Circular No. 99/2020/TT-BTC guiding the activities of investment fund management companies

 

CIRCULAR

Guidelines on the activities of investment fund management companies

On the basis of Securities Law November 26, 2019;

On the basis of Enterprise Law dated June 17, 2020;

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 guiding the activities of investment fund management companies.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

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

2.The scope of application of this Circular includes:

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 Boardincluding General Director (Director) and Deputy General Directors (Deputy Directors).

2. Certified copyis 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 Companyis a business entity granted a License for establishment and securities trading operations by the State Securities Commission, performing fund management, portfolio management, and securities investment advisory services.

4. Entrusted Clientis an investment fund, securities investment company, and individuals or organizations entrusting their capital and assets to the fund management company for management.

5. Individual dossierincludes personal information according to the form prescribed in Appendix II attached to this Circular, a valid copy of the passport of foreign individuals or other lawful identification.

6. Beneficiaryis an organization or individual who does not hold the title of owner of the asset but has full ownership rights over it as provided by law.

7. Entrusted Assetsis a list of assets including money, securities, and other assets of the entrusted client.

Chapter II

REGULATIONS ON COMPANY GOVERNANCE AND ORGANIZATIONAL STRUCTURE OF FUND MANAGEMENT COMPANIES

Article 3. Charter, Principles of Company Governance of Fund Management Companies

1.The charter of fund management companies must be established in accordance with the operational model of the company and must include at least the contents prescribed in the Model Charter set out in Appendix XII attached to this Circular. For public companies, the Model Charter applicable to public companies shall be referenced to establish the company's charter.

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

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

1.The organizational structure, rights, obligations, and activities of the Board of Directors, Board of Members, Supervisory Board, Audit Committee, internal audit department, Management Board; conditions, election, removal, dismissal, rights, 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 stipulated in the company's 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 public fund management company or a public investment securities 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 check and evaluate the organizational structure, corporate governance activities, operational management, and coordination of each department and each position to prevent conflicts of interest and protect customer rights;

b) To check and assess the completeness, effectiveness, efficiency, and compliance with legal regulations, provisions of the Company Charter; internal control systems; internal policies and procedures, including professional ethics 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, legitimacy, truthfulness, prudence, and adherence to business processes and risk management;

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 at random intervals;

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

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

e) To recommend solutions to improve the effectiveness and efficiency of the company's operations; to monitor the results of implementing 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 comply with 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 objective, fair, unbiased, and free from 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. Management Board members and all employees of the fund management company are responsible for cooperating, providing complete, timely, truthful, and accurate information and documents related to the requirements of the internal audit department. Departments within the company are responsible for informing the internal audit department of any 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 are responsible for maintaining confidentiality of information obtained during the audit process, except when required by competent state management agencies;

4. Personnel of the internal audit department must meet the following conditions upon appointment:

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) Possessing a professional certificate for asset management in countries that are members of the Organization for Economic Co-operation and Development (OECD) or having passed the international investment analyst certification CFA level II or higher (Chartered Financial Analyst level II) or CIIA (Certified International Investment Analyst - Final Level); or possessing a securities professional certificate; or possessing a basic securities and securities market issues certificate and a securities and securities market law certificate;

5. The personnel structure of the internal audit department must include at least one employee holding a certified auditor or certified accountant certificate issued by Vietnam; or international certificates 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 the legal affairs, inspection, management, and supervision 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 decision of the owner regarding the appointment, dismissal, or change of personnel in the internal audit department;

b) Personal file, judicial record not older than six months from the submission date (for new employees), certified copies of documents ensuring that the personnel and 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 appropriate internal control system in accordance with 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 shall be responsible for:

a) Monitoring 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) Supervising 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 or decision-making, organization of 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 throughout the business process without consulting other departments or individuals;

c) Participating in building and supervising the implementation of internal policies, regulations, procedures, and rules of the company aimed at preventing conflicts of interest; supervising the implementation of professional ethics rules; compiling, storing, statistically analyzing, and monitoring the company's business activities and personal transactions of company employees;

d) Participating in building and organizing the implementation of risk management processes for the company and each entrusted client; promptly identifying, assessing the level of risk, setting investment limits, and taking preventive and management measures for potential risks in the company's investment activities and those of entrusted clients;

đ) Ensuring that the net asset value of entrusted portfolios, 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) Supervising and ensuring the financial information system and management are truthful, complete, timely, and accurate; having a backup information system to promptly handle emergencies such as natural disasters, fires, explosions, ensuring continuous operation of the company;

g) Proposing solutions to resolve disputes, conflicts of interest, and complaints from customers and partners; contingency plans to mitigate consequences when incidents occur;

h) Performing 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) Meeting the provisions of Clause 4, Article 5 of this Circular;

b) Having at least two years of work experience 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 being related to members of the Management Board and not concurrently working 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 officer 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 officers, 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 officers;

b) A list attached with personal files and criminal records issued no more than six months prior to the submission date (for new staff members); certified copies of other documents ensuring that the staff member and the personnel structure of the internal control department meet the requirements 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 identify potential risks in the company's activities, asset management activities, and inspection and supervision activities at each unit, department, and licensed business activity.

