Circular No. 183/2011/TT-BTC guiding the establishment and management of open-en

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THE MINISTRY OF FINANCE --------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom – Happiness ----------------
No. 183/2011/TT-BTC	Hanoi, December 16^th 2011

CIRCULAR

GUIDING THE ESTABLISHMENT AND MANAGEMENT OF OPEN-ENDED FUNDS

Pursuant to the Law on Securities dated June 29^th 2006;

Pursuant to the Law on Enterprises dated November 29^th 2005;

Pursuant to the Law on the amendment and supplementation of a number of articles of the Law on Securities dated November 24^th 2010;

Pursuant to the Government's Decree No. 118/2008/NĐ-CP dated November 27^th 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance

The Ministry of Finance guides the establishment and management of Open-ended funds as follows:

Chapter I

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Article 1. Scope and subjects of regulation

This Circular guides the mobilization of capital for the establishment and management of Open-ended funds and the operation of the fund Management Companies, Supervisory Banks, Distributors and providers of services related to the management of Open-ended funds within the territory of the Socialist Republic of Vietnam.

Article 2. Interpretation of terms:

In this Circular, the terms below shall be construed as follows:

1. Soft commission is the expenses not being directly paid in cash, and are included in other valid expenses.

2. Nominal agents are the distributors which open nominal accounts in its name and trade fund certificates on behalf of investors in the sub-account..

3. Distributors are the organizations that trade securities, depository banks, commercial banks and insurers that have registered the distribution of open-ended fund certificates.

4. Annual average net asset value of the fund is the total net asset value of such Fund determined at the time of valuation divided by the number of the fund certificate working days during the year.

5. Liquidation value of a share is determined by the value of owner’s equity of the issuer divided by the total number of circulating shares.

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7. Fund consolidation is the consolidation of two open-ended funds or more (hereinafter referred to as old funds) into a new open-ended fund (hereinafter referred to as new fund) by transferring all assets, rights and legal interests, debts and obligations of the old funds to the new fund , as well as terminating the existence of old funds.

8. Personal profile includes information in the form prescribed in Annex 7 of this Circular, a authenticated copy of the ID card, passport or other identity papers .

9. Days mean working days.

10. Valuation date is the date on which the fund management company determines the net asset value of the funds as prescribed by The Law on Securities

11. Date of trading fund certificates us the date on which the fund management company, on behalf of the fund, issues or repurchases open-ended fund certificates.

12. Supervisory bank is a commercial bank having Certificate of registration for securities depository, appointed by a Fund Management Company to provide depository services and supervise the fund management.

13. Beneficiaries are the organizations, individuals whose names are not registered as owners of assets, but such assets are totally under their ownership.

14. Groups of companies in an ownership relationship are parent companies, subsidiaries, joint venture companies, and associated companies.

15. Fund investment portfolio management includes the researching and analyzing; developing and implementing investment strategies and tactics; deciding the portfolio structure, types of assets for investment and capital withdrawal, deciding the time of investment execution and capital withdrawal.

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17. Bond funds are the open-ended funds that invest in various kinds of bonds and valuable papers, with the proportion of investment in such assets makes up at least 80% of the net asset value.

18. Fund merger is one open-ended fund or several open-ended funds (hereinafter referred to as transferor funds) being merged into another open-ended fund (hereinafter referred to as transferee fund) by transferring all assets, rights and legal interests, debts and obligations of transferor funds to the transferee fund, and the transferor funds no longer exist.

19. Primary Register of investors (hereafter referred to as Primary Register) is the written documents or electronic files or both that record the information about the investors that own fund certificates.

20. Secondary Register of investors (hereafter referred to as Secondary Register) is the Register book of Investors made and managed by Distributors under the authorization from the Fund Management Company.

21. Quarterly average number of the fund units is the total number of circulating fund units at the end of each trading day divided by the number of trading days in a quarter.

22. Accounts for trading open-ended fund certificates are the accounts through which investors buy, sell, own certificates of one open-ended funds, or more, managed by the fund management company. The accounts for trading open-ended fund certificates are opened and managed by a provider of agency transferring services . There are two types:

a) Investor’s accounts are the accounts owned and undersigned by investors.

b) Nominal accounts are the accounts owned by investors in the secondary register and undersigned by a distributor. This account shall be divided into separate, independent sub-accounts corresponding to each investor’s Secondary register.

23. Deposit accounts for offsetting fund certificate transactions are deposit accounts at a Supervisory Bank, opened by nominal agents for making payment for fund certificate transactions only.

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25. The time of closing the order book is the deadline for distributors to receive trading orders from investors that shall be executed on the trading day. The time of closing the order book shall be specified in Fund Charter and announced in the Prospectus or Simplified Prospectus before 10:30 on the latest day before the fund certificate trading day.

26. Quotation providers are securities companies and financial institutions allowed to trade in foreign exchange, the bond quotation systems chosen by Fund Management Companies for providing the quotation of the assets other than listed securities or registered securities.

27. Related service providers are depository banks and the Vietnam Securities Depository that provide one or all of following services, under the authorization by the fund management company:

a) Fund administration services:

- Record the transactions of a Fund: record the changes of cash inflows and outflows of the Fund;

- Make the fund financial statements; cooperate with and assist the auditors in auditing the Fund;

- Determine the net asset value of the fund, the net asset value per fund certificate unit in accordance with law and the Fund's Charter;

- Do other activities in accordance with law and the Fund's Charter.

b) Transferring agent services:

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- Record purchase orders, sale orders, switching made by investors; transfer the ownership of the fund certificates; update the Primary Registers;

- Support the investors in exercising their rights related to the ownership of the fund certificates;

- Organize meetings of the Board of Representatives of the Fund, General Meetings of Investors of the Fund; maintaining the communication channel with the investors, distributors, State management agencies and other competent agencies;

- Provide the investors with financial statements, fund operation reports, prospectus, simplified prospectus, trading account statements, transaction certifications, and other documents;

28. Annual average profit rate of the fund is the pre-tax profit of the Fund in a year divided by the annual average net asset value of such Fund.

29. Charter capital of the open-ended fund is the capital raised during the initial public offering of the fund certificates.

Chapter II

THE ESTABLISHMENT AND MANAGEMENT OF OPEN-ENDED FUND

SECTION I. THE ESTABLISHMENT OF OPEN-ENDED FUND

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1. A fund must be named in Vietnamese, accompanied by letters, numbers and symbols. The name must be pronounceable and has at least two components below:

a) The phrase “Investment Fund”;

b) The type of the fund, suitable for the investment objectives and policies, the portfolio structure and invested assets.

2. The name of the Fund must comply with the laws on enterprises. The State Securities Commission is entitled to require Fund Management Companies to change the fund names in accordance with related laws.

Article 4. The dossier of registration for the initial public offering of the fund certificates

1. A dossier of registration for the initial public offering of open-ended fund certificates includes:

a) The written application for the public offering of the fund certificates according to the form provided in Annex 1 enclosed with this Circular;

b) The Fund’s Charter;

c) The prospectus, the Simplified prospectus;

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e) The principle contract on the supervision; the principle contracts signed with relevant service providers (if any) including the contents prescribed in Annex 32 enclosed with this Circular; the principle contracts signed with nominal agents; the principle contracts for the fund certificate distribution; the principle contracts to provide fund administration services (if any). In case the service providers are distributors or nominal agents who have not been issued with Certificates of registration of the fund certificate distribution, such service providers must provide the documents about the registration for the distribution of open-ended fund certificates as prescribed in Clause 3, Article 39 of this Circular;

f) The advertising documents and introduction of the fund as prescribed in Clause 1, Article 42 of this Circular (if any);

g) In case the Fund Management Company does not organize the first Investors' General Meetings, it must provide the additional documents for consulting the investors , including:

- The list enclosed with personal profiles and other valid documents proving that the Board of Representatives satisfy the requirements in Clauses 2, 3 and 4 Article 28 of this Circular;

- Documents related to other issues that need to be consulted by the investors.

2. The dossier of registration for the initial public offering of the fund certificates shall be made into 01 original attached with electronic files. The original set shall be sent by post or directly to the State Securities Commission’s administrative department.

3. Information in the dossier must be correct, accurate, unequivocal, and contain sufficient important information that affect the decisions of investors. The Fund Management Company shall be responsible for the information and documents in the dossier.

4. While the dossier is being examined, the Fund Management Company shall amend and supplement dossier incorrect information , or compulsory important information is omitted; or when new information related to dossier of registration for the initial public offering is provided. The Fund Management Company shall announce the new information as prescribed in Clause 3 Article 5 of this Circular, and send the amended or supplemented documents to the State Securities Commission. The amended and supplemented documents must be signed by the persons that signed the dossier of registration or the persons holding the same position.

5. Within 30 days from the date on which complete and valid dossier is received as prescribed in Clauses 1 and 2 of this Article, the State Securities Commission shall issue the certificate of registration of the public offering of open-ended fund certificates. The refusal must be explained in writing by the State Securities Commission.

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7. While the State Securities Commission is examining the dossier of registration for offering open-ended fund certificates, the Fund Management Company and related persons may only accurately use the information in the prospectus sent to State Securities Commission surveying the market, and must clearly state that all information is unofficial. The information serving the market survey shall not be provided through the mass media.

Article 5. The offering of the fund certificates

1. The initial public offering of the fund certificates shall be carried out only:

a) The State Securities Commission issues the Certificate of registration for offering fund certificates; and

b) The Fund Management Company guarantees that the buyers may access the prospectus, simplified prospectus in the dossier of registration for offering open-ended fund certificates at distributors mentioned in issuance notice.

2. At least 15 days before the date of the initial public offering of open-ended fund certificates, the Fund Management company shall send an offering announcement to State Securities Commission and publish in accordance with the regulations of the Ministry of Finance on the dossier of registration for public offering of securities via the mass media as prescribed in Clause 3 this Article.

3. The disclosure of information shall be carried out through the following media :

a) The publications and websites of the Fund Management company, Distributors, nominal agents; or

b) Other mass media in accordance with law;

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5. The money from the sale of fund certificates from the initial public offering shall be transferred into the escrow account opened at a Supervisory bank until the State Securities Commission issues the Certificate of registration for the fund establishment. Supervisory bank shall pay the minimum interest which is equal to the demand interest rate during the escrow period.

6. The Fund Management Company must finish the issuance of the fund certificates within 90 days from the effective date of the Certificate of registration for offering fund certificates. In case the issuance can not be finished within this period, the Fund Management Company shall request the State Securities Commission to consider the extension of the deadline for fund certificate issuance.

Within 07 days from the dated on which the request from the Fund Management Company is received, the State Securities Commission shall consider the extension of the deadline for the fund certificate issuance, but the extension must not exceed 30 days. The refusal must be informed and explained in writing by the State Securities Commission.

7. The suspension, cancellation of the offering must comply with Article 22, 23 of The Law on Securities.

Article 6. The dossier of registration for the fund establishment

1. Within 10 days after the date on which the initial public offering is finished, the Fund Management Company must send the dossier of registration for the fund establishment to the State Securities Commission, including:

a) The written application for the Fund establishment according to the form provided in Annex 9 enclosed with this Circular;

b) The report on the offering results according to the form prescribed in Annex 10 enclosed with this Circular, and the Supervisory bank’s written confirmation on the money gained from the offering;

c) The list of nominal agents and all investors including the investors trading via the nominal accounts, according to the form in Annex 11 enclosed with this Circular, together with the following information:

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- For investors: Full name, ID number or unexpired passport number, address (for individuals); Full name, abbreviation name, number of the Certificate of business registration, head office’s address (for organizations), number of the account for trading open-ended fund certificates, trading method (via nominal agents or distributors); the amount of fund units held, holding ratios, date of purchase;

d) The summary of investors’ opinions about the content related to the regulations in Point g, Clause 1 Article 4 of this Circular.

2. The dossier of registration for fund establishment prescribed in Clause 1 this Article shall be made in 01 original set enclosed with electronic files. The original dossier is sent directly at the administrative department of the State Securities Commission or by post.

3. Within 10 days from the on which the complete and valid dossier is received, the State Securities Commission shall issue the Certificate of the fund establishment registration. The refusal must be informed and explained in writing by the State Securities Commission.

