Vietnam: Supervisory bank may appoint a foreign financial institution to deposit the overseas assets

Specifically, according to Article 32 of Circular No. 227/2012/TT-BTC of the Ministry of Finance of Vietnam, the depository bank and supervisory bank may appoint a foreign financial institution intended for asset depository as a secondary depository to deposit the overseas assets of the investment company in accordance with law. The depository authorization must comply with the following regulations:

- The secondary depository must be a depository member as prescribed by the law of its home country;

- The depository authorization must be made based on the contract between the depository bank, supervisory bank, and the secondary depository. The contract must specify the rights, obligations, and responsibilities of the depository bank, the supervisory bank, and the secondary depository. The secondary depository only execute the legitimate orders or from the depository bank and supervisory bank;

- The deposited assets must be specified that they are assets of the investment company for which the depository bank and supervisory bank are providing services;

- The depository bank and supervisory bank are responsible for inspecting and supervising the activities of the secondary depository, and incur all the expenses related to the authorization of the supervision and asset depository of the investment company;

- The secondary depository overseas is entitled to redeposit assets at a securities depository of which it is a member, in accordance with the law of its home country. The assets under the ownership of the investment company must be registered by the secondary depository as prescribed by relevant laws;

- The depository bank and supervisory bank must have adequate information about all assets under the ownership of the investment company, including the types, amount, depository location, and depository organization. The depository bank and supervisory bank are responsible for ensuring that assets of the investment company are registered, deposited, and recorded so that they are always identified as under the ownership of the investment company.

View more details at Circular No. 227/2012/TT-BTC of the Ministry of Finance of Vietnam, effective from July 01, 2013.

Le Vy

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE