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THE STATE SECURITIES
COMMISSION
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SOCIALIST REPUBLIC OF
VIET NAM
Independence - Freedom – Happiness
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No. 05/1998/QD-UBCK3
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Hanoi, October 13, 1998
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DECISION
PROMULGATING REGULATION ON ORGANIZATION AND OPERATION OF
SECURITIES INVESTMENT FUND AND FUND-MANAGING FIRM
THE CHAIRMAN OF THE STATE SECURITIES COMMISSION
Pursuant to the Governments Decree No. 15/CP
of March 2, 1993 on the tasks, powers and State management responsibility of
the ministries and the ministerial-level agencies;
Pursuant to the Governments Decree No. 75/CP of November 28, 1996 on the
establishment of the State Securities Commission;
Pursuant to the Governments Decree No. 48/1998/ND-CP of July 11, 1998 on
securities and securities market;
At the proposal of the Director of the Securities Trading Management Department,
DECIDES:
Article 1.- To
promulgate together with this Decision the Regulation on organization and
operation of securities investment fund and the fund - managing firm.
Article 2.- This
Decision takes effect 15 days after its signing.
Article 3.- The director
of the Office, the head of the Securities Trading Management Department, the
heads of units under the State Securities Commission and parties involving in
the operation of the securities investment fund shall have to implement this
Decision.
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THE STATE SECURITIES
COMMISSION
Le Van Chau
REGULATION
ON ORGANIZATION AND OPERATION OF SECURITIES INVESTMENT FUND
AND THE FUND-MANAGING FIRM
(issued
together with Decision No. 05/1998/QD-UBCK3 of October 13, 1998 of the Chairman
of the State Securities Commission)
Chapter I
GENERAL PROVISIONS
Article 1.- This
Regulation prescribes the organization and operation of the securities
investment fund and the fund-managing firm.
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1. The parties involving
in the operation of the securities investment fund shall include the
fund-managing firm, supervisory bank and investors.
2. The fund-management firm shall be responsible
for the establishment and management of the securities investment fund and
effect the investment.
3. The supervisory bank shall be responsible for
supervising the fun-managing firm, preserving and keeping in custody property
of the securities investment fund in order to protect the investors interests.
4. The investors shall contribute capital
formulating the securities investment fund and benefit from the investment made
by the securities investment fund.
Article 3.- In this
Regulation, the following terms shall be construed as follows:
1. The securities investment fund (hereafter
referred to as the fund for short) is a fund formulated from capitals
contributed by investors, managed by the entrusted fund-managing firm and
invested in securities with at least 60% of the funds asset value.
2. The closed securities investment fund (hereafter
referred to as the closed fund for short) is a securities investment fund in
which the investors are not entitled to resell the investment fund certificates
to the fund before the expiration of operation term or the dissolution.
3. The open securities investment fund
(hereafter referred to as the open fund for short) is a securities investment
fund in which the investors are entitled to resell the investment fund
certificates to the fund.
4. The fund-managing firm is a legal person
licensed by the State Securities Commission to manage the fund.
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6. The investment fund certificate (hereafter
called certificate for short) is a kind of securities issued by the fund-managing
firm representing a securities investment fund, which certifies the investors
right to benefit from the fund.
7. The fund manager is a person licensed
to practice securities business and appointed by the fund-managing firm as
manager of the securities investment fund.
8. The net value of the funds assets is
the total value of the assets and investments owned by the fund minus its debt
liabilities at the time of payment.
9. The quick asset is the portion of the funds
assets, which is comprised of cash and other assets which can be converted into
cash within 15 days.
Chapter II
THE FUND-MANAGING FIRM
Article 4.-
1. A firm conducting the
operation of managing securities investment fund(s) must have the operation license
granted by the State Securities Commission and shall only be allowed to conduct
business according to such license.
2. Foreign securities business organizations
wishing to engage in the management of securities investment funds shall have
to set up joint ventures with Vietnamese partners according to the licenses
granted by the State Securities Commission.