4. Right after the Certificate of the fund establishment registration takes effect, the Fund Management Company may release their capital in escrow at the Supervisory bank to make investments. The Supervisory bank shall pay the interest on such capital in escrow in accordance with the agreement signed with the Fund Management Company.

5. Within 15 days after the finish of the initial public offering of the fund certificates, the Fund Management Company shall disclose information in accordance with Clause 3 Article 5 of this Circular, send reports to the State Securities Commission, incur all expenses and financial obligations arising from the capital mobilization, and refund the contributions to investors, including the interest (if any) upon the occurrence of one of the following events:

a) Fewer than one 100 investors, not including professional securities investors, purchase fund certificates;

b) The total value of capital mobilized is smaller than 50 billion VND or smaller than the estimated minimum capital value according to the Fund’s Charter (if any);

c) The distribution of the fund certificates is not able to be finished within the period prescribed in Clause 6 Article 5 of this Circular.

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1. Within 05 days after the Certificate of the fund establishment registration take effect, the Fund Management Company or a related service provider authorized by the Fund Management Company shall make, manage the Primary Register of investors, and certify the investors' ownership of the fund certificates. The fund management companies are entitled to authorize nominal agents in foreign countries to manage Secondary Registers and certify the ownership of the fund certificates for investors in foreign countries. The relevant service providers shall be authorized in accordance with the contract that contain the information prescribed in Annex 32 enclosed with this Circular.

2. The Primary Register includes:

a) The Name, head office’s address of the Fund Management Company; the Name, head office’s address of the Supervisory bank, depository bank (if any); full name of the fund;

b) Investor’s information include:

For individuals: Full names, ID or passport numbers; Addresses, telephone numbers and email addresses (if any);

For organizations: Full names, abbreviated names, trading names, registered office addresses, numbers of establishment and operation licenses/business registration certificates; Full names, ID or passport numbers, telephone numbers, email addresses of persons authorized trade fund certificates by their organization;

c) The account numbers of investor’s, or sub-account numbers, attached with the numbers of nominal accounts; securities trading codes (applicable to foreign investors)

d) The amount of the fund certificates being held; the date of ownership registration.

3. Nominal agents may open and manage secondary registers of investors on the basis of the contracts signed with the Fund Management Companies or relevant service providers. Such secondary registers of investors shall include all information about investors as prescribed in Clause 2 of this Article. Any cost of the management of such secondary registers of investors shall not be included into the fund expenses.

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a) The Fund certificate transactions are made between the fund and the investors on the days of trading fund certificates;

b) The Non-commercial transactions such as changing owner’s name when the ownership is transferred, given, donated, or inherited under the judgments of the court, and other cases prescribed by law; the fund certificates are transferred from nominal accounts to investor’s accounts, and vice versa.

c) The personal information about investors is changed;

5. The Fund Management company and related service providers must always have sufficient information about the ownership of each investor, including those trading via nominal accounts. The information about assets of investors in the Primary Register, including the investors trading via nominal accounts, is the proof of the investors' ownership of the fund certificates. The Investor's ownership shall be established when the information about investor's ownership is updated in the Primary Register.

Article 8. The Fund's charter, prospectus and simplified prospectus

1. Fund’s charter is initially issued by fund management company according to the form in Annex 02 enclosed with this Circular. The investors that register for purchasing fund certificates are considered having approved the fund’s charter. When the issued fund’s charter is amended or supplemented, the Fund management company shall collect opinions in the Investors' General Meeting. The following changes are exempted from obtaining opinions from the Investors' General Meeting:

a) The change of law leads to such amendment, supplementation or adjustment ;

b)There are grammatical or spelling errors in the fund's charter.

2. Within 07 days from the date on which the fund’s charter is amended or supplemented, the fund management company shall send reports to the State Securities Commission according to Annex 29 enclosed with this Circular, and announce such changes using the methods prescribed in Clause 3 Article 5 of this Circular and other relevant regulations of the Ministry of Finance on the organization and operation of the fund management companies.

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4. The fund management company shall make a simplified prospectus that contain the fundamental prescribed in Annex 04 enclosed with this Circular.

5. The prospectus and the simplified prospectus must be interpretable without so many jargons, shall be posted on the websites of the fund management company, relevant service providers and distributors, and shall be complimentarily provided for investors upon their request.

SECTION II. THE TRANSACTIONS OF OPEN-ENDED FUND CERTIFICATE

Article 9. Investor’s Accounts, Nominal Account

1. For investors who initially trade fund certificates, fund management companies, related service providers or distributors shall summarize the identities of investors and beneficiaries (if any), and open fund certificate trading accounts for investors on the basis of the written registration for fund certificate trading according to the form in Annex 20 enclosed with this Circular. The Investors re be entitled to select the following types of the fund certificate trading accounts:

a) Personal accounts, undersigned by the investor (hereby referred as investor’s accounts as prescribed in Point a Clause 22 Article 2 of this Circular);

b) Sub-accounts for trading undersigned by the agent a prescribed in Point b Clause 22 Article 2 of this Article (referred to as investor’s sub-account)

2. Before signing the contract to provide services and open the accounts, or sub-accounts for investors, the fund management company or the relevant service providers, nominal agents, distributors authorized by the fund management company shall collect and verify the identities of investors according to Annex 33 enclosed with this Circular. If the investor’s information is not provided, the fund management company, relevant service providers, and distributors are entitled to refuse to open accounts or sub-accounts for investors.

3. The investor’s account/ sub-account contains the following information:

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b) The amount of the fund certificates;

c) The amount of increased/decreased fund certificates, reasons for such increase/decrease;

d) Other personal information about investors as prescribed in Clause 2 Article 7 of this Circular.

4. The management of investor’s accounts and nominal accounts must comply the following rules:

a) The Fund management company or relevant service providers shall open and manage accounts independently, separately of each nominal agent and investor. Distributors shall notify the opening and closing of investor’s accounts to the fund management company or relevant service provider s

b) Nominal agents must open and manage sub-accounts independently, separately of each investor, and notify the fund management company or relevant service providers of the opening and closing sub-accounts. The total balance of personal sub-accounts of investors must match the balance of the nominal accounts, the balance of each personal sub-account must match the data about the investor's ownership of the fund certificates in the Primary Register.

c) Nominal agents must provide information about each investor’s sub-account for the fund management company or relevant service providers; regularly compare the balance of each sub-account to ensure the consistency with the ownership information in the Primary Register. This regulation is not applicable to overseas nominal agents.

5. Fund management companies or relevant service providers, nominal agents are responsible for providing account statements, sub-account statements for investors within 02 days from the day on which the written requests from such investors are received.

6. Before opening an account or sub-account for trading fund certificates, the foreign investors must register for the securities trading code in accordance with the regulations on foreign investment in the securities market issued by the Ministry of Finance. This Clause is not applicable to the investors outside the territory of the Socialist Republic of Vietnam that make transactions via the nominal accounts of overseas nominal agents.

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8. Providers of services of transferring agents and nominal agents must update the securities trading accounts, and ownership status of foreign investors sufficiently, promptly and accurately, and provide such information for competent State management agencies when receive the written request. This regulation is not applicable to overseas nominal agents that open the nominal accounts prescribed in Clause 7 this Article.

Article 10. General regulations on fund certificate transactions

1. Within 30 days from the effective date of the Certificate of the fund establishment registration, the Fund management company shall arrange the trading of the fund certificates for investors. Open-ended fund certificates shall be traded periodically, in accordance with the Fund’s Charter, the Prospectus, and the simplified Prospectus. The trading frequency shall not be under twice per month.

2. Trading orders shall be sent to distributors specified in the prospectus and the simplified prospectus, or posted on the website of the fund management company, or sent to the fund management company or relevant service providers. The fund management company or the relevant service provider shall set up a trading order receiving system ensuring that investors in Vietnam may place trading order at all distributors listed in the prospectus and the simplified prospectus, or posted on the website of the fund management company.

3. Distributors may only receive trading orders from investors when order forms are filled with complete and accurate information according to the form provided in Annex 21 enclosed with this Circular. Order forms shall be kept by distributors in accordance with the laws on securities. When investor’s trading orders are received via internet, telephone, fax, the distributors must comply with the laws on electronic trading and securities, and:

a) Completely, promptly and clearly record the time for receiving orders, and the person that receives the orders from investors;

b) If orders are received via telephone or fax, with the reception must be confirmed before the execution, and investors shall be requested to provide the original order forms that bear their signature, as a proof for the their order making. The time at which original order forms must be provided for the fund management company and distributors is specified in the fund's charter and the prospectus.

4. The fund management company and the relevant service providers shall only execute the orders received before the order book is closed. Depending on the regulations in the fund's charter and the prospectus, the orders received after the order book is closed shall be cancelled or remain valid and be executed on the next trading days.

5. Within 03 days from the date on which the fund certificates are traded, the fund management company or the relevant service provider, the nominal agents shall update the information about the post-trading holdings of investors in the Primary Registers and send it to such investors for confirmation according to the form defined in Annex 22 enclosed with this Circular.

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7. The fund management company, the relevant service provider and the distributors must maintain an order book containing sufficient information about fund certificate trading orders of investors according to the form specified in Annex 23 enclosed with this Circular.

8. When a fund management company has two or more open-ended funds and the Fund’s Charter and the Prospectus allow investors to switch between funds. The switching order shall be execute as follows:

a) The order to sell fund certificates shall be executed first, then the order to purchase target fund certificates shall be executed;

b) The orders shall be executed on the days of trading the certificates of corresponding funds.

c) Investors only pay switching fees (if any) specified by the Fund’s Charter, and do not have to pay selling fee, purchase fee for the execution of the orders prescribed in Point a and Point b of this Article.

9. Fund management companies, relevant persons of the fund management companies may contribute capital, trade certificates of open-ended funds managed by the fund management company at the same price as that of other investors in accordance with Article 14 this Circular.

Article 11. Fund certificate purchase orders

1. The execution of purchase orders of investors and nominal agents must comply with the following principles:

a) The purchase orders are sent together with valid documents certifying that the investor have completed making payment to the fund's account, or the payment is confirmed by the supervisory bank as prescribed in Point c this Clause. Nominal agents make payment based on the difference between the values of purchase and sale orders. The payment time is specified in the contract between the transferring agent and the nominal agent;

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c) The supervisory bank confirms the complete reception of money from the investors and nominal agents;

d) The trading value of the purchase orders shall not be lower than the minimum purchase value (if any) specified in the fund's charter and the prospectus;

e) The amount of the fund units sold to investors or nominal agents can be a decimal fraction rounded to the nearest hundred.

2. The fund management company shall open a cash account for the fund at the supervisory bank to receive payments for the fund certificates made by investors or nominal agents. Nominal agents shall open deposit accounts for paying for the fund certificate transactions at the supervisory bank as prescribed in Point e Clause 3 Article 40 of this Circular in order to receive payments from investors trading via the nominal accounts.

3. The money from the sale of the fund certificates shall be transferred to the cash account of fund at the supervisory bank, and shall only be disbursed for investment after the day of trading fund certificates. The Fund management company and the supervisory bank are responsible for paying interests to investors, at the rate of interest on demand deposit from the date on which the fund receives payments for the certificates from the investors.

Article 12. Fund certificate sale orders

1. The execution of sale orders of an investor and nominal agent must comply with the following rules:

a) Sale orders shall be executed only when the fund management company, distributor, nominal agent or the relevant service provider ensures that the investors have enough fund units to sell as required, and the amount of remaining fund units after the transaction of is not lower than the minimum amount (if any) required to maintain the account or sub-account as prescribed in the fund's charter the prospectus;

b) Sale orders might not be executed, or partly executed as prescribed in Clause 1 Article 13 of this Circular;

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d) Payment period shall is specified in the fund's charter and the prospectus, but must not exceed 07 days from the date on which the fund certificates are traded. In the cases in Clause 3 of Article 13, and after the board of representatives of the fund issues the written approval, the payment may be delayed but must not exceed 30 days from the date on which the fund certificates are traded.

2. Within 03 days from the date on which the payment is received as prescribed in Point d Clause 1 of this Article, the nominal agent shall finish paying the investors.

