Consolidated Document number 40/VBHN-BTC on the management and use of funds for traffic order and safety assurance

SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ______________________

 

 

CIRCULAR¹

Guidelines on the activities of investment fund management companies

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Circular No. 99/2020/TT-BTC dated November 16, 2020, issued by the Minister of Finance, guiding the activities of investment fund management companies, shall take effect from January 1, 2021, amended and supplemented by:

Circular No. 88/2025/TT-BTC dated September 3, 2025, issued by the Minister of Finance, amending and supplementing certain provisions of Circulars regulating the reporting system applicable to investment fund management companies, representative offices, branches of securities companies, and foreign investment fund management companies in Vietnam, shall take effect from October 20, 2025.

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

Based on the Enterprise Law dated June 17, 2020;

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

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

The Minister of Finance issues this Circular to guide the activities of investment fund management companies.²

 

PART I

GENERAL PROVISIONS

 

Article 1. Scope of Regulation and Applicability

Article 1. This Circular stipulates the activities of investment fund management companies (hereinafter referred to as fund management companies) in Vietnam.

Article 2. The objects subject to this Circular include:

a) Fund management companies;

b) Organizations and individuals related to the activities of fund management companies.

Article 2. Interpretation of Terms

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

1. Management Board includes the General Director (Director) and Deputy General Directors (Deputy Directors).

2. Certified copy is a copy issued from the original book or a certified copy by an authorized agency or organization or a copy that has been verified to match the original.

3. Fund Management Company is a business entity licensed by the State Securities Commission for establishment and operation of securities business, performing fund management, portfolio management, and securities investment advisory services.

4. Entrusted Clients are investment funds, securities companies, and individuals or organizations entrusting their capital and assets to be managed by fund management companies.

5. Individual dossier including personal information forms as prescribed in Appendix II attached hereto, a valid copy of the passport of foreign individuals or other lawful identification documents.

6. Beneficiary is an organization or individual who does not hold the title of owner of the asset but has full ownership rights over that asset according to the law.

7. Entrusted Assets is a list of assets including money, securities, and other assets of entrusted clients.

 

Chapter II

PROVISIONS ON COMPANY GOVERNANCE,
ORGANIZATIONAL STRUCTURE OF FUND MANAGEMENT COMPANIES

 

Article 3. Company Charter and Principles of Corporate Governance of Fund Management Companies

1. The company charter of fund management companies must be established in accordance with the organizational model of the company's operations and must contain at least the contents prescribed in the Model Charter set out in Appendix XII attached hereto. For public companies, the Model Charter applicable to public companies should be referenced when drafting the company charter.

2. Fund management companies must comply with the provisions of the Securities Law, the Enterprise Law, this Circular, and other relevant laws regarding corporate governance.

Article 4. Board of Directors, Board of Members, Supervisory Board

1. The organizational structure, powers, obligations, and activities of the Board of Directors, Board of Members, Supervisory Board, Audit Committee, internal audit department, Management Board; conditions, election, removal, dismissal, powers, and obligations of members of the Board of Directors, Chairman of the Board of Directors, members of the Board of Members, Chairman of the Board of Members, Chairman of the company, Head of the Supervisory Board, Supervisors, Chairman of the Audit Committee, members of the Audit Committee are regulated by the company charter, consistent with the corporate governance regulations applicable to public companies, enterprise laws, and not contrary to the provisions of this Circular.

2. Members of the Board of Directors or members of the Board of Members of fund management companies may not be members of the Board of Directors or members of the Board of Members, Management Board, fund managers of another fund management company, or members of the Board of Directors or members of the Board of Members, Management Board, employees at custodian banks, supervisory banks providing services to investment funds, securities companies managed by the company.

Article 5. Internal Audit

1. A fund management company that is a public company or manages a public fund, or a publicly traded securities investment company must establish an internal audit department. The internal audit department shall be under the Board of Directors or the Board of Members or the owner of the company.

2. The internal audit department shall have the following responsibilities:

a) To inspect and evaluate the organizational structure, corporate governance activities, operational management, and coordination of each department and position to prevent conflicts of interest and protect customer rights;

b) To inspect and evaluate the completeness, effectiveness, efficiency, and compliance with legal regulations, provisions in the Company Charter; internal control systems; internal policies and procedures, including ethical rules, business processes, risk management systems, information technology systems, accounting, reporting and disclosure procedures, complaint and appeal handling procedures from customers, and other internal regulations;

c) To verify the legality, validity, truthfulness, prudence, and adherence to business processes and risk management procedures;

d) To conduct audits according to the annual internal audit plan. The annual internal audit plan must be approved by the Board of Directors or the Board of Members or the owner of the company before implementation. The annual internal audit plan must ensure the following principles:

- Internal audits must be conducted annually and on an ad hoc basis;

- Activities, processes, and departments must be assessed for risk levels according to the company's internal regulations. High-risk activities, processes, and departments must be prioritized for auditing and audited at least once a year;

- The annual audit plan must be adjusted when there are changes in the risk levels of activities, processes, and departments;

đ) To conduct a comprehensive audit of all departments within the company at least every two years;

e) To recommend measures to improve the effectiveness and efficiency of the company's operations; to monitor the implementation results of recommendations approved by the Board of Directors or the Board of Members or the owner of the company after the audit.

3. Internal audit activities must ensure the following principles:

a) Independence: The internal audit department and its activities must be independent from other departments and activities of the fund management company, not subject to management by the company's Management Board. Staff of the internal audit department may not concurrently work in other departments of the fund management company;

b) Objectivity: Internal audits must be impartial, fair, without bias, influence, or interference when performing their duties;

c) Honesty: Internal audit work must be carried out honestly, carefully, and responsibly;

d) Cooperation: The internal audit department has unrestricted access to all company information and documents. Members of the Management Board and all employees of the fund management company have the responsibility to cooperate, provide complete, timely, honest, and accurate information and documents related to the requirements of the internal audit department. Departments within the company have the responsibility to inform the internal audit department when they discover weaknesses, issues, violations, risks, or significant asset losses of the company or customers;

đ) Confidentiality: The internal audit department and staff of the internal audit department have the responsibility to keep confidential information obtained during the audit process, except when providing information upon request of competent state management agencies.

4. When appointing personnel to the internal audit department, the following conditions must be met:

a) Not currently being pursued for criminal responsibility or serving a prison sentence or prohibited from practicing securities according to the law;

b) Not having been administratively punished in the securities and securities market sector within the last six months prior to the appointment date;

c) Holding a property management license issued by countries that are members of the Organization for Economic Co-operation and Development (OECD) or having passed the international investment analysis certification CFA level II or higher (Chartered Financial Analyst level II) or CIIA (Certified International Investment Analyst - Final Level); or holding a securities practice license; or holding a basic securities and securities market issues certificate and a securities law and securities market law certificate.

5. The staffing structure of the internal audit department must include at least one employee holding an auditor or accountant certification issued by Vietnam; or international certifications in accounting and auditing such as ACCA (Association of Chartered Certified Accountants), CPA (Certified Public Accountants), CA (Chartered Accountants), ACA (Associate Chartered Accountants); or having worked for three years or more in legal, inspection, management, and supervision departments of financial organizations in state management agencies in the finance, banking, insurance, securities, and state audit sectors.

6. Within seven working days from the date of appointment, dismissal, or change of personnel in the internal audit department, the fund management company must notify the State Securities Commission and submit the following documents:

a) Resolution or decision of the Board of Directors or the Board of Members or the owner's decision regarding the appointment, dismissal, or change of personnel in the internal audit department;

b) Personal file, judicial record issued not more than six months from the submission date (for new employees), certified copies of documents ensuring that the employee and the staffing structure of the internal audit department comply with the provisions of Clause 4 and Clause 5 of this Article.

7. The internal audit department must promptly submit the annual internal audit report to the Board of Directors or the Board of Members or the company's owner and the Securities Commission. The internal audit report must clearly state the evaluation opinions and conclusions of the internal audit department, the basis for issuing the audit opinion; the explanations of the audited entity; measures to address violations and improve operations.

Article 6. Internal Control

1. The fund management company must establish an internal control system appropriate to its organizational structure and management, set up an internal control department under the Management Board, and issue regulations on internal control including mechanisms, policies, procedures, and internal rules.

2. The internal control department has the responsibility to:

a) Monitor to ensure that each position, each department, and all company activities comply with legal provisions, policies, business procedures, and internal rules of the company;

b) Supervise the implementation of responsibilities by all employees in the company for assigned, delegated, or authorized activities. The principle of delegation and authorization within the company must ensure:

- The mechanism of delegation and authorization must be clear, specific, transparent, ensuring separation of duties and powers among individuals and departments within the company. Business procedures must ensure separation between functions and tasks of each position and department within the company, from analysis, assessment, approval, decision-making, execution, reporting, and post-investment supervision;

- An individual may not hold multiple positions that could perform conflicting or overlapping activities. Staffing must ensure that an individual cannot independently make and implement two or more activities in the entire business process without consulting other departments or individuals;

c) Participate in building and supervising the implementation of internal policies, regulations, procedures, and rules of the company aimed at preventing conflicts of interest; supervise the implementation of professional ethics rules; compile, store, statistically analyze, and monitor the company's business activities and personal transactions of company employees;

d) Participate in building and organizing the implementation of risk management work for the company and each entrusted client; promptly identify, assess the level of risk, establish investment limits, and take preventive and management measures for potential risks in the company's investment activities and those of entrusted clients;

đ) Monitor to ensure that the net asset value of the entrusted portfolio, securities investment funds, and securities investment companies is appropriately valued according to legal and internal regulations; company assets and resources are managed safely and effectively; entrusted client assets are managed separately and independently; financial reports, activity reports, financial safety index reports, and other reports of the company are prepared truthfully, accurately, timely, and fully updated according to legal regulations;

e) Monitor and ensure that the financial information and management systems are truthful, complete, timely, and accurate; have backup information systems to promptly handle emergencies such as natural disasters, fires, explosions, ensuring continuous operation of the company;

g) Propose solutions to resolve disputes, conflicts of interest, and complaints from customers and partners; preventive measures to mitigate consequences when incidents occur;

h) Perform internal audit functions if the fund management company does not establish an internal audit department.

3. Personnel of the internal control department must meet the following requirements:

a) Meet the provisions of Clause 4, Article 5 of this Circular;

b) Have at least two years of experience working in specialized business departments of fund management companies, securities companies, credit institutions, insurance enterprises, auditing organizations, or government agencies in the fields of finance, banking, insurance, securities, and state auditing;

c) Not be related to members of the Management Board and shall not concurrently work in business departments directly related to licensed securities trading activities.

4. The personnel structure of the internal control department must include at least:

a) One compliance control officer holding a bachelor's degree or higher in law and having at least one year of work experience in law;

b) One employee holding certificates in accounting and auditing as stipulated in Clause 5, Article 5 of this Circular; or holding a bachelor's degree or higher in accounting or auditing and having at least one year of work experience in accounting or auditing;

c) The head of the internal control department must meet the requirements of point a or point b of this clause.

5. Within seven working days from the date of appointment, dismissal, or change of internal control personnel, the fund management company must notify the Securities Commission and attach the following documents:

a) The decision of the General Director (Director) of the company regarding the appointment, dismissal, or change of internal control personnel;

b) A list attached with personal files, criminal records issued no more than six months prior to the submission date (for new employees); certified copies of other documents ensuring that the employee and the personnel structure of the internal control department comply with the provisions of Clause 3 and Clause 4 of this Article.