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1. A firm applying for the
management of the fund shall have to meet the following requirements:
a/ Being a joint-stock company or a limited
liability company, which is established under the Vietnamese laws and has a
legal capital of 5 billion VND;
b/ Having a staff trained in securities
operations.
c/ Having adequate material and technical
foundations for the fund-managing operations.
d/ The manager of the fund-managing firm and the
manager of the fund must have the practice license as prescribed in Chapter VI
of this Regulation.
2. For fund-managing joint-ventures, besides the
conditions defined in Clause 1, this Article, the foreign parties to the
joint-ventures must be the securities business organizations lawfully operating
in the countries where they are headquartered.
Article 6.-
1. Companies applying for
licenses to conduct operations of managing funds shall have to submit to the
State Securities Commission an application dossier which includes:
a/ An application for the license to conduct
fund-managing operations;
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c/ The companys charter;
d/ Cirrculum vitaes of the founding members,
Managing Board members and managers of the company;
e/ Valid papers proving that the company fully
meets the conditions defined in Article 5 of this Regulation;
f/ A plan of operation for the first year.
2. For fund-managing joint-ventures, apart from
documents prescribed in Clause 1, this Article, the following lawfully
certified papers are required:
a/ The charter of the foreign company being a
party to the joint venture;
b/ The license for securities business operation
of the foreign party to the joint-venture;
c/ The joint-venture contract and the
joint-venture companys charter;
d/ The balance sheets, the reports on revenues
and the annual reports of the joint-venture parties business situations for the
three latest years;
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f/ The papers included in the dossiers of
joint-venture companies must be the copies lawfully certified by the notary
public in the localities where the foreign parties are headquartered; and their
Vietnamese versions shall be certified by the State notary public of Vietnam.
Article 7.-
1. Within 90 days from the
date of receiving the complete dossier of application for an operation license,
the State Securities Commission shall grant or refuse to grant the license. In
case of refusal, the State Securities Commission shall explain in writing the
reason(s) therefor.
2. In case of any amendments and/or supplements
to the dossiers, the dossiers-receiving date shall be counted from the date the
State Securities Commission receives the amended and/or supplemented text.
3. After being granted the operation license,
the fund-managing firm shall have to make its business registration as
prescribed by law.
Article 8.- Before
being granted the operation license, the fund-managing firm shall pay to the
State Securities Commission a licensing fee equal to of 0.2% of its legal
capital.
Article 9.-
1. Within 15 days after
being granted the operation license the fund-managing firm shall have to make
announcement on at least one centrally-run newspaper and one daily of the
locality where its head-office is located for 05 consecutive issues, with the
following principal contents:
a/ The full name (in Vietnamese and in English)
and the transaction name of the firm;
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c/ Operations permitted to conduct;
d/ The serial numbers and issuing dates of the
establishment permit and the operation license and its term (if any);
e/ The names and surnames of the chairman of the
Management Board and general director (director);
f/ The date of operation commencement;
g/ The head-office, branches and representative
offices (if any).
2. In the course of business operations, the
fund-managing firm shall have to post up its operation license at its
head-office and branches.
3. The fund-managing firm must clearly inscribe
its name and the serial number of its license on the headlines of its mails,
advertisements and other transaction papers.
4. In case of amendment and/or supplement to, or
renewal of, the operation license, the fun-managing firm shall have to fully
observe the license announcement procedures as those for the initial operation
license.
5. In case of opening or closure of its
branch(es), the fund-managing firm shall have to announce the serial number and
issuing date of the decision on the opening or closure of its branch(es), the
main operations of the branch(es), the head-office(s) and the date of opening
or closure of such branch(es) on a centrally-run newspaper and a daily of the
locality where the companys branch(es) is (are) located for 05 consecutive
issues.
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1. Addition to its operation functions.
2. Amendment and/or supplement to its charter.
3. Opening of new branch(es) or representative
office(s); relocation of its head-office, branch(es) or representative
office(s).
Article 11.-
1. The fund-managing
firms operation shall cover:
a/ Establishing and dissolving the fund;
b/ Selecting and effecting investment with the
fund�s
capital;
c/ Determining the value of the funds assets and
the value of each certificate as prescribed in Article 44 of this Regulation;
d/ Determining the fund’s
benefits and guiding the supervisory bank to divide such benefits to investors;
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f/ Conducting other activities for the benefits
of investors.
