Types of securities investment funds in Vietnam

Types of securities investment funds in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Types of securities investment funds in Vietnam

Types of securities investment funds according to Article 99 of the Law on Securities 2019 are as follows:

- Securities investment funds include public funds and private funds.

- Public funds include open-end funds and closed-end funds.

2. Regulations on Establishment and operation of securities investment funds in Vietnam

Regulations on Establishment and operation of securities investment funds according to Article 100 of the Law on Securities 2019 are as follows:

- The establishment of and public offering of fund certificates of public funds by fund management companies shall comply with Article 108 of this Law and have to be registered with SSC.

- The establishment of private funds by fund management companies shall comply with Article 113 of this Law and have to be registered with SSC.

- The Government shall specify the requirements, documentation and procedures for offering, establishment, reorganization and dissolution of the securities investment funds mentioned in Article 99 and Article 114 of the Law on Securities 2019.

- Operations of the types of funds specified in Article 99 and Article 114 of the Law on Securities 2019 shall comply with regulations of the Minister of Finance and relevant laws.

3. Rights and obligations of investors in securities investment funds in Vietnam

Rights and obligations of investors in securities investment funds according to Article 101 of the Law on Securities 2019 are as follows:

- Investors have the rights to:

+ Benefits from investments of the securities investment fund in proportion to their contributions;

+ Interests and assets lawfully distributed from liquidation of assets of the securities investment fund;

+ Request the fund management company to repurchase open-end fund certificates;

+ File lawsuits against the fund management company, supervisory bank or relevant organizations if they violate their the lawful rights and interests;

+ Execute their rights through the General Meeting of Investors;

+ Transfer fund certificates in accordance with the fund’s charter;

+ Exercise other rights prescribed by law and the fund’s charter.

- Investors have the obligations to:

+ Implement decisions of the General Meetings of Investors;

+ Fully pay for the fund certificates;

+ Fulfill other obligations prescribed by law and the charter of the securities investment fund.

4. Regulations on General Meeting of Investors of securities investment funds in Vietnam 

Regulations on the general meeting of securities investment fund investors according to Article 102 of the Law on Securities 2019 are as follows:

- General Meeting of Investors consists of all investors and is the supreme decision-making body of a securities investment fund.

- The General Meeting of Investors has the following rights and obligations:

+ Elect, dismiss the chairperson and members of the representative board of the securities investment fund;

+ Decide the wages and operating cost of the representative board;

+ Decide fundamental changes in investment policies, profit distribution and investment objectives of the fund; decide change of the fund management company and supervisory bank; change of payment to the fund management company and supervisory bank;

+ Decide revisions to the fund’s charter;

+ Decide division, consolidation, merger, dissolution of the securities investment fund; change of the charter capital or operating period of the securities investment fund;

+ Request the fund management company and supervisory bank to present transaction documents at the meeting;

+ Approve annual reports on the fund’s finance, assets and operation; select accredited audit organization to audit the fund’s annual financial statements;

+ Take actions against violations committed by the fund management company, supervisory bank and representative board if they cause damage to the fund;

+ Exercise other rights and obligation prescribed by law and the fund’s charter.

- General Meetings of Investors of securities investment funds shall be convened on an annual and ad hoc basis.

- The Minister of Finance shall specify the procedures for convening, conducting General Meetings of Investors of securities investment funds and procedures for approving decisions thereof.

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