Quyết định 35/2007/QD-BTC

DECISION

ISSUING REGULATIONS ON ORGANIZATION AND OPERATION OF FUND MANAGEMENT COMPANIES

THE MINISTER OF FINANCE

Pursuant to the Law on Securities dated 29 June 2006;
Pursuant to Decree 14/2007/ND-CP of the Government dated 19 January 2007 making detailed provisions for implementation of the Law on Securities;
Pursuant to Decree 77/2003/ND-CP of the Government dated 1 July 2003 on functions, duties, powers and organizational structure of the Ministry of Finance;
On the proposal of the chairman of the State Securities Commission:

DECIDES:

Article 1. To issue with this Decision the Regulations on Organization and Operation of Fund Management Companies.

Article 2. This Decision shall be of full force and effect fifteen (15) days after the date of its publication in the Official Gazette.

Article 3. The Head of the Office, Chairman of the State Securities Commission, fund management companies and parties concerned shall be responsible for implementing this Decision.

REGULATIONS

ON ORGANIZATION AND OPERATION OF FUND MANAGEMENT COMPANIES
(Issued with Decision 35/2007/QD-BTC of the Minister of Finance dated 15 May 2007)

Chapter I

GENERAL PROVISIONS

Article 1. Governing scope

These Regulations provide for the establishment, organization and operation of fund management companies and for the operation of securities and securities market service providers to fund management companies within the territory of the Socialist Republic of Vietnam.

Article 2. Interpretation of terms

In these Regulations, the following terms shall be construed as follows:

1. Fund management company means an organization with legal entity status which provides services being  management  of  securities  investment  Funds  and  management  of  securities  investment portfolios. Apart from licensed fund management companies, other economic institutions shall not be permitted to provide services being management of securities investment Funds and management of investment portfolios.

2. Entrusting investor means any organization or individual who entrusts a fund management company to manage investment of its/his/her assets.

3. Fund management practitioner means a person who has a fund management practising certificate issued by the State Securities Commission and who is working in a professional position in a fund management company.

4. Valid copy means a copy which is notarized [and/or] certified by a competent body of Vietnam.

5. Valid application file means a file containing all the documents required by these Regulations and with all items declared as required by law.

6. Net circulating assets means the difference between short-term assets and short-term debts.

7. Liquid capital means capital in money and assets which are convertible into cash within thirty (30) days.

8. Date of valuation means the day fixed by a fund management company to determine the net asset value of a securities investment Fund ("a Fund") or the net asset value of a securities investment company.

Chapter II

ESTABLISHMENT, ORGANIZATION AND OPERATION

Section 1. ISSUANCE OF LICENCE FOR ESTABLISHMENT AND OPERATION

Article 3. Conditions for issuance of licence for establishment and operation:

1. Having office headquarters and equipment for the professional operation including:

(a) Having the land use right for at least one year to the office headquarters, which must have safe and secure equipment;

(b) Having the minimum facilities and equipment comprising office equipment; a computer system together with software for conducting classification of investments, analysis and risk management; and a system for preserving securities.

2. Having minimum paid up charter capital equal to the level of legal capital stipulated in article 18 of Decree 14/2007/ND-CP.

3. Ensuring a sufficient number of employee are issued with a fund management practising certificate in accordance with the business plan, including at least five employees with a fund management practising certificate based at the head office.

4. The following personnel must satisify the conditions stipulated in article 10 of these Regulations and the conditions for fund management practioners stipulated by the Ministry of Finance: the director or deputy director in charge of fund management and investment portfolio management, the general director or deputy general director in charge of fund management and investment portfolio management, the head of the section in charge of fund management and investment portfolio management, and fund management practioners.

5. Conditions applicable to capital contributing individuals:

(a) They are not persons prohibited from establishing and managing an enterprise in Vietnam as stipulated in clause 2(b), (c), (d), (dd) and (e), and in clause 4(b) of article 13 the Law on Enterprises;

(b) They satisfy the conditions stipulated in clause 2 of article 4 of these Regulations.

6. Conditions applicable to capital contributing legal entities:

(a) They are currently legally operating and are not prohibited from establishing and managing an enterprise in Vietnam as stipulated in clause 2(a) and (g), and in clause 4(a) of article 13 the Law on Enterprises;

(b) They satisfy the conditions stipulated in clause 3 of article 4 of these Regulations.

(c) They  are  not  a  legal  entity  operating  in  the  banking  finance  sector,  and  their  licence  for establishment and operation, business licence or equivalent document has not been revoked.

7. Individuals stipulated in clause 3(a) and (b) of article 10 of these Regulations and organizations of which they are a major shareholder or the largest capital contributor may not be founding members contributing, or shareholders purchasing more than 5% of the charter capital or capital contribution with voting rights of the fund management company.

8. Organizations  stipulated  in  clause  4(a)  of  article  13  the  Law  on  Enterprises  may  not  be  capital contributors or purchase shares in a fund management company.

Article 4. Financial conditions for issuance of licence for establishment and operation:

1. Organizations  and  individuals  contributing  capital  to  establish  a  fund  management  company  must use  only  their  own  capital  funds  to  contribute  capital  and  must  not  use  capital  entrusted  for investment by, or capital obtained from other individuals or organizations.

2. Capital contributing shareholders or members being individuals must provide evidence of their assets in cash, securities or other assets. In the case of cash, they must have certification from the bank about the balance in their bank account; in the case of securities, they must have certification from a securities company or issuing organization about the number of such securities; and in the case of other  assets,  they  must  prove  their  ownership  and  such  assets  must  be  valued  by  an  assessor currently legally operating in Vietnam.

3. Capital  contributing  shareholders  or  members  being  organizations  must  use  only  legal  capital sources which must be certified by an independent auditor. Organizations shall be deemed to have sufficient financial capacity to contribute capital when they satisfy the following conditions:

(a) Their equity (excluding long-term investment items) must be sufficient to make the full capital contribution as undertaken;

(b) Their net circulating assets must at least equal the amount of their capital contribution as at the date of the most recent audited annual financial statements;

(c) Their  business  and  production  has  not  suffered  loss  for  the  two  most  recent  years  and accumulated  losses  do  not  exceed  equity  as  at  the  date  of  the  most  recent  audited  annual financial statements.

4. Founding shareholders or founding members must jointly register to purchase at least 20% of the charter capital in the fund management company and undertake to hold it for 3 years from the date of issuance of the licence for establishment and operation, except where it is assigned to other founding shareholders  or  founding  members. This provision applies to any fund management company established before the Law on Securities became effective.

Article 5. Application file for issuance of licence for establishment and operation of a fund management company

1. An application file for issuance of a licence for establishment and operation of a fund management company shall contain:

(a) Request for grant of a licence (on the standard form in Appendix 1 to these Regulations);

(b) Explanatory statement on material and technical facilities, showing they are adequate for the professional  business  activities  of  management  of  Funds  and  investment  portfolios  (on  the standard form in Appendix 2 to these Regulations), and draft contract of lease of the location proposed as headquarters of the company;

(c) Minutes of meeting of the founding shareholders or founding members and resolution agreeing to establish the company. The minutes and resolution must include a unanimous decision to establish  the  company;  the  trading  name  in  both  Vietnamese  and  English;  the  professional business activities; the charter capital; the list of founding shareholders or founding members; ratification  of  the  company  charter;  a  business  plan;  appointment  of  a  representative  of  the founding shareholders or founding members to complete procedures for establishment of the company;  and  undertakings  to  contribute  capital  from  founding  shareholders  or  founding members,  ratios,  and  period  for  which  they  undertake  to  hold  their  shares  or  capital contribution;

(d) List, plus summarized curriculum vitae which have been certified by the competent body (on the standard form in Appendix 4 to these Regulations), plus valid copies of people’s identity cards  or  passports  and  legal  files  of  the  proposed  director  or  general  director,  of  fund management  practitioners,  and  of  members  of  the  Inspection  Committee  or  inspectors;  and copy fund management practising certificates of, or applications for same from the proposed director  or  general  director  and  from  fund  management  practitioners  together  with  their undertakings to work for the company;

(e) List of founding shareholders or founding members and other shareholders or members (on the standard form in Appendix 3 to these Regulations), plus:

(i) Shareholders or members being individuals must provide a summarized curriculum vita which has  been  certified  by  the  competent  body  (on  the  standard  form  in  Appendix  4  to  these Regulations), plus valid copy people’s identity card or passport;

(ii) Shareholders  or  members  being  organizations  must  provide  a  copy  business  registration certificate or licence for establishment and operation; company charter; minutes and resolution on capital contribution passed by the board of management or member's council or decision on capital contribution passed by the company owner and appointing an authorized representative; and a summarized curriculum vita which has been certified by the competent body (on the standard form in  Appendix 4 to  these  Regulations)  plus  valid  copy  people’s identity card or passport of the authorized representative;

(f) Draft company Charter unanimously passed by all founding shareholders or founding members (on the standard form in Appendix 20 issued with these Regulations);

(g) Business operational plan for the initial three years, appropriate for the proposed professional business activities (on the standard form in Appendix 5 to these Regulations), together with professional ethics rules and internal control rules;

(h) Data  proving  the  financial  capacity  of  founding  shareholders  or  founding  members  being individuals and proving the funding source of their capital contributions as required by article 4.2;

(i) In the case of shareholders or members being legal entities which undertake to contribute ten (10) per cent or more of the charter capital: annual financial statements for the most recent year calculated at the time of making the undertaking, certified by an independent auditor. If the  auditor's  certificate  is  qualified,  such  qualification  must  not  have  a  major  impact  on  the financial status of the entity. If 90 days have expired since the end of the most recent financial year, there must also be a quarterly report for the most recent quarter;

(j) In the case of legal entities which undertake to contribute less than ten (10) per cent of the charter  capital,  their  capital  must  be  audited,  and  their  financial  capacity  and  the  funding source of their capital contributions as required by article 4.2 must be audited;

(k) Data  proving  organizations  or  individuals  contributing  five  per  cent  or  more  of  the  charter capital  or  contributing  charter  capital  with  voting  rights  in  the  fund  management  company satisfy the conditions as required by article 3.7.

2. The file stipulated in clause 1 of this article shall be prepared in two original sets, each with equal validity, and sent to the State Securities Commission.

Article 6. Procedures for issuance of licence for establishment and operation

1. Within thirty (30) days from the date of receipt of an application file, the SSC shall give approval in principle  to  the  issuance  of  a  licence,  and  if  the  SSC  requires  clarification  of  any  matters  in  the application file then it shall have the right to request the representative of the founding shareholders or founding members or the person proposed to be appointed as director (general director) to explain these  issues  either  directly  [in  person]  or  in  writing.  In  a  case  of  refusal  to  approve,  the  State Securities Commission shall provide a written response explaining its reasons.

2. Within six months from the date of receiving approval in principle, the applicant for the issuance of a licence must complete investment in the material and technical facilities and deposit the legal capital in an escrow account. An applicant being an organization shall be permitted to use part of the capital contribution portion of shareholders or members in order to invest in the material facilities servicing the business operation of the company. The remaining capital contribution portion must be deposited in an escrow account at a bank appointed by the SSC and such bank must certify the amount in the account. This capital amount may only be released after the SSC has officially issued the licence for establishment and operation.

3. With a time-limit of seven days from the date of receipt of confirmation about the capital amount in the escrow account from the bank, and minutes of inspection of the material facilities of the company and other valid data stipulated in article 5 of these Regulations, the SSC shall issue the licence for establishment and operation to the company.   In a case of refusal, the SSC shall provide a written response explaining its reasons.

4. If there are any changes at all relating to the application file for issuance of the licence as from the date  of  approval  in  principle  up  until  the  date  of  officially  commencing  operation,  the  fund management company must report such change to the SSC within 3 days of its occurrence.

5. Within  a  time-limit  of  seven  (7)  days  from  the  date  of  grant  of  a  licence  for  establishment  and operation,  a  fund  management  company  must  make  an  announcement  of  such  licence  on  the website of the SSC and in three consecutive editions of one written or electronic newspaper legally operating in Vietnam. The announcement of the licence must contain the following main particulars:

(a) Name of the fund management company (both name in Vietnamese and name in English);

(b) Address of the head office of the company and of any branch or representative office;

(c) Number of the licence for establishment and operation, date of issuance, and the professional business activities which are permitted by the licence;

(d) Charter capital;

(e) Name of legal representative of the company.

