CIRCULAR

GUIDING THE ESTABLISHMENT, ORGANIZATION AND OPERATION OF FUND MANAGEMENT COMPANY

Pursuant to the Securities Law dated June 29, 2006;

Pursuant to the Law amending and supplementing a number of Articles of the Law on Securities dated November 24, 2010;

Pursuant to the Law on Enterprises dated November 29, 2005;

Pursuant to the Decree No.58/2012/ND-CP dated July 20, 2012 of the Government detailing and guiding the implementation of a number of Articles of the Law on Securities and the Law Amending and Supplementing a Number of Articles of the Law on Securities;

Pursuant to the Decree No.118/2008/ND-CP of November 27, 2008 of the Government defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the request of the Chairman of the State Securities Commission;

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Chapter I

GENERAL PROVISIONS

Article 1. Scope and subjects of governing

1. This Circular provides for the establishment, organization and operation of the fund management company and the activities of the concerned organizations and individuals in the territory of the Socialist Republic of Vietnam.

2. Except for the licensed fund management companies, the other organizations may not receive capital or property entrusted to manage the securities portfolio; may not raise capital and assets to establish, manage securities investment fund in accordance with provisions of the Securities Law.

Article 2. Interpretation of terms

In addition to the terms explained in the Decree No.58/2012/ND-CP of July 20, 2012 of the Government detailing and guiding the implementation of a number of Articles of the Law on Securities and the Law Amending and Supplementing a number of Articles of the Law on Securities, in this Circular, the terms below are construed as follows:

1. Executive Board consists of Director (General Director), Deputy Directors (Deputy General Director).

2. Valid copy means a copy certified in accordance with law.

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4. Entrusting customer representatives mean the chairman of the fund representative board, chairman of the Management Board of securities investment company, the legal representative of property entrusting organization authorized by general meeting of investors, the fund representative board, the general meeting of shareholders of securities investment company, the Management Board of securities investment company, property entrusting organization authorized to perform its rights under the provisions of the fund charter, charter of securities investment company, investment management contract, the company charter and the provisions of law.

5. General meeting of investors consists of all investors contributing capital to the fund, holding fund certificate, is the highest decision-making body of the fund.

6. Entrusting customers mean the funds, securities investment companies and the individuals and organizations entrusting their capital, assets to the fund management company for management.

7. Personal record includes the written provision of information in the form prescribed in Appendix 03 attached herewith, a valid copy of identity card, passport or other lawful personal identification.

8. Valid record means the record with full documents under provisions of this Circular, with content declared fully in accordance with the law.

9. Consolidation means the form that two or more companies of the same type (called as consolidated companies) are merged into a new company (called as consolidating company) by transferring all assets, rights, obligations and legitimate interests to the consolidating company, and ending the existence of the consolidated companies.

10. Employees of an organization mean the ones who work under labor contracts for such organization in the entire administrative time.

11. Fund administrator means the one who practices fund management designated for management by the fund management company to manage, administer the investment activities of the fund, securities Investment Company.

12. The beneficiaries mean the organizations, individuals not taking the name of the property owner, but having full ownership of such property in accordance with the law.

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14. Entrusted assets mean the list of assets including cash, securities and other assets of the entrusting customers.

15. Electronic information file means the data file formatted in Word, Excel, for documents issued by the competent authorities in PDF format.

16. Working capital means the difference between current assets and current liabilities

Chapter II

ESTABLISHMENT, ORGANIZATION OF FUND MANAGEMENT COMPANY

Section 1. ESTABLISHMENT OF FUND MANAGEMENT COMPANY

Article 3. Conditions for being granted permit of establishment and operation

1. Having head office and equipment meeting the following conditions:

a) The right to use the company's head office with a minimum period of one year from the complete and valid date of the records to set up fund management company;

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2. Having Director (General Director), Deputy Director (Deputy General Director) in charge of business (if any) to satisfy the provisions of Clause 1 of Article 11 of this Circular and at least 05 years of fund management practice certificates for professional staffs.

3. Having actually-contributed charter capital at least equal to the legal capital as prescribed by law.

4. Structure of shareholders, limited partners in the fund management company

a) With at least two (02) founding shareholders, founding members to be organizations to meet the provisions of Clause 6 of this Article, which must have at least one (01) organization to be commercial bank, insurance company, securities company;

Where the fund management company is organized in the form of one-member limited liability company, the owner must be a commercial bank, insurance company, securities company;

b) The founding shareholders, founding members to be organization must own at least 65% of the charter capital, which the organizations are commercial banks, insurance companies, securities companies must own at least 30% of the charter capital of the fund management company;

c) Shareholders, limited partners owning 10% or more of the charter capital of the fund management company and the concerned persons of the shareholders, limited partners may not own more than 5% of the charter capital in another fund management company.

5. Conditions for individuals contributing capital:

a) None of the cases not having the right to establish and manage enterprises in Vietnam in accordance with the provisions of law on enterprises;

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6. Conditions for the organizations contributing capital:

a) Having the legal entity and not in a state of consolidation, merger, division, separation, dissolution, bankruptcy; none of the cases not having the right to establish and manage enterprises in Vietnam in accordance with the provisions of law on enterprises;

b) Having a minimum operation period of five (05) consecutive years preceding the year participating in capital contribution to establish the fund management company. If it is commercial bank, insurance company, securities company, it must have a minimum operation period of two (02) consecutive years preceding the year participating in capital contribution to establish the fund management company;

c) Having financial capacity to meet the provisions of Clause 2, Article 4 of this Circular.

7. Conditions for foreign investors contributing capital to establish or purchase to own up to 49% of the charter capital; establish or purchase to own 100% of the charter capital of the fund management company shall comply with the provisions of the Decree No.58/2012/ND-CP of July 20, 2012 of the Government detailing and guiding a number of Articles of the Law on Securities and the Law Amending and Supplementing a Number of Articles of the Law on Securities.

Article 4. Conditions on financial capacity of shareholders, limited partners

1. Individuals may only use their own capital and must demonstrate that they have enough ability to contribute capital in Vietnam Dong or a freely convertible foreign currency in bank accounts. Minimum value of money must be equal to the amount of capital to be expected to contribute for the establishment of the fund management company and the time of confirmation of the bank shall not exceed thirty (30) days to the complete and valid date of the records.

2. Organizations are used only equity capital and other valid, legal sources of capital as prescribed by law. The most recent annual financial statement audited must not have exception and meet the following criteria:

a) Having interest in two (02) consecutive years preceding the year requesting for establishing a fund management company and having no accumulated losses to the latest quarter to the time of filing records to request for the establishment of a fund management company;

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c) Where the organizations contributing capital are the commercial banks, insurance companies, securities companies, they are not in a state of control, special control, temporary pause, suspension of operations or other state of warning, at the same time must satisfy the conditions to be participated in contributing capital, investment in accordance with the provisions of specialized laws.

3. Shareholders, limited partners who are individuals, foreign organizations must meet the conditions of financial capacity stipulated in the Decree No.58/2012/ND-CP of July 20, 2012 of the Government detailing and guiding the implementation of some Articles of the Law on Securities and the Law amending and supplementing a number of Articles of the Law on Securities and the provisions of Clauses 1 and 2 of this Article.

Article 5. Records requesting for granting permit for the establishment and operation of fund management company

1. Records requesting for granting permit for the establishment and operation of fund management company include:

a) Application for granting permit for the establishment and operation according to the form prescribed in Appendix 01 attached herewith;

b) Minute of meeting and Resolution of shareholders, limited partners, or the owner's decision on the establishment of a fund management company, including at least the following contents:

- Full name, trade name in Vietnamese, English, abbreviated name of the company to be established; address of head office;

- Charter capital; lists of shareholders, limited partners; number of shares, par value, value worth of shares and percentage of ownership of each shareholder or capital contribution, percentage of ownership of each contributing member;

- Ratifying the company's charter, business plan and the representative completes the procedure for establishment of fund management company;

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d) Contract in principle of leasing head office or decision on handing over the premises, headquarter of the owner; accompanied by documents certifying ownership or the right to use the head office of the lessor or owner;

đ) The plan of operation, business in the first three (03) years after granting permit for the establishment and operation with the content in the form prescribed in Appendix 04 attached herewith, together with the fund management process; process of asset allocation and portfolio management; risk management processes for each type of fund, entrusting customer and business activities of the company; internal control process and set of professional ethics;

e) Documents proving financial capacity:

- For individuals: confirmation of the bank on balance of VND or freely-convertible foreign currency in the individual's account at the bank;

- For organizations: the latest annual financial statement audited and the latest quarterly financial statement. For the organizations of capital contribution to be the parent companies, the groups, they must supplement the consolidated financial statement of the latest year audited. For the organizations as commercial banks, insurance companies, securities companies, they must supplement the periodic reports on the financial safety norms, capital safety in accordance with the provisions of specialized law in two latest ( 02) last year, up to the complete and valid date of records, and document of the competent State management agency to certify that the organization of capital contribution is not in a state of control, special control or other warning state under the provisions of specialized laws and to approve that this organization is allowed to contribute capital to establish, purchase shares, capital contribution in the fund management company, the value of contributed capital and the percentage allowed to own;

g) A list in the form prescribed in Appendix 02 attached herewith and personal dossiers of shareholders, limited partners, authorized representatives of shareholders, limited partners who are legal entities; Management Board’s members or Council of Members, Supervisory Board (if any), the internal audit department (if any), the Executive Board, the internal control department, professional staffs to be expected of the fund management company;

- For organizations contributing capital, additional documents include: a valid copy of the license of establishment and operation, business registration certificate or other equivalent documents, the charter of company, minutes of meetings and resolutions of the general meeting of shareholders, Council of members, or the minutes of the meeting and the decision of the Management Board or Council of members or the decision of the owner on the capital contribution to establish a fund management company in accordance with the provisions of the charter of the company; written authorization for the authorized representative;

- Criminal record issued shall not exceed six (06) months, up to the date of application of: (i) the authorized representative and the legal representative of the organization contributing more than 10% of the charter capital in the fund management company; (ii) the founding shareholders, founding members, individuals contributing more than 10% of the charter capital in the fund management company; (iii) members of the Management Board or Council of members or president of the fund management company; (iv) members of the Executive Board, the supervisory board (if any), the internal audit department (if any), head of the internal control department and the professional staffs of the fund management company;

- A valid copy of fund management practicing certificate or the international certificates certifying the Executive Board’s members in charge of professional, professional staffs meeting those specified at Point c, Clause 1, Article 11 of this Circular;

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2. In case shareholders, limited partners are the foreign investors, the materials or documents issued by the competent State management agencies of foreign countries must be legalized in consulate but not more than six (06) months before the date of application. All other documents of the foreign investors must be translated and certified into Vietnamese by the organizations having translation function legally operating in Vietnam or foreign countries.

3. Records as specified in Clauses 1 and 2 of this Article shall be made in one (01) original set attached to a file of electronic information. The original documents are sent directly to the State Securities Commission or sent by post.

4. Within thirty (30) days from the date that the State Securities Commission sends a written request, the shareholders, limited partners, owner establishing the fund management company must supplement, complete records according to provisions. Where it is necessary to clarify issues related to records requesting for permit of establishment and operation of the fund management company, the State Securities Commission may request the representative of shareholders, founders, owner or the person expected to be Director (General Director) of the fund management company to explain in person or in writing. After the above time limit, if the shareholders, limited partners, owner do not supplement or complete the full records, the State Securities Commission may refuse to grant a permit of establishment and operation.

Article 6. The order for granting permit of establishment and operation

1. Within twenty (20) days from the date of receiving complete and valid records as prescribed in Article 5 of this Circular, the State Securities Commission sends written notice to representative of shareholders, members of capital contribution, owner of the fund management company to complete the conditions of material facilities and freezing of contributed capital. Shareholders, limited partners, owner are used capital for investment in material facilities. The remaining contributed capital must be frozen on commercial bank’s account as designated by the State Securities Commission and must be released and transferred to the account of the fund management company immediately after the permit of establishment operation is effective.

2. The State Securities Commission inspects material facilities, head office of the fund management company before granting a permit of establishment and operation.

3. After a period of three (03) months from the date of receipt of the notice of the State Securities Commission under the provisions of Clause 1 of this Article, if the shareholders, limited partners, the owner do not complete the material facilities, do not freeze capital and do not supplement fully staffs in accordance with provisions, the State Securities Commission may refuse to grant permit.

4. Within seven (07) days from the date of receipt of confirmation of the capital frozen, and the minute of inspecting material facilities and other valid documents as provided for in Article 5 of this Circular, the Securities Commission State grants permit of establishment and operation for the fund management company. In case of refusal, the State Securities Commission shall send written reply, clearly stating the reason.

5. Within seven (07) days from the effective date of permit of establishment and operation, the fund management company shall publish the permit of establishment and operation according to the provisions of Article 66 of the Law on Securities.

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1. Name of fund management company, branches and representative offices of the fund management company must comply with the provisions of the law on enterprises and must have the phrase "fund management".

2. Company charter is set up in accordance with the company's organizational model, with content in the form prescribed in Appendix 11 attached herewith. In case of specified in the charter, the Executive Board of fund management company is revised grammatical errors, spelling or grammatical errors in the charter that do not affect the content of the charter and must not consult shareholders' general meeting, Council of members or owner. After the amendment, supplement is made; the Executive Board must notify the shareholders, limited partners or owner of the amendment and supplement.

3. Fund management companies shall comply with the principles of corporate governance set out in the company charter. Fund Management Companies who are public companies must also comply with other provisions of the securities laws of corporate governance applicable to the public companies.

4. Percentage of ownership of the founding shareholders, founding members must meet the provisions of Clause 4 of Article 3 of this Circular within three (03) years from the date of issuance of permit of establishment and operation. Founding shareholders, founding members are not transferred their shares or contributed capital within three (03) years from the date of issuance of permit of establishment and operation, except for the transfer to other founding shareholders, founding members. Where the founding shareholders, founding members are forced to liquidate their assets by a decision of the court or of the competent state management agency, they shall be transferred to other shareholders, members and the shareholders, members receiving transfer shall automatically become the founding shareholders, founding members of the company.

Section 2. ORGANIZATIONAL STRUCTURE OF FUND MANAGEMENT COMPANY

Article 8. Management Board, Council of members, Board of Supervisory

1. Organizational structure, conditions, appointment, dismissal or removal, and the rights, obligations and duties of Management Board, Council of members, chairman of the Management Board, chairman of the Council of members, president of the company, the supervisory board (if any), the internal audit department (if any), the Executive Board shall be defined by the company charter in accordance with the provisions of the law on corporate governance applicable to the public companies, the provisions of the law on enterprises and not contrary to the provisions of this Circular.

