Thông tư 224/2012/TT-BTC

CIRCULAR

GUIDING THE ESTABLISHMENT AND MANAGEMENT OF CLOSED FUNDS, MEMBER FUNDS

Pursuant to the Securities Law datd 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 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 dated 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;

The Minister of Finance issues the Circular guiding the establishment and management of the closed fund, the member fund.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. This Circular provides for the capital mobilization, establishment, management and supervision of closed fund activities (not including real estate investment funds), the member fund in the territory of the Socialist Republic of Vietnam.

2. Subjects of this Circular include:

a) The fund management companies, supervisory banks, custodian banks;

b) The Securities Depository Center;

c) Securities Exchanges;

d) The Representative Board of the fund, members of the Representative Board of the fund and the investors of the fund;

đ) Other relevant organizations and individuals.

Article 2. Interpretation of terms

In this Circular, the terms below are construed as follows:

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

2. Fund certificate means a type of security certifying ownership of investors toward the fund’s part of contributed capital.

3. Distribution agents of closed fund certificates (hereinafter referred to as the Distribution agents) mean the securities companies, fund management companies.

4. Liquidation value of a share is determined by the value of the equity of the issuer divided by the total number of outstanding shares.

5. Personal record includes the written information provision in the form prescribed in Appendix 19 attached to this Circular, a certified copy of the identity card, valid passport or other certified legal personal identiftion.

6. Valid dossier means a dossier with enough papers under the provisions of this Circular and the fully-declared content in accordance with the law provisions.

7. Fund consolidation means a form of two or more closed funds or member funds (hereinafter referred to as the consolidated fund) consolidated into a new closed fund or member fund (hereinafter referred to as the consolidating fund) by transferring all assets, rights and legal interests, debts and other obligations to the consolidating fund, and terminating the existence of the consolidated funds.

8. Valuation date means a date fixed by a fund management company to determine the fund's net asset value.

9. The fund administrator means the one who practices fund management designated by a fund management company to manage the fund's investment operation.

10. Group of the companies with together ownership relationship means the  parent company, subsidiaries, joint ventures and associated companies.

11. Fund merger means a form of two or more closed funds or member funds (hereinafter referred to as the mergered fund) mergered into a closed fund or member fund (hereinafter referred to as the merger receiving fund) by transferring all assets, rights and legal interests, debts and other obligations to the merger receiving fund, and terminating the existence of the mergered funds.

12. Fund charter capital means the contributed capital by the investors and be recorded in the fund's charter.

13. Independent members of the Representative Board of the fund mean the members who are not involved with the fund management companies, supervisory banks in accordance with provisions in Clause 4 of Article 15 of this Circular.

14. Securities trading organizations mean the securities companies, fund management companies, branches in Vietnam of foreign fund management companies.

Article 3. The general provisions on the closed funds, the member funds

1. Name of the fund must comply with the provisions of the enterprise law, written in Vietnamese, which can include numbers, symbols, is able to be pronounced and have at least the following two elements:

a) The term "investment fund";

b) The name, in accordance with the objectives, policies and invested asset structure of the fund.

2. State agencies, units of the Vietnam People's Armed Forces are not contributed capital to establish the funds, purchase fund certificates. The contribution of capital to establish the funds, purchase fund certificates of the credit institutions, insurance companies, securities trading organizations, one member state limited liability companies shall comply with the provisions of the related specialized law.

3. Where the fund charter regulates to allow foreign investors to own more than 49% of the charter capital, the fund shall register securities transaction codes and subject to the provisions of the law on ownership limitation applicable to foreign investors.

4. The publication of information on the activities of the fund as stipulated in this Circular is made through mass media below:

a) On the electronic information page of the fund management company. Where deemed necessary, the fund management company shall disclose information at the same time on the electronic information page of the supervisory bank, custodian bank, distribution agents;

b) The mass media of the Securities Depository Center, the Securities Exchange (for closed funds);

c) Other mass media in accordance with the law provisions on disclosure of information on stock market.

5. Fund charter issued for the first time is made by the fund management company in the form prescribed in Appendix 11 attached herewith. Investors registering to buy fund certificates are deemed to have adopted this charter. In case of amendment and supplement of the fund charter issued, the fund management company must consult opinion from the general meeting of the investors. Where the fund charter providing for allowing the implementation, the fund management companies are corrected errors of grammar, spelling without affecting the content of the charter and without consulting opinion from the general meeting of the investors. After amendment and supplement of the fund charter is made, the fund management company must inform the investors on the amendments and supplements.

6. The fund management company must prepare and provide the investors a prospectus, summary prospectus, including all the information in the form prescribed in Appendix 13 and Appendix 14, issued together with this Circular. The prospectus, summary prospectus is updated when arising the important information or updated periodically at a frequency specified in the fund charter. The prospectus, summary prospectus must be presented understandably, limited use of professional terms, posted on the electronic information page of the fund management company and provide free of charge to the investors upon request.

7. Assets of the fund are owned by the investors participating, holding fund certificates corresponding to the ratio of contributed capital, are not the assets of the fund management company, supervisory bank or custodian bank. The fund management company is used assets of the fund only for making payment or guaranteeing for the liabilities of the fund, are not used for making payment for obligations of the company or other organizations, individuals in any form and in all cases.

Chapter II

CLOSED FUND

Section 1. SELLING OFFER, ESTABLISHMENT OF CLOSED FUNDS

Article 4. Registration for selling offer of closed fund certificates, registration for further issuance of closed fund certificates

1. The selling offer, issuance of closed fund certificates to the public includes the first selling offer to mobilize capital for establishing fund and further issuance to increase capital.

2. The first selling offer of fund certificates to the public must be registered by the fund management company with the State Securities Commission and comply with the following provisions:

a) The provisions of Clause 3 of Article 12 of the Law on Securities;

b) The fund management companies have sufficient capital in accordance with the law on the establishment, organization and operation of the fund management companies; are not placed in a state of operation control, special control, operation temporary cause, suspension of operation or in the process of consolidation, merger, dissolution or bankruptcy;

c) The fund management companies are not in a state of being sanctioned the violations of regulations in the field of securities that have not fully performed the sanctions and remedies under the sanctioning decisions of the competent state authorities.

3. The further issuance of fund certificates must be registered by the fund management companies with the State Securities Commission and comply with the following provisions:

a) To meet the conditions specified in Clause 1 and Clause 2, Article 94 of the Law on Securities;

b) To have plan to issue and use capital adopted by the latest general meeting of investors. The approved plan must include the following contents:

- Information on the rate of the buying right; principles and method of determining the issuance price; dilution rate of fund certificates expected after the issuance; method of determining the issue price; successful issuing rate or the minimum number of money obtained in the issuance batch and handling plans in case of absence of successful rate of issuance or not collecting fully minimum number of money as expected; selection criteria of investors for selling offer and method to determine the conditions of selling offer in the absence of distributing all the fund certificates to be expected for issuance;

- Information on the plan of using capital; objectives, plans, disbursement schedule (if any);

c) Issuance records, time for issuance, issuance price specifically, criteria to determine and subjects offered in case of not distributing all the buying rights of fund certificates expected for issuance must be adopted by the representative board of the fund;

d) only be issued to the existing investors of the funds through the issuance of buying rights of fund certificates. Buying rights of fund certificates are allowed for transfer. In case the existing investors do not exercise buying rights of fund certificates, the fund management company is allowed selling offer to other investors.

4. Dossier of registration for the first selling offer of the fund certificate to the public includes:

a) A written registration for selling offer of the fund certificate to the public in the form specified in Appendix 01 attached herewith;

b) Fund charter;

c) The prospectus and summary prospectus;

d) The contract in principle regarding supervisory, supervision activities between the custodian bank and fund management company;

đ) The contract in principle on the distribution of fund certificate between the fund management company and the distribution agents;

e) A list together with the personal records, copies of certificates of fund management practice of at least two (02) fund administrators;

g) Underwriting commitments (if any).

5. Registration dossier for further issuance of fund certificates includes:

a) Documents as prescribed at Points a, b and c, Clause 4 of this Article, in which the fund charter must be defined the capital increase of the fund;

b) Minute of the meeting and the resolutions of the general meeting of the investors on adoption of the further selling offer of fund certificate to increase capital to the fund, adoption of the plan of issuance and use of capital; minute of meeting and resolutions of the representative board of the fund on adoption of selling offer registration dossier and the contents specified at Point c, Clause 3 of this Article;

c) The financial statement of the year preceding the year proposed further issuance of fund certificates audited by auditing organization approved to ensure thet the profit of the fund in that year must be positive number.

6. Registration dossier for the first selling offer of fund certificates to the public, the further issuance of fund certificates specified in Clauses 4 and 5 of this Article shall be made into an (01) original set together with an electronic data file. The original set is sent in person to the State Securities Commission or sent by post.

7. The fund management companies must take responsibility and make sure the information in the dossier accurately, truthfully, not misleading and fully the important contents affecting the decisions of investors. During the dossier’s consideration duration, the fund management companies are obliged to update, modify, add documents if the incorrect information is found, important information arises, or information required to have on the dossier is omissed, or it deems necessity to explain the issues that can cause misleading. The amendments and supplements must be signed by those who have signed in offering registration dossier or by those who have the same titles with such persons or of the legal representatives of the companies.

In case of further issuance of closed fund certificates, the amendments, supplements of documents and the generating information must be published by the fund management companies in accordance with provisions of Clause 4 of Article 3 of this Circular.

8. During the dossier’s consideration by the State Securities Commission, the fund management companies and related persons are only used in an honest and accurate manner of information in the prospectus submitted to the State Securities Commission to explore the market, in which must state that all information is expected only. The provision of this information is not done through the mass media.

9. Within thirty (30) days from the date of receiving complete and valid dossier as prescribed in Clauses 4 and 5 of this Article, the State Securities Commission issues a first offering registration certificate of fund certificates to the public, a certificate of registration for further issuance of fund certificates. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

10. The offering registration certificate of fund certificates, certificate of registration for further issuance of fund certificates issued by the State Securities Commission to the fund management company is the written confirmation that registration dossier for selling offer, further issuance of fund certificates met fully the conditions and procedures as prescribed by law.

Article 5. Offering for sale, distribution of closed fund certificates

1. The offering for sale of fund certificates to the public is made only after the State Securities Commission issues a registration certificate for selling offer of fund certificates.

2. Within seven (07) days from the effective date of the registration certificate for selling offer, the fund management company shall publish the statement of selling offer in accordance with provisions of Clause 4 of Article 3 of this Circular and at the same time submit to the State Securities Commission. The statement of selling offer must have full contents in accordance with provisions in Appendix No. 02, issued together with this Circular.

3. The fund management companies, distribution agents, underwritering organizations (if any) must distribute fund certificates equally, publicly to ensure the registration time limit for buying fund certificates to the investors at least twenty (20) days; this time limit must be recorded in the statement of offering for sale.

Where the number of fund certificates registered for purchase exceeding the number of fund certificates registered for selling offer, the fund management companies must distribute all fund certificates allowed to offer for sale to the investors corresponds to the ratio registered for purchase from each investor.

4. All capital contributed by investors must be frozen in a bank account opened at the custodian bank and only be released after the effective date of the certificate of registration for fund establishment. The custodian bank shall pay interest to the fund with a minimum interest rate equal to the flexible fund withrawal applied to the period freezing capital.

5. The fund management companies must complete the distribution of fund certificates for a period of ninety (90) days from the effective date of registration certificate for selling offer of fund certificates to the public. In case of unable to complete the distribution of fund certificates within this period, the fund management companies shall send written request to the State Securities Commission for consideration of extending the distribution of fund certificates.

