Thông tư 91/2013/TT-BTC

CIRCULAR

GUIDING THE REGISTRATION OF ESTABLISHMENT, ORGANIZATION AND OPERATION OF VIETNAM-BASED REPRESENTATIVE OFFICES OF FOREIGN SECURITIES TRADING ORGANIZATIONS AND VIETNAM-BASED BRANCHES OF FOREIGN FUND MANAGEMENT COMPANIES

Pursuant to the June 28, 2006 Law on Securities;

Pursuant to the November 24, 2010 Law Amending and Supplementing a Number of Articles of the Law on Securities;

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

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

At the proposal of the Chairman of the State Securities Commission,

The Minister of Finance promulgates the Circular to guide the registration of establishment, organization and operation of Vietnam-based representative offices of foreign securities trading organizations and Vietnam-based branches of foreign fund management companies.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. This Circular guides the registration of establishment, organization and operation of Vietnam-based representative offices of foreign securities trading organizations and Vietnam-based branches of foreign fund management companies.

2. Subjects of application include: Vietnam-based representative offices of foreign securities trading organizations (below referred to as representative offices); Vietnam-based branches of foreign fund management companies (below referred to as branches); and individuals and organizations involved in the registration of establishment, organization and operation of Vietnam-based representative offices and branches.

Article 2. Interpretation of terms

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

1. Valid copy means a copy of a document which is notarized or certified in accordance with Vietnamese law.

2. Vietnam-based branch of a foreign fund management company means a dependent unit of such company (parent company), which has no legal person status and has its parent company taking responsibility before Vietnamese law for all of its activities in Vietnam.

3. Parent company means a securities trading organization established in a foreign country and registering the operation of a Vietnam-based representative office or a foreign fund management company established in a foreign country and registering the establishment of a Vietnam-based branch.

The parent company takes responsibility before Vietnamese law for all activities and obligations of their Vietnam-based representative offices or branches.

4. Competent representative means:

a/ Chairperson of the Board of Directors, chairperson of the Members’ Council, company president, chief executive officer or general director of the parent company;

b/ A person authorized in writing by the person mentioned at Point a of this Clause;

c/ A person competent according to the parent company’s charter to sign documents specified in this Circular and perform relevant jobs within the scope of vested powers.

5. Personal file includes an information sheet made according to the form in Appendix 2 to this Circular and a valid copy of the valid people’s identity card or passport or another lawful personal identification paper.

6. Valid dossier comprises documents and papers which are fully filled in as prescribed by relevant laws, including foreign-language documents made on the following principles:

a/ Documents issued by competent foreign state management agencies must be legalized by consular offices, translated into Vietnamese and notarized in accordance with relevant laws. The date of consular legalization must be within six (6) months before the submission of the dossier;

b/ Other foreign-language documents not issued by competent foreign state management agencies or documents downloaded from websites of such agencies must only be translated into Vietnamese by a licensed translation organization in Vietnam; or translated into Vietnamese by another organization, provided Vietnamese translations are certified by a licensed translation organization in Vietnam to be accurate and complete to foreign-language documents. These documents are not subject to consular legalization;

7. Date of operation commencement means a day on which a Vietnam-based representative office of a foreign securities trading organization or a Vietnam-based branch of a foreign fund management company commences operation.

8. Country of origin means a country where a parent company is established and locates its head office.

9. Foreign securities trading organization means a securities company or fund management company established in a foreign country.

10. Vietnam-based representative office of a foreign securities trading organization means a Vietnam-based representative office of a securities company or foreign fund management company established in a foreign country.

11. Charter capital of a Vietnam-based branch of a foreign fund management company means capital allocated by a parent company to its Vietnam-based branch.

Chapter II

OPERATION REGISTRATION OF REPRESENTATIVE OFFICES OF FOREIGN SECURITIES TRADING ORGANIZATIONS

Article 3. Conditions for operation registration of representative offices

Foreign securities trading organization that wish to register operation of their Vietnam-based representative offices must satisfy the conditions prescribed in Clauses 1 and 2, Article 74 of Decree No. 58/2012/ND-CP of July 20, 2012, 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.