2. Members of the Management Board or Council of members of the fund management company may not be members of the Management Board or Council of members, Executive Board, fund management practitioners of another fund management company or members of the Management Board or Council of members, Executive Board, staffs of the depository banks, supervisory banks providing services to the fund, securities investment company that the company is managing.

Article 9. Internal Audit

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2. Internal audit department is under the Management Board or Council of members or owner of the company.

3. Internal audit department shall:

a) Examine and evaluate the organizational structure, corporate governance activities, operating activities, coordination of each department, each working position in order to prevent conflicts of interest, protect rights of customers;

b) Examine and evaluate the adequacy, effectiveness and efficiency, the level of compliance with the provisions of law, the provisions of the charter of the company; the internal control system; internal policies, procedures, including the rules of professional ethics, professional process, risk management procedures and system, information technology system, accounting, process and system of report, disclosure of information, the process of receiving and handling denunciations and complaints from customers, and other internal regulations;

c) Check the validity, legality, honesty, the level of prudence, compliance with professional processes and risk management;

d) Audit the entire operations of all departments of the fund management company at least once a year;

đ) Propose the complete solutions to enhance the effectiveness and performance of the company; monitor the implementation of recommendations after the audit has been approved by the Council of members, president of the company.

4. Internal audit activity must satisfy the following principles:

a) Independence: the internal audit department and the operation of this department is independent with the departments and other activities of the fund management company, not subject to the management of the Executive Board of the fund management company;

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c) Honesty: internal audit must be done in an honest, careful and responsible manner;

d) Coordination: internal audit department is allowed full, unrestricted access to information and documents of the company. Member of the Executive Board and all employees of the fund management company are responsible for coordinating, providing fully, timely, honestly, exactly all information, relevant documents, as required by the internal audit department. The Departments of the company shall inform the internal audit department as discovering the weaknesses and shortcomings, mistakes, risk or large losses on assets of the company or of the customers;

đ) Confidentality: The internal audit department, staffs of the internal audit department are not disclosed the information obtained during the audit, unless otherwise provided for the State Securities Commission.

5. Personnel, personnel structure of the internal audit department must meet the following conditions:

a) Having full civil act capacity and legal capacity, other than those serving prison penalty terms or prohibited to practice by a court;

b) Not being sanctioned from level of fines or more for the violations of law in the field of securities, banking, insurance, within two (02) years, up to the time of appointment;

c) Meeting those specified at Point c, Clause 1, Article 11 of this Circular; or having securities trading, practicing certificates; or having certificates of basic issues of securities and securities markets or legal certificate of securities and securities markets;

d) Not at the same time working in other departments of the fund management company;

đ) Having at least one staff who has auditor practicing certificate, or international certificate of accounting and auditing as ACCA (Association of Chartered Certified Accountants), CPA (certified public accountants), CA (Chartered Accountants) , ACA (Associate Chartered Accountants); or took test and satisfied a number of subjects of the curriculum of training for auditor practicing certificate including economic law; finance; currency and credit; auditing; accounting; analysis of financial activities in accordance with relevant laws; or who has a working period of three (03) years or more in the legal department, department of inspection, management and supervision of the activities of the financial organizations in the state management agencies in the field of finance, banking, insurance, securities, state audit.

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a) Notice of the appointment, dismissal, change of internal audit staff;

b) Minutes of meetings and resolutions of the Management Board or Council of members or decision of the president of the company on the appointment, dismissal, change of the internal audit department’s staffs;

c) A list together with the personal dossier, criminal record (for new employees) issued for a period of (06) six months from the date of appointment and valid documents to prove employees and personnel structure of the internal audit department to meet the relevant provisions of Clause 5 of this Article.

7. Within ninety (90) days after the end of the fiscal year, the fund management company must send the report of internal audit and internal control report as provided for in Clause 5 of Article 10 of this Circular to the State Securities Commission. Internal audit report must state clearly opinions, conclusions of the audit department, basis of the audit opinion; the explanation of the audit object; remedies, handling of violation and completion.

Article 10. Internal control

1. Fund management companies mut set up internal control system in accordance with the company's organizational structure, establish the internal control department under the Executive Board and promulgate the regulations on internal control including policies, regulations, professional processes and other internal regulations. Internal control department is responsible for:

a) Monitoring to ensure the activities of each position, and department and of the entire company in the compliance with the laws, policies, professional processes, internal regulations of the company; monitoring the implementation of responsibility of every employee in the company for the activities assigned, decentralized, authorized in the following principles:

- Mechanism of decentralization, authorization must be clear, specific and transparent to ensure separation of duties and powers from the individuals, departments of the company. The professional processes must ensure separation between the functions and duties of each position, department in the company from the analysis, appraisal, acceptance or approval, or decision on implementation, implementation organization, report and monitoring after the investment;

- An individual is not allowed to be in charge of many positions that he/she can perform the activities, professional skills with conflicted or overlapped purposes, interests. Personnel is arranged to ensure that an independent can not independently make his/her own decision and perform two or more activities in the entire professional process from investment analysis, evaluation and approval of investment , investment decision, transactions and investment, reporting transaction results, management and investment monitoring after the transaction without consulting other departments and individuals;

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c) Participating in the building of process, implementation organization of the risk management for the activities of the company and for each entrusting customer; timely identifying, evaluating the risk level, setting up the investment limit and taking measures to prevent and manage potential risks in the investment activities of the company and of entrusting customers;

d) Monitoring to ensure the portfolio's net asset value, fund certificates to be valued in accordance with the provisions of law and internal regulations; assets and resources of the company to be managed safely, effectively; customer’s assets are managed separately, independently; financial report, operational report, report on financial safety norms and other reports of the company to be made honestly, correctly, timely, fully updated in accordance with the law;

đ) Monitoring and ensuring the financial information system and managing truthfully, completely, timely and accurately; having backup information system to promptly handle the situations such as natural disasters, fires, explosions.... to maintain continuous operation of the company;

e) Proposing the plan for handling dispute settlement, conflict of interest, complaints from customers and partners; contingency plans to overcome the consequences when problems occur;

g) Performing the internal audit function in the case a fund management company is not required to establish internal audit department under the provisions of Clause 1 of Article 9 of this Circular.

2. Personnel structure in the internal control department must meet the following conditions:

a) Having at least one staff meeting those specified at Point đ, Clause 5 of Article 9 of this Circular; or having professional skill, knowledge of accounting, auditing from university degree or higher and the actual working time of accounting or auditing at least 01 (one) year;

b) Having at least one staff with professional skill, knowledge of law from university degree or higher and the actual working time of law at least 01 (one) year;

c) Head of internal control department must meet those specified at Point a or b of this Clause and other conditions specified in Clause 3 of this Article.

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a) Meeting those specified at Points a, b and c, Clause 5 of Article 9 of this Circular;

b) Having working experience for at least two (02) years in the professional departments of the securities trading organizations, or credit institutions or insurance companies, or in the state management agencies countries in the field of finance, banking, insurance, securities, state audit;

c) They are not the relevant persons of members of the Executive Board and not allowed to concurrently work in the professional departments directly related to the securities business licensed.

4. Within seven (07) days from the date of the change of the internal control staffs, fund management company shall send notice to the State Securities Commission, together with the decision of the Director (General Director), list and personal dossiers, criminal records (for new employees) to be issued for a period of (06) six months from the date of appointment to ensure staff and structure of the internal control department to meet those specified in Clauses 2 and 3 of this Article.

5. Within ninety (90) days from the end of the fiscal year, the fund management company must establish internal control report and send to the State Securities Commission. The report must specify the potential risks in the company's operations, entrusting customers’ asset management activities and the activities of inspection and supervision in each unit, each department and professional activity to be licensed.

Article 11. The organizational structure

1. Director (General Director), Deputy Director (Deputy General Director) in charge of business, the fund administering persons must satisfy the following conditions:

a) Meeting the provisions at Point a, b Clause 5, Article 9 of this Circular;

b) Having at least five (05) years of experience working at the professional departments of the organizations in the field of finance, banking, insurance or departments of finance, accounting, investment in the other enterprises;

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- Certificate of asset management practice in the countries that are members of the organization of economic cooperation and development (OECD); or

- Taken test and obtained international certificate of second level CFA investment analysis (Chartered Financial Analyst Level II), or CIIA level II (Certified International Investment Analyst - Final level);

d) Up to the time of appointment, to be the securities business practicers who have not ever violated those specified at Point b, Clause 1, Article 80 of the Law on Securities;

đ) Not concurrently being employees of the other economic organizations and complying with the provisions of responsibility of securities practicer in Article 81 of the Law on Securities.

2. Fund management companies must dismiss, remove the relevant titles for a period of twenty-four (24) hours right after these individuals no longer meet the provisions in point đ, Clause 1 of this Article, point a Clause 5 Article 9 of this Circular or violate those specified at Point b, Clause 1, Article 80 of the Law on Securities.

3. Except for being appointed as the representatives for contributed capital or appointed as the Management Board’s members, Council of members, supervisory board of the organizations owning the fund management companies, organizations receiving investment capital from the fund management companies; securities practitioners in the fund management companies are not:

a) At the same time working for other organizations having ownership relation with the fund management company where they work. This provision shall not apply in the case the securities practitioners are appointed to join in the Executive Board, the management board of the organizations receiving investment capital from investment funds, securities investment company that the fund management companies are managing;

b) At the same time working for other securities companies, fund management companies;

c) At the same time working as Director (General Director) of an organization offering securities to the public or listing organizations.

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1. Fund management companies meeting the provisions at Points c and d, Clause 1, Article 13 of this Circular are proposed for establishment of representative offices. Representative office is not done the business, not performed asset management for the entrusting customers, investment advisory, and is not signed economic contracts related to securities business operations. In case of being authorized in writing by the parent company, representative office is signed office lease contract, contracts with employees and other economic contracts unrelated to the securities business. Scope of operation of representative offices includes the following contents:

a) Performing the functions of office for communications and market research;

b) Promoting development of cooperation projects in the field of securities and securities market of the company;

c) Promoting and monitoring the implementation of the contracts signed between the company with other organizations and individuals.

2. Records for approval to establish a representative office includes the following documents:

a) Written approval for the establishment of a representative office in the form prescribed in Appendix 05 attached herewith;

b) Minute of the meeting and the resolution of the general meeting of shareholders or the Management Board, or Council of members, or the owner's decision on the establishment of a representative office in accordance with the provisions of the charter of the company;

c) The list attached to the personal dossiers of the office representative’s staffs;

d) Contract or contract in principle renting office or decision on handing over the premises, the head office of the owner; accompanied by documents certifying ownership, the right to use the office of the lessor or owner.

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4. Within fifteen (15) days from the date of receiving complete and valid records as prescribed in Clause 2 of this Article, the State Securities Commission makes a decision on approval for establishing a representative office. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

5. Records requesting for closing representative office include the following documents:

a) A written request for closing representative office in the form prescribed in Appendix 05 attached herewith;

b) Minute of the meeting and the resolution of the general meeting of shareholders or the Management Board, or Council of members, or the owner's decision on the closing of representative office in accordance with the provisions of the charter of the company.

6. Records in accordance with provisions in Clause 5 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent directly to the State Securities Commission or sent by post.

7. Within fifteen (15) days from the date of receiving complete and valid records as prescribed in Clause 5 of this Article, the State Securities Commission approves in principle for closing representative office. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

8. After obtaining the written approval in principle of closing representative office, the fund management company must disclose information and inform customers on the closure of representative office for a period of at least fifteen (15) days for customers, partners to take plan to handle the valid economic contracts.

9. After completing the closure of representative office, fund management company reports and sends the following documents to the State Securities Commission:

a) The original decision on approval of establishment of the representative office;

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c) Certificate issued by the competent authority for returning the stamp;

d) Documents certifying the fund management company to disclose information of the closure of representative office.

10. Within ten (10) days from the date of receiving complete and valid records as prescribed in Clause 9 of this Article, the State Securities Commission makes a decision to terminate operation of representative office and announces this decision on the electronic information page of the State Securities Commission.

11. Representative office of fund management company shall be revoked the decision on approval of establishment in the following cases:

a) The fund management company is dissolved, bankrupted or withdrawn permit of establishment and operation;

b) The application for approval of the establishment of representative office with false information;

c) Operation with improper purpose, not in accordance with the content of the decision on approval of establishment of representative office.

12. Within fifteen (15) days from the date of receipt of written notice of the State Securities Commission of the withdrawal of the decision on approval of establishment of representative office in accordance with the provisions of Clause 11 of this Article, the fund management company shall close the representative office and report to the State Securities Commission in accordance with provisions in Clause 9 of this Article.

Article 13. Branch

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a) Having office, equipment to meet the conditions in Clause 1 of Article 3 of this Circular;

b) Branch Director must meet the provisions of Clause 1 of Article 11 of this Circular and has at least two (02) professional staffs with fund management practicing certificates at office of the branch. Personnel in branch are not allowed to work concurently at the head office or other branches of the fund management company;

c) The fund management company must not be in a state of control, special control, temporary pause, suspension of operation, dissolution, consolidation, merger, transformation of company form or performing the procedures of withdrawal of permits as prescribed; not be in those specified in Clause 9 of Article 22 of this Circular;

d) The fund management company shall not be sanctioned for administrative violations in the field of securities and securities markets within six (06) months.

2. Records requesting for approval to establish a branch include:

a) An application for approval to establish a branch in the form prescribed in Appendix 05 attached herewith;

b) Minute of the meeting and the resolutions of the general meeting of shareholders and the Management Board, or Council of members, or the owner's decision on the registration of establishment of branch

c) Contract or Contract in principle of leasing branch’s head office or decision on handing over the premises, branch’s head office of the owner; accompanied by documents certifying ownership or the right to use the head office of the lessor or owner; an explanation of material facility of branch’s head office expected to be established.

d) A List of securities practitioners expected to work in the branch together with the the personal dossier, criminal record issued for a period of not more than (06) six months from the date of submission for approval to establish a branch and a valid copy of fund management practicing certificate of Director, Deputy Director of the branch in charge of the operation (if any) and professional staffs.

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4. Records as provided for in Clause 2 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

5. Within fifteen (15) days from the date of receiving complete and valid records as prescribed in Clause 2 of this Article, and the minute of the inspection of head office of the branch expected to be established, the State Securities Commission makes a decision on approval for establishing the branch of the fund management company. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

6. Branch of the fund management company must officially operate within six (06) months from the effective date of approval of the establishment of the branch.