Within seven (07) days from the date of receipt of the request of the fund management company, the State Securities Commission considers the extension of the distribution of fund certificates, but not more than thirty (30) days. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

6. Within three (03) days from the date of completion of the selling offer batch or the expiry date of the selling offer registration certificate, the fund management company must notify the State Securities Commission, and make disclosure of information specified in Clause 4 of Article 3 of this Circular for that the fund does not meet the conditions of establishment upon the occurrence of one of the following cases:

a) There are less than one hundred (100) investors to buy fund certificates, excluding professional securities investors; or

b) The total value of mobilized capital is less than fifty (50) billion VND or less than the value of the minimum capital expected to be mobilized under the provisions of the fund charter (if any).

7. In case of not meeting the conditions to establish fund in accordance with provisions in Clause 6 of this Article, within fifteen (15) days from the date of completion of the selling offer batch or or the expiry date of the selling offer registration certificate, the fund management company must refund the investors any amount of money contributed, including interest arising (if any), and shall bear all costs arising from the mobilization.

8. The suspension or cancellation of the selling offer batch is made under the provisions of Articles 22 and 23 of the Securities Law.

9. In case of further issuance of fund certificates to raise capital, order and procedures for notifying issuance, distribution of buying rights shall comply with the provisions of Clauses 1, 2, 3, 4, and 5 of this Article and other relevant provisions of law on securities applicable to the listing organizations and of enterprise law.

Article 6. Registration for establishing closed fund, adjustment of the registration certificate of closed fund

1. Within ten (10) days after the date of completion of the selling offer batch or the expiry date of the selling offer registration certificate, the fund management company must submit to the State Securities Commission registration dossier for fund establishment, it comprises:

a) A written registration for fund establishment in the form prescribed in Appendix 03 attached herewith;

b) Report on the result of the selling offer batch in the form prescribed in Appendix No. 21 issued together with this Circular, together with the written certification of the custodian bank for the capital amount mobilized in the selling offer batch and the number of investors to pay for the selling offer batch.

2. In case of further issuance of fund certificates to increase capital, within five (05) days after the end of the issuance batch, the fund management company must request the State Securities Commission to adjust the certificate of fund establishment registration. Dossier requesting for adjustment of the certificate of fund establishment registration includes the documents specified in Clause 1 of this Article.

3. Registration dossier for fund establishment, dossier requesting for adjustment of the certificate of fund establishment registration shall be made in one (01) original set together with an electronic data file. The original set is sent in person to the State Securities Commission or sent by post.

4. Within ten (10) days from the date of receipt of complete and valid dossier, the State Securities Commission shall issue the certificate of fund establishment registration or adjust the certificate of fund establishment registration. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

Article 7. Certification of ownership of fund certificates

1. Within five (05) days from the effective date of the certificate of fund establishment registration or the adjusted certificate of fund establishment registration, the fund management company is responsible for certifying the ownership to the investors for the quantity of fund certificates purchased and set up registers of investors with the following principal contents:

a) Name and address of the head office of the fund management company; name and address of the head office of the custodian bank; full name of the fund; listed stock code of the fund (if any);

b) Total fund certificates to be offered, the total number of fund certificates sold and the total capital mobilized for the fund;

c) The list of investors: name, identity card number or valid passport, contact address (for individuals), the full name, abbreviated name, business registration number, address of headquarter (for organizations); securities depository account number (if any); owned fund certificate number; percentage of ownership; date of purchase registration and date of payment;

d) Date of preparing the registers of investors.

2. Information on the investors in the register of investors as a basis for authentication of ownership of fund certificates of the investors.

3. The fund management companies shall make registration, depository of fund certificates in accordance with the law on registration and depository of securities.

4. Within forty-five (45) days from the effective date of the certificate of fund establishment registration, the fund management company sends to the State Securities Commission:

a) Minute of the meeting or the minute of the counting of votes and resolution of the meeting of investors on the Representative Board of the fund, members of the Representative Board of the fund;

b) A List and the personal records of the members of the Representative Board of the fund.

Article 8. Listing of fund certificates

1. Within thirty (30) days from the effective date of the certificate of fund establishment registration or the adjusted certificate of fund establishment registration, the fund management company must complete the dossier and list fund certificates on the Stock Exchange in accordance with the law provisions.

2. The investors registered to buy fund certificates are deemed to have been passed the listing of fund certificates. Where the fund charter regulates and published in the prospectus, the listing of fund certificate, additional listing of new fund certificates issued additionally shall not need to consult the general meeting of investors.

Section 2. INVESTMENT ACTIVITY OF THE FUND

Article 9. Portfolio and investment operation of the closed fund

1. Closed fund's portfolio must be consistent with the investment objectives and policies set out in the fund charter and announced in the prospectus.

2. Closed fund is allowed to invest in the following assets in Vietnam:

a) Deposits in the commercial banks in accordance with provisions of banking law;

b) Monetary market instruments including valuable papers, transfer instruments under the provisions of the banking sector;

c) Government bonds, bonds guaranteed by the government, local government bonds;

d) Shares listed or registered for trading and bonds listed on the stock exchanges in Vietnam;

đ) Shares unlisted, shares unregistered for trading of public company; unlisted bonds of issuers operating under Vietnamese law; shares of joint stock companies, contributed capital in the limited liability company;

e) The securities and other assets in accordance with the law and the guidance of the Ministry of Finance.

3. Fund management companies are only sent money and invested in monetary market instruments specified in points a and b, Clause 2 of this Article in the commercial banks approved by the Representative Board of the fund.

4. The fund's portfolio structure must conform to the provisions in the fund charter and must ensure:

a) Do not invest in the securities of one issuer more than fifteen percent (15%) of the total value of the outstanding securities of that organization, except for government bonds;

b) Do not invest more than twenty percent (20%) of the total value of the fund's assets in securities and other assets (if any) specified in points a and b, Clause 2 of this Article issued by the same organization, except for government bonds;

c) Do not invest more than thirty percent (30%) of the total value of the fund's assets on the assets specified at Points a, b, d, đ and e, Clause 2 of this Article issued by an organization or a group of companies having ownership relationship together;

d) Do not invest more than ten percent (10%) of the total value of the fund's assets in real estate and financial assets specified in point đ Clause 2 of this Article;

đ) Do not use capital and assets of the fund to provide loans, guarantees for the loans, except for investment in deposits as stipulated in point a clause 2 of this Article; do not use the assets of the fund to implement the margin trading (loan for buying securities), short sales (securities loan for sale);

e) Do not invest in its fund certificates, invest in the securities investment funds, securities investment companies established and operating in Vietnam;

g) In case of registered funds as foreign investors in accordance with provisions of Clause 3 of Article 3 of this Circular, in investment activity, the fund must comply with the provisions of related law on the ownership restrictions with foreign investors.

5. Fund management companies are not borrow to finance the operation of the fund, except for short-term loans to cover the necessary expenses for the fund. The total value of the fund's short-term loans shall not exceed five percent (5%) of the net asset value of the fund at any time and a maximum term is thirty (30) days.

6. Except for otherwise specified at Point đ, e, g, Clause 4 of this Article, the fund's investment structure is permitted deviation of not more than fifteen percent (15%) compared with the investment restrictions specified in Clause 4 of this Article and only due to the following reasons:

a) Price changes in the market of the assets in the portfolio of the fund;

b) Making the lawful payment of the fund;

c) The consolidation, merger, purchase of treasury shares, public offer to buy securities of the issuers;

d) Newly-registered fund for establishment or increase of capital or merger but its operating time of not exceeding six (06) months from the effective date of the certificate of fund establishment registration or the adjusted certificate of fund establishment registration;

đ) The fund being under liquidation of assets to be dissolved.

7. Within three (03) months from the date of arising deviation due to the reasons specified in Clause 6 of this Article, the fund management company must complete the adjustment of the portfolio of the fund, to ensure compliance with the provisions of Clause 4 of this Article.

8. Where the deviation is a cause from that the fund management company does not comply with the investment restrictions prescribed by law or the fund charter, it must adjust the portfolio for a period of fifteen (15) days from the date of arising the deviation. The fund management company must pay compensation for damages to the fund (if any) and bear all expenses incurred related to the adjustment of the portfolio. If there is profit, it must be accounted immediately at all profits for the fund.

9. Within five (05) days from the date of completion of the adjustment of the portfolio, the fund management company shall disclose the information specified in Clause 4 of Article 3 of this Circular, and notify State Securities Commission of the deviation of portfolio structure, causes, time of arising or detections, the extent of damage and compensation for the fund (if any) or the profits generated for the fund (if any), the remedies, the taken time, the correct results. The notice shall include the certification of a custodian bank.

10. When conducting the purchases, sale of assets for the fund, the fund management company must comply with the following provisions:

a) For securities listed or registered for trading at the Stock Exchange, the transactions must be done through the trading system of the Stock Exchange;

b) For assets not being securities listed or registered for trading, or in the transactions agreed, the fund management company must get written approval of the Representative Board of the fund of the price range expected to perform, the time of the transaction, transaction performing partners or partners not being allowed to perform transactions (if any), type of assets of transaction before the transactions are made.

Article 10. Net asset value

1. The fund management companies are responsible for determining the fund's net asset value and net asset value on a recurring fund certificate at least once a week, in which:

a) The net asset value of the fund is determined by the total asset value minus total liabilities of the fund. The total asset value of the fund is determined by the market price or the reasonable value of the asset (in case the market price can not be determined). The fund's total liabilities are the debts or obligations of payment of the fund calculated up to the date before the date of valuation. Method of determining market price, reasonable value of assets in the portfolio, the value of debts and payment obligations shall comply with the principles set out in Appendix 04 attached herewith and internal regulations in the valuation manual;

b) The net asset value on a fund certificate is equal the fund's net asset value divided by the total number of outstanding fund certificates.

2. The fund management companies must build valuation manual including the following minimum contents:

a) Principles, criteria for selection, change of the organizations providing quotation. These principles should also be clearly stated in the charter of the fund;

b) Principles, procedures to implement and the valuation methods in accordance with the provisions of law, the provisions in the fund charter and approved by general meeting of the investors. The principles, processes of implementation and evaluation methods should be clear, logical, consistent with international practice to be uniformly applied in different market conditions.

3. Valuation manual must be approved by the Representative Board of the fund and provided to the custodian bank to confirm the calculation of net asset value. List of at least three (03) organizations providing quotation, not being the related person of the fund management company and the custodian bank, also must be approved by the the Representative Board of the fund.

4. The fund's net asset value, net asset value per fund certificate must be certified by the custodian bank. The value certification must be made in writing, or accessed through the electronic information system of the custodian bank approved by the fund management company.

5. In the next working day after the custodian bank certifies, information on the fund's net asset value, net asset value per fund certificate is published in accordance with provisions of Clause 4 of Article 3 of this Circular.

6. The fund management companies are authorized to the custodian banks to determine the fund's net asset value, net asset value per fund certificate. In this case, the fund management companies and the custodian banks must have mechanisms and procedures for comparison and review, inspection and monitoring to ensure that the operation of determining the net asset value is consistent with the provisions of law, the net asset value is calculated correctly.

7. In case of being valuated incorrectly, within twenty-four (24) hours from the detection of the matter, the custodian bank or fund management company (in case the custodian bank provides services to determine net asset value) must notify and request the fund management company or custodian bank to timely adjust.

8. Within five (05) days from the date of detection of the net asset value’s being-valuated-incorrectly, the fund management company or custodian bank (in case the custodian bank provides services to determine net asset value) must revise and publish information in accordance with provisions of Clause 4 of Article 3 of this Circular, at the same time notify the State Securities Commission of the incorrect valuation, including the cause of the incident, time of the incorrect valuation, handling measures. Such a notice must be signed for certification by the fund management company and the custodian bank.

Article 11. Fund’s profit division

1. The investors are received incomes from the funds according to profit distribution policy provided for in the fund charter and according to the division plan adopted by the latest general meeting of the investors. Incomes paid to the investors are drawn from the profits in the period, or profits accumulated after making the full appropriation of funds (if any) as specified in the fund charter and meeting all tax obligations of tax, finance (if any) in accordance with the law provisions.