Article 4. Dossiers for operation registration of representative offices

1. A dossier for operation registration of a representative office comprises:

a/ An application for a certificate of operation registration of a representative office, made according to the form provided in Appendix 1 to this Circular and signed by a competent representative of the parent company;

b/ A valid copy of the establishment and operation license or business registration certificate or documents of equivalent legal validity of the parent company. In case these documents specify an operation term of the parent company, the remaining time of such term must be at least one (1) year;

c/ A valid copy of the articles of incorporation of the parent company or the memorandum for private placement or the establishment contract;

d/ A valid copy of the document certifying that the parent company satisfies the conditions prescribed in Article 3 of this Circular;

dd/ A valid copy of the written permission of the competent foreign management agency for opening a Vietnam-based representative office (if required by foreign law);

e/ The latest audited annual financial statement by the time of submission of the dossier, and written certification of the fulfillment of the tax obligation in the latest fiscal year issued by a competent agency of the country of origin;

g/ Minutes and decision of the meeting of the Board of Directors or Members’ Council or chief executive officer or director (general director) on the establishment of a Vietnam-based representative office and appointment of the chief representative in Vietnam;

h/ Personal files of the person expected to be appointed as the chief representative and staff members of the representative office;

i/ A contract or on-principle contract on rent of the working office of the representative office, enclosed with documents certifying the ownership and use right or leasing competence of the lessor;

k/ In case of establishing a representative office of a fund management company, the following documents related to the fund currently investing in Vietnam (if any) must be added:

- A valid copy of the fund establishment registration (if any) or a document certifying that the fund has completed the establishment registration (if any) in a foreign country granted by a foreign management agency; articles of incorporation and prospectus of the fund, entrustment contract or memorandum for private placement or another equivalent document;

- A document of the custodian bank certifying the fund’s assets in Vietnam;

- A valid copy of the certificate of registration of the securities trading code of the fund (if any) or a document certifying the registration for opening of an account for capital contribution or share purchase in Vietnam dong or an account of indirect foreign investment capital (if any).

2. A dossier prescribed in Clause 1 of this Article must be made in two (2) sets, one (1) in Vietnamese and one (1) original set in the language of the country of origin, enclosed with its electronic file. Such a dossier may be submitted directly or sent by post to the State Securities Commission.

3. The parent company may modify and supplement the dossier when finding it necessary or requested by the State Securities Commission. Within six (6) months after the State Securities Commission makes a written request, the parent company shall complete the dossier under regulations. Past that time limit, if the parent company fails to modify and supplement the documents or complete the dossier as required, the State Securities Commission may refuse to grant a representative office operation registration certificate.

4. Within seven (7) days after receiving a complete and valid dossier prescribed in Clauses 1 and 2 of this Article, the State Securities Commission shall grant a representative office operation registration certificate. In case of refusal to grant, the State Securities Commission shall reply in writing, clearly stating the reason for refusal, but is not required to return the dossier.

Article 5. Information disclosure and operation commencement

1. Within thirty (30) days after its representative office operation registration certificate takes effect, a parent company or representative office shall carry out procedures for grant of a seal by the public security agency, publicize such certificate on a licensed printed or electronic newspaper permitted for distribution in Vietnam for three (3) consecutive issues, with the following details:

a/ Name and address of the representative office;

b/ Full name, abbreviated name, transaction name and address of the head office of the parent company;

c/ Full name and nationality of the chief representative;

d/ Serial number, date and validity term of the certificate;

dd/ Operations of the representative office;

e/ Expected date of operation commencement.

2. Within fifteen (15) days from the date of operation commencement, the representative office shall send to the State Securities Commission a notice of operation, made according to the form provided in Appendix 4 to this Circular, and documents certifying that the parent company has completed the procedures prescribed in Clause 1 of this Article.

Article 6. Operation term of representative offices

1. The operation term of a representative office is specified in its operation registration certificate.

2. The maximum validity term of a representative office operation registration certificate is five (5) years but must not exceed the remaining validity duration of the establishment and operation certificate or the business registration certificate or a document equivalent validity of the parent company.

Article 7. Modification of representative office operation registration certificates

1. A parent company shall request the State Securities Commission to modify its representative office operation registration certificate in the following cases:

a/ Change of chief representative;

b/ Renaming of the representative office;

c/ Relocation of the representative office in Vietnam;

d/ Renaming or relocation of the head office of the parent company;

dd/ Change of the place of business registration of the parent company;

e/ Change of the legal status or any change related to the division, splitting, merger or consolidation of the parent company.