6. The fund management company must submit an annual internal control report to the Securities Commission. The report must clearly indicate potential risks in the company's activities, asset management activities, and inspection and supervision activities at each unit, each department, and each licensed business activity.

Article 7. Management Board and Employees of Fund Management Companies

1. Fund management companies must appoint a General Director (Director) and Deputy General Directors (Deputy Directors) responsible for securities business operations (if applicable) in accordance with Clause 5, Article 75 of the Securities Law.

2. In addition to the General Director (Director) and Deputy General Directors (Deputy Directors), fund management companies must ensure that there are at least five employees holding fund management licenses during their operation.

3. Fund management companies must assign individuals holding securities practice licenses to the following positions:

a) Fund managers; heads and deputy heads of investment analysis, investment appraisal, and investment decision-making departments; direct investment analysts, appraisers, and decision-makers must hold fund management licenses;

b) Heads and deputy heads of securities investment advisory departments, direct securities investment advisors; heads and deputy heads of investment execution departments, direct investment executors for entrusted clients must hold appropriate securities practice licenses.

4. Fund management companies must dismiss the General Director (Director), Deputy General Directors (Deputy Directors) responsible for securities business operations, and fund managers within seven working days when these individuals violate the provisions of Article 12, Clause 2, Article 98 of the Securities Law or are subject to criminal prosecution or serving a prison sentence or are prohibited from engaging in securities business according to the law.

5. Within five working days from the date of passing the appointment, dismissal, or change decision regarding the General Director (Director), Deputy General Directors (Deputy Directors) responsible for securities business operations, or the fund manager, fund management companies must notify the State Securities Commission and attach the following documents:

a) Decisions on the appointment, dismissal of the General Director (Director), Deputy General Directors (Deputy Directors) responsible for securities business operations, and the fund manager;

b) A list of the General Director (Director), Deputy General Directors (Deputy Directors) responsible for securities business operations, and the fund manager in the format prescribed in Appendix I attached hereto; certified copies of documents ensuring that the new General Director (Director), Deputy General Directors (Deputy Directors) responsible for securities business operations, and the fund manager comply with the legal requirements for securities.

Article 8. Representative Office

1. The name of the domestic representative office of a fund management company must include the fund management company's name along with the term "representative office" and comply with the regulations on the name of representative offices under the law on enterprises.

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

a) The fund management company is dissolved, bankrupted, or has had its securities business license revoked;

b) The application documents for establishing a representative office contain false information;

c) Engaging in activities contrary to the purpose or not in accordance with the content of the representative office establishment decision.

3. Within fifteen days from the date of receiving the written notification from the State Securities Commission about the revocation of the representative office establishment decision, the fund management company must close the representative office and report to the State Securities Commission in accordance with the securities law.

Article 9. Branches

1. The name of a domestic branch of a fund management company must include the name of the fund management company followed by the term "branch" and comply with the regulations on branch names under the laws on enterprises.

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

a) The fund management company is dissolved, bankrupted, or has had its securities business license revoked;

b) The application documents for approval to establish a branch contain false information;

c) Engaging in activities contrary to their purpose or not in accordance with the content of the establishment decision for the branch;

d) Failing to meet the conditions regarding office premises and equipment necessary for securities business within the maximum rectification period of three months from the date of non-compliance;

đ) Not operating for a period of three months from the date of receiving the establishment decision for the branch.

3. Within fifteen days from the date of receipt of the written notification from the State Securities Commission about the revocation of the establishment decision for the branch, the fund management company must close the branch and report to the State Securities Commission in accordance with the laws on securities.

 

Chapter III

OPERATIONS OF THE FUND MANAGEMENT COMPANY

 

Section 1

GENERAL PROVISIONS

 

Article 10. Obligations of the Fund Management Company

1. The fund management company acts as the authorized representative of the entrusting client, representing the entrusting client in exercising ownership rights over the client's assets in a truthful and careful manner.

2. The fund management company must issue procedures for managing investment funds, procedures for managing investment portfolios, procedures for providing investment advisory services, and other operational procedures consistent with the company’s securities business; internal control procedures; valuation manuals; procedures concerning the conditions, procedures, and formalities for convening meetings and passing resolutions at investor assemblies applicable to all funds and shareholder meetings of securities investment companies; detailed codes of professional ethics for each position. In cases where the entrusting client invests in derivative securities to mitigate risks, the fund management procedure must specifically stipulate principles and methods for using derivative securities to mitigate risks for the fund and the securities investment company; the investment portfolio management procedure must specifically stipulate principles and methods for using derivative securities to mitigate risks for the underlying securities held by the entrusting client. These procedures must be uniformly implemented in the company's operations.

3. The fund management company must adhere to professional ethics rules, act voluntarily, fairly, truthfully, and in the best interest of the entrusting client. Compliance with professional ethics rules is a mandatory clause in employment contracts between the company and its employees.

4. The fund management company must establish a risk management system and issue strategies, policies, and risk management procedures appropriate to the company's organizational model, scale of operations, types of investment funds, securities investment companies, and clients managed by the company. The risk management system, strategies, policies, and risk management procedures are established based on international practices suitable for the Vietnamese market conditions and in accordance with the guidelines of the State Securities Commission.

5. When managing entrusted assets, the fund management company must ensure:

a) Investing entrusted assets in compliance with legal provisions, the charter of the investment fund, the charter of the securities investment company, and the entrustment investment agreement;

b) Signing deposit agreements or monitoring agreements with deposit banks for member funds, individual securities investment companies, and entrusted investment portfolios; signing monitoring agreements with monitoring banks for public funds and public securities investment companies;

c) Depositing all assets generated within Vietnam, timely and accurately recording ownership data, and storing original legal documents verifying asset ownership at deposit banks and monitoring banks;

- In the case of depositing money or deposit certificates for entrusting clients: the fund management company can only deposit with credit institutions approved by the entrusting client; must provide full information about deposit agreements and deposit accounts to deposit banks and monitoring banks for them to reconcile account balances and deposit contract values with the credit institution accepting deposits, store original deposit agreements, and provide these agreements upon request of deposit banks and monitoring banks;

- In the case of investing in shares of limited liability companies, unlisted stocks, or unlisted bonds for entrusting clients: the fund management company must deposit original or valid copies of transaction contracts, transaction documents, or original share registers or member registers or documents confirming asset ownership at deposit banks and monitoring banks for periodic reconciliation with the entity receiving the investment;

d) Establishing an information management system for entrusting clients' accounts at the company ensuring independent and segregated asset management for each entrusting client; segregating entrusted assets from the company's own assets; timely and fully maintaining accounting records, transaction documents, and related materials to transactions and asset ownership of entrusting clients; comprehensively, accurately, and promptly compiling information on assets of each entrusting client and the places where those assets are deposited;

d) Establish a mechanism to regularly reconcile tripartite data on customer assets entrusted on the customer account management system at the company, the asset custody system of entrusted customers at the custodian bank, supervisory bank with issuers, Vietnam Securities Depository and Clearing Corporation, shareholder registration organizations, project sponsors, capital reception organizations, deposit receiving organizations. The fund management company is responsible for establishing a mechanism for the custodian bank and supervisory bank to actively and directly reconcile with the aforementioned organizations to check, monitor, and accurately compile information on asset custody, ownership registration, and entrusted asset management.

e) Assign a minimum of two fund managers to manage and operate the investment activities of each securities investment fund and each securities investment company. Fund managers must have a fund management qualification certificate, at least two years of experience in asset management, and not have been administratively punished in the securities and securities market sector. In cases where the securities investment fund or securities investment company managed by the company invests solely in derivative securities for risk mitigation purposes, the fund manager must also hold a specialized certificate in derivative securities and the derivative securities market. Information about the qualifications, expertise, and asset management experience of the fund manager must be disclosed in the Prospectus.

6. The company must establish a fair and reasonable process for allocating trading orders and distributing assets when conducting transactions for entrusted customers and for itself. The asset distribution process must clearly state the implementation principles, pricing methods, and asset allocation quantities for each entrusted customer, ensuring compliance with each customer's investment objectives and risk tolerance levels. The trading order allocation and asset distribution process must be provided to entrusted customers, custodian banks, supervisory banks, and uniformly applied.

In cases where the fund management company buys or sells the same type of asset for multiple entrusted customers and for itself on the same day, the asset allocation and transaction execution shall follow the priority sequence below:

a) Prioritize the allocation of trading assets to entrusted customers. Asset allocation among entrusted customers must be fair and conducted according to the established asset distribution process. In portfolio management operations, if the entrusted customer does not specify the trading price and the assets are purchased or sold at different prices, the fund management company must use the weighted average price to allocate assets; if the entrusted customer specifies the trading price, the fund management company allocates based on the specified price.

b) Allocation of transactions to the company itself can only be carried out after fully satisfying all trading orders for entrusted customers. If the fund management company has insider information or knows that the trading of entrusted assets may significantly impact the price of a particular asset, the fund management company may not trade in the same asset or disclose such transactions to third parties.

Asset allocation must be notified to the custodian bank and supervisory bank for immediate implementation on the trading day.

7. When conducting asset transactions for entrusted customers, the fund management company ensures:

a) For public funds and public securities investment companies:

- The value of securities transactions through brokerage in a year via a securities company shall not exceed 50% of the total value of securities transactions in the year of the public fund or public securities investment company;

- The value of securities transactions through brokerage in a year via a securities company related to the fund management company shall not exceed 20% of the total value of securities transactions in the year of the public fund or public securities investment company;

This provision does not apply to: public funds and public securities investment companies that have not operated for six months from the date of issuance of the Certificate of Registration for Fund Establishment, License for Establishment and Operation until the end of the year in which the fund or securities investment company was established; Open-ended bond funds with total annual transaction values lower than 300 billion VND;

b) For other entrusted customers, the fund management company must comply with the provisions of point a of this clause, except in cases where the company has fully provided information about the interests of the fund management company with the securities company and the entrusted customer has issued a written approval to exempt from applying the above provisions.

8. In fund management operations and agency transfer operations, the fund management company is responsible for ensuring:

a) Implementing the determination of the net asset value of the entrusted customer's investment portfolio, the net asset value of the fund, the securities investment company, the net asset value per fund share, and the securities investment company's stock, and other fund management activities in accordance with laws governing securities investment funds, the Fund Charter, the Securities Investment Company Charter, and the Entrusted Investment Management Contract;

b) Establishing, storing, and promptly updating complete and accurate records of investor registration and shareholder registration. The contents of the investor registration record and shareholder registration record shall be implemented in accordance with relevant laws governing securities investment funds, the Fund Charter, and the Securities Investment Company Charter;

c) The fund management company authorized to conduct fund management operations and agency transfer operations. The authorization to conduct operations must comply with the provisions at Article 12. This Circular and the provisions in the Fund Charter and the Securities Investment Company Charter.