2. The State Securities Commission may request
the fund-managing firm to perform necessary tasks in order to protect the
common interests as well as the interests of investors.
3. The fund-managing firm is entitled to carry
out the securities investment consultancy if it is so licensed by the State
Securities Commission. The granting, suspension and withdrawal of licenses for
securities investment consultancy shall comply with the provisions in the
Regulation on organization and operation of securities firms, issued together
with Decision No. 04/1998/QD-UBCK3 of October 13, 1998 of the President of the
State Securities Commission.
Article 12.-
1. The fund-managing
firm, members of its management board, its manager and the fund’s manager shall
have to observe the fund’s charter and protect the investors interests.
2. The fund-managing firm shall have to
represent the fund in exercising rights and fulfilling obligations towards the
properties on the list of the funds investments.
3. The fund-managing firm, members of its
management board, its manager, the fund�s manager and relevant
persons shall be entitled to buy and sell certificates only at the market
prices.
Article 13.-
1. The fund-managing firm
may enjoy fees and bonuses prescribed in the funds charter and be refunded the
expenses related to the funds establishment and investment.
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3. When trading properties for the fund, the
fund-managing firm, members of its management board, its manager and the funds
manager must not receive any interests other than the fees and bonuses
prescribed in the funds charter for themselves or a third person.
Article 14.-
1. The fund-managing firm
shall only be entitled to invest the Funds capital in securities or other
properties in accordance with the funds charter and the provisions of law.
2. The fund-managing firm shall not be allowed
to use the fund’s capital
and assets for investment in more than 15% of the total value of an issuing
organizations securities in circulation, and must not invest more than 10% of
the total value of a funds assets in the being-circulated securities of an
issuing organization.
3. The fund-managing firm shall not be allowed
to use capital and assets of the fund(s) under it management for the purchase
of more than 49% of the total value of being-circulated securities of an
issuing organization or an unlisted company.
4. The fund-managing firm shall not be allowed
to use the fund’s capital
and assets for lending and guaranteeing any borrowings, and not be allowed to
borrow so as to provide support for the fund’s activities, except for
short-term borrowing to cover necessary expenses.
5. The fund-managing firm shall not be allowed
to use capital and assets of a fund for investment in real estates which exceed
10% of the value of the funds assets.
6. The fund-managing firm shall not be allowed
to use capital and assets of a fund for investment in more than 10% of the
stock capital of an unlisted company, and/or to invest more than 5% of the
total value of a funds assets in an unlisted company.
7. The fund-managing firm shall not be allowed
to invest more than 30% of the funds total assets value in various companies of
the same group or a number of companies which are interrelated in term of
ownership.
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9. The fund-managing firm must not use capital
of a fund to invest in another fund or to buy assets of another fund, which it
manager in order to increase or reduce the value of this fund.
10. For open funds, the fund-managing firm must
constantly maintain the quick assets percentage stated in the fund�s
charter. Such percentage must be at least equal to 20% of the funds total asset
value.
11. The fund-managing firm, members of its
management board, its managers and the managerial officials of the fund must
not be share-holders of the supervisory bank.
Article 15.-
1. A fund-managing firms
rights and obligations towards the fund may be transferred to another
fund-managing firm.
2. The State Securities Commission shall accept
the change of a fund-managing firm only when it deems that such change conforms
to the interests of the investors.
3. The change of a fund-managing firm shall be
valid only when the following documents are approved by the State Securities Commission:
a/ The transfer contract signed between the two
fund-managing firms;
b/ The supervision-management contract between
the new fund-managing firm and the supervisory bank.
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Article 16.- Where a
fund-managing firm goes bankrupt, the funds assets shall belong to the
investors and shall not be accounted into the firms assets; nobody is entitled
to use the funds capital or assets for the payment of the fund-managing firms
debts.