7. Records requesting for closing domestic branches include:

a) A written request for closure of a branch in the form prescribed in Appendix 05 attached herewith;

b) Minute of the meeting and the resolutions of the general meeting of shareholders and the Management Board, or Council of members, or the owner's decision on the closure of the branch;

c) Plan for dealing with economic contracts that are still valid, including the labor contracts.

8. Records as provided for in Clause 7 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

9. Within fifteen (15) days from the date of receiving complete and valid records as prescribed in Clause 7 of this Article, the State Securities Commission approves in principle for closing branch. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

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11. After completing the closure of the branch, the fund management company reports and sends the following documents to the State Securities Commission:

a) The original decision on approval of the establishment of the branch;

b) Minutes of the liquidation of contracts and documents to verify the branch has completed its obligations and responsibilities for the concerned organizations and individuals;

c) Certificate issued by the competent authority for returning the stamp;

d) Documents certifying the fund management company disclosed information of the closure of the branch.

12. Within ten (10) days from the date of receiving complete and valid records as stipulated in Clause 11 of this Article, the State Securities Commission shall make decision to terminate the operation of branch and announce this decision on the electronic information page of the State Securities Commission.

13. Branch of the fund management company is revoked the decision on approval of the establishment in the following cases:

a) The fund management company is dissolved, bankrupted or withdrawn permit of establishment and operation;

b) The application for approval of the establishment of branch with false information;

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d) Failure to meet the conditions of office, equipment for securities business activities permitted; or failure to operate within six (06) months from the date of being issued decision on approval of establishment of branch.

14. Within a maximum period of fifteen (15) days from the date of receipt of written notice of the State Securities Commission of the withdrawal of the decision on approval of establishment of branch in accordance with the provisions of Clause 13 of this Article, the fund management company shall conduct procedures to close the branch and report to the State Securities Commission in accordance with provisions in Clause 11 of this Article.

Article 14. Change of the company’s name, head office, branch’s office, representative office, legal representative

1. Change of the company’s name, head office, branch’s office, representative office of the fund management company must be approved by the State Securities Commission.

2. Records requesting for approval of the changes specified in Clause 1 of this Article shall include the following documents:

a) Written request for approval of changes in the form prescribed in Appendix 05 attached herewith;

b) Minute of the meeting and the resolutions of the shareholders' general meeting, the Management Board or Council of members or the decision of the owner of the fund management company of the change of name of the company; head office, branch’s office, representative office in accordance with the provisions of the charter of the company;

c) The charter amending, supplementing the contents related to the changes mentioned above;

d) Contract in principle of leasing head office, branch’s office or decision on handing over the premises, owner’s head office; accompanied by documents certifying ownership or the right to use the head office of the lessor or owner; and an explanation of material facility of head office, branch’s office.

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4. Records as provided for in Clause 2 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

5. Within fifteen (15) days from the date of receiving complete and valid records as prescribed in Clause 2 of this Article, together with the minutes of the inspection of the material facilities (in case of change of head office, branch’s office), the State Securities Commission shall issue permit of adjusting the permit of establishment and operation, adjusting the decision on approval of the establishment of head office, branch’s office. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

6. Within seven (07) days from the date of the change of the legal representative, the fund management company shall request the State Securities Commission to amend the permit of establishment and operation. Records include the following documents:

a) An Application for amending the permit of establishment and operation according to the form prescribed in Appendix 05 attached herewith;

b) Minute of the meeting and the resolutions of the shareholders' general meeting, the Management Board or Council of members or the decision of the owner of the fund management company of the change of legal representative in accordance with the provisions of the charter of the company;

c) Personal dossier of the legal representative newly appointed.

7. Records as provided for in Clause 6 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

8. Within five (5) working days from the date of receiving complete and valid records as prescribed in Clause 6 of this Article, the State Securities Commission shall issue permit of adjusting the permit of establishment and operation. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason

Article 15. Temporary pause, suspension of operation, withdrawal of permit of establishment and operation of the fund management company

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a) Forced to temporarily pause operation due to not fixed the state of special control under the provisions of the law on financial safety norms and gross losses of less than fifty percent (50%) of charter capital;

b) Temporarily pause voluntarily its operation, provided that all economic contracts related to securities business were liquidated.

2. Time limit for temporary pause of operation is not more than two (02) years. Beyond this time limit, if the company does not meet the provisions of the law on financial safety norms (in the case specified in point a Clause 1 of this Article) or does not restore its operation (in the case specified at Point b, Clause 1 of this Article), the State Securities Commission shall revoke the permit of establishment and operation.

3. Within fifteen (15) days since the State Securities Commission has sent a written request for temporary pause of operation under the provisions of point a, Clause 1 of this Article, the fund management company must complete the procedures for temporary pause of its operation with the tax authority and other relevant agencies and disclose information on the electronic information page of the fund management company, the State Securities Commission and the stock exchange on the time of temporary pause of its operation; comply with the provisions of Clause 11 of this Article and carry out the procedures for handling the valid contracts as prescribed at Point a, b, d, đ and e, Clause 14 of this Article.

4. The temporary pause of operation as prescribed at Point b, Clause 1 of this Article must be registered with the State Securities Commission. Registration records for temporary pause include:

a) A written registration for temporary pause of operation in the form prescribed in Appendix 23 attached herewith;

b) Minute of the meeting and the resolutions of the shareholders' general meeting, Council of members or the decision of the owner on the ratification of the temporary pause of operation;

c) Minutes of the liquidation of the valid contracts signed with the entrusting customers or other valid documents certifying that the company has completed the transfer of rights and entrusted asset management responsibilities to the replacing fund management company.

5. Records as provided for in Clause 4 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

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7. Fund management company shall report and send to the State Securities Commission the documents of head office, material facilities, professional staffs according to the relevant provisions of Point d and g, Clause 1, Article 5 of this Circular to satisfy the provisions of Clause 1 and Clause 2, Article 3 of this Circular before the company restores its operation.

8. Fund management company is suspended its operation in the following cases:

a) Records requesting for grant, adjustment of permit of establishment and operation with false information;

b) The fund management company can not fix the status of special control after the time limit prescribed by law for the financial safety norms and with gross losses reached fifty percent (50%) or more of the charter capital, or no longer meet the conditions of capital for the securities business;

c) Operation with improper purpose, not in accordance with the securities business permitted;

d) Failing to maintain the conditions to grant permit of establishment and operation under the provisions of Article 62 of the Law on Securities;

đ) Depending on the nature and seriousness of the violations specified in Clause 2, Article 119 of the Law on Securities; or the violations of law that led to loss of entrusting customers’ assets without remedies, compensation for trusting customers at the request of the competent authority; or the violations of law provisions and failing to implement the requirements of the competent State management agency and deliberately evading or obstructing the sanction, failing to remedy the violations in accordance with the law.

9. Time limit for suspension of operation is not more than sixty (60) days (for cases specified at Point a, c, d, Clause 8 of this Article) and not more than six (06) months (for cases specified at Point b, Clause 8 of this Article). Time limit for suspension of operation for the cases specified at Point đ, Clause 8 of this Article shall comply with the provisions of the law on handling of administrative violations in the field of securities and securities markets.

10. Within fifteen (15) days since the State Securities Commission has made a decision to suspend operation, the fund management company shall inform the customers of the suspension of its operation; carry out the order and procedures for consulting investors’ general meeting, the general meeting of shareholders of securities investment company, the entrusting customers on the plan for handling funds, securities investment company, the investment management contracts; consulting the replacing fund management companies (if any).

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a) Do not sign new, renewable contracts of investment management, investment advisory contracts and other economic contracts with new customers, new partners; do not receive additional capital from the current entrusting customers;

b) Do not raise capital to establish new fund, new securities investment company; do not increase its charter capital to the fund, securities investment company being managed;

For the valid investment management contracts, the funds, securities investment companies operating, the fund management company is made the transactions only after obtaining the written approval of the entrusting customers or entrusting customers’ representatives (authorized for each time). Entrusting customers are solely responsible for the authorization to the fund management company to carry out these transactions.

c) Do not pay dividends, distribute profits; do not transfer the unsecured debts into secured debts by its assets; do not purchase treasury shares, acquire contributed capital; do not establish more branches, representative offices, expand the area of ​​operation, add securities business; do not contribute capital, invest in subsidiaries, joint ventures, associated companies; do not implement the business and investment which need the approval of the State Securities Commission under the provisions of law;

d) Comply with the provisions of the securities law of the portfolio management, fund management, securities investment companies; ensure the legitimate rights and interests of entrusting customers and take entire responsibility for the entrusted asset transactions in accordance with the law.

12. Fund management company is revoked permit of establishment and operation in the following cases:

a) Failing to conduct the securities business permitted for a period of twelve (12) months from the date of issuance of permit of establishment and operation;

b) Failing to remedy the violations led to the forced temporary pause, suspension of operation during the period of temporary pause, suspension of the operation according to the provisions of Clause 2 and Clause 9 of this Article;

c) The company is dissolved, bankrupted, or consolidated or merged;

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13. Within thirty (30) days from the date of being forced to revoke permit in accordance with the provisions of Clause 12 of this Article, the State Securities Commission sends a written request to the fund management company for terminating the permitted activities to conduct the procedures of revoking permit of establishment and operation.

14. Since receiving the official dispatch of the State Securities Commission, the fund management company is responsible for:

a) Within 24 hours, disclosing unusual information on electronic information page at the places of business of the fund management company, securities exchanges, securities depository center of the revocation of permit of establishment and operation;

b) Completely terminating the securities business permitted; not signing new, renewable economic contracts, unless it is the contract which is intended to terminate the operation of the company;

c) Completely terminating the transaction and management of assets, securities investment consultation under any form for customers and partners;

d) Within fifteen (15) days, the fund management company sends to the State Securities Commission a report on the following contents:

- Detailed portfolio of each customer entrusting the management of portfolio, certified by the depository bank in the form prescribed in Appendix 08 attached herewith;

- Detailed portfolio of the funds, securities investment companies that the company is managing, certified by the depository bank, custodian bank;

đ) Within forty-five (45) days from the date of receipt of the document of the State Securities Commission, the fund management company is responsible for:

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- Performing final settlement of all portfolio accounts (close or transfer); transfer the entire balance of cash and securities to entrusting customers according to the behest of entrusting customers;

- Performing plan of settlement ratified by entrusting customers, investors’ general meeting of the fund, the general meeting of shareholders of the Securities investment company; liquidating contracts, handing over responsibilities to the replacing fund management company or fund management company formed after the consolidation or merger;

- Organizing the general meeting of shareholders, Council of members, consulting opinions of the owners on the plan to dissolve or bankrupt the company;

e) Within sixty (60) days from the date of receipt of the dispatch of the State Securities Commission, the fund management company must report to the State Securities Commission of the settlement plans, the completion of transfer of all rights and obligations of asset management to the replacing fund management company and liquidation of the contract attached:

- Minute of the liquidation of contract with the each entrusting customer; or contract for the transfer of rights and obligations of portfolio management of entrusting customers to the replacing fund management company (signed three parties between entrusting customer and the fund management companies);

- Report on the handover of the rights, responsibilities of fund management, securities investment company with replacing fund management company in accordance with the law;

- Report on the plan for dealing with disputed assets (if any) arising from the securities business permitted.

15. Within five (05) working days from the date of receiving the report specified at Point e, Clause 14 of this Article, the State Securities Commission sends a written request to the company, the concerned parties to conduct procedures of dissolution or bankruptcy of the company under the provisions of the law on enterprises, enterprise bankruptcy law and the relevant provisions of this Circular.

16. Within seven (07) working days from the date of completion of the dissolution or bankruptcy of the company, the legal representative of the fund management company shall send the original permit of establishment and operation of the fund management company and all records and documents relating to the dissolution, bankruptcy of the company to the State Securities Commission. Within seven (07) working days after receiving complete and valid records, the State Securities Commission shall make a decision to revoke the permit of establishment and operation.

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Article 16. The transactions and the activities required to be approved by the State Securities Commission

1. The transactions that change the following percentage of ownership in the fund management company must be approved in writing by the State Securities Commission, unless the fund management company is a public company:

a) Transactions account for ten percent (10%) or more of the charter capital; or

b) Transactions resulting ownership percentage of shareholders, limited partners over or under the ownership levels of 10%, 25%, 50%, 75% of the charter capital of the management company.

2. Where the fund management company is a public company, if the transfer resulting the transfer receiving party owns 25% or more of the outstanding voting shares of the fund management company, the transfer receiving party must comply with the provisions of the law on public offer to buy shares of a public company.

3. The parties to the transactions as prescribed in Clause 1 of this Article must through a fund management company send written request to the State Securities Commission for approving the transactions, including:

a) A written request for approval of the transaction in the form prescribed in Appendix 05 attached herewith;

b) Contract in principles between the parties to the transaction;

c) The relevant documents as prescribed at Point e, g, Clause 1, Article 5 of this Circular, to ensure the transfer receiving party to meet the conditions specified in Article 4 of this Circular.

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a) Being approved by shareholders' general meeting, Council of members or owners for the establishment of representative offices, branches, investment abroad;

b) Meeting the financial safety regulations after deducting capital granted for the branch, cost for establishing representative offices abroad, overseas investment capital;

c) Ensuring to maintain equity capital after deducting capital granted for the branch, cost for establishing representative offices abroad, overseas investment capital to be more than the legal capital.

5. Records requesting for approval to establish a representative office, branch abroad or foreign investment of the fund management company include the following documents:

a) A written request for approval of the oversea establishment of representative office, branch or foreign investment in the form prescribed in Appendix 05 attached herewith;

b) Minute of the meeting and the resolutions of the general meeting of shareholders, and the Management Board or Council of members, or the owner's decision on the establishment of oversea representative office, branch, investment in foreign countries in accordance with the provisions of the charter of the company;

c) The plan of operation, investment in foreign countries, including estimated investment capital, investment capital source, trading partners (if any), the field of investment, the content and scope of operation, business plans and other relevant information in the first three years.

6. Records as provided for in Clause 3 and Clause 5 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

7. Within seven (07) days from the date of receiving the complete and valid records as provided for in Clauses 3 and 5 of this Article, the State Securities Commission shall make decision on approving the request of the fund management company. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

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9. Within fifteen (15) days from the date of being permitted the establishment of overseas representative office, branch or being approved the foreign investment projects or agreed to permit the termination of operation of representative office, branch by foreign competent authority, the fund management company must notify the State Securities Commission. Records of notice include the following information, documents:

a) Information on the headquarter, staffs of representative office, branch, capital value together with the written approval of the competent State management agency of Vietnam in the field of investment and management of foreign exchange;

b) Documents, records submitted to the foreign state management agency, together with a valid copy of the permit, the written approval or equivalent documents issued by the competent authority in foreign country.