2. A dossier of request for modification of a representative office operation registration certificate comprises:

a/ In case of change of chief representative:

- A written request for modification of the representative office operation registration certificate, made according to the form provided in Appendix 3 to this Circular and signed by the competent representative of the parent company;

- A decision on change of chief representative, signed by the competent representative of the parent company;

- Documents certifying that the dismissed chief representative has fulfilled the tax and financial obligations toward the Vietnamese State;

- Personal file of the person expected to be appointed as the chief representative.

b/ In case of renaming or relocation of the representative office:

- A written request for modification of the representative office operation registration certificate, made according to the form provided in Appendix 3 to this Circular, signed by the competent representative of the parent company or the head office authorized by the parent company, and enclosed with a power of attorney;

- A copy of the contract to rent the new office of the representative office (in case of relocation of the representative office), enclosed with documents certifying the ownership and land use right or leasing competence of the lessor.

c/ In case of a change related to the parent company as specified at Points b, d, dd and e, Clause 1 of this Article, within six (6) months after such change occurs, the parent company shall request the modification of the representative office operation registration certificate. A dossier comprises the following:

- A written request for modification of the representative office operation registration certificate, made according to the form provided in Appendix 3 to this Circular and signed by the competent representative of the parent company;

- A valid copy of the establishment and operation license or business registration certificate or a valid document granted by a foreign competent management agency certifying the relocation of the head office of the parent company; change of the place of business registration of the parent company; renaming or change of the legal status; the division, splitting, merger or consolidation; or a document of equivalent validity.

3. A dossier mentioned in Clause 2 of this Article must be made in two (2) sets, one (1) in Vietnamese and one (1) original set in the language of the country of origin, enclosed with its electronic file. Such a dossier may be sent directly or by post to the State Securities Commission.

4. Within seven (7) days after receiving a complete and valid dossier made according to Clause 2 or 3 of this Article, the State Securities Commission shall modify the representative office operation registration certificate. In case of refusal to modify the certificate, the State Securities Commission shall reply in writing, clearly stating the reason.

5. Within seven (7) days after the modified representative office operation registration certificate takes effect, the parent company shall publicize information on modified contents of the certificate according to Clause 1, Article 5 of this Circular.

Article 8. Extension of representative office operation registration certificates

1. A foreign securities trading organization may have its representative office operation registration certificate extended when fully satisfying the following conditions:

a/ It continues to maintain its operation in accordance with the law of the country of origin and satisfy the conditions prescribed in Article 3 of this Circular;

b/ It commits no violation of the Vietnamese law which may lead to the revocation of the representative office operation registration certificate.

2. At least thirty (30) days before the representative office operation registration certificate expires, the parent company shall carry out the procedures for extension, unless it has submitted a complete and valid dossier for extension of the operation duration of its representative office under Clauses 3 and 4 of this Article before the representative office operation registration certificate expires. Past that time limit, if the parent company wishes to maintain the operation of its Vietnam-based representative office, it shall carry out the procedures for grant of a new representative office operation registration certificate under Clauses 3 and 4 of this Circular.

3. A dossier of request for extension of a representative office operation registration certificate comprises:

a/ A written request for the representative office operation registration certificate, made according to the form provided in Appendix 3 to this Circular and signed by the competent representative of the parent company;

b/ Relevant documents specified at Points b, d, e and g, Clause 1, Article 4 of this Circular;

c/ In case of a change in the articles of incorporation of the parent company or change of the chief representative or relocation of the representative office, the relevant documents specified at Points c, h and i, Clause 1 of Article 4 and Clause 2, Article 7 of this Circular must be added.

4. A dossier specified in Clause 3 of this Article must be made in two (2) sets, one (1) in Vietnamese and one (1) original set in the language of the country of origin, enclosed with an electronic data file. Such a dossier may be sent directly or by post to the State Securities Commission.

5. Within seven (7) days after receiving a complete and valid dossier, the State Securities Commission shall carry out the procedures for extension of the representative office operation registration certificate. In case of refusal to extend the certificate, the State Securities Commission shall reply in writing, clearly stating the reason.

Article 9. Scope of operation, rights and obligations of representative offices, chief representatives and staff members of representative offices

The scope of operation, rights and obligations of representative offices, chief representatives and staff members of representative offices are specified in Clauses 4 and 5, Article 78 of the Law on Securities; Article 76 of the Government’s Decree No. 58/2012/ND-CP of July 20, 2012, 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. Staff members of representative offices shall pay taxes in accordance with the Vietnamese law.

Article 10. Termination of operation of representative offices

1. A representative office terminates its operation in the following cases:

a/ At the request of the parent company;

b/ Upon the expiration of the operation term specified in the representative office operation registration certificate.;

c/ It has its operation registration certificate revoked under Article 11 of this Circular.