3. If fund's charter or the prospectus allows, the fund management company may transfer part of the investment portfolio instead of paying cash to investors. The transfer of investment portfolios must satisfy the following conditions:

a) The investment portfolio shall be transferred only when the fund management company deems it necessary to avoid negative effect on the net asset value of the fund. The transfer must be approved in writing by the board of representatives, and reports must be provided at the next investors' general meeting;

b) The investor (the transferee) issues a written approval;

c) Only execute sale orders with the total payment value exceeding 50 billion VND as prescribed in the fund's charter and announced in the prospectus;

d) The structure of the portfolio transferred to the investors must be identical to that of the fund’s investment portfolio, ensuring the consistency of asset types, structure and proportion of each type of assets in the fund’s investment portfolio.

4. The supervisory bank is responsible for checking and certifying that the transfer is conformable with Clause 3 of this Article.

Article 13. Partial repurchase, suspension of the trade of open-ended fund certificates

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a) The total value of sale orders(including sale orders from swapping) after subtracting the total value of purchase orders (including purchase orders for swap) on the day of trading fund certificates exceeds 10% of the net asset value of that fund; or

b) The complete execution of the investor’s orders might lead to the fact that:

- The net asset value of the fund goes down below 50 billion VND; or

- The value of remaining fund units in the investor’s account is lower than the minimum value required or the minimum amount of the fund unit for maintaining such account prescribed in the fund's charter and announced in the prospectus (if any); or

- The residual net asset value or the amount of residual fund units is lower than the minimum net asset value or the minimum amount of circulating fund units prescribed in the fund's charter and announced in the prospectus (if any); or

- The amount of circulating fund exceeds the maximum amount (if any) prescribed in the fund’s charter and announced in prospectus; or

- Other cases prescribed in the fund's charter and announced in the prospectus.

2. For the repurchase of the remaining part of sale/switching orders that were partly executed as prescribed in Clause 1 of this Article, the fund management company is entitled to apply one of the two following rules provided in the fund's charter and announced in the prospectus:

a) The first come, first served rule: orders sent to the fund management company or the relevant service provider first shall be executed first; or

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1. In the cases in Point a Clause 1 of this Article, if the fund's charter and the prospectus permit, the fund management company may extend the payment period, which must not exceed 30 days from the day of the fund certificate trading.

2. Open-ended fund certificate transactions may be suspended in one of the following cases:

a) The fund management company fails to repurchase the open-ended fund certificates due to force majeure circumstances;

b) The fund management company fails to determine the net asset value of the fund on the day of valuating the repurchase price of open-ended fund certificates because the Securities Exchange decides to suspense the trade of securities in the fund’s investment portfolio.

c) Other cases as prescribed in the fund’s charter or the State Securities Commission deems necessary.

5. The fund management company shall send reports to the board of representatives of the fund and SSC within 24 hours from the occurrence of the events specified in Clause 4 of this Article, and resume the repurchase of open-ended fund certificates after such events end.

6. The duration of the suspension of the fund certificate trading is specified in the fund's charter, but must not exceed 03 months from the last day of the fund certificate trading.

7. Within 30 days, from the end of the suspension of the fund certificate trading as prescribed in Clause 6 of this Article, the fund management company shall organize an investors' general meeting to consult investors about the dissolving, splitting the fund or extending the suspension duration.

8. While convening the investors' general meeting, if the reasons for such suspension of the fund certificate trading are resolved, the fund management company may stop convening the investors' general meeting.

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1. The initial issuance price of an open-ended fund unit shall be decided by the fund management company in the fund's charter, and announced in the prospectus.

2. The sale price of a fund unit, meaning a price at which the investors must pay the fund management company, is the net asset value per fund unit on the fund certificate trading day plus the issuance fee (if any).

3. The repurchase price of a fund unit, meaning the price at which the fund management company must pay the investors, is determined by the net asset value per fund unit on the fund certificate trading day minus repurchase fee (if any).

4. The repurchase fees, issuance fees, and switching fees can be set at various rates, based on the period of holding fund certificates, investment objectives, or investment values. These fees must be specified in the fund's charter and announced in the prospectus. The maximum issuance fee must not exceed 5% of the transaction value. The repurchase and switching fees must not exceed 3% of the transaction value.

5. Except for the fees payable by the fund as prescribed in the fund's charter, issuance fee, repurchase fee (if any) and switching fee (if any) specified in the fund's charter and announced in the prospectus, the investors do not have to any fees to the fund, the fund management company, the entrusted organization and distributors when trading fund certificates.

6. These fees shall be increased if the increased fees do not exceed the maximum rates prescribed in Clause 4 of this Article. The soonest day to apply the increased fees is the 90^th day from the date on which the fee rates in the fund's charter and the prospectus are amended, and the time of application and these documents are announced in accordance with the regulations on information disclosure in the securities market issued by the Ministry of Finance and provided for investors according to relevant regulations in this Circular.

SECTION III. INVESTMENT OF OPEN-ENDED FUNDS

Article 15. Investment limits of an open-ended fund

1. The investment portfolio of an open-ended fund must be conformable with the fund’s investment objectives and policies as stated in the fund's charter and the prospectus.

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a) Deposits at commercial bank as prescribed by the laws on banking;

b) Money market instruments, foreign currencies, valuable papers, transferring instruments in accordance with the laws on banking;

c) Government bonds, bonds underwritten by the Government and municipal bonds;

d) Listed shares, registered shares, listed bonds of issuers that operate within Vietnam’s law;

e) Shares, bonds to be listed or registered by the issuers that operate within Vietnam’s law;

f) Listed and registered derivatives at Stock Exchanges as a hedge.

3) The investment in the assets prescribed in Point e Clause 2 of this Article shall must satisfy the following conditions:

a) The investment is allowed by the Fund’s charter and the Prospectus

b) The types, codes of securities, quantity, transacted value, and time of execution are approved in writing by the board of representatives of the fund ;

...

4. Except for the bond fund, investment portfolio of open-ended fund must include the securities of at least 06 issuers, and:

a) Do not invest more than 49% of the fund’s total asset value in the assets as prescribed in Points a and b Clause 2 of this Article;

b) Do not invest more than 30% of the fund’s total asset value in the assets prescribed in Points a, b, d, e and f Clause 2 of this Article, which are issued by the same company or by a group of companies that have mutual ownership relations. The investment in derivative securities equals the value committed in the contract as prescribed in Annex 13 enclosed with this Circular;

c) Do not invest more than 20% of total asset value of the fund in circulating securities of an issuer, including valuable papers, transferring instruments, bonds, voting shares, non-voting preferable shares, and convertible bonds;

d) Do not invest in securities of an issuer more than 10% of the total value of circulating securities of that issuer.

e) Do not invest more than 10% of the total asset value in the assets prescribed in points e Clause 2 of this Article;

f) The total value of major investments in the fund’s investment portfolio must not exceed 40% of the fund’s total asset value;

g) At any time, the total value in committed the transactions of derivative securities, outstanding loans and other payables of the fund must not exceed the net asset value of the fund;

h) Do not invest in securities investment funds, shares of securities investment companies that are established and operated in Vietnam;

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5. Except for the cases in Points g, h and i Clause 4 of this Article, the investment structure of the open-ended fund may vary with 15% compared to the limits prescribed in Clauses 4 of this Article, and only due to the following reasons:

a) The fluctuation of the market prices of assets in the fund’s investment portfolio;

b) Making legitimate payments of the fund;

c) Executing trading orders of investors ;

d) Consolidating, merging, and acquiring issuers;

e) The new fund has just been licensed or has not operated for 06 months from the date on which the certificate of the fund establishment registration is issued, due to the splitting, consolidation, or merger of the funds.

f) The fund is in the process of dissolution.

6. Fund management companies must adjust the investment portfolio to meet the investment limits prescribed in Clause 4 of this Article within 03 months, from the date on which the variation occurs

7. In case variation is caused by the inconformity with the investment limits prescribed by law of the fund’s charter, the fund management company is be responsible for adjusting the portfolio within 15 days from the date on which the variation occurs and shall incur the costs of these transactions and losses (if any). The profit (if any) must be immediately recorded.

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Article 16. Giving and taking loans, repurchasing, and making margin transactions.

1. Fund management companies may not use the capital and assets of the fund to give or underwrite any loan, except for the investments in deposit prescribed in Point a Clause 2 Article 15 of this Circular;

2. Fund management companies may not take loans to sponsor activities of the fund, except for short–term loans to defray necessary costs of the fund. The total value of short–term loans must not exceed 5% of the net asset values of the fund at any time and the longest loan term is 30 days.

3. Fund management companies may not use the fund’s assets to make margin transactions (taking loans to purchase securities) for the fund or other organizations and individuals; may not use the fund’s assets to make false transactions or give securities loans.

4. If the fund’s charter permits, the may repurchase Government bonds in accordance with the regulations of the Ministry of Finance on the management of Government bond transactions.

Article 17. Forms of asset transaction

1. When purchase, sale of listed securities, and trading registration at the Stock Exchange must be done via the concentrated transaction system of the Stock Exchange.

2. For transactions in the form of negotiations, the sale and purchase of securities that are not listed or registered, the fund management company must ensure that

a) The estimated price, time of execution, transaction partners, type of traded assets are approved in writing by the board of representations of the fund before the transaction is made;

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SECTION IV. NET ASSET VALUE OF OPEN-ENDED FUNDS

Article 18. General principles on determination of net asset value

1. The fund management company shall determine the net asset value of the fund and the net asset value of a fund unit based on market price, or fair price (in the absence of the market price) of the assets in fund’s portfolios.

2. The list of at least 03 quotation service providers, which are not the relevant persons of the fund management company and the supervisory bank, must be approved by the board of representatives of the fund.

3. The fund management company must make a valuation manual comprising the following contents:

a) The principles, criteria for selecting and changing quotation service providers. These principles must be specified in the fund’s charter;

b) The detailed principles and process to implement the methods of price determination in accordance with law, the fund’s charter and international practice.

4. The detailed principles and process to implement the methods of price determination prescribed in Point b Clause 3 of this Article must be clear and reasonable in order to be uniformly applied to various conditions of the market, and must be certified by the supervisory bank and approved by the investors’ general meeting.

5. The net asset value of the fund and the net asset value of a fund unit must be certified by the supervisory bank. The value certification must be made in writing, or the access via the electronic information system of the supervisory bank is approved by the fund management company. If the valuation is incorrect, the supervisory bank must notify and request the fund management company to adjust it within 24 hours.

...

7. The fund management company may authorize relevant service providers to determine the net asset value of the fund, the net asset value of a fund unit based on the price offered by quotation service providers. The fund management company is responsible for inspecting, supervising in order to ensure that the determination of the net asset value is accurate and in compliance with laws.

8. Within 03 days from the date on which net asset value of the fund reduces by 50% compared to the initial mobilized capital, or falls below 30 billion VND, the fund management company must send reports to the State Securities Commission and suggest remedial measures. In case the net asset value of the fund of the fund falls below 10 billion VND in 06 consecutive months, the fund management company must liquidate assets for dissolving the fund as prescribed in Article 33 of this Circular.

Article 19. Net asset value of the fund

1. The net asset value of the fund is determined by deducting the fund's payables, including the debts and payment obligations, from the total market value of all assets in the portfolio on the trading day closest to the valuation day. In the absence of the market value on the latest trading date, or the market price is highly volatile as prescribed in the fund’s charter or internal regulations of the company, the fund management company may apply reasonable values in accordance with the principles, methods or theoretical models of asset valuation provided in the fund’s charter or the fund’s valuation manual after obtaining the written approval from the board of representatives of the fund.

2. The net asset value of a fund unit is the net asset value of the fund divided by the total number of circulating fund units on the trading day closest to the valuation day. The net asset value shall be rounded according to regulations on accounting and auditing. The residual amount after the rounding shall be included in the fund.

3. The determination of the market value of the fund’s assets must comply with the method prescribed in Annex 10 enclosed with this Circular.

Article 20. Compensation for damages given to investors and the fund

1. The fund management company is be responsible to give compensations to the fund and the investors who trade fund certificates and suffer damage when the valuation of the net asset value of the fund is significantly incorrect. The variation is considered significant if it reaches :

a. At least 0.75% of the net asset value, applicable to bond funds.

