Vietnam: Fund management companies issued with certificate of eligibility to trade derivatives must have the minimum charter capital of VND 250 billion

According to Article 4 of the Decree No. 158/2020/NĐ-CP of the Vietnam’s Government, fund management companies may only provide derivative investment consulting. In order to be issued with certificate of eligibility to trade derivatives, a securities company is required to meet the following requirements:

- The minimum charter capital or equity is VND 250 billion;

- Director (General Director), Deputy Director (Deputy General Director) in charge of specific operations and at least 05 employees for each derivative trading operation must have securities professional certificates suitable for their operations as prescribed by law and professional certificate in derivatives and derivative market;

- Maintain a working capital ratio of at least 220% in the last continuous 12 months; have sufficiently contributed to provisions as prescribed by law;

- Incur no loss in the last 02 years;

- Receive unqualified opinions from the accredited audit organizations for the latest audited annual financial statements and the latest reviewed mid-year financial statements (in case an application for certificate of eligibility to trade derivatives is submitted after June 30);

- It is not following procedures for reorganization, dissolution or bankruptcy; it is not subject to any decision on suspension of business operations issued by competent authorities.

Therefore, in accordance with the above provisions, in order to be issued with certificate of eligibility to trade derivatives, fund management companies must meet the requirements that the minimum charter capital or equity is VND 250 billion, concurrently, maintain a working capital ratio of at least 220% in the last continuous 12 months.

More details at the Decree No. 158/2020/NĐ-CP of the Vietnam’s Government, effective from January 01, 2021.

Ty Na

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