9. When managing the investment capital of a securities investment company, the fund management company must:

a) Ensure compliance with supervision by the Shareholders' Meeting, Board of Directors of the securities investment company, supervisory bank, and be responsible to the Shareholders' Meeting and Board of Directors of the securities investment company for the exercise of assigned rights and duties, provisions of the Company Charter of the securities investment company, and the investment trust agreement;

b) Ensure the establishment of systems, development of procedures, and implementation of risk management consistent with investment policies, types of investable assets, and report to the Shareholders' Meeting and Board of Directors on risk management activities;

c) Make daily investment and divestment decisions for the securities investment company without needing resolutions from the Shareholders' Meeting and Board of Directors of the securities investment company as stipulated in the Company Charter of the securities investment company and the investment trust agreement;

d) Implement investment policies and resolutions of the Shareholders' Meeting and Board of Directors of the securities investment company as stipulated in the Company Charter of the securities investment company; conduct asset transactions within the investment limits, types of investable assets, transaction volumes, and transaction counterparties specified in the Company Charter of the securities investment company and the investment trust agreement;

đ) Propose dividend distribution plans, capital adjustment plans, restructuring plans for the securities investment company;

e) Sign contracts on behalf of the securities investment company within the authority prescribed in the Company Charter of the securities investment company and the investment trust agreement;

g) Perform other rights and duties as prescribed by law, the Company Charter of the securities investment company, the investment trust agreement, and resolutions of the Shareholders' Meeting and Board of Directors of the securities investment company;

10. When managing voluntary supplementary pension funds, the fund management company must ensure compliance with legal regulations concerning voluntary supplementary pension programs;

11. The fund management company has the obligation to promptly and fully provide information about: entrusted clients, entrusted asset portfolios, entrusted asset transactions, organizations receiving investment capital, related parties of the fund management company, and other relevant information to the custodian bank and supervisory bank. The fund management company must provide information upon written request from the custodian bank and supervisory bank and facilitate their full exercise of rights and obligations as prescribed by law. At least once a month, the fund management company has the obligation to reconcile each entrusted client's asset portfolio with the custodian bank and supervisory bank;

12. Within fifteen days from the date the supervisory bank discovers and notifies the fund management company of entrusted asset transactions that violate regulations or exceed the fund management company's authority as prescribed by law, the Fund Charter, the Company Charter of the securities investment company, and the investment trust agreement, the fund management company must cancel the transactions or undertake transactions to restore the portfolio for the entrusted client. The fund management company shall bear all costs arising from these transactions and losses. If these transactions generate profits, the entire profit amount must be accounted for the benefit of the entrusted client;

13. The fund management company is liable for compensating losses caused to entrusted clients due to employee errors, technical system failures, procedural errors of the company, or failure to fulfill obligations as prescribed by law, the Fund Charter, the Company Charter of the securities investment company, and the investment trust agreement. Compensation for open-ended funds and investors in open-ended funds shall be carried out according to the laws on securities investment funds and agreements between the parties involved. Compensation for closed-end funds, member funds, securities investment companies, and other entrusted clients shall be carried out according to agreements between the parties involved;

14. The fund management company shall implement professional liability insurance for employees working in the securities business department if deemed necessary, or establish a risk prevention reserve fund to compensate losses for entrusted clients in cases stipulated in Clause 13 of this Article;

15. The fund management company must comply with anti-money laundering regulations as prescribed by current laws. The fund management company has the responsibility to implement, require distributors to develop, issue, and organize the implementation of internal regulations on anti-money laundering;

16. The fund management company has the responsibility to implement, require distributors to develop, issue, and organize the implementation of procedures and processes for customer identification, verification, and updating of customer information as prescribed by securities laws, anti-money laundering laws, and related laws. When implementing customer identification, the fund management company and distributors may decide whether to meet customers face-to-face or not;

a) In cases where there is no face-to-face meeting with customers, the fund management company and distributors must ensure measures, forms, and technologies to identify, collect complete customer information, and accurately verify customers as prescribed by securities laws, anti-money laundering laws, electronic transaction laws, and related laws on ensuring customer information security and confidentiality;

b) The fund management company and distributors must store complete customer identification information as prescribed by securities laws, anti-money laundering laws, and related laws. Customer identification information must be stored in backup, secured, and provided upon request of competent state authorities;

c) Before implementing non-face-to-face customer identification activities, the fund management company and distributors through the fund management company must notify the State Securities Commission.

d) In case of necessity, the State Securities Commission may require the fund management company and distribution agents to temporarily suspend or terminate the implementation of customer identification through non-face-to-face methods.

17. The fund management company shall ensure that the investment of assets entrusted by individual and foreign organizations complies with the legal regulations on foreign exchange management and the foreign ownership ratio in Vietnamese enterprises.

18. When using entrusted assets raised in Vietnam for indirect investment abroad, the fund management company must comply with the legal provisions on indirect foreign investment, foreign exchange management, and other relevant legal provisions. Indirect foreign investment activities can only be carried out if the Fund Charter, Investment Securities Company Charter, and Entrusted Investment Contract contain provisions allowing such actions.

19. The fund management company has the responsibility to keep confidential the information of customers, transaction information of assets, customer investment portfolios, and other related information, except when providing information upon request of the State Securities Commission and competent state management agencies.

20. The fund management company must ensure:

a) Separation of premises and information technology infrastructure from other organizations. If the company uses the information technology infrastructure of its parent company, subsidiary, or associated organization, it must implement a permission and security mechanism to ensure that departments of the parent company, subsidiary, or associated organization cannot access the company's computer systems and databases.

b) Separation of physical facilities, personnel, and databases between business operations that have potential conflicts of interest within the company, including separation between asset management trust operations; investment research and analysis activities; investment execution; and securities investment advisory activities. Computer systems and databases must be authorized to each individual and department according to internal control regulations.

c) Separation of physical facilities, personnel, and databases between the company's financial investment activities and fund management investment securities, portfolio management investment securities, and securities investment advisory activities.

21. In financial investment activities from own capital, the fund management company ensures:

a) Financial investment activities must be funded from own capital and not from any form of borrowing;

b) It is not allowed to invest in derivative securities from its own funds, borrowed funds, or other legally raised funds;

c) It is not permitted to lend or provide funds of the company to organizations or individuals in any form, except for depositing money at credit institutions in accordance with banking laws, investing in deposit certificates, treasury bills, listed bonds issued in accordance with legal provisions;

d) Economic contracts and transactions between the company and related parties of the company can only be implemented after being approved by the Shareholders' Meeting, Board of Directors, Board of Members, or Owner in accordance with the Company Charter and legal provisions on enterprises;

đ) It is allowed to use legally raised funds, including borrowed funds, to invest in company headquarters. In cases where the headquarters is not fully utilized, the fund management company may lease it out;

e) The fund management company is responsible for reporting to the State Securities Commission about investments in subsidiaries, joint ventures, associated companies, and changes in the value of these investments within thirty days from the completion of the investment, change in the value of the investment, or divestment, according to the model specified in Appendix X attached to this Circular;

g) The fund management company and related parties (excluding related parties being funds or securities investment companies managed by the fund management company) may only invest up to 5% of the outstanding voting shares of listed or traded securities companies on the stock exchange;

22. The fund management company must obtain approval from the State Securities Commission and receive a limit from the State Bank of Vietnam before conducting indirect foreign investment. Indirect foreign investment activities must comply with the provisions set forth in point a, Clause 21 of this Article, legal provisions on investment, banking laws, and the following principles:

a) The fund management company is permitted to invest up to 20% of its equity capital based on the most recent audited annual financial report or reviewed semi-annual financial report or latest quarterly financial report, ensuring that it does not exceed the limit confirmed by the State Bank of Vietnam. The fund management company can only invest indirectly abroad in investment instruments prescribed by the State Bank of Vietnam;

b) In cases where the investment portfolio of the fund management company exceeds the prescribed limit due to market price fluctuations of held assets or due to enjoying rights related to held assets, the fund management company must take necessary measures to comply with the investment limit stipulated in point a of this clause within three months from the date of exceeding the limit.

23. When providing online securities trading services, the fund management company and fund certificate distributors must comply with legal regulations on electronic securities trading.

24. In the activity of reporting ownership and disclosing information about transactions on the securities market, the fund management company has the responsibility:

a) The fund management company and entrusted customers must comply with legal regulations on reporting ownership and disclosing information on the securities market applicable to major shareholders of public companies, investors holding five percent or more of closed-end fund certificates, insiders, and related parties of insiders;

b) The obligation to report ownership and disclose information arises from the following time points:

- The number of shares, fund certificates held by the fund management company and entrusted clients reaching 5% or more of the total voting shares of a public company or reaching 5% or more of the total fund certificates of a closed-end fund, except for entrusted clients being an exchange-traded fund;

- The fund management company is a related party of an internal person as prescribed by law, except for exchange transactions of an exchange-traded fund and periodic portfolio restructuring activities according to the benchmark index;

- The obligation to report ownership, disclose information, methods, timing of information disclosure, ownership report templates, and information disclosure implementation shall be carried out in accordance with the provisions of the law on information disclosure in the securities market;

c) Fulfill other obligations regarding reporting ownership and disclosing information as prescribed by the law on information disclosure in the securities market. In cases where the entrusted investment portfolio is registered under the name of the owner of the entrusted asset, the entrusted client shall be responsible for fulfilling the obligation to report ownership and disclose information in accordance with the law;

25. The fund management company has the responsibility to organize annual training and seminars for employees, send securities practitioners to participate in training courses organized by the State Securities Commission (if any), ensuring that the staff is updated with skills, expertise, professional knowledge, and legal knowledge. Information about these activities of the company must be included in the annual activity report submitted to the State Securities Commission;

26. The fund management company must update all changes in organizational structure and operations of the company into the fund management company database of the State Securities Commission in a timely and complete manner;

Article 11. Restrictions on the activities of the fund management company and its employees

1. The fund management company may not be a related party or have ownership, lending, or borrowing relationships with the supervisory bank, custodian bank of the securities investment fund, or the securities investment company it manages. Members of the Board of Directors or Board of Members, internal audit department staff, Supervisory Board, Chairman of the company, Management Board, and employees of the fund management company may not work in departments providing custody, supervision, and fund management services at these banks, and vice versa;

2. The fund management company and its related parties may participate in capital contribution to establish, invest in funds, or securities investment companies managed by the fund management company if the Fund Charter or Securities Investment Company Charter allows such activities, except for those activities prohibited as stipulated in point b, Clause 6 of this Article;

3. The fund management company, parent company, subsidiary, joint venture, associated company, members of the Board of Directors or Board of Members, Supervisory Board, Management Board, and employees of the company may only be trading partners for assets in the entrusted asset portfolio managed by the company under the following principles:

a) Transactions must be conducted through centralized matching orders at the stock exchange;

b) In cases where transactions are not conducted through centralized matching orders, transactions must be executed upon written approval from the entrusted client or their representative. The written approval from the entrusted client must specify: type of traded asset, trading partner or criteria for determining the trading partner, transaction price or principle for determining the transaction price, time of execution;

4. All securities transactions of Management Board members, employees of the fund management company must be reported to the internal control department before and immediately after the transaction. Transaction reports of these individuals must include: name of traded security, quantity, transaction price, total transaction value, time of execution, method of execution, trading account number, securities company where the trading account is opened. These individual transaction reports must be stored and managed by the internal control department and provided to the State Securities Commission upon request;

5. Members of the Board of Directors or Board of Members, Management Board, and employees of the fund management company are not permitted to request, demand, or accept, either individually or on behalf of the company, any remuneration, profit, or benefit, except for service fees and bonuses as prescribed in Clause 9 of this Article, which are stipulated in the Fund Charter, Securities Investment Company Charter, and investment entrustment contracts;

6. In the management of entrusted assets, the fund management company ensures:

a) Not to use the assets of the fund or securities investment company to invest in the same fund or securities investment company;

b) Not to use the assets of the entrusted client's managed portfolio, fund, or securities investment company to invest in another managed fund or securities investment company, except when the entrusted client specifically designates such investments, the entrusted client is an individual foreigner, an organization established under foreign law, a wholly foreign-owned enterprise, a voluntary supplementary pension fund, and these clients have approved the execution of the aforementioned transactions;

c) Not to use the assets of a public fund or public securities investment company to invest in the same fund management company; not to invest in organizations that are related parties of the fund management company, except when using the assets of an exchange-traded fund to invest in securities within the benchmark index constituent securities; not to invest in organizations where members of the Board of Directors or Board of Members, Management Board members, or employees of the company hold more than 10% of the charter capital.