...

2. In case the net asset value of a fund unit is incorrectly determined at the variations prescribed in clause 1 of this Article, the fund management company shall plan the remedial measures and pay compensation in the following orders:

a) Re-valuate the net asset value on days of trading the fund certificates during the period when the variation is significant until it falls below the levels prescribed in Clause 1 of this Article (hereinafter referred to as incorrect valuation period);

b) Determine compensations given to the fund and investors who suffer damage for the incorrect valuation of the fund’s asset. The fund management company or the fund does not have to pay compensation to the investors that suffer a loss smaller than 100,000 or another smaller value as prescribed in the fund's charter, but the payments of the fund management company must be included in the fund, unless otherwise decided by the investors’ general meeting or the board of representations of the fund;

c) Within 15 days from the day on which the net asset value is adjusted, the fund management company shall send reports to the State Securities Commission on the compensation for damages given the fund and the investors, specifying the reasons, the incorrect valuation period, the damage suffered by the fund and the investors, enclosed with a list of compensated investors and the compensations given to each investor. Within 07 days from the date of reporting to the State Securities Commission, the fund management company shall carry out the procedure for paying compensation to the fund and investors, who suffer damage, at the rate prescribed in Clause 4, 5 of this Article.

3. In case the Fund is under-valuated, the amount of compensation given to the fund and investors are determined as follows:

a) For the investors who purchase fund certificates before the incorrect valuation and sell fund certificates during the incorrect valuation period: the amount of compensation shall depend on the level of variation and the amount of the fund units sold by investors;

b) For the fund: the compensation amount shall depend on the level of variation, the number of the fund units sold by the fund during the incorrect valuation period, and the number of circulating fund units;

4. In case the fund is over-valuated, the compensation given to the fund and investors shall be determined as follows:

a) For the investors that purchase fund certificates during the incorrect valuation period and keep holding such fund certificates after the incorrect valuation period: the compensation amount shall depend on the level of variation, the number of the fund units purchased and held after the incorrect valuation period;

...

5. Any compensation given to the investors and the fund must be included in the operating costs of the fund management company. In case fund’s charters and the investors’ general meeting allow, the compensation given to the investors prescribed in Point a Clause 3 and Point a Clause 4 of this Article shall be included in the fund’s expenses.

6. The Fund management company shall pay compensation for any damage suffered by the fund in the following cases:

a) The fund management company does not comply with the investment policies, invests in assets subject to restriction as prescribed in the fund's charter; or

b) Using loaned capital for illegitimate purposes, against the law; or the fund management company takes the loans that exceed the limits prescribed in the fund's charter and law. or

c) Making investments that exceed the investment limitations, except for the cases in Clause 6 of Article 15.

7. The compensation given to the fund in the cases as prescribed in Clause 6 of this Article depends on the damage caused by the excess investment, the loan costs. The profit (if any) made from such investments and activities must be included in the fund.

8. The payment for the compensation given to the Fund and the investors prescribed in Clauses 1, clause 6 of this Article shall be done via the supervisory bank. The fund management company shall be responsible for developing a mechanism for cooperation with the supervisory bank in order to promptly provide payment instructions for investors and the fund.

9. The compensation given to the fund and the investors must be included in the fund’s annual report made by the fund management company as prescribed in Clause 2 Article 48 of this Circular, specifying the its reasons and influence, the number of investors who are affected and compensated, the amount of compensation given to each investor, the amount of compensation given to the fund, the method of compensation, method of payment, and other remedial actions (if any).

Article 21. Profit distribution policy of the fund

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2. Profits may be distributed in cash or by fund units. The profit distribution in the form of fund units must be agreed by the General Meeting of Investors or the board of representatives of the fund (if the latest Investors' General Meeting authorized the board of representatives of the fund to decide in accordance with the Fund's charter) or allowed by the fund’s charter and the prospectus. Fund certificates are divided based on net asset value of a fund unit on the date on which the investor list is closed, or another value prescribed in the fund’s charter.

3. The fund management company must deduct all taxes, fees and charges in accordance with laws before distributing profits to investors.

4. After distributing profits, the fund management company shall send reports to each investor on the fund profit distribution, including the following contents:

a. The form of profit distribution (in cash or in fund units);

b. Total profits in the period and accumulated profit, details of profits;

c. The value of profits being distributed, the number of the fund units issued for the purpose of profit distribution (in case of profit distribution by fund units);

d. The net asset value of a fund unit before and after the profit distribution;

e. The impacts on the net asset value of the fund after the distribution.

5. If the Fund’s Charter and the Prospectus allow, the Fund management company shall distribute the Fund's assets to investors more than distributed profits, but the net asset value of the fund must not fall below 50 billion VND after the distribution. The plan, schedule, assets to be distributed, source of the funds must be approved by the Investors' General Meetings.

...

7. If the investors have finished transferring their fund units in the period between the date on which the investor list is closed and the payment date, that person that transfers shall receive the profit.

Article 22. The fund’s operating costs

1. Operating costs of the fund shall include the following after-tax costs:

a. The cost of asset management paid to the fund management company;.

b. The cost of fund’s asset depository and supervision paid to the Supervisory Bank;

c. The cost of fund administration, transfer agent and other costs paid by the Fund management company to relevant service providers;

d. The audit cost paid to auditing firms;

e. The cost of legal consultancy, quotation services, and other reasonable services, the wages paid to the board of representatives of the fund;

f. The costs of drafting, printing, sending the Prospectus, simplified prospectus, financial statements, transaction confirmation, bank statements and other documents that shall be sent to investors; costs of information disclosure; costs of organizing general meetings of investors or the board of representatives of the fund;

...

2. Within 45 days from the end of Q2 and Q4 every year, the fund management shall disclose information about the fund’s operating cost rate as well as the fund’s portfolio turnover rate on the websites of the fund management company and distributors after these values are verified by the Supervisory Bank.

a) Operating cost rate of the fund is determined by the following formula:

Operating cost rate (%) =

Total operating cost x 100%

Average net asset value of the fund in the year

In case the fund has been operated under one year, the operating cost rate shall be determined as follows:

Operating cost rate (%) =

Total operating cost x 365 x 100%

Average net asset value of the fund in the reporting period × number of days of operation of the fund (from the licensing date )

...

Turnover rate of the portfolio (%) =

(Total value of purchase in the period + total value of sales in the period) x100%

2 x Average net asset value of the fund in the year

In case the fund has operated under one year, the turnover rate of the fund’s portfolio shall be determined as follows:

Rate of turnover of the fund’s portfolio (%) =

(Total value of purchase in the period + total value of sale in the period) x 365 x 100%

2 x Average net asset value of the fund in the reporting period x number of days of operation of the fund is (from the licensing date)

3. The costs of brokerages, transfer, and other transaction costs related to the transactions of the fund's asset payable to the securities companies do not include any other cost, even the costs of other services or payables to a third party (soft commissions).

4. The fund management company and distributors shall pay the costs of printing, publishing advertisements, and the fund’s product information.

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THE GENERAL MEETING OF INVESTORS, THE BOARD OF REPRESENTATIVES OF THE FUND

SECTION 1. GENERAL MEETING OF INVESTORS

Article 23. Rights and duties of investors participating in the open-ended fund

Investors shall have all rights and duties as prescribed in the Law on Securities and other related regulations. Investors are responsible for making full payment for fund units purchased within the period as prescribed in the Fund's charter, Prospectus and are only responsible for the fund’s debts and other asset obligations of the Fund up to the amount paid when purchasing the fund’s certificates.

Article 24. Investors' General Meeting

1. The Investors' General Meeting is convened by the fund management company and shall make decisions on:

a) The amendment and supplementation o the Fund's charter and supervision contracts;

b) The fundamental changes in the Fund’s investment policies and objectives, and profit distribution policies; the increase of the fees paid to the fund management company and the supervisory bank; the changes of the fund management company and the supervisory bank;

c) The consolidation and merger of the funds;

...

e) The dissolution of the fund;

f) The election, dismissal of the President and members of the board of representatives of the fund; The wages and operating costs of the board of representatives of the fund; the selection of the accredited auditing firm to audit the fund’s annual financial statements; the approval for the reports on the financial condition, assets and annual operation of the fund;

g) Other issues prescribed in Article 85 the Law on Securities, the Law on Enterprises, and fund’s charter.

2. The agenda and content of the General Meeting of Investors shall be prepared by the fund management company in accordance with the Law on Enterprises. At least 15 days before the investor’s general meeting, the fund management company shall send the agenda, content, and all relating documents of the meeting to the State Securities Commission.

3. The annual investor’s general meeting shall be held within 30 days from the date of the annual financial statement audited by an accredited auditing firm. The meeting shall not be held in the form of seeking written opinions, except otherwise prescribed in the fund’s charter.

4. The fund management company shall convene an irregular Investors' General Meeting in the following cases:

a) The fund management company, the Supervisory Bank, or the board of representatives of the fund considers such meeting are necessary for the interests of the fund;

b) The meeting is requested by the investors or a group of investors representing at least 10% of total fund units in circulation issued within at least 6 consecutive months before convening the meeting, or a smaller ratio prescribed in the Fund’s Charter;

c) Other cases prescribed in the Fund's charter.

...

6. Unless the meeting must be held to seek investor’s opinions on the issues prescribed in Point b and c Clause 1 this Article, in the other cases prescribed in the fund’s charter and the prospectus, the fund management company may seek written opinions from investors instead of holding a meeting. The principles, contents, order, and procedure for seeking investor’s written opinions must be specified in the fund’s charter. In this case, the fund management company must comply with the time limit for meeting’s documents to investors as in an investor’s general meeting according to the laws on enterprises and securities.

Article 25. The conditions and formalities of conducting Investors' General Meetings

1. The Investors' General Meeting shall be held when the number of investors that attend the meeting is able to represent at least 51% of the total circulating fund units. Investors may attend the meeting directly or under an authorization or in other forms prescribed in the Fund's charter.

2. If the first meeting fails to satisfy the conditions prescribed in Clause 1 of this Article, the second meeting shall be convened within 30 days from the date on which the first meeting was going take place. In this case, the Investors' General Meeting shall be held regardless of the number of investors that attend.

3. The formalities and forms of the Investors' General Meeting must comply with the Fund's charter and the laws on enterprise and securities.

Article 26. Approving the decisions of Investors' General Meetings

1. Except for the cases prescribed in Clause 2 this Article, the decisions made in the Investors' General Meeting shall be approved at the meeting if the following conditions are met:

a) The decision is supported by a number investors that represent at least 51% of the total amount of circulating fund units. The specific ratio is specified in the fund’s charter;

b) The total number of votes for the decision must reach at least 30% of the total number of circulating fund units as at the voting time. The specific ratio is specified in the fund’s charter;

...

a) The decision is approved by a number of investors that represent at least 65% of the total amount of circulating fund units. The specific ratio is specified in the fund’s charter;

b) The total number of votes for the decision must reach at least 40% of the total amount of circulating fund units at the voting time. The specific ratio is specified in the fund’s charter.

3. If the Investors' General Meeting is held according to Clause 2 Article 25 of this Circular and the investors that attend the meeting represent less than 51% of the total amount of circulating fund units, then the decision made at the meeting shall be approved at the meeting if the corresponding conditions specified in Point a Clause 1 or Point a Clause 2 of this Article are met.

4. When seeking investor’s written opinions as prescribed in Clause 6 Article 24 this Circular, decisions are approved when they are approved by a number of investors that represent at least 65% of the total fund units.

5. The fund management company and the board of representatives of the fund shall consider and ensure that all decisions of the Investors' General Meeting are conformable with laws and the Fund's charter. In case the decision is not conformable with laws and the Fund's charter, another Investors' General Meeting shall be held to obtain opinions of investors or obtain writing opinions from investors.

6. Within 07 days, after the end of the Investors' General Meeting, or after the deadline for obtaining investors’ written opinions as mentioned in Clause 4 of this Article, the fund management company shall make the minute of meeting and the resolution of the Investors' General Meeting, then send them to the Supervisory Bank and the investors, or post them on the company’s website as prescribed in laws.