2. Incomes may be paid in cash, fund certificates issued additionally. At least fifteen (15) days prior to the distribution of incomes, the fund management company must notify to the registered addresses of the investors. The notice must include the minimum contents as specified in Appendix 20 attached herewith.

3. The payment of income of the fund must ensure the principles of:

a) In accordance with the policy of profit division provided for in the fund charter and announced in the prospectus, summary prospectus;

b) Made after the fund has fulfilled its tax obligations and other financial obligations as prescribed by law and set aside sufficient funds in accordance with the provisions of the fund charter (if any);

c) After making payment, the fund must still have sufficient funds to pay all the due debts and other financial obligations and ensure that the net asset value is not less than fifty (50) billion VND;

d) The payment rate of income shall be decided by general meeting of the investors or the Representative board of the fund, in accordance with the investment objective, provisions in the fund charter on profit distribution policy of the Fund;

e) In case of income distribution by fund certificates, the fund must still have sufficient reciprocal capital from undistributed after-tax profit based on the latest financial report audited or reviewed.

Section 3. GENERL MEETING OF THE INVESTORS, REPRESENTATIVE BOARD OF THE FUND

Article 12. Rights and obligations of the investors participating in the fund

1.  The investors have the following rights and obligations:

a) The right to be treated equally. Each fund certificate creates the owner the equal rights, obligations, benefits;

b) The right to freely transfer fund certificates, except for transfer restrictions in accordance with the law and the fund charter;

c) The right to be received fully periodical information and unusual information on the operation of the fund;

đ) The rights and responsibilities to participate in general meetings of the investors and exercise their right to vote in person or through authorized representatives or perform remote voting;

đ) The obligation to pay the full amount to buy fund certificates within the time limit specified in the fund charter, prospectus and only take responsibility for the debts and other asset obligations of the fund within the amount paid as purchasing the fund certificates;

e) Other rights and obligations in accordance with the law on securities and fund charter.

2. The investors or group of the investors holding more than 10% of the total fund certificates in circulation for a continuous period of at least six (06) months or a smaller ratio stipulated in the fund charter have the following rights:

a) To nominate persons to participate in the Representative Board of the fund. The order and procedures for the nomination is made in accordance with the law on enterprises applicable to the nomination of candidates to participate in the Management Board of a shareholder or a group of shareholders owning more than 10% of the total number of common shares;

b) To review and extract the minute book and resolutions of the Representative Board of the fund, the annual financial statements and reports of the supervisory banks related to the operation of the fund;

c) To request the fund management company to convene irregular general meeting of the investors in the following cases:

- Having authentication bases on that the fund management company, custodian bank violates the rights of the investors, or the obligations of the fund management company, custodian bank or makes a decision ultra vires provided for in the fund charter, supervisory contract or assigned by general meeting of the investors, causing losses to the fund;

- The Representative Board of the fund has expired its term of more than six (06) months but has not been elected another for replacement;

- Other cases as stipulated in the charter of the fund;

d) To request the fund management company, the custodian bank to explain the unusual problems related to assets and management operation and transactions of the fund's assets. The fund management company, the custodian bank must send the written replies to the investors within fifteen (15) days from the date of receipt of the written request;

đ) To propose the matters to be included in the agenda of general meeting of the investors. The proposal must be in writing and sent to the fund management company no later than three (03) working days before the opening date, unless the charter fund otherwise prescribed time limit;

e) Other rights and obligations in accordance with the fund charter.

3. Requirements and recommendations of the investors or group of the investors as stipulated in Clause 2 of this Article shall be made in writing and must contain full name, permanently-residing address, identiy card number, valid passport number or other lawful personal certification for the investors as individuals; name, head office address, nationality, number of establishment decision or business registration number for the investors as organizations; number of fund certificates held and the holding time of each investor, the total fund certificate of the whole investor group and the ownership percentage in the total outstanding fund certificates of the fund; requested content and proposals; bases and reason. In case of convening the irregular general meeting of the investors as prescribed at Point c, Clause 2 of this Article, it must be accompanied by documentation to verify the reason of the convocation of the irregular general meeting of the investors; or the documents or evidence on the violations of the fund management company, custodian bank, the seriousness of the violation or the decision ultra vires as stipulated in the fund charter, supervision contract.

Article 13. General meeting of the investors

1. The general meeting of the investors shall be convened and decided by the fund management company with the following contents:

a) Amendment, supplement of the fund charter, supervision contract;

b) Change of the policy, the fund's investment objectives; decision on the percentage of ownership of foreign investors in the fund; income distribution plan change; increase of the fees paid to the fund management company, custodian bank; replacement of fund management company, custodian bank;

c) Merger or consolidation of the fund; dissolution of the fund; increase of the charter capital of the fund; extension of the operation duration of the fund;

d) Decision on the contracts or transactions between the fund and the investor owning more than 35% of outstanding fund certificates or another percentage as stipulated in the fund charter; authorized representatives and the relevant persons of the investors. In this case, the investors with related interests may not vote. Contracts or transactions are approved when there are the number of investors representing at least 65% of the total remaining number of votes to agree;

đ) Election, dismissal, removal of the chairman and members of the Representative Board of the fund; decision on the remuneration and expenses for the operation of the Representative Board of the fund; adoption of the selection of audit organizations approved to audit annual financial statement of the fund, independent evaluation organization (if any); adoption of financial statements, reports of assets and annual operation of the fund;

e) Consideration and handling of violations of the fund management company, the custodian bank and the Representative Board of the fund causing losses to the fund;

g) Other matters under their jurisdiction in accordance with the law on securities and fund charter.

2. Program and content of the agenda of the general meeting of the investors shall be made by the fund management company in accordance with enterprise law. Annual general meeting of the investors is held within thirty (30) days from the date that the annual financial statement has been audited and approved by the audit organization.

3. The fund management company shall convene the irregular general meeting of the investors in the following cases:

a) At the request of the custodian bank, or the Representative Board of the fund as it deems necessary for the benefit of the fund;

b) At the request of the investors or group of investors as specified at Point c, Clause 2, Article 12 of this Circular;

c) Other cases as stipulated in the fund charter.

4. The organization of the irregular general meeting of the investors is made within thirty (30) days from the date that the fund management company receives request for convening an irregular general meeting of the investors. No later than fifteen (15) days before the meeting of general meeting of the investors is taken place, the fund management company must submit to the State Securities Commission the entire program, the content of the meeting and related documents, at the same time publish information on the convocation of the irregular general meeting of the investors, clearly stating the reasons and objectives of the meeting.

5. Where the fund management company fails to convene a general meeting of the investors as defined in Clause 3 and 4 of this Article, the fund management company shall be responsible before the law and have to pay for damages incurred for the fund (if any). Where the fund management company fails to convene a general meeting of investors in accordance with provisions of Clause 3 of this Article within thirty (30) days, the Representative Board of the fund or the custodian bank shall replace the management company fund to convene a general meeting of the investors by the order and procedures prescribed in this Circular.

Article 14. Conditions and terms and conditions for conducting the meetings, adoption of the decision of general meeting of the investors

1. The fund management company is responsible for building and publishing on the electronic information page of the company the company's internal rules on the conditions, order and procedures for convocation and terms and conditions for conducting the meetings and adoption of the decisions at the general meeting of the investors in accordance with the enterprise law and fund charter, including the following contents:

a) Notice of convening the general meeting of the investors, including the time limit for sending notice and receiving votes in the case of collecting written opinions of the investors; procedures for registering to attend the general meeting of the investors from;

b) The method of voting; order, procedures of voting; announcement of the voting result;

c) Preparation and adoption of the minutes of the general meeting of the investors; notification of resolutions of the general meeting of the investors to the public; orders and procedures to be against the general meeting of the investors.

2. The general meeting of the investors is held when there is a number of investors to attend representing for at least fifty-one percent (51%) of the total outstanding fund certificates. Form of participation may be in person, or an authorization to participate, or a participation in online meetings via the communication media as stipulated in the fund charter.

3. Decision of the general meeting of the investors is adopted at the meeting when being approved by the number of investors representing for at least 65% of the total votes of all attending investors.

4. If the first meeting does not qualify to be conducted in accordance with the provisions of Clause 2 of this Article, the second meeting is convened within thirty (30) days from the date of the first meeting scheduled opening. In this case, the general meeting of the investors is conducted regardless of the number of participating investors.

5. Except for the annual general meeting of the investors or the general meeting of the investors for collecting opinions on the issues specified in point b, c, d, Clause 1, Article 13 of this Circular, the fund management companies are consulted the investors in writing, instead of general meeting of the investors. Principles, content, order and procedures for consulting the investors’ opinions in writing must be clearly stated in the fund charter, in conformity with the principles in the business law. In this case, the fund management companies must comply with the time limit for sending slips and the meeting documents to the investors as for the case of inviting general meeting of the investors.

6. Except for collecting the opinions of the investors in the form of writing, the decision of the general meeting of the investors is adopted when being approved by number of the investors representing for at least 75% of the total number of votes.

7. The fund management companies and the Representative Board of the fund take the responsibility to consider and ensure the resolutions of the general meeting of the investors in accordance with the provisions of the law and the fund charter. If the decision of the general meeting of the investors is not in accordance with the provisions of the law and the fund charter, the general meeting of the investors shall be held for re-collecting opinions or written opinions of the investors shall be collected.

8. Within seven (07) days after the end of the general meeting of the investors, or after the end of the collection of investors’ opinions in writing in accordance with provisions of Clause 5 of this Article, the fund management company must submit the minute and resolution of the general meeting of the investors to the custodian bank, provide the investors and disclose information under the provisions of Clause 4 of Article 3 of this Circular.

Article 15. Representative Board of the fund

1. Representative Board of the fund represents the investors with from three (03) to eleven (11) members, is elected at the general meetings of the investors or given written opinions by the investors. The nomination, self-nomination of members of the representative Board of the fund must comply with the following provisions:

a) Information relating to the candidates of Representative Board of the fund must be published in the electronic information page of the fund management company no later than ten (10) days before the convening date of the general meeting of the investors to elect members of Representative Board of the fund. Information must include: full name, date of birth; qualifications; management level; experience in asset management activities, or investment analysis or experience in the securities activity, banking and insurance; the process of working and the achieved results; the companies, funds that the candidates are holding the titles of members of the Management Board, members of Representative Board of the fund; benefits related to fund management companies, custodian banks (if any); other relevant information, if any;

b) Where the number of candidates of the Representative Board of the fund nominated and passed is still not enough the necessary quantity, the in-power representative Board of the fund may nominate additional candidates or organize nomination under the mechanism provided for in the fund charter. Mechanism of nomination or the method that the in-power representative Board of the fund nominates candidates representing the fund must be clearly disclosed and must be adopted by the general meeting of the investors before the nomination is conducted;

c) The order and procedures for the nomination of candidates to be members of the Representative Board of the fund shall comply with the provisions of enterprise law and securities law applicable to members of the Management Board and the Management Board.