2. In case a representative office terminates its operation under Points a and b, Clause 1 of this Article, at least thirty (30) days before the expected date of operation termination, the parent company shall send to the State Securities Commission a dossier of request for termination of operation of representative office. Such a dossier comprises:

a/ A notice of termination of operation of the representative office, made according to the form provided in Appendix 5 to this Circular;

b/ A plan on termination of operation of the representative office, specifying the order and procedures for liquidation of assets and fulfillment of obligations of the representative office; method, time limit and plan for payment of debts, recovery of assets, and settlement of obligations and interests of related individuals and organizations; and a plan on transfer of money and assets of the representative office abroad;

c/ A decision of the parent company on termination of operation of the representative office.

3. A dossier specified in Clause 2 of this Article must be made in two (2) sets, one (1) in Vietnamese and one (1) original set in the language of the country of origin, enclosed with its electronic file. Such a dossier may be sent directly or by post to the State Securities Commission.

4. Within ten (10) days after receiving a complete and valid dossier specified in Clauses 2 and 3 of this Article, the State Securities Commission shall consider and approve on principle the termination of operation of the representative office.

5. After receiving the State Securities Commission’s on-principle written approval of termination of operation of the representative office, the representative office shall carry out the procedures for its closure, including:

a/ Publicizing information on operation termination on three (3) consecutive issues of a central or local newspaper of the locality where the representative office is located for related organizations and individuals to know and settle related interests;

b/ Liquidating the office rent contract and labor contracts with its staff members and other transactions (if any);

c/ Fulfilling tax and financial obligations toward the State in accordance with current laws;

d/ Carrying out procedures for returning its seal in accordance with relevant laws;

dd/ Paying all debts and other obligations toward related organizations and individuals in Vietnam; fulfilling all obligations and interests toward other related organizations and individuals.

6. After completing the procedures prescribed in Clause 5 of this Article, the parent company shall report to the State Securities Commission on the completion of the procedures for termination of operation of its Vietnam-based representative office. A reporting dossier comprises:

a/ A notice of termination of operation of the representative office, made according to a form provided in Appendix 6 to this Circular and signed by a competent representative of the parent company;

b/ Relevant documents certifying that the parent company has completed the liquidation procedures and fulfilled all obligations toward related organizations and individuals specified in Clause 5 of this Article and relevant laws of Vietnam;

c/ The original operation registration certificate of the representative office.

7. A dossier specified in Clause 6 of this Article must be made in two (2) sets, one (1) in Vietnamese and one (1) original set in the language of the country of origin, enclosed with its electronic file. Such a dossier may be sent directly or by post to the State Securities Commission.

8. Within fifteen (15) days after receiving a complete and valid dossier specified in Clauses 6 and 7 of this Article, the State Securities Commission shall issue a decision on revocation of the representative office operation registration certificate.

5. After receiving the State Securities Commission’s decision of termination of operation of the representative office, the parent company may transfer remaining assets (if any) of the representative office abroad in accordance with current laws.

Article 11. Revocation of representative office operation registration certificates

1. Depending on the nature and seriousness of its violation, a foreign securities trading organization may have its representative office operation registration certificate revoked in the following cases:

a/ The parent company or representative office violates regulations on foreign exchange management, internal transactions, market manipulation and other prohibited transactions in accordance with the Vietnamese law; or fails to fulfill tax and other financial obligations toward the Vietnamese State in accordance with law;

b/ The dossier of application of the representative office operation registration certificate contains untruthful or inaccurate information or omits important contents which must be included in the dossier;

c/ The representative offices operates for improper purposes, or inconsistently with the functions or other contents stated in the representative office operation registration certificate or other regulations on operation of representative offices;

d/ The representative office fails to send reports as requested by the State Securities Commission;

dd/ The parent company terminates its operation, goes bankrupt or is dissolved, divided, split up, merged or consolidated, and the organization formed after the division, splitting, merger or consolidation requests the termination of operation of the Vietnam-based representative office;

e/ The representative office fails to commence its operation within twelve (12) months after obtaining the operation registration certificate.

2. In case a representative office has its operation registration certificate revoked under Clause 1 of this Article, the State Securities Commission shall request in writing the parent company or representative office to carry out the procedures for closing the representative office under Clauses 5, 6, 7, 8 and 9 of Article 10 of this Circular.

Article 12. Obligations of representative offices to report and preserve dossiers

1. In the course of operation, a representative office shall report on its operation on a quarterly or an annual basis to the State Securities Commission. Such a report is made according to Appendix No. 7 to this Circular.

2. The time limit for submitting a report mentioned in Clause 1 of this Article:

a/ Within 15 days from the last day of a quarter;

b/ Within 90 days from the last day of a year.