Chapter III
THE SUPERVISORY BANK
Article 17.- The
supervisory bank shall be selected by the fund-managing firm for each fund. The
supervisory bank must meet the following conditions:
1. Having been licensed to be set up and operate
in Vietnam;
2. Having been licensed by the State Securities
Commission to conduct the securities custody activities;
3. Being entirely independent from the
fund-managing firm;
4. Not possessing any property of the fund.
Article 18.- The
supervisory bank shall have the responsibility:
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2. To inspect and supervise the fund management
so as to ensure that it conforms to laws and the funds charter, and to protect
the investors interests;
3. To effect the funds collecting and spending
activities in strict accordance with the fund-managing firms guidances;
4. To certify reports made by the fund-managing
firm, which are related to the funds property and operation;
5. To reports to the State Securities Commission
when discovering that the fund-managing firm has carried out activities in
contravention of law or the funds charter.
Article 19.- The
supervisory bank, when performing its tasks, shall be entitled to enjoy only
fees prescribed in the funds charter, and not to receive any sum of money for
itself or a third person.
Article 20.-
1. The supervisory banks
management board members, managers and staff members directly involved in
supervising and preserving the funds property must not be share-holders of the
fund-managing firm.
2. The supervisory bank must not be a customer
buying and/or selling the fund�s property.
Article 21.-
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2. The change of a supervisory bank shall be
valid only when the following documents are approved by the State Securities
Commission:
a/ The transfer contract between the old
supervisory bank and the new one;
b/ The management supervision contract between
the fund-managing firm and the new supervisory bank.
3. The change of the supervisory bank must be
announced thrice consecutively on mass media as prescribed in the fund�s
charter.
Chapter IV
THE INVESTORS
Article 22.- The
investors are organizations or individuals that contribute capital through
buying investment fund certificates so as to establish a fund. The investors
shall have the rights to:
1. Enjoy benefits from the fund�s
activities;
2. Demand the fund-managing firm to strictly
observe the fund�s charter.
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1. Directly perform rights and obligations
regarding the properties on the list of the fund�s investments;
2. Demand the fund-managing firm and/or the
supervisory bank to submit books or transaction papers, except at the investors
congress.
Article 24.-
1. The investors congress
shall be convened by the fund-managing firm in the following circumstances:
a/ Where there are important changes in the
investment environment and the situation on the fund�s investment;
b/ Where it is so requested by the investors who
own at least 10% of the total certificates in circulation.
2. The investors congress shall be convened by the
supervisory bank in the following circumstances:
a/ The fund-managing firm goes bankrupt;
b/ The fund-managing firm is suspended from
operation;
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3. The convening of an investors congress under
the provisions of Clauses 1 and 2 of this Article must be effected within 30
days after such a circumstance takes place. Within 10 days before the investors
congress, the fund-managing firm or the supervisory bank shall have to announce
the convening of such congress on mass media as provided for in the Funds
charter at least 03 times.
4. The expenses for organizing the investors�
congress shall be paid by the fund.
Article 25.- At
the investors congress, the investors shall have the rights:
1. To elect the chairman of the congress;
2. To decide on such important matters relating
to the organization and operation of the fund as:
a/ Amending and/or supplementing the funds
charter;
b/ Changing the fund-managing firm;
c/ Changing the supervisory bank;
d/ Dissolving the fund.
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Article 27.-
1. The convening of
investors’ congress must be
notified to the State Securities Commission within 10 days before the congress
is held.
2. Within 10 days after the investors’ congress, the fund-managing
firm and the supervisory bank shall have to report the congress’s results to the State
Securities Commission.
Chapter V
THE SECURITIES
INVESTMENT FUND
Article 28.-
1. The securities
investment funds shall be set up and managed by fund-managing firms. For the
establishment of a fund and offer for sale of investment fund certificates, a
fund-managing firm shall have to submit an application dossier to the State
Securities Commission for approval.
2. Such a dossier shall comprise:
a/ The application for the establishment of the
securities investment fund;
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c/ The management supervision contract;
d/ The prospectus.
3. Within 45 days after receiving the complete
and valid dossiers of application, the State Securities Commission shall grant
or refuse to grant the certificate-issuing license. In case of refusal, the
State Securities Commission shall explain in writing the reason(s) therefor.
In case of amendments and/or supplements to the
application dossiers, the dossier-receiving time shall be counted from the date
the State Securities Commission receives the amended and/or supplemented text.