6. Within six months from the date of issuance of the licence for establishment and operation, the fund management  company  must  forward  the  SSC  rules  on  Fund  management,  rules  on  investment portfolio management, and risk management rules. The fund management company must officially commence operation within twelve (12) months from the date of issuance of its licence.

Article 7. Naming a fund management company

1. The name of a fund management company must comply with articles 31 to 34 inclusive of the Law on Enterprises, and must contain the following elements:

(a) Type of enterprise;

(b) The words "fund management"; and

(c) A discrete name.

2. The names of any branch or representative office of a fund management company must comply with the Law on Enterprises.

Section 2. ORGANIZATION AND OPERATION

Article 8. Organization of a fund management company

1. The organizational structure of a fund management company must ensure separation and independence  from  the  organizational  structure  (if  any)  of  the  owner,  of  founding  members  or founding  shareholders  of  the  company  and  from  [the  organizational  structure]  of  other  companies being affiliated persons or entities (if any).

2. A  fund  management  company  must  ensure  separation  regarding  organization  and  operation, information technology system and reporting system as between activities of managing assets [on the one hand] and other business operations of the same company and business activities of other organizations being affiliated persons or entities [on the other hand].

3. A fund management company must comply with the principles on corporate management stipulated in its charter consistent with the model charter set out in Appendix 20 issued with these Regulations.

A fund management company being a public company must comply with the law on corporate management applicable to public companies.

4. A  member  of  the  board  of  management  or  member's  council  or  the  chairman  of  any  one  fund management  company  shall  not  be  permitted  to  concurrently  act  as  a  member  on  the  board  of management or member's council or the chairman of another fund management company.

5. The director (deputy director) or general director (deputy general director) in charge of management of a Fund or investment portfolio; the director of a branch; and staff managing a Fund or investment portfolio must have fund management practising certificates.

Article 9. Internal control

1. Fund management companies must issue internal control rules and set out professional ethics rules applicable to their employees.

2. Fund management companies shall establish an internal control department at their head office. The internal control department shall have the following duties:

(a) To supervise and provide guidelines for observance of State regulations and laws, including the Law on Securities and other relevant legal instruments;

(b) To formulate, guide and supervise the implementation of the professional ethics rules in the company;

(c) To supervise activities with a potential conflict of interest including self-trading by the company and  private  transactions  of  employees  of  the  company  to  ensure  that  such  activities  and transactions are  not  trading  practices taking unlawful  advantage of  the  market  or  are  not in breach of the law on securities trading;

(d) To supervise observance of professional rules for management of Funds and entrusted assets and the implementation of other professional rules in accordance with law;

(e) To supervise the depository and separate management in independent accounts of assets and capital  entrusted  by  each  investor,  assets  of  each  Fund  or  each  securities  investment company managed by the company, and assets of the company;

(f) To supervise the valuation of the net asset value of a Fund or net asset value of a securities investment company and the valuation of fund certificates;

(g) To verify the validity, legality, truthfulness and level of prudence in fund management and management  of  entrusted  assets  and  capital  and  in  the  work  of  accounting,  statistics  and preparation of financial statements;

(h) To supervise liquid capital and financial prudential limits in business and professional activities of  the  company;  to  assess  financial  statements,  to  inspect  books  of  account  and  other documents  of  the  company  and  management  of  Funds  and  entrusted  assets  at  any  time where deemed necessary or upon the request of the director (deputy director) or the general director (deputy general director);

(i) To formulate and propose options dealing with disputes and conflicts of interest;

(j) To  formulate  and  propose  options  providing  against  and  remedying  any  consequence  of breakdowns when they occur;

(k) Other relevant issues.

3. The  internal  control  department  shall  have  employees  with  professional  qualifications  in  law  and employees  with  professional  qualifications  and  experience  in  accounting  and  auditing.  Employees working for the internal control department must satisfy the following requirements:

(a) Have full capacity for civil acts and full legal capacity;

(b) Not  be  a  person  affiliated  to  the  director  (deputy  director)  or  the  general  director  (deputy general director), to a head of a professional section, to a major shareholder or to a member contributing more than 5% of the charter capital of the fund management company;

(c) Have a bachelor or higher degree specializing in economics or law and at least three years working  experience  in  a  professional  section  of  a  securities  trading  organization,  financial institution or bank; and have an adequate certificate of professional qualification in securities and the securities market;

(d) The  head  of  the  internal  control  department  must  have  a  professional  qualification  in accounting and auditing;

(e) Satisfy the conditions stipulated in clause 3 of article 10 of these Regulations.

4. Fund management companies shall send the SSC the documents stipulated in clause 1 of this article and a list accompanied by curriculum vitae which have been certified by the competent body (on the standard form stipulated in Appendix 4 to these Regulations), and legal records of the employees of the internal control department mentioned in clause 3 of this article.

5. Employees working for the internal control department may concurrently work for other sections of the  fund  management  company,  but  may  nor  conduct  fund  management  activities  or  investment portfolio management for investors.

6. Fund  management  companies  shall  evaluate  the  operation  of  the  internal  control  system  at  least once  each  year.  Reports  on  evaluation  of  the  operation  of  the  internal  control  system  shall  be submitted to the SSC with the annual financial statements.

Article 10. Conditions for practising fund management and for managerial positions in a fund management company

1. A fund management practitioner must satisfy the following provisions:

(a) Have full capacity for civil acts and full legal capacity;

(b) Have at least three years working experience in the financial or banking sector;

(c) Have a fund management practising certificate issued by the SSC.

2. A  person  who  is  appointed  as  the  director  (deputy  director)  in  charge  of  fund  management  or investment portfolio management, or the general director (deputy general director) in charge of fund management or investment portfolio management in a fund management company, or the director of a branch of a fund management company, must satisfy the following conditions:

(a) The provisions in paragraphs (a) and (c) of clause 1 of this article;

(b) Have  professional  qualifications  in  financial  and  banking  services  and  at  least  five  years working experience in the financial or banking sector.

3. The following persons shall not be permitted to act as the general director (deputy general director) or director (deputy director) in charge of fund management or investment portfolio management in a fund management company, or as director of a branch of a fund management company, or as a fund management practitioner or an employee working for the internal control department:

(a) Persons who are or have been subject to prosecution for criminal liability, or who have been sentenced for a breach in relation to ownership or national security or a breach in relation to the  financial,  banking  or  insurance  sectors  or  who  have  been  prohibited  by  a  court  from conducting business;

(b) Persons who have been sentenced for a breach in relation to other sectors;

(c) Persons who were the owner of an enterprise, the chairman of the board of management or of the members' council or the director or general director at the time when such enterprise was declared bankrupt by a court, unless [they] participated at the request of the authorized State body in order to strengthen or re-structure such enterprise;

(d) Persons who were the legal representative of an enterprise at the time when its operation was suspended or compelled to be dissolved as a result of the commission of a serious breach of the law, unless [they] were the representative at the request of the authorized State body in order to strengthen or re-structure such enterprise;

(e) Persons prohibited from managing another enterprise as stipulated in article 13.2 of the Law on Enterprises;

(f) A securities practitioner whose practising certificate was revoked by the SSC in accordance with the provisions of article 80.1(b) of the Law on Securities or who was subject to a penalty imposed by the SSC in accordance with the law on securities and securities market within the last three years;

(g) Persons  who  concurrently  are  a  member  of  the  board  of  management  or  of  the  members' council  or  the  chairman  of  a  company  or  currently  work  for  another  organization  having  an ownership  relationship  with  the  fund  management  company  or  who  concurrently  work  for another securities company or fund management company, or concurrently act as the director or  general  director  of  an  organization  offering  its  securities  to  the  public  or  of  a  listed organization.

4. The documentation and procedures for issuance of a fund management practising certificate shall be subject to the regulations of the Ministry of Finance on fund management practising certificates.

Article 11. Branches of fund management companies

1. A fund management company must have approval from the SSC prior to opening or closing a branch.

2. A branch of a fund management company shall be permitted to conduct the professional business activities of management of Funds and assets which the fund management company authorizes the branch to conduct.

3. The  establishment  of  a  branch  of  a  fund  management  company  must  satisfy  the  following requirements:

(a) The  branch  has  headquarters  and  the  necessary  equipment  to  service  the  activities  of managing assets as stipulated in article 3.1 of these Regulations;

(b) The branch has sufficient fund management staff for its business plan and at least three staff at the branch who are fund management practitioners;

(c) The director of the branch satisfies the conditions stipulated in clauses 2 and 3 of article 10 of these  Regulations  and  other  regulations  of  the  Ministry  of  Finance  on  fund  management practitioners.

4. An application file to establish a branch shall contain:

(a) Request  for  establishment  of  a  branch  (on  the  standard  form  in  Appendix  6  to  these Regulations);

(b) Minutes and decision on establishment of  the branch passed by the board of management; minutes  and  decision  on  establishment  of  the  branch  passed  by  the  members'  council;  or decision on establishment of the branch passed by the company owner;

(c) Business operational plan of the branch for the initial three years;

(d) Explanatory statement on material and technical facilities, showing they are adequate for the professional  business  activities  (on  the  standard  form  in  Appendix  2  to  these  Regulations), together with draft contract of lease of the location proposed as the branch;

(e) Copy fund management practising certificates of, or applications for same from the proposed director of the branch and staff who will work at the branch together with their curriculum vitae certified by the competent authority (on the standard form in Appendix 4 to these Regulations).

5. The  SSC  shall  inspect  the  material  facilities  at  the  proposed  branch  of  the  fund  management company prior to issuing a decision approving opening of the branch.

6. The  branch  of  the  fund  management  company  must  officially  commence  operation  within  six  (6) months from the date of approval from the SSC.

7. An application file requesting closure of a branch shall contain:

(a) Request for closure of the branch explaining the reasons (on the standard form in Appendix 6 to these Regulations);

(b) Minutes and decision on closure of the branch passed by the board of management or by the members' council; or decision on closure of the branch passed by the company owner;

(c) Plan for dealing with still effective contracts for management of investments signed with clients.

8. Within a time-limit of fifteen (15) days from the date of receipt of a valid file and minutes of inspection of  the  material  facilities  of  the  branch  (in  the  case  of  opening  a  branch),  the  SSC  shall  issue  a decision approving opening or closing of the branch. In a case of refusal, the SSC shall provide a written response explaining its reasons.

9. The  written  approval  for  establishment  of  a  branch  of  a  fund  management  company  shall  be withdrawn in the following cases:

(a) The branch fails to commence operation within six months from the date of issuance of written approval for its establishment;

(b) The  fund  management  company  is  dissolved  or  becomes  bankrupt,  or  its  licence  for establishment and operation is withdrawn;

(c) The application file for opening the branch contained false information;

(d) The operation of the branch is incorrect in terms of the objectives and items stipulated in the letter of approval to opening of the branch;

(dd) The branch no longer satisfies the conditions on an office, office facilities and personnel required for securities business activities of the branch.

Article 12. Representative offices

1. A fund management company wishing to open or close a representative office must have approval from the SSC.

2. A representative office of a fund management company shall not be permitted to conduct business activities.

3. An application file to establish a representative office shall contain:

(a) Request for establishment of a representative office (on the standard form in Appendix 6 to these Regulations);

(b) Minutes  and  decision  on  establishment  of  the  representative  office  passed  by  the  board  of management or by the members' council; or decision on establishment of the representative office passed by the company owner;

(c) List of proposed head of the representative office and staff who will work at the representative office together with their curriculum vitae certified by the competent authority (on the standard forms in Appendices 3 and 4 to these Regulations).

4. An application file requesting closure of a representative office shall contain:

(a) Request for closure of the representative office specifying the reasons for the closure (on the standard form in Appendix 6 to these Regulations);

(b) Minutes and decision on closure of the representative office passed by the board of management or by the members' council; or decision on closure of the representative office passed by the company owner.

