What are operations of fund management companies in Vietnam?

What are operations of fund management companies in Vietnam? 

Pursuant to Article 73 of the Law on Securities in 2017 (effective from 01/01/2021), operations of a fund management company include:

- Securities investment fund management;

- Securities investment fund management;

- Securities investment consultancy.

The licensing of the operations mentioned in Clause 1 of this Article shall be included in the securities trading license of the fund management company.

What are operations of fund management companies in Vietnam? - image from internet

What are requirements for issuing the securities trading license to a fund management company in Vietnam?

Pursuant to Article 75 of the Law on Securities in 2017 (effective from 01/01/2021) stipulating requirements for issuing the securities trading license to a fund management company in Vietnam:

1. 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.

2. Shareholders and contributing members:

a) Shareholders and contributing members shall satisfy the requirements specified in Point a and Point b Clause 2 Article 74 of this Law;

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

c) 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.

3. Quantities of shareholders and contributing members:

a) At least 02 founding shareholders and contributing members shall be organizations. The owner of the fund management company that is a single-member limited liability company shall be an insurer or commercial bank or foreign organization that satisfies the requirements specified in Clause 2 Article 77 of this Law;

b) Total capital contributed by organizations shall be at least 65% of charter capital; capital contributed by insurers and commercial banks shall be at least 30% of charter capital.

4. Infrastructural requirements:

a) The premises are adequate for securities trading;

b) Available equipment and technologies are adequate for securities trading processes.

5. 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:

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

b) 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;

- This point is guided by Clauses 3 to 8 of Decree 155/2020/ND-CP, which takes effect from January 1, 2021.

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

d) 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.

6. A draft charter conformable with Clause 1 Article 80 of this Law.