10. Document in foreign language shall comply with the provisions of Clause 2, Article 5 of this Circular.

Section 3. COMPANY RESTRUCTURING

Article 17. General provisions on consolidation or merger of the fund management company

1. Consolidation, merger must meet the following principles:

a) The consolidation or merger; plan of consolidation, merger, contract of consolidation, merger must be adopted by the General Meeting of shareholders, Council of members, owner;

b) The rights, obligations are settled by agreement between the concerned parties according to the voluntary principle in accordance with the provisions of law;

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d) Information on the process of consolidation, merger must be provided to shareholders, limited partners in a complete, timely and accurate manner;

đ) Treasury stock of the merged, consolidated company must be destroyed;

e) The fund management company formed after the consolidation, merger must meet the conditions specified in Clauses 1, 2 and 3 of Article 3 of this Circular;

g) The consolidation or merger of the fund management companies that are public companies must also comply with the provisions of the relevant law (if any).

2. In the process of consolidation, merger, fund management company, the Management Board or Council of members, supervisory board (if any), the Executive Board shall:

a) Ensure the safety to the company's assets, not hide, disperse assets of the company in any form and take responsibility before law for the problems outside of the accounting book which were not be handed over;

b) The fund management companies participating in the consolidation, merger have the right and responsibility to all their rights and obligations until the fund management company formed after the consolidation, receiving merger is issued, modified permit of establishment and operation;

c) Comply with the provisions of the law on the disclosure of information on the stock market.

3. Shareholders opposed the consolidation, merger may request the fund management company to acquire their shares. The purchase price is under the agreement between the two parties on the basis of the net asset value per share at the time of acquisition. Creditors may request the fund management company to repay the loans when the consolidation or merger is made. The above requirements shall be made in writing, clearly stating the names and addresses of shareholders, limited partners, creditors, number of shares, the value of contributed capital, loan value and should be sent to the company within thirty (30) days from the date of adoption of the consolidation or merger.

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Article 18. The order and procedures for consolidation, merger

1. Fund management companies doing the consolidation, merger must be approved by the State Securities Commission. Records requesting for approval of consolidation, merger include:

a) A written request for consolidation or merger in the form prescribed in Appendix 12 attached herewith;

b) Minutes and resolutions of the general meeting of shareholders, Council of members or owners of the companies participating in consolidation, merger;

c) Plan for consolidation, merger that has been adopted by the general meeting of shareholders, Council of members or owners of the companies participating in consolidation, merger including the contents in the form prescribed in Appendix No.19, 20, issued together with this Circular;

d) Contract in principle of consolidation or merger in the form prescribed in Appendix No.17, 18, issued together with this Circular;

đ) Document from the competition management agency of the consolidation or merger.

2. Records as specified in Clause 1 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

3. Within thirty (30) days after receipt of complete and valid records as stipulated in Clause 1 of this Article, the State Securities Commission shall make a decision on approving consolidation or merger. In case of refusal, the State Securities Commission shall send a written reply clearly stating the reason.

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5. After completing the consolidation, merger, fund management company must file application to the State Securities Commission for the permit of establishment and operation of the consolidated company, modification of the permit of establishment and operation for the merger receiving company. Records include the following documents:

a) An application in the form prescribed in Appendix No.12 issued together with this Circular, together with the written authorization of the companies participating in consolidation, merger to authorized representative to perform the legal procedures related to the consolidation or merger;

b) The originals of the permits of establishment and operation of the consolidated, merged companies;

c) Report of the result of the consolidation or merger in the form prescribed in Appendix 15 attached herewith;

d) The charter of the consolidated, merged company;

đ) The opinion of the consultant (if any);

e) A List of shareholders, limited partners of the company before and after the consolidation or merger in the form prescribed in Appendix No.13 issued together with this Circular and the documents specified at Point g, Clause 1 of Article 5 of this Circular.

6. Records as specified in Clause 5 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

7. Within thirty (30) days from the date of receipt of complete records as prescribed in Clause 5 of this Article, the State Securities Commission shall issue a permit of establishment and operation for the consolidated company, modify the permit of establishment and operation for the merger receiving company. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason. The effective date of permit of establishment and operation, modification permit is the date of consolidation or merger.

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9. After the date of consolidation, merger, the companies participating in consolidation, merger shall have to hand over immediately all rights and obligations to the fund management company formed after the consolidation, merger. The fund management company formed after the consolidation, merger inherits all rights and obligations of the fund management companies participating in consolidation or merger.

Article 19. The order and procedures for conversion of company type

1. Fund management company makes the conversion of type of company must be approved by the State Securities Commission. Records requesting for approval to convert type of company include:

a) A written request for approval of conversion of the company type in the form specified in Appendix 12 attached herewith;

b) Minute of the meeting and resolutions of the shareholders' general meeting, Council of members or the decision of the owner on the conversion of the type of company and including the contents in accordance with provisions of the enterprise law; method of conversion adopted by the general meeting of shareholders, Council of members or owner;

c) The converted company's charter;

d) The original permit of establishment and operation;

đ) Documents certifying to freeze the capital; agreement of capital contribution (in case of additional issue, offer to new shareholders, limited partners), the transfer contract (if available) and other documents in accordance with provisions of the law on enterprises of the conversion of company.

2. Records as specified in Clause 1 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

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4. Where the conversion associated with individual stock offering, the offering of shares to the public or transactions specified in Article 16 of this Circular; conditions, order and procedures shall comply with the provisions of relevant law.

Article 20. General provisions on the dissolution of the fund management company

1. Fund management company is dissolved in the following cases:

a) Expiration of operation period stated in the charter of the company without extension;

b) According to the decision of the general meeting of shareholders, Council of members, owner of the company;

c) Permit of establishment and operation to be revoked.

2. Fund management company may be dissolved only when ensuring payment of all debts and other financial obligations.

3. Since being approved for dissolution by the State Securities Commission, owner, Council of members, the Management Board may not perform the activities that are prohibited by the provisions of the law on enterprise dissolution, and directly organize the liquidation of assets of the company, unless the company's charter provided for the establishment of separate team of liquidation.

Article 21. The order of dissolution or revocation of permit of establishment and operation of the fund management company

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a) A written request for dissolution in the form prescribed in Appendix 16 attached herewith;

b) Minute of the meeting and the resolutions of the general meeting of shareholders, Council of members, or the owner's decision on the dissolution;

c) Plan for dealing with the obligations arising from the economic contracts, labor contracts, together with a list of the fund management companies expected to replace. The plan includes the following basic contents:

- The time and method of disclosing information, informing customers, partners on the dissolution of the company; time to stop the transactions, close the account balances of customers, partners, creditors;

- Duration, method and procedures for the liquidation of the contracts, handover of power, responsibility for assets of entrusting customers to the replacing fund management company, payment for the debts;

- Duration and method of settlement of complaints of customers, creditors, partners.

2. Records as specified in Clause 1 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

3. Within fifteen (15) working days from the date of receipt of the full and valid records under the provisions of Clause 1 of this Article, the State Securities Commission approves for the dissolution of the company. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

4. Within seven (07) days from the date of approval of dissolution, the company must:

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b) Publicize the dissolution under the provisions of the law on disclosure of information in the stock market.

5. The Company conducts procedures of liquidation of valid economic contracts under the provisions of Clause 10 of this Article; liquidation and distribution of assets to shareholders, limited partners in accordance with the law on enterprise dissolution. Time limit for handling the valid economic contracts should not exceed six (06) months from the date of approval of the dissolution by the State Securities Commission. Time limit for asset liquidation is made according to the dissolution plan adopted by the general meeting of shareholders, Council of members or owner, but not more than twelve (12) months.

6. Within seven (07) days from the date of completion of the liquidation of assets, repay all the debts, divide assets to shareholders, limited partners, the legal representative of the Company must notify the State Securities Commission the performance accompanied by the following documents:

a) Report on the liquidation of the assets of the company, the repayment of debt and other financial obligations to the creditors, those who have other rights and obligations, including financial obligations to state, tax debts and arrears of social insurance. The report must include a list of creditors and the debts paid; a list of shareholders, limited partners, percentage of contributed capital and the amount, volume of assets paid;

b) The report must be certified by the depository bank, custodian bank and fund representative board, Management Board of securities investment company, entrusting customers for the liquidation of contract, together with the minute of the liquidation of the contract, certified by the custodian bank, depository bank; materials on the dissolution of the fund as prescribed by law for the establishment and management of securities investment fund.

In case of handing over power, responsibility and portfolio of funds, securities investment company, entrusting customers to the replacing fund management company, the report must be accompanied by documents of the handover of rights and obligations toward entrusting customers to the replacing fund management company certified by the custodian bank, the old and new depository bank;

c) A list of employees and benefits of employees which have been resolved;

d) Written certification of tax agency regarding the fulfillment of tax obligations; certificate of returning stamp of the competent agency; original permit of establishment and operation of the company and the permits of amendment, supplementation.

7. Report records of the liquidation result is made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

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9. Members of Management Board or Council of members, supervisory board (if any), the Executive Board is responsible for the truthfulness and accuracy of the dissolution records of the company. In case dissolution records specified in Clauses 1 and 6 of this Article have incorrect information, forged documents, the above individuals must jointly pay the unpaid debts, the unpaid tax, and benefits of laborers unresolved and take personal responsibility before law for the consequences arising within three (03) years from the date of filing the statement of dissolution to the Commission State securities.

10. In the process of dissolution, the liquidation of contract, handover of the valid contracts to the replacing fund management company must comply with the following principles:

a) For securities investment consultancy: the fund management company liquidates the securities investment consulting contracts for a period of six (06) months from the date of approval of the dissolution;

b) For portfolio management:

- Within thirty (30) days from the date of receiving the written approval of the dissolution of the State Securities Commission, the fund management company shall have to return assets to the customers upon request in writing; stop purchase/sale of securities; stop withdrawal/deposit of customers’ money. Then close the balance of money and asset of each entrusting customer;

- No later than five (05) working days from the date of closing balance of entrusted assets, the fund management company must report to the State Securities Commission of the portfolio of each customer; notify and send portfolio account statement to each entrusting customer. The entrusted portfolio account statement of each entrusting customer must be certified by depository bank for the balance of cash and securities in the entrusted portfolio in the depository bank. Notice to entrusting customer must state the proposal of the replacing fund management company; guide the transfer of assets and handover of rights and responsibility toward customers to the replacing fund management company; or propose the liquidation of the portfolio; or return assets to the customers for self-management;

- From the date of closing balance of cash, securities of account of portfolio management, depository members do not make order of transaction, instruct the payment of the fund management company for the assets of customers, except for the liquidating transactions, transactions in order to execute the ownership of the customers or the transactions as required and instructed in writing by the customers;

After sixty (60) days from the date of receiving the written approval of the dissolution of the State Securities Commission, if the customers do not self-select a replacing fund management company or do not require liquidation of the portfolio, the dissolved fund management company can transfer the entire assets, money of customers to the entrusted portfolio depository accounts of the replacing fund management company selected by the company.

c) For fund management:

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- The handover of the rights and obligations with respect to fund, securities investment company to the replacing fund management company shall comply with the provisions of point b this Clause and Article 27 of this Circular.

d) The dissolved fund management company must compensate damages to customers in case of money, assets of customers to be lost in the process of dissolution of the company as stipulated in the fund charter, the charter of securities investment company, portfolio management contracts. In the absence of this provision, the customer has the rights as an unsecured creditor. Compensation level must be made according to the same rate as for other unsecured creditors;

đ) In the process of dissolution, fund management companies continue to perform the obligations to report the activity of portfolio management, fund management as prescribed in Article 32 of this Circular and the provisions of law on the establishment and management of securities investment funds, together with information on the progress of the liquidation of the contract, returning of the assets to each entrusting customer and the handover of rights and responsibilities to the replacing fund management company.

11. While the company is conducting dissolution procedures, individuals and organizations with related rights and interests have the right to apply to a competent court to request for opening bankruptcy proceedings against the company under the provisions of law on bankruptcy.

Article 22. Increase or decrease adjustment to the charter capital of fund management company

1. The increase of the charter capital of the fund management company shall comply with the law provisions on enterprises and ensure:

a) To comply with the regulations on offering, issuance of securities to the public; offering, individual issuance in the case of capital increase by the way of offering or issuance;

b) To have sufficient funds to carry out from undistributed after-tax profit on the latest financial statement audited or examined, and the latest quarterly financial statement in the case of capital increase by way of issuance of shares to pay dividends to current shareholders, issuance of shares under optional program to employees;

c) To have sufficient funds to carry out from: capital surplus, development and investment fund, undistributed after-tax profit and other funds (if any) are used to supplement charter capital as prescribed by the law on the latest financial statement audited or examined, and the latest quarterly financial statement in case of issuance of shares to raise capital from the equity capital;

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2. Before implementation of the capital increase, the fund management company must report to the State Securities Commission. Report records include:

a) A Notice of the increase of the charter capital of the fund management company;

b) Minute of the meeting and the resolutions of the general meeting of shareholders, Management Board or Council of members, or the owner of the company on the capital increase;

c) Capital increase plan, including information on the purpose of the capital increase, the capital increase form; scope of increased capital; capital source to perform; percentage of shares, value of contributed capital issued additionally or shares, value of shares issued for new partners to contribute capital; expected time of implementation;

d) List of shareholders, limited partners together with the relevant documents as prescribed at Point e, g, Clause 1, Article 5 of this Circular to ensure shareholders and contributing members to satisfy the provisions of point d, Clause 1 of this Article.

3. Records as provided for in Clause 2 of this Article is made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

4. Within (07) days from the date of receipt of complete and valid records according to provisions of Clause 2 of this Article, the State Securities Commission sends a written reply on the capital increase of the fund management company. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

5. Within seven (07) days from the date of completion of the capital increase, the fund management company sends to the State Securities Commission the report records of result of capital increase. Report records include:

a) An Application for amending permit of establishment and operation of the fund management company in the form prescribed in Appendix 05 attached herewith;

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c) Certificate of freezing capital in commercial bank as designated by the State Securities Commission (in the case of raising capital from shareholders, limited partners);

d) Report on the ownership structure of the company before and after the capital increase.

6. Records as provided for in Clause 5 of this Article is made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

7. Within (07) days from the date of receipt of complete and valid records according to provisions of Clause 5 of this Article, the State Securities Commission shall modify the permit of establishment and operation for the fund management company. The modified permit must be stated clearly the charter capital before the modification and the charter capital after the modification of contributed-actually or spent- actually capital.