5. Within a time-limit of fifteen (15) days from the date of receipt of a valid file, the SSC shall issue a decision approving opening or closure of the representative office. In a case of refusal, the SSC shall provide a written response explaining its reasons.

Article 13. Change of name or location of head office, branch or representative office

1. A fund management company must have approval from the SSC if it wishes to change the name or location of its head office or of a branch or representative office.

2. An application file requesting change of name of the company shall contain:

(a) Request for change of name specifying the reasons for the change (on the standard form in Appendix 6 to these Regulations);

(b) Minutes and resolution on change of name passed by the general meeting of shareholders or members' council; or decision on change of name passed by the company owner;

(c) Amended  charter  passed  by  the  general  meeting  of  shareholders,  members'  council  or company owner.

3. An application file requesting change of location of the head office or of a branch or representative office shall contain:

(a) Request for change of location of the head office or of the branch or representative office (on the standard form in Appendix 6 to these Regulations);

(b) Minutes and resolution on change of location passed by the board of management or by the members' council; or decision on change of location passed by the company owner;

(c) Explanatory statement on material and technical facilities, showing they are adequate for the professional business activities to be conducted at the new location and draft lease (on the standard form in Appendix 2 to these Regulations);

(d) If there is to be a change of staff, list of proposed fund management staff who will work at the new location together with their curriculum vitae certified by the competent authority (on the standard forms in Appendices 3 and 4 to these Regulations).

4. Within a time-limit of fifteen (15) days from the date of receipt of a valid file and minutes of inspection of the material facilities (if any), the SSC shall issue a decision approving the change of name or location  of  the  head  office,  or  location  of  branch  or  representative  office  of  the  fund  management company. In a case of refusal, the SSC shall provide a written response explaining its reasons.

Article 14. Temporary  cessation  of  operation,  suspension  of  operation,  and  withdrawal  of  licence  for establishment and operation

1. A fund management company must have approval from the SSC if it wishes to temporarily cease its operation.

2. An application file requesting temporary cessation of operation shall contain:

(a) Request for temporary cessation of operation, specifying the reasons and the dates on which it is roposed to cease the operation and recommence the operation (on the standard form in Appendix 6 to these Regulations);

(b) Minutes and resolution on temporary cessation of operation passed by the board of management or members' council, or decision passed by the company owner;

(c) Plan for dealing with currently effective investment management contracts, including proof that the interests of investors will be protected.

3. [The original omits clause 3].

4. Within a time-limit of seven (7) days from the date of receipt of a valid file, the SSC shall issue approval for temporary cessation of operation of the company. In a case of refusal, the SSC shall provide a written response explaining its reasons.

5. The duration of a temporary cessation of operation shall not exceed sixty (60) days. After the SSC has issued approval, the fund management company must announce the temporary cessation on the mass media as stipulated in article 17 below.

6. The operation of a fund management company shall be suspended in the following circumstances:

(a) The application for issuance of, or for amending the licence for establishment and operation contained deliberately false information;

(b) After the expiry of the period of a warning stipulated in article 74 of the Law on Securities, the fund management company failed to remedy the situation giving rise to the warning and no longer satisfies the capital prudential requirements for a fund management company stipulated in article 24 below;

(c) The operation is for an incorrect objective or does not comply with the items stipulated in the licence for establishment and operation;

(d) There  was  a  breach  of  the  nature  or  seriousness  referred  to  in  article  119.2  of  the  Law  on Securities, or a breach adversely affecting the lawful rights and interests of investors;

(e) The  company  no  longer  meets  the  criteria  and  conditions  for  issuance  of  a  licence  as stipulated in article 3 of these Regulations.

7. Within a time-limit of 30 days from the date on which the SSC issues the decision suspending operation  of  the  fund  management  company,  the  general  meeting  of  investors  or  the  members' council  of  a Fund shall  be  responsible to  appoint  a replacement fund  management  company.  If  a replacement  fund  management  company  is  not  appointed,  then  the  SSC  has  the  right  to  appoint another company to take over management of the Funds and investment portfolios of the suspended fund  management  company. In such a  case,  an  automatic  authorization  relationship  shall  be established [as between the two companies].

8. If the operation of a fund management company is suspended, the company must continue to carry out management of its Funds and investment portfolios pursuant to contracts which it had previously undertaken  to  conduct  or  perform,  until  such  time  as  there  is  a  complete  handover  of  rights  and obligations of the Funds and investment portfolios to the replacement fund management company pursuant to article 21.3 of these Regulations.

9. The duration of a suspension shall be as decided by the SSC but shall not exceed 60 days, and the SSC shall be responsible to announce any decision on suspension of the operation of a fund management company on the website of the SSC and on the mass media.

10. The licence for establishment and operation of a fund management company shall be revoked in the following circumstances:

(a) Failure to manage Funds and investment portfolios for a period of twelve (12) months as from the date of issuance of its licence for establishment and operation;

(b) Failure to remedy the situation stipulated in clause 6(b) of this article within a period of six (6) months from the date of temporary cessation of operation;

(c) Failure  to  rectify  a  breach  stipulated  in  sub-clauses  (a),  (c),  (d)  and  (e)  of  clause  6  of  this article within a period of sixty (60) days from the date of temporary cessation of operation;

(d) There  was  a  breach  of  the  nature  or  seriousness  referred  to  in  article  119.2  of  the  Law  on Securities, or another breach of the law on securities adversely affecting the lawful rights and interests  of  investors  and  the  company  failed  to  remedy  such  adverse  effect  or  to  pay damages for loss at the request of a competent body;

(e) Dissolution or bankruptcy; or division or consolidation of the company.

11. In a case where the licence of a fund management company is revoked pursuant to sub-clause (b) or (c) of article 10 of these Regulations, the company must complete all transactions in accordance with contracts which it had previously undertaken to perform.  In a case where the licence of the company is revoked pursuant to sub-clause (d) or (e) of article 10 of these Regulations, the company must terminate  all  the  activities  stipulated  in  its  licence  immediately  after  it  has  completed  handover  of rights  and  obligations  with  respect  to  the  Funds  and  investment  portfolios  it  manages  to  the replacement fund management company, or to the new fund management company after completion of the division or consolidation and after the new company is licensed.

12. The SSC shall be responsible to announce revocation of the licence for establishment and operation of a fund management company on the website of the SSC and on the mass media.

Article 15. Division, demerger, merger, consolidation or conversion of form, dissolution or bankruptcy

1. The SSC must provide approval before a fund management company may divide, demerge, merge, consolidate, convert or dissolve.

2. An application file requesting approval for a division, demerger, merger, consolidation or conversion shall contain:

(a) Request for division, demerger, merger, consolidation or conversion (on the standard form in Appendix 6 to these Regulations);

(b) Plan on division, demerger, merger, consolidation or conversion of the company, including the method of implementation, business scope after the change and forecast financial status for the next three years; a plan on distribution and on dealing with currently effective investment management contracts and other economic contracts, and this plan must ensure it does not adversely  affect  the  interests  of  current  investors  or  of  Funds  which  the  company  currently manages;

(c) Draft contract on consolidation or merger in the cases of consolidation or merger;

(d) Minutes and resolution of the general meeting of shareholders or of the members' council, or decision of the Company owner agreeing to the division, demerger, merger, consolidation or conversion  of  the  company.  The  resolution  must  include  a  unanimous  decision;  plan  on carrying out the division, demerger, merger, consolidation or conversion; the trading name in both Vietnamese and English; the professional business activities; the charter capital; and the company charter following the division, demerger, merger, consolidation or conversion;

(e) Legal opinion on the legality of the division, demerger, merger, consolidation or conversion;

(f) Opinion from a financial consultant or approved auditor on valuation and conversion ratio of shares or capital contribution portions in the case of a consolidation or merger;

(g) List of shareholders or members, values and percentage ownership and the charter capital of the organization to be formed after the division, demerger, merger, consolidation or conversion;

(h) List, summarized curriculum vitae and legal files certified by a competent body of members of the  board  of  management,  members'  council,  shareholders  or  capital  contributing  members being individuals with above 5 per cent of the charter capital, of the director (deputy director) or general director (deputy general director), of staff working in the internal audit department and fund  management  practitioners  at  the  fund  management  company  to  be  formed  after  the division, demerger, merger, consolidation or conversion, unless such staff already worked at the company prior to such division, demerger, merger, consolidation or conversion.   Any new members must satisfy the conditions required by article 10 of these Regulations;

(i) Other data as required by articles 5 and 6 of these Regulations proving that the new company satisfies all the conditions for issuance of a licence for establishment and operation.

3. Within a time-limit of thirty (30) days from the date of receipt of a valid file, the SSC shall issue a decision approving the division, demerger, merger, consolidation or conversion of the company and issue a licence to the new company. In a case of refusal, the SSC shall provide a written response explaining its reasons.

4. The actual process of division, demerger, merger, consolidation or conversion shall be implemented in accordance with the Law on Enterprises and other relevant laws.

5. A fund management company shall be dissolved in the following circumstances:

(a) On  expiry  of  the  duration  of  its  operation  stipulated  in  the  company  charter,  without  any decision on extension;

(b) The general meeting of shareholders or the members' council or the company owner passes a decision to dissolve;

(c) The licence for establishment and operation of the company is revoked;

(d) The company is merged or consolidated with another fund management company.

6. An application file for dissolution shall contain the following documents:

(a) Request for dissolution, specifying the reason;

(b) Minutes  and  resolution  of  the  general  meeting  of  shareholders  or  the  members'  council,  or decision of the company owner on dissolution;

(c) Plan for resolving investment management contracts and other economic contracts which are still effective. This plan must ensure that it protects the lawful rights and interests of investors and of other parties concerned.

7. Within a time-limit of 60 days from the date of receipt of a valid file, the SSC shall issue a decision approving  dissolution  of  the  company  prior  to  expiry  of  the  duration  of  its  operation.  In  a  case  of refusal, the SSC shall provide a written response explaining its reasons.

8. A fund management company shall conduct procedures for dissolution or bankruptcy in accordance with the Law on Enterprises and other relevant laws.

Article 16. Transactions resulting in a change of ownership of shareholding or capital contribution by ten per cent of more of the paid-up charter capital of a fund management company

1. Transactions resulting in the following change of ownership of shares or capital contribution portions must be approved by the SSC:

(a) Any organization or individual holding below 10 per cent, 25 per cent, 50 per cent or 75 per cent of the shareholding capital or the contributed capital of the fund management company intending to purchase in order to hold from 10 percent, 25 per cent, 50 per cent or 75 per cent or more of such shareholding capital or contributed capital.

(b) Any organization or individual holding from 10 per cent, 25 per cent, 50 per cent or 75 per cent or more of the shareholding capital or contributed capital of the fund management company intending to sell shares or capital contribution portion so that such entity will own less than 10 per cent,  25 per cent,  50 per cent  or  75  per cent  of the  shareholding  capital or  contributed capital in the company.

2. Where the fund management company is not a public company, then no later than fifteen (15) days prior  to  undertaking  a  transaction  as  stipulated  above,  the  entity  involved  in  the  transaction  must forward a request via the fund management company to the SSC for approval, containing:

(a) Request for approval to assignment (on the standard form in Appendix 6 to  these Regulations);

(b) Draft contract on such transaction;

(c) Summarized  curriculum  vita  certified  by  a  competent  body  enclosing  copy  people’s  identity card or passport (on the standard form in Appendix 4 to these Regulations) of a purchasing shareholder  or  member  being  an  individual,  and  copy  business  registration  certificate  in respect of a purchasing shareholder or member being an organization;

(d) Data proving the financial capacity of the purchasing shareholder or member as required by article 5.1(h), (i) and (j);

(e) Data  proving  the  purchasing  shareholder  or  member  satisfies  the  conditions  as  required  by article 3.7 and 3.8.

3. Within  fifteen (15)  days  from  the date of  receipt  of a  complete application  file,  the  SSC shall  give approval to the transaction resulting in a change of ownership of shareholding or contributed capital, or in a case of refusal shall provide a written response explaining its reasons.

4. Within three (3) days of the date of completing any transaction referred to in clause 1 above, the fund management company must report the results of the trading to the SSC and report the ratio of share or capital contribution holding by the parties to the transaction.