2. The following persons shall not be members of the Representative Board of the fund:

a) Minors, those who have limited or lost civil act capacity; those who are subject to criminal prosecution, serving judgments, decisions on crime of domestic or foreign courts or are being prohibited by court for business practice;

b) Those who are being convicted of infringing property, infringing the economic management order, convicted on domestic or foreign charges in sectors of securities, finance, banking, insurance without effacing criminal record; those who have been convicted of domestic or foreign charges from serious crimes or more;

c) Those who are prohibited from managing other enterprises in accordance with law on enterprises;

d) Those who used to be private business owners, partners of the partnerships, the directors (general directors), members of the Management Board, Council of Members, Supervisory Board of the enterprises, chairman and members of the Management Board of cooperative at the time that the enterprise, the cooperative is declared bankruptcy, except the enterprise, the cooperative is declared bankruptcy due to force majeure;

e) The legal representative of the enterprise at the time the enterprise is suspended its business operation, forced to dissolve due to serious violations of the law, except for the case of being representative proposed by the competent State agency to regulate and strengthen the enterprise;

e) Those who used to be suspended the titles of chairmen of the Management Boards, members of the Management Boards, chairmen of the Councils of members, members of the Councils of members, head of the supervisory board, supervisory board’s members, Directors (general directors) of the credit institutions, securities trading organizations, and insurance enterprises under the provisions of specialized laws, or determined by the competent authorities that those persons violate law leading to the institutions’ being-revoked-license;

g) Those who are not participated in the management and administration in accordance with law on officers, civil servants and the law on prevention and combat of corruption;

h) As a member of more than five (05) Representative Boards of the public fund, the Management Boards of the public securities investment company;

i) Other cases as stipulated in the fund charter.

3. The following cases, naturally lost their status as members of the Representative Board of the fund:

a) Lost civil act capacity, died;

b) As representatives of the capital contributed by investors as organizations when the organizations are terminated its legal entity;

c) no longer being representatives of the contributed capital by authorization of investors as organizations;

d) Expelled from the territory of the Socialist Republic of Vietnam;

đ) Other cases as stipulated in the fund charter.

4. At least two-thirds (2/3) of the members of the Representative Board of the fund are the independent members by the following principles:

a) Not being the relevant persons of the fund management companies, custodian banks, or authorized representatives of these organizations;

b) Satisfying the other provisions in the fund charter (if any).

5. The Representative Board of the fund must have:

a) At least one independent member with qualification and experience in the field of accounting and auditing;

b) At least one independent member with qualification and experience in the field of analysis of investment in securities or asset management;

c) At least one member with legal expertise.

6. Tenure, standards, order, procedures for the appointment, dismissal, removal, addition of members of the Representative Board of the fund shall comply with the provisions of the fund Charter in accordance with the provisions of law on enterprises and securities applicable to members of the Management Board and the Management Board.

7. Within ten (10) days from the date of change of members of the Representative Board of the fund, the fund management company notifies the State Securities Commission and sends a list of the members of the Representative Board of the fund in the form prescribed in Appendix 12 issued together with this Circular with the personal records of the new members of the Representative Board.

8. Where the structure of the Representative Board no longer meets the conditions specified in Clauses 4 and 5 of this Article, or has the members in the cases specified in Clauses 2 and 3 of this Article, within fifteen (15) days after detecting the matter, the Representative Board of the fund shall choose members of temporary replacement meeting the relevant regulations. The fund management company discloses information on the selection of members of temporary replacement of the Representative Board of the fund in accordance with the securities law of the change members of the Representative Board of the fund. Temporarily-replacing members execute the rights and perform obligations of the members of Representative Board of the fund until the general meeting of the investors officially appoints the replacement members.

9. The rights and obligations of the Representative Board of the fund are specified in the fund charter and must include at least the following tasks:

a) To represent the interests of investors; carry out the activities in accordance with provisions of law to protect the interests of investors;

b) To approve the valuation manual, list of the organizations that provide quotation as prescribed in Clause 3, Article 10 of this Circular; list of the banks receiving deposit of the fund as provided for in Clause 3 of Article 9 of this Circular; approve the transactions provided for in Clause 10 of Article 9 of this Circular; approve dossier requesting for further issuance of fund certificates and other related contents according to assigned competence;

c) To decide on the income distributed by the profit division plan provided for in the fund charter or adopted by the general meeting of the investors; implementation time, manner and form of profit distribution;

d) To decide on problems without consistency between the fund management company and the custodian bank on the basis of the provisions of the law;

đ) To request the fund management company, custodian bank promptly to provide all documents, information on asset management activities and monitoring activities;

e) To perform other duties as prescribed by law and the provisions of the fund Charter.

10. Decisions of the Representative Board of the fund are adopted by voting at the meetings or collecting written opinions in accordance with the fund charter. Each member of the Representative Board of the fund has a voting.

11. Members of the Representative Board of the fund have the  following rights, responsibilities and obligations:

a) The rights, responsibilities and obligations of the members of Representative Board of the fund shall comply with the provisions of enterprise and securities law applied to the members of the Management Board of the listing companies and in the fund charter;

b) To perform their duties honestly, diligently for the best interests of the fund; may not authorize the others to exercise their rights, obligations and responsibilities to the fund;

c) To fully attend the meetings of Representative Board of the fund and have clear opinions of the issues discussed.

12. In case the fund charter has no regulation, remuneration and other benefits of the members of Representative Board of the fund shall comply with the following provisions:

a) Members of Representative Board of the fund are paid remuneration by their works, paid for the costs of food, accommodation, travel and other reasonable costs based on the number of working days, the nature of the works and the daily average remuneration in accordance with provisions of the fund charter and decisions of the general meeting of the investors. Remuneration and expenses that the fund has paid to each member of the Representative Board of the fund are published in details in the annual report of the fund. The fund management company is responsible for withholding regular income tax of members of the Representative Board of the fund in accordance with the relevant laws;

b) The total remuneration and expenses paid to the Representative Board of the fund in year do not exceed the total operating budget per year of the Representative Board of the fund adopted by the general meeting of investors. These amounts are included in the management expenses of the fund and must be made in a separate section in the annual financial statements of the fund.

13. The fund management companies are responsible for supporting in personnel, technical equipment, preparing materials in the meeting of the Representative Board of the fund. The Representative Board of the fund holds meeting at least once six (06) months or as required by the fund management company. The order for holding the meeting, the agenda and related documents are notified in advance to the members within the time limit prescribed by enterprise law, the fund charter. Form to attend the meeting can be in person, or through the communication media as stipulated in the fund charter.

14. The Representative Board of the fund’s meeting is held when there are at least two-thirds (2/3) of the members attending the meeting, in which the number of independent members must be a majority (51% or more of the members attending the meeting). Members not directly attending the meeting have the voting rights to adopt by a written vote. Decision of the Representative Board of the fund shall be adopted if it is adopted by a majority of the members and a majority of independent members.

15. Minute of meeting of the Representative Board of the fund must be detailed and clear. Secretary and other members of the Representative Board of the fund participating in the meeting must sign in the minute of the meeting. Minute of meeting of the Representative Board of the fund shall be kept in the fund management company under the provisions of enterprise law and fund charter.

Section 4. RESTRUCTURING OF THE FUND

Article 16. Consolidation or merger of the fund

1. Closed fund is consolidated, merged with another closed fund in accordance with the decision of the general meeting of the investors. At least thirty (30) days before the general meeting of the investors is taken place, the fund management company must provide for the investors the documents related to the consolidation or merger including:

a) Plan of consolidation or merger together with the analysis report of the consolidation or merger with the contents specified in Appendix 05 attached herewith;

b) The draft contract of consolidation or merger with the content specified in Appendix 06 attached herewith;

c) The annual financial statements audited, the quarterly financial statements of all merged, consolidated funds to the latest quarter;

d) Draft charter of the fund, the prospectus, the summary prospectus of the consolidated fund; draft charter of the merger receiving fund, the prospectus and summary prospectus of the merger receiving fund.

2. Within ten (10) days from the date of adopting the decision of consolidation, merger of the general meeting of the investors, the fund management company must notify the decision of consolidation, merger of the fund to the creditors. Within thirty (30) days from the date of receipt of the notice, the creditors may demand the fund to make payment the amount payable in writing. If a written request is not sent to the fund management company within the time limit mentioned above, the creditors shall be considered as not requesting the merged, consolidated funds to make payment before the consolidation or merger. Payment obligation shall be made by the consolidation, merger receiving fund.

3. Where the consolidated, merged funds are all managed by the same fund management company, all legal consulting service costs, administrative costs and other services related to consolidation or merger of the funds, are not accounted for in the cost of the funds, unless the general meeting of the investors otherwise provides for.

4. Fund management company, the representative board of the fund shall:

a) Provide adequately, timely, accurately and truthfully the information on the process of consolidation, merger to the investors;

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

c) Payment of the fund’s debts to the creditors at the request of the creditors. The payment must be completed no later than the date of the consolidation or merger.

Article 17. The order and procedures for consolidation, merger of the fund

1. Within sixty (60) days from the date of the latest general meeting of investors of the fund to participate in consolidation, merger to adopt the decision on consolidation, merger, fund management company files dossier to request the State Securities Commission to grant certificate of registration for establishment of the fund to the consolidation fund or adjust certificate of registration for establishment of the fund to the merger receiving fund. Dossier includes the following documents:

a) Application for adjustment of certificate of registration for establishment of the fund in the form prescribed in Appendix 07 attached herewith; together with the original of the certificates of registration for the establishment of the merged, consolidated funds;

b) Plan of consolidation, merger and contract of consolidation, merger adopted by the general meeting of the investors which clearly specifies the roadmap to implement;

c) Report on assessment of the custodian banks on the contents of the plan of merger, consolidation and contract of merger, consolidation related to the principle of determining liabilities, assets and net asset value at the date of consolidation, merger; conversion rules and determination of the conversion rate; plan and the principle of transfer of assets between the funds; number of fund certificates expected for circulation of the consolidation, merger receiving fund;

d) Minutes of the meeting and the resolutions of the general meeting of investors on the consolidation, merger;

đ) The list of creditors requesting for payment of the payable accounts, the payable value of each creditor;

e) other relevant documents sent to the investors;

g) The official dispatches of the Stock Exchange, the Securities Depository Center to approve in principle the listing cancellation or temporary suspension from trading, cancellation of the registration of merged, consolidated fund certificates;

h) In the case of the fund consolidation, additional materials include the consolidated fund charter, consolidated fund prospectus, contract in principle on supervision signed with the custodian bank adopted by the general meeting of investors of the consolidated funds.

2. Dossier requesting for grant of fund establishment registration certificate for the consolidating fund, or adjusting the fund establishment registration certificate for the merger receiving fund is made into an (01) original set together with an electronic data file. The original set is sent in person to the State Securities Commission or sent by post.

3. Within thirty (30) days from the date of receiving complete and valid dossier as prescribed in Clause 1 of this Article, the State Securities Commission shall grant or adjust fund establishment registration certificate. In case of refusal, the State Securities Commission shall reply in writing, and clearly state the reason.

4. The consolidation, merger date is the date that the certificate of registration of the establishment of the fund or adjusted fund establishment registration certificate is effective. Since this time:

a) The consolidated fund, merged fund ends its existence at the same time the consolidating fund, merger receiving fund inherits all assets, liabilities, rights, and legal interests and other obligations of the merged, consolidated funds;

b) The investors of consolidated funds, merged funds are received assets in the form of certificates of the consolidating fund, merger receiving fund according to a conversion rate determined at the date of consolidation or merger;

c) Certificate of merged, consolidated funds are canceled on the date of consolidation or merger.

5. Within seven (07) days from the date of consolidation, merger, fund management company discloses information on the completion of the consolidation, merger under the provisions of Clause 4 of Article 3 of this Circular. Content of publication of information includes:

a) Date of consolidation, merger;

b) Principles for determining the net asset value per mergered, consolidated fund certificate at the date of the consolidation or merger; conversion rate of fund certificate; liquidity ratio per fund certificate (if any).

6. From the date of consolidation, merger, fund management company, custodian bank shall:

a) Receive the handover of all accounting books, documents, securities portfolio and other assets together with other documents related to the merged, consolidated fund;

b) Receive and inherit all of the rights and legitimate interests, take responsibility for the financial obligations, debts, including tax debts, financial obligations to the State; continue to implement the economic contracts of the merged, consolidated funds;

c) Complete the procedures of registration for ownership of assets received from the merged, consolidated funds in accordance with relevant law;

d) Represent the consolidating fund, merger receiving fund to implement the obligations of the fund in accordance with the relevant law provisions.

