Are employees of the supervisory bank allowed to trade in the assets of the securities investment company in Vietnam?
What is a supervisory bank?
Pursuant to the provisions of Clause 1, Article 116 of the 2019 Law on Securities in Vietnam on the supervisory bank as follows:
Supervisory banks in Vietnam
1. A supervisory bank is a commercial bank that has the certificate of securities depository registration granted by State Securities Commission, provides depository services and supervises the management of public funds and investment companies.
...
Thus, a supervisory bank is a commercial bank that has the certificate of securities depository registration granted by State Securities Commission, provides depository services and supervises the management of public funds and investment companies.
Are employees of the supervisory bank allowed to trade in the assets of the securities investment company in Vietnam?
Does the supervisory bank have to fulfill the obligations of depository members?
Pursuant to the provisions of Clause 2, Article 116 of the 2019 Law on Securities in Vietnam, the supervisory bank shall perform the following obligations:
Supervisory banks in Vietnam
…
2. Supervisory banks shall supervise operations of fund management companies that are relevant to the public funds and investment companies that are the banks’ clients. A supervisory bank has the following obligations:
a) Fulfill the obligations specified in Clause 3 Article 56 of this Law;
b) Deposit assets of public funds and investment companies; separately manage assets of public funds, investment companies and assets of the bank;
c) Supervise to compliance of this law, charters of securities investment funds and charters of investment companies by fund management companies and their General Directors (Directors);
d) Manage revenues, expenses, payments and transfer of assets of public funds and investment companies at the request of the fund management companies or General Director (Director) of the investment companies;
dd) Verify reports prepared by fund management companies and investment companies that are relevant to the public funds or investment companies;
e) Supervise reporting and information disclosure by fund management companies and investment companies in accordance with this Law;
g) Report to SSC in case a fund management company, investment company, organization or individual commits violations against the law, the fund’s charter or the investment company’s charter;
h) In cooperation with fund management companies and investment companies, periodically examine accounting books, financial statements and transactions of public funds and investment companies;
i) Fulfill other obligations prescribed by law, the charter of the securities investment fund and investment company.
At the same time, Clause 3, Article 56 of the 2019 Law on Securities in Vietnam stipulates the obligations of depository members as follows:
Members of Vietnam Securities Depository and Clearing Corporation
…
3. Depository members have the obligations to:
a) Fulfill the obligations specified in Points b, d, dd, g, h, i, l, m Clause 2 Article 55 of this Law;
b) Ensure availability of premises and equipment serving the securities depositing and payment;
c) Contribute to the compensation fund as prescribed by law;
d) Separately manage assets of clients and assets of depository members; promptly and accurately record assets, rights to assets and interests relevant to assets deposited by clients;
d) Maintain fulfillment of conditions for provision of securities depository services;
e) Report and fulfill other obligations prescribed by law and the charter of Vietnam Securities Depository and Clearing Corporation.
Thus, the supervisory bank must ensure the fulfillment of the obligations of the depository member and at the same time ensure the performance of the additional obligations specified in Clause 2, Article 116 of the 2019 Law on Securities in Vietnam.
Are employees of the supervisory bank allowed to trade in the assets of the securities investment company in Vietnam?
Pursuant to the provisions of Article 117 of the 2019 Law on Securities in Vietnam on the limits on supervisory banks as follows:
Limits on supervisory banks
1. Supervisory banks, their Boards of Directors, executives and employees that supervise and manage assets of public funds and investment companies must not be related persons, owners, lenders or borrowers of the fund management companies or investment companies, and vice versa.
2. Supervisory banks, their Boards of Directors, executives and employees that supervise and manage assets of public funds and investment companies must not be buyers or sellers of assets of public funds and investment companies.
Thus, employees of the supervisory bank in charge of supervising and managing assets of public funds and investment companies must not be buyers or sellers of assets of public funds and investment companies.
LawNet
