related parties or persons involved in managing or governing the fund management company, nor shall they have ownership relations, capital contributions, shareholdings, loans, or lending transactions with the fund management company that the supervisory bank provides supervisory services to, and vice versa.

4. The supervisory bank, members of the board of directors, members of the executive board, and business personnel shall not be buyers or sellers in transactions involving the purchase or sale of assets of the securities investment company. The supervisory bank may only be a buyer or seller in foreign exchange transactions or securities transactions conducted through the trading system of the Stock Exchange.

5. If circumstances arise causing the bank to no longer meet the conditions stipulated in Clauses 1, 2, and 3 of this Article, the bank must notify the fund management company and the State Securities Commission within twenty-four (24) hours from the time such circumstances arise.

6. To supervise the operations of the securities investment company, the supervisory bank must have at least two business personnel who possess all of the following certificates:

a) Certificate in securities law and securities market law;

b) Basic certificate in securities and securities market; or a securities business practice certificate, or a Certified Financial Analyst (CFA) certificate from Level I upwards, or a Certified International Investment Analyst (CIIA) certificate from Level I upwards; or a securities business practice certificate issued in OECD countries;

c) Accounting certificate, auditing certificate, or chief accountant certificate; or international certificates in accounting and auditing such as ACCA, CPA, CA (Chartered Accountants), ACA (Associate Chartered Accountants).

7. Within ten (10) days from the effective date of the supervisory contract, the supervisory bank has the obligation to report and submit to the State Securities Commission:

a) The supervisory contract;

b) A statement of information accompanied by a certified copy of the relevant professional certificates of the business personnel designated by the supervisory bank to supervise the custody of the fund's assets, as stipulated in Clause 6 of this Article;

c) Commitments from the supervisory bank and the business personnel of the supervisory bank that they are not related parties or have ownership relations, capital contributions, shareholdings, loans, or lending transactions with the fund management company that the supervisory bank provides supervisory services to.

8. The reporting file of the supervisory bank as prescribed in Clause 7 of this Article shall be established in one (01) original set accompanied by an electronic data file. The original set of files shall be sent directly to the State Securities Commission or sent via postal service.

9. Within seven (07) days from the date of receiving a complete and valid file as prescribed in Clause 8 of this Article, the State Securities Commission shall issue a confirmation document for the reporting file of the supervisory bank and the business personnel designated by the supervisory bank to supervise the custody of the securities investment company's assets.

Article 32Activities of depository banks and supervisory banks

1. Depository banks and supervisory banks may select foreign financial organizations with depositary functions to act as secondary depositaries to deposit overseas assets of securities investment companies in compliance with the law. The delegation of depositary authority must comply with the following regulations:

a) The secondary depositary must be a member of the depositary according to foreign law;

b) The delegation of depositary authority must be carried out based on a contract between the depository bank, the supervisory bank, and the secondary depositary. The contract must clearly define the rights, obligations, and responsibilities of the depository bank, the supervisory bank, and the secondary depositary. The secondary depositary can only act upon lawful orders or instructions from the depository bank and the supervisory bank;

c) Depositary assets must be clearly identified as the assets of the securities investment company provided services by the depository bank and the supervisory bank;

d) The depository bank and the supervisory bank are responsible for monitoring and supervising the activities of the secondary depositary, as well as bearing all costs arising from the delegation of supervisory and depositary activities of the securities investment company's assets;

đ) Foreign secondary depositaries have the right to re-deposit assets at securities depositary organizations of which they are members, in accordance with local regulations. The assets of the securities investment company must be registered as belonging to the securities investment company by the secondary depositary in accordance with relevant laws.

e) The depositary bank and supervisory bank must have complete information on all assets owned by the securities investment company, including type, quantity, place of deposit, and depositing organization. The depositary bank and supervisory bank are responsible for ensuring that the assets of the securities investment company are registered, deposited, and recorded in such a way that they can always be identified as belonging to the securities investment company.