7. Within fifteen (15) days from the date of consolidation, merger, custodian bank appraises the accuracy and notifies the State Securities Commission the results of the consolidation, merger in the form prescribed in Appendix 08 attached herewith.

Article 18. Extension of the operation duration of the fund

1. The extension of the operation duration of the fund shall comply with the following provisions:

a) The extension of the operation duration of the fund adopted by the general meeting of investors of the fund;

b) The fund's net asset value at the latest valuation period before the time of filing dossier for extension is not less than fifty (50) billion VND.

2. In a period of at least thirty (30) days before the expiration of the operation, fund management company must conduct extension procedures. Dossier requesting for extension of the fund include the following documents:

a) Notice of extension of operation duration of the fund in the form prescribed in Appendix 09 attached herewith;

b) Minutes of the meeting and the resolutions of the general meeting of the investors of the fund on extension of the operation duration of the fund, in which specifies the duration of operation of the fund;

c) The contract signed with the custodian bank on the extension of the time to provide supervision services for the fund;

d) Details of portfolio and report on the net asset value of the fund (certified by the custodian bank) at the latest valuation date calculated to the date of applying for extension.

3. Dossier requesting for extension of the operation duration of the fund shall be made in one (01) original set together with an electronic data file. The original set is sent in person to the State Securities Commission or sent by post.

4. Within fifteen (15) days from the date of receiving complete and valid dossier as prescribed in Clause 2 of this Article, the State Securities Commission shall adjust fund establishment registration certificate. In case of refusal, the State Securities Commission shall reply in writing, clearly state the reason.

Article 19. Dissolution of the fund

1. The liquidation, dissolution of the fund is conducted in the following cases:

a) The fund management company has been dissolved, declared bankruptcy or revoked the license of establishment and operation but the fund representative board may not establish a replacing fund management company within two (02) months, since the date of occurence of the event;

b) Custodian bank has been dissolved, declared bankruptcy, unilaterally terminated the supervision contract or the supervision contract has been terminated by the fund management company; certificate of registration for operation of securities depository of custodian bank has been revoked but the fund management company can not establish another custodian bank to replace within two (02) months from the date of occurence of the event;

c) The net asset value of the fund is reduced to less than ten (10) billion VND in six (06) consecutive months;

d) Expiration of the operation duration stated in the fund charter or the general meeting of the investors makes decision to dissolve the fund before the end of the operation duration stated in the fund charter;

đ) Other cases as prescribed by the fund charter.

2. Within thirty (30) days from the date of dissolution of the fund as prescribed at Point a, b, c and đ, Clause 1 of this Article, or three (03) months before the date of dissolution of the fund as stipulated in point d Clause 1 of this Article, the fund management company or custodian bank and the representative board of the fund (in the absence of the fund management company) convenes a general meeting of investors to adopt the dissolution plan of the fund.

3. The general meeting of investors has the right to appoint an independent auditing organization to inspect, evaluate and supervise all activities of liquidation, valuation, re-appraisal of valuation and distribution of the fund's assets to the investors; maintain the operation of the in-power the representative board of the fund to supervise the process of liquidating and distributing its assets.

4. Fund management company, custodian bank is responsible for implementation of the liquidation, distribution of assets to investors under the plan adopted by the general meeting of investors. Where the fund is dissolved under the provisions of Clause 1 of this Article, the custodian bank is responsible for the liquidation, distribution of assets of the Fund.

5. The general meeting of investors decides the date of fund dissolution. From the date of dissolution of the fund, the fund management company, the custodian bank may not:

a) Implement the investment activities, purchases of assets for the fund;

b) Transfer the unsecured debts into debts secured by the assets of the fund;

c) Give the assets of the fund to other organizations and individuals;

d) Make payment for the contract in which the value of the obligations of the fund is more than the value of the obligations of the other party; or make debt payments to the creditors that are simultaneously the debtors of the fund without offset;

đ) carry out other transactions for the purpose of dispersing assets of the fund.

6. Assets of the fund being dissolved, including:

a) Assets and property rights which the fund has at the time that the fund is forced to  be dissolved;

b) Profits, assets and property rights that the fund will have due to the implementation of the transactions established prior to the time the fund is forced to be dissolved;

c) Assets that are things used to secure the obligations of the fund. Where using assets as things used to secure to make payment to the secured creditors, if the value of things used to secure exceeds the payable secured debts, the excess is the fund's asset.

7. The liquidation of assets as stock listed, registered for transaction is done through the trading system of the stock exchanges, or transaction by other means to ensure the greatest benefit for the fund and in accordance with plan of dissolution adopted by the general meeting of investors.

Where independent audit organization or representative board of the fund implements the supervision of the liquidation process of assets in accordance with provisions of Clause 3 of this Article, the sale of assets that are not stock listed, registered for transaction must also be approved in writing by the independent audit organization or representative board of the fund (if any) as specified in point b Clause 10, Article 9 of this Circular.

8. Where the investors have requested in writing, the fund management company or custodian bank is transferred the porfolio to the investors corresponding to the percentage of ownership of the investors in the fund in the following principles:

a) The porfolio transferred to the investors must cover a full range of assets in the fund's portfolio, the structure of each asset like the portfolio of fund under the plan of liquidation and distribution of assets;

b) In case of being securities registered, of centralized depository, the transfer of assets to the investors, the fund management company, custodian bank shall comply with the guidance of the Securities Depository Center;

In case of being other assets required to register ownership, the fund management company, custodian bank shall require the organizations receiving investment capital, issuers, shareholders book managing organization to register asset ownership for the investors. The payment is considered as completion after ownership of the investors was registered.

9. Proceeds from the liquidation of the fund’s assets and the remaining assets are paid in the following priority order:

a) Financial obligations to the State;

b) The amounts to be paid to the fund management company, custodian bank, other payables and fund dissolution costs. In the case fund is required to be dissolved in accordance with point a or b, Clause 1 of this Article, the fund is not required to pay to the fund management company or custodian bank the costs arising under the contract from the date of occurance of the conditions;

c) The remaining assets are used to pay investors corresponding to proportion of capital contributed by the investors in the fund. Where they are the assets of ownership registration, the fund management company, custodian bank shall require the Securities Depository Center, organization managing shareholder books, issuers and organizations receiving investment capital (for securities unregistered for depository, shares) perform the allocation and registration of asset ownership for the investors.

10. Result of liquidation of the fund's assets must be certified by the custodian bank, the fund management company (if any) and approved by the independent audit organization or representative board of the fund (if any) performing the supervision of the liquidation of assets.

Article 20. The order and procedures for dissolution

1. Within seven (07) days from the date of adopting the dissolution of the fund by the general meeting of the investors, the fund management company or custodian bank and representative board of the fund (in the absence of fund management company) must announce the dissolution of fund to the State Securities Commission.

2. Documents for making announcement of the dissolution of fund include:

a) Notice of fund dissolution in the form prescribed in Appendix 09 attached herewith;

b) Minutes of the meeting and the resolutions of the general meeting of the investors on the dissolution of fund, together with plan and roadmap of liquidation and distribution of assets adopted by the general meeting of the investors, which clearly states the principle to determine the net asset value at the date of dissolution and the during the liquidation of assets of the fund in accordance with the provisions of law, the provisions of the fund Charter and valuation manual; asset distribution method for investors and provide information for the investors regarding the liquidation and distribution of assets;

c) Written commitment signed by the legal representative of the fund management company (if any) and the custodian bank on the taking responsibility for completing the asset liquidation procedures for fund dissolution.

3. After fifteen (15) days from the date of the notice, if the State Securities Commission has no opinion, the fund management company, custodian bank shall publish notice of fund dissolution as specified in Clause 4 of Article 3 of this Circular. At the same time, the fund management company carries out the order, procedure to cancel the voluntary listing, registration of fund certificates under the guidance of the Stock Exchange, the Securities Depository Center.

4. Liquidation of assets, the time limit for asset liquidation of fund is made under the plan of dissolution adopted by the general meeting of the investors, but not more than two (02) years from the date of publication of the notice of the dissolution of the fund. During the liquidation of fund’s assets for dissolution, management fee, supervision fees and other fees collected by the tariff adopted by the general meeting of the investors. After the date of fund dissolution, monthly, the fund management companiy provides for the investors with information on the payment rate per fund certificate, expenses incurred during the period, the remaining net asset value of the fund, the remaining net asset value per fund certificate and value of assets distributed to investors in the form prescribed in Appendix 16 attached herewith. Notices sent to the investors must be provided to the State Securities Commission together with a report on the assets and report on the fund's portfolio in the form prescribed in Appendix 17 attached herewith.

5. Within five (05) days from the date of completion of the dissolution of the fund, the fund management company, custodian bank (if there is no fund management company) is responsible for the publication of information on the completion of liquidation, distribution and dissolution of the fund in accordance with provisions of Clause 4 of Article 3 of this Circular, at the same time notifying the State Securities Commission the fund dissolution results, including the following documents:

a) The report certified by the fund management company, the custodian bank and the audit organization or the representative board of the fund (if any) on the liquidation of assets of the fund, the repayment of debts and the performance of other asset obligations for the creditors, those who have other rights and obligations, including financial obligations to the State under the provisions of Appendix 10 attached herewith. The report must include a list of creditors and the debts paid, including tax debts;

b) The report certified by the fund management company, the custodian bank and the audit organization or the representative board of the fund (if any) on the process of liquidation of assets, the method of liquidation and distribution of assets; total value of assets collected after the liquidation; total payable debts and the remaining assets for distribution to the investors. Where the fund distributing assets not money, additional documentation includes written certification of the Securities Depository Center on the completion of distribution, registration of securities for the investors at the request of the fund Management Company, custodian bank and investors; written certification of the organization managing books of shareholders, issuers, enterprise receiving investment capital of the fund for the completion of transfer of ownership of shares, the equity for each investor participating in the fund at the request of the fund management company;

c) The original of the certificate of registration of the establishment of the fund;

d) Report on the evaluation of the results of asset liquidation of the audit organization designated by the general meeting of the investors or of the representative board of the fund (if any).

6. Where the notice on the liquidation results is not accurate, having forged documents, the fund management company, custodian bank, the concerned organizations or individuals shall be jointly responsible for payment of the outstanding debts and take personal responsibility before law for the consequences arising within three (03) years from the date of report on the dissolution result to the State Securities Commission.

Chapter III

MEMBER FUND

Article 21. Establishment of member fund

1. Member fund contributed capital to establish by the members meeting the provisions of point b Clause 2 of this Article on the basis of the Capital Contribution Agreement Memoradium and fund charter.

2. The establishment of member fund must be reported to the State Securities Commission and meet the following conditions:

a) Capital contributed actually must be at least fifty (50) billion VND;

b) Having a maximum number of thirty (30) contributing members and including only members as domestic legal entities, foreign organizations;

c) Being managed by a fund management company meeting those specified at Points b and c, Clause 2, Article 4 of this Circular;

d) The assets of the fund deposited at a depository bank independent from the fund management company.