Article 29.- The
investment fund certificates must be inscribed in VN dong; the certificates par
value is 10,000 VN dong.
Article 30.-
1. The funds charter must
include the following main contents:
a/ The name of the fund, the name and
head-office of the fund-managing firm, and the name and head-office of the
supervisory bank;
b/ The number of certificates to be issued for a
closed fund or the maximum number of certificates to be issued for an open
fund;
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d/ Risks to be possibly borne by the fund;
e/ Method(s) of determining the value of the
funds assets;
f/ The profit-sharing policy and mode of the
fund;
g/ The certificates issuance, re-purchase or
transaction;
h/ The registration of certificate ownership;
i/ The investors rights and obligations;
j/ The investors congress;
k/ Expenses and rewards to be paid to the
fund-managing firm by the fund;
l/ Expenses to be paid to the supervisory bank
by the fund;
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n/ The contents of and means for announcing
information related to the fund;
o/ The funds operation term;
p/ The dissolution of the fund;
q/ The amending and supplementing of the funds
charter;
r/ Change of fund-managing firm;
s/ Change of supervisory bank.
2. The amendments and/or supplements to the
funds charter must be adopted by the investors congress and approved by the
State Securities Commission. Within 15 days after the approval by the State
Securities Commission, the fund-managing firm shall have to make public such amendments
and/or supplements on mass media provided for in the fund�s
charter at least 03 times in a row.
Article 31.-
1. The management
supervision contract signed between the fund-managing firm and the supervisory
bank must comply with the provisions of law and the fund’s charter.
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a/ The names of the fund-managing firm, the
supervisory bank and of the securities investment fund;
b/ The rights and obligations of the
fund-managing firm and of the supervisory bank;
c/ Expenses and mode of paying fees to the
fund-managing firm;
d/ Expenses and mode of paying fees to the
supervisory bank;
e/ The dissolution of the fund;
f/ The forms and contents of certificates, the
issuance, sale offer, transfer and cancellation of certificates;
g/ Change of fund-managing firm;
h/ Change of supervisory bank;
i/ The duration, termination and amendment of
the contract.
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Article 32.-
1. The prospectus for the
initial issuance of certificates shall be prepared by the fund-managing firm.
It must include the contents stated in the fund’s charter, the management-supervision
contract as well as the following information:
a/ Other funds being managed by the
fund-managing firm in question;
b/ Regulations on tax(es) applicable to the
fund;
c/ The selling prices and mode of determining
the selling prices of certificates;
d/ The volume of certificates to be issued;
e/ The estimated distribution duration;
f/ Ways of certificate purchase registration;
g/ Ways of certificate distribution if the
number of certificates to be purchased according to registration exceeds the
number of issued certificates;
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i/ The effective duration of the prospectus.
2. The amendment and/or supplement to the
prospectus must be approved by the State Securities Commission. In the course
of certificate issuance, the fund-managing firm shall have to post up the
prospectus at all certificate-selling places.
Article 33.- While the
State Securities Commission is scrutinizing the dossiers of application for the
establishment of a fund and the certificate issuance, the fund-managing firm
shall be entitled to use only truthful and accurate information in the
prospectus already submitted to the State Securities Commission for market
probing; any advertisement for the certificate sale on mass media is
prohibited.
Article 34.- Within 5
days after getting the certificate-issuing license, the fund-managing firm
shall have to announce the issuance on a centrally-run newspaper and a daily of
the locality where the firm is headquartered for 05 consecutive issues with the
following main contents:
1. The funds name;
2. The names and head-offices of the
fund-managing firm and the supervisory bank;
3. The funds investment objectives;
4. The funds operation term;
5. The number of certificates to be issued;
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7. The certificate-distributing timelimit and
locations;
8. Telephone number(s) and fax number(s) for making
registrations of certificate purchase.
Article 35.-
1. The fund-managing firm
shall be allowed to use only truthful and accurate information in the
prospectus for certificate issuance.
2. When issuing certificates, the fund-managing
firm may use the brief prospectus, which must indicate fully and accurately the
principal contents according to the provisions of Article 32 of this
Regulation.