Article 7. Management Board, 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 the provisions of 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 certificates to the following positions:

a) Fund manager; 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 the fund manager 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 for the General Director (Director), Deputy General Directors (Deputy Directors) responsible for securities business operations, or the fund manager, the fund management company must notify the State Securities Commission and submit 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) List of the General Director (Director), Deputy General Directors (Deputy Directors) responsible for securities business operations, and the fund manager according to the model prescribed in Appendix I issued along with this Circular; 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 followed by the phrase "representative office" and comply with the regulations on the name of representative offices under the laws 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 the representative office contain false information;

c) Operating 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 notice from the State Securities Commission regarding 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 operations 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 FUND MANAGEMENT COMPANIES

Section 1.

GENERAL PROVISIONS

Article 10. Obligations of Fund Management Companies

1. A 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. A 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 appropriate to the company’s securities business; internal control procedures; pricing 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 the case 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. A fund management company must adhere to professional ethics rules, act voluntarily, fairly, truthfully, and in the best interests of the entrusting client. The provisions on compliance with professional ethics rules are mandatory clauses in employment contracts between the company and its employees.

4. A 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, a fund management company must ensure:

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

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 information, and storing original legal documents verifying asset ownership at deposit banks and monitoring banks;

- In the case of depositing money or certificate of deposit for the entrusting client: the fund management company can only deposit at credit institutions approved by the entrusting client; must provide full information about deposit contracts and deposit accounts to the deposit bank and monitoring bank for these organizations to reconcile account balances and the value of deposit contracts with the credit institution accepting deposits, store original deposit contracts, and provide them upon request of the deposit bank and monitoring bank;

- In the case of investing in shares of limited liability companies, unlisted stocks, or unlisted bonds for the entrusting client: the fund management company must deposit original or valid copies of transaction contracts, transaction documents, or original share registers or membership registers or documents confirming asset ownership at deposit banks and monitoring banks for these organizations to periodically reconcile with the organization 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; fully and promptly storing accounting books, transaction documents, and related materials to transactions and asset ownership of entrusting clients; comprehensively, accurately, and promptly compiling information on the assets of each entrusting client and the places where those assets are deposited;

d) Establish a mechanism for inspection, regularly reconciling three-party 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 receiving organizations, deposit receiving organizations. The fund management company is responsible for establishing a mechanism to enable the custodian bank and supervisory bank to actively and directly reconcile with the aforementioned organizations to check, monitor, and comprehensively and accurately compile information on asset custody, ownership registration, and asset management.

e) Assign a minimum of two fund managers to manage and oversee the investment activities of each securities investment fund and each securities investment company. Fund managers must have a fund management license, 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 a securities investment fund or a 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 process for allocating trading orders and distributing assets fairly and reasonably when executing transactions for entrusted customers and for itself. The asset allocation process must clearly state the implementation principles, pricing methods, and the quantity of assets allocated to 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 the event that 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 be carried out in the following priority order:

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

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

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

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

a) For public funds, public securities investment companies:

- The value of securities transactions through brokerage in a year by a securities company does not exceed 50% of the total value of securities transactions in a year by the public fund, public securities investment company;

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

This provision does not apply to: public funds, 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, public securities investment company was established; Open-ended bond funds with a total transaction value in a year 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 where the company has provided full information about the interests of the fund management company with the securities company and the entrusted customer has issued a written approval allowing exemption from applying the above regulations.

8. In fund management operations and agency transfer activities, 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 certificate, and stock of the securities investment company, and other fund management activities in accordance with laws on securities investment funds, the Fund Charter, the Securities Investment Company Charter, and the Entrusted Investment Contract;

b) Establishing, storing, and promptly updating the investor registration book, shareholder registration book. The content of the investor registration book, shareholder registration book shall be implemented in accordance with relevant legal provisions on 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 activities. The authorization to operate complies with the provisions of Article 12 of this Circular and the provisions of 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 oversight by the Shareholders' Meeting, the Board of Directors of the securities investment company, the supervisory bank, and be responsible to the Shareholders' Meeting and the 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 contract.

b) Ensure the establishment of systems, development of procedures, and implementation of risk management consistent with the investment policy, type of investment assets, and report to the Shareholders' Meeting and the 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 the Board of Directors of the securities investment company as stipulated in the Company Charter of the securities investment company and the investment trust contract.

d) Implement investment policies and resolutions of the Shareholders' Meeting and the 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 limit, types of permitted investment assets, transaction volume, and transaction counterparties specified in the Company Charter of the securities investment company and the investment trust contract.