The fund management company may use the capital of member funds, single securities investment companies, and client assets entrusted to manage portfolios to invest in the aforementioned organizations if the fund charter, single securities investment company charter, investment trust contract, and minutes of the agreement on capital contribution permit the fund management company to carry out this investment at a suitable management service fee and ensure compliance with the provisions of point b of this clause;

d) Shall not use entrusted assets to lend under any form, guarantee loans under any form, or pay off the debts of the fund management company, related parties of the fund management company, organizations, or individuals. This provision does not apply to: individual foreign clients, organizations established under foreign laws and have been approved to allow the execution of such transactions; or in cases where the entrusted portfolio management client is the owner of the entrusted assets;

đ) Shall only use the assets of entrusted portfolio management clients to invest in listed derivative securities on the stock exchange for the purpose of hedging risks associated with underlying securities held by the entrusted portfolio management clients. Investments by the fund and the single securities investment company in derivative securities must comply with the regulations on securities investment funds;

e) Shall not make statements or guarantees to entrusted clients about the level of income or profit achieved from investments or guarantee that entrusted clients will not incur losses, except in the case of investing in fixed-income securities; shall not enter into investment trust contracts for bond purchases with interest rates that are inconsistent with market realities and investment analysis results of the company; shall not directly or indirectly compensate part or all of the losses of entrusted clients due to investment activities;

g) Shall not engage in transactions aimed at reducing the profits of one entrusted client to increase the profits of another entrusted client; shall not conclude contracts or conduct transactions with terms unfavorable to entrusted clients;

7. The fund management company may only use its own capital and the capital of entrusted clients to purchase and hold (excluding shares in the portfolio of an entrusted client that is an index fund) more than 25% of the voting shares of a public company or circulating closed-end fund certificates of a closed-end fund when ensuring:

a) Written approval from the entrusted clients or their representatives regarding the public tender offer, the tender offer price, the expected amount of assets to be tendered, and the method of asset distribution after the tender offer is completed;

b) The fund management company conducts the public tender offer in accordance with the public tender offer regulations stipulated by the Securities Law;

8. The fund management company shall not delegate or outsource to organizations within Vietnam to provide fund investment management services, investment portfolio management services, or securities investment advisory services;

9. Except for open-ended funds, the fund management company may receive performance bonuses according to the provisions of the fund charter, the single securities investment company charter, and the investment trust contract. The bonus amount must comply with the following principles:

a) Calculated based on the annual excess profit of the securities investment fund or the single securities investment company over a reference profit determined based on the market index growth rate, portfolio structure, and other indicators specified in the fund charter, the single securities investment company charter, and the investment trust contract;

b) Must be reduced or not paid if there were losses in the preceding years and these losses have not been offset.

Article 12. Delegation of Activities

1. During the course of conducting business operations, the fund management company may:

a) Delegate to the custodian bank, supervisory bank, Vietnam Securities Depository Corporation to perform fund management services and agency transfer services for securities investment funds and securities investment companies;

b) Delegate to foreign organizations providing advisory and asset management services for entrusted assets located abroad.

2. When implementing the delegation of activities as stipulated in Clause 1 of this Article, the fund management company must ensure:

a) The fund charter, securities investment company charter, and investment trust agreement contain provisions allowing the fund management company to delegate these activities. In cases where the delegation of activities is carried out as provided in Point b of Clause 1 of this Article, the foreign organization must be licensed by the relevant authority in the securities sector of that country to accept delegation and be subject to supervision and inspection by such authority;

b) Basic information about the delegatee, scope of activities, functions, and responsibilities of the delegatee must be disclosed in the Prospectus and provided to the entrusting clients. The Shareholders' Meeting of the securities investment fund, the Shareholders' Meeting of the securities investment company, and the entrusting clients have the right to request the fund management company to change the delegatee if deemed necessary;

c) The delegatee must possess sufficient capacity, systems, personnel, and experience to carry out the delegated activities;

d) The service-providing department of the delegatee must be separate from other departments of the delegatee in terms of organizational personnel, operational procedures, reporting systems, and approval processes for reports;

đ) The delegatee has the responsibility to provide the fund management company with independent audit reports on the delegated activities, and documents serving the inspection and supervision activities of the fund management company as stipulated in Point c of Clause 3 and Clause 4 of this Article;

e) The delegation of activities and the delegatee as provided in Point a of Clause 1 of this Article must be clearly stated in the fund charter and the securities investment company charter. The delegation of activities and the delegatee as provided in Point b of Clause 1 of this Article must be approved in writing by the Shareholders' Meeting of the securities investment fund, the Shareholders' Meeting of the securities investment company, and the entrusting clients;

3. In the process of delegating activities, the fund management company must assume responsibility:

a) Before signing a service usage contract with the delegatee, the fund management company must assess and prepare a report evaluating the capacity and physical facilities, ensuring that the delegatee has adequate equipment, technical solutions, operational procedures, experienced and qualified personnel to carry out the delegated activities; (i) Name, headquarters address, contact phone number of the parties signing the contract; materials, technical solutions, business processes, experienced personnel with appropriate professional qualifications to carry out the authorized activities;

b) Sign a delegation contract with the delegatee. The delegation contract shall include the minimum contents as prescribed in Appendix IX issued together with this Circular;

c) Regularly inspect and supervise to ensure that the delegated activities are conducted prudently, safely, and in compliance with legal regulations, the fund charter, the securities investment company charter, the investment trust agreement, ensuring the quality of services provided meets the criteria and requirements of the company and the entrusting clients. The fund management company may use independent consultants and services provided by other professional organizations operating legally to fulfill the responsibilities stipulated herein. Monthly, the fund management company must prepare a comprehensive report on the results of inspecting and supervising the delegated activities;

d) Maintain experienced and specialized personnel suitable for monitoring, identifying, and effectively managing risks arising from the delegated activities;

đ) Establish systems and build procedures to ensure at all times that the fund management company, independent auditors, and the State Securities Commission can access necessary information to inspect and supervise the delegated activities, evaluate, and manage risks arising from the delegated activities;

e) The delegation does not reduce or alter the responsibility of the fund management company towards the entrusting clients. The fund management company is fully responsible for financial and legal liabilities arising from the delegation, except for legal obligations, fees, and service prices directly agreed upon and paid by the client to the delegatee based on the investment trust agreement, supervision contract, custody contract, as stipulated in the fund charter and the securities investment company charter, and in accordance with related laws. The fund management company must ensure the continuity of the delegated activities, without interruption and affecting the investment activities and services provided to the entrusting clients;

g) Provide complete, timely, and accurate information related to the delegatee to fully and promptly exercise rights and obligations in the delegated activities;

h) Timely and accurately store instructions, requests, and documents sent to the delegatee to implement the delegated activities, delegation contracts, and capacity and physical facility evaluation reports. These documents must be provided to the State Securities Commission upon request;

i) Within ten days from the date of signing the contract with the delegatee for the activities specified in Point b of Clause 1 of this Article, the fund management company must notify the State Securities Commission of this delegation and attach documents confirming that the delegatee meets the requirements stipulated in Clause 2 of this Article;

4. Reports on inspections and supervision carried out as stipulated in Point c of Clause 3 of this Article and related documents must be provided to the Board of Directors or Board of Members or owners of the fund management company, the fund representative council, the Board of Directors of the securities investment company, the relevant supervisory bank, and the State Securities Commission within thirty days from the date the report is compiled.

Article 13. Termination of rights and obligations of the fund management company towards the entrusting client and replacement of the fund management company

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

a) The fund management company voluntarily proposes to terminate its rights and obligations towards the entrusting client in accordance with the provisions of the Fund Charter, Securities Investment Company Charter, and the Entrustment Investment Contract;

b) At the request of the Shareholders' Meeting of the Securities Investment Fund, the Shareholders' Meeting of the Securities Investment Company, or the entrusting client managing the portfolio;

c) The fund management company has its securities business establishment and operation license revoked according to the provisions of Article 95 of the Securities Law;

d) Reorganization of the fund management company;

đ) The securities investment fund or the securities investment company has expired its operational period, and the entrustment investment contract has become invalid.

2. The fund management company must convene meetings of the Shareholders' Meeting of the Securities Investment Fund, the Shareholders' Meeting of the Securities Investment Company, and the entrusting client to seek opinions on the asset disposal plan and the replacement fund management company in the cases specified in points a, c, and d of Clause 1 of this Article.

3. Within five working days from the date the entrusting client approves the decision to replace the fund management company, the replacement fund management company shall be responsible for:

a) For the entrusting client managing the portfolio, the fund management company shall notify the State Securities Commission and attach the following documents: the principle contract regarding the termination of rights and obligations between the entrusting client and the replaced fund management company; the principle contract regarding the entrustment investment between the entrusting client and the replacement fund management company; the handover plan of rights and obligations between the two fund management companies; the principle contract regarding the depositary of assets and related contracts and documents. Within seven working days from the date of notification, the replacement fund management company shall publish information about accepting the handover of entrusted asset management on its electronic website, notify the depositary bank, and both fund management companies shall implement the handover plan of rights and obligations towards the entrusting client;

b) For the fund or the securities investment company, the fund management company shall request the State Securities Commission to adjust the Certificate of Registration for Fund Establishment and the License for Establishment and Operation of the Securities Investment Company related to the change of the fund management company.

4. The rights and obligations of the replaced fund management company towards the entrusting client shall only terminate from the completion date of the registration and transfer of ownership of the entrusted assets, full handover of assets, documents proving ownership, certificates, ledgers, and information about the entrusted assets, rights, and obligations towards the entrusting client to the replacement fund management company. The transfer of assets must be completed within six months from the date the entrusting client approves the decision to replace the fund management company. The termination of the rights and obligations of the fund management company towards the entrusting client managing the portfolio shall be carried out in accordance with the provisions of Clause 1 of Article 27 of this Circular.

5. Within seven working days from the date of completing the handover, the replacement fund management company shall submit to the State Securities Commission the handover responsibility and asset record between the two fund management companies. The record must be confirmed by the entrusting client or their representative and the depositary bank, and the supervisory bank.

6. The replaced fund management company shall bear full responsibility for the debts and assets towards the entrusting client that have not been fully handed over to the replacement fund management company. In this case, the replaced fund management company shall be responsible for resolving and mitigating any resulting consequences within five years from the completion of the asset handover to the replacement fund management company as stipulated in Clause 5 of this Article.

7. The entrusting client shall bear all costs related to replacing the fund management company in the case specified in point b of Clause 1 of this Article. Other cases shall be implemented according to the agreement between the parties.

 

Section 2

SECURITIES INVESTMENT FUND MANAGEMENT BUSINESS

 

Article 14. Establishment and Management of Funds in Accordance with Vietnamese Law

1. A fund management company may raise capital both domestically and internationally to establish and manage various types of securities investment funds and securities investment companies.