3. Report records on the establishment of the member fund include the following documents:

a) Application for registration of the operation of the member fund made by the fund management company in the form prescribed in Appendix 03 attached herewith;

b) Fund charter, including the relevant contents in the form prescribed in Appendix 11 attached herewith;

c) The prospectus, the cover page of the prospectus must be stated clearly the principle of operation of the fund: "This fund must not comply with the provisions of the law governing investment activity of securities investment fund implementing selling offer of fund certificates to the public. The investment in this fund is only suitable for the organizations willing to accept a potential high level of risk from the investment of the fund. Organizations investing in this fund should consider carefully before contributing capital, making investment decision";

d) Asset depository contract;

đ) Minutes of capital contribution agreement, a list of organizations to contribute capital in the form prescribed in Appendix 12 attached herewith and the following documents:

- A certified copy of the establishment decision, business registration certificate or other equivalent document of limited partners. For members as foreign organizations, a copy of the business registration certificate or equivalent document must be certified by the agency where the organizations registered not exceeding six (06) months before the date of completion of dossier registering for fund establishment and must be translated and notarized public in accordance with relevant laws;

- Minutes of the meeting and the decision of the general meeting of shareholders or the Management Board, the decision of the Council of members or the owners in accordance with the provisions of the company charter of the organization to contribute capital on the capital contribution to the fund, on appointment of authorized representative of contributed capital together with the personal records of this person;

- A copy of the certificate of registration of securities trading code of the foreign organization;

e) Depository bank’s certification on the scale of contributed capital.

4. Report records on the establishment of the member fund is made into one (01) original set together with an electronic data file. The original is sent in person to the State Securities Commission or sent by post.

5. Fund management companies shall ensure that the information in the record must be complete, accurate and truthful. When the record is being under consideration, the fund management companies are obliged to update, modify, add documents if they found that information is incorrect, important information arises, or important information is omitted which is required to have in the record according to provisions. The amendments and supplements must be signed by those who have signed in the record or of those who have the same titles with those persons or the legal representative of the company.

6. The fund management companies and the organizations contributing capital to establish member funds may not use the mass media to advertise, call for capital contribution.

7. Within fifteen (15) days after receiving a complete record in accordance with provisions in Clause 3 of this Article, the State Securities Commission notifies in writing to confirm that the fund management company has reported on the establishment of member fund. In case of refusal, the State Securities Commission shall reply in writing, and clearly state the reason.

8. Within five (05) days after the date of receipt of the notice of the State Securities Commission, the fund management company discloses information on the establishment of the member fund as provided for in Clause 4 of Article 3 of this Circular. Capital of the member fund may only be disbursed after the notice of the State Securities Commission was issued.

Article 22. Increase, decrease of charter capital of member fund

1. The increase or decrease of the charter capital of the member fund shall comply with the following provisions:

a) The fund charter providing for the increase or decrease of charter capital;

b) The increase or decrease of charter capital of the fund adopted by the general meeting of members of the fund;

c) After the adjustment of capital is made, the fund still meets the provisions of Clause 2, Article 21 of this Circular;

d) In case of increase of capital, the fund management company must meet additional conditions as specified in point b clause 2 of Article 4 of this Circular.

2. In the case of reduction of capital, assets used to allocate to the members may be cash or other assets by the decision of the general meeting of members of the fund. Fund management company, custodian bank is responsible for allocating assets fairly correspond to the capital contribution percentage of each member. The transfer of names, registration of ownership of assets to the members, performance of tax obligations to the State shall comply with the relevant provisions of law.

3. Member fund is increased capital by way of raising additional capital from existing members, or raising additional capital from the new members. Capital contributed additionally may be in cash or types of securities listed or registered for trading at the Stock Exchange. The capital contribution with securities must ensure:

a) Limited partners are not limited to transfer for assets expected to be put into the fund provided that they are not the assets used to secure under pledge, mortgage, escrow, deposit, frozen or in the other security asset transactions in accordance with the provisions of the civil law;

b) Assets included in the fund must meet the provisions of the fund charter, in conformity with the investment objective and investment policy of the fund; they are not the assets included in the fund's portfolio, but about to be liquidated or divested; they are not securities paused, temporarily suspended from trading and delisted or securities of the issuers in a state of liquidation, dissolution or bankruptcy;

c) The contribution of capital by assets must be approved by all members of the fund, and is considered to be completed after the legal ownership to the assets used to contribute capital has been transferred to the fund. The transfer of ownership is done under the guidance of the Securities Depository Center;

d) The valuation of assets used to contribute capital must be consistent with the provisions of the fund Charter and other provisions of law, if relevant. Value of assets included in the fund shall be determined on the basis of the price of the day-end at the date of completion of the transfer procedures of ownership at the Securities Depository Center.

4. Within seven (07) days after the completion of the capital increase or reduction of the fund, the fund management company must notify the State Securities Commission on the increase or reduction of capital of the fund as follows:

a) Notice of the increase or decrease of capital of member fund;

b) Minutes of the meeting and the resolutions of the general meeting of members on the increase or reduction of capital and other relevant documents;

c) Fund charter amendment; depository contract amended and supplemented (if any);

d) Minutes of the capital contribution agreement and a list of limited partners, amount of contributed capital, the percentage of contributed capital ownership before and after the increase or decrease of charter capital in the form specified in Appendix 12, issued together with this Circular;

e) Written certification of the depository bank on the additionally-contributed capital, list of assets contributed into the fund. In case of capital contribution by securities, add written certification of the Securities Depository Center on the transfer of securities portfolio of the organizations to contribute capital to the fund, including the securities depository account number of each organization, amount and type (code) stock, date of transfer of ownership and portfolio accounting into depository account of the fund. In case of reduction of capital: written certification of depository bank, the Securities Depository Center (in case of asset allocation as securities to members) on asset allocation for each member, which clearly state the list of assets distributed to the member.

5. Dossier specified in Clause 4 of this Article shall be made into an (01) ordinary set together with an electronic data file. The original set is sent in person to the State Securities Commission or sent by post.

6. Within five (05) days from the date of receiving complete and valid dossier as prescribed in Clause 4 of this Article, the State Securities Commission notifies in writing to confirm the increase or decrease of capital of the member fund. In case of refusal, the State Securities Commission shall reply in writing, clearly state the reason. The increased capital of the member fund is disbursed only after having confirmation of the capital increase made by the State Securities Commission.

Article 23. Consolidation or merger of the member fund

1. Member fund is consolidated, merged with another member fund according to decision of the general meeting of members. The fund established after the consolidation or merger has number of the members not exceeding thirty (30) members. Date of consolidation, merger is the date that the general meeting of members adopts the decision on the consolidation or merger.

2. Within five (05) days from the date of consolidation or merger, fund management company must submit dossier of notification of consolidation, merger of member fund, including the following documents:

a) Written notice of the consolidation or merger of the member fund;

b) Minutes of the meeting and the resolutions of the general meeting of members on the consolidation, merger, together with plan for consolidation or merger which clearly states the principles and methods of determining the liability, assets and net asset value at the date of consolidation or merger;

c) Details of the portfolio, total asset value, total liabilities and net asset value at the date of consolidation or merger; conversion rate of fund certificate at the date of the consolidation or merger; liquidity ratio per fund certificate (if any);

d) The value of the loans repaid at the request of creditors (if any);

đ) In the case of consolidating the funds, additional materials include the consolidated fund charter, contract of asset depository of the consolidated fund.

3. Dossier specified in Clause 2 of this Article shall be made in an (01) original set together with an electronic data file. The original set is sent in person to the State Securities Commission or sent by post.

4. Within five (05) days from the date of receiving complete and valid dossier as prescribed in Clause 2 of this Article, the State Securities Commission shall send a written notice confirming the consolidation, merger of the funds . In case of refusal, the State Securities Commission shall reply in writing, clearly state the reason.

5. Since the date of consolidation, merger of the funds, the consolidating, merger receiving fund inherits the rights and obligations of the mergered, consolidated funds under the provisions of Clause 4 of Article 17 of this Circular.

6. Within seven (07) days from the date of notification of the State Securities Commission confirming the consolidation, merger of the funds, fund management company discloses information on the completion of the consolidation, merger under the provisions of Clause 4 of Article 3 of this Circular.

Article 24. Extension of the operation duration, dissolution of the member funds

1. The extension of operation duration of the member fund shall comply with the decision of the general meeting of members, in accordance with the provisions of Clause 1 of Article 18 of this Circular.

2. In a period of at least fifteen (15) days before expiration of the fund’s operation duration, fund management company reports the State Securities Commission on the extension of the operation duration of the member fund. Report dossier on the extension of the operation duration of the fund includes the following documents:

a) The documents specified in Clause 2, Article 18 of this Circular;

b) A list of members of the fund in the form prescribed in Appendix 12 attached herewith and documents of the new members (if any) as specified in point đ Clause 3, Article 21 of this Circular.

3. Dossier, order and procedures for extension of operation duration of the member fund shall comply with the provisions of Clause 3 and 4 of Article 18 of this Circular.

4. The dissolution of the member fund is made by fund management company, depository bank, general meeting of members in accordance with the relevant provisions in Article 19 of this Circular. The liquidation and distribution of assets, provision of information on liquidation of assets for the investors shall follow the plan of dissolution adopted by the general meeting of members. Order, procedures, records announcing the dissolution and report on the process of liquidating assets to dissolve the fund and report records on the completion of dissolution of the member fund shall comply with the relevant provisions in Article 20 of this Circular, together with the documents of depository bank and fund management company clearly stating the payment details, the list of assets distributed to each member and the written certification of the members of get enough money or assets under the plan of dissolution adopted by the general meeting of members.

Article 25. Investment activities of the member fund

1. Member fund is invested in the types of assets defined in Clauses 2 and 3 of Article 9 of this Circular. The member fund is contributed capital to establish joint-stock company, limited liability company under the provisions of the law on enterprises. Where the fund charter regulates and approved by the general meeting of members in writing, the member fund is invested in the types of real estates satisfying the conditions to be traded in accordance with the law on real estate business.

2. Unless the fund charter otherwise provided for, the member fund is not required to comply with the relevant provisions of Points a, b, c, d, Clause 4, Clause 5, Clause 6, Clause 7, Clause 8, Clause 9, Clause 10 of Article 9 of this Circular.

3. In the activity of member fund management, the fund management companies must ensure that:

a) Do not invest in their own funds and other securities investment funds, including securities investment companies, real estate investment funds;

b) Do not use capital, assets of the fund to provide loans, guarantee the loan of any third party; do not guarantee the issuance of securities;

c) In cases of provided for by fund charter, the funds are loaned with mortgage, overdrawn or other forms from the depository banks, loan for buying securities (margin trading) in ​​the following principles:

- The loan of assets must comply with the provisions of law;

- The loan limit shall be decided by the general meeting of members, but must ensure that the total debts and liabilities of the fund does not exceed 30% of the total assets of the fund at any time;

- The credit department of the depository bank must be completely separate from the organizational structure and operation with the asset depository department of the fund; credit activity is independent from depository operation and not subject to the regulation of depository contract;

- The fund management company must provide information on the rights of the depository bank and the possibility of conflict of interests for the general meeting of members to consider and decide;

d) Fund management fees, award fees (if any) paid to the fund management company, fees paid to depository bank and other service charges should be provided for in details in the fund charter, in accordance with the provisions of law.

4. Fund management company shall make and archive registers of limited partners and all information related to the transfer of contributed capital between the members. Depository bank may provide services to make and archive registers of limited partners on the basis of service providing contracts signed with the fund management company.

5. Fund management company identifies, or authorizes depository bank monthly to determine the net asset value of the member fund and the net asset value per fund certificate. In case of authorizing depository bank to determine the net asset value, the fund management company must check regularly, monitor to ensure that the activities of determining the net asset value is consistent with the provisions of law, provisions of fund charter and the net asset value is calculated correctly.

6. Fund management companies must build valuation manual including the contents specified in Clause 2, Article 10 of this Circular. List of the quoting organizations, the valuation manual must be approved by the Board of Representatives of the fund.

7. The distribution of income of the member fund shall comply with the provisions of Article 11 of this Circular.

Article 26. Regulations on members, representative board of the fund

1. The rights and obligations of participants in the Board of Representatives of the member fund shall comply with the provisions of the fund charter, in conformity with the relevant provisions of Articles 12, 13 and 14 of this Circular. Where the fund Charter does not require, structure of the Board of Representatives of the member fund is not subject to the provisions of Clause 5 of Article 15 of this Circular. Other provisions of the members of Board of Representatives of the fund and Board of Representatives of the fund shall comply with Article 15 of this Circular.