5. Where the fund management company is a public company, then any entity intending to purchase voting shares leading to ownership of 25% or more of the number of currently circulating shares in the company must do so by way of a public offer to acquire as stipulated in article 32 of the Law on Securities and regulations of the Ministry of Finance on purchasing and selling share certificates and on a number of other cases of additional public offers of shares, and such entity must also implement the procedures stipulated in clauses 2, 3 and 4 of this article.

6. Where the fund management company is a public company, then any entity intending to purchase voting shares leading to ownership of 10% or more of the number of currently circulating shares in the company must also implement the provisions in clauses 2, 3 and 4 of this article.

Article 17. Announcement of changes

A fund management company must announce any change approved by the SSC on the fund management company's website or in a newspaper in the place where the change occurred, within a time-limit of 5 working days from the date of approval to such change.

Article 18. Provision on responsibilities and obligations of fund management companies

1. Fund management companies shall be permitted to conduct the following business activities:

- Management of securities investment Funds and securities investment companies;

- Management of investment portfolios.

2. A fund management company shall, as the representative of the interests of an investor, shareholder or entrusting investor as stipulated in a Fund charter or securities investment company charter or in an investment management contract, vote at the general meeting of shareholders or at meetings of the  board  of  management  of  an  issuing  organization  in  which  such  Fund,  securities  investment company or entrusting investor is a shareholder; or vote at meetings of the members' council of an enterprise  in  which  such  Fund,  securities  investment  company  or  entrusting  investor  is  a  capital contributor.

3. When a fund management company manages a closed investment Fund, an investment portfolio or a securities investment company, it shall be entitled to fees and bonuses in accordance with law and in accordance with the provisions in the Fund charter, the securities investment company charter or the investment management contract. If such charter or contract provides for bonuses on the basis of investment results, then the company shall only be entitled to a bonus if the growth rate of the net asset  value  of  the  Fund  or securities  investment  company  or  the  growth  rate  of  the  value  of  the portfolio which the company manages is higher than a reference rate approved by the investor. The amount and payment of bonuses to a fund management company managing a closed public Fund or a public securities investment company shall be determined as follows:

(a) The amount of a bonus shall be calculated on the basis of that part of the profit which exceeds market growth rate (growth rate of market indicators) adjusted according to the investment portfolio structure of the Fund or securities investment company. The amount of a bonus must be stipulated in the  Fund charter, the securities investment company charter and prospectus, and must be approved by investors.

(b) The bonus must be excluded and shall not be payable if the investment activities of previous years  suffered losses  not  yet  offset. The  level  of adjustment must  be  specified  in  the Fund charter, the securities investment company charter and prospectus, and must be approved by investors.

(c) A  bonus shall only  be  payable  after  payment  of  other  payable  disbursements,  and shall  be calculated on the basis of the audited annual financial statements.

4. A  fund management company  must  comply  with  the  law  of  Vietnam,  Fund  charters,  securities investment companies charters and investment management contracts.

5. A  fund management company  must  act  voluntarily,  fairly  and  honestly  and  in  the  best  interests of Funds, securities investment companies, investors and entrusting investors.

6. A  fund management company  must sign  contracts  with  a  depository  bank  and  custodian  bank containing specific clauses on the rights and obligations of the parties during management of assets of Funds, assets of securities investment companies and entrusted assets.

7. A  fund management company  must sign  contracts  with  entrusting  investors  and  with  securities investment  companies   when  providing  services  being  management  of  investment portfolios  and assets of securities investment companies.

8. A  fund management company  must invest assets  of Funds  and  of securities  investment companies and  entrusted  assets  correctly  in  accordance  with law,  and  in  accordance  with  the  charter  of the relevant Fund or securities investment company or the relevant investment management contract.

9. A fund management company must compensate for loss to any Fund, any securities investment company, any investor in a Fund or securities investment company, or to any entrusting investor caused as a result of the fund management company or its staff failing to correctly discharge their obligations in accordance with law or breaching the law on securities and securities market. The amount of compensation  must  be  approved  by  investors,  including  investors  who  previously  held fund certificates or share certificates in the securities investment company and entrusting investors who have terminated their portfolio management contracts with the fund management company.

10. A  fund management company  must  ensure  separate  and  independent  management  of  assets  of each Fund, assets of each securities investment company, assets of each investor, and assets of the Company itself.

11. A fund management company must have rules on distribution of traded assets which are uniform, reasonable and fair when conducting trading for Funds, for securities investment companies, for each entrusting investor and for the Company itself. These rules must be approved by entrusting investors, by the board of trustees1 of a Fund, by the board of management of a securities investment company, and by the custodian bank and depository bank. When the fund management company purchases or sells the same type of asset simultaneously for a Fund or a securities investment company which it manages and for the Company itself, traded assets shall be distributed in the following priority order:

(a) Priority distribution to the Fund/s and securities investment company/ies which the fund management company manages, ensuring fair and reasonable treatment of interests as between such Funds and securities investment companies;

(b) Distribution to the company itself only after satisfying the requirement in sub-clause (a) above.

12. A  fund management company  must  ensure  liability  of  third  parties  to  which  it  delegates  authority during  management  of  Funds  and  investment  portfolios,  and  must  ensure  that  changes  to  the organizational  and  managerial structure  of  the  fund management company  do not  adversely  affect the  interests  of  investors  in  Funds  and  in  securities  investment  companies  or  the  interests  of entrusting investors. The above-mentioned relationship must ensure:

(a) The authorized party is a financial institution licensed to conduct the delegated task;

(b) Basic information about the authorized party is provided to the board of trustees of the Fund, the board of management of the securities investment company, and to the entrusting investor;

(c) Such delegation of authority must be approved by the board of trustees of the Fund, the board of management of the securities investment company, and by the entrusting investor;

(d) When a fund management company delegates authority, it must report to the SSC enclosing the written approval referred to in sub-clause (c) above.

13. A fund management company which delegates authority as referred to in clause 12 above shall be responsible  to  supervise  and  ensure  delegated  tasks  are  implemented  quickly  and  in  compliance with law, with the Fund charter or the securities investment company charter or in compliance with the investment management contract; and the fund management company shall bear full liability for losses arising from the delegation of authority and caused to a Fund, securities investment company or entrusting investor.

14. A  fund management company  must  conduct  valuations  of  the  net  asset  value  of  a  Fund  and  of  a securities investment company; the net asset value of a fund unit or share certificate in a securities investment company; the value of an investment portfolio and other activities in accordance with law, in  accordance  with  the  charter  of the  relevant  Fund  or securities  investment  company,  or  in accordance with the relevant investment management contract. All the above-mentioned valuations may  be  provided  by  a  custodian  bank  on  the  basis  of  a  contract  between  such  bank  and  the fund management company, and the latter must supervise that the net asset valuation conducted by the custodian bank complies with current regulations.

15. A fund management company shall be responsible to keep, store and update in a prompt, complete and  accurate  manner  a  register  of  investors  and  a  register  of  shareholders;  and  all  the  above- mentioned  work  may  be  performed  by  a  department  of  the  custodian  bank  or  by  a  Securities Depository Centre on the basis of a contract between such bank or Centre with the fund management company; and the latter must supervise that the keeping, storing and updating of the register of investors and register of shareholders by the custodian bank or Securities Depository Centre complies with current regulations. The contents of the register of investors and of the register of  shareholders  shall  comply  with  regulations  of  the  Ministry  of  Finance  on  establishment  and management of securities investment Funds and securities investment companies.

16. A  fund management company  shall  promptly  provide  written  notice  to  the  custodian  bank  or depository bank about voting rights and instructions for voting which the fund management company authorizes such custodian bank or depository bank to exercise on behalf of and in the interests of any Fund, securities investment company or entrusting investor at a meeting of a general meeting of shareholders, board of management or members' council of an issuing organization or enterprise in which such Fund, company or investor is a shareholder or capital contributor.

17. A fund management company must promptly provide complete and essential information on a Fund, securities  investment  company  and  entrusted  assets  to  the  custodian  bank  or  depository  bank  to enable  the  latter  to  exercise  rights  and  discharge  obligations  in  respect  of  such  Fund,  securities investment  company  and  entrusted  assets  in  accordance  with  law.  At  least  once  per  month  the fund management company  must  verify  with  the  custodian  bank  or  depository  bank  the  assets  of each Fund, securities investment company and investor.

18. In a case where the custodian bank discovers that a transaction involving assets of a Fund or of a securities  investment  company  is  inconsistent  with  law  or  with  the  Fund  charter  or  securities investment  company  charter,  or  discovers  that  a  transaction  exceeds  the  authority  of  the  fund management company and this has already been notified to the fund management company, then the fund management company must rescind such transaction or undertake to purchase or sell the assets of the Fund or securities investment company in order to restore the status quo as soon as possible.  Such  remedying  of  consequences  must  take  place  within  3 months  from  the  date  of discovery of the unlawful transaction. All expenses arising in relation to such transaction and any loss to  the  Fund  or  to  the  securities  investment  company  shall  be  borne  by  the  fund  management company, and shall not be included in fund management expenses.

19. A fund management company must purchase professional indemnity insurance in accordance with law  for  fund  practitioners  managing  Funds  or  it  must  establish  a  risks  reserve  in  order  to  pay compensation  for  loss  to  investors  as  a  result  of  breakdowns  and  errors  by  fund  management practitioners during the course of professional activities.

20. A  fund  management  company  must  formulate  and  issue  professional  rules  applicable  to  each working position within the company, professional rules on internal control and professional ethics rules applicable to staff working at the company, aimed at preventing conflicts of interest which may arise within the company, between the company and Funds, between the company and securities investment companies which the company manages, between the company and entrusting investors, between clients of the company, and during transactions with affiliated persons. A provision requiring compliance with professional ethics rules shall be mandatory in the labour contracts signed by the fund management company with its employees.

21. Each year, a fund management company must hold training courses to raise the professional skills of its staff, ensuring that their professional skills and knowledge of the law is updated and is appropriate for the working tasks assigned to them.  Information about annual training activities conducted by the company must be sent to the SSC at the same time as the fund management company submits its annual report on operational status.

22. A fund management company shall be responsible to prepare, issue and report to the SSC policies and  professional  rules  on  risk  management  which  are  in  compliance  with  law,  aimed  at  promptly analyzing, assessing and monitoring management of risks during investment activities conducted for Funds, for securities investment companies, and with entrusted assets.

23. A  fund management company must comply with the regimes stipulated by law on accounting, auditing and statistics, discharge of financial obligations, and reporting and disclosure of information.

24. A fund management company must archive complete vouchers and accounts which reflect in detail, accurately  and  promptly  all  daily  trading  orders  of  each  Fund  and  of  each  securities  investment company, all daily trading orders for investment portfolios and for the company itself as well as for staff of the company, including the chronological order in which trading orders were submitted and the order in which transactions were implemented.  The above-mentioned vouchers shall include:

(a) Distribution contracts;

(b) Investment management contracts;

(c) Vouchers relating to offers to sell fund certificates and securities investment company shares;

(d) Other data and vouchers stipulated by law.

25. The vouchers stipulated in clause 24 above must be archived for a minimum of fifteen (15) years, and they must be supplied to the SSC on request.

26. A fund management company shall be responsible to ensure, while managing investment portfolios and Member Funds which have foreign participation, that investment of assets by foreign investors complies with the law on restriction on the ratio of ownership (both direct and indirect) of foreigners in Vietnamese enterprises.

27. A fund management company must clearly write on the cover of a prospectus of a Fund and must include in data advertising investment, the following specific warning on risks:

"The Investment Fund (here name the Fund) described in this Prospectus is a securities investment Fund established pursuant to the Law on Securities passed by the National Assembly on 29 June 2006 and its implementing guidelines. This prospectus has been registered with the SSC on (here give the date).

The fact that the SSC has issued a certificate for a public offer of fund certificates only means that registration  was  implemented  correctly  in  accordance  with  current  regulations,  and  does  not  carry any  implication  guaranteeing  the  contents  of  this  Prospectus  or  the  investment  objectives  and strategies of the Fund.

