04:18 | 16/06/2024

Shall the fund management company in Vietnam increase charter capital of the managed securities investment company during the compulsory business suspension?

Shall the fund management company in Vietnam increase charter capital of the managed securities investment company during the compulsory business suspension? Shall the fund management company notify SSC before its business resumption?

Shall the fund management company in Vietnam increase charter capital of the managed securities investment company during the compulsory business suspension?

Pursuant to the provisions of Clause 1, Article 25 of Circular 99/2020/TT-BTC:

Operations of a fund management company during voluntary business suspension
1. During its voluntary business suspension, the fund management company must comply with the provisions in Clause 4 Article 26 hereof.
...

Pursuant to the provisions of point b Clause 4, Article 26 of Circular 99/2020/TT-BTC:

Operations of a fund management company during compulsory business suspension
...
4. During the compulsory business suspension, the fund management company shall:
a) Not conclude any new trust agreements or extend existing trust agreements and securities investment consulting contracts; not receive additional funds from existing trustors; carry out procedures for closing and transferring accounts as requested by clients (if any);
b) Not raise funds for establishing new securities investment funds or new securities investment companies; not increase charter capital of the managed securities investment fund or securities investment company;
With regard to effective trust agreements and operating securities investment funds and securities investment companies, the fund management company shall conduct transactions after obtaining written approval from trustors or their representatives (single authorization). Trustors shall assume responsibility for its authorization to the fund management company to conduct these transactions;
...

Thus, the fund management company shall not increase charter capital of the managed securities investment company during the compulsory business suspension.

Shall the fund management company increase charter capital of the managed securities investment company during the compulsory business suspension? (Image from the Internet)

Shall the fund management company in Vietnam notify SSC before its business resumption?

Pursuant to the provisions of Clause 2, Article 25 of Circular 99/2020/TT-BTC:

Operations of a fund management company during voluntary business suspension
...
2. The fund management company must provide SSC with the documents proving its maintenance of fulfillment of requirements for issuance of the securities trading license prescribed in Clause 1 Article 85 of the Law on Securities before its business resumption. These documents must comply with regulations on required documents for application for the securities trading license of the fund management company.
...

Pursuant to point c Clause 1 Article 85 of the Law on Securities 2019:

Maintenance of fulfillment of requirements for issuance of the securities trading license
1. Maintenance of fulfillment of requirements for issuance of the securities trading license:
...
c) Fund management companies shall maintain fulfillment of the licensing requirements specified in Clause 1, Point b and Point c Clause 2, Clause 4 and Clause 5 Article 75 of this Law;
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The fund management company must provide SSC with the documents proving its maintenance of fulfillment of requirements for issuance of the securities trading license before its business resumption. To be specific:

- The capital contributed shall be VND. The minimum charter capital for each operation of the fund management company is conformable with regulations of the Government

- Shareholders and contributing members:

+ Shareholders and contributing members that are foreign investors shall satisfy the requirements specified in Article 77 of this Law;

+ Shareholders and contributing members holding at least 10% of charter capital of 01 fund management company; their related persons (if any) do not hold more than 5% of charter capital of another fund management company.

- Infrastructural requirements:

+ The premises are adequate for securities trading;

+ Available equipment and technologies are adequate for securities trading processes

- Personnel requirements:

There is a General Director (Director), at least 05 employees having asset management certifications, and at least 01 employee in charge of compliance management. The General Director (Director) shall:

+ Not be facing criminal prosecution, serving an imprisonment sentence or being banned from securities trading as prescribed by law;

+ Have at least 04 years’ experience of working in specialized departments of finance, securities, banking, insurance organizations or in finance, accounting, investment departments of other organizations;

+ Have the practising certificate for asset management or equivalent as prescribed by the Government;

+ Not incur any administrative penalties for securities-related offences in the last 06 months prior to the application date.

The Deputy General Directors (Deputy Directors) in charge of specific operations shall satisfy the requirements specified in Points a, b, d of this Clause and have practising certificates suitable for their operation.

Vietnam: Shall the SSC disclose information about business suspension of the fund management company on its website?

Pursuant to the provisions of Clause 4, Article 25 of Circular 99/2020/TT-BTC:

Operations of a fund management company during voluntary business suspension
...
4. SSC shall disclose information about business suspension of the fund management company on its website.

Thus, SSC shall disclose information about business suspension of the fund management company on its website.

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