3. Representative offices shall fully, accurate and prompt preserve documents and dossiers at their offices and update information and data relating to their operation. In case of necessity, at the request of the State Securities Commission, a representative office shall promptly report, provide documents or explain matters related to its and its parent company’s operation on the Vietnamese securities market.

Chapter III

ESTABLISHMENT AND OPERATION OF VIETNAM-BASED BRANCHES OF FOREIGN FUND MANAGEMENT COMPANIES

Article 13. Conditions for grant of establishment and operation licenses of Vietnam-based branches

1. A foreign fund management company that wishes to register the establishment of a Vietnam-based branch must not be in the state of consolidation, merger, division, splitting, dissolution or bankruptcy and must satisfy the conditions prescribed in Clause 3, Article 74 of Decree No. 58/2012/ND-CP of July 20, 2012, 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.

2. A branch that is expected to be established in Vietnam by a foreign fund management company must have adequate physical foundations and capable practitioners as prescribed by the law on establishment, organization and operation of fund management companies like domestic fund management companies, and satisfy the conditions prescribed in Clauses 3 and 4, Article 71 of the Government’s Decree No. 58/2012/ND-CP of July 20, 2012, 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.

Article 14. Dossiers of application for establishment and operation licenses of Vietnam-based branches

1. A dossier of application for an establishment and operation license of a Vietnam-based branch of a foreign fund management company comprises:

a/ An application for an establishment and operation license of a Vietnam-based branch of a foreign fund management company, made according to the form provided in Appendix No. 8 to this Circular and signed by a competent representative of the parent company;

b/ A plan on business operation of the Vietnam-based branch for the first three (3) years after the establishment and operation license is granted, made according to the form provided in Appendix 9 to this Circular;

c/ A valid copy of the articles of incorporation or memorandum for private placement or establishment contract;

d/ A valid copy of the establishment and operation license of the foreign fund management company or an equivalent document granted by a competent agency of the country of origin. In case such document specifies an operation term of the parent company, the remaining duration of such operation term must be at least five (5) years;

dd/ Documents certifying the eligibility of the parent company as prescribed in Article 13 of this Circular;

e/ A valid copy of the written permission of a competent foreign agency for opening a Vietnam-based branch (if any in accordance with law);

g/ The latest audited financial statement;

h/ A minutes (if any) of a meeting and a decision of the Shareholders’ General Meeting, Board of Directors or Members’ Council, or a decision of the owner or a competent representative as stated in the articles of incorporation of the parent company on the establishment of a Vietnam-based branch;

i/ A decision on appointment of the branch director of the foreign fund management company, signed by a competent person of the parent company; a tentative list of professional staff members, enclosed with their personal files and judicial records issued within six (6) months before the submission of the dossier, other related documents certifying the eligibility of the branch director or practitioners of the branch as prescribed in Clause 2, Article 13 of this Circular;

k/ A contract or an on-principle contract on rent of the branch office, enclosed with documents certifying the ownership or use right or leasing competence of the lessor;

l/ Documents related to the fund currently investing in Vietnam (if any) as prescribed at Point k, Clause 1, Article 4 of this Circular.

2. A dossier specified in Clause 1 of this Article must be made in two (2) sets, one (1) in Vietnamese and one (1) original set in the language of the country of origin, enclosed with its electronic file. Such a dossier may be sent directly or by post to the State Securities Commission.

3. Within six (6) months after the State Securities Commission makes a written request, the parent company shall supplement and complete the dossier under regulations. In case of necessity to clarify matters related to the dossier, the State Securities Commission shall request in writing the parent company or the person expected to act as the branch director to give written explanations. Past that time limit, if the parent company fails to amend and supplement documents and complete the dossier or to give adequate explanations as requested, the State Securities Commission may refuse to grant a branch establishment license.

Article 15. Procedures for grant of establishment and operation licenses of Vietnam-based branches

1. Within twenty (20) days after receiving a complete and valid dossier specified in Article 14 of this Circular, the State Securities Commission shall notify such in writing to the foreign fund management company for ensuring adequate physical foundations and staff and freeze the charter capital of the branch. The parent company may use the charter capital of the branch to build the physical foundation. The remaining charter capital must be frozen on the commercial bank account as designated by the State Securities Commission and may be released and transferred into the account of the branch immediately after the branch establishment and operation license takes effect.

2. The State Securities Commission shall inspect the physical foundations of the Vietnam-based branch office before granting an establishment and operation license.

3. Three (3) months after receiving a notice from the State Securities Commission as specified in Clause 1 of this Article, if the foreign fund management company fails to complete its physical foundations, freeze capital and supplement its staff as prescribed, the State Securities Commission may refuse to grant a license.