2. The conditions, procedures, formalities, and documentation for the issuance, establishment, and operation of securities investment funds and securities investment companies shall be carried out in accordance with the provisions of the Securities Law.

Article 15. Establishment and Dissolution of Funds in Accordance with Foreign Law

1. A fund management company may raise capital from abroad to register the establishment of a fund according to foreign law.

2. Within thirty days from the date of completing the registration of the establishment or dissolution of the fund with the competent authority of the foreign country, the fund management company must notify the State Securities Commission and submit the following documents:

a) A certified copy of the Certificate of Offering Fund Certificates, the Registration of Establishing a Fund under Foreign Law, or equivalent documents; or documents confirming the dissolution of the fund issued by the competent authority of the foreign country;

b) A certified copy of the registration documents for establishing or dissolving the fund submitted as required by the competent authority of the foreign country, including minutes of meetings, resolutions of the shareholders' meeting or the board of directors of the fund or equivalent bodies regarding the liquidation or dissolution of the fund.

3. When participating in investment in Vietnam, a fund established abroad by a fund management company must comply with relevant regulations applicable to foreign investors.

 

Section 3

MANAGEMENT OF INVESTMENT PORTFOLIO

 

Article 16. General Provisions on Investment Portfolio Management Activities

1. A fund management company may manage the investment portfolio for entrusted clients on accounts in the name of the fund management company or on the client's account in accordance with the investment entrustment contract signed with the client and the provisions of the law. In the case where the client is an organization, the investment entrustment contract must be signed by the legal representative of the client or an authorized representative accompanied by a power of attorney established in accordance with the law.

2. The investment entrustment contract must include basic contents as prescribed in Appendix III attached to this Circular and must ensure:

a) There are no clauses that facilitate the fund management company to evade its legal liability for compensation to the entrusted client in cases of fault or intentional misconduct by the company;

b) There are no clauses that limit the scope of compensation or financial responsibility of the company towards the entrusted client without justifiable reasons; or transfer risks to the entrusted client in cases of fault or intentional misconduct by the company;

c) There are no clauses that treat the entrusted client unfairly.

3. The investment entrustment contract and the approvals of the entrusted client allowing the fund management company to act as the owner of the entrusted assets, conduct transactions, report investment restrictions, investment instructions, and instructions to exercise ownership rights over the client's assets as stipulated herein must be established in writing or electronically. Electronic documents must comply with the Law on Electronic Transactions and related guiding documents. The fund management company must have technological infrastructure to ensure customer information security, electronic data storage, and provide such data upon request of the State Securities Commission and other competent state authorities.

4. When using the client's assets for investment, the fund management company must ensure:

a) If the investment entrustment contract does not specify otherwise, the fund management company may only invest in deposits, money market instruments including negotiable instruments and transferable instruments as prescribed by law, listed securities, securities registered for trading, open-ended fund certificates, exchange-traded fund certificates, government bonds, government-guaranteed bonds, local government bonds, repurchase transactions (repo) of government bonds, government-guaranteed bonds, and local government bonds on the trading system of the Stock Exchange;

b) If the investment entrustment contract permits, the fund management company may use the client's assets to participate in the establishment of, purchase shares in, or contribute capital to unlisted or non-registered trading enterprises; invest in privately placed corporate bonds, non-listed bonds, projects, real estate, and assets that are not listed or registered for trading securities; conduct repurchase transactions (repo) with these non-government bond, non-government-guaranteed bond, and non-local government bond assets. Such investments and transactions must fully comply with the following principles:

- Assets must be registered in the name of the entrusted client, except when the client requests otherwise in writing. If the fund management company is requested to act as the asset owner on behalf of the client, before conducting the transaction, the fund management company must obtain written approval from the client to proceed with the transaction and report the results to the client after completion of the transaction. The traded assets, original legal documents confirming asset ownership or original or certified copies of the transaction contracts, payment vouchers must be deposited and stored fully at the custodian bank chosen by the entrusted client;

- For repurchase transactions (repo) of assets that are not government bonds, government-guaranteed bonds, or local government bonds, the entrusted client must be named as the counterparty.

c) In case the fund management company is requested to be named as the owner of assets on behalf of the entrusted client who is an insurance company, financial institution, securities company, or public company; the fund management company shall have the responsibility to request the entrusted client to clearly specify investment restrictions in writing and bear legal responsibility for the type of investment assets, the volume of investment assets, the value of investment, the form of implementation, ensuring compliance with regulations on financial safety, capital safety, laws governing the activities of the entrusted client, securities laws, and the Articles of Association of the entrusted client, especially in the following activities:

- Investment in the entrusted client itself: In the case of investing in shares issued by the entrusted client, it must comply with corporate law and related laws;

- Investment in parent companies, subsidiaries, joint ventures, associated companies, and other related organizations of the entrusted client; organizations that are related parties of members of the Board of Directors or members of the Board of Members or the Chairman of the entrusted client;

- Investment in real estate, projects developed and managed by the entrusted client, parent companies, subsidiaries, joint ventures, associated companies of the entrusted client, or of organizations that are related parties of members of the Board of Directors or members of the Board of Members or the Chairman of the entrusted client;

- The entrusted client must notify, report, disclose information, and obtain approval from the competent state management agency regarding the transactions and investment activities mentioned above according to the laws governing the activities of the entrusted client; obtain approval from the General Shareholders' Meeting, Board of Members, Board of Directors, or the Owner regarding the transactions and investment activities mentioned above in accordance with the Articles of Association of the entrusted client;

d) Except in cases where the entrusted client is named as the owner of the entrusted assets, the fund management company or the entrusted client may not use the entrusted assets to lend, guarantee loans, pledge, mortgage, collateralize, deposit, credit, or serve as security in asset transactions for organizations or individuals, including the fund management company or the entrusted client itself;

đ) In cases where the entrusted client is an individual from abroad or an organization established under foreign law, the fund management company may carry out investment and financing activities for enterprises as specified or pursuant to the terms of the investment entrustment contract in accordance with relevant laws;

5. In cases where the fund management company manages a portfolio on the account of the entrusted client, the client has the responsibility to notify the securities company and depository member about entrusting the fund management company to manage the securities investment portfolio, accompanied by the investment entrustment contract or the authorization document of the entrusted client allowing the fund management company to execute transactions on the client's account;

6. During the period when the investment entrustment contract on the client's account remains valid as stipulated in Clause 5 of this Article, the securities company and depository member can only accept and execute trading orders, investment instructions, and payments from the fund management company and have the responsibility to confirm the status of the deposited assets of the entrusted client in the periodic report on the management of the investment portfolio by the fund management company. The fund management company must fully comply with its obligations in managing the securities investment portfolio, depositing assets, reporting ownership, and disclosing information, exercising all rights, and ensuring the full exercise of the rights, interests, and obligations of the entrusted client in accordance with this Circular;

7. In cases where the client designates investments, the fund management company must ensure:

a) The investment instruction of the entrusted client must be in writing and must clearly specify the type of investment asset or the organization receiving investment capital, the value of investment capital or the volume of investment assets, the time and duration of execution, and the name of the registered owner of the investment asset;

b) In cases where the fund management company is requested to stand in the name of the owner on behalf of the entrusted client:

- The fund management company has the responsibility to request the entrusted client to provide complete information to ensure that the entrusted client and the transaction counterparties, and the organizations receiving investment capital meet all conditions for the transaction to be carried out in accordance with Clause 4 of this Article and comply with the laws governing the activities of the entrusted client, the organizations receiving investment capital, and other relevant laws if applicable;

- In cases of investing in securities of public companies, public funds, or public securities investment companies, the entrusted client has the responsibility to either self-implement or authorize in writing the fund management company to perform ownership reporting and information disclosure in accordance with securities laws applicable to insiders and related parties of insiders (in cases where the entrusted client is an insider or a related party of an insider as defined by securities laws) and for major shareholders in cases where the entrusted client is a major shareholder or an investor holding five percent or more of the total number of fund certificates as stipulated by securities laws (where the number of shares and fund certificates owned by the entrusted client includes the number of shares and fund certificates registered in the name of the entrusted client and the number of shares and fund certificates designated by the entrusted client for the fund management company to invest on their behalf);% trở lên tổng số chứng chỉ quỹ theo quy định của pháp luật chứng khoán (trong đó số lượng cổ phiếu, chứng chỉ quỹ thuộc sở hữu khách hàng ủy thác bao gồm số cổ phiếu, chứng chỉ quỹ đăng ký đứng tên chủ sở hữu là khách hàng ủy thác và số cổ phiếu, chứng chỉ quỹ mà khách hàng ủy thác chỉ định công ty quản lý quỹ thực hiện đầu tư và đứng tên chủ sở hữu thay mặt khách hàng ủy thác). ||| - In cases of investing in securities of public companies, public funds, or public securities investment companies, the entrusted client has the responsibility to either self-implement or authorize in writing the fund management company to perform ownership reporting and information disclosure in accordance with securities laws applicable to insiders and related parties of insiders (in cases where the entrusted client is an insider or a related party of an insider as defined by securities laws) and for major shareholders in cases where the entrusted client is a major shareholder or an investor holding five percent or more of the total number of fund certificates as stipulated by securities laws (where the number of shares and fund certificates owned by the entrusted client includes the number of shares and fund certificates registered in the name of the entrusted client and the number of shares and fund certificates designated by the entrusted client for the fund management company to invest on their behalf).

Article 17. Investment Policy

1. The fund management company shall be responsible for compiling customer identification information, including information about beneficiaries (if any); financial capacity, investment experience, investment period, investment objectives, acceptable risk level, investment restrictions, sample investment portfolio, and other requirements (if any) of customers; necessary information related to investment restrictions as stipulated in Clause 4, Article 16 of this Circular. Clause 4 of Article 16 of this Circular.

2. Annually and when necessary, the fund management company shall be responsible for updating customer identification information according to the provisions of Clause 1 of this Article. When changes occur, the entrusting customer shall have the obligation to provide complete and timely relevant information to the fund management company. The fund management company has the right to refuse to manage the investment portfolio for the entrusting customer if the entrusting customer fails to provide complete and timely information as required.

3. The fund management company shall be responsible for establishing investment principles and policies suitable for the needs of entrusting customers based on compiled information as stipulated in Clause 1 of this Article. The investment policy must be clear and detailed, fully reflecting basic information about risk levels, types of risks, sample investment portfolio structure, management fees, rights and responsibilities of all parties, and other important related information. The investment policy is an inseparable part of the investment entrustment contract.

4. In case the fund management company does not comply with the investment policy stipulated in the investment entrustment contract, the company must adjust the investment portfolio within 15 days from the date of discovering the deviation, bear all costs arising from transactions related to this adjustment, and shall not charge management fees for parts of the portfolio that do not conform to the investment policy.

5. All losses or profits arising from investment activities that do not comply with the investment policy and investment objectives, the fund management company shall be responsible for compensating the entrusting customer according to the written agreement between both parties or allocate all generated profits directly to the customer's portfolio immediately after completing the investment portfolio adjustment.

6. The provisions of Clauses 4 and 5 of this Article shall not apply in cases where the investment portfolio structure deviates due to:

a) Market price fluctuations of assets in the entrusting customer's investment portfolio;

b) Payments made at the request of the entrusting customer;

c) Due to consolidation, merger, division, or separation activities of issuers;

d) Within six months from the date the investment entrustment contract becomes effective.