đ) Propose dividend distribution plans, capital increase or reduction 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 contract.

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

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

11. The fund management company has the obligation to provide timely and complete information about: entrusted customers, entrusted asset portfolios, entrusted asset transactions, organizations receiving investment capital, related parties of the fund management company, and other relevant information to the depositary bank and the supervisory bank. The fund management company must provide information upon written request of the depositary bank and the supervisory bank and facilitate these organizations in fully exercising their rights and fulfilling their obligations as prescribed by law. At least once a month, the fund management company has the obligation to reconcile the asset portfolio of each entrusted customer with the depositary bank and the 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 contract, the fund management company must cancel the transactions or undertake transactions to restore the portfolio for the entrusted customer. The fund management company shall bear all costs arising from these transactions and losses. In case these transactions generate profits, the entire profit amount must be recorded for the benefit of the entrusted customer.

13. The fund management company is liable for compensating losses caused to entrusted customers due to employee errors, accidents, or technical system and operational procedure faults of the company, or due to the fund management company failing to fulfill its obligations as prescribed by law, the Fund Charter, the Company Charter of the securities investment company, and the investment trust contract. 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, fund members, securities investment companies, and other entrusted customers 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 operations department if deemed necessary, or establish a reserve fund to compensate losses to entrusted customers in cases stipulated in Clause 13.

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 execution 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 execution 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 full customer information, and verify customers accurately 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 ensures that the investment of assets entrusted by individual and foreign organizations complies with the legal regulations on foreign exchange management and the proportion of foreign ownership 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 related legal provisions. Indirect foreign investment activities can only be carried out if the Fund Charter, Securities Investment Company Charter, and the 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 from the State Securities Commission and competent state management agencies.

20. The fund management company must ensure:

a) Separation of headquarters and information technology infrastructure from other organizations. In cases where 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 activities; investment research and analysis activities; investment execution activities; and securities investment advisory activities. The computer system and database permissions must be assigned to each individual and department according to their positions as stipulated by internal control regulations.

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

21. In financial investment activities using own capital, the fund management company must ensure:

a) Financial investments must be sourced from own capital and not borrowed funds in any form;

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

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

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 corporate law regulations;

đ) It is allowed to use legally raised funds, including borrowed funds, to invest in company headquarters. If unused space is available, 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 investment value, or divestment, following the model prescribed in Appendix X attached to this Circular;

g) The fund management company and related parties (excluding related parties that are managed 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 stock exchanges;

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 of Article 21, investment laws, banking laws, and the following principles:

a) The fund management company is permitted to invest up to 20% of its equity capital as reported in the most recent audited annual financial statements or reviewed semi-annual financial statements or quarterly financial statements, ensuring that it does not exceed the limit confirmed by the State Bank of Vietnam. The fund management company can only conduct indirect foreign investment in investment instruments specified 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 course of reporting ownership and disclosing information about market transactions, the fund management company has the responsibility:

a) The fund management company and entrusted clients 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 date:

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

- The fund management company is a related party of an insider as provided by law, except for exchange transactions of exchange-traded funds and periodic portfolio restructurings according to the reference index;

- The obligation to report ownership, disclose information, methods, timing of disclosure, and the format of ownership reports and information disclosures 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 client is named as the owner of the entrusted asset, the entrusted client shall be responsible for fulfilling the obligations to report ownership and disclose information as prescribed by law;

25. The fund management company has the responsibility to organize annual training and seminars for employees, sending securities professionals 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 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 in the fund management company database of the State Securities Commission in a timely and complete manner;

Article 11. Restrictions on the activities of fund management companies and their employees;

1. A fund management company may not be a related party or have ownership, lending, or borrowing relationships with the supervisory bank or custodian bank of the securities investment fund or 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, or fund management services at these banks, and vice versa;

2. The fund management company and its related parties may participate in establishing and investing in funds or securities investment companies managed by the fund management company if the fund charter or securities investment company charter allows such participation, except for activities prohibited under 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 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 the representative of the entrusted client. The client's approval letter must specify: type of traded assets, 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 and employees of the fund management company must be reported to the internal control department before and immediately after the transaction. Transaction reports of individuals mentioned above must include: name of traded securities, quantity, transaction price, total transaction value, time of execution, method of execution, trading account number, securities company where the trading account is opened. 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 stipulated in Clause 9 of this Article as specified in the fund charter, securities investment company charter, and investment trust agreements;