The value of Fund certificates, the possibility of gaining profit and the level of risk stipulated in this data is purely for reference purposes only and may change at any time depending on market status. Investment in this Fund does not carry any assurance that investors will make a profit.   Investors should  themselves  carefully  balance  the  risks  and  the  level  of  those  risks  before  they  make  any decision to invest in this Fund."

28. The use of entrusted assets which are mobilized in Vietnam in order to invest in securities issued by a foreign institution, in securities issued by an issuing organization which is regulated by foreign law, or  in  securities  issued  offshore  must  be  approved  by  the  general  meeting  of  investors  of  a  public Fund,  by  the  members'  council  of  a  Member  Fund,  by  the  general  meeting  of  shareholders  of  a securities investment company, or by the entrusting investor. Any offshore investment must comply with the law on offshore investments and with the law on foreign exchange control, and there must be written approval from the competent body.

Article 19. Limits on the operation of a fund management company and on staff working at a fund management company

1. A fund management company shall not be permitted to raise capital and manage a member fund which has from 31 or more capital contributing members.

2. A fund management company must not be an affiliated person or the owner of the custodian bank or the depository bank of a Fund or of a securities investment company which is managed by such fund management company. A member of the Board of Management, a member of the members' council, the  Chairman,  Director or  Deputy  Director,  General  Director or Deputy  General  Director  or  a  fund management practitioner of the fund management company shall not be permitted to concurrently work for the custodian bank or depository bank of a Fund or a securities investment company which is currently managed by the fund management company, and vice versa.

3. An affiliated person of the fund management company, a fund management practitioner or a person working in the fund management company shall only be permitted to purchase or sell certificates in a public fund or shares in a public securities investment company which is managed by the company through the trading system by the method of matching orders at the Stock Exchange or a Securities Trading Centre and when permitted by the Fund Charter or the Charter of the securities investment company.

4. Except  in  the  case  of  sale  and  purchase  transactions  as  stipulated  in  clause  3  of  this  article,  an affiliated  person  of  the  fund  management  company,  a  fund  management  practitioner  or  a  person working in the fund management company must not be a party to other transactions with a public fund or Public securities investment company which is managed by the fund management company.

5. A  fund  management  company,  a  person  affiliated  to  such  company,  and  a  fund  management practitioner at the company shall not be permitted to be a party to a transaction of the purchase or sale  of  investment  assets  in  a  portfolio  which  the  company  manages,  unless  such  transaction  is conducted through the trading system by the method of matching orders at the Stock Exchange or a Securities Trading Centre and is specifically provided for in the investment management contract and is agreed to in writing by the entrusting investor.

6. All securities transactions conducted by a member of the Board of Management, a member of the members' council, the Chairman, the Director or Deputy Director, General Director or Deputy General Director, a member of the Inspection Committee, an Inspector, a fund management practitioner or staff of the Fund Management Company must be reported to the internal control department prior to and immediately after such transaction is conducted and must be centrally managed at the company under  the  supervision  of  the  internal  control  department. Information about the above-mentioned transactions shall comprise classes of securities, price of securities, trading time, trading methods and the total value of transactions, and shall be archived for fifteen (15) years and shall be provided to the SSC when required.

7. When the fund management company conducts the trading of assets of the Fund, of the securities investment company and entrusted assets, members of the Board of Management, members of the members'  council,  the  Chairman,  the  Director  or  Deputy  Director,  the  General  Director  or  Deputy General  Director,  fund  management  practitioners  and  all  staff  of  the  fund management company shall  not  be  permitted  to  request,  require  or  receive,  in  the  name  of  any  individual  or  of  the fund management company, any remuneration, profit or benefit derived from the implementation of transactions  of  the  Fund  assets,  assets  of  the  securities  investment  company  or  transactions  of assets  entrusted  by  a  third  party  except  for  fees  and  bonuses  specified  in  the  Fund  charter,  the securities  investment  company  charter  or  in  the  investment  management  contract. This provision applies to all types of member funds, public funds and securities investment companies.

8. A fund management company shall not be permitted:

(a) To use assets of a Fund or of a securities investment company which it manages in order to invest in the same Fund or the same securities investment company;

(b) To use the assets of a Fund or of a securities investment company which it manages in order to invest in another public Fund or another public securities investment company which it also manages;

(c) To use the assets of a public Fund or of a public securities investment company in order to invest  in  another  investment  Fund  or  another  securities   investment  company  which  it manages;

(d) To use assets of the company, or entrusted assets belonging to an investment portfolio which it  manages  in  order  to  invest  in  public  Funds  or  in  public  securities  investment  companies which were established in Vietnam and which it manages.

9. A  fund  management  company  shall  only  be  permitted  to  use  capital  of  the  company,  entrusted assets belonging to an investment portfolio, assets of a member Fund, or privately placed shares of a securities  investment  company  in  order  to  invest  in  member  Funds  or  privately  placed  shares  of securities  investment  companies  established  pursuant  to  the  law  of  Vietnam  which  such  fund management  company  manages  in  cases  where  the  charter  of  the  relevant  Fund,  the  relevant investment management contract, or the relevant minutes of agreement on contribution so permit the fund management company to make these investments; and in this case the company shall only be entitled to the level of management fees approved by the investors.

10. A fund management company shall not be permitted to use assets of a public Fund or of a public securities investment company to make joint venture capital or associated capital contributions or to invest in such fund management company, in an economic organization being an affiliated person [entity] of the fund management company or in an economic organization being an affiliated person [entity] of a member of the Board of Management, a member of the members' council, the Chairman, the General Director or Deputy Director, the General Director or Deputy General Director of the fund management company or a fund management practitioner. The fund management company may use capital of a Member Fund or assets of entrusting investors to implement such investment activities in the case where provisions in the Fund charter, the investment management contract or the minutes of a capital contribution agreement permit the fund management company to make such investment with an appropriate level of fees for management approved by investors.

11. A  fund  management  company  shall  not  be  permitted  to  use  assets  of  a  Fund  or  of  a  securities investment company or entrusted assets in order to provide a loan or to guarantee any loan of the company or of persons affiliated to the company, or to make payment of any debt of the company or of any persons affiliated to the company or to pay the debt of any other person or entity at all.

12. A fund management company must control and ensure that fees for trading assets of public Funds and of public securities investment companies are at an appropriate level and are not higher than the average level of such fees on the market.

13. A  fund  management  company  shall  only  be  permitted  to  manage  investment  capital  of  public securities  investment  companies  and  of  public  Funds  when  the  company  satisfies  the  following conditions:

(a) It  has  at  least  two  fund  management  practitioners  managing  the  Fund  with  experience  in managing funds and investment portfolios and who have had such work experience for at least two years;

(b) The fund management practitioners stipulated in sub-clause (a) above have not been subject to an administrative penalty in the securities and securities market sector during the course of their managing funds and investment portfolios.

14. A fund management company must comply with the restrictions on investment during management of public Funds as stipulated in Article 92 of the Law on Securities.

Article 20. Termination of rights and obligations of a fund management company owed to a fund and/or securities investment company

1. A fund management company shall only be permitted to terminate its rights and obligations owing to a fund and/or to a securities investment company in the following circumstances:

(a) The fund management company itself requests such termination pursuant to the charter of a fund or securities investment company, and such termination is agreed by the general meeting of investors or by the member's council of the fund or by the general meeting of shareholders;

(b) At  the  request  of  the  custodian  bank  or  depository  bank,  or  at  the  request  of  the  board  of trustees of a fund or the board of management of the securities investment company, and the request is approved by the general meeting of investors or by the member's council or by the general meeting of shareholders;

(c) The licence for establishment and operation is revoked pursuant to article 70 of the Law on Securities;

(d) On voluntary termination of operation;

(e) The duration of operation of the fund or securities investment company expires;

(f) The  fund  management  company  merges  or  consolidates  with  another  fund  management company and the former has completed handover of rights and obligations owing to a fund or securities investment company to the new company formed after the merger or consolidation and the new company has been issued with a licence for establishment and operation.  In the cases stipulated in clause 1 of this article, the rights and obligations owed to funds and/or a securities investment company by the old fund management company shall be transferred to a new company which is approved as a replacement pursuant to article 21 of these Regulations. The old fund management company must speedily transfer the whole of its source documents and  other  information  regarding  the  fund  and/or  securities  investment  company  to  the replacement company to ensure that the latter has sufficient information to exercise the rights and  discharge  the  obligations  owed  to  such  fund  and/or  securities  investment  company  in accordance with the Law on Securities and other relevant laws.

Article 21. Change of fund management company

1. A change of fund management company may only be carried out after it is approved by the general meeting of investors or by the member's council of a fund, or by the general meeting of shareholders of the securities investment company. The new company chosen as a replacement must send the SSC the following documents:

(a) Written request to act as replacement;

(b) Request  to  terminate  rights  and  obligations  owing  to  a  fund  and/or  securities  investment company  from  the  fund  management  company  (in  the  case  stipulated  in  article 20.1(a)  of these Regulations);  or

(c) Written request for replacement of the fund management company from the custodian bank, depository  bank  or  board  of  trustees  of  a  fund  or  board  of  management  of  a  securities investment company together with a detailed report on the reasons for the change (in the case stipulated in article 20.1(b) of these Regulations); and

(d) Minutes and resolution of the general meeting of investors, member's council of a fund or the general meeting of shareholders of the securities investment company regarding the change of fund management company and selection of a replacement company;

(e) Plan on the change and method for dealing with issues regarding rights and obligations of relevant parties;

(f) Draft supervisory contract or depository contract;

(g) Draft charter of the fund or securities investment company as amended;

(h) Proposed new name of the fund or securities investment company (if any);

(i) Proposed date for conducting the change of fund management company.

2. Within  five  (5) business  days  from  the  date  of  approval  from  the  SSC,  the  change  of  fund management  company  must  be  publicly  announced  for  investors  on  the  mass  media  by  the custodian bank, depository bank and the new replacement fund management company.

3. The  rights  and  obligations  which  the  former  fund  management  company  owes  to  a  fund  and/or securities  investment  company  shall  only  terminate  after  complete  handover  of  such  rights  and obligations   to   the   replacement   fund   management   company,   and   the   new   replacement   fund management company must send the SSC minutes of handover signed by both companies; and the former fund management company shall be liable for undischarged obligations (if any) owing to the fund and/or securities investment company.

Article 22. Provision of information to investors

1.A  fund  management  company  must  ensure  discharge  of  obligations  regarding  disclosure  and provision of information to investors including entrusting investors as stipulated by law.

2. A fund management company must ensure all the following information is available at its head office, branches, representative offices, and offices of distribution agents, and that the information appears on the website of the company in order for investors to refer to it:

(a) Charters of funds, charters of securities investment companies, and prospectuses;

(b) Reports for the most recent month, and annual reports of funds and of securities investment companies for the most recent five (5) years;

(c) Latest assessment reports on total net asset value and net asset value of one fund unit and one  share  in  a  securities  investment  company  (in  accordance  with  Appendix 8  issued  with these Regulations;

(d) All data, reports and contracts referred to in any prospectus;

(e) In the case of entrusting investors, the investment management contracts with the necessary information stipulated for such contracts.

3. The information stipulated in clause 2 above must be provided free of charge on the website of the fund management company.

Article 23. Increasing or reducing charter capital of a fund management company

1. A fund management company must report to the SSC at least fifteen (15) days prior to implementing an increase or reduction in its charter capital, reporting the following information:

(a) Decision  passed  by  the  general  meeting  of  shareholders  and  board  of  management  or decision passed by the member's council or company owner;

(b) Plan  on  the  increase  or  reduction  including  information  about  the  form  of  such  increase  or reduction, its purpose, the capital source for implementing it, the ratio of additional shares to be issued in the case of an increase, or the ratio of withdrawal or redemption in the case of the reduction of capital; and the proposed schedule for implementing same;

(c) Summarized curriculum vitae certified by a competent body (on the standard form in Appendix 4 to these Regulations) enclosing copy people’s identity cards or passports of new shareholders or members (where a fund management company which is not a public company increases its charter capital);

(d)Data proving the financial capacity of shareholders or members as required by article 5.1(h), (i) and (j) (where  a  fund  management  company  which  is  not  a  public  company  increases  its charter capital);

(e)Data proving the purchasing shareholders or members satisfy the conditions as required by article 3.7 and 3.8.