Article 18. Implementation of Investments

1. The fund management company must ensure that customers have sufficient funds and assets to execute transactions in accordance with the law.

2. The fund management company may conduct asset transactions between investment portfolios of entrusting customers according to the following principles:

a) For assets traded that are not listed securities or registered securities for trading on stock exchanges, the transaction must be approved in writing by all parties involved in the transaction beforehand. The approval opinion must include the price, volume of trade, and execution time;

b) For assets traded that are listed securities or registered securities for trading on stock exchanges:

The transaction must be approved in writing by all parties involved in the transaction beforehand or notified to the relevant parties afterwards according to the contract; simultaneously, the purchase (sale) price cannot be higher (lower) than the closing price on the day of the transaction; or the transaction price determined by the fund management company within the trading price range on the day of the transaction as stipulated in the contract.

Article 19. Custody of Entrusted Customer Assets

1. In the business of managing investment portfolios, the fund management company may open custody accounts in its own name at multiple custodian banks to custody entrusted assets according to the following principles:

a) At each custodian bank, the fund management company may open one custody account for domestic entrusted customers managing portfolios and one custody account for foreign entrusted customers managing portfolios;

b) Entrusted customers managing portfolios may choose one or more custodian banks where the fund management company opens custody accounts as stipulated in point a of this clause to custody entrusted assets;

c) The assets of entrusted customers managing portfolios must be registered and deposited fully and promptly with the custodian bank chosen by the customer, must be managed separately, independently, and must ensure the following principles:

- For assets that must be registered for ownership, the original legal documents confirming ownership of the asset must be deposited with the custodian bank except in cases where securities have been centrally registered and deposited. In cases where securities are issued in book-entry form or there is no legal document confirming ownership of the asset, the fund management company is responsible for depositing the original or a valid copy of the transaction contract and transaction documents with the custodian bank;

For assets that must be registered for ownership but have not yet completed registration under the name of the fund management company, the fund management company must deposit the original or a valid copy of the transaction contract and transaction documents with the custodian bank. The custodian bank is responsible for confirming the registration and deposit status of these assets in the periodic report on the management of investment portfolios of the fund management company until the ownership registration is completed;

- For assets that do not need to be registered for ownership as prescribed by law, the fund management company is responsible for depositing the original or a valid copy of the transaction contract and transaction documents with the custodian bank;

- For bank deposits and deposit contracts, the fund management company is responsible for providing full information about deposit accounts and the value of deposit contracts to the custodian bank so that the custodian bank can reconcile monthly with the deposit receiving organization;

- The fund management company is responsible for requesting the issuing organization, capital receiving organization, deposit receiving organization, or shareholder register management organization to reconcile and confirm ownership of assets according to the requirements of the custodian bank on a monthly basis;

d) Settlement of transactions of listed and registered securities must comply with the principle of simultaneous delivery of securities and payment and settlement netting principles as prescribed by law. Settlement of other asset transactions must be carried out according to lawful instructions from the fund management company and other relevant laws if applicable. All transfer transactions, payments, and securities transfers must be conducted accurately to the trading counterparties of the entrusted customers and the accounts of the entrusted customers. The settlement value must correspond to the quantity of assets and securities and match the amount recorded in the settlement documents. Invoices, accounting documents, electronic information, and documents confirming the settlement and execution of transactions for entrusted customers must be stored fully and accurately. Except in cases of asset transactions between investment portfolios of different entrusted customers as provided for in Clause 2 of Article 18 of this Circular, the fund management company and the custodian bank shall not transfer funds and assets internally between the accounts of portfolio-managing entrusted customers;

đ) Enter into a custody agreement with the custodian bank, deposit all assets generated in Vietnam, and manage assets separately for each entrusted customer. The custody agreement must be consistent with the investment entrustment contract and include key contents as specified in Appendix IV attached to this Circular.

2. Entrusted assets, whether tangible or intangible, registered for ownership and deposited under the name of the fund management company on the custody account but belonging to the entrusted customer and not being the property of the fund management company or the custodian bank. The fund management company and the custodian bank may not use these assets to settle debts or provide guarantees for debt settlements for themselves, third parties, or even the entrusted customer.

3. The fund management company ensures that the entrusted customer enjoys full ownership rights over the entrusted customer's assets on the entrusted account according to the following principles:

a) The fund management company is merely the authorized representative of the entrusted customer and may only carry out activities within the scope of authorization stipulated in the investment entrustment contract;

b) The fund management company may only use and manage the assets in the customer's account in accordance with the provisions of the investment entrustment contract or written instructions from the customer;

c) The fund management company exercises voting rights and other ownership rights according to written instructions from the entrusted customer; promptly and accurately informs the entrusted customer about any benefits arising related to the customer's assets.

Article 20. Acceptance and Return of Assets Entrusted by Customers

1. In the operation of managing investment portfolios, the fund management company may accept non-cash assets for management. The assets that the company accepts from entrusted customers for management must meet the following requirements:

a) Belong to the entrusted customer, with complete and valid legal documents verifying the ownership of the asset;

b) Be freely transferable, not restricted from being transferred at the time the investment entrustment contract becomes effective;

c) Not be collateralized, pledged, mortgaged, put up as a guarantee, deposited as a pledge, or involved in other secured transactions as stipulated by civil law.

2. The entrusted customer shall implement the transfer of ownership of assets in the entrusted portfolio to the fund management company for management according to the following principles:

a) For assets with registered ownership rights, the entrusted customer shall follow the legal procedures to transfer ownership of such assets to the fund management company. In cases where the entrusted assets are listed securities, traded securities, or centrally deposited securities, the transfer of ownership shall be carried out through the Vietnam Securities Depository Corporation and shall not incur transaction service fees. For other assets, the transfer of ownership shall be conducted in accordance with relevant laws;

b) For assets without registered ownership rights, the capital entrustment must be executed by delivering the entrusted assets with confirmation by a receipt. The receipt must clearly state:

- Name, address, identity card number, citizen identification card number, passport number, or other lawful personal identification of the individual entrusted customer;

- Business registration certificate number or establishment decision or equivalent document of the organizational entrusted customer; name, address, identity card number, citizen identification card number, passport number, or other lawful personal identification of the legal representative or authorized representative of the organizational entrusted customer; accompanied by minutes and resolutions of the Shareholders' Meeting, Board of Members, Board of Directors, and decisions of the owner regarding the entrustment of assets to the fund management company for management in compliance with the Articles of Association of the asset entrusting organization; establishment documents or equivalent documents of the entrusting customer if it is an organization; name, contact address, identification card number, citizen identification card number, passport number, or other legally valid personal identification number of the legal representative or authorized representative of the entrusting customer if it is an organization; accompanied by minutes of meetings and resolutions of the Shareholders' Meeting, Board of Members, Board of Directors, or decisions of the owner regarding the entrustment of assets to the fund management company in accordance with the Articles of Association of the asset entrusting organization;

- Type and quantity of entrusted assets; value of entrusted assets; date of delivery; signature of the entrusted customer or their representative and the signature of the legal representative of the fund management company.

c) An asset is only considered to have been entrusted to the fund management company for management when the lawful ownership of the contributed asset has been transferred to the fund management company.

The value of entrusted assets in the investment entrustment contract is determined according to the principle of determining the net asset value as prescribed by the law on securities investment funds. For assets that are not listed securities, traded securities, or transferable instruments, the valuation of entrusted assets can be performed by a valuation enterprise in accordance with the law on price.

3. The fund management company returns entrusted assets to the customer based on a written request from the customer according to the investment entrustment contract. The handover and transfer of ownership of assets are carried out according to the instructions of the entrusted customer and in accordance with the principles set forth in Clause 2 of this Article. In cases where the returned assets are registered and centrally deposited securities, the Vietnam Securities Depository Corporation shall carry out the transfer of ownership outside the securities trading system upon a written request from the fund management company, the entrusted customer, and the depositary bank.

Article 21. Indirect Investment Portfolio Management Activities Overseas

1. A fund management company shall conduct indirect investment portfolio management activities overseas after being approved by the State Securities Commission and obtaining the limit for entrusting indirect investments abroad from the State Bank of Vietnam.

2. Indirect investment portfolio management activities overseas must comply with regulations on investment portfolio management activities stipulated in this Circular, investment laws, banking laws,

3. The fund management company must enter into an indirect investment abroad entrustment contract with the entrusted organization; the contract must specify the amount entrusted, the term of entrustment, indirect investment abroad instruments, rights and obligations of the parties, and comply with the provisions of Clause 1, Clause 2, Article 16 of this Circular and relevant legal provisions. The indirect investment abroad entrustment contract must be separate from the domestic entrustment investment contract.

4. The fund management company must ensure that indirect investment abroad entrustment and receiving entrustment comply with foreign indirect investment laws.

5. The fund management company signs a deposit agreement with a foreign depositary organization to deposit indirect investment abroad assets. The foreign depositary organization must be permitted to carry out deposit activities according to foreign laws.

The fund management company signs a deposit agreement with a domestic depositary bank; the domestic depositary bank is authorized by the foreign depositary organization to deposit indirect investment abroad assets and must bear full responsibility for the authorized deposit activities.

6. Within five working days from the date the fund management company signs a deposit agreement with a foreign depositary organization, the domestic depositary bank signs a deposit authorization agreement with the foreign depositary organization, or when changing the foreign depositary organization, the fund management company must notify the State Securities Commission along with the deposit agreement, deposit authorization agreement, a copy of the registration certificate for securities deposit activities or equivalent documents of the foreign depositary organization.

7. Deposit activities, deposit authorization activities for indirect investment abroad assets must comply with the provisions of this Circular, investment fund laws, and relevant legal provisions.

 

Section 4

SECURITIES INVESTMENT ADVISORY SERVICES

 

Article 22. Securities Investment Advisory Services

1. Securities investment advisory services include the following contents:

a) Advising clients on investment policies and trading strategies, including capital allocation structure; types of investment assets and methods to determine asset value; investment forms; transaction timing, quantity, and prices suitable for client goals, investment policies, risk tolerance levels;

b) Issuing publications on securities investment after obtaining permission under press laws; developing and implementing programs to disseminate knowledge, promote securities investment, and specialized training programs on securities investment.

2. Before providing securities investment advisory services, the fund management company has the responsibility to compile and update information about clients, including financial capability, assets, income, investment objectives, investment forms, risk tolerance levels, experience, understanding of investment, investment assets, and other information deemed necessary. In cases where clients do not provide sufficient information as required, the fund management company may refuse to provide services.

3. When providing securities investment advisory services, the fund management company must assign securities professionals to directly advise each client.

4. At least five working days before changing the advisor for a client, the fund management company must notify the client in writing and provide information about the replacement advisor.

5. The fund management company must enter into a securities investment advisory service contract with each client, specifying:

a) Scope of securities investment advisory services, service delivery form, assets subject to advice;

b) Contract duration, service price;

c) Name and brief resume of the advisor's experience;

d) Rights and obligations of the parties involved in the contract.

Article 23. Provisions on investment advisory services for securities of fund management companies

1. Voluntary, fair, and honest towards clients, providing full and timely accurate information so that clients can make their own investment decisions.

2. The information, data, and economic forecasts provided to clients must be based on actual events, accompanied by reliable reference documents issued by professional financial organizations and publicly disclosed. The content of advice must be based on careful and reasonable scientific analysis from reliable sources. Securities analysis reports and market recommendations must clearly state the source of the data cited and the person responsible for the report's content.