3. Where requested by investors, the
fund-managing firm shall have to hand over the fund�s charter or the officially
approved prospectus to the former.
Article 36.-
1. The fund-managing firm
shall have to complete the initial issuance of investment fund certificates
within 45 days after being granted the issuing license.
2. Within 10 days after the end of the first
issuing campaign, the fund-managing firm shall have to send a report on the
issuance results to the State Securities Commission and register the official
establishment of the fund.
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a/ For closed funds: The total value of the
investment fund certificates sold in the first issuing campaign achieves at
least 5 billion VN dong and the minimum number of certificate owners is 100;
b/ For open funds: The volume of investment fund
certificates sold in the first issuing campaign represents at least 15% of the
total number of certificates to be issued.
4. The timelimit for the State Securities
Commission to approve the registration of the official establishment of the
fund shall be 10 days after receipt of the report on issuance results.
5. Where the registration of the funds official
establishment is refused, the fund-managing firm shall have to cancel the
issuing campaign and return the money to the investors within 30 days after the
end of the first issuing campaign. The expenses for the issuance and the money
reimbursement shall be covered by the fund-managing firm.
Article 37.- Within 15
days after the fund is registered for official establishment, the fund-managing
firm shall have to pay the State Securities Commission a fee for licensing the
fund establishment, which is equal to 0.02% of the total value of the
certificates to be issued, calculated according to the par value, but must not
exceed 50 million VN dong.
Article 38.- After the fund is registered for official establishment,
those certificates which have not yet been issued shall be kept in the fund’s
account at the supervisory bank. The resumption of certificate issuance shall
have to comply with the following stipulations:
1. For closed funds: They shall only be issued
in separate campaigns and a prospectus must be made for each issuing campaign
and submitted to the State Securities Commission for approval. The prospectus
must be made in accordance with Article 32 of this Regulation;
2. For open funds: They may be issued but the
total number of certificates in circulation must not exceed the maximum number
provided for in the approved charter of the fund.
3. The selling price of these certificates is
stipulated in Appendix 1 to this Regulation (not enclosed herewith).
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1. The proceeds from
certificate issuance must be remitted into the fund's account(s) at the
supervisory bank.
2. Before the fund is registered for official
establishment, the fund-managing firm shall not be allowed to use the proceeds
from certificate issuance for any purpose.
Article 40.-
1. All expenses incurred
in the certificate issuance shall be covered by the fund, except for case
mentioned in Clause 5, Article 36 of this Regulation.
2. The above expenses must be accurately and
fully accounted and not exceed the issuance expense stated in the prospectus.
Article 41.-
1. The fund-managing firm
shall, on behalf of the closed fund, issue closed-fund certificates.
2. The closed-fund certificates may be
transferred, listed and transacted at the Stock Exchange or the Securities
Trading Centers according to the provisions of law.
3. A closed-fund may be re-registered as an open
fund. The re-registration must be adopted by the investors congress and
approved by the State Securities Commission.
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1. The fund-managing firm
shall, on behalf of the open fund, issue open-fund certificates.
2. After the fund is registered for official establishment,
investors may request the fund-managing firm to buy back the certificates at
the time prescribed in the funds charter. The back-buying prices of
certificates are stipulated in Appendix 1 of this Regulation (not enclosed
herewith).
3. The back-buying shall be effected within 15
days after receiving investors request; where the fund has not enough cash to
buy back certificates, the above timelimit may be prolonged for 5 more days.
4. Where past the timelimit mentioned in Clause
3 of this Article the fund-managing firm still fails to buy back the
certificates, the supervisory bank shall have to suspend the issuing activities
and temporarily cease to buy back the certificates, and at the same time
convene the investors congress. The convening of investors�
congress and the realization of its resolutions shall comply with Clauses 3 and
4 of Article 24 and with Articles 25, 26 and 27 of this Regulation.
Article 43.- The
selling or buying back of investment fund certificates must be effected via the
supervisory bank.