8. Within six (06) months from the audited date of the annual financial statements, the fund management company must raise capital when equity capital falls below the legal capital to ensure equity capital shall not be lower than the legal capital.

9. In case of not meeting the provisions of Clause 8 of this Article, the fund management company may not raise capital to establish the funds, securities investment companies; increase charter capital for closed fund, the member fund, securities investment companies being managed; establish branches, representative offices, invest abroad, supplement professional skill.

10. Fund Management Company that is a joint stock company, limited liability company with two or more members is reduced charter capital through the form of acquisition of shares and the contributed capital from shareholders and members. Shares, the contributed capital of the shareholders, members after the acquisition to reduce its charter capital must be destroyed right after making the full payment to shareholders, limited partners. Conditions, order, procedures, records of acquisition of shares, contributed capital to reduce its charter capital shall comply with the provisions of Article 23 of this Circular and the relevant provisions of the law on the acquisition of treasury shares of the public company.

11. Within ten (10) days from the date of completion of the acquisition of shares, contributed capital to reduce its charter capital, the fund management company must send to the State Securities Commission the report records of the result of the acquisition of shares, contributed capital and propose amendments to the permit of establishment and operation. Report records include:

a) An Application for amending the permit of establishment and operation of the fund management company in the form prescribed in Appendix 05 attached herewith;

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12. Records in accordance with the provisions of Clause 11 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

13. Within (07) days from the date of receipt of complete and valid records according to provisions of Clause 11 of this Article, the State Securities Commission shall modify the permit of establishment and operation for the fund management company. The modified permit must be stated clearly the charter capital before the modification and the charter capital after the modification of contributed-actually or spent- actually capital. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reasons.

Article 23. Treasury shares

1. Fund management company organized in the form of shareholding company is acquired not more than 30% of the total number of common shares sold as treasury shares (hereinafter referred to as the purchase of treasury shares). Treasury shares are not entitled to receive dividends, in cash and shares; not entitled to priority in the batches of issuance of capital increase, including issuance of capital increase from equity capital; not entitled to voting.

2. Except acquisition of shares in accordance with the provisions of Article 90 of the Law on Enterprises; acquisition of fractional shares under the plan to issue shares to pay dividends, issue shares from equity capital, the purchase of treasury shares of the fund management company must meet the following conditions:

a) The decision adopted by the general meeting of shareholders in case of acquisition of more than 10% of the total common shares or more than 10% of the total number of dividends preferred shares issued; or decision adopted by the Management Board in case of acquisition of not more than 10% of the total number of common shares in every 12 months or not more than 10% of the total dividends preferred shares issued in every 12 months.

Where the fund management company is a public company, the purchase of treasury shares leading the number of treasury shares obtained from 25% or more of the total outstanding shares, implement the public purchasing offering in accordance securities law.

b) Based on the financial statement of latest period audited or examined in accordance with provisions, having enough capital to purchase treasury shares from the following sources: capital surplus or fund of investment and development or undistributed after-tax profit, or other sources of equity used to purchase treasury shares in accordance with the law provisions.

Where the fund management company is a parent company, the company must have sufficient capital under ownership and use of the parent company on the consolidated financial statement audited or examined in accordance with provisions;

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d) The rate of available capital after the purchase of treasury shares is obtained at least 180% or more and equity capital after the acquisition of treasury shares is not lower than the legal capital.

3. Fund management company must report to the State Securities Commission before making the purchase of treasury shares. Report records include the following documents:

a) Notification of purchase of treasury shares, which clearly states the purpose of the transaction, the execution time, the number of treasury shares and the expected rate of treasury shares acquired, made capital, defined principles price or exercise price;

b) Minutes of the meeting and the resolutions adopted by the general meeting of shareholders in case of acquisition of more than 10% of the total common shares or more than 10% of the total number of dividends preferred shares issued; or the one adopted by the Management Board in case of acquisition of not more than 10% of the total number of common shares in every 12 months or not more than 10% of the total dividends preferred shares issued in every 12 months.

c) The minute of the meeting and the resolution of the Board of Directors adopting the purchase plan of treasury shares.

4. Records in accordance with provisions of Clause 3 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

5. Within seven (07) days from the date of receipt of complete and valid records in accordance with provisions of Clause 3 of this Article, the State Securities Commission sends a written notice on the receipt of full report records of the purchase of treasury shares in accordance with the law provisions. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

6. Time limit for purchase of treasury shares must not exceed thirty (30) days. Fund management company may not change and must comply with treasury shares trading plan adopted by the general meeting of shareholders, the Management Board. Where it can not be implemented, it must consult opinions of the general meeting of shareholders, the Management Board. Within ten (10) days from the date of completion of the purchase of treasury shares, the fund management company notifies the State Securities Commission the trading results, together with a list of shareholders selling shares to the company, the number of shares sold in the form prescribed in Appendix 13 attached herewith and reports the financial safety norms after the purchase of treasury shares.

7. Where the fund management company is a public company, it must also comply with other relevant provisions of law on the disclosure of information, the purchase of treasury shares.

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a) Being had overdue debt based on the latest period financial statement, audited or examined;

b) Being in the process of selling offering of shares to raise additional capital;

c) Companys shares are subject to public purchasing offering;

d) Having made the purchase of treasury shares within six (06) months, except as follows: acquisition of shares in accordance with Article 90 of the Law on Enterprises, acquisition of fractional shares under the plan of issuing shares to pay dividends, to issue shares from equity capital;

đ) Purchase of treasury shares and the sale of treasury shares in the same batch;

e) Failure to meet those specified at Point d, Clause 2 of this Article, or in a state of alert in accordance with the provisions of law on financial safety norms.

9. Unless the acquisition is done according to the percentage of ownership of each shareholder or where the company makes the public purchasing offering over the shares issued, the company may not purchase treasury shares from the following subjects:

a) Members of the Management Board, supervisory board (if any), the Executive Board and the concerned people;

b) People who own shares to be restricted transfer in accordance with the law provisions and the charter of the fund management company;

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The provisions of points a and c of this Clause do not apply to the case that the fund management companies whose shares are listed or registered for trading on the Stock Exchange acquire shares by matching method.

10. Fund management company may purchase treasury shares if they meet the following conditions:

a) Treasury shares is sold only after six (06) months from the date of ending the batch of the latest purchase of treasury shares, except for treasury shares are sold or used as bonus shares to employees of the company;

b) Having decision adopted the plan of sale by the Management Board, which clearly states the execution time, the principle of determining value;

c) In case of sale of treasury shares in the form of offering of securities to the public, the fund management company shall comply with the provisions of the law on offering of securities to the public. In case of sale of treasury shares having preference to the subjects defined in points a and c of Clause 9 of this Article, it must be adopted by the general meeting of shareholders, the above subjects may not participate in the voting.

11. The use of treasury shares to distribute dividends to existing shareholders and bonuses for employees must be adopted by the general meeting of shareholders and the fund management company must ensure to have adequate counterpart funds from the equity capital based on the latest period financial statement audited or examined from the following sources:

a) Capital surplus;

b) Development and investment fund;

c) Undistributed after-tax profit;

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Where the fund management company is the parent company, the company must ensure to have sufficient capital under its ownership and use on the consolidated financial statement audited.

12. The order and procedures for reporting the sale of treasury shares, use of the treasury shares to distribute dividends to existing shareholders and bonuses for employees shall comply with the provisions of Clauses 3, 4, 5, 6 of this Article.

Chapter III

OPERATION OF FUND MANAGEMENT COMPANY

Section 1. GENERAL PROVISIONS

Article 24. General provisions on the responsibilities and obligations of fund management company

1. To comply with the provisions of law and the charter of the fund management company. Implement the entrusted asset management as stipulated in the fund charter, the charter of securities investment company, investment management contract; to comply with the rules of professional ethics, voluntariness, fairness, honesty and for entrusting customers’ sack of the best interests.

2. Fund Management Company is the authorized representative of entrusting customer, on behalf of the entrusting customer to execute the ownership toward the assets of entrusting customers in an honest and careful manner.

3. Except for open fund, the fund management company is entitled to award fee in accordance with the provisions of the fund charter, charter of securities investment company, investment management contract. An award fee is ensured in compliance with the following principles:

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b) It must be calculated deduction, or not be paid if the investment activities in the preceding years are lost and this loss is not compensated.

4. When managing entrusted assets, the fund management company must:

a) Sign custodian or depository contract with a depository bank for member fund, individual securities investment company, entrusted portfolio; sign custodian contract with the custodian bank for public fund, public securities investment company; make depository for all assets arising in the territory of Vietnam and store full, timely and accurate information on data of ownership, the original legal documents verifying the ownership of property in a depository bank, custodian bank;

In case of investing deposit to the entrusting customers, fund management companies are only deposited in the banks in the list approved by the entrusting customers; store the original or valid copy of the contract of deposit, loan contract in the depository bank, custodian bank for the institution to periodically cross-check with the bank of deposit;

In case of investment or capital contribution; trading assets, shares, unlisted shares for entrusting customers; the fund management companies must store the original contracts, the permit of establishment and operation or business registration certificate (if any), the book of shareholders or documents certifying the ownership of assets in the depository bank, custodian bank for the institution to periodically cross-check with the organizations receiving investment capital;

b) Develop a information system to manage entrusting customers’ accounts in the company to ensure the principle of management of independence and separation of assets to each entrusting customer, separation of entrusted assets and assets of the company; adequate and timely storage of accounting books, transaction documents and other documents related to transactions and ownership of entrusting customers’ assets; sum up fully, accurately and timely information on each entrusting customer’ s assets and place for depository, storage of assets;

c) Establish a mechanism of examination, regular crosscheck of three parties to ensure the consistency of data of entrusted assets on the system of accounts of entrusting customers managed in the company, the depository system of assets of entrusting customers in the depository bank, custodian bank with the issuers, the Securities Depository Center, the organization managing the registrars of shareholders, project owners, organizations receiving investment capital, banks of deposit. The fund management companies shall establish a mechanism for the depository bank, custodian bank to actively, directly cross-check with the above organizations to inspect, monitor, sum up fully and accurately information of depository, property registration and management of entrusted assets.

d) Invest entrusted assets in accordance with the provisions of law, the provisions in the charter of fund, charter of securities investment company and investment management contracts;

e) Assign at least two (02) fund managers to manage each fund, each securities investment company. The fund managers mentioned above must have practical experience in the asset management activities for at least two (02) years and have not been sanctioned for administrative violations in the field of securities and securities markets. Information on qualifications and professional skill, experience managing assets of the fund managers must be disclosed in the prospectus.

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a) Prioritize the allocation of transacted assets for entrusting customers. The allocation of assets between the entrusting customers must be fair according to the asset allocation process consistently applied by the company. Asset allocation process must clearly state the principles of performance, valuation method, volume of assets allocated to each customer, to ensure compatibility with the investment objectives, level of risk acceptance or the other criteria in accordance with the internal regulations of the company and informed the entrusting customers. Where the assets are bought or sold at different prices, the fund management companies must use the weighted average price to allocate asset;

b) The asset allocation for the company itself is made only after fully meeting the orders of asset transaction for the entrusting customers. Where the fund management company knows internal information, or knows that the orders of entrusted asset transaction may create a major influence on the price of an asset, the fund management company may not make transaction of the same type of such asset or disclose to a third party of such asset transaction;

c) The distribution of asset must be informed to the depository bank, custodian bank to carry out right in the day of the transaction.

6. In the fund management, fund management companies are responsible for ensuring:

a) To determine the net asset value of the portfolio of entrusting customers; the net asset value on a fund certificate, shares of securities investment company under the provisions of the law, charter of fund, charter of securities investment company, investment management contracts;

b) To make, store and update timely, completely and accurately the registrars of investors, shareholders. Contents of the registrars of investors, shareholders shall comply with the relevant provisions of the law on the establishment and management of securities investment funds, the provisions on the establishment, organization and operation of the securities investment companies.

7. The fund management companies are authorized the fund management activities. The authorization for the activities shall comply with the provisions of Article 26 of this Circular and the provisions of the fund charter, the charter of the securities investment companies.

8. Fund management companies are obliged to provide timely, completely the necessary information on entrusting customers, information on entrusted asset transactions, information on the place to make depository of entrusted assets, other concerned information (if any) and create all the necessary convenient conditions for the depository bank, custodian bank at the request in writing of these organizations to fulfill the rights and responsibilities to their entrusting customers in accordance with the law provisions. At least once a (01) month, the fund management company is obliged to compare the list of assets of each entrusting customer with the depository bank, custodian bank.

9. Within fifteen (15) days from the date that the custodian bank detects and informs the fund management company on entrusted asset transactions contrary to the provisions or exceeding the competence of the fund management company in accordance with law provisions, provisions in the charter of fund, charter of securities investment company, investment management contract, the fund management company must cancel the transactions, or perform the transactions in order to restore the position for the entrusting customers. The fund management company shall bear all costs incurred related to the transactions and the losses (if any). In case the transactions generate profit, all profits have to be accounted for entrusting customers.

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11. The fund management companies must build the processes and establish organizational structure, risk management system in accordance with the company's scale of operation, types of funds, securities investment companies and customers which they are managing. Risk management system should be based on the policy, risk management process built according to international practice in accordance with market conditions in Vietnam to ensure a full identification, to determine a potential scale of risk in the company's activities, potential risk in the professional processes, the company's system, potential risk in the portfolio of each entrusting customer. Depending on the type of risk and level of complexity of invested assets and requirements of entrusting customers, the companies must give an appropriate level of risk. Details of the process and the risk management system shall comply with the additional guidance of the State Securities Commission.

12. Fund management companies are responsible for compensation for the losses caused to the entrusting customers due to the employee's fault, malfunction or error of technical system and professional process of the companies or because the fund management companies fail to comply with its obligations under the provisions of law, the provisions of the charter of fund, charter of securities investment company and investment management contract. The compensation for the opened fund, opened fund investors shall comply with the provisions of the law on the establishment and management of opened fund and the agreement between the concerned parties. The compensation for the closed fund, the member fund, securities investment companies, other entrusting customers comply with the agreement between the two concerned parties.

13. The fund management companies must purchase professional liability insurance for their professional staffs (when necessary), or set up a risk reserve fund as prescribed by law to compensate for entrusting customers in the cases specified in Clause 12 of this Article.

14. The fund management companies shall conduct; require the dealers, organizations providing related services to set up a system and organize the implementation of processes to synthesize information, identify customers accordance with the provisions of law on anti-money laundering and the provisions of the law on brokerage and securities transactions.