Article 27. Objection to decisions of Investors' General Meetings

1. The investors that object to the decisions passed by the Investors' General Meeting on issues prescribed in Points b and c Clause 1 of Article 24 are entitled to require the fund management company to redeem their fund certificates or switch to another open-ended fund under management of the fund management company. Such requests must be made in writing, specifying the investor’s name and address, the amount of the fund units, the reasons for requesting the redemption or switching. The investors must send requests to the head office of the fund Management Company or the nominal agent within 15 days from the date on which the Investors’ General Meeting approves the decision on the issues mentioned above.

2. Within 45 days from the date on which the result of the investor’s general meeting is announced, the fund management company must complete the redemption or switching of the fund certificates for investors who object to decisions passed by the Investors' General Meeting as prescribed in Clause 1 of this Article. In this case, the redemption price depends on the net asset value on the date of the investor’s general meeting, and the investors are exempted from paying the redemption fees or switching fees.

...

Article 28. The board of representatives of the fund

1. The board of representatives of the fund represents the investors and is selected in the Investors' General Meetings, or voted in writing by investors. The tenure, standards, number of members, appointment and dismissal, admission to the Board members, appointment of the President of the Board, the conditions and procedures for holding meetings and passing resolutions of the Board are prescribed in the Fund's charter and other laws.

2. The board of representatives of the fund consists of 3 - 11 members, at least two third (2/3) among which are independent members.

3. The board of representatives of the fund includes:

a) At least one independent member with qualifications and experience in accounting and auditing;

b) At least one independent member with qualifications and experience in securities investment analysis or asset management;

c) At least one member with qualifications and experience in laws and securities laws.

4. In case the Board’s structure or any member of the Board no longer satisfies the conditions specified in Clauses 2 and 3 of this Article, or a member is forced to resign, the board of representatives of the fund and the fund management company shall select a member that satisfy the conditions in Clause 3 of this Article for temporary substitution within 15 days from the date on which the ineligibility is found. The temporary substitute member shall exercise the rights and fulfill the duties of a member of the board of representations of the fund until the Investors' General Meeting appoints an official member.

5. The rights and duties of the board of representatives of the fund shall be specified in the Fund's charter, including:

...

b) Approving the list of quotation service providers, the principles and methods for net asset value determination; approving the list of the banks receiving fund’s deposits, monetary instruments and assets that the fund is allowed for investment in as prescribed in Points a, b, e Clause 2 Article 15 of this Circular; approving fund's asset transactions as prescribed in Clause 2 of Article 17 of this Circular. These decisions must be made with extreme caution to ensure the safety of the fund’s assets;

c) Deciding the amount of distributed profit, the schedule and procedures of profit distribution, or settlement of losses during operation; making decisions on the issues in disagreement between the fund management company and supervisory bank;

d) If the Fund’s Charter permits and the latest Investors' General Meetings authorizes, the Board of Representatives is entitled to make decisions on the issues prescribed in Point b, c, d, e, f and g Clause 1 Article 24 of this Circular;

e) Requiring the fund management company and the supervisory bank to adequately provide documents and information about the fund management and the supervision.

f) Fulfill other duties prescribed in the Fund's charter.

6. Within 15 days from the date on which the board of representatives of the fund makes decisions on the issues prescribed in Point b, c, d, e Clause 1 Article 24 of this Circular in accordance with Point d Clause 5 of this Article, the board of representatives of the fund, through the fund management company, must send the meeting minutes and the Resolution of the board of representatives of the fund to the State Securities Commission and the supervisory bank, then provide information about the decision for investors in the form specified in the Fund's charter. In this case:

a) The State Securities Commission is entitled to request the board of representatives of the fund to change their decision if such decision is contrary to law or the change is considered necessary to ensure the investors' interests. Within 07 days from the reception of the meeting minutes, the decisions of the board of representatives of the fund and relevant documents, if the State Securities Commission does not give any written opinion, the fund management company and relevant organizations may implement decisions made by the board of representatives of the fund in accordance with law;

b) The investors who object decisions on the issues prescribed in Points b and c Clause 1 Article 24 of this Circular made by the board of representatives of the fund are entitled to request the fund management company to redeem or switch their fund certificates in the cases in Article 27 of this Circular.

7. The decisions of the board of representatives of the fund are voted at the meetings, via conference by phone, internet or other audio/video devices, or via written opinion and other methods as prescribed in the Fund's charter. Each member of the Board has one vote. The Board meeting shall be held if at least two-thirds of the Board members attend the meeting , and the number of independent members among which must make up at least 51%. The members who do not attend the meeting in person may vote by sending written opinions. The decision of the board of representatives of the fund shall be passed if it is supported by at least 51% of attendants and at least 51% of independent members.

...

9. If the Fund's charter does not specify, the wages and other benefits of members of the board of representatives of the fund shall comply with the following regulations:

a) Members of the board of representatives of the fund shall be receive wages and enjoy benefits according to the Fund's charter or the decision of the Investors' General Meeting. The Investors' General Meeting shall decide on annual wages and operating budgets allocated to the board of representatives of the fund based on the estimated number of days, the volume and nature of their work, and the average daily wages of the members. The Fund management company shall deduct taxes on infrequent income of the members of representative board according to the relevant laws;

b) The members of the board of representatives of the fund shall have their reasonable expenditures on meals, accommodation, travel, and other expenditures covered as prescribed in the Fund's charter. The total amount of such wages and expenses must not exceed the total annual operating budget allocated to the board of representatives of the fund that is passed by the Investors' General Meeting as prescribed in the Fund's charter and the prospectus;

c) The wages and operating costs of the board of representatives of the fund shall be included in the management cost of the fund and they shall be separately listed in the fund’s annual financial statements.

10. Clause 9 of this Article is not applicable if the members of the board of representatives of the fund are concurrently employees of the fund management company.

Chapter IV

FUND RESTRUCTURING

SECTION I. FUND MERGER AND CONSOLIDATION

Article 29. General regulations on the consolidation and merger of the funds

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2. The fund management company shall hold the Investors' General Meetings to consult the investors about the consolidation and merger according to the form in Annex 13 enclosed with this Circular. At least 30 days before the Investors' General Meeting, the fund management company shall provide their investors with the documents about the consolidation and merger, including:

a) The consolidation or merger plan enclosed with the report on the analysis of the consolidation or merger in accordance with Annex 13 of this Circular;

b) The draft consolidation or merger contract in accordance with Annex 14 of this Circular;

c) The audited annual financial statement, audited quarterly financial statements of all consolidated or merged funds until the latest quarter;

d) The drafts of the charter, prospectus, simplified prospectus of the new fund; drafts of charter, prospectus, simplified prospectus of the transferee fund;

3. The fund management company may suspend fund certificate transactions within 30 days in order to complete the consolidation or merger, except for the repurchase or switching of the fund certificates requested by the investors who object to the consolidation, merger

4. The date of consolidation, merger is the effective date of the Certificate of fund establishment registration takes effect. The old funds and transferor funds no longer exist on the date of consolidation or merger. Concurrently, the new fund or transferee fund shall inherit all assets, liabilities, legal rights and obligations from the old fund or transferor fund from the date of consolidation or merger. In particular:

a) All assets of the old funds or transferor funds under the ownership of the new fund or transferee fund must be registered and deposited at the supervisory bank of the new fund or transferee fund;

b) All liabilities of the old funds or transferor funds shall be transferred to the new fund or transferee fund. This regulation is not applicable when the old funds or transferor funds have settled all liabilities before the consolidation or the merger according to the consolidation or merger plan.

...

d) Depending on terms and conditions of the consolidation, merger contract and consolidation, merger plan, besides fund units received as prescribed in point d of this Clause, investors of consolidated, transferor funds may receive a payment in cash. The value of payment of a fund unit shall not exceed 10% net asset value of a fund unit determined as on the date of consolidation, merger as mentioned in point d of this Clause.

5. Fees for legal consultation service, administration and other consultation services related to fund consolidation; merger shall not be accounted as the fund’s expenses or incurred by investors, otherwise prescribed by the General Meeting of Investors.

Article 30. Orders and procedures for consolidating and merging funds

1. Within 60 days from the date on which the final Investors' General Meeting of the Fund involved in the consolidation or merger approves the consolidation or merger, the relevant Fund management companies shall submit a dossier of application to the State Securities Commission for the certificate of the fund establishment registration, or adjust the certificate of the fund establishment registration of the transferee fund. The dossier includes:

a) The written application for the issue or adjustment of the certificate of the fund establishment registration according to the Form in Annex 11 enclosed with this Circular; attached with the original certificate of the fund establishment registration of old funds or transferor funds;

b) The plan for the consolidation/merger enclosed with the report on the consolidation/merger and the consolidation/merger contracts approved by Investors' General Meetings. The consolidation/merger contracts shall be signed by the President of the board of representatives of the funds together with the legal representatives of the relevant fund management companies;

c) The assessment made by the Supervisory bank of the consolidation or merger plan and the consolidation/merger contract related to the plan for determining debts, assets and the net asset value on the date of consolidation or merger; the plan for conversion and determination of the conversion ratio; the plans and principles for asset transfer among funds.

d) The minute of meetings and the Resolutions of the Investors' General Meeting about the consolidation or merger;

e) The conditions of the new fund or transferee fund prescribed in Points b, c, d, e, and f Clause 1 Article 4 of this Circular and other relevant documents.

...

3. Within 30 days from the date on which the complete and valid dossier is received, the State Securities Commission shall adjust the certificate of fund establish registration. Within 07 days from the consolidation/merger date, the fund management company shall announce the information about the consolidation/merger as prescribed by law. The announcement includes:

a) The date of consolidation, date of merger;

b) The rules for determining the net asset value of a consolidated/transferor fund unit on the date of consolidation/merger; the ratio of the fund unit conversion, the ratio of money paid to the investors in the old funds or transferor funds (if any).

4. Right after the date of consolidation/merger, the fund management company, the Supervisory bank and relevant organizations shall cooperate in registering the assets received from old funds or transferor funds as prescribed by law, and concurrently update the information about Investors' ownership in the Primary Register and the Secondary registers.

5. Within 15 days from the date of consolidation/merger, the fund management company shall receive and execute sale orders, purchase orders and switching orders of the new fund or transferee fund.

6. Within 15 days from the date of consolidation/merger, the Supervisory bank shall verify the accuracy of the consolidation/merger result and send reports to the State Securities Commission according to the Form at Annex 12 enclosed with this Circular. In particular:

a) The details of investment portfolio, the total asset value, the total debts value and the net asset value on the date of consolidation or merger; the actual conversion ratio of the fund units on the date of consolidation or merger; the ratio of payment in cash of a fund unit (if any).

b) The quantity and value of fund units repurchased from investors who object to the consolidation or merger; the value of loans paid upon the request from creditors.

7. Within 06 months from the date of consolidation or merger, the fund management company shall keep and provide the investors with the documents related to the consolidation/merger at Head Offices of the fund management company and the places where fund certificates are distributed, and post such documents on the websites of the fund management company and distributors. The relevant documents include:

...

b) The information related to the profit distribution, the issuance of certificates of the new fund, transferee fund to investors of the old funds or transferor funds;

c) The verification made by the supervisory bank as prescribed in Clause 6 of this Article.

SECTION II. FUND SPLITTING

Article 31. General provisions on fund splitting

1. In case the fund portfolio is illiquid as prescribed in Points b and c Clause 4 Article 15 of this Circular, the fund management company may split the fund according to the plan approved by the Investors' General Meeting.

2. At least 30 days before the Investors' General Meeting, the fund management company must provide investors with documents related to the splitting of the fund including:

a) The plan for splitting the fund according to the provisions prescribed in Annex 16 enclosed with this Circular;

b) The draft charters of the funds established after splitting;

3. The fund management company, on behalf of the fund, shall repay all debts and fulfilling all financial obligations of the fund before splitting.