Article 44.-
1. The fund-managing firm
shall have to periodically determine the net asset value of the fund and the
value of each certificate according to the following provisions:
a) For closed funds: They shall be determined
monthly, serving as basis for certificate transactions;
b) For open funds: They shall be determined
daily, serving as basis for the issuance and back-buying of certificates.
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3. The methods of calculating the fund’s net asset value and each
certificate�s value are stipulated in Appendix 1 of
this Regulation (not enclosed herewith).
Article 45.-
1. The fund shall be allowed
to dissolve in cases where the operation duration stated in its charter expires
or where the dissolution is necessary for the protection of the investors
interests.
2. Before dissolving a fund, the fund-managing
firm shall have to convene the investors congress and present a dissolution
plan so that the investors may decide.
3. The convening and realization of the
resolution(s) of the investors congress shall comply with Clauses 3 and 4 of
Article 24 and with Articles 25, 26 and 27 of this Regulation.
4. Before dissolving the fund, the fund-managing
from shall have to seek permission from the State Securities Commission, which
shall approve the dissolution of the fund only when the fund-dissolving plan
accords the investors interests.
Chapter VI
PRACTICE LICENSE
Article 46.-
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2. The State Securities Commission shall
consider and grant fund-management practice licenses to foreign individuals at
the proposal of the fund-managing firm.
Article 47.- Applicants
for fund management practice licenses must meet the following conditions:
1. Having full legal capacity and civil act
capacity;
2. Having at least the degree of bachelor of
economics or bachelor of law;
3. Having all professional certificates granted
by the State Securities Commission;
4. Having worked at least for 03 years in the
field of finance, banking or insurance;
5. Having never been the general director
(director) of a bankrupt company, except for cases provided for in Clause 2,
Article 50 of the Law on Enterprise Bankruptcy;
6. Having never been practitioners whose
licenses had been withdrawn by the State Securities Commission;
7. Not falling in one of the falling cases:
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b/ Having been sentenced for serious offences
against the national security, serious crimes against the socialist ownership
as well as citizens’
ownership, or serious economic crimes;
c/ Having been sentenced for other offences, and
the sentences have not yet been wipped out.
Article 48.- The
dossiers of application for a practice license shall comprise:
1. The application for the fund management
practice license;
2. Professional certificates granted by the
State Securities Commission and diplomas and certificates certifying academic
degrees;
3. Curricula vitae with competent bodies
certification that the applicants do not fall into the categories prescribed in
Clause 7, Article 47 of this Regulation.
Article 49.- The
dossier of application for a practice license for a foreigner shall comprise:
1. The application for a practice license for
the foreigner;
2. The copy of his/her passport; the notarized
copy of the permit for his/her stay in Vietnam;
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4. Diplomas and/or certificates certifying
his/her academic degree and professional qualifications.
5. A written certification of his/her legal status
by a competent body of the country which he/she bears the citizenship of;
6. The labor contract (if any) already signed
with a fund-managing firm.
Article 50.-
1. Within 30 days after
receiving the complete and valid dossiers, the State Securities Commission
shall grant or refuse to grant the license. In case of refusal, it shall have
to explain in writing the reason(s) therefor.
2. In case of amendment and/or supplement to a
dossier of application for the practice license, the dossier-receiving date shall
be the date the State Securities Commission receives the amended and/or
supplemented text.
Article 51.- Before
being granted the practice license, the individual applicant shall have to pay
a licensing fee of 1 (one) million VN dong to the State Securities Commission.
Article 52.- The
practice license holder must not:
1. Simultaneously work for or invest in two or
many fund-managing firms;
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3. Buy, sell, transfer, lease or borrow practice
licenses.
Article 53.- A
fund management practitioner shall have his/her license withdrawn in the
following circumstances:
1. He/she no longer meets the conditions for
being granted the fund management practice license as provided for in Article
47 of this Regulation;
2. He/she breaches the provisions in Articles
42, 69, 70, 71, 72 and/or 73 of Decree No. 48/1998/ND-CP of the Government on
securities and securities market, issued on July 11, 1998.
Chapter VII
THE REPORTING REGIME
Article 54.- Apart from
observing the accounting and financial regimes prescribed by current
legislation, the fund-managing firm shall have to abide by the reporting regime
provided for in this Chapter.