2. If the increase or reduction in charter capital of a fund management company leads to a change of ownership as stipulated in article 16.1 of these Regulations, then it must be approved by the SSC. The procedures regarding approval shall be implemented as stipulated in clauses 2 to 6 inclusive of article 16 of these Regulations.

3. A  fund  management  company  shall  implement  an  increase  or  reduction  in  its  charter  capital  in accordance with the Law on Enterprises and other relevant laws, and if the form of such increase is a public offer of securities, then the company must also comply with the Regulations on public offers of securities.   When  increasing  or  reducing  its  charter  capital,  the  fund  management  company  must satisfy the conditions on legal capital, liquid capital, and financial safety criteria stipulated in article 24 of these Regulations.

4. Within a time frame of seven (7) working days after completing an increase or reduction in its charter capital,  the  fund  management  company  must  report  to  the  SSC  on  the  results,  enclosing  the following documents:

(a) A summarized report on the results of the increase or reduction in charter capital;

(b) A  list  of  investors  specifying  their  full  name  and  people's  identity  card  number  or  passport number in the case of individuals, or the number of the business registration certificate in the case  of  organizations,  any  bank  account  numbers,  and contact addresses in the case of investors being individuals or head office addresses in the case of investors being organizations, the number of shares which they hold or their capital contribution portion, the ratio of ownership, and the date of registration of ownership. If the fund management company is a public company, then this list of investors must be certified by the Securities Depository Centre.

5. The paid up legal capital of a fund management company must satisfy the capital requirements stipulated in article 18.3 of Decree 14.

Article 24. Financial safety of a fund management company

1. A fund management company must  ensure  that  its  business  capital  reserved  for  financial  and investment activities of the company is sourced from the paid up capital of the company and does not include any borrowings, entrusted capital or other capital appropriated from other organizations and individuals.

2. A fund management company must, during the process of its operation, continually comply with the regulations on liquid capital on the principle of ensuring that liquid capital is at least equal to 50% of the total expenses in the previous financial year in accordance with the annual financial statements audited by an independent auditor.  In the case of a newly established fund management company, its liquid capital must be maintained at least equal to fifty (50) per cent of the total expenses forecast in the initial year of operation (details of this provision are set out on the standard form in Appendix 7 issued with these Regulations).

Chapter III

PROFESSIONAL BUSINESS ACTIVITIES OF FUND MANAGEMENT COMPANIES

Section 1. MANAGEMENT OF SECURITIES INVESTMENT FUNDS AND SECURITIES INVESTMENT COMPANIES

Article 25. Management of securities investment funds and securities investment companies

Fund  management  companies  shall  raise  capital  and  establish  and  manage  securities  investment funds and securities investment companies in accordance with the Regulations on establishing and managing securities investment funds and securities investment companies issued by the Ministry of Finance.

Section 2. MANAGEMENT OF INVESTMENT PORTFOLIOS

Article 26. Investment strategy

1. Before providing an investment strategy or implementing any investment for an entrusting investor, a fund  management  company  must  collate  personal  information  about  the  investor  and  the  investor shall be responsible to provide such information, aimed at understanding the financial capability of the  investor,  the  period  for  conducting  investments,  the  objective  of  investment,  the  level  of  risks which  the  investor  is  capable  of  bearing,  the  restrictions  on  investment  and  other  investment requirements of the entrusting investor. A fund management company must, periodically and when necessary, update this information.

2. An investment strategy which the company implements in order to manage assets of an entrusting investor must be consistent with the needs of such investor on the basis of the information which he or she provides in accordance with clause 1 of this article.   This investment strategy must be clear, detailed and specific, it must ensure that the entrusting investor has complete information on the type of risks which may affect profitability, complete information on investment fees which will arise, and other important relevant information.   The investment strategy shall form an inseparable part of the investment management contract which the investor must sign and certify that it is consistent with his or her requirements.

3. The provision in clause 2 of this article shall not apply in a case where an entrusting investor does not wish to supply or update information stipulated in clause 1 for the fund management company.  In this  case,  the  investment  management  contract  between  the  company  and  the  entrusting investor must  specify  such  fact,  and  the  fund  management  company  has  the  right  to  refuse  to  provide investment portfolio management services to such an investor.

Article 27. Investment management contract

1. A fund management company shall accept the work of managing an investment portfolio on the basis of an investment management contract between the company and the investor.   In addition to the contractual items agreed by the two parties in accordance with law, the contract must also contain the basic items on the standard form in Appendix 10 to these Regulations.  The contract must specify the  responsibilities  and  obligations  of  the  fund  management  company  and  of  the  depository  bank owed to the entrusting investor during the process of managing the assets of the entrusting investor.

2. An entrusting investor shall engage a fund management company to conduct asset investment on the investor's behalf on the basis of an investment management contract which must not contain any of the following provisions:

(a) A provision enabling the company to evade its legal liability as a result of gross negligence on the part of the company and affecting the interests of the investor;

(b) A  clause  limiting  liability  to  compensate  for  financial  obligations  of  the  company  without  a legitimate reason or transferring risks from the company to the investor;

(c) A clause providing that it is mandatory for the investor to pay compensation in an unfair manner;

(d) A clause causing unfair disadvantage to the investor or creating bias or inequality as between investors.

3. In the case of an entrusting investor  being an institution, the representative of the institution must have a power of attorney in order to sign the investment management contract.

4. In a case where an entrusting investor is an insurance company, in addition to compliance with the law  on  securities  and  securities  market,  entrusting  capital  and  assets  sourced  from  an  insurance operation  to  a  fund  management  company  must  comply  with  the  relevant  law  in  the  insurance business  sector.   A  fund  management  company  must  forward  the  SSC  a  copy  of  any  investment entrustment contract which it signs with an insurance company.

Article 28. Distribution of assets between investment management contracts

1. In a case where a fund management company simultaneously purchases or sells securities or other assets  for  a  number  of  investment  management  contracts,  the  company  must  have  a  policy  and rules  on  distribution  of  the  securities  to  each  contract  which  are  reasonable  and  fair.  Traded securities  and  assets  must  be  distributed  at  the  same  ratio  to  entrusting  investors  who  have  the same risk acceptance level.   In a case where securities are purchased or sold at different prices, then the company must use the average price when distributing assets.

2. A fund management company must have a specific clause in an investment management contract about,  and  must  provide  information  to  an  entrusting  investor  about  the  method  for  choosing investment  assets,  and  the  method  for  distributing  securities  to  the  investment  account  of  the company and the investment account of the entrusting investor.  A fund management company must ensure that investment transactions are conducted in a fair manner, without bias or priority to the interests of the company, an affiliated person or any entrusting investor.

Article 29. Implementing investments pursuant to investment management contracts

1. Prior  to  conducting  a  transaction  for  an  entrusting  investor,  a  fund  management  company  must ensure  there  is  sufficient  money  and  assets  in  the  investor's  account  in  order  to  conduct  such transaction in accordance with law.

2. A fund management company shall be permitted to conduct a transaction of the purchase or sale of investment assets between investment portfolios of the one entrusting investor which the company manages, if the transaction satisfies the following conditions:

(a) The transaction is consistent with the investment objectives and policies and the interests of the parties to the transaction;

(b) Each month, the trading terms and information about the transaction must be provided to the investor  in  a  complete,  accurate  and  detailed  manner.   Data  explaining  the  reason  for  the transaction  and  transaction  vouchers  must  be  prepared  and  retained  in  a  complete  and detailed manner in order to provide them to the investor on request;

(c) An  investment  management  contract  must  contain  specific  rules  on  classification,  analysis, approval and issuance of an investment decision for each transaction, and must also contain principles and provisions on payment of fees for each such transaction.

3. If  due  to  the  fault  of  a  fund  management  company  the  investment  portfolio  structure  of  any  one entrusting investor exceeds the restrictions on investment stipulated in the investment management contract,  then  the  company  must  amend  such  structure  as  soon  as  possible,  and  shall  not  be permitted  to  collect  management  fees  in  respect  of  that  part  of  the  portfolio  which  was  prepared incorrectly in terms of the investment management contract, and the company must bear all trading fees relating to amendment of the portfolio and all other expenses which arise.

4. If  a  fund  management  company  fails  to  conduct  investments  in  accordance  with  the  investment strategy stipulated in article 26 of these Regulations causing loss to an investor, then the company shall be liable to pay compensation to the investor for such loss, and the level of compensation must be approved by the investor in writing.

Article 30. Management of assets of entrusting investors

1. When  a  fund  management  company  manages  an  investment  portfolio,  it  must  open  a  depository account in the name of the company at a depository bank on behalf of the entrusting investor.

2. The  assets  of  each  entrusting  investor  must  be  managed  in  a  separate  account  pursuant  to  a provision  in  the  investment  management  contract,  and  the  entrusting  investor  must  approve  such account. The investment management contract must also stipulate the relationship (if any) between the company with the depository bank and all fees and expenses payable to the depository bank in order for the client to consider and make a decision thereon.

3. The  fund  management  company  shall  only  be  permitted  to  use  entrusted  assets  in  the  account stipulated  in  clauses 1  and  2  of  this  article  correctly  in  accordance  with  the  provisions  in  the investment management contract or on written instructions from the entrusting investor.

4. A  fund  management  company  must  prepare  periodical  detailed  reports  on  an  investment  portfolio including other relevant information on investment activities and send it to each entrusting investor pursuant to article 32 of these Regulations.

Article 31. Depository contracts

1. A  depository  contract  must  be  signed  between  the  fund  management  company  and  a  depository bank  for  each  entrusting  investor,  must  be  consistent  with  the  provisions  in  the  investment management  contract,  and  must  contain  the  main  items  as  stipulated  on  the  standard  form  in Appendix 10 to these Regulations.

2. The  fund  management  company  must  provide  a  copy  of  the  depository  contract  to  the  entrusting investor on request.

Article 32. Reporting regime applicable to entrusting investors

1. Every  month,  quarter  and  year,  the  fund  management  company  must  provide  a  report  to  the entrusting investor on the status of such investor's investment portfolio.

2. The  report  must  contain  the  information  set  out  on  the  standard  form  in  Appendix 11  to  these Regulations, namely the following items:

(a) The type, number and value of the assets in the portfolio at the beginning of the period;

(b) The puchasing and selling transactions during the period; and the type, quantity and value of each transaction and type of asset;

(c) The status of collection of fees during the period;

(d) The type, number and value of each type of asset in the portfolio at the end of the period.

Chapter IV

REGIME ON REPORTING, AND ARCHIVING FILES AND VOUCHERS

Article 33. Regime on reporting and disclosure of information by fund management companies

1. A fund management company must implement the periodical reporting regime by providing monthly, quarterly  and  annual  reports  to  the  SSC  regarding  the  activities  of  the  company,  the  investment activities  of  each  fund,  securities  investment  companies  and  investment  portfolios  [which  the company manages] as follows:

(a) Report on monthly, quarterly and annual operation or status of the fund management company (on the standard form in Appendix 12 to these Regulations);

(b) Report on operation or status of management of investment portfolios, provided on a monthly, quarterly  and annual  basis  (on  the standard  form  in  Appendix 13  to  these Regulations);  the annual report must be audited by an independent auditor;

(c) Monthly, quarterly and anual reports on liquid capital of the fund management company (on the standard form in Appendix 7 to these Regulations);

(d) Quarterly  and  annual  financial  statements  of  the  fund  management  company  prepared  in accordance with the law on accounting; the annual financial statements must be audited by an independent auditor.

2. A fund management company must forward the SSC monthly, quarterly and annual reports of the assets of each fund and securities investment company which it manages, as follows:

(a) Monthly,  quarterly  and  annual  reports  regarding  each  fund  and  each  securities  investment company:

(i) Monthly, quarterly and annual reports on the assets of each fund and each securities investment company on the standard form in Appendix 14 to these Regulations;

(ii) Monthly, quarterly and annual reports on changes to net asset value of each fund and each  securities  investment  company  (on  the  standard  form  in  Appendix 15  to  these Regulations);

(iii) Monthly,  quarterly  and  annual  reports  on  the  investment  activities  of  each  fund  and securities investment company (on the standard form in Appendix 16 to these Regulations);

(iv) Report  on  status  of  the  investment  portfolio  of  each  fund  and  securities  investment comopany (on the standard form in Appendix 17 to these Regulations);

(v) Report  on  a  number  of  indicators  during  operation  of  each  fund  and  each  securities investment company (on the standard form in Appendix 18 to these Regulations).

