Administrative penalties for violations of regulations on operation of Vietnam-based branches of foreign fund management companies

According to Decree No. 108/2013/NĐ-CP of Vietnam’s Government, administrative penalties for violations of regulations on operation of Vietnam-based branches of foreign fund management companies are specified as follows:

A fine of between VND 70,000.000 and 100.000.000 shall be imposed on a fund management company or a Vietnam-based branch of a fund management company which conducts any of following violations:

- Failing to set up a system of internal control, division of internal control, internal audit in accordance with regulations; failing to ensure personal structure at divisions of internal control, internal audit to meet conditions in accordance with regulations; failing to supervise and prevent conflicts of interests within customers, or between the company, securities practitioners and customers in accordance with law;

- Violating regulations on liability of fund management company in performing the professional operations of securities investment advisory; conducting banned acts in professional operations of securities investment advisory;

- Failing to comply with process of distributing transaction orders, distributing transaction assets upon conducting transactions for investment funds, securities investment companies, trusting investors and itself;

- Acting as a buying or selling partner in a transaction in assets for trusted investment in contravention of law;

- Failing to keep the prescribed investment ratio or failing to readjust the investment portfolio under law;

- Failing to conduct in accordance with regulations on authorized operation of fund Management Company;

- Anticipating or guaranteeing its customers of a ratio of earnings or profits to their investments or securing its customers of no loss incurred; agreeing or giving a specific interest or sharing profit or loss with customers; deciding on investments on its customers' behalf, unless it is so provided by law.

A fine of between VND 150,000.000 and 200.000.000 shall be imposed on a Vietnam-based branch of a fund management company which conducts any of following violations:

- Infringing regulations on raising and managing funds and assets in Vietnam;

- Infringing the regulations on foreign exchange management, ratio of ownership in Vietnamese enterprises;

- Using the entrusted assets in contravention of law;

- Conducting sale offer, issue of securities to raise capital for itself in Vietnam;

- Remitting profits to foreign country in contravention of law;

- Failing to put into the depository and separately manage assets and capital of each entrusting investor, investment fund or securities investment company managed by it; failing to separate entrusted assets, assets of investment fund, securities Investment Company from its assets.

View more details at Decree No. 108/2013/NĐ-CP of Vietnam’s Government, effective from November 15, 2013.

Ty Na

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