15. The fund management companies must ensure the investment of assets of entrusting customers as individuals, foreign organizations to comply with the regulations of law on foreign exchange management, ownership percentage in the Vietnamese Enterprises at the time of investment.

16. The use of entrusted assets mobilized in Vietnam to invest in securities issued by the foreign institutions, issuers subject to foreign law, securities issued in foreign countries and the other assets abroad must comply with the provisions of the law on investment abroad, foreign exchange management and the provisions of relevant law. This investment is made only if the charter of fund, charter of securities investment company, investment management contract has terms and conditions to allow implementation. Before the implementation, the fund management companies must be approved in writting by general meeting of investors, general meeting of members, the general meeting of shareholders of securities investment company, entrusting customers or entrusting customers’ representatives and the competent state management authorities.

17. When making transactions of assets for entrusting customers, fund management companies ensure that:

a) For the organizations to be public funds, public securities investment company:

- The volume or value of the transactions during the year through a securities company shall not exceed 50% of the total volume or value of transactions in the year of the organization; and

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b) For other entrusting customers, the fund management companies must comply with the provisions of point a of this Clause, unless the company has provided full information on the benefits of the fund management company with related securities company and entrusting customers to have written consent to waive the application of the above provisions.

18. The fund management companies are responsible for keeping secret of information of customer, information on asset transactions, customers’ portfolio and other relevant information, except for providing information to the Commission State Security and the competent State management agencies on demand.

19. The fund management companies must:

a) Separate their headquarters, information technology infrastructure with the other economic organizations. Where the companies use information technology infrastructure of their parent companies, subsidiaries or organizations who are the concerned one, it must use the mechanism of decentralization and restriction of use to make sure that the departments of the parent companies, subsidiaries or organizations who are the concerned one can not access to the computer system, database of the company;

b) Separate database between the professional departments of potential conflicts of interest in the company, including the separation between the entrusted assets management department; department of research, investment analysis and the investment implementing department. Computer system and databases are decentralized to each individual, department, consistent with the working position in accordance with the provisions on internal control.

20. In business, fund management companies must ensure:

a) Working capital for financial investment activities must be from equity capital, not a loan in any form;

b) Do not loan, or transfer the company's capital to relevant persons and other organizations and individuals in any form, except for deposit at the credit institutions in accordance with the banking law, investment in bonds issued under the provisions of law;

c) Economic contracts and transactions (if any) between the company and shareholders, limited partners from 35% of charter capital or more, members of the Management Board or Council of members, members of the Executive Board, members of the Supervisory Board, staffs of the internal audit department; related persons of the above subjects; are made only after there are number of shareholders, limited partners representing 65% or more of total remaining number of votes agree or owner agrees in writing;

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đ) Within thirty (30) days from the date of completion of investment in the subsidiaries, joint ventures, associated companies, fund management company shall inform the State securities Commission of this portfolio in the form prescribed in Appendix 22 attached herewith;

e) Do not contribute capital to establish or purchase shares or capital contribution in other fund management companies, securities companies in Vietnam, except for the following cases:

- Consolidation or merger; or

- Buy to own or together with related persons own not more than 5% of the outstanding shares of the fund management companies, securities companies registered transactions, listed on the stock exchange.

21. When managing investment capital of securities investment companies, fund management companies must ensure:

a) To be subject to the supervision of the general meeting of shareholders, Management Board of securities investment company, custodian bank and take responsibility before the shareholders' general meeting, Management Board of securities investment company on the implementation of the rights and duties assigned, the provisions in the charter of securities investment company, investment management contracts;

b) To set up a system, build a process and implement the risk management in accordance with the investment policy and type of investment asset and report to the General meeting of shareholders and Management Board on the risk management;

c) To make investment decisions, withdraw the daily investment capital of securities investment company that do not need to have a decision of the Management Board of securities investment company, shareholders' general meeting of securities investment company under the provisions of the charter of the securities investment company and investment management contract;

d) To implement the investment policies, decisions of the general meeting of shareholders, Management Board of securities investment company in accordance with provisions of the charter of securities investment company; to carry out asset transactions within the limit of investment, type of assets permitted investment, transaction volume and transaction objects (if any) specified in the charter of the securities investment company, the investment management contract;

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e) To sign the contracts in the name of securities investment company under the competence specified in the charter of the securities investment company and investment management contract;

g) To exercise the other powers and duties as prescribed by law, the charter of the securities investment company, investment management contract and the decision of the general meeting of shareholders, the Management Board of the securities investment company.

22. In the activity of ownership report, information disclosure on stock market transactions, the fund management company is responsible for:

a) The fund management company, along with the entrusting customers comply with the provisions of the law on ownership report and information disclosure on the stock market applicable to related persons, those who know internal information;

b) Obligation of ownership report, disclosure of information arising from the time:

- Number of shares own by the fund management company (if any) and the entrusting customers (if any) obtained 5% or more of the total number of outstanding shares of an issuer, or

- Fund management company (if any) is the one who knows internal information under the provisions of the securities law;

c) The contents of the ownership report, disclosure of information, information disclosure method shall comply with the provisions of the law on disclosure of information on the stock market;

d) Performing other duties on ownership report and disclosure of information under the provisions of the law on disclosure of information in the stock market. Where customers entrusting portfolio take the ownership name for entrusted assets, the customers are responsible for the obligations of ownership report, disclosure of information under the provisions of law.

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Article 25. Restrictions on the activities of the fund management company and the fund management company's staffs

1. Fund management company may not raise and manage member fund from thirty-one (31) or more limited partners.

2. Fund management company may not be a related person of the custodian bank, depository bank of the fund, securities investment company that the company is managing. Members of the Management Board, or Council of Members, internal audit department’s staffs, supervisory board (if any), the president of the company, the Executive Board and employees of the fund management company may not work in the departments providing services of depository, supervision, fund management at these banks, and vice versa.

3. The related persons of fund management company are traded public fund certificates, shares of securities investment company that the company is managing only when the fund charter, charter of securities investment company provided for allowing to do transactions. Unless the transaction is in the public purchasing offerring or in the selling offerring, issuance to the public, these transactions are carried out through the trading system at the Stock Exchange (for the closed fund, the public securities investment companies, real estate investment funds), or by the methods specified in the regulations of the fund charter, prospectus (for opened fund).

4. Fund management companies, parent companies, subsidiaries, joint ventures, associated companies, Members of the Management Board, or Council of Members, supervisory board (if any), the Executive Board and employees of the company are purchased the assets in the entrusted asset portfolio or sold to the portfolio of entrusting customers that the company is managing according to the following principles:

a) Transactions by matching method focused on implementation through trading system in the Stock Exchange;

b) In case of being an agreement transaction or traded assets are not securities listed or registered for trading on the Stock Exchange, it must be approved in writing by the entrusting customers or representatives of the entrusting customers to allow conducting transactions. It must be shown the approval of the type traded assets, the method of determining the price, fees, partners or criteria for determining trading partners, the time to implement the transaction, the other conditions (if any).

5. All securities transactions made by members of the Executive Board, employees of the fund management company must be reported to the internal control department before and after the transaction. Report on individual transactions must include information on the type (code) of securities, the quantity and value of transactions, total transaction value, the time to implement the transaction, method of implementation, number of transaction account, Securities company where the transaction accounts are opened. Report on individual transactions must be stored and centrally managed at the department of internal control and provide for the State Securities Commission upon request.

6. Members of the Management Board or Council of members, Executive Board and employees of the fund management company are not allowed to request, require or receive, in the name of the individual or in the name of the company, any remuneration, profits or benefits, in addition to the fees and charges clearly stated in the fund charter, the charter of the securities investment company, investment management contract.

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a) They shall not use the assets of the fund, securities investment company to invest in the other fund, securities investment company managed by them;

b) They shall not use entrusted assets to invest in public funds, other public securities investment companies managed by them, or vice versa. This provision shall not apply in the case entrusting customers are foreign individuals, organizations with 100% foreign capital and have agreed to allow the implementation of the above transactions;

c) They shall not use assets of public funds, public securities investment companies to invest in the fund management company itself; shall not invest in the organizations as related persons of the fund management company; shall not invest in the organizations that the members of the Management Board or Council of members, members of the Executive Board, and employees of the company are shareholders or members holding more than ten percent (10%) of the charter capital;

Fund management company may use capital of the member funds, individual securities investment company, assets of the entrusting investors in the portfolio management to invest in the organizations mentioned above in the case the fund charter, the charter of the individual securities investment company, investment management contract, agreement of capital contribution provides for allowing the fund management company to make the investment with appropriate management fee;

d) They shall not use entrusting assets to lend under any form, guarantee for the loans in any form or make payment for the debt obligations of the fund management company, the concerned persons of the fund management company, other organizations and individuals;

This provision shall not apply in the case of lending in the form of investment of deposits in the credit institutions in accordance with the provisions of banking law, or purchase of bonds issued, bond transactions in accordance with the provisions of law; entrusting customers to be foreign individuals, organizations with 100% foreign capital and have agreed to allow the implementation of the above transactions;

đ) They shall not commit, ensure investment results except for the investments in products with fixed-income; shall not sign the contracts receiving entrustment to invest in bonds with an interest rate not consistent with market and investment analysis result of the company itself; directly or indirectly to offset a part or all of the losses of entrusting customers caused by investment activities; shall not perform the transactions to reduce the profits of an entrusting customer to increase the profit of another entrusting customer; shall not enter into a contract, make transaction with the illegitimate, unreasonable disadvantage terms.

8. Except as a result of consolidation or merger of the issuer, the fund management company is used equity capital and capital of entrusting customers only for purchasing and owning (excluding shares in the porfolio of entrusting customers as porfolio swap fund) more than twenty-five percent (25%) of the total number of outstanding shares of a public company if meeting the following conditions:

a) To be approved in writing of the entrusting customers or representatives of the entrusting customers of the public purchasing offering, the purchasing offering price, the volume of assets expected for purchasing offering, method to distribute assets after making the purchasing offering;

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9. Fund management company is not authorized, outsourced the organizations in the territory of Vietnam to provide securities investment consultancy service, entrusted asset management service.

Article 26. Authorization for operation

1. Other than the function as authorized representative of entrusting customers, the fund management companies may:

a) authorize the depository bank, securities depository center to implement the activities of fund management, transfer agent in accordance with the law on the establishment and management of securities investment funds; determine net asset value; manage registrars of the investors, shareholders of securities investment company; exercise voting right and ownership right of entrusting customers; authorize dealer to supply public fund distribution service;

b) authorize the foreign organizations to provide services of consultancy, management and custody of fund's asset portfolio, the securities investment companies are invested abroad in accordance with the provisions of law.

2. The authorization specified in Clause 1 of this Article must ensure:

a) The authorization and principles of the authorization must be specified in the charter of fund, charter of securities investment company, investment management contract; basic information of the party receiving authorization, scope of operation, functions and duties of the parties receiving authorization must be published in the prospectus, provided for the entrusting customers. General meeting of the fund's investors, shareholders' general meeting of securities investment company, entrusting customers have the right to request the fund management company to change the organization receiving authorization if necessary;

b) The party receiving authorization must have sufficient capacity, system, personnel and experience. For the authorization provided for at Point b, Clause 1 of this Article, the overseas party receiving authorization must register its opreration or is licensed for activity receiving authorization and subject to supervision by supervision management agency of financial services in the home country;

c) The department providing service of the party receiving authorization must separate from the remaining parts of the party receiving authorization for personnel organization, professional process system, system of report and approval of the report;

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đ) The authorization for operation and the party receiving authorization under the provisions of point a Clause 1 of this Article must be clearly stated in the charter of fund, charter of securities investment company and announced in the prospectus. The authorization for operation and the party receiving authorization under the provisions of point b Clause 1 of this Article must be approved in writing by the general meeting of investors, the general meeting of shareholders of securities investment company, entrusting customers.

3. For the activities authorized, the fund management company is responsible for:

a) Before signing contract to use service of the party receiving authorization, the fund management company must appraise and make record to evaluate the capacity and material facilities to ensure the party receiving authorization to be equipped material facilities, technical solution, system security, backup system for disaster, backup system for hot, professional process, internal control system, risk management, human resources having experience and appropriate professional qualification to carry out the authorized activities;

b) Regular inspection and supervision to ensure the activities authorized to be carried out carefully, safely, consistent with the provisions of law, the provisions in the charter of fund, charter of securities investment company, investment management contract to ensure the quality of service provided in accordance with the criteria and requirements of the company and the entrusting customers (if any). The fund management company is used independent consultant, services provided by the professional organizations, other legal activities to carry out the responsibilities specified in this point;

c) Maintaining personnel having the experience, expertise, appropriate professional skill to monitor, identify and effectively manage risks arising from the activities authorized;

d) Setting up a system, building a process to ensure at all times, the fund management company, independent audit organization, the State Securities Commission may access to the necessary information to inspect, supervise authorizations, assess and manage the risks arising from the authorizations;

đ) The authorization shall not reduce or change the responsibilities of the fund management companies for entrusting customers. The fund management companies must take full financial and legal responsibility arising from the authorization, except for legal obligations, the fees that the customers directly agree, make payment to the party receiving authorization on the basis of investment management contract, supervision contract, depository contract, the provisions of the fund charter, the charter of the securities investment company and in accordance with the provisions of relevant laws. The fund management company must ensure the continuity for the activities authorized, do not interrupt and affect the investment and services to provide for entrusting customers;

e) Providing adequately, timely and accurately the related information to the party receiving authorization for such party to be able to fully, timely implement all the rights, obligations and responsibilities of the authorization;

g) Archiving fully, timely and accurately the instructions, requirements, documents sent to the party receiving authorization to carry out the authorization; authorization contract includes the minimum contents in the form prescribed in Appendix No.21 issued together with this Circular together with a record of evaluating the capacity and material facilities. These documents must be provided to the State Securities Commission as required;

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4. At least once a year, the fund management company shall make a report evaluating the service quality of the authorization with the following contents:

a) Expenses payable to the party receiving authorization compared with total operating expenses, profits and income of the fund, the securities investment company and entrusted porfolio;

b) The total cost payable to each party receiving authorization, including costs for the authorization and expenses payable to the other services provided by the party receiving authorization; percentage of the total costs payable to each party receiving authorization compared with the total costs of doing business in the year of the fund management company;

c) The types of risks, the level of risk from the authorization for entrusted assets and the measures to prevent and manage the above risks;

d) Evaluation of the ability to maintain equipment, material facilities, technical solutions, system security, backup system for disaster, backup system for hot, professional process, internal control system, risk management, human resources having experience and appropriate professional qualification to ensure the authorization to be carried out smoothly, not affecting the investment activities and services to provide for entrusting customers.