(b) Financial statements of a fund and of a securities investment company: quarterly and annual financial statements of each fund and each securities investment company managed by the fund  management  company  must  be  prepared  in  accordance  with  the  law  on  accounting applicable to securities investment funds and securities investment companies.  These annual financial  statements  must  have  auditing  approval  prior  to  submission  to  the  SSC  and  other bodies;

(c) In a case where the fund management company represents a fund or securities investment company by voting at a meeting of the general meeting of shareholders, board of management or  members'  council  of  an  enterprise  in  which  such  fund  or  securities  investment  company invests,  then  the  fund  management  company  shall  be  obliged  to  report  matters  on  which  it voted in the monthly report on activities of such fund or securities investment company. A fund management company must report changes  to the net  asset  value  of  the  fund  at  the same intervals at which it makes a valuation of the net asset value of the fund.

4. A fund management company must prepare a report on any assignment of a privately placed fund unit in a member fund, share or share certificate in a securities investment company within 15 days from completion of the assignment.  The report must include details of the listed members and capital contributing  shareholders  (both  before  and  after  the  assignment);  the  number  of  shares  or  capital contribution portion, and the ratio of such shareholding and capital contribution (both before and after the assignment); the level of change in the shareholding or capital contribution, and the form of the assignment.

5. A fund management company must provide a report to the SSC on occurrence of the following events:

(a) Change  in  membership  of the  board  of management  or  members'  council,  of  the  chairman, director (deputy director) or general director (deputy general director) or any fund management practitioner. The report must specify the reason for the change in personnel and must name the replacement personnel;

(b) Amendments or additions to the company charter, to the charter or prospectus of any fund or any securities investment company which the fund management company manages;

(c) A report on any change to charter capital prior to implementing an increase or reduction of the charter capital of the company;

(d) Any  event  which  may  seriously  affect  the  financial  ability  or  investment  activities  of  the company and of any fund or securities investment company which the company manages, or which may affect activities of managing investment portfolios.

6. The time-limits for lodging the reports stipulated in clauses 1 and 2 above shall be:

(a) Monthly reports on the fund management company, funds and securities investment companies must be submitted to the SSC within five working days after the last date of the month;

(b) Quarterly reports on the  fund management  company, funds and securities investment companies must be submitted to the SSC within twenty days after the last date of the month;

(c) Annual reports on the fund management company, funds and securities investment companies must be submitted to the SSC within ninety (90) days after the last day of the financial year.

7. The time-limit for reporting the events mentioned in sub-clauses (a), (b) and (d) of clause 5 above shall be within 24 hours of the occurrence of the event, and the time-limit for reporting changes in charter capital shall be as stipulated in article 23 of these Regulations.

8. A fund management company must report to the SSC within 24 hours of discovery of any breach by the custodian bank or depository bank of a fund charter, a securities investment company charter and  prospectus,  the  supervisory  contract  or  depository  contract,  or  of  the  law  on  securities  and securities market.

9. A securities investment company must report to the SSC on the net asset value of a fund and of a securities  investment  company  at  the  same  time  as  it  makes  a  public  report  to  investors  (on  the standard form in Appendix 8 to these Regulations).

10. In addition to the cases stipulated in this article, in necessary cases in order to protect the general interest and the interests of investors, the SSC may require a fund management company to report on activities of the company.

11. On receipt of a request as stipulated in clause 10 above, the fund management company must report to the SSC within 48 hours.

12. All reports sent to the SSC by fund management companies as stipulated in this article must be sent in the form of an electronic data file.

13. Fund management companies must implement the regime on disclosure of information in accordance with the law on securities.

Article 34. Regime on archiving files and source documents

1. A fund management company must store and update important databases relating to the activities of the company, and it must maintain back-ups of important databases outside the office headquarters of the company.

2. Fund management companies, custodian banks and depository banks must constantly maintain in a systematic manner and ensuring clarity, accuracy and uniformity, data relating to the following:

(a) Offers of fund certificates and shares in securities investment companies;

(b) Activities regarding registration of ownership;

(c) Financial  statements,  invoices  and  accounting  source  documents  regarding  transactions  of assets  of  funds  and  securities  investment  companies  for  the  entire  duration  of  operation  of such funds and companies; and data relating to the assets and trading for entrusting investors during the entire effective term of the contracts signed with such clients;

(d) Invoices,  source  documents,  databases  and  other  data  evaluating  the  price  of  all  types  of securities and used to make net asset valuations of funds, securities investment companies, investment portfolio assets and fund certificates;

(e) Rules  on  conducting  valuations,  preparation  of  overall  reports  on  making  valuations,  and compliance with law.

3. Fund management companies, custodian banks and depository banks must periodically and regularly inspect and check investment portfolios, data and vouchers on trading and registration of ownership, accounting books, and accounting vouchers and data relating to assets and trading for funds, securities investment companies and entrusting investors; ensuring that these items balance and  are  consistent  with  the  provisions  in  the  fund  charters,  charters  of  the  securities  investment companies and prospectuses, investment management contracts, and are in conformity with the law on accounting.

4. All data stipulated in clauses 1, 2 and 3 of this article must be archived for 15 years after termination of  activities  of  the  fund  or  securities  investment  company  or  after  termination  of  the  investment management contract with the client.

Chapter V

INSPECTIONS, SUPERVISION, AND DEALING WITH BREACHES

Article 35. Inspections and supervision

Fund  management  companies,  fund  management  practitioners,  custodian  banks  and  depository  banks shall be subject to supervision by the SSC and other competent bodies in accordance with law.

Article 36. Dealing with breaches

Any Fund management company, fund management practitioner, depository bank or custodian bank which breaches the provisions of law in the securities and securities market sector shall be deal with in accordance with current regulations.

Chapter VI

ORGANIZATION OF IMPLEMENTATION

Article 37. Application of the Law on Securities to organizations and individuals who were operating in the securities and securities market sector prior to the date of effectiveness of these Regulations

1. Any organization or individual owning more than the percentage shareholding or capital contribution portion in a fund management company as stipulated in article 18.7 of Decree 14 must adjust such ownership ratio in accordance with Decree 14 and report to the SSC thereon within six (6) months from the date on which these Regulations take effect.

2. Any fund management company which was established prior to the date on which these Regulations take effect must amend and supplement the charter of the company, and prepare and send to the SSC rules on professional ethics, rules on asset management, risk management rules, and internal control rules which comply with the provisions in these Regulations, within a period of six (6) months as from the date these Regulations take effect.

3. Fund  management  companies,  depository  banks  and  custodian  banks  must  adjust  their  relevant activities or operation for compliance with these Regulations and report thereon to the SSC within six (6) months from the date on which these Regulations take effect.

LIST OF APPENDICES
(Only Appendix 20 has been translated)

APPENDIX 20
(Issued with the Regulations on Organization and Operation of Fund Management  Companies)

MODEL CHARTER OF A FUND MANAGEMENT COMPANY

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom – Happiness
*****************

LEGAL BASES:

Pursuant to the Law on Enterprises 60/2005/QH11 passed by the National Assembly of the Socialist
Republic of Vietnam on 12 December 2005, and its implementing guidelines;
Pursuant to the Law on Securities 70/2006/QH11 passed by the National Assembly of the Socialist
Republic of Vietnam on 29 June 2006 and effective as from 1 January 2007;
Pursuant to Decree 14-2007-ND-CP of the Government dated 19 January 2007 making detailed provisions for implementation of the Law on Securities;

Chapter I

GENERAL PROVISIONS

Article 1. Definitions

1. The  following  terms  shall  be  construed  as  follows,  unless  a  clause  or  context  in  this  Charter stipulates otherwise:

(a) The Company means (name of the company) Fund Management Shareholding2 (or Limited Liability) Company.

(b) Charter  capital  means  the  amount  of  capital  the  shareholders  (members)  contribute  or  the company owner assigns to the company and which is recorded in the company Charter.

(c) Law on Securities means the Law on Securities 70/2006/QH11 passed by the National Assembly of the Socialist Republic of Vietnam on 29 June 2006.

(d) Law on Enterprises means the Law on Enterprises 60/2005/QH11 passed by the National Assembly of the Socialist Republic of Vietnam on 12 December 2005.

(e) Date of establishment means the date on which the company was issued with its licence for establishment and operation.

(f) Law means all legal instruments stipulated in article 1 of the Law on Promulgation of Legal Instruments issued on 12 November 1996.

(g) Manager of the company means the chairman of the Members’ Council, chairman of the company, chairman of the Board of Management, a member of the Board of Management, a member of the Members’ Council, the director or general director and  other  managerial positions as stipulated in the company Charter.

(h) Affiliated persons means organizations and individuals related to each other as stipulated in article 6.34 of the Law on Securities.

(i) Vietnam means the Socialist Republic of Vietnam.

(j) SSC means the State Securities Commission.

(k) LL means limited liability.

(l) …..[blank]

(m) …..[blank]

2. In this Charter, references to any clause or document include any amendment to or replacement of such clause or document.

3. Headings  are  for  reference  only  and  shall  not  affect  the  meaning  in  this  Charter.  Words  and expressions  defined  in  the  Law  on  Securities  and  the  Law  on  Enterprises  shall  carry  a  similar meaning in this Charter unless that would contradict the subject matter or context in this Charter.

Article 2. Name of the Company

1. The Vietnamese name of the Company is ……..

2. The English name of the Company is (name of the company) Fund Management Limited (or Shareholding) Company.

3. The trading name of the Company is (name of the company) Fund Management Company.

4. The abbreviated name of the Company is…...

5. Any change of name of the Company must be approved by the SSC.

Article 3. Form of ownership and extent of liability

1. The Company is organized in the form of a limited liability (or shareholding) company, established and operating pursuant to the law of Vietnam on the terms and conditions set out in this Charter.

2. The  Company  owner  (if  a  one  member  limited  liability  company)  and  members/shareholders contributing capital to establish the company shall be liable for the debts and other asset obligations of the company within the scope of the amount of their capital contribution/amount of charter capital of the company.

3. The Company is a legal entity with its own seal and bank account and has financial autonomy.

4. The Company is established on the basis of voluntary capital contributions from the shareholders/members/Company owner.

Article 4. Address of head office, branches and representative offices (house number, name of street, ward, district, city or province must be clearly stated)

1. Registered head office of the company:

- Address:

- Telephone number:

- Fax number:

- Website (if any):

2. Branch of the company:

- Address:

- Telephone number:

- Fax number:

3. Representative office of the company:

- Address:

- Telephone number:

- Fax number:

4. The Company may, depending on its actual operational situation, open branches and representative offices and change the location of its head office, branches and representative offices. The opening of a branch or representative office or a change of location of the head office or of a branch or of a representative office must have written approved from the SSC.

Article 5. Objectives of operation and business sectors

1. Objectives of operation:

2. Business sectors:

The Company is permitted to conduct the business activities stipulated in its licence for establishment and operation issued by the SSC, including:

- Management of securities investment funds;

- Management of investment portfolios.

Article 6. Duration of operation

The duration of operation of the Company is … years (or is for an unlimited duration) commencing from the date on which the company was issued with its licence for establishment and operation, and this duration may be extended in accordance with law at the time of expiry except in the case of termination of operation pursuant  to  a  decision  of  the  General  Meeting  of  Shareholders/Members’  Council/Company  owner  or pursuant to a decision of a competent State body.

Article 7. Legal representative

The  director  or  general  director/chairman  of  the  Board  of  Management/chairman  of  the  Members’ Council/chairman of the  company is the legal representative of the Company with the rights and obligations stipulated in the company Charter.

Chapter II

CHARTER CAPITAL – SHARES – SHARE CERTIFICATES – SHAREHOLDERS – CAPITAL CONTRIBUTING MEMBERS – OWNER OF THE COMPANY

Article 8. Charter capital and increase or decrease in charter capital

1. The charter capital of the Company is …… VND contributed in cash by the shareholders/members/Company owner.

2. The charter capital of the Company may be increased or decreased depending on the business and investment needs and operational scale of the Company, consistent with current regulations.