4. Within seven (7) days after receiving a certification of capital freezing, minutes of inspection of the physical foundations and other valid documents specified in Article 14 of this Circular, the State Securities Commission shall grant an establishment and operation license for a Vietnam-based branch of the fund management company. In case of refusal to grant a license, the State Securities Commission shall reply in writing, clearly stating the reason, but is not required to return the dossier.

5. Within thirty (30) days after the branch establishment and operation license takes effect, the parent company shall carry out the procedures for application for a seal with the public security agency, and publicize the branch establishment and operation license on a licensed printed or electronic newspaper in Vietnam for three (3) consecutive issues with the following principal details:

a/ Name and address of the branch office;

b/ Full name, abbreviated name, transaction name and address of the head office of the parent company;

c/ Full name and nationality of the branch director;

d/ Serial number, date of grant and validity term of the branch establishment and operation license;

dd/ Charter capital;

e/ Operations of the branch;

g/ Expected date of operation commencement.

6. Within fifteen (15) days from the date of operation commencement, the Vietnam-based branch shall send to the State Securities Commission a notice of operation, made according to the form provided in Appendix 14 to this Circular, and documents certifying that the foreign organization has completed the procedures prescribed in Clause 5 of this Article.

Article 16. Modification of establishment and operation licenses of Vietnam-based branches

1. The branch of a foreign fund management company shall request the State Securities Commission to modify its establishment and operation license in case of the following change:

a/ Change of the branch director;

b/ Change of the branch name;

c/ Relocation of the branch office;

d/ Renaming or relocation of the head office of the parent company;

dd/ Change of the place of business registration of the parent company;

e/ Change of the legal status or change related to the division, splitting, merger or consolidation of the parent company.

2. The dossier and procedures for requesting modification of branch establishment and operation licenses comply with the relevant provisions of Articles 7 and 14 of this Circular. In case of relocation of the branch office of the foreign fund management company, the State Securities Commission shall inspect the physical foundations to assure that the branch satisfies the operation conditions as prescribed by the law on establishment, organization and operation of the fund management company before modifying the branch establishment and operation license.

Article 17. Suspension of operation, termination of operation and revocation of establishment and operation licenses of Vietnam-based branches

1. A Vietnam-based branch shall suspend its operation for up to two (2) years in the following cases:

a/ It is forced to suspend its operation for failure to remedy its financial adequacy ratio subject to special control in accordance with law and its accumulated loss is equal to under fifty per cent (50%) of its charter capital;

b/ It voluntarily suspends its operation on the condition that it has liquidated all economic contracts related to its securities trading operation.

2. A Vietnam-based branch shall terminate its operation in the following cases:

a/ In the cases specified at Points a, b, c and d, Clause 1, Article 11 of this Circular;

b/ It fails to maintain the conditions for grant of branch establishment and operation license prescribed in Clause 3, Article 74 of Decree No. 58/2012/ND-CP of July 20, 2012, 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;

c/ It fails to remedy within the prescribed time limit its financial adequacy ratio subject to special control and its accumulated loss is equal to fifty per cent (50%) or more of its charter capital, or it no longer satisfies the condition on capital for branch operation;

3. A Vietnam-based branch has its establishment and operation license revoked in the following cases:

a/ In the cases specified at Points dd and e, Clause 1, Article 11 of this Circular;

b/ It fails to remedy violations leading to forced operation suspension or termination during the period of operation suspension or termination specified in Clause 1 or 2 of this Article.

4. The order and procedures for operation suspension or termination and revocation of establishment and operation licenses of Vietnam-based branches of foreign fund management companies comply with the law on securities like domestic fund management companies.

Article 18. Dissolution of Vietnam-based branches

1. A Vietnam-based branch is dissolved in the following cases:

a/ Its parent company so requests; it wishes to be dissolved or voluntarily terminates its operation, provided it is able to pay all debts and fulfill other obligations;

b/ Its operation term specified in its establishment and operation license expires;

c/ It has its establishment and operation license revoked.

2. The order, dossier and procedures for dissolving branches of foreign fund management companies comply with the law on securities like domestic fund management companies.

Article 19. Change of charter capital of Vietnam-based branches

1. Charter capital of a Vietnam-based may be increased with the following sources:

a/ Retained profits;

b/ Capital additionally allocated by the parent company.

2. When reducing the charter capital of its Vietnam-based branch, a parent company shall assure that the branch satisfies the conditions on charter capital and financial adequacy ratio after the reduction.