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Article 32. Orders and procedures on fund splitting

1. Within 30 days since the Investors' General Meeting of the fund approves the splitting, the fund management company shall complete the procedures and documents requesting the State Securities Commission to issue Certificates of the fund establishment registration for the funds established after splitting. The documents include:

a) The written application for the issuance of the Certificate of the fund establishment registration according to the form provided in Annex 14 enclosed with this Circular, together with the original copy of the Certificate of the fund establishment registration of the fund being split;

b) The plan for splitting the fund passed by the Investors' General Meeting;

c) The report of Supervisory Bank on the plan for splitting the investment portfolio; the plan for transferring ownership and assets;

d) The supervisory contracts between the fund management company and supervisory banks;

e) Meeting minutes and resolution of the Investors' General Meeting on the splitting of the fund;

f) The Fund's charter, the Prospectus and simplified prospectus of the funds established after splitting (if they are changed or new funds are established).

2. The fund splitting dossier shall be made in 01 original set together with electronic files. The original set shall be submitted directly at the administrative department of the State Securities Commission or by post.

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4. Within 7 days from the splitting date, the fund management company, related service providers, nominal agents shall:

a) Complete making the Primary Register and the Secondary registers of the funds newly established after splitting;

b) Notify the date of splitting, confirm the completed contents under the splitting plan, the net asset value of a fund unit of the new funds, confirm the asset ownership of each investor.

c) Provide information about the splitting of the fund as required by the law.

5. Within 15 days from the splitting date, the supervisory bank and related service providers shall split the investment portfolio of the split fund, and carry out the procedures for registering the ownership of assets for the new fund as prescribed by law.

6. Within 06 months from the splitting date, the fund management company shall keep and provide the documents related to the splitting of the fund at Head Offices of the fund management company and places for fund certificate distribution on website of the fund management company. Such documents include:

a) The splitting plan and progress;

b) The portfolio structure of the split fund on the splitting date and of the funds established after splitting;

c) The information related to the profit distribution, the issuance of the fund certificates of the funds established after splitting.

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Article 33. General regulations on fund dissolution

1. A fund shall be liquidated and dissolved in the following cases:

a) The fund management company is dissolved, bankrupt, or its license for establishment and operations is revoked, and the board of representatives of the fund fail to appoint a substitute fund management company within 02 months from the date on which such events happen;

b) The supervisory bank is dissolved, bankrupt, or the supervisory contract is unilaterally terminated by the supervisory bank or the fund management company, or the Certificate of registration for securities depository services is revoked and the fund management company fail to appoint a substitute supervisory bank within 02 months from the date on which such events happen;

c) The operating period of the fund as prescribed in the fund's charter and in the certificate of the fund establishment registration expires without extension (for funds subject to a operating period);

d) The fund is dissolved according to the decision of the investors' general meeting;

e) The net asset value of the fund falls below 10 billion VND in 06 consecutive months;

f) Other cases prescribed in the fund's charter.

2. Within 30 days from the date of the compulsory dissolution prescribed in Clause 1 of this Article, the board of representatives of the fund shall convene the investors' general meeting for approving the fund dissolution plan.

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4. The fund management company shall liquidate and distribute the fund’s assets to investors as prescribed in the liquidation and dissolution plan, approved by the investors' general meeting, and in accordance with the fund's charter and law. In case it is impossible to liquidate all assets in the period specified in the dissolution and liquidation plan, the fund management company shall distribute and transfer the remaining assets to investors in accordance with Point c Clause 10 of this Article.

5. The fund management company and related service providers may not to run marketing and communication program about the fund to receive, execute purchase/sale/switching orders of the fund certificates from the date of the compulsory dissolution.

6. From the date of the compulsory dissolution, the fund management company may not:

a) Make investment, purchase securities and other assets for the fund;

b) Convert unsecured debts into debts secured by the fund’s assets;

c) Give or donate fund’s assets to other organizations and individuals;

d) Pay contracts in which the value of the fund’s obligations is greater than that of the other party; or pay debts to the creditors being the fund’s debtors without offsetting;

e) Make other transactions for the purpose of illegally liquidate the fund’s assets.

7. The assets of the fund being dissolved include:

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b) The profits, assets and rights to the assets that the fund will have by making transactions before the fund is compulsorily dissolved;

c) The assets put up as collateral for the fulfillment of the fund’s obligations. When paying the assets put up at collateral to the secured creditors, if the value of the collateral exceeds the value of the secured debts, then the excess value is the fund’s assets.

8. When liquidating assets being the fund’s securities, it is necessary to employ a transparent method such as an auction or trading via the concentrated matching system of the Stock Exchange. Other cases must be approved in writing by the board of representatives of the fund as prescribed in Clause 2 Article 17 of this Circular.

9. After being confirmed by the supervisory bank, the result of the liquidation of assets of the dissolved fund shall be verified and approved by the board of representations of the fund or an auditing firm appointed by the investors' general meeting as prescribed in Clause 3 of this Article, before making paying the debts to creditors and investors as required.

10. The receipts from the liquidation of the fund’s assets and residual assets shall be paid in the following order:

a) Financial obligations to the State;

b) The payables to the fund management company and the supervisory bank, other payables and fund dissolution costs. In case the fund is compulsorily dissolved as prescribed in points a, b under Clause 1 of this Article, the fund is exempted from paying the fees to the fund management company and the supervisory bank fees according to the contract from the date on which such events happen;

c) The rest shall be used to pay investors in proportion to the ratios of capital contribution to the fund of the investors.

Article 34. Orders and procedures of the fund dissolution

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2. The report on the fund dissolution shall contain:

a) The notice of the fund dissolution, specifying the reasons for the dissolution;

b) Minutes and resolutions of the investors' general meeting on the fund dissolution, enclosed with a plan for asset liquidation and the fund dissolution approved by the investors' general meeting;

c) Written commitments of the fund management company and the supervisory bank on the completion of the procedures for asset liquidation to dissolve the fund.

3. The report on the fund dissolution shall be made in 01 original set attached with a electronic files. The original report shall be submitted directly to administrative department of the State Securities Commission or by post.

4. Within 15 days from the date on which the complete and valid dossier is received, the State Securities Commission shall confirm in writing reception of the report sent by the fund management company. Within 30 days from the date on which the written confirmation of the State Securities Commission’ is received, the fund management company shall disclose the information about the liquidation of the fund’s assets and the fund dissolution in accordance with the regulations on information disclosure in the securities market promulgated by the Ministry of Finance. The notice must include information about the period of asset liquidation.

5. Within 05 days from the date on which the dissolution is finished, the fund management company and the supervisory bank must send reports to the State Securities Commission on the results of the fund dissolution. The report on the result of the fund dissolution includes:

a) A report on the fund’s asset liquidation, repayment of debts and fulfillment of other financial obligations to creditors and other stakeholders, including financial obligations to the State. The report must be enclosed with a list of creditors and amount of debts paid, including tax debts;

b) A report made by the fund management company, certified by the supervisory bank and the board of representatives of the fund, on the asset liquidation, the liquidation methods and total receipts after the liquidation; the total debt payable and the remaining assets distributed to shareholders;

...

d) An audited financial statement for the period from the end of the latest audited financial year to the date of expiration of the operating period of the fund or the date when the fund dissolution is approved;

e) The verification of the liquidation results made by the auditing firm (if any) appointed by the investors' general meeting as prescribed in Clause 3 Article 33 of this Circular.

6. The report on the fund dissolution shall be made in 01 original set attached with electronic files. The original report shall be submitted at the administrative department of the State Securities Commission or by post.

7. In case the results of assets liquidation and fund dissolution are incorrect or forged, the Fund Management Company, the supervisory bank and relating people shall be jointly responsible for settling unpaid debts and shall take personal responsibility for the consequences arising within 3 years from the date of on which the report on the dissolution result is submitted to the State Securities Commission.

Chapter V

ACTIVITIES OF RELATED SERVICE PROVIDERS IN MANAGING OPEN-ENDED FUNDS

SECTION I. SUPERVISORY BANK

Article 35. General provisions on supervisory bank

1. The supervisory bank selected by the fund management company shall satisfy all requirements as provided in Clause 1 Article 98 of the Law on Securities.

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3. For supervising the operation of a open-ended fund, the supervisory bank must have at least 2 supervisors that hold the following certificates:

a) Fundamental certificates in securities and the securities market; or international qualifications in securities such as CFA (Chartered Financial Analyst), CIIA (Certified International Investment Analyst); or practice certificates in securities issued in the countries being members of the Organization for Economic Cooperation and Development (OECD);

b) Certificates in the Laws on securities and securities market;

c) Certificates in accounting or auditing, or Chief Accountant Certificates or Certificates in accounting analysis, or ACCA (Association of Chartered Certified Accountants), CPA (Certified Public Accountants) international qualifications in accounting.

4. The supervisory bank must satisfy other requirements and conditions in accordance with the laws on the establishment and management of securities investment funds.

Article 36. The depository of the fund’s assets of the supervisory bank

1. The supervisory bank may appoint domestic and foreign financial institutions licensed to accept deposits of assets as secondary depository institutions to accept deposits of the fund assets in Vietnam and abroad. The depositary authorization must comply with the following regulations:

a) The secondary depository institution shall be a depository member in accordance with domestic and foreign law;

b) The depository authorization must be carried out based on the contract between the supervisory bank and the secondary depository institution. The contract must specify rights, obligations, responsibilities between the supervisory bank and the secondary depository institution. The secondary depository institution shall only follow legitimate orders or directives from the supervisory bank;

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d) The secondary depository institution overseas may re-accept deposits of assets at a securities depository center of which it is a member, in accordance with the law of the home country. The fund’s ownership of the assets must be registered by the secondary depository institution in accordance with relevant laws.

e) The supervisory bank must adequately obtain information about all assets under the fund’s ownership, including types, quantity, depositary places and depositary institutions. The supervisory bank must ensure that the fund's assets are registered, deposited and recorded so that they are always recognized as under the fund’s ownership.

2. The depository of the fund’s assets shall ensure that:

a) All assets of the open-ended fund formed in Vietnam are be deposited at the supervisory bank in accordance with the following rules:

- If the ownership of the assets is registered, the registration must be undersigned by the fund, unless it must be undersigned by the supervisory bank, the secondary depository institution, or the fund management company as prescribed by relevant laws. The originals of legal documents certifying the fund’s ownership of assets shall be adequately deposited at the supervisory bank, except for the securities have been registered and centrally deposited.

- If there are no documents certifying the ownership of assets, or the registration of the ownership of assets is not required, the supervisory bank may inspect the depository and registration of such assets, the issuer, the organization that manage the Register of shareholders, the bank that take deposits, or other organizations must ensure that the asset deposits are conformable with Point e Clause 1 of this Article;

b) The payment for the transactions of listed and registered securities must comply with the rules of making payment simultaneously with securities transfer payment, as well as the rules of offsetting and making payment prescribed by laws. The payment for the transactions of other shall be made in accordance with the legitimate orders and directives of the fund management company and other relevant laws. The payment for the transactions of securities and assets must be consistent with the quantity of assets, securities and match the amount written in the payment receipts.

c) Completely exercise the rights and fulfilling the duties related to fund's ownership of assets, complete the procedure for settling taxes of the fund;

d) Comply with rules of asset depositing in accordance with the regulations on the establishment and management of securities investment fund.

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Article 37. Supervisory activities of supervisory bank

1. The supervision is limited to the fund management company's activities relating to the fund being supervised. During the supervision, the supervisory bank shall :

a) Cooperate with the fund management company in periodically reviewing the internal rules, the method for defining the net asset value of the fund; inspecting and supervising the determination of the fund’s net asset value; ensuring that the net asset value per fund unit is correct and conformable with law and the fund’s charter.

b) Inspect, supervise the investment and transactions of the fund’s assets, including the assets that are not centrally registered at Vietnam Securities Depository; inspect and supervise the asset transactions between the fund, the fund management company, and relevant persons. When violations of law are discovered, the supervisory bank shall immediately report them to the State Securities Commission and notify the fund management company within 24 hours from the discovery of the violations, and concurrently request the correction or take action to remedy the consequences caused by such violations within a limited period of time;

c) Supervise the process and verify the of results of the merger, consolidation, dissolution and liquidation of the fund's assets.

d) Supervise and ensure legitimacy of the expenditures from the fund’s assets in accordance with the fund’s charter and law;

e) Inspect and supervise other activities of the fund management company in the management of the fund’s in accordance with Article 98 of the Law on Securities and the fund’s charter.