2. Responsibilities of the depositary bank and supervisory bank in the asset deposit activities of the securities investment company:

a) Require the securities investment company and the fund management company (if any) to register the assets of the securities investment company at the earliest time according to the economic contract terms between the securities investment company and its counterparties and in accordance with relevant laws; ensure that all assets of the securities investment company arising within the territory of Vietnam must be registered under the name of the securities investment company and fully deposited with the depositary bank and supervisory bank according to the following principles:

- In cases where assets are registered under ownership, they shall be registered and recorded under the name of the owner as the securities investment company, except when the assets must be registered and recorded under the name of the depositary bank, supervisory bank, or sub-depositary organization or the fund management company as stipulated by relevant laws, while being deposited with the depositary bank and supervisory bank. Original legal documents confirming ownership rights of the assets must be fully deposited and stored in the vault of the depositary bank and supervisory bank, except in cases of securities that have been centrally registered and deposited. In cases where the assets are real estate, the depositary bank and supervisory bank must ensure that there are complete legal documents regarding ownership and usage rights as prescribed. In cases of securities issued in book-entry form or where the transfer of ownership to the securities investment company has not yet been completed, the original purchase and sale contracts and transaction settlements must be deposited with the depositary bank and supervisory bank;

In cases where assets are not registered under ownership or have not been timely transferred to the securities investment company within the time limit specified in issuance agreements, transfer agreements, investment agreements, or equivalent economic contracts, the depositary bank and supervisory bank are responsible for clearly reporting the status of depositing and registering these assets in periodic reports established according to the provisions related to Clause 1 Article 35 and Clause 1 Article 36 of this Circular, and simultaneously sending written notifications to the board of directors of the securities investment company.

- In cases where assets are not registered under ownership, the depositary bank and supervisory bank are responsible for periodically reconciling monthly with organizations receiving investment capital, issuing organizations, shareholder registration bookkeeping organizations, or other equivalent organizations regarding the quantity and value of the securities investment company's assets, ensuring that the depositing of assets complies with the provisions of Point e Clause 1 of this Article.

- In cases of bank deposits, the depositary bank and supervisory bank have the right and responsibility to request the securities investment company and the fund management company (if any) to provide full information about deposit contracts and deposit accounts of the securities investment company. The depositary bank and supervisory bank are responsible for periodically reconciling monthly the balance of deposit accounts and the value of deposit contracts with the banks receiving deposits from the securities investment company;

b) Manage and deposit the assets of the securities investment company separately from the assets of other organizations and individuals, including the assets of the depositary bank and supervisory bank;

c) Except in cases where the securities investment company manages its own capital, the fund management company acts as the authorized representative to execute asset transactions of the securities investment company. The transfer of assets of the securities investment company in investment and divestment activities can only be carried out according to written instructions from the fund management company and the fund manager in accordance with the provisions of the deposit agreement and supervision agreement;

d) Settlement of transactions of listed and registered securities must comply with the principles of simultaneous delivery of securities and payment and netting settlement principles as prescribed by law. All transfer and payment transactions, asset transfers must be executed accurately to the trading counterparts of the securities investment company and the securities investment company's accounts. The payment amount must correspond to the quantity of assets, price, and match the amounts recorded in payment documents;

đ) Carry out fully, completely, and promptly according to lawful orders and instructions from the securities investment company and the fund management company (if any) to fully and promptly enforce all rights and obligations related to the ownership of the securities investment company's assets, including tax clearance procedures for the securities investment company;

e) Confirm reports on the assets of the securities investment company, ensuring that the quantity of assets in the report is correct, complete, and accurate with the actual state of deposited assets at the bank;

g) Participate and provide full information at shareholders' meetings of the securities investment company; board meetings of the securities investment company but without voting rights;

3. Assets of the securities investment company in physical or non-physical form, registered under the name of the securities investment company or not under the name of the securities investment company (in cases where assets are not registered under ownership as prescribed by law), deposited with the depositary bank, supervisory bank, and sub-depositary organization (if any), belong to the securities investment company, not to the depositary bank, supervisory bank, or fund management company. The depositary bank and supervisory bank may not use the assets of the securities investment company to settle their debts or provide payment guarantees for third parties, including the fund management company.

4. Transactions for the securities investment company on the account of the depositary bank, supervisory bank, including activities of receiving money, settling transactions, receiving dividends, interest on bonds, and other income, must be clearly identified as belonging to the securities investment company. In cases where transactions on the account or in the name of the sub-depositary organization according to relevant laws, these transactions and assets involved must be clearly identified as belonging to the securities investment company through the supervisory bank.