3. The order, dossier and procedures for increasing or reducing charter capital of Vietnam-based branches comply with the law on securities like domestic fund management companies.

Article 20. Operation of Vietnam-based branches

1. Vietnam-based branches shall comply with the following provisions:

a/ They may manage assets mobilized abroad, including also those formed in Vietnam from capital raised abroad; they may not raise capital in Vietnam for management in any form;

b/ Unless their entrusting clients instruct or their investment management contracts or articles of incorporation of foreign organizations otherwise provide, when managing assets of clients, branches of foreign fund management companies shall comply with regulations on depository, separate management of assets of different clients and asset transactions between investment portfolios of entrusting clients like domestic fund management companies;

c/ They shall keep confidential information on clients, asset transactions, investment portfolios of clients and other relevant information, except the case of provision of information to the State Securities Commission and competent management agencies upon request;

d/ They shall comply with the laws on foreign exchange and limit ownership in Vietnamese businesses, taxes, charges and anti-money laundering and other relevant laws;

dd/ They may use assets mobilized abroad to fund projects and businesses, provide loans and perform investment contracts under investment management contracts, articles of incorporation of foreign organizations or instructions of clients;

e/ They may not borrow capital in any form in the Vietnamese territory for their clients, other organizations and individuals or themselves; may not put trusted assets or their own assets in mortgages, pledges, escrow accounts or deposits or use them to secure or guarantee loans in the Vietnamese territory, including loans of entrusting clients, other organizations and individuals or their loans;

g/ They may not offer and issue securities to raise capital in the Vietnamese territory;

h/ They may remit their profits abroad in accordance with Vietnamese law;

i/ They shall conduct securities trading operations stated in their establishment and operation licenses in accordance with Vietnamese law and treaties to which Vietnam is a contracting party;

k/ Their employees shall pay taxes as prescribed by Vietnamese law.

2. In reporting on ownership and disclosing information on trading on the securities market, Vietnam-based branches shall:

a/ Represent their entrusting clients to perform the obligations to report on and disclose trading information in accordance with the law on securities; comply, together with entrusting clients, with regulations on reporting on ownership and disclosing information on the securities market applicable to affiliated persons, major shareholders, internal shareholders and internal investors;

b/ The obligation to make reports and disclose information arises when:

- The number of stocks owned by Vietnam-based branches, parent companies and entrusting clients reach 5% or more of the total outstanding stocks of an issuing organization, or

- Vietnam-based branches or parent companies are internal shareholders or internal investors in accordance with the law on securities.

c/ Contents of information reports and disclosure and methods of information disclosure comply with the law on disclosure of information on the securities market.

3. A Vietnam-based branch shall conduct a public offering in accordance with the law on securities in the following cases:

a/ It, its entrusting clients or it together with its entrusting clients purchases to own at least twenty five-per cent (25%) of the total outstanding stocks or closed-end fund certificates of an issuing organization;

b/ It, its entrusting clients or it together with its entrusting clients holds at least twenty five-per cent (25%) or more of the total outstanding stocks or closed-end fund certificates of an issuing organization and additionally purchase between five (5) and under ten (10) per cent of outstanding stocks or closed-end fund certificates within less than one year from the date of completion of the previous public offering;

c/ It, its entrusting clients or it together with its entrusting clients holds at least twenty five-per cent (25%) or more of the total outstanding stocks or closed-end fund certificates of an issuing organization and additionally purchase at least ten (10) per cent of outstanding stocks or closed-end fund certificates of such issuing organization.

4. In the course of operation, a Vietnam-based branch and its parent company shall:

a/ Within thirty (30) days after the parent company completes investments in its subsidiary companies, joint-stock or associated companies in Vietnam, the branch shall notify the State Securities Commission of such investments; the parent company may not contribute capital or purchase to own over 5% of the charter capital of a fund management company in Vietnam;

b/ The Vietnam-based branch may neither contribute capital nor purchase shares or capital contributions in fund management companies and securities companies in Vietnam, except when it purchases to own or owns, together with affiliated persons, no more than 5% of outstanding stocks of a fund management company or securities company registered for trading or listing on the Stock Exchange.

5. All securities transactions in Vietnam of members of management boards or employees of Vietnam-based branches must be reported to the internal control section of such branches before and right after they are conducted. A report on such personal transaction must contain information on type (code) of securities, trading volume and price, and the securities company where the trading account is opened. Reports on personal transactions must all be preserved and managed at the internal control section and provided to the State Securities Commission upon request.