5. The reports of the examination, monitoring implemented according to the provisions at Point b, Clause 3 of this Article, service quality assessment report of the authorization provided for in Clause 4 of this Article and other relevant documents must be provided for the Management Board or Council of members or owner of the fund management company, the fund representative board, the Management Board of securities investment company, concerned custodian bank and the State Securities Commission within thirty (30) days from the date of the report to be summarized.

Article 27. Termination of the rights and obligations for entrusting customers and replacement of the fund management company

1. The fund management companies terminate their rights and obligations for entrusting customers in the following cases:

a) Voluntary termination of their rights and obligations for entrusting customers under the provisions of the fund charter, the charter of the securities investment company, investment management contracts;

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c) Permit of establishment and operation to be revoked according to the provisions of Article 70 of the Law on Securities;

d) Consolidation or merger with another fund management company;

đ) Funds, securities investment companies, expiration of operation duration, of investment management contract.

2. Fund management company must organize the general meeting of investors, general meeting of shareholders of securities investment company, entrusting customers to consult on the plan to handle assets and replacing fund management company in cases specified at Point a, c, d, Clause 1 of this Article.

3. Within fifteen (15) days from the date that entrusting customers ratify the decision on replacing the fund management company, replacing fund management company is obliged to send to the State Securities Commission the following documents:

a) A written request for termination of the rights and obligations toward entrusting customers and replacement of the fund management company, signed by the legal representatives of both the fund management companies;

b) Record of the meeting and the resolutions of the general meeting of investors, the general meeting of shareholders of securities investment company, the contract in principle of termination of the rights and obligations with respect to entrusting customers, the contract in principle signed between entrusting customers and replacing fund management company;

c) Plan for dealing with assets and process to transfer obligations;

d) The contract in principle of supervision, custody and other contract to provide service (if any);

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4. Records in accordance with provisions of Clause 3 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

5. Within fifteen (15) days from the date of receipt of complete, valid records as specified in Clause 3 of this Article, the State Securities Commission shall approve the change of fund management companies.

6. Within three (03) days from the date of being approved by the State Securities Commission, the replacing fund management companies have to disclose information of receiving handover of management of entrusted assets on electronic information page of the fund management company and the supervisory, custodian bank.

7. Rights and obligations toward entrusting customers of replaced fund management company replaced are terminated only from the time of completion of the registration and transfer of ownership to the entrusted assets, handover of all assets and documents to prove ownership, vouchers, books and information on the entrusted assets, entrusting customers to the replacing fund management company. The transfer of assets must be completed within six (06) months from the date of receipt of written approval of the State Securities Commission under the provisions of Clause 5 of this Article. The termination of the rights and obligations of the fund management company for customers entrusting portfolio management shall comply with the provisions of point b Clause 10, Article 21 of this Circular.

8. Within seven (07) days from the date of completion of the handover, the replacing fund management company sends to the State Securities Commission a handover record of responsibilities and assets between both fund management companies. The record must be certified by entrusting customers, entrusting customers’ representatives and the depository bank, custodian bank.

9. The replaced fund management company must take entirely responsibility for the liabilities and assets toward entrusting customers that have not been handed fully to the replacing fund management company. In this case, the replaced fund management company shall resolve and overcome the consequences arising within three (03) years from the completion of the transfer of assets to the replacing management company as provided for in Clause 8 of this Article.

10. Entrusting customers shall bear all costs related to the replacement of the fund management company in the cases specified at Point b, Clause 1 of this Article. Other cases shall follow an agreement between two parties.

Section 2. FUND MANAGEMENT PROFESSION

Article 28. Establishment, dissolution of fund under foreign law

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2. Within thirty (30) days from the date of completion of the registration of the establishment, dissolution of fund with the foreign competent management authorities, the fund management companies notify the State Securities Commission and enclose the following documents:

a) A valid copy of offering certificate of fund certificates, written registration for establishment of fund under foreign law or equivalent documents; or documents certifying the dissolution of fund issued by the foreign competent authorities;

b) A valid copy of registration documents for the establishment of the fund, the fund dissolution is submitted at the request of the foreign competent management authority, including minutes of the meetings and resolutions of the general meeting of investors or the representative board of the fund or equivalent organization of the fund for the liquidation or dissolution of the fund.

3. The fund established abroad by fund management company when participating in invest in Vietnam must comply with the relevant regulations applicable to foreign investors. The selling offering of fund certificate established abroad in Vietnam must comply with the regulations of the selling offering of securities of foreign issuers in Vietnam.

Article 29. Establishment of fund, fund management under Vietnamese law

1. Fund management companies may raise capital domestically and abroad to establish the types of securities investment funds, including the securities investment companies as prescribed by securities law.

2. Fund management companies are established, managed real estate investment funds when having at least two (02) employees meeting the following conditions:

a) The provisions of Point a, b Clause 5, Article 9 of this Circular;

b) Having a certificate of real estate valuation in accordance with the provisions of law on real estate business and having at least two (02) years of experience in real estate valuation in the real estate business organizations, the real estate service business organizations, price valuation enterprises; or

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3. The establishment, order, procedures, records and management operation of types of securities investment funds shall comply with the law on the establishment and management of securities investment funds.

Section 3. PORTFOLIO MANAGEMENT PROFESSION

Article 30. Portfolio management and investment management contracts

1. The fund management company providing portfolio management services to entrusting customers based on investment management contracts signed with customers. Where entrusting customer is an organization, investment management contract must be signed by the legal representative of the customer, or an authorized representative enclosed with written authorization made in accordance with the law provisions.

2. Investment management contract must be archived at the office of the company and provided to the State Securities Commission upon request. Investment management contract must include the basic contents as prescribed in Appendix 06 attached herewith and shall ensure:

a) There are no provisions to facilitate the fund management company to be able to avoid liability of compensating customers, in case of fault of the company or by the intentional mistake of the Company;

b) There are no provisions to limit the scope of compensation, the financial responsibility of the company toward customers without legitimate reason; or transfer the risk to the customers in case of fault of the company or by the intentional mistake of the Company;

c) There are no provisions of unfair treatment to customers.

3. The use of capital of entrusting customers for investment must ensure:

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b) In case the investment management contracts contain provisions allowing the performance, the fund management company is used capital of entrusting customers to contribute capital to establish, purchase contributed capital, shares in the unlisted companies, register transactions; invest in the projects, real estate and other assets not securities listed, registered transactions; corporate bonds issued individually in accordance with the provisions of law; implement repurchase transactions (repo) for assets other than government bonds. The investment in the assets mentioned above and implementation of the transactions provided for in this point must fully comply with the following principles:

- For investment activities, assets must be registered ownership in the name of entrusting customers, unless the entrusting customers otherwise request in writing.

Where the fund management companies are required to take the name as the owners of the assets on behalf of the entrusting customers, before the transactions are made, the fund management companies must be approved in writing by the customers to allow implementing the transactions and report to the customers after the transaction have been completed.

- For repurchase transactions (repo) of assets not being government bonds, the entrusting customers must take the name as the transactors, not authorized to the fund management company. Payment vouchers, assets traded, the original contract and the legal documents to confirm ownership of assets must be deposited and sent fully in the depository bank selected by the entrusting customers;

c) In case the fund management companies are required to take the name of the owners of the assets on behalf of entrusting customers in the portfolio management activities for entrusting customers who are insurance companies, financial institutions, securities companies, public companies; the fund management companies are responsible for requiring entrusting customers to state clearly limited investment in writing and take responsibility before law for the type of invested assets, volume of invested assets, investment value, form of implementation, to ensure compliance with the regulations on financial safety, capital safety and other provisions of specialized laws, the provisions of the law on securities and provisions of charter of the companies of entrusting customers, particularly in the following activities:

- Investing in the entrusting customer itself. In case of investing in shares issued by the entrusting customers, it must comply with the provisions of law relating to treasury stock transactions;

- Investing in parent companies, subsidiaries, joint ventures, associated companies and other organizations who are related persons of the entrusting customers; the organizations who are related persons of the members of the Management Board or Council of members or presidents of entrusting customers’ companies;

- Investing in real estate, the investment projects developed, managed by entrusting customers, the parent companies, subsidiaries, joint ventures, associated companies of entrusting customers, or the organizations who are related persons of the members of the Management Board or Council of members or presidents of entrusting customers’ companies;

- The entrusting customers must make notice, report, disclose information or obtain the approval of the competent State management agencies on the transactions and investment activities mentioned above in accordance with the provisions of specialized law (if specified); obtain the approval of the general meeting of shareholders, Council of members, Management Board on the transactions, investment activities mentioned above to suit to charter of entrusting customers’ companies (if specified);

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đ) In case entrusting customers as foreign individuals, organizations with 100% foreign capital, the fund management companies are made the investment in, financing for the enterprises as designated or according to the terms and conditions in the investment management contract in accordance with the provisions of relevant law.

Article 31. Investment Policy

1. The fund management companies are responsible for information synthesis to identify customers, including information on the beneficiaries (if any); financial capacity, investment experience, investment period, investment objectives, the acceptable level of risk, limited investment, portfolio sample and other requirements (if any) of the customers; necessary information related to the limited investment specified in Clause 3, Article 30 of this Circular.

2. Quarterly, the fund management companies are responsible for updating the entrusting customer identification information in accordance with provisions in Clause 1 of this Article. When the change is arisen, the entrusting customers are obliged to provide full and timely information related to for the fund management companies. The fund management companies have the right to refuse to provide portfolio management services to the customers in case the entrusting customers do not provide full and timely information as required.

3. The fund management companies are responsible for building principles and investment policy in accordance with customers’ demand based on sysnthesized information specified in Clause 1 of this Article. The investment policy should be clear, detailed, fully shown the basic information on the level of risk, types of risk, structure of portfolio sample, cost for management, rights and responsibilities of the parties and other concerned important information. Investment policy is an integral part of the investment management contract.

4. Where the fund management companies do not comply with the investment policy stipulated in the investment management contract, the companies must readjust the portfolio in a shortest period of time, bear all costs incurred related to this transaction, are not collected management fee for the portfolio not consistent with the investment policy.

5. Any loss or profit arising from investment activities not complying with the investment policy, investment objective, or the portfolio not in accordance with the investment policy, portfolio structure that has been determined with customers or other errors of the fund management company, the fund management company shall pay compensation to investors in accordance with the agreement in writing between the parties or account any profit arising in the porfolio of the customers right after completion of the portfolio adjustment.

6. Those specified in Clauses 4 and 5 of this Article shall not apply in the case the portfolio structure is erroneous due to:

a) Change of price in the market of the assets in the portfolio of customers;

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c) Operation of consolidation, merger, acquisition of the issuers;

d) During a period of six (06) months from the effective date of the investment management contract.

Article 32. Implementation of investment

1. The fund management companies must ensure that customers have enough money and assets to carry out the transactions in accordance with the law provisions.

2. The fund management companies are made the transactions of assets between the portfolios of the entrusting customers according to the following provisions:

a) For assets traded that are not securities listed or registered for trading on the Stock Exchanges in Vietnam, the transaction must be approved in writing by the parties to the transaction. The written approval must include price, volume of the transaction, time to implement the transaction;

b) For assets traded that are securities listed or registered for trading on the Stock Exchanges:

- The transactions must be approved in advance in writting by the parties to the transaction or notified later to the concerned parties in accordance with the provisions of the contract; and,

- Purchase price (sale) shall not be higher (lower) than the closing rate at the date of the transaction; or the transaction price determined by the fund management company within the margin of trading price at the date of the transaction in accordance with provisions of the contract.

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a) Directive of the investment of entrusting customer must be in writing and must specify the type of assets invested or the organizations receiving investment capital, value of investment capital or amount of invested assets, time and duration to perform, the name of the person who registered as owner of the assets invested;

b) Where the fund management company is required to take name as the owner on behalf of the entrusting customer:

- The fund management companies are responsible for requiring entrusting customers to provide sufficient information to ensure the entrusting customers and trading partners, organizations receiving investment capital to meet fully the conditions for transactions to be performed under the provisions of Clause 3 of Article 30 of this Circular and in accordance with the provisions of specialized law governing the operation of entrusting customers, organizations receiving investment capital and other laws (if relevant);

- In case of investing in securities of public companies, entrusting customers are responsible for implementing by their own, or the written authorization to require the fund management companies to report ownership, disclose information before and after the transaction in accordance with provisions of securities law applicable to the persons who know internal information (in the case entrusting customers are the ones who know internal information under the provisions of the securities law) and to major shareholders (in the case entrusting customers are the major shareholders, the fund's major investors in accordance with the provisions of securities law, including the number of shares owned by customers as shares registered in the ownership name of entrusting customers and the number of shares designated by entrusting customers for the fund management companies making investment in to take the ownership name as the owner on behalf of the customers).

Article 33. Depository, asset management of porfolio entrusting customers

1. In the portfolio management, fund management companies are opened depository accounts in the name of fund management companies in several depository banks to deposit entrusted assets according to the following principles:

a) At each depository bank, fund management companies are openned (01) depository account for domestic entrusting customers and a (01) depository account for foreign entrusting customers;

b) Each entrusting customer, including domestic and foreign customer is selected for itself a (01) depository bank for depository of portfolio entrusted management for the fund management company;

c) All the assets of the customers must be registered, deposited timely, fully at the depository bank that customers selected and must be managed separately and independently according to the following principles:

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For securities issued in the book-entry form, or which have not got legal documents to certify ownership of the assets, the fund management company shall deposit the original contracts of the transaction, the deposit contracts or valid copies of these contracts; together with transaction documents, and require the issuers and organizations receiving investment capital, credit institutions accepting deposits or organizations managing the registrars of shareholders, periodically once a month to crosscheck, certify the ownership of assets as required by the depository bank;

d) The settlement of transactions of securities listed, registered for trading must comply with the principle of delivery of securities at the same time with payment and rules of offset, payment in accordance with the law provisions. The payment for other asset transactions must comply with the legal orders and directives of the fund management company and other provisions of law, if relevant. All transfers and payments, transfer of securities must be implemented to the right trading partners of the entrusting customers, the accounts of the entrusting customers. Payment value must match with the number of assets, stock and the right amount of money stated in the payment vouchers. Invoices, accounting documents, electronic information, the documents certifying the payment and the implementation of transaction to entrusting customers must be archived fully and accurately; except for performing the transactions of assets between the portfolio of the entrusting customers under the provisions of Clause 2 of Article 32 of this Circular, the fund management company and the depository bank, custodian bank is not transferred money and assets internally between the accounts of customers entrusting the portfolio management;

đ) Signing a depository contract with the depository bank to deposit all assets arising in Vietnam and managing assets separately to each entrusting customer. Depository contract must be consistent with the investment management contract and include some main contents in the form prescribed in Appendix 07 attached herewith.