5. The depositary bank, supervisory bank must have appropriate technical systems to automatically receive, monitor, execute, and record transactions related to assets on the account of the securities investment company, except in cases where there are specific instructions in writing from the fund management company. This system must ensure compliance with the following basic requirements:

a) Maintain accounting records to fully and accurately record all assets of the securities investment company. Any changes related to assets must also be fully, accurately, and promptly reflected;

b) Collect, disburse, and record dividends, interest on bonds, capital gains, and other income;

c) Execute journal entries and settle disbursements;

d) Receive and execute journal entries recording issuance proceeds, restructuring of issuing organizations, and other related adjustment activities into the securities account.

6. The depositary bank, supervisory bank shall be responsible for fully compensating the securities investment company in case of loss of assets deposited at the bank, including in cases where such loss is due to the fault or fraudulent acts of the bank's employees, or due to the carelessness or lack of diligence of the bank.

7. The depositary bank, supervisory bank shall be responsible for fully compensating the securities investment company in case of loss of assets by the sub-depositary organization, except in the following circumstances:

a) Situations of force majeure beyond the control of the depositary bank, supervisory bank, which have been clearly defined as exempting the depositary bank, supervisory bank from liability in such cases in the deposit agreement, supervision agreement;

b) The sub-depositary organization has the responsibility to compensate the securities investment company and the sub-deposit agreement includes provisions allowing the fund management company (if any) to act on behalf of the securities investment company to demand compensation from the sub-depositary organization under the agreement;

c) The depositary bank, supervisory bank has fully performed its duty of verification and related authorization activities in accordance with the provisions of the law.

Article 33. Supervisory Activities of the Supervisory Bank

1. The scope of supervision is limited only to the activities of the fund management company that relate to the securities investment company for which the bank performs the supervisory function.

2. Responsibilities of the supervisory bank in supervising the investment activities of the fund management company concerning the assets of the securities investment company:

a) Cooperate with the fund management company to periodically review internal procedures regarding principles and methods for determining the net asset value of the securities investment company; supervise the determination of asset values; check and ensure that the net asset value per share of the securities investment company is accurate, appropriate, and in compliance with the law and the articles of association of the securities investment company.

b) Supervise investment activities and asset transactions of the securities investment company, recheck to ensure that the types of investments, portfolio structure comply with legal restrictions on investment and borrowing; supervise asset transactions between the securities investment company and the fund management company and related parties, ensuring compliance with the law and the articles of association of the securities investment company;

In case of discovering violations of the law, the supervisory bank must immediately report to the Securities Commission and notify the fund management company within twenty-four (24) hours from the time of discovery, while requesting the fund management company to correct errors or take corrective actions for these violations within the prescribed period;

c) Supervise the implementation of organizational activities, check the results of mergers, consolidations, dissolutions, liquidation of the securities investment company's assets;

d) Supervise and ensure legality, and only pay from the assets of the securities investment company expenses that comply with the law and the articles of association of the securities investment company;

e) Supervise other activities of the fund management company in managing the assets of the securities investment company in accordance with the provisions of Article 98 of the Securities Law, relevant provisions in this Circular, and guiding documents on the securities law and the articles of association of the securities investment company;

f) Confirm reports on net asset value, investment activities, and investment portfolios of the securities investment company.

3. The supervisory bank is responsible for establishing and retaining for ten (10) years files and certificates in both paper and electronic data formats to confirm compliance with the supervisory bank's activities towards the fund management company in accordance with the provisions of the law as stipulated in Appendix 16 issued together with this Circular. These documents must be provided upon written request of the Securities Commission.

4. The supervisory bank is responsible for providing timely, complete, and accurate information necessary for the fund management company, approved auditing organizations (upon written request of the fund management company) so that these organizations can fully exercise their rights and obligations towards the securities investment company in accordance with the law and the articles of association of the securities investment company.

5. The supervising bank has the right to request the fund management company to promptly provide necessary documents and information, and if relevant, for the supervising bank to fully exercise its rights and obligations towards the securities investment company in accordance with the law. The supervising bank is responsible for maintaining confidentiality of all documents and information received from the fund management company in accordance with the law.