2. Limited partners are free to transfer their contributed capital in the fund. The transfer of part or all of the contributed capital in the fund must:

a) The transferee satisfies the relevant provisions of Clause 2, Article 3 of this Circular;

b) After the transfer is made, the fund still meets the conditions specified in Clause 2, Article 21 of this Circular.

3. Within fifteen (15) days from the date of completion of the transaction, the fund management company notifies the State Securities Commission on the transfer of the contributed capital among the members of the fund as follows:

a) Notification on transfer of the contributed capital among the members, which clearly state the information on the parties to the transaction, quantity of fund certificates and percentage of ownership of the parties (before and after the transaction); transaction value;

b) Transfer contract between the members of the fund certified by the fund management company

Chapter V

CUSTODIAN BANKS, DEPOSITORY BANKS

Article 27. The general provisions on custodian bank

1. Custodian bank selected by the fund management company must meet the conditions specified in Clause 1, Article 98 of the Law on Securities.

2. Custodian bank must be completely independent and separate from the fund management company that the bank provides custodian services.

3. Members of the Management Board, members of the Executive Board and employees of the custodian bank who directly do the preservation of the fund’s assets and monitor the asset management activities of the fund management company (hereinafter referred to professional staffs) are not the persons relating or participating in the management, administration of fund management company or having ownership relationship, capital contribution, share holding, borrowing or lending with the fund management company that custodian bank provides supervision service and vice versa.

4. Custodian banks, members of the Management Board, members of the Executive Board and professional staffs are not partners of purchase and sale of the transactions of purchase and sale of assets of the fund, except for foreign exchange transactions accordance with the provisions of the relevant law, the securities transactions made through the trading system of the Stock Exchange.

5. If there are the matters arising that the bank no longer meets the conditions specified in Clauses 1, 2 and 3 of this Article, within two-four (24) hours from the arising time the bank must notify the fund management company and the State Securities Commission.

6. To monitor the operation of the fund, the custodian bank must have at least two (02) employees having the following certificates:

a) Certificate of the securities law;

b) Basic Certificate of securities and securities market; or certificates of practicing securities business or took exame and obtained international certificate of securities investment analysis CFA from level 1 or higher (Chartered Financial Analyst level 1), CIIA (Certified International Investment Analyst) level 1 or higher; or securities business practicing certificate issued at the nations as members of the Organization for Economic Cooperation and Development (OECD);

c) Accounting certificate, or chief accountant certificate, or audit certificate, or obtained international certificates in the field of accounting, auditing ACCA (Association of Chartered Certified Accountants), CPA (Certified Public Accountants), CA (Chartered Accountants), ACA (Associate Chartered Accountants).

7. Within ten (10) days from the effective date of the supervision contract, custodian bank is obliged to report and send to the State Securities Commission:

a) supervision contract;

b) Written provision of information together with a valid copy of professional certificates in accordance with provisions of Clause 6 of this Article of the professional staff designated supervision, preservation of the fund’s assets by the custodian bank;

c) Commitment of custodian bank and the professional staffs of the custodian bank for meeting the provisions of Clauses 1, 2 and 3 of this Article.

8. Report records of custodian bank specified in Clause 7 of this Article shall be made into an (01) original set together with an electronic data file. The original set is sent in person to the State Securities Commission or sent by post.

9. Within seven (07) days after receiving complete and valid dossier as prescribed in Clause 7 of this Article, the State Securities Commission sends a written certification on reporting records of custodian bank and professional staff designated to supervise activities of the fund by the custodian bank.

Article 28. Operation of the depository bank, custodian bank

1. Depository bank, custodian bank is selected foreign financial institution with asset depository function to be auxiliary depository institution to deposit assets in foreign countries of the fund invested in accordance with law provisions. Depository authorization activity must comply with the following provisions:

a) Auxiliary depository institution must be a depository member in accordance with foreign law;

b) Depository authorization activity must be made on the basis of a contract between depository bank, custodian bank and auxiliary depository institution. The contract must clearly define the rights, obligations and responsibilities between the depository bank, custodian bank and auxiliary depository institution. Auxiliary depository institution shall only comply with order or legal instruction of the depository bank, custodian bank;

c) The deposited assets must be clearly identified as assets of the fund that the depository bank, custodian bank provides services;

d) Depository bank, custodian bank is responsible for inspecting, supervising the activities of the auxiliary depository institution as well as bearing all costs incurred relating to the authorization to perform asset supervision, depository activities of the fund;

đ) Foreign auxiliary depository institution has the right to re-deposit assets in the securities depository organization of which they are members, according to the regulations of the home country. Fund's assets must be registered ownership by auxiliary depository institution of the fund in accordance with provisions of relevant laws;

e) Depository bank, custodian bank must have full information on all assets owned by the fund, including the type, quantity, place of depository, asset storage and documents certifying ownership of the fund's assets. Depository bank, custodian bank is responsible for ensuring the fund's assets to be registered ownership of the fund, deposited to always be able to identify, confirm that the assets are owned by the fund.

2. Responsibility of the depository bank, custodian bank in the depository activity of assets of the fund:

a) To require the fund management company to register fund's assets under the name of the fund in the earliest time according to the economic terms and conditions of the contract between the fund (through a fund management company) and partners and accordance with the provisions of the relevant legislation; to ensure all assets of the fund arising in the territory of Vietnam must be registered ownership of the fund and make full depository in the depository bank, custodian bank in the following principles:

- Where the assets registered ownership, then register, record under the name of the owner as the fund, unless the assets must be registered, recorded under the name of the depository bank, custodian bank or the auxiliary depository institution or fund management company under the relevant provisions of the law, at the same time, deposit at the depository bank, custodian bank. Original legal documents certifying ownership of assets must be deposited and sent full treasury at the depository bank, custodian bank, unless the securities are registered, made centralized depository. Where the assets are real estate, depository bank, custodian bank must ensure full legal documentation of ownership, use rights as prescribed. Where securities are issued in book-entry form, or the transfer of ownership of the fund has not been completed, the original contract of sale and purchase and buying payment transactions must be deposited at a depository bank, custodian bank;

Where the assets are not registered ownership, or have not been timely transfered ownership to the fund within the time limit prescribed in the issuance agreements, assignment contract, investment contract or equivalent economic contracts, depository bank, custodian bank shall clearly confirm the status of depository and registration of assets in the periodic reports prepared in accordance with the relevant provisions of Clause 1, Article 32, Clause 1 Article 33 of this Circular, at the same time send a written notice to the representative board of the fund.

- If they are type of assets not registered ownership, the depository bank, custodian bank is responsible for monthly cross-check with the organization receiving investment capital, issuer, organization managing the registers of shareholders or other equivalent organizations in quantity, the value of the fund's assets, to ensure the depository of assets to comply with the provisions at Point e, Clause 1 of this Article.

- Where they are bank deposits, the depository bank, custodian bank has the right and responsibility for requiring fund management company to provide full information on the deposit contracts, the deposit accounts of the fund. Depository bank, custodian bank is responsible for monthly cross-check of the balance of deposit accounts, the value of the deposit contracts with the banks receiving deposits of the fund;

b) Separate management and depository from assets of each fund; separate from assets of the funds with assets of depository bank, custodian bank and separate from the assets of the other customers of the depository bank, custodian bank. Each fund is opened a separate securities depository account, separate from the securities depository accounts of the other individuals and organizations, including of the fund management company;

c) The fund management company is representative authorized to make transactions of the fund's assets. The transfer of the fund's assets in investment activities, investment divestment is made only by written directive of the fund management company in accordance with the provisions of the depository contract, supervision contract;

d) The payment of transactions of securities listed, registered for transaction 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 of other asset transactions must comply with the orders and lawful directives of the fund management company and other provisions of law, if relevant. All money transfers, payment, transfer of assets must comply with the trading partners of the fund, the fund's accounts. The payment value must match the volume of assets, the transaction price and the right amount stated in the payment vouchers;

đ) Perform properly, fully and promptly according to orders, lawful directives of the fund management company; execute fully and promptly the rights and obligations related to the ownership of the fund's assets, including the procedures for payment and settlement of tax to the fund;

e) Verify the reports on the assets of the fund established by the fund management company, to ensure that the volume of assets in the report is true, complete and accurate to the real status of assets deposited in the banks;

g) Participate and provide full information at the meetings of general meeting of investors of the securities investment fund, general meeting of members of the fund, the meetings of the Board of Representative of the fund, but without voting right.

3. Fund's assets in the material or immaterial form, registered ownership in the fund’s name or not (in the case assets are unregistered ownership in accordance with the law provisions), are deposited in depository bank, custodian bank and auxiliary depository organization (if any), are the assets owned by the fund, not the assets of the depository bank, custodian bank or fund management company. Depository bank, custodian bank may not use the assets of the fund to pay or guarantee payment for its debts or for third parties, including for fund management company.

4. The transactions for the fund on account of depository bank, custodian bank, including activities receiving money, transaction payment, receiving dividends, bond interest and other income, must be determined clearly as belong to the fund. Where the transactions on the account or in the name of the auxiliary depository organization under the relevant law, these transactions and assets in the transaction must be clearly determined clearly as belong to the fund, through the custodian bank.

5. Depository bank, custodian bank must have appropriate technical system to automatically receive, monitor, implement and account transactions related to the assets on account of the fund, except for otherwise having specific instructions in writing made by the fund management company. The system must meet the following basic contents:

a) Having accounting books to record complete, full assets of the fund. All changes related to assets must also be reflected fully, accurately and timely;

b) Having revenues, expenditures, accounting of dividends, bond interest, capital gains and other income;

c) Accounting securities, fund certificate in the transactions of acquisition, additional issuance or conversion;

d) Implementing book entry, payment for expenses;

đ) Receiving and making book-entry to record securities account from the additional issuance, restructuring the issuer and other related adjustment activities.

6. Depository bank, custodian bank is responsible for full compensation for the fund in the event of loss of the assets of the fund deposited and sent to the store of the bank in accordance with the law, including the cases of error or fraud of the bank's employees, or due to negligence, careless of the bank.

7. Depository bank, custodian bank is responsible for full compensation for the fund in case the auxiliary depository organization causes loss to the fund's assets, except:

a) Under unforeseen circumstances, beyond the control of the depository bank, custodian bank, which was clearly stated on the indemnity to the depository bank, custodian bank under the relevant terms and conditions in the depository contract, supervision contract;

b) The auxiliary depository organization is responsible for paying compensation to the fund and auxiliary depository contract with terms to allow the fund management company on behalf of the fund to require the auxiliary depository organization to pay compensation under the contract;

c) Depository bank, custodian bank has fulfilled responsibilities of evaluation and the activities related to the authorization in accordance with the provisions of the law.

8. Where the depository bank provides supervision service for the member fund, the depository bank makes reporting obligations only to the limited partners in accordance with provisions of the supervision contract, without obligation to report to the State Securities Commission of the supervision activities specified in Article 29 of this Circular.

Article 29. Closed fund supervision activities of the custodian bank supervision

1. Supervision scope is limited only in the activities of fund management companies related to the closed fund that the bank performs supervision function.