6. Vietnam-based branches may provide securities investment consultancy services to domestic and foreign clients. When providing securities investment consultancy services in Vietnam, Vietnam-based branches shall fully comply with regulations on professional personnel and operations applicable to domestic fund management companies.

7. The organizational structure and management of Vietnam-based branches decided by their parent companies must comply with Vietnamese law on organizational structure, management and internal control of fund management companies.

8. Vietnam-based branches shall issue professional processes, set up and operate risk management systems under the guidance of the State Securities Commission and suitable to their professional operations, ensuring a risk control and management mechanism for each product and process of performing business operations; or may apply internal regulations issued by parent companies.

9. Annually, Vietnam-based branches shall organize training courses for their employees or request their practitioners to participate in training courses organized by the State Securities Commission (if any), ensuring their employees update professional skills and qualifications and legal knowledge.

Article 21. Financial mechanisms of Vietnam-based branches

1. In the course of operation, a Vietnam-based branch shall always maintain its equity capital not lower than the legal capital prescribed in Clause 3, Article 71 of the Government’s Decree No. 58/2012/ND-CP of July 20, 2012, 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.

2. Vietnam-based branches shall implement the financial mechanisms prescribed by Vietnamese law like domestic fund management companies.

3. Vietnam-based branches shall attain and maintain financial prudential ratios like domestic fund management companies.

Article 22. Financial and tax obligations and accounting regime of Vietnam-based branches

1. Vietnam-based branches shall perform tax and financial obligations prescribed by the laws on taxes and tax administration.

2. Vietnam-based branches shall fully comply with the provisions of the Vietnamese law on accounting of domestic fund management companies.

Article 23. Obligations of Vietnam-based branches to report, preserve dossiers and disclose information

1. A Vietnam-based branch shall send to the State Securities Commission the following periodical operation reports:

a/ Monthly and annual operation reports, made according to in the form provided in Appendix 10 to this Circular;

b/ Quarterly, biannual and annual financial statements. Biannual financial statements must be reviewed while annual financial statements must be audited by accredited audit firms;

c/ Monthly and annual reports on management of investment portfolios, made according to the form provided in Appendix 11 to this Circular; annual financial statements of investment funds in Vietnam, made according to regulations of countries of origin;

d/ Reports on financial prudential ratios as prescribed by law for domestic securities trading organizations.

2. Time limits for submitting reports specified in Clause 1 of this Article:

a/ Within ten (10) days from the last day of a month, for monthly reports; within twenty (20) days from the last day of a quarter, for quarterly reports;

b/ Within forty five (45) days from the last day of the fist six months of a fiscal year, for biannual financial statements;

c/ Within ninety (90) days from the last day of a fiscal year, for annual financial statements.

3. Vietnam-based branches shall report to the State Securities Commission events which may seriously affect their financial capability and management of trusted assets within three (3) working days after such events occur.

4. In case of necessity, in order to protect common interests and investor interests, the State Securities Commission may request branches of foreign fund management companies to report on other operations of branches or parent companies in the Vietnamese territory. Branches shall report to the State Securities Commission within forty eight (48) hours after receiving a request.

5. Vietnam-based branches shall fully, accurately and prompting preserve documents and dossiers at their offices, and update information and data relating to their operations. In case of necessity, at the request of the State Securities Commission, Vietnam-based branches shall promptly report and provide documents or explain matters related to their and their parent companies’ operations on the Vietnamese securities market.

6. Vietnam-based branches shall disclose information in accordance with current laws like domestic fund management companies.

Article 24. Examination and inspection of operations of Vietnam-based branches

1. The State Securities Commission shall examine and inspect operations of Vietnam-based branches of foreign fund management companies in accordance with current laws.

2. Before conducting examination and supervision of operations of Vietnam-based branches, parent companies and state management agencies in charge of finance, banking and securities in localities where the head offices of parent companies are located shall notify and send examination plans to the State Securities Commission.

3. Within 30 days after receiving examination conclusions, Vietnam-based branches shall send to the State Securities Commission reports on results of examination, internal control and internal audit, conclusions of inspection by parent companies and competent foreign management agencies of their branches operations.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 25. Effect

This Circular takes effect on November 1, 2013, and replaces the Finance Minister’s Decision No. 124/2008/QD-BTC of December 26, 2008, promulgating the Regulation on establishment and operation of Vietnam-based representative offices of foreign securities trading organizations.

Article 26. Organization of implementation

The State Securities Commission, Vietnam-based representative offices of foreign securities trading organizations, Vietnam-based branches of foreign fund management companies and related organizations and individuals shall organize the implementation of this Circular.-