6. The supervising bank may provide services to determine the net asset value of the securities investment company to the fund management company. The department providing the service to determine the net asset value at the supervising bank must be separate in terms of personnel organization and customer electronic database systems from the departments performing supervisory functions and other business departments of the supervising bank. The department providing the service to determine the net asset value must have staff holding a certified public accountant qualification or auditing certificate or accounting certificate or international certificates in the field of accounting such as ACCA, CPA, CA, ACA.

7. In the event that the fund management company does not undertake activities to restore the position of the securities investment company within the time limit specified in Clause 6 and Clause 7 of Article 10 of this Circular, the supervising bank shall report to the State Securities Commission within seven (07) days from the date the supervising bank sends notice to the fund management company. In this case, the supervising bank has the right to only execute lawful trading orders and instructions from the fund management company without causing the securities investment company's portfolio structure to violate legal provisions and other provisions in the company's charter.

Article 34. Termination of Rights and Obligations of the Depository Bank and Supervising Bank towards the Securities Investment Company

1. The depository bank and supervising bank terminate their rights and obligations towards the securities investment company in the following cases:

a) The depository bank and supervising bank are divided, split, dissolved, bankrupted, merged, consolidated, converted into another legal entity, or had their securities depositary activity registration certificates revoked in accordance with Clause 2 of Article 51 of the Securities Law;

b) Unilaterally terminating the deposit agreement and supervision agreement;

c) The securities investment company ceases operations, is dissolved, or is merged;

d) By decision of the shareholders' meeting of the securities investment company.

2. In the case of changing the depository bank and supervising bank, the securities investment company is obligated to report to the State Securities Commission and attach the following documents:

a) A notification letter from the securities investment company regarding the replacement of the supervising bank and depository bank, specifying the reasons for replacement; accompanied by a commitment from the depository bank and supervising bank to fully transfer rights and obligations concerning the securities investment company's assets to the replacing depository bank and supervising bank;

b) Minutes of the shareholders' meeting and resolution on changing the depository bank and supervising bank, specifying the expected replacing depository bank and supervising bank; approval of the plan to transfer assets from the old depository bank and supervising bank to the new ones;

c) The basic deposit agreement and basic supervision agreement signed with the replacing depository bank and supervising bank;

d) Amended articles of association of the securities investment company;

e) Plan for transferring rights and responsibilities between banks, including during the transition period, and methods for handling issues related to the rights and obligations of the parties involved.

3. The dossier as prescribed in Clause 2 of this Article shall be established in one (01) original copy accompanied by an electronic data file. The original dossier shall be directly submitted to the State Securities Commission or sent via postal service.

4. Within ten (10) days from the date of receiving complete and valid documents as stipulated in Clause 2 of this Article, the State Securities Commission adjusts the content regarding the change of supervising bank and depository bank in the securities investment company's establishment and operation license. If rejected, the State Securities Commission must respond in writing and specify the reasons.

5. In the cases specified in Clause 1 and Clause 2 of this Article, the rights and obligations of the supervising bank and depository bank towards the securities investment company shall be transferred to another supervising bank and depository bank in accordance with Article 86 of Decree No. 58/2012/NĐ-CP. The supervising bank and depository bank will only terminate the contract after completing the full transfer of rights and obligations to the replacement bank. The replacing supervising bank and depository bank must prepare and submit to the State Securities Commission a handover record between the two banks, confirmed by the fund management company and the board of directors of the securities investment company.

6. Within ten (10) days from the date of completing the replacement of the depository bank and supervising bank as specified in Clause 3 of this Article, the securities investment company and the fund management company (if applicable) are responsible for publicly disclosing information about the change of the depository bank and supervising bank for the securities investment company in accordance with relevant laws.

7. In the case where the depository bank and supervising bank convert their legal status, the new bank inherits all rights and obligations concerning the assets deposited and supervised at the old bank.