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

a) Not using the assets of the fund or securities investment company to invest in itself;

b) Not using the assets of the entrusted client's managed portfolio, fund, or securities investment company to invest in another fund or securities investment company managed by itself, except when the entrusted client's managed portfolio specifically designates such investment, 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 such transactions;

c) Not using the assets of the public fund or public securities investment company to invest in the fund management company itself; not investing in organizations that are related parties of the fund management company, except when using the assets of the exchange-traded fund to invest in securities within the structural securities portfolio of the reference index; not investing 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, individual securities investment companies, and client assets entrusted for portfolio management to invest in the aforementioned organizations if the fund charter, individual securities investment company charter, investment trust agreement, and minutes of the capital contribution agreement permit the fund management company to carry out such investments at appropriate management service fees and ensure compliance with the provisions of this point b;

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 clients from foreign countries, organizations established under foreign laws that have been approved to allow the execution of the aforementioned transactions; or in cases where the portfolio management entrustment client is the owner of the entrusted assets;

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

e) Shall not make statements or guarantees to entrustment clients about the level of income or profit achieved on the investment or guarantee that entrustment clients will not incur losses, except in the case of investing in fixed-income securities; shall not enter into investment trust agreements 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 a part or all of the losses incurred by entrustment clients due to investment activities;

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

7. The fund management company may only use its own capital and the capital of entrustment clients to purchase and hold (excluding the number of shares in the entrustment client's portfolio that is an index fund swap) 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 entrustment 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 executed;

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 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 individual securities investment company charter, and the investment trust agreement. The bonus amount must comply with the following principles:

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

b) Must be reduced or not paid if the investment activities in the preceding years resulted in losses that 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 Entrusted Investment Contract provide provisions allowing the fund management company to delegate these activities. In cases where the delegation of activities is carried out as prescribed in Point b of Clause 1 of this Article, the foreign organization must be licensed by the relevant authority in the securities sector of the foreign country to accept delegation and be subject to supervision and inspection by that authority;

b) Basic information about the recipient of the delegation, scope of activities, functions, and responsibilities of the recipient of the delegation must be disclosed in the Prospectus and provided to the entrusting client. The Shareholders' Meeting of the Securities Investment Fund, the Shareholders' General Meeting of the Securities Investment Company, and the entrusting client have the right to request the fund management company to change the organization receiving the delegation if deemed necessary;

c) The recipient of the delegation must possess adequate capacity, systems, personnel, and experience to carry out the delegated activities;

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

đ) The recipient of the delegation 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 prescribed in Point c of Clause 3 and Clause 4 of this Article;

e) The delegation of activities and the recipient of the delegation as prescribed 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 recipient of the delegation as prescribed 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' General Meeting of the Securities Investment Company, and the entrusting client;

3. In the process of delegation, the fund management company shall be responsible for:

a) Before signing a service usage contract with the recipient of the delegation, the fund management company must assess and prepare a report evaluating the capacity and infrastructure, ensuring that the recipient of the delegation has sufficient equipment, technical solutions, operational procedures, experienced and qualified personnel to carry out the delegated activities;

b) Signing a delegation contract with the recipient of the delegation. The delegation contract includes minimum contents according to the model prescribed in Appendix IX issued together with this Circular;

c) Regularly inspecting and supervising to ensure that the delegated activities are conducted prudently, safely, and in compliance with the law, the Fund Charter, the Securities Investment Company Charter, the Entrusted Investment Contract, ensuring the quality of services provided meets the criteria and requirements of the company and the entrusting client. The fund management company may use independent consultants and services provided by other professional organizations operating legally to fulfill the responsibility prescribed herein. Monthly, the fund management company must prepare a consolidated report on the results of inspecting and supervising the delegated activities;

d) Maintaining experienced and qualified personnel to monitor, identify, and manage effectively risks arising from the delegated activities;

đ) Establishing systems and building 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 client. The fund management company shall bear full financial and legal responsibility arising from the delegation, except for legal obligations, fees, and service charges directly agreed upon and paid by the client to the recipient of the delegation based on the Entrusted Investment Contract, Supervision Contract, Custody Contract, as stipulated in the Fund Charter and the Securities Investment Company Charter, and in accordance with relevant laws. The fund management company must ensure the continuity of the delegated activities, without interruption, and without affecting the investment activities and services provided to the entrusting client;

g) Providing complete, timely, and accurate information related to the recipient of the delegation to fully and promptly exercise rights and obligations in the delegated activities;

h) Properly storing complete, timely, and accurate instructions, requests, documents sent to the recipient of the delegation to implement the delegated activities, delegation contracts, capacity and infrastructure assessment 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 recipient of the delegation for the activities prescribed 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 recipient of the delegation complies with the provisions of Clause 2 of this Article;

4. Reports on inspections and supervision carried out as prescribed 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 banks, 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 General Meeting of Shareholders of the Securities Investment Company, or the entrusting client managing the portfolio;

c. The fund management company has had its securities business establishment and operation license revoked in accordance with 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 General Meeting of Shareholders 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 at the time of completion of 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 handover 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 rights and obligations of the fund management company towards the entrusting client managing the portfolio shall be carried out in accordance with Clause 1 of Article 27 of this Circular.