3. When advising on investment in an asset, the fund management company must ensure it is consistent with the client's investment objectives, risk tolerance, and financial capacity. At the same time, the fund management company and its advisors must disclose their interests related to that asset if the company or employees own that asset.

4. Investment advisors are responsible for informing clients that the advice they provide for the client's investment activities is merely advisory and that the client bears all risks from their investment decisions.

5. In investment advisory activities, the fund management company and its advisors must ensure: ^:

a) Not advising clients to invest in assets without fully providing information about the asset and the issuing organization to the client;

b) Not acting as brokers to facilitate buying and selling transactions between clients and third parties; not brokering borrowing or lending transactions involving clients and the fund management company or between clients and third parties;

c) Not providing unverified information, rumors, or misleading information to clients; not providing false information, exaggerating facts, or information likely to cause misunderstanding, making predictions, or engaging in actions aimed at enticing, inciting, or persuading clients to trade in certain assets that are inconsistent with the client's investment objectives, investment experience, risk perception, risk tolerance, and financial capacity; not providing misleading information about the profit characteristics and risks of such assets;

d) Not giving gifts or using material benefits in any form to entice or persuade clients to trade in certain assets; not requesting, demanding, or accepting under personal or organizational names, from clients, the fund management company, or any third party, any remuneration or material benefits to entice clients to trade in certain assets, except for service fees stipulated in the securities investment advisory contract;

đ) Not investing on behalf of clients, receiving money or assets from clients for investment or trading, except in cases where the client is a trustee who has signed a trust investment contract with the fund management company;

e) Not predicting future asset prices or guaranteeing investment results except when investing in fixed-income securities or capital preservation investment products; not agreeing to share profits or losses with clients.

 

Chapter IV

ACTIVITIES OF THE FUND MANAGEMENT COMPANY DURING REORGANIZATION
TEMPORARY SUSPENSION, SUSPENSION, OR DISSOLUTION
PERIOD

 

Article 24. Activities of Fund Management Companies during Reorganization Period

1. During the reorganization period, fund management companies, the Board of Directors or Board of Members, Supervisory Board, Management Board shall be responsible for:

a) Ensuring the safety of the company's assets, not hiding or disposing of the company's assets in any form and being liable under the law for issues outside the books that have not been handed over;

b) Participating fund management companies have rights and responsibilities for all their interests and obligations until the fund management company formed after reorganization is granted or adjusted with the License for Establishment and Securities Business Operation;

c) Adhering to legal provisions on information disclosure on the securities market.

2. Shareholders opposing reorganization have the right to request the fund management company to repurchase their shares. Creditors have the right to demand the fund management company to repay loans when implementing reorganization. The above requests are carried out according to the law on enterprises.

3. From the date the License for Establishment and Securities Business Operation, and the Adjusted License for Establishment and Securities Business Operation of the fund management company formed after reorganization becomes effective, participating fund management companies must immediately hand over all their interests and obligations to the fund management company formed after reorganization. The fund management company formed after reorganization inherits all the rights and obligations of the participating fund management companies.

4. The fund management company formed after reorganization must implement information disclosure according to the legal provisions on information disclosure on the securities market.

Article 25. Activities of Fund Management Companies during Suspension Period

1. During the suspension period, fund management companies must comply with the provisions at Clause 4, Article 26 of this Circular.

2. Fund management companies report to the State Securities Commission documents ensuring the maintenance of licensing conditions stipulated in Clause 1, Article 85 of the Securities Law before resuming operations. These documents are implemented according to the regulations on related documents in the application dossier for the License for Establishment and Securities Business Operation of the fund management company.

3. Within 15 days from the date of receiving the reporting documents, the State Securities Commission notifies about the receipt of the reporting documents for resuming operations of the fund management company.

4. The State Securities Commission is responsible for disclosing information about the suspension of operations of the fund management company on the website of the State Securities Commission.

Article 26. Activities of Fund Management Companies during Suspension of Operations

1. The State Securities Commission issues a decision to suspend operations of fund management companies in accordance with the cases prescribed in Article 94 of the Securities Law.

2. The maximum suspension period is 60 days from the date of suspension for the cases prescribed in point a, point c, Clause 1, Article 94 of the Securities Law; up to six months from the date of suspension for the case prescribed in point b, point d, Clause 1, Article 94 of the Securities Law.

3. Within 15 days from the date the suspension decision takes effect, the fund management company has the responsibility to notify entrusted clients about the suspension of operations; proceed with the procedures and formalities to seek opinions from the Investors' General Meeting of the investment funds, the Shareholders' General Meeting of the investment companies, and entrusted clients regarding the handling plans for investment funds, investment companies, and entrusted investment contracts; seek opinions on replacement fund management companies (if any).

4. During the suspension period, the fund management company must comply with the following provisions:

a) Not signing new or extended entrusted investment contracts, securities investment advisory contracts; not accepting additional capital from current entrusted clients; must execute final settlement and transfer accounts upon client requests (if any);

b) Not raising capital to establish new investment funds or investment companies; not increasing the registered capital of existing investment funds or investment companies managed by them;

For ongoing valid entrusted investment contracts, operating investment funds, and investment companies, the fund management company can only conduct transactions after obtaining written approval from the entrusted client or the client's representative (one-time authorization). Entrusted clients bear full responsibility for authorizing the fund management company to conduct these transactions;

c) Not paying dividends, distributing profits; not converting unsecured debts into secured debts with their own assets; not repurchasing shares or equity contributions; not establishing additional branches, representative offices, expanding business areas, investing abroad; not participating in capital contributions or investments in subsidiaries or associated companies; not conducting business and investment activities requiring approval from the State Securities Commission as prescribed by law;

d) Adhering to legal provisions on securities portfolio management activities, investment fund management; ensuring the rights and legitimate interests of entrusted clients and fully responsible for entrusted asset transactions as prescribed by law;

đ) Having a remediation plan and reporting the implementation situation according to the requirements of the State Securities Commission.

5. Fund management companies report to the State Securities Commission documents prescribed in Clause 2, Article 25 of this Circular and documents ensuring the remediation of the situation leading to suspension of operations before resuming operations.

6. Within 15 days from the date of receiving the reporting documents, the State Securities Commission notifies about the receipt of the reporting documents for resuming operations of the fund management company.

7. The State Securities Commission shall be responsible for publishing information on the suspension of operations of fund management companies on the Commission's electronic information website.

Article 27. Activities of fund management companies during liquidation

During the liquidation process, the fund management company shall settle valid contracts; transfer rights, responsibilities, and investment portfolios of funds, securities investment companies, and entrusted clients to the replacement fund management company according to the following principles:

1. For the business of managing investment portfolios:

a) Within thirty days from the date of the approval document for liquidation issued by the State Securities Commission, the liquidating fund management company must return assets to entrusted clients upon their written request; cease trading in buying and selling securities; stop depositing and withdrawing money for entrusted clients. Subsequently, it shall reconcile the balances of money and assets for each entrusted client.

b) Within a maximum of five working days from the date of reconciling the balances of entrusted assets, the fund management company must report to the State Securities Commission on the investment portfolio of each entrusted client; notify and send account statements of the entrusted investment portfolio to each entrusted client. The account statement of the entrusted investment portfolio for each entrusted client must be confirmed by the depository bank regarding the balances of money and securities within the entrusted portfolio at the depository bank. Notifications to entrusted clients must include recommendations for a replacement fund management company; guidance on transferring assets and transferring rights and responsibilities to the replacement fund management company; or recommendations for liquidating the investment portfolio; or returning assets to entrusted clients for self-management.

c) From the date of reconciling the balances of money and securities in the managed investment portfolio account, the depository member shall not execute trading orders or payment instructions from the fund management company concerning the assets of entrusted clients, except in cases of liquidation sales transactions, transactions to exercise ownership rights of entrusted clients, or transactions based on written requests and instructions from entrusted clients.

d) After sixty days from the date of the approval document for liquidation issued by the State Securities Commission, if the entrusted client does not choose a replacement fund management company or request the liquidation of the investment portfolio, the liquidating fund management company shall transfer all assets and money of the entrusted client to the account of the replacement fund management company's entrusted portfolio as selected by the company.

2. For the business of managing securities investment funds:

a) The fund management company must seek the opinion of the Shareholders' Meeting of the securities investment fund and the General Meeting of Shareholders of the securities investment company regarding the replacement of the fund management company. In case the fund management company is being liquidated and the Shareholders' Meeting and the General Meeting of Shareholders cannot agree on a replacement fund management company, then the securities investment fund and the securities investment company must be liquidated and dissolved according to the laws governing securities investment funds.

b) The transfer of rights and obligations related to the securities investment fund and the securities investment company to the replacement fund management company shall be carried out in accordance with the provisions set forth in Article 13 of this Circular.

3. For the business of providing investment advisory services in securities: the fund management company shall terminate investment advisory service contracts within six months from the date of the approval document for liquidation issued by the State Securities Commission.

4. A fund management company undergoing liquidation must compensate clients for losses in the event that the clients' money and assets are lost during the liquidation process according to the regulations stipulated in the Charter of the securities investment fund, the Charter of the securities investment company, and the entrustment investment contract. In the absence of such provisions, clients have the rights of an unsecured creditor. The level of compensation must be implemented at the same ratio as for other unsecured creditors.

5. During the liquidation process, the fund management company shall continue to fulfill its obligation to report on the management of investment portfolios and the management of securities investment funds according to the provisions set forth in Article 29 of this Circular and the provisions of the law on investment funds, along with information on the progress of contract liquidation, asset return to each entrusted customer, and the handover of rights and responsibilities to the replacement fund management company.

 

Chapter V

INFORMATION DISCLOSURE, REPORTING OBLIGATIONS, AND RECORD KEEPING

 

Article 28. Information Disclosure

1. The fund management company must store all relevant documents at its headquarters, representative offices, branches, distribution agencies, as well as on the company's electronic information website, and provide them free of charge to investors upon request, including the following:

a) The Fund Charter, Securities Investment Company Charter, Prospectus, Summary Prospectus, and other documents, reports, and contracts referenced in the Prospectus and Summary Prospectus of the fund and securities investment company;

b) Annual financial reports audited by independent auditors for the fund and securities investment company for at least the last five years; semi-annual financial reports and quarterly financial reports up to the most recent quarter for the fund and securities investment company;

c) Periodic activity reports of the fund and securities investment company as required by the law on investment funds for at least the last five years;

d) Reports on the net asset value of the fund and securities investment company as required by the law on investment funds.

2. In cases where an entrusted customer or the representative of an entrusted customer requests it, the fund management company must provide the risk management process, clearly stating the investment limitations, preventive and management methods of risks that the company uses to manage the entrusted customer’s assets.

3. For customers managing portfolios, the fund management company has the responsibility to:

a) Monthly, the fund management company must report to the entrusted customer about the portfolio investment situation according to the model specified in Appendix V issued together with this Circular. The fund management company may provide this report to the entrusted customer in paper form or electronic form if the entrustment investment contract allows it. Electronic documents must comply with the regulations on electronic transactions;

b) Provide the entrusted customer with the entrustment investment contract, depositary contract, and attached documents upon the customer's request;

c) Provide the entrusted customer with account statements of the portfolio investment, transaction statements confirmed by the depositary bank, and information on portfolio management activities, answering any inquiries made by the customer.