Chapter V

REPORTING SYSTEM

Article 35. Information for investors and reporting regime of fund management companies and individually managed securities investment companies

1. The fund management company shall regularly submit to the State Securities Commission the following reports:

a) Weekly report on changes in the net asset value of publicly traded securities investment companies according to the form set out in Appendix No. 17 issued together with this Circular;

b) Report on investment activities (including asset information) of publicly traded securities investment companies and individually managed securities investment companies on a monthly, quarterly, and annual basis according to the form prescribed in Appendix No. 18 issued together with this Circular;

c) Semi-annual and annual summary report on the management activities of publicly traded securities investment companies and individually managed securities investment companies, including the basic contents specified in Appendix No. 19 issued together with this Circular;

d) Prospectus, summary prospectus; audited quarterly, semi-annual financial statements, and annual financial statements of publicly traded securities investment companies and individually managed securities investment companies.

2. The documents stipulated in Clause 1 of this Article must be provided free of charge to shareholders on the fund management company's electronic information website, or sent directly via email to shareholders or other methods prescribed in the articles of association of publicly traded securities investment companies and the prospectus.

3. Shareholders may refuse to accept the documents stipulated in Clause 2 of this Article. In case shareholders request, the fund management company must provide the risk management process, clearly stating investment restrictions, prevention and risk management methods used to manage the assets of publicly traded securities investment companies.

4. Individually managed securities investment companies that self-manage capital must provide information to investors and report to the State Securities Commission:

a) The reports stipulated in Point b and d of Clause 1 of this Article;

b) Report on share transfer activities among shareholders of the company within fifteen (15) days from the completion of the transfer. The report details the list of shareholders (before and after the transfer); number of shares (before and after the transfer); shareholding ratio (before and after the transfer); change in shareholding; share transfer method.

5. Fund management companies and individually managed securities investment companies that self-manage capital must report to the State Securities Commission on the following events:

a) Changes, new appointments of board members, General Director or Chairman of the Board, Deputy General Director or Deputy Chairman of the Board, business personnel of securities investment companies. Reports on changes, recruitment, and appointments must be accompanied by personal files of replacement personnel and related documents verifying that replacement personnel meet the conditions as prescribed;

b) Amendments and supplements to the articles of association; prospectus. The report must be submitted along with the amended and supplemented articles of association; prospectus.

c) Events that may have a significant impact on the financial capability and operations of securities investment companies.

6. Reporting deadlines:

a) For monthly reports, within five (05) days from the end of the month;

b) For quarterly reports, within twenty (20) days from the end of the quarter;

c) For semi-annual reports, within thirty (30) days from the end of the second quarter;

d) For annual reports, within ninety (90) days from the end of the fiscal year;

e) For events stipulated in Clause 5 of this Article, within three (03) days from the occurrence of the event.

7. In addition to the reporting cases prescribed in this Article, when necessary, to protect common interests and shareholder interests, the State Securities Commission may require fund management companies and securities investment companies to report on the activities of securities investment companies.

8. Fund management companies and securities investment companies must report to the State Securities Commission within forty-eight (48) hours from receiving the reporting request stipulated in Clause 7 of this Article.

Article 36. Reporting System of Supervisory Banks and Depository Banks

1. The supervisory bank shall prepare and submit to the State Securities Commission monthly, quarterly, and annual supervision reports on the asset management activities of publicly traded securities investment companies managed by fund management companies in accordance with the model prescribed in Appendix 20 attached to this Circular. The supervision report of the supervisory bank must assess compliance with laws and regulations stipulated in the company's charter as follows:

a) Assess the compliance of the fund management company in its investment and trading activities of the securities investment company;

b) Evaluate the determination of the net asset value of the securities investment company, detailing cases of incorrect asset valuation (if any);

c) The issuance of shares of the securities investment company;

d) Any violations (if any) of the fund management company and recommendations for resolution and remediation.

2. The supervisory bank has the obligation to report to the State Securities Commission within twenty-four (24) hours from the time a violation is discovered in the following cases:

a) The fund management company violates securities and securities market laws;

b) Losses caused by the fund management company's asset management activities are significant and the costs to resolve the consequences are excessively high;

c) Other cases as required by the State Securities Commission.

3. The depository bank and supervisory bank must comply with the provisions applicable to fund management companies under Clause 6, 7, and 8 of Article 35 of this Circular..

Chapter VI

IMPLEMENTING PROVISIONS

Article 37. Effective Date

This Circular takes effect from July 1, 2013.

Article 38. Organization of implementation

The State Securities Commission, fund management companies, supervisory banks, depository banks, and organizations and individuals related to the activities of securities investment companies are responsible for organizing implementation.