5. Within seven working days from the date of completion of the handover, the replacement fund management company shall submit to the State Securities Commission the minutes of the handover of responsibilities and assets between the two fund management companies. These minutes 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 date of completing the handover of assets 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 two 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 various types 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 in accordance with foreign law.

2. Within thirty days from the date of completing the registration for the establishment or dissolution of a fund with the competent authority of a 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 a foreign country;

b) A certified copy of the registration documents for establishing or dissolving a fund submitted according to the requirements of the competent authority of a foreign country, including minutes of meetings, resolutions of the shareholders' meeting or the board of directors or equivalent bodies of the fund 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

BUSINESS OF MANAGING INVESTMENT PORTFOLIO

Article 16. General Provisions on Investment Portfolio Management Activities

1. A fund management company may manage investment portfolios for entrusted clients on accounts in the name of the fund management company or on the accounts of the entrusted clients in accordance with the investment entrustment contract signed with the entrusted client and the provisions of the law. In the case where the entrusted client is an organization, the investment entrustment contract must be signed by the legal representative of the entrusted 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 allow the fund management company to evade its legal obligation to compensate 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 liability 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 consents 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 assets of the entrusted client 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 the security and confidentiality of customer information, storage of electronic data, and provision upon request of the State Securities Commission and other competent state management agencies.

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

a) If the investment entrustment contract does not provide 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 allows it, the fund management company may use the assets of the entrusted client to participate in the establishment of, purchase shares or equity contributions in unlisted or non-registered trading enterprises; invest in privately placed corporate bonds, non-listed corporate bonds, projects, real estate, and assets that are not listed or registered for trading securities; conduct repurchase transactions (repo) with such 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 entrusted client requests otherwise in writing. If the fund management company is requested to act as the owner of the asset on behalf of the entrusted client, before conducting the transaction, the fund management company must obtain written consent 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 ownership of the asset 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 limitations 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 the parent company, subsidiary, joint venture, associated company, 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, the parent company, subsidiary, joint venture, associated company 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 Meeting of Shareholders, Board of Members, Board of Directors, or Owner regarding the transactions and investment activities mentioned above in accordance with the Articles of Association of the entrusted client;

d) Except when 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 the case where the entrusted client is a foreign individual 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 the case 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 has the responsibility to fully comply with its obligations in managing the securities investment portfolio, depositing assets, reporting ownership, and disclosing information, exercising all rights, ensuring the full exercise of the rights, interests, and obligations of the entrusted client in accordance with this Circular;

7. In the case 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 the case where the fund management company is requested to be named as 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 organization 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 organization receiving investment capital, and other relevant laws if applicable;

- In the case of investing in securities of a public company, public fund, or publicly traded securities investment company, the entrusted client has the responsibility to either perform themselves or authorize in writing the fund management company to perform ownership reporting and disclosure of information in accordance with securities laws applicable to insiders and related parties of insiders (in the case where the entrusted client is an insider or a related party of an insider as defined by securities laws) and for major shareholders in the case where the entrusted client is a major shareholder or an investor holding 5% 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 the beneficiary (if any); financial capacity, investment experience, investment period, investment objectives, acceptable risk level, investment restrictions, sample investment portfolio, and other requirements (if any) of the customer; necessary information related to investment restrictions as stipulated in Clause 4, Article 16 of this Circular.

2. Annually and when necessary, the fund management company shall be responsible for updating customer identification information entrusted 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 the entrusting customer based on compiled information as stipulated in Clause 1 of this Article. The investment policy must be clear and detailed, fully reflecting basic information on risk levels, types of risks, sample investment portfolio structure, management fees, rights and responsibilities of the parties, and other important related information. The investment policy is an integral 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 such transactions, and shall not charge management fees for the portion of the portfolio that does 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 resulting profits 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) Activities involving mergers, acquisitions, divisions, or spin-offs of issuing organizations;

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 different entrusting customers according to the following principles:

a) For non-listed securities or securities registered for trading on stock exchanges, transactions must be approved in writing by all parties involved in the transaction prior to execution. The approval opinion must include the price, volume, and time of execution;

b) For listed securities or securities registered for trading on stock exchanges:

Transactions must be approved in writing by all parties involved in the transaction prior to execution or notified to the relevant parties after the transaction 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 custodial 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 custodial account for domestic entrusted customers managing investment portfolios and one custodial account for foreign entrusted customers managing investment portfolios;

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

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

- For assets that must be registered as 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 the form of recorded numbers or do not have legal documents 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 as 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 periodic reports on the management of investment portfolios by the fund management company until the ownership registration is completed;

- For assets that do not need to be registered as ownership according to the provisions of the 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 reconciles monthly with the deposit receiving organization;