Article 55.- The fiscal
year of the fund-managing firm and the fund shall begin on January 1st and
finish at the end of December 31st every year.
Article 56.-
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a/ The final statement of accounts, the report
on business result, the report on money circulation (if any) of the
fund-managing firm, with certification by the audit;
b/ The list of shareholders of the fund-managing
firm and the proportion of share owned by each of them;
c/ The general statement of accounts of various
funds managed by the firm;
d/ The names, ages and qualifications of the
leading officials of the fund-managing firm;
e/ Important decisions regarding organization
and operation in the year.
2. Where a fund-managing firm owns more than 50%
of the stock capital of another organization, the formers financial report must
include also the financial statement of such organization.
Article 57.-
1. Within 03 months from
the end of a fiscal year, the fund-managing firm shall have to send to the
State Securities Commission the funds annual report with certification by the
supervisory bank. Within 15 days after the approval by the State Securities
Commission, the fund-managing firm must make public the fund's annual report on
mass media as provided for in the funds charter.
2. The funds annual report shall include the
following contents:
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b/ The detailed report on the fund�s
assets, calculated at market prices;
c/ The funds profits and division of profits;
d/ The detailed report on the expenses paid in
the year by the fund;
e/ The numbers of investment fund certificates
issued and bought back in the fiscal year, the number of investment fund
certificates being in circulation at the end of the fiscal year;
f/ The value of each investment fund certificate
being in circulation at the end of the fiscal year;
g/ Transactions carried out for the fund by the
fund-managing firm during the fiscal year;
h/ Names, ages and qualifications of the
managerial officials of the fund-managing firm and of the fund;
i/ Important decision on economic or legal
matters as well as the investment policies, made by the fund-managing firm
during the operation year.
Article 58.-
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2. Within 15 days from the end of every quarter,
the fund-managing firm shall have to send to the State Securities Commission
the funds balance of accounts, business result report and money circulation (if
any) report for the previous quarter, together with the written explanations.
3. The reports mentioned in Clauses 1 and 2 of
this Article must be certified by the supervisory bank in term of their
truthfulness and accuracy.
Article 59.-
1. The fund-managing firm
shall have to promptly report in writing to the State Securities Commission
when:
a/ The firm is investigated by a competent
agency;
b/ The firm plans a merger with another company;
c/ The firm suffers from a great material loss;
d/ The firm is complained against;
e/ The firm sees a change in the dominant
shareholders;
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g/ The firm appoints or dismisses the fund
manager;
h/ The firm witnesses important changes in its
business operation, which may affect the management of the fund;
i/ The firm cannot buy back the certificates;
j/ The fund�s value drops by 10%
as compared to the value at the time the fund was registered for official
establishment;
k/ There are important changes in the business
environment and the fund�s investment
situation.
2. Right after sending such reports to the State
Securities Commission; the fund-managing firm shall have to publish the
information prescribed at Points b, e, f, g, h, i, j and k, Clause 1 of this
Article at least 03 times on mass media as provided for in the fund’s charter.
Article 60.- In case of
necessity, and in order to protect the common interests and the investors’ interests, the State Securities
Commission may request fund-managing firms to report and make public
information on the activities of the funds or the fund-managing firms.
Chapter VIII
INSPECTION, SUPERVISION
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The inspected or supervised fund-managing firms
and individual practitioners shall have to supply information at the request of
the inspection and supervision bodies.
Article 62.-
1. All disputes arising
in course of operation of the securities investment funds must be settled first
of all through negotiations and conciliation. The State Securities Commission,
the Stock Exchanges, and Securities Trading Centers may act as mediators to
reconcile disputes. In case of failure in the conciliation attempt, the parties
may bring their disputes to an economic arbitration or court for settlement
according to provisions of law.
2. If dispute involving foreign parties cannot
be negotiated or settled according to international agreements which the
Socialist Republic of Vietnam has signed or acceded to, they shall be resolved
according to Vietnamese law.
Chapter IX
IMPLEMENTATION PROVISION
Article 63.- The
amendment and/or supplement of this Regulation shall be decided by the Chairman
of the State Securities Commission.
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