2. Responsibility of the custodian bank in investment supervision activities of the fund management company for the assets of closed fund:

a) To coordinate with the fund management company to periodically review internal processes in principle, the method of determining the net asset value of the fund; supervise the determination of net asset value; inspect to ensure that net asset value per fund certificate is true, correct and in accordance with the provisions of law, the provisions of the fund Charter;

b) To supervise the investment activity and asset transactions of the fund, re-check to ensure type of invested asset, portfolio structure if it is in accordance with the regulations on investment restriction, loan restriction accordance with the law provisions and in the fund charter; supervise the asset transactions between the fund and fund management company and the concerned persons, to ensure compliance with the provisions of the law and the fund charter;

In case of detecting signs of violation of the provisions of law, the custodian bank shall report to the State Securities Commission and notify the fund management company within twenty-four (24) hours from the detection of the matter and require the fund management company to take remedial measures, overcome the consequences arising within the prescribed time limit;

c) To supervise the implementation, inspection of results of consolidation, merger, dissolution and liquidation of its assets;

d) To supervise and ensure the legality and payment only from the assets of the fund, the expenses in accordance with the provisions of the law and the provisions of the fund charter;

đ) To supervise the other activities of the fund management company in the management of the fund's assets in accordance with the provisions of Article 98 of the Law on Securities, the relevant provisions of this Circular and other documents guiding securities law and in the fund charter;

e) To confirm the reports on net asset value, investment activity, investment portfolio of the fund established by the fund management company.

3. Custodian bank is responsible for setting up and storing records, documents under written form and electronic data file in a period of ten (10) years to confirm compliance with the legal provisions of the fund management company in the form prescribed in Appendix 15 attached herewith. These documents must be provided upon written request of the State Securities Commission.

4. When requested in writing by the fund management company, the custodian bank is responsible for providing timely, completely and accurately necessary information for the fund management company, approved auditing organization for the organization to execute the rights and perform obligations with respect to the fund in accordance with the law, the fund charter.

5. The custodian bank may request the fund management company promptly provide the necessary information and documentation if relevant for the custodian bank to be able to execute the rights and perform obligations to the fund in accordance with law. The custodian bank is responsible for keep in secret in accordance with the law for all documents and information received from the fund management company.

6. The custodian bank may provide service of determining the fund's net asset value for the fund management company. Department providing service of determining the net asset value at the custodian bank must be separated from the departments of personnel, customer electronic database system, department of performing the supervision function and other business departments of the custodian bank. Department providing service of determining the net asset value must have employees with certificate of chief accountant or accounting or audit certificate or international certificates in the field of accounting ACCA, CPA, CA, ACA.

7. Where the fund management company does not carry out the operations to restore the fund within the time limit prescribed in Clause 6, Clause 7, Article 9 of this Circular, the custodian bank shall report to the State Securities Commission within seven (07) days from the date of sending a notice to the fund management company by the custodian bank. In this case, the custodian bank has the power only to make orders, directives and legal transactions of the fund management company but not making the structure of the fund's portfolio violate the provisions of law and other provisions in the fund charter.

8. Where the fund management company must pay damages to the fund, investors in accordance with provisions of Clause 8 of Article 9 of this Circular and other relevant regulations, the custodian bank must cooperate with the fund management company to conduct procedures for making payments timely and adequately to the investors under the lawful directives of the fund management company. The custodian bank, or associating with the fund management company (depending on the supervision contract’s content) is responsible for paying compensation for the fund in the event of damages incurred from that the custodian bank does not perform fully and promptly the responsibility to supervise the investment activities of the fund, to determine the net asset value of the fund and other supervision activities to the fund under the provisions of the law. The level of damage compensation is made under the terms and conditions of the contract signed or agreement between the fund management company and the custodian bank.

Article 30. Termination of the rights and obligations of the depository bank, custodian bank for the fund

1. Depository bank, custodian bank terminates its rights and obligations to the fund in the following cases:

a) Depository bank, custodian bank is split, separated, dissolved, declared bankruptcy, consolidated, merged, converted legal entity or revoked certificate of registration for operation of depositing securities in accordance with provisions of Clause 2 of Article 51 of the Law on Securities;

b) Unilateral termination of the depository contract, supervision contract;

c) The fund expires its time of operation, dissolved, consolidated or merged;

d) The decision of the general meeting of the investors or the general meeting of the members of the fund.

2. In the cases specified in Clause 1 of this Article, the rights and obligations to the fund of the depository bank, custodian bank is transferred to the other depository bank, custodian bank as stipulated in Article 31 from this Circular. The depository bank, custodian bank terminates the contract only after they have completed the transfer of all rights and obligations to the replacing bank.

3. Where the depository bank, custodian bank converts its legal entity, the new bank inheriting all rights and obligations for asset is made depository and supervision like the former bank.

Article 31. Change of the depository bank, custodian bank

1. In case of changing the depository bank, custodian bank, the fund management company is obliged to report the State Securities Commission and propose a depository bank, custodian bank to replace together with the following documents:

a) A written request for replacement of custodian bank, depository bank co-signed by the fund management company and depository bank, custodian bank; in which clearly states the reason for replacement; together with the written commitment of depository bank, custodian bank on the transfer of full rights and obligations with respect to the assets of the fund to the replacing depository bank, custodian bank;

b) Minute of the meeting and decision of the general meeting of the investors, the general meeting of members on changing the depository bank, custodian bank, which clearly states depository bank, custodian bank expected to replace; approving the plan to convert the assets from the former depository bank, custodian bank to the replacing depository bank, custodian bank;

c) Depository contract in principle, custodian contract in principle signed with the replacing depository bank, custodian bank;

d) Amended charter;

đ) The plan of handing over the rights and responsibilities of the banks, including a period of two banks making the transfer and method to handle the issues of rights and obligations of the concerned parties.

2. Dossier specified in Clause 1 of this Article shall be made into an (01) original set of dossier together with the electronic data file. The original set is sent in person to the State Securities Commission or sent by post.

3. Within ten (10) days from the date of receiving complete and valid dossier prescribed in Clause 1 of this Article, the State Securities Commission adjusts the content of the change of custodian bank, depository bank in the certificate of fund establishment registration or notice of the report of the establishment of a member fund. In case of refusal, the State Securities Commission shall reply in writing, clearly stating the reason.

4. Rights and obligations to the fund of the custodian bank, depository bank are terminated only at the time of completion of the transfer of rights and obligations toward the fund to the replacing custodian bank, depository bank. The replacing custodian bank, depository bank shall establish and submit to the State Securities Commission the handover minute between two custodian, depository banks certified by the fund management company and the Representative Board of the fund.

5. Within ten (10) days from the date of completion of the replacement of a depository bank, custodian bank specified in Clause 3 of this Article, the fund management company shall disclose information on the change of depository bank, custodian bank to the fund in accordance with the relevant laws.

Chapter VI

REPORTING OBLIGATIONS

Article 32. Information to the investors and the obligation to report on the operation of the fund

1. The fund management companies must periodically submit to the State Securities Commission the following reports:

a) Weekly report on the change of net asset value of closed fund in the form;

b) Report on investment activity (including information on assets) of the fund monthly, quarterly and annually in the form prescribed in Appendix 17 attached herewith;

c) The prospectus, summary prospectus; audited annual, semi-annual and quarterly financial statements.

2. The documents referred to in Clause 1 of this Article shall be provided free of charge to the investors on electronic information page of the fund management company, or e-mailed directly to the investors or other forms provided for in the fund charter, prospectus.

3. The investors may refuse to receive the documents specified in Clause 2 of this Article. Where the investors request, the fund management company must provide the risk management process, stating clearly the investment restrictions, methods of prevention and risk management used to manage the fund's assets.

4. The deadline for submission of the reports:

a) For the monthly reports, is within five (05) days after the end of the month;

b) For the quarterly reports, is within twenty (20) days after the end of the quarter;

c) For the semi-annual reports, within thirty (30) days after the end of the second quarter;

d) For the annual reports, is within ninety (90) days after the end of the fiscal year.

5. In addition to the cases of report provided for in this Article, in case of necessity, in order to protect the public interest and the interests of the investors, the State Securities Commission may require the fund management company to report on the fund’s operation.

6. The fund management companies must report to the State Securities Commission, within forty-eight (48) hours from receipt of the reporting requirements specified in Clause 5 of this Article.

7. The reports sent to the State Securities Commission shall be accompanied by an electronic data file.

8. Within seven (07) days from the date of amendment and supplement of the fund charter, prospectus update, the fund management companies must report to the State Securities Commission, accompanied by the fund charter, prospectus, and disclose the information specified in Clause 4 of Article 3 of this Circular and provide to the investors upon request.

Article 33. Reporting obligations of the custodian bank, depository bank

1. The custodian bank shall prepare and submit to the State Securities Commission the monthly, quarterly and annual supervision reports on asset management activities of the fund made by the fund management company under the form prescribed in Appendix 18 issued together with this Circular. The supervision reports of the custodian bank must assess the compliance with the provisions of law, the provisions of the fund Charter as follows:

a) To assess the compliance of the fund management company in the investment activity and transactions of the funds;

b) To assess the determination of the net asset value of the fund, which details the cases of incorrect valuation of assets of the fund (if any);

c) The issuance of fund certificates, capital mobilization of the fund;

d) The violations (if any) of the fund management company and proposals of solutions to handle, overcome.

2. The custodian bank is obliged to report the State Securities Commission, within twenty-four (24) hours after the violation has been detected in the following cases:

a) The fund management company violates the law on securities and securities market;

b) Losses from asset management activities caused by the fund management company are too big and the cost to remedy is too high;

c) The other cases at the request of the State Securities Commission.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 34. Effect

This Circular takes effect from March 15, 2013 and replaces the Decision No.45/2007/QD-BTC dated June 05, 2007 of the Minister of Finance on promulgating the Regulation on the establishment and management of the securities investment funds.

Article 35. Implementation organization

The State Securities Commission, the fund management companies, custodian banks, depository banks and other organizations and individuals involved in the activities of closed funds, the member funds are responsible for the implementation.

Appendix No. 03

FORM OF REQUEST FOR GRANT/ ADJUSTMENT OF CERTIFICATE OF REGISTRATION FOR FUND ESTABLISHMENT

(Promulgated together with the Circular No. 224/2012/TT-BTC of December 26, 2012 of the Ministry of Finance guiding establishment and management of closed-end funds, member funds)

THE SOCIALIST REPUBLIC OF VIETNAM

Independence– Freedom – Happiness

-------------------------------------

...., date ...... month .......year....

REQUEST FOR GRANT/ ADJUSTMENT OF  

CERTIFICATE OF REGISTRATION FOR FUND ESTABLISHMENT

Respectfully to: State Securities Commission

We are:

- Name of company (full name, abbreviated name and English name):

- The permit of establishment and operation No.: .... Issued by the State Securities Commission dated ……………

- Address of head office:

- Telephone: .... .........Fax:…….

To request the State Securities Commission for grant/ adjustment of certificate of registration for fund establishment with the following contents:

­­­­­

1. Name of investment fund (full name, abbreviated name and English name):

2. Custodian Bank:

3. Certificate of registration for the public offer of fund certificates (if any) number …. Issued by the State Securities Commission dated …………

4. Operational duration of the fund (if any):

5. Quantity of fund certificates:

6. The charter capital of fund:

7. Par value of fund certificate:       

In case of request for adjustment of certificate of registration for fund establishment, it is required to supplement:

8. Certificate of registration for fund establishment number …. Issued by the State Securities Commission dated …………;

9. Quantity of the circulating fund certificates (before adjustment):

10. The charter capital of fund (before adjustment):

11. Quantity of fund certificates that are issued additionally:

12. The issuing price of a fund certificate unit:

14. The additionally-mobilized capital:

15. Quantity of the circulating fund certificates (after adjustment):

We hereby undertake to be fully responsible for the accuracy and truthfulness of the content of request and dossier of registering for fund establishment / request for adjustment of  certificate of registration for fund establishment attached to this documents.

Appendix No. 12

FORM OF MEMBER LIST

(Promulgated together with the Circular No. 224/2012/TT-BTC of December 26, 2012 of the Ministry of Finance guiding establishment and management of closed-end funds, member funds)

I.             Form of member list of the Fund Representative Board

II.           Form of  list of members contributed capital into the member fund

We hereby undertake to be fully responsible for the accuracy and truthfulness of the contents above.

The other appendices are not translated herein