- The fund management company is responsible for requesting the issuing organization, the capital investment receiving organization, the deposit receiving organization, or the shareholder registry management organization to reconcile and confirm ownership of the asset according to the request of the custodian bank monthly;

d) Settlement of transactions of listed securities and registered transactions must comply with the principles of simultaneous delivery of securities and payment and netting settlement 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 legal provisions 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 payment amount must correspond to the quantity of assets and securities and match the amount recorded in the payment 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 entrusted customers as stipulated in Clause 2, Article 18 of this Circular, the fund management company and the custodian bank, supervisory bank shall not transfer funds and assets internally between the accounts of entrusted customers managing investment portfolios;

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 and deposited on custodial accounts under the name of the fund management company but belong to the entrusted customer and are not 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 payment guarantees for their own debts or for third parties or for the entrusted customer themselves.

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 principle:

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

b) The fund management company may only use and manage assets in the entrusted 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 of all benefits arising related to the entrusted 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) Belonging to the ownership of the entrusted customer, with complete legitimate legal documents verifying the customer's asset ownership rights;

b) Being freely transferable assets, not restricted from transfer at the time the investment entrustment contract becomes effective;

c) Not being assets under pledge, mortgage, deposit guarantee, collateral, advance payment, credit guarantee, or 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 process the transfer of ownership rights of such assets to the fund management company in accordance with the law. In cases where the entrusted assets are listed securities, traded securities, or centrally deposited securities, the transfer of ownership rights shall be carried out through the Vietnam Securities Depository Corporation and shall not incur transaction service fees. For other assets, the transfer of ownership rights shall be carried out 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, contact address, identification number of the identity card, citizen identification card, passport, or other lawful personal identification of individual entrusted customers;

- Business registration certificate number or establishment decision or equivalent document of organizational entrusted customers; name, contact address, identification number of the identity card, citizen identification card, passport, or other lawful personal identification of the legal representative or authorized representative of organizational entrusted customers; accompanied by minutes of meetings 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 Organization 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 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 legal ownership right over the contributed asset has been transferred to the fund management company.

d) The value of entrusted assets in the investment entrustment contract is determined based on the principle of determining the net asset value as stipulated by the law on securities investment funds. For assets that are not listed securities, traded securities, or transferable instruments, the valuation of entrusted assets may be conducted by a valuation enterprise in accordance with the law on prices.

3. The fund management company shall return entrusted assets to the customer upon request in writing by the customer based on the investment entrustment contract. The handover and transfer of ownership of assets shall be carried out according to the instructions of the entrusted customer and in accordance with the principles specified 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 written request by the fund management company, the entrusted customer, and the depositary bank.

Article 21. Indirect Investment Portfolio Management Activities Overseas

1. The fund management company shall conduct indirect investment portfolio management activities overseas after being approved by the State Securities Commission and obtaining the limit for accepting mandates to invest indirectly overseas from the State Bank of Vietnam.

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

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

4. The fund management company must ensure that indirect investment mandates and acceptance of indirect investment mandates overseas comply with the legal regulations on indirect investment overseas.

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

The fund management company signs a deposit agreement with a domestic depositary bank; the domestic depositary bank is authorized by the depositary organization abroad to deposit indirect investment assets overseas 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 depositary organization abroad, the domestic depositary bank must sign a deposit authorization agreement with the depositary organization abroad, or when changing the depositary organization abroad, the fund management company must notify the State Securities Commission along with the deposit agreement, the deposit authorization agreement, a copy of the registration certificate for securities deposit activities or equivalent documents of the depositary organization abroad.

7. Deposit activities and deposit authorization activities for indirect investment assets overseas must comply with the provisions of this Circular, securities investment fund laws, and related 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 structures; types of investment assets and methods to determine asset values; forms of investment and transactions; timing, quantity, and prices suitable for the client's objectives, investment policies, risk tolerance levels;

b) Issuing publications on securities investment to the public 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 complete 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 a securities professional certified employee to directly advise each client.

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

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

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

b) Contract duration, service fee;

c) Name and brief resume regarding experience of the advisory staff;

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 customers, providing full and timely accurate information to enable customers to make their own investment decisions.

2. The information, data, and economic forecasts provided to customers 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 credible sources. Securities analysis reports and market recommendations must clearly state the source of the data and the person responsible for the report's content.

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

4. Advisors are responsible for informing customers that the advice given for their investment activities is merely advisory and that customers bear all risks from their investment decisions.