2. Entrusted assets under material or immaterial form, registered ownership and deposited on the depository account in the name of the fund management company but owned by the entrusting customers and not being the assets of the fund management company, depository bank. The fund management company, depository bank may not use these assets for payment or guarantee of payment for the debts of themselves or for third parties, including the fund management company or depository bank.

3. The fund management companies ensure entrusting customers to be inherited all the rights of ownership to the assets on their entrusting accounts according to the following principles:

a) The fund management companies are represented only by authorization of entrusting customers and are allowed to perform only the activities within the scope of authorization which have been specified in the investment management contract;

b) The fund management companies are used and managed assets only on entrusting customers’ accounts in accordance with the provisions of the investment management contract or according to written instructions of the customers;

c) The fund management companies exercise the right to vote and other ownership rights in accordance with the written instructions of the entrusting customers; promptly inform fully and accurately to entrusting customers the benefits arising related to their assets.

4. The fund management companies are managed porfolio on the account of trading securities of customers. In this case, the customers shall notify the securities companies, depository members on the entrustment of management of securities portfolio to the fund management company, together with investment management contracts on customers’ accounts.

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Article 34. Receipt and returning of assets to customers

1. In the portfolio management, the fund management companies are received assets not being money to manage. The assets that the companies receive from the customers to manage must meet the following conditions:

a) Owned by the entrusting customers, with sufficient valid legal documents to verify ownership of customers’ assets;

b) Being assets freely transfered, not being restricted transfer at the effective time of the investment management contracts;

c) Not being the assets being mortgaged, pledged, deposited or in the transactions of collateral security assets in accordance with the provisions of civil law.

2. Entrusting customers transfer ownership of assets in the entrusted porfolio to a fund management company to manage in accordance with the following provisions:

a) For assets with ownership registration, the entrusting customers conduct procedures to transfer ownership of the assets to the fund management company in the competent state agency. Where the entrusted assets are securities listed or registered for trading or centralized depository, the transfer of ownership is done through the Securities Depository Center and not subject to transaction fees. For other assets, the transfer of ownership shall comply with the provisions of the relevant law;

b) For assets non registered ownership, entrustment of capital must be made by the delivery of entrusted assets certified by record. Record of delivery must clearly state:

- Full name, permanent address, number of identity card, passport or other lawful personal identification (for entrusting customer to be an individual);

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- Type of assets and number of unit entrusting assets; value of entrusted assets; date of delivery; entrusting customer’s signature or representative of entrusting customers and the legal representative of the fund management company;

c) Assets are deemed to have been entrusted to the fund management company to manage only when legal ownership right to the assets contributed as capital was transferred to the fund management company;

d) The value of the entrusted assets in the investment management contract are determined according to the principles for determining the net asset value in accordance with the law provisions on the establishment and management of securities investment fund. For assets not being securities listed, registered for trading, transfer instruments, the valuation of entrusted assets may be implemented by the price appraisal organizations in accordance with the provisions of the law on valuation.

3. The fund management companies are returned the entrusted assets to customers upon request in writing by the customers. The handover, transfer of ownership of the assets shall comply with the instructions of the entrusting customers and the provisions of Clause 2 of this Article. In case of receiving, returning assets to be securities registered for centralized depository, the Securities Depository Center shall transfer ownership out of the securities trading system as required in writing by the fund management companies, entrusting customers, depository bank.

Section 4. SECURITIES INVESTMENT CONSULTANCY

Article 35. Securities investment consultancy

1. Securities investment consulting activities include the following contents:

a) Advising customers on investment policy and strategy of transaction, including the invested capital allocation structure; type of assets invested and the method to determine value of assets; form of investment, transaction; time to implement, the quantity and the price in accordance with the objective, investment policy, the level accepting risk of customers;

b) Issuing to the public of the publications on securities investment after it has been licensed under the provisions of the law on the press; building and implementing the universal programs of knowledge, promoting securities investment, the intensive training programs on investment in securities.

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3. In case of providing securities investment advisory services, the fund management companies must appoint at least one professional staff at the investment advisory department to advise each customer. Professional staff in the investment advisory department must meet those specified at Point a, d, đ, Clause 1, Article 11 of this Circular, having the securities business practicing certificate or meet those specified at Point c, Clause 1 Article 11 of this Circular, and not being concurrently worked in other professional departments of the company, including the departments of fund management, asset management, investment department.

4. At least five (05) days before the change of consultant advising customers, the fund management company shall notify in writing to the customers and provide information on the replacing staff in accordance with provisions of point c, Clause 5 of this Article.

5. Fund management companies must sign the investment advisory contract with each customer, which clearly states:

a) The scope of consultancy, service providing form, assets received for consultancy;

b) Duration of the contract, service charges;

c) Full name and resume of experience of the consultant;

d) The rights, responsibilities and obligations of the parties to the contract.

Article 36. Regulations on investment consultancy of the fund management companies

1. Voluntariness, fairness, honesty to customers, providing complete, timely accurate information for customers to make their own investment decisions.

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3. When advising for investment in an asset, the fund management company must ensure the conformity with the investment objective, level accepting risk, the financial capacity of the customer, and the fund management company, consultant has to announce their interests related to such asset if the company, consultant who owns the asset.

4. The counsultant has the responsibility to explain to customer that his/her advice to give to customer’s investment activities is for reference only and customer must bear all risks from their investment decisions.

5. In the securities investment consultancy, fund management companies, counsultant must:

a) Not advise customers to invest in assets without providing full information on the assets, the issuers to the customers;

b) Not broker transaction of purchase and sale between customer and a third party; Not broker transaction of lending, borrowing assets between customer and the fund management company or between customer and third parties;

c) Not provide the information that has not been verified, rumors, false information to customers; not provide false information, not be amplified the truth, misleading, not give the forecast or perform the acts to entice, induce or invite customers to trade in an asset that does not match with the investment objective, investment experience, risk awareness capability, level accepting risk and financial capacity of customers; not provide misleading information on the profit and risk characteristics of the assets;

d) Not give gifts, use the material benefits under any kind to offer, solicit customer to trade an asset; not request, require or receive in the name of an individual or the name of an organization, from customers, the fund management company or a third party of any compensation, any material benefit to offer customers to make an asset transaction, in addition to the fee specified in the investment advice contract.

đ) Not invest on behalf of customers, receive money, customer’s assets for investment or transaction, unless the entrusting customers have signed investment management contract with the fund management company;

e) Not forecast price of asset in future, ensure investment results (except for investments in fixed-income products or the products invested for capital preservation) or agreement of sharing profit or loss with the customer.

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1. The fund management company is made securities investment consulting professional supplement. Records requesting for securities investment consulting professional supplement include the following documents:

a) An application for amending the permit of establishment and operation of business in the form specified in Appendix 05 issued together with this Circular;

b) Minutes of meetings and resolutions of the shareholders' general meeting, Council of members or the decision of the owner of securities investment consulting professional supplement; amended and supplemented charter of the company;

c) A list in the form prescribed in Appendix 02 issued together with this Circular and personal profile, a valid copy of the securities business practicing certificate, or certificate of practicing securities investment consultancy in the OECD countries or the international certificates of CFA, CIIA at levels of professional staff in the investment advisory department.

2. Records specified in Clause 1 of this Article shall be made in one (01) original set attached a file of electronic information. The original set is sent in person to the State Securities Commission or sent by post.

3. Within five (05) working days from the date of receiving the complete and valid records as prescribed in Clause 1 of this Article, the State Securities Commission shall issue the permit of adjusting the permit of establishment and operation of the company. In case of refusal, the State Securities Commission shall reply in writing, clearly state the reason.

Chapter IV

OBLIGATIONS OF REPORT AND MANAGEMENT OF RECORDS

Article 38. Provision of information to the investors, customers entrusting porfolio

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a) The fund charter, the charter of the securities investment company, the prospectus, summarized prospectus, and other documents, reports, contracts referred to in the prospectus, summary prospectus of the fund, securities investment company;

b) The annual financial statements of the funds, securities investment companies audited in at least five latest (05) years; semi-annual financial statements, quarterly financial statements to the latest quater of the funds, securities investment companies;

c) Reports on the operation of the funds, securities investment companies on a quarterly and annual period as prescribed by law for the establishment and management of investment funds, the securities investment companies at least (05) latest years;

d) Report on the net asset value of the funds, securities investment companies in accordance with the law provisions on the establishment and management of investment funds, securities investment companies.

2. Where the entrusting customers or representatives of entrusting customers request, the fund management companies must provide the risk management process, outlining the limited investment, method of prevention and risk management that the companies use to manage assets of entrusting customers.

3. For customers entrusting portfolio, the fund management companies are responsible for:

a) Providing investment management contracts and other documents attached to the contract;

b) Providing depository contracts and documents attached to the contracts;

c) Monthly reporting to the customers on the state of portfolio in the form prescribed in Appendix 08 attached herewith;

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Article 39. Obligation to report

1. The fund management companies send to the State Securities Commission periodic reports on the activities of the company as follows:

a) Report on monthly activities of the fund management company with the contents of the form in Appendix 09 attached herewith;

b) Quarterly financial reports, semi-annual financial statements, annual financial statements. Semi-annual financial statements and annual financial statements must be examined and audited by an approved auditing organization;

c) Monthly reports on the status of portfolio management in the form prescribed in Appendix 10 attached herewith;

d) Financial statements of the funds, securities investment companies under the provisions of the law on accounting for the funds, securities investment companies.

2. The fund management companies must notify the State Securities Commission the following events:

a) Change, recruitment and appointment of new members of the Management Board or Council of members, the Executive Board and professional staffs. Notification of change, recruitment and appointment of personnel must be accompanied by the personal profile of the replacing personnel and the relevant documents to verify the replacing personnel to meet the conditions as specified at Point g, Clause 1 of Article 5 of this Circular;

b) Amendments and supplements to the charter of the company; the charter, prospectus of the fund, securities investment companies managed by the company. Report attached by the amended and supplemented charter of the company, charter, prospectus of the fund, securities investment companies managed by the company.

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3. The deadline for submission of the reports specified in Clause 1 of this Article:

a) Within ten (10) days from the end of the month for the monthly reports;

b) Within twenty (20) days from the end of the quarter for the quarterly reports;

c) Within forty-five (45) days from the end of the first six months of the year for the semi-annual financial statements;

d) Within ninety (90) days from the end of the fiscal year for annual report.

4. The time limit for report to the State Securities Commission on the events referred to in Clause 3 of this Article is three (03) working days after the occurrence of the events.

5. The fund management companies report to the board of representatives of the fund, the Management Board of the securities investment company or portfolio entrusting customers in case of detection of the violations of the custodian bank, depository bank for fund charter, charter of investment company securities, contract of supervision, depository contract, report to the State Securities Commission in the case these organizations violate the law provisions within three (03) working days from the detection of violation.

6. In addition to the cases of report specified in this Article, in case of necessity, in order to protect the public interests and the interests of investors, the State Securities Commission may require the fund management companies to report on operation of the companies.

7. The fund management company must report to the State Securities Commission, within forty-eight (48) hours from receipt of the requirement for report specified in Clause 6 of this Article.

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Article 40. Archiving of records, documents and information

1. The fund management companies must keep completely, accurately, timely, and systematically the all documents, records and update information and data relating to the operation of the companies. The information on the activities of the companies must be made backup in a location outside the companies’ headquarters.

2. The fund management companies, custodian banks, depository banks, dealers, concerned service providing organizations must archive fully, systematically to ensure clearly, precisely and consistently the documents related to:

a) The selling offering of fund certificates, distribution of fund certificates;

b) Certification of the ownership to the fund's investors, securities investment companies, entrusting customers; registration of asset ownership of the fund, securities investment company, entrusting customers;

c) Financial statements, accounting records; system of accounts, bills, transaction documents must be secured to reflect in details, accurately and timely daily orders of transactions of each entrusting customer, of the company and the employees in the company, including information on the order to make orders, the transactions made; documents and electronic information used to determine the net asset value; the original legal documents of ownership registration, the original legal documents of ownership verification relating to assets, asset transactions and other documents if relevant must be stored by the fund management company and the custodian bank, depository bank in the process of operation of the fund, the securities investment company, the validity of the investment management contract;

d) Report on the activities of valuation, investment analysis, investment decision, investment management, withdrawal of capital and other relevant documents; final report on the asset management operations; report on the internal inspection, control in accordance with laws and internal regulations; report on the resolution of complaint letters, complaints and denunciations, compensation requirements of customers.

3. Portfolio, data and transaction documents, ownership registration, bookkeeping, accounts, documents, electronic information relating to assets, asset transactions of the fund, the securities investment company, the entrusting customers must be periodically and frequently inspected, crossed check by the fund management company, supervisory bank, custodian bank and the related institutions in accordance with provisions of the fund charter, charter of securities investment company, investment management contract and the regulations of law on accounting.

4. Documents and information specified in Clauses 1, 2 and 3 of this Article shall be archived within ten (10) years. Where the documents are related to the accounting activities, it shall comply with the specialized provisions in the field of accounting and auditing.

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IMPLEMENTATION

Article 41. Implementation provisions

1. This Circular takes effect from 01/03/2013 and replaces the Decision No.35/2007/QD-BTC dated 15/5/2007 of the Minister of Finance on promulgating the Regulation on organization and operation of the fund management companies and the Decision No.125/2008/QD-BTC dated 26/12/2008 on amending and supplementing a number of Articles of the Regulation on organization and operation of the fund management companies issued together with the Decision No.35/2007/QD-BTC dated 15/5/2007 of the Ministry of the Minister of Finance.

2. The fund management companies establish internal audit department under the provisions of Clauses 1 and 5 of Article 9 of this Circular; adjust the portfolio management activities in accordance with the provisions of Article 30, 31, 32, 33 of this Circular; change the organizational structure and adjust their operations in accordance with the provisions of this Circular. These activities must be completed and notified in writing to the State Securities Commission within six (06) months from the effective date of this Circular.

Article 42. Implementation organization

The State Securities Commission, the fund management companies, the depository bank, the custodian bank and the relevant organizations and individuals are responsible for the implementation.

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Thông tư 212/2012/TT-BTC hướng dẫn về thành lập, tổ chức và hoạt động công ty quản lý quỹ do Bộ trưởng Bộ Tài chính ban hành