Vietnam: Violating regulations on borrowing for supporting operations of the securities investment fund or company shall be fined up to VND 200 million

According to the Decree No. 156/2020/NĐ-CP of the Vietnam’s Government, a fine ranging from VND 150.000.000 to VND 200.000.000 shall be imposed upon a securities investment fund management company for committing one of the following violations:

- Evading legal liabilities and limiting scope of compensation and financial liabilities of the securities investment fund management company or transferring risks from the securities investment fund management company to investors;

- Using assets of the securities investment fund or securities investment company for making investments in that fund or company or another securities investment fund or company established and operating in Vietnam, or contributing to joint ventures or associations or making financial investments in that securities investment fund management company and its related persons;

- Violating regulations on financial investment, purchase of shares, stakes and bonds, contribution of capital to enterprises, or holding of shares;

- Violating regulations on borrowing for supporting operations of the securities investment fund or company;

- Using assets of the securities investment fund or company, or trust assets for paying debts, providing loans or guaranteeing any loans of the company, its related persons or partners;

- Violating regulations on lending or allocation of company’s capital to other entities;

- Lending securities or other assets to clients; acting as a broker for transactions between clients and third party;

- Failing to separately deposit and manage assets and capital of each trustor, each securities investment fund or securities investment company managed by the securities investment fund management company; failing to separately manage trust assets, assets of the securities investment fund or securities investment company, and assets of the securities investment fund management company;

- Making investment in assets for trustors against regulations of law;

- Colluding with the securities company to conduct transactions, in excess of permissible limits, in securities included in the investment portfolio of a fund managed by the securities investment fund management company for the purpose of earning brokerage fees;

- Investing in derivatives with capital of trustors, securities investment fund or company when such investment in derivatives is not prescribed in the investment portfolio management contract or charter of the securities investment fund or company;

- Investing in derivatives using its own capital, borrowed capital and other lawful capital sources.

More details at the Decree No. 156/2020/NĐ-CP of the Vietnam’s Government, effective from January 01, 2021.

Ty Na

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