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

a) Not advising customers to invest in assets without fully disclosing information about the asset and the issuing organization to the customer;

b) Not acting as an intermediary for buying and selling transactions between customers and third parties; not acting as an intermediary for borrowing or lending assets between customers and the fund management company or between customers and third parties;

c) Not providing unverified information, rumors, or misleading information to customers; not providing false information, exaggerating facts, or providing information that may cause misunderstanding, making predictions, or engaging in actions aimed at enticing, urging, or persuading customers to trade in a certain type of asset that does not match the customer's investment objectives, investment experience, risk perception, risk tolerance, and financial capability; not providing information that misleads about the characteristics of returns and risks of the asset;

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

đ) Not investing on behalf of customers, receiving money or assets from customers for investment or trading, except in cases where the customer has signed a mandate investment contract with the fund management company;

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

Chapter IV

ACTIVITIES OF THE FUND MANAGEMENT COMPANY DURING REORGANIZATION, TEMPORARY SUSPENSION OF OPERATIONS, TERMINATION OF OPERATIONS, AND LIQUIDATION

Article 24. Activities of Fund Management Companies during Reorganization Period

1. During the reorganization period, the fund management company, 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. The participating fund management companies have the rights and responsibilities for all their interests and obligations until the fund management company formed after reorganization is granted or adjusted with the Securities Business Establishment and Operation License;

c. Complying with legal provisions on information disclosure on the securities market.

2. Shareholders opposing the 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. These requests are carried out in accordance with the law on enterprises.

3. From the date the Securities Business Establishment and Operation License, the adjusted Securities Business Establishment and Operation License of the fund management company formed after reorganization becomes effective, the participating fund management companies must immediately hand over all their rights 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 in accordance with 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, the fund management company must comply with the provisions set forth in Clause 4, Article 26 of this Circular.

2. The fund management company reports to the State Securities Commission documents ensuring the maintenance of licensing conditions prescribed in Clause 1, Article 85 of the Securities Law before resuming operations. These documents are implemented according to the relevant document regulations in the application for the Securities Business Establishment and Operation License of the fund management company.

3. Within fifteen days from the date of receipt of the reporting documents, the State Securities Commission notifies about receiving 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 electronic information 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 the fund management company in the cases provided for in Article 94 of the Securities Law.

2. The maximum suspension period is sixty days from the date of suspension for the cases provided for in Point a and Point c, Clause 1, Article 94 of the Securities Law; six months from the date of suspension for the case provided for in Point b and Point d, Clause 1, Article 94 of the Securities Law.

3. Within fifteen 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 Investment Fund Shareholders' Meeting, the Joint Stock Company Shareholders' Meeting, and entrusted clients regarding the handling plans for investment funds and joint stock 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 according to client requirements (if any);

b. Not raising capital to establish new investment funds or joint stock companies; not increasing the registered capital of existing managed investment funds or joint stock companies;

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

c. Not paying dividends, allocating profits; not converting unsecured debts into secured debts with its 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 stipulated by law;

d. Complying with 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 stipulated by law;

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

5. The fund management company reports to the State Securities Commission documents specified in Clause 2, Article 25 of this Circular and documents ensuring the ability to remedy the situation leading to suspension of operations before resuming operations.

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

7. The State Securities Commission shall be responsible for publishing information regarding 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 outstanding contracts; transfer rights, responsibilities, and investment portfolios of funds, securities companies, and entrusted clients to the replacement fund management company according to the following principles:

Clause 1. For portfolio management services:

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

Point 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 portfolios of each entrusted client; notify and send account statements of the investment portfolios to each entrusted client. The copies of the account statements of the entrusted investment portfolios for each client must be confirmed by the depository bank for the balances of funds and securities held in the depository bank. Notifications to entrusted clients must include recommendations for replacement fund management companies; instructions on transferring assets and transferring rights and responsibilities to the replacement fund management company; or proposals for liquidating investment portfolios; or returning assets to entrusted clients for self-management;

Point c. From the date of reconciling the balances of funds and securities in the managed portfolio accounts, the custodian member shall not execute trading orders or payment instructions from the fund management company for the assets of entrusted clients, except for liquidation sales transactions, transactions to exercise ownership rights of entrusted clients, or transactions based on written instructions from entrusted clients;

Point d. Sixty days from the date of receipt of the approval document for liquidation from the State Securities Commission, if entrusted clients do not select a replacement fund management company or request the liquidation of their investment portfolios, the liquidating fund management company shall transfer all assets and funds of entrusted clients to the custody account of the replacement fund management company chosen by the company;

Clause 2. For securities investment fund management services:

Point 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 company regarding the replacement of the fund management company. In cases where the fund management company is liquidated and the Shareholders' Meeting and the General Meeting cannot agree on a replacement fund management company, the securities investment fund and the securities company must be liquidated according to the laws governing securities investment funds;

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

Clause 3. For securities investment advisory services: the fund management company shall terminate all securities investment advisory contracts within six months from the date of receipt of the approval document for liquidation from the State Securities Commission;

Clause 4. Fund management companies undergoing liquidation must compensate clients for losses resulting from the loss of funds and assets of clients during the liquidation process, in accordance with the regulations stipulated in the Charter of the securities investment fund, the Charter of the securities company, and the entrustment investment agreement. In the absence of such provisions, clients have the rights of unsecured creditors. The compensation amount must be implemented at the same ratio as for other unsecured creditors;

Clause 5. During the liquidation process, the fund management company shall continue to fulfill its reporting obligations regarding portfolio management activities and securities investment fund management activities in accordance with Article 29 of this Circular and the laws governing securities investment funds, including information on the progress of contract terminations, asset returns to each entrusted client, and the transfer of rights and responsibilities to the replacement fund management company;

Chapter V

INFORMATION DISCLOSURE, REPORTING OBLIGATIONS, AND RECORD KEEPING

Article 28. Provision of Information

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

a) The charter of the fund, the charter of the securities investment company, the prospectus, the summary prospectus, and other documents, reports, and referenced contracts in the prospectus and summary prospectus of the fund and the securities investment company;

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

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

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

2. In case a client or the representative of a client requests, the fund management company must provide risk management procedures, clearly stating investment restrictions, preventive and management methods that the company uses to manage clients' assets.

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

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

b) Provide the client with the entrustment investment contract, the custody contract, and attached documents upon the client's request;

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

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 entrustment investment 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 sends 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 prescribed 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 custodian bank where the fund management company opens a custodial account, confirmed by the custodian member where the client opens an account, and confirmed by the overseas custodian organization according to the model prescribed 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 prescribed in Appendix VIII issued together with this Circular;

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

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

2. 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 figures 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 figures reflecting a specific point in time);

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

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

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

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

a) Changes, elections, dismissals of members of the Board of Directors, members of the Board of Members. The notification must be accompanied by resolutions or decisions on the election, dismissal, or change of members of the Board of Directors, members of the Board of Members, and other valid documents ensuring that new members of the Board of Directors and the Board of Members meet the provisions of the company's charter, securities laws, and corporate laws;

b) Changes in the head of domestic representative offices, changes in the directors of domestic branches. Notifications of changes must be accompanied by appointment decisions and other valid documents ensuring that replacement personnel meet the requirements of securities laws.

c) Amend and supplement the Company Charter. The notice shall be accompanied by the amended and supplemented Company Charter;

d) Complete the share transfer transaction, equity contribution transfer transaction of shareholders, contributing members of the fund management company, except for the case where the shares of the fund management company have been listed on the Stock Exchange. The notice shall be made according to the form prescribed in Appendix XI attached hereto and shall be accompanied by a certified copy of the share transfer contract, equity contribution transfer contract between the parties involved in the transaction. In the case where 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 Securities Commission of the events stipulated in Clause 5 of this Article is three working days from the date such events occur;

7. The fund management company shall report to the fund representative body, the Board of Directors of the securities investment company, or the entrusting client in the event of discovering violations of the Fund Charter, the Securities Investment Company Charter, the supervision contract, and the depositary contract by the supervisory bank, the depositary bank; report to the Securities Commission within three working days from the date of discovery of the violation in the case of these organizations violating the law;

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

Article 30. Recordkeeping of Documents, Records, and Information

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

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 the responsibilities and obligations of each organization as prescribed by law and service provision contracts as follows:

a) Activities of issuing fund certificates, distributing fund certificates;

b) Confirmation of ownership rights for investors of the securities investment fund, securities investment company, entrusting clients; registration of ownership assets of the securities investment fund, securities investment company, entrusting clients;

c) Financial reports, accounting books; account systems, invoices, transaction documents ensuring detailed, accurate, and timely reflection of every daily transaction order of each entrusting client, of the company itself, and of employees within the company, including information on order sequence placement, transaction execution; 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, asset transactions, and related documents must be stored by the fund management company and the supervisory bank, depositary bank throughout the operation period of the securities investment fund, securities investment company, and the duration of the entrustment investment contract;

d) Reports on valuation activities, investment analysis, investment decisions, investment management, divestiture, 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, accusations, damage compensation requests from clients;

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

3. The investment portfolio, transaction documents, ownership registration, accounting books, accounting accounts, documents, and electronic information related to assets, asset transactions of the securities investment fund, securities investment company, entrusting 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, entrustment investment contract, and accounting laws;

4. The documents, records, and information specified 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 PROVISIONS

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 has the responsibility to establish 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 fund management company that is a joint-stock company must be approved at the most recent General Shareholders' Meeting from the date this Circular takes effect. The Company Charter of a fund management company that is a limited liability company must be approved by the Board of Members or the owner within six months from the date this Circular takes effect.

4. The provisions concerning the Vietnam Securities Depository and Central Counterparty Joint Stock Company set forth in this Circular shall be implemented by the Vietnam Securities Depository until the Vietnam Securities Depository and Central Counterparty Joint Stock Company 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 Joint Stock Company, securities investment fund management companies, securities depository banks, supervisory banks, and other organizations and individuals related to this matter are responsible for implementing this Circular./.