Vietnam: The supervisory bank must be independent from the asset management company

Specifically, according to Article 31 of Circular No. 227/2012/TT-BTC of the Ministry of Finance of Vietnam, general regulations on supervisory banks are as follows:

1. The supervisory bank appointed by the asset management company must satisfy the conditions in Clause 6 of this Article, Clause 1 Article 98 of the Law on Securities of Vietnam, and be accepted by the General meeting of shareholders of the investment company.

2. The supervisory bank must be independent from the asset management company for which the bank is providing supervisory services.

3. Members of the Board of Directors, members of the Executive Board, and employees of the supervisory bank in charge of protecting the assets of the investment company, and supervise the asset management of the asset management company (hereinafter referred to as employees) must not be related, nor participate in the administration of the asset management company, nor in an ownership relation, nor making capital contributions, nor hold shares, nor take loans, nor give loans to the asset management company for which the bank is providing supervisory services, and vice versa.

4. The supervisory bank, members of the Board of Directors, members of the Executive Board, and employees must not be partners in the sale of assets of the investment company.  The supervisory bank may only be a partner in foreign exchange transactions, or other security transactions that are done via the transaction system of the Stock Exchange.

5. Where an event occurs that makes the bank no longer satisfies the conditions in Clause 1, Clause 2, and Clause 3 of this Article, the bank must notify the asset management company and the State Securities Commission within 24 hours from the occurrence.

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

Le Vy

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