2. The supervisory bank shall make and keep the documents in either hard copies and electronic files within 10 years for certifying the compliance of the supervisory bank in whole supervising the fund management company with law as prescribed in Annex 19 enclosed with this Circular. These documents must be provided at the written request of the State Securities Commission.

3. The supervisory bank must adequately, promptly, and accurately provide the fund management company and appointed audit firm with necessary information so that they can sufficiently exercise their rights and fulfill their obligations to the fund in accordance with law and the fund's charter.

...

5. The supervisory bank may use the services provided by the auditing firm and other organizations to implement Clause 4 of this Article. The supervisory bank, the organizations and individuals conducting that inspect and supervise the fund management company at the supervisory bank's request shall be responsible for keeping all information of the fund management company, the fund and investors confidential as prescribed by law. The report on the inspection certified by of relevant parties and the documents enclosed therewith must be provided for the board of representatives of the fund and the State Securities Commission at their written requests.

6. The supervisory bank is entitled to provide fund administration services for the fund management company. The personnel organization, the electronic data system of the department in charge of the provision of such service at the supervisory bank must be separate from that of the supervisory department and other business department of the supervisory bank. In case the supervisory bank provides fund administration services as prescribed in Point a Clause 27 Article 2 of this Circular, the department in charge of the provision of such services must have employees that hold chief accountant certificates or auditing certificates or ACCA (Association of Chartered Certified Accountants), CPA (Certified Public Accountants) certificates.

7. In case the fund management company fails to tack actions to restore the position of the fund within the period specified in the Circular guiding the establishment, organization and operation of fund management companies issued by Ministry of Finance, the supervisory bank must send reports to the State Securities Commission within 07 days, from the date on which the supervisory bank sends notice to the fund management company. In this case, the supervisory bank is entitled to only follow the legitimate orders and instructions of the fund management company which do make the structure of the portfolio violating laws and other regulations in the fund's charter.

8. In the case the fund management company has to pay compensation to investors, the supervisory bank must cooperate with the fund management company to promptly and sufficiently make payment to investors according to legitimate instructions of the fund management company. The supervisory bank is jointly responsible and has to pay compensation to the investors and the fund if the damage is caused by the failure to decently supervise the fund's investment, to determine the net asset value of the fund, and to carry out other supervisory activities as prescribed by law. The rate of compensation depends on the civil agreements between the fund management company and the supervisory bank.

9. The supervisory rights and obligations to the fund shall be terminated in accordance with the regulations on the establishment and management of securities investment funds.

Article 38. The regime for reporting of the supervisory bank

1. The supervisory bank must send the report on the supervision to the State Securities Commission every month, every quarter, and every year in accordance with Annex No. 30 enclosed with this Circular. The report must assess the conformity to the fund's charter, the laws on securities and the securities market as follows:

a) Assess the fund management company's conformity while making investment and transactions;

b) Assess the determination of the net asset value of the fund, specifying the incorrect valuation of the fund’s assets (if any);

...

d) Specify the violations (if any) committed the fund management company, and suggest remedial measures.

2. The reports must be attached with electronic files and sent to the State Securities Commission within:

a) 05 days from the end of the month;

b) 20 days from the end of the quarter;

c) 30 days the date on which the audited annual financial statements is available.

3. The supervisory bank must notify the State Securities Commission within 24 hours from the discovery of the violations in the following cases:

a) The fund management company, distributors violate the fund's charter and laws on securities and securities markets;

b) The damage from the asset management the fund management company is significant, and costs of remedying the consequences are tremendous;

4. Except for the cases specified in Clause 1 and Clause 3 of this Article, if necessary, the State Securities Commission is entitled to request the supervisory bank to provide irregular reports on other relevant activities within its activities related to the fund.

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SECTION III . FUND CERTIFICATE DISTRIBUTORS

Article 39. Registering the distribution of open-ended fund certificates

1. Conditions for registering the distribution of open-ended fund certificate:

a) Being a securities company licensed to broker securities, a fund management company, a depository bank, an insurer, or a commercial bank. A commercial bank or an insurer is required to register the distribution of fund certificates with the State Securities Commission as prescribed in Clause 3 of this Article;

b) Having at least one business location for distributing open-ended fund certificates satisfy the requirements in Clause 2 of this Article when registering the fund certificate distribution;

c) Having a process of fund certificate distribution, including the process, procedure identifying, updating information, and verifying information about investors and beneficiaries ( specified in Annex 33 enclosed with this Circular), the code of conducts applied to the staff in charge of the fund certificate distribution, internal rules for prevention of late trading and speculation by taking advantage of time differences, market timing in accordance with international practice.

2. The locations for distributing open-ended fund certificates must:

a) Be legal business locations of the distributor as prescribed by the Law on Enterprises, including the head office, branches, transaction offices, and representative offices;

b) Have at least 02 employees that hold securities brokerage certificates, or have passed the test on securities brokerage held by the State Securities Commission, or being legitimate securities practitioners overseas that hold certificates in the laws on securities and securities markets of Vietnam;

...

- Having office equipment and computer systems supporting the distribution of the fund certificates and the management of investors’ information. and the information about investors must be separately stored and maintained and without being shared with other departments;

- Having a safe system to preserve and store documents, materials, trading orders, and payment directives of investors;

- Having a backup system to ensure that the reception and transmission of orders is smooth upon the occurrence of malfunction.

3. The dossier of registration as a distributor, applicable to insurers and commercial banks, includes:

a) The written registration as a distributor for open-ended fund certificates according to the form in Annex 05 enclosed with this Circular;

b) The Power of attorney issued by the organization that register the open-ended fund certificate distribution to its branches, transaction offices, representative offices to provide fund certificate distribution services according to the form in Annex 06 as enclosed with this Circular;

c) An authenticated copy of the establishment and operation license of organization that registers the open-ended fund certificate distribution; the authenticated copies of establishment and operation licenses of branches, transaction offices, registration certificates of representative offices; or equivalent documents of the locations where open-ended fund certificates are distributed;

d) The description of technical facilities and personnel at the locations where fund certificates are distributed according to the form in Annex 08 enclosed with this Circular, together with the list and information of the employees that hold the Certificate in securities brokerage according to the form in Annex 07 of this Circular, and authenticated copies of their unexpired ID cards or passport;

e) The technical process prescribed in Point c Clause 1 of this Article.

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4. The dossier of registration as a distributor shall be made in 01 original set attached with electronic files. The original dossier shall be submitted directly to administrative department of the State Securities Commission or by post.

5. Within 15 days from the date on which the complete and valid dossier is received, SSC shall issue the certificate of registration of fund certificate distribution. The refusal must be notified and explained in writing by the State Securities Commission.

6. When adding locations for fund certificate distribution, the distributor shall notify the State Securities Commission, and send the documents specified in Points a, b, c and d Clause 3 of this Article at least 7 days before providing the distribution services.

7. The Certificate of registration of fund certificate distribution shall be revoked in the following cases:

a) The fund certificate distribution is voluntarily discontinued;

b) The establishment and operation license or certification of business registration is revoked;

c) The conditions for the fund certificate distribution are not satisfied during the operation as prescribed in Clause 01 of this Article; the regulations prescribed in Article 40 are not complied with; or the regulations on distributors prescribed in Article 41 of this Circular are violated.

8. The fund certificate distribution location shall discontinue the distribution in the following cases:

a) The distributor decide to discontinue the distribution;

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c) The distribution location fails to maintain necessary conditions for registering the fund certificate distribution as prescribed in Clause 2 of this Article;

d) The distribution contract expires.

9. The fund management company must assessment the facilities before selecting distributors and distribution. The report on the assessment of the facilities of the distributors and distribution locations must be kept at the office of the fund management company and provided at the requests of competent State management agencies. The fund management company must usually inspect and supervise to ensure that activities of distributors are conformable with the law and the distribution contracts.

10. When a distributor is shut down as prescribed in Clause 7 of this Article, the fund management company must notify their investors of the alternative distributors. When a distribution location is shut down as prescribed in Clause 8 of this Article, the distributors send advance notice to the fund management company and its investors, and concurrently appointing a substitute distribution location .

11. The fund management company may distribute certificates of the fund under its management. In this case, the company shall ensure that:

a) The offering and distribution are carried out at the head office and other legal business locations of the company. The transactions made via the internet, phone, fax, and email must comply with the regulation on electronic transactions in the securities sector;

b) the employees in charge of the fund certificate distribution may not simultaneously work at the asset management department, investment analysis department, and internal control department.

Article 40. Activities of division agent

1. Activities of a distributor include:

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b) Receive and send trading orders to the fund management company and related service providers promptly and accurately; the distributors may not consolidate and offset the trading orders, or receive money directly and make payment for the fund certificates for investors.

c) Support investors in completing the procedures for adjusting information in the Primary Register; certify the investor’s ownership of the fund units, and transfer of ownership as prescribed in Article 7 of this Circular;

d) Maintain a continuous and smooth communication channel with investor, accurately, sufficiently, and promptly update the information for investors, answer questions of investors about the offered fund products; make statistics and provide the account statements and transaction certifications for investors; provide investors with the prospectus, simplified prospectus, the fund’s financial statements, documents about general meetings of investors, and other information; disclose information and make reports under the authorization of the fund management company;

e) Support the fund management company or related service providers in organizing general meetings of investors; receive authorization to participate and vote at general meetings of shareholders at written requests of investors;

f) Summarize and store detailed information about investors and their transactions. Provide such for the Fund management company, related service providers, the State Securities Commission at their requests.

2. Activities of nominal agent:

a) Act as a distributor as prescribed in Clause 1 of this Article with regard to the investors who make transaction via investors’ accounts;

b) Make and monitor the secondary register of investors who register for trading via nominal accounts; establish and manage the system of sub-accounts, update and provide sufficient information about the investors, including the information about the transactions and ownerships for the fund management company and related service providers;

c) Execute trading orders for the nominal account based on the consolidation of trading orders from investors; ensure that the purchase orders are completely executed, the sales orders are fairly distributed, and the payments are made in accordance with law.

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3. The functions of nominal agents must be clearly specified in the prospectus and simplified prospectus. Nominal agents must comply with the following regulations:

a) The assets on the nominal account are not under the ownership of the nominal agents, but under the ownership of investors in the secondary register of investors. These investors are entitled to the lawful rights and benefits of the owners in proportion to the fund units being held in the nominal accounts. An investor may ask nominal agents to transfer the ownership of their fund units on the nominal account to investor’s account (if any);

b) Nominal agents must separate the money and assets of each investor; separate the money and assets of investors from their own ones. Nominal agents that wish to trade fund certificates proprietarily must open an account for trading fund certificates that is independent from the nominal account, as prescribed in Point a Clause 1 Article 9 of this Circular;

c) Nominal agents may not use money and assets of investors in any shape or form; may not deposit, withdraw, transfer or make transactions related to the assets of investors on the nominal account; may not receive authorization from investors to transfer money or assets among the sub-accounts of investors. The transactions related to the investors’ assets may be made if they are conformable with law and under written orders or directives of investors;

d) The nominal agent must open a deposit account for paying fund certificate transactions, as prescribed in Clause 23 Article 2 of this Circular at the supervisory bank in order to receive and make payments for the fund certificate transactions made by investors. The nominal agent may only use this account to make payments for the fund certificate transactions made by investors or to refund money to the investors that transferred the money if requested. The supervisory bank, related service providers, the fund management company, and the nominal agent must participate in building a system or providing a cooperation co- mechanism in order to frequently inspect and monitor the activities of this account, ensuring:

- The balance (if any) of each investor on this account is accurately monitored at any time, and the investors and competent State management agencies are sufficiently, promptly, and accurately with the information about the balance (if any) at their written requests.

- The money (if any) of investors is not exploited nor used without their written authorization. When detecting signs of violating this regulation, the supervisory bank, the fund management company and relevant service provider must inform the State Securities Commission and investors within 24 hours;

e) Within 03 days from the date of on which the payment from the fund or investors is received, the nominal agent has to finish paying the investors under lawful orders and directives made by the fund management company, the supervisory bank, or finish paying the fund under the directives of investors;

Article 41. General regulations on the fund certificate distribution

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2. Distribution staff may offer fund certificates only after investors are provided with the fund's charter, prospectus, simplified prospectus, contracts referred in the prospectus and the latest reports on the fund operation. Distribution staff shall explain the contents of the fund's charter and prospectus, especially investment objectives and policies, and investment strategies to achieve such objectives, the characteristics of risks and profit, profit distribution policies, taxes, fees and charges and other expenses, the mechanism for trading fund certificates, to investors.

3. Distribution staff shall provide adequate and accurate information about result of the fund, implying the that the previous results are for reference only and may be changed due to the market situation.

4. Distribution staff must not provide false, exaggerated, and misleading information, nor provide incomplete information, nor provide forecasts to entice, persuade investors to purchase fund certificates, nor cause misunderstanding about the profit characteristics and risks of such fund certificates. When making comparison with other open-ended fund products, the differences among these funds must be specified so that the investors can make their selection. It is prohibited to directly or indirectly entice or persuade investors to purchase risky fund certificates when the investors they do not completely understand all potential risks when making investment in the fund, or when the fund is not compatible with the investment objectives and financial capacity of the investors.

5. Distributors and distribution staff must keep the information about the investors and their transactions confidential; do not use such information for any purpose, unless otherwise upon agreed by the investors or requested by competent State management agencies.

6. Distributors may not discount or reduce trading prices the fund certificates in any form or shape. It is prohibited to offer physical or monetary gifts in any shape or form to encourage investors to purchase fund certificates; it is prohibited to request or receive any wages, revenues or benefits in their own name or the organization’s name from the fund management company for the purpose of persuading investors to buy fund certificates in apart from the fees announced in the prospectus and the distribution contract signed with the fund management company.

7. Distributors may not distribute fund’s certificates at business locations which have not yet been registered or licensed as prescribed by law, or without notifying the State Securities Commission. Distributors are entirely responsible for the activities of the locations where of the fund certificates are distributed, and activities of distribution staff while distributing fund certificates to investors.

8. The fund management company and distributor must annually provide training to enhance knowledge and capability of the distribution staff. The information about annual training of the fund management company and the distributor must be attached to the annual report made by the fund management company.

Chapter VI.

PROVISION OF INFORMATION FOR INVESTORS

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Article 42. Regulations on the information, advertisement and introduction of fund

1. The fund management company may advertise, provide information and introduce the fund on mass media, by communication devices, publication, on boards, panels, posters, unmovable objects, transportation vehicles or movable objects, and other commercial means.

2. The fund management company, related organizations and individuals may not advertise and introduce the funds which have not yet been issued with the Certificates of the fund establishment, or have shut down, except for the seminars introducing the funds to the officers of state competent authorities.

3. The information, advertisement and introduction of the fund within the territory of the Socialist Republic of Vietnam shall be expressed in Vietnamese, except for the internationalized terms and trademarks that cannot be expressed in Vietnamese. The language must be interpretable, unambiguous, and non-misleading. The professional concepts and terminologies should not be frequently used and must be explained. The size of letters must be large enough to be recognized in normal conditions and the font size must not be smaller than 12.

4. Documents of advertisement and introduction of the fund shall be clear, and do not mislead people into believing that that fund certificates are certificates of deposits, transferable instruments, or valuable papers as prescribed in the banking law, or financial instruments having fixed income or profit from guaranteed investment. Documents of advertisement and introduction of the fund shall not contain opinions that mislead investors into believing that the value of the investment increases perpetually, nor guarantee or forecast the future investment results the fund. This Clause is not applicable when the open-ended fund entirely invests in bonds and securities that fixed income or in capital preservation funds.

5. In case the fund management company employs special trading techniques or asset management tactics that cause the net asset value of the fund to fluctuate, the introduction and advertisement documents, including the prospectus, must specify the reasons and explanation for these techniques and tactics.

6. The fund management company, related organizations and individuals may not make comparison with the advertisements, guarantee that the investment result of a fund is better than that of another, the list of references in the prospectus, or other economic indexes. The comparison must comply with the following rules:

a) The comparison must include uncertainty about the investment results, implying that investment results may change due to market developments;

b) The comparison must be reasonable and accurate based on the actual results in the same period. The comparison results shall be objectively assessed by a third party as prescribed in Clause 7 of this Article.

...

a) The comments, assessments of the third party, or the ratings, rankings must be reliable, objective and based on the comparison of real performances, documents or events;

b) Comments, assessments, ratings shall be publicly disclosed or publicly conducted by a recognized organization which provides financial and statistical information;

c) Advertisement or introduction of the fund when using quotation of such comments or assessments shall state clearly the source of references including name of the document, name of the publisher, time of publication so that investors may verify;

d) The rating or ranking may only be used for advertising and introducing the fund certificates within 01 year from the date of the rating, ranking, or rewarding;

e) The rating and ranking must be given based on the comparison of the operation in at least 5 years of the funds with same investment objectives or in the same group of the funds with relatively similar portfolio structure. The comparison period must not be shorter than 01 year.

8. The advertisements and introduction of the fund must specify that the State management agencies mentioned in the content only certify the legitimacy of the establishment and operation of the fund; do not imply that the information, advertisements, as well as the investment objectives, strategies of the fund, the fund’s assets, the value of fund units, profitability, and risks of the fund are guaranteed. Advertisements and introduction of the fund may not use the titles, symbols, images, position, prestige, and mails of the State agencies, officers, and public employees of the State management agencies, thank-you letters of from investors to advertise, introduce the fund, or offer fund certificates.

9. The information, advertisement and introduction of the fund must be objective, truthful and clear without causing misinterpretation. The information must be up-to-date. The fund management company, related organizations and individuals are responsible for the content and legitimacy of the information provided during the advertisement and introduction of its fund’s certificates.

10. At least 15 days before the advertisement/introduction of the fund to the public, the fund management company shall send a notification to the State Securities Commission of the commencement date of the advertisement, enclosed with:

a) A set of documents on the fund product advertisement/introduction. The script, video tape or audio tape of the radio show or television show (if any) must be sent. The script must describe the images, the wordings, and music;

...

Article 43. Recommendations

1. The information, advertisement and introduction of the fund must contain the following recommendations:

a) Investors should carefully read the prospectus before purchasing the fund certificates; pay attention to the fees and charges for trading fund certificates;

b) Trading prices of the fund certificates may vary due to the market developments, and investors may suffer losses on their capital invested in the fund;

c) The information about performance of the previous performance of the fund (if any) is for reference only, and it guarantee the profitability.

2. The Information, advertisement and introduction of the fund must warn investors about the risks when making investments in the fund.

3. The recommendations must bold and clear, the font size must not be smaller than that of other information in the publications and advertisements.

SECTION II. INFORMATION PROVISION

Article 44. Provision of documents and information to investors

...

2. The fund management company has to announce or provide investors with the following documents:

a) The prospectus, simplified prospectus; audited annual financial statements and biannual financial statements;

b) Biannual and annual reports on the management of the fund, including the fundamental information prescribed in Annex 28 of this Circular.

c) Biannual and annual statistic reports on the transaction cost of the fund’s investment according to the form in Annex 27 of this Circular;

d) Biannual and annual reports on the operation of the fund according to the form in Annex 34 of this Circular;

3. The documents prescribed in Clause 2 of this Article shall be complimentarily provided for the investors via the website of the fund management company, or send directly to investors’ emails, or in other forms as prescribed in the fund's charter and the prospectus. The information must be provided within 30 days from the end of half the fiscal year; and within 90 days from the end of fiscal year. Investors may refuse to receive documents in Clause 2 of this Article.

4. When being requested by investors, the fund management company shall provide investors with the process of risk management, specifying the investment limits, risk preventing and controlling measures for managing the fund’s assets.

Article 45: Regime for reporting, depositing documents, and managing information

1. The fund management company shall send the State Securities Commission:

...

b) The biannual and annual reports on the fund management, including contents prescribed in Annex 28 of this Article;

c) The monthly, quarterly, and annually reports on the fund’s assets transactions prescribed in Article 16 enclosed with this Circular, according to the form in Annex 31 of this Circular;

d) The biannual and annual reports on the statistics of transaction cost of the fund’s investments according to the form in Annex 27 enclosed with this Circular;

2. The reports must be attached with electronic files within 05 days from the end of month, within 15 days from the end of a quarter; within 30 days from the end of half a fiscal year; within 90 days from the end of a fiscal year.

3. The fund management company and the supervisory bank shall keep all of documents related to the investments of the fund in accordance with the regulations on the organization and operation of the fund management companies.

4. The fund management company, the supervisory Bank, distributors, relevant service providers, auditing firms, the board of representatives, related organizations and individuals are responsible for keeping information about operations of the fund, information of investors confidential; not revealing such information to any third party, except otherwise requested in writing by competent State agencies.

Chapter VII

ORGANIZING THE IMPLEMENTATION

Article 46. Converting a close-ended fund into an open-ended fund

...

a. The net asset value at the time when the dossier of application for the conversion is submitted reaches at least 50 billion VND;

b. The investment portfolio only contain listed and registered shares at the Stock Exchanges; the cash and cash equivalents with investment restriction ratio satisfy the requirements in Article 15 and Article 16 of this Circular;

c. The fund conversion plan is approved by the investors’ general meeting. The resolution of investors’ general meeting is approved by a number of investors that represent at least 75% of total amount fund units in circulation.

2. The fund management company must seek opinions of investors on the fund conversion. At least 15 days before the investors’ general meeting, the fund management company shall provide investors with documents related to fund conversion, including:

a. The conversion plan, specifying the conversion cost;

b. The audited annual financial statement and the latest audited quarterly financial statement.

3. Within 07 days, from the date when fund’s certificates are delisted or suspended to carry out the conversion, the fund management company must complete the procedure and the dossier of application for requesting the State Securities Commission to adjust the certificate of registration of the establishment of the new fund. The dossier includes:

a. The written application for adjusting certificate of fund establishment registration according to the form in Annex 14 enclosed with this Circular; attached with the original certificate of fund establishment registration of the converted fund;

b. The meeting minute and resolution of the investors’ general meeting on the fund conversion, enclosed with a conversion plan approved by the investors’ general meeting;

...

d. The written approval for delisting or suspending fund certificates, issued by the Stock Exchange.

e. Other documents prescribed in Point b, c, d, e, f Clause 1 Article 4 of this Circular.

4. Within 15 days, from the date on which the complete dossier is received as prescribed in clause 3 this Article, the State Securities Commission shall adjust the certificate of the fund establishment registration. The conversion date is the effective date of the adjusted certificate of the fund establishment registration.

5. Within 03 days from conversion date, the fund management company or relevant service provider shall notify the investors of:

f. The conversion date;

g. The net asset value on the conversion date;

h. The list of distributors, relevant service providers (if any), supervisory banks, depository banks (if any);

i. The first date of trading open-ended fund certificates;

j. The confirmation of the amount of investors’ fund units; the account numbers of the accounts or sub-accounts for trading fund certificates;

...

5. Within 15 days, from conversion date, the fund management company, the supervisory bank, the relevant service provider (if any), the Vietnam Securities Depository, the distributors and other relevant organizations shall complete the Primary Register, secondary registers, and adjust registration of asset ownership in cooperation as prescribed by law.

6. The new fund shall inherit all rights, obligations and lawful interests of the old fund. Investors shall not incur any conversion cost.

Article 47. Implementation

1. This Circular takes effect on March 01st 2012

2. The State Securities Commission, fund management companies, supervisory banks, related service providers, organizations and individuals related to the operation of open-ended funds shall implement this Circular.

3. The amendment and supplementation of this Circular shall be decided by the Minister of Finance..

...

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Circular No. 183/2011/TT-BTC guiding the establishment and management of open-en

Official number:	183/2011/TT-BTC	Legislation Type:	Circular
Organization:	The Ministry of Finance	Signer:	Tran Xuan Ha
Issued Date:	16/12/2011	Effective Date:	Premium
Gazette dated:	Updating	Gazette number:	Updating
		Effect:	Premium

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Circular No. 183/2011/TT-BTC of December 16, 2011, guiding the establishment and management of open-ended funds

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