4. The fund management company has the responsibility to provide the State Securities Commission with the entrustment investment contract when requested by the State Securities Commission. When providing indirect foreign investment entrustment contracts, the fund management company must submit documents proving that the entrusting organization meets the conditions for indirect foreign investment as stipulated by law.

Article 29. Reporting Obligations

1. The fund management company must send the State Securities Commission periodic reports as follows:

a) Monthly and annual reports on the activities of the fund management company according to the model specified in Appendix VI issued together with this Circular;

b) Monthly reports on the management of the portfolio investment activities of the fund management company, confirmed by the depositary bank where the fund management company opens a depositary account, confirmed by the depositary member where the entrusted customer opens an account, and confirmed by the overseas depositary organization according to the model specified in Appendix VII issued together with this Circular;

c) Semi-annual and annual reports on the risk management activities of the fund management company according to the model specified in Appendix VIII issued together with this Circular;

d) Internal audit results reports annually; internal control reports annually of the fund management company;

e) Quarterly financial reports; semi-annual financial reports reviewed, and annual financial reports audited by an approved auditing organization according to accounting laws applicable to fund management companies;

2. The deadlines for submitting periodic reports as stipulated in Clause 1 of this Article are as follows:

a) For monthly reports: Within five working days from the end of the month;

b) For quarterly reports: Within twenty days from the end of the quarter;

c) For semi-annual reports: Within forty-five days from the end of the first six months of the year;

d) For annual reports: Within ninety days from the end of the year.

3. The period for finalizing data for periodic reports as stipulated in Clause 1 of this Article is as follows:

a) For monthly reports: From the first day of the reporting month to the last day of the reporting month (except for data reflecting a specific point in time);

b) For quarterly reports: From the first day of the reporting quarter to the last day of the reporting quarter (except for data reflecting a specific point in time);

c) For semi-annual reports: From January 1 of the reporting period to June 30 of the reporting period (except for data reflecting a specific point in time);

d) For annual reports: From January 1 of the reporting year to December 31 of the reporting year (except for data reflecting a specific point in time);

e) For fund management companies that have not been operating for a full reporting period, the reporting period starts from the date of issuance of the license for establishment and securities business operation to the last day of the reporting period as specified in points a, b, c, and d of this clause.

4.³ Securities fund management companies must submit periodic reports to the State Securities Commission in electronic form based on the database of the State Securities Commission.

5. The fund management company must notify the State Securities Commission of the following events:

a) Changes, elections, dismissals of Board of Directors members, Board of Members. Notifications must be accompanied by resolutions or decisions on the election, dismissal, or change of Board of Directors members, Board of Members, and other valid documents ensuring that new Board of Directors members and Board of Members meet the requirements stipulated in the Company Charter, securities laws, and enterprise laws;

b) Changing the head of the domestic representative office, changing the director of the domestic branch. The notification of change must be accompanied by the appointment decision and other valid documents ensuring that the replacement personnel meet the legal requirements for securities;

c) Amending and supplementing the Company Charter. The notification must be sent with the amended and supplemented Company Charter;

d) Completing the transaction of transferring shares, capital contributions of shareholders, contributing members of the fund management company, except where the shares of the fund management company have been listed on the stock exchange. The notification shall be made according to the form prescribed in Appendix XI issued together with this Circular and must be accompanied by a certified copy of the share transfer contract, capital contribution transfer contract between the parties involved in the transaction. In case the fund management company is a public company, if the transfer leads to the transferee owning 25% or more of the voting shares of the fund management company, then the transferee must comply with the legal provisions regarding the public offer to purchase shares of a public company;

đ) Events that may significantly affect the financial capability, asset management activities;

6. The time limit for notifying the State Securities Commission about the events stipulated in Clause 5 of this Article is three working days from the date such events occur;

7. The fund management company must report to the fund board of directors, the board of directors of the securities investment company, or the client entrusting portfolio management in case it discovers that the supervisory bank, depositary bank violates the fund charter, the securities investment company charter, the supervision contract, the deposit contract; report to the State Securities Commission within three working days from the date of discovery if these organizations violate legal provisions;

8. In addition to the reporting cases stipulated in this Article, when necessary, to protect common interests and investor interests, the State Securities Commission may require the fund management company to report on its activities. The fund management company must report to the State Securities Commission within forty-eight hours from the date of receipt of the request from the State Securities Commission;

Article 30. Recordkeeping of Documents, Materials, and Information

1. The fund management company must fully, accurately, timely, and systematically record all documents, files, and update information and data related to the company's operations in accordance with the laws on enterprises. Files, materials, and information about the company's operations must be stored in a backup location outside the main office;

2. The fund management company, supervisory bank, depositary bank, distribution agent, and related service providers must fully, systematically, clearly, accurately, and consistently store documents appropriate to their respective responsibilities and obligations under the law and service provision contracts as follows:

a) Activities of issuing and distributing fund certificates;

b) Confirmation of ownership rights for investors of the securities investment fund, securities investment company, and entrusted clients; registration of assets owned by the securities investment fund, securities investment company, and entrusted clients;

c) Financial reports, accounting books; account systems, transaction invoices, and documents ensuring detailed, accurate, and timely reflection of every daily transaction order of each entrusted client, the company itself, and its employees, including information on transaction orders placed and executed; electronic documents and information used to determine net asset value; original legal documents for ownership registration, original or certified copies of legal documents confirming ownership rights related to assets, transactions, and relevant documents must be stored by the fund management company and supervisory bank, depositary bank throughout the operation period of the securities investment fund, securities investment company, and the validity period of the entrusted investment contract;

d) Reports on valuation activities, investment analysis, investment decisions, investment management, divestment, and related documents; summary reports on business management activities; internal inspection and control work reports in accordance with the law and internal regulations; reports on handling complaints, claims, damage compensation requests from clients;

đ) All documents related to the activities of the fund and the securities investment company;

3. Investment portfolios, transaction records, ownership registrations, accounting books, accounting accounts, electronic documents and information related to assets and asset transactions of the securities investment fund, securities investment company, and entrusted clients must be regularly and continuously checked and reconciled by the fund management company, supervisory bank, depositary bank, and related organizations in accordance with the fund charter, securities investment company charter, entrusted investment contract, and accounting laws;

4. Documents, materials, and information stipulated in Clauses 1, 2, and 3 of this Article must be stored for ten years. In the case of accounting-related documents, they must be stored in accordance with accounting and auditing laws;

 

Chapter VI

IMPLEMENTING PROVISIONS⁴

 

Article 31. Effective Date

1. This Circular takes effect from January 1, 2021.

2. This Circular replaces Circular No. 212/2012/TT-BTC dated December 5, 2012, issued by the Minister of Finance guiding the establishment, organization, and operation of fund management companies. It abolishes Article 1; Clause 1, Clause 3, and Clause 4 of Article 7 of Circular No. 91/2019/TT-BTC dated December 31, 2019, issued by the Minister of Finance amending and supplementing certain Circulars on reporting systems and administrative procedures applicable to fund management companies, securities investment funds, and securities investment companies.

3. The fund management company shall be responsible for drafting the Company Charter in accordance with the Securities Law No. 54/2019/QH14, the Enterprise Law No. 59/2020/QH14, and this Circular. The Company Charter of a joint-stock fund management company must be approved at the nearest shareholders' meeting from the date this Circular takes effect. The Company Charter of a limited liability fund management company must be approved by the Board of Members or the owner within six months from the date this Circular takes effect.

4. Provisions concerning the Vietnam Securities Depository and Central Counterparty Corporation in this Circular shall be implemented by the Vietnam Securities Depository until the Vietnam Securities Depository and Central Counterparty Corporation is established and officially operates in accordance with the Securities Law No. 54/2019/QH14.

Article 32. Implementation Organization

The State Securities Commission, the Vietnam Securities Depository and Central Counterparty Corporation, securities investment fund management companies, deposit banks, supervisory banks, and related organizations and individuals are responsible for implementing this Circular.

 

MINISTRY OF FINANCE ______ Number: 40/VBHN-BTC	CERTIFIED CONSOLIDATED DOCUMENT Hanoi, October 7, 2025
Place of Receipt: - OFFICE OF THE GOVERNMENT (FOR PUBLICATION IN THE GAZETTE); - Official Website of the Ministry of Finance (for publication); - Securities Commission Portal (for reference); - Legal Department of the Ministry of Finance; - To be filed: VT, SSC (6b).	DEPUTY MINISTER DEPUTY MINISTER Nguyen Duc Chi

 

 

^{____________________}

¹ CONSOLIDATED FROM THE FOLLOWING TWO CIRCULARS:

- Circular No. 99/2020/TT-BTC dated November 16, 2020 issued by the Minister of Finance guiding the operation of securities investment fund management companies.

- Circular No. 88/2025/TT-BTC dated September 3, 2025 issued by the Minister of Finance amending and supplementing certain articles of Circulars on reporting regulations applicable to securities investment fund management companies, representative offices, branches of securities companies, and foreign fund management companies operating in Vietnam.

This consolidated document does not replace the above two Circulars.

² Circular No. 88/2025/TT-BTC dated September 3, 2025 issued by the Minister of Finance amending and supplementing certain articles of Circulars on reporting regulations applicable to securities investment fund management companies, representative offices, branches of securities companies, and foreign fund management companies operating in Vietnam is based on the following grounds:

"Pursuant to the Securities Law No. 54/2019/QH14 amended and supplemented by Law No. 56/2024/QH15;

Pursuant to Decree No. 155/2020/NĐ-CP dated December 31, 2020 of the Government detailing the implementation of certain provisions of the Securities Law;

Pursuant to Decree No. 29/2025/NĐ-CP dated February 24, 2025 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance, amended and supplemented by Decree No. 166/2025/NĐ-CP;

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

The Minister of Finance issues this Circular amending and supplementing certain articles of Circulars on reporting regulations applicable to securities investment fund management companies, representative offices, branches of securities companies, and foreign fund management companies operating in Vietnam."

³ This Clause is amended and supplemented in accordance with Article 3 of Circular No. 88/2025/TT-BTC dated September 3, 2025 issued by the Minister of Finance amending and supplementing certain articles of Circulars on reporting regulations applicable to securities investment fund management companies, representative offices, branches of securities companies, and foreign fund management companies operating in Vietnam, which takes effect from October 20, 2025.

⁴ Article 4 of Circular No. 88/2025/TT-BTC dated September 3, 2025 issued by the Minister of Finance amending and supplementing certain articles of Circulars on reporting regulations applicable to securities investment fund management companies, representative offices, branches of securities companies, and foreign fund management companies operating in Vietnam, which takes effect from October 20, 2025, is stipulated as follows:

"Article 4. Implementation Provisions

1. This Circular takes effect from October 20, 2025.

2. In case securities investment fund management companies, representative offices, branches of securities companies, and foreign fund management companies operating in Vietnam (hereinafter referred to as reporting entities) cannot submit reports through the State Securities Commission's database due to force majeure such as network system failures, server malfunctions, inability to use digital certificates, and other force majeure reasons, the reporting entity shall notify the State Securities Commission, stating the reasons and submitting the report via email or in paper form. Once the force majeure situation is resolved, the reporting entity shall promptly submit the full report on the State Securities Commission's database.

3. The State Securities Commission, securities investment fund management companies, representative offices, branches of securities companies, foreign fund management companies operating in Vietnam, and related organizations and individuals are responsible for implementing this Circular.