3. The Company may increase its charter capital in the following forms:………..

4. The Company may decrease its charter capital in the following forms:………..

5. The Company must report to the SSC before and after an increase or decrease in its charter capital and must ensure any increase or decrease in charter capital satisfies the relevant law.

A. SHAREHOLDING COMPANY:

[Articles 9 to 24 are applicable to a Shareholding Company:]

Article 9. Shares of the Company

1. The shareholding Company must have ordinary shares.  Owners of ordinary shares shall be ordinary shareholders.

2. The shareholding Company may have preference shares. Owners of preference shares shall be called preference shareholders.

Preference shares shall be of the following classes:

(a) Voting preference shares;

(b) Dividend preference shares;

(c) Redeemable preference shares;

(d) Other preference shares stipulated in the company Charter.

3. Only founding shareholders may hold voting preference shares.   The voting preference of founding shareholders  shall  be  valid  for  only  three  years  from  the  date  of  issuance  of  the  licence  for establishment and operation of the company.  After that period, voting preference shares of founding shareholders shall be converted into ordinary shares.

4. Persons  who  are  entitled  to  purchase  dividend  preference  shares,  redeemable  preference  shares and other preference shares shall be stipulated in the company Charter or decided by the General Meeting of Shareholders.

5. Each share of the same class shall entitle its holder to the same rights, obligations and interests.

6. Ordinary shares may not be converted into preference shares.  Preference shares may be converted into ordinary shares pursuant to a resolution of the General Meeting of Shareholders.

Article 10. Offer for sale and assignment of shares

1. The Board of Management shall determine the timing and method of and the price at which shares shall be offered for sale for the number of shares which may be offered for sale.  The price at which shares shall be offered shall not be lower than the market price at the time of offering or the most recently recorded value in the books of shares, except in the following cases:

(a) Initial offering of shares to persons other than founding shareholders;

(b) Shares  offered  to  all  shareholders  in  proportion  to  the  respective  numbers  of  shares  they currently hold in the company;

(c) Shares offered to brokers or underwriters. In this case, the specific amount of discount or rate of discount must be approved by the shareholders representing at least seventy five (75) per cent of the total number of shares with voting rights;

(d) Other cases and the rates of discount in such cases shall be stipulated in the company Charter.

2. In  the  case  the  company  issues  additional  ordinary  shares  and  offer  such  shares  to  all  ordinary shareholders  in  proportion  to  the  respective  percentage  of  shares  they  currently  hold  in  the company, the following provisions must be implemented:

(a) The  company  must  notify  shareholders  in  writing  by  a  method  guaranteed  to  reach  their permanent  addresses.  The notice must be published on newspaper in three consecutive issues within ten (10) working days from the date of notification.

(b) The notice must contain full name, permanent address, nationality, number of people’s identity card,  passport  or  other  lawful  personal  identification  in  respect  of  a  shareholder  being  an individual;  name,  permanent  address,  nationality,  number  of  decision  on  establishment  or number of business registration in respect of a shareholder being an organization; the current number of shares and percentage of shares of shareholders in the company; total number of shares  intended  to  be  issued  and  number  of  shares  for  which  a  shareholder  is  entitled  to subscribe; offered selling price of shares; time-limit for registration to subscribe; full name and signature of the legal representative of the company. The time-limit stated in the notice must be  reasonable  for  shareholders  to  register  to  subscribe  for  shares.  The notice must be accompanied by a registration form for share subscription issued by the company.

(c) Shareholders  have  the  right  to  transfer  their  priority  right  in  subscribing  for  shares  to  other people.

(d) If a registration form for share subscription is not sent to the company within the notified time- limit,  the  relevant  shareholder  shall  be  deemed  as  having  rejected  the  priority  right  for subscription.  Where  shareholders  and  transferees  of  priority  rights  for  subscription  do  not register to subscribe for all the shares intended to be issued, the remaining number of shares intended  to  be  issued  shall  be  managed  by  the  Board  of  Management. The  Board  of Management may distribute such shares to shareholders of the company or to other people in a  reasonable  manner  with  conditions  not  more  favourable than  the  conditions  offered  to shareholders, except where otherwise approved by the General Meeting of Shareholders or where shares are sold via the Stock Exchange or a Securities Trading Centre.

3. Shares  shall  be  deemed  to  have  been  sold  upon  full  payment  and  correct  and  full  entry  of  the particulars  on  the  purchaser  stipulated  in  clause  2  of  article  16  of  this  Charter  in  the  register  of shareholders; from such point of time, the purchaser of shares shall become a shareholder of the company.

4. After shares are sold, the company must issue and deliver share certificates to the purchasers.   A company may sell shares without delivering share certificates.   In this case, the particulars about a shareholder stipulated in clause 2 of article 16 of this Charter recorded in the register of shareholders shall be sufficient to certify the ownership of shares of such shareholder in the company.

5. Shares may be freely assigned, except in the cases stipulated in clause 4 of article 17 and clause 3 of article 20 of this Charter. Assignment shall be conducted in writing by normal methods or by hand delivery of share certificates. Assignment  documents  must  be  signed  by  the  assignor  and  the assignee  or  their  authorized  representatives.  The assignor shall remain the owner of the relevant share until the name of the assignee is registered in the register of shareholders.

Where only a number of shares in a share certificate indicating names are assigned, the old share certificate  shall  be  cancelled  and  the  company  shall  issue  a  new  share  certificate  recording  the number of shares assigned and the remaining number of shares.

6. The conditions, methods and procedures for offering shares to the public shall comply with the law on securities.

Article 11. Redemption of shares

1. Redemption of shares upon demand by shareholders:

- A shareholder voting against the re-organization of the company or against a change to the rights  and  obligations  of  shareholders  stipulated  in  the  company  Charter  may  demand  the company to redeem its shares.  Such demand must be made in writing and specify the name and address of the shareholder, the number of shares of each class, the intended selling price, and the reason for demanding redemption by the company.  Such demand must be sent to the company  within  ten  (10)  working  days  from  the  date  on  which  the  General  Meeting  of Shareholders passed a decision on a matter referred to in this clause.

- The company must redeem shares upon demand by the shareholder as stipulated in clause 1 of  this  article  at  the  market  price  or  the  price  determined  on  the  basis  of  the  principles stipulated in the company Charter within a period of ninety (90) days from the date of receipt of the  demand. Where there is disagreement relating to the price, such shareholder may sell shares to other people or the parties may request valuation by a professional valuation organization. The company shall recommend at least three professional valuation organizations for the shareholder to select from and such selection shall be the final decision.

2. Redemption of shares pursuant to a decision of the Company:

The Company may redeem no more than thirty (30) per cent of the total number of ordinary shares sold,  and  part  or  all  of  the  dividend  preference  shares  sold  in  accordance  with  the  following provisions:

(1) The Board of Management has the right to decide on redemption of more than ten (10) per cent of the total number of shares of each class already sold within each period of twelve (12) months.  In  other  cases,  redemption  of  shares  shall  be  decided  by  the  General  Meeting  of Shareholders.

(2) The Board of Management shall decide on the price for redemption of shares. The price for redemption  of  ordinary  shares  shall  not  be  higher  than  the  market  price  at  the  time  of redemption, subject to the exception in clause 3 of this article.   In respect of shares of other classes, unless otherwise provided in the company Charter or agreed between the Company and  the  relevant  shareholders,  the  price  for  redemption  shall  not  be  lower  than  the  market price;

(3) The Company may redeem shares of each shareholder in proportion to the number of shares each holds in the company.  In this case, the decision to redeem shares of the company shall be notified by a method guaranteed to reach all shareholders within thirty (30) days from the date on which such decision is passed.  The notice must include the name and address of the head office of the company, total number of shares and class of shares to be redeemed, price for redemption or principle for determination of the price for redemption, procedures and time- limit for payment, and procedures and time-limit for shareholders to offer to sell their shares to the company.

Shareholders who agree to have their shares redeemed must send an offer to sell their shares by a method guaranteed to reach the company within thirty (30) days from the date of notice. The offer must  include  full  name,  permanent  address,  number  of  people’s  identity  card,  passport  or  other lawful  personal  identification  in  respect  of  a  shareholder  being  an  individual;  name,  permanent address,  nationality,  number  of  decision  on  establishment  or  number  of  business  registration  in respect  of  a  shareholder  being  an  organization;  number  of  shares  owned  and  number  of  shares offered;   payment   methods;   signature   of   the   shareholder   or   the   legal   representative   of   the shareholder. The Company shall only redeem offered shares within the above mentioned time-limit.

Article 12. Conditions for payment and dealing with redeemed shares

1. The Company may only pay shareholders for redeemed shares in accordance with article 11 of this Charter if, after such redeemed shares are paid for, the company shall still be able to satisfy in full its debts and other property obligations.

2. All shares redeemed in accordance with article 11 of this Charter shall be considered shares not yet sold amongst the shares which may be offered for sale.

3. Share certificates certifying the ownership of redeemed shares must be destroyed immediately after the corresponding shares are paid for in full. The chairman of the Board of Management and the director or general director must be jointly liable for any loss caused to the Company by failure to destroy or delayed destruction of share certificates.

4. After the redeemed shares are fully paid for, if the total asset value recorded in the accounting books of the Company is reduced by more than ten (10) per cent, the company must notify all creditors thereof within fifteen (15) days from the date on which the redeemed shares are fully paid for.

Article 13. Inheritance of shares

Inheritance of shares of the Company shall be implemented in accordance with current regulations.

Article 14. Issuance of bonds

1. The  shareholding  company  may  issue  bonds,  convertible  bonds  and  other  classes  of  bonds  in accordance with law and the company Charter.

2. The company may not issue bonds in the following cases except where otherwise stipulated by the law on securities:

(a) Payment has not been made in full for the principal and interest of issued bonds, payment has not been made or not been made in full for due debts in three previous consecutive years;

(b) The average after tax profit rate of the three previous consecutive years is not higher than the interest rate intended to pay for the bonds to be issued.

The issue of bonds to creditors being selected financial institutions is not restricted by the provisions in sub-clauses (a) and (b) of this clause.

3. Where it is not otherwise stipulated in the company Charter, the Board of Management has the right to make decisions on the class of bonds, total value of bonds and timing of issue, but must report to the  General  Meeting  of  Shareholders  at  its  next  meeting.  The  report  must  be  accompanied  by documents and a file to explain the decision of the Board of Management on issuing bonds.

Article 15. Share certificates

1. Share certificates may or may not indicate names. A share certificate of the company must contain the following main particulars:

(a) Name and address of head office of the company;

(b) Number and date of issuance of the licence for establishment and operation;

(c) Number of shares and class of shares;

(d) Par value of each share and total par value of shares included in the share certificate;

(dd) Full name, permanent address, nationality, number of people’s identity card, passport or other lawful personal identification in respect of a shareholder being an individual; name, permanent address, nationality, number of decision on establishment or number of business registration in respect of a shareholder being an organization in the case of a named share certificate;

(e) Summary of procedures for share assignment;

(g) Sample signature of the legal representative and seal of the company;

(h) Registration number in the register of shareholders of the company and date of issuance of the share certificate;

(i) Preference share certificates shall also include other details as stipulated in articles 20, 21 and 22 of this Charter.

2. Errors in the content and form of a share certificate issued by the company shall not affect the rights and interests of its owner. The chairman of the Board of Management and the director or general director shall be jointly liable for any loss caused by such errors to the company.

3. Where a share certificate is lost, torn, burnt or  otherwise destroyed in another form, the company shall reissue the shareholder with a share certificate at the request of such shareholder.

A request of a shareholder must contain the following undertakings:

(a) That the share certificate has really been lost, torn, burnt or otherwise destroyed; in the case of loss, it is additionally undertaken that all best efforts have been exercised to look for the share certificate and if found, such share certificate shall be returned to the company for destruction;

(b) That (the shareholder) shall be responsible for any disputes arising from the re-issue of a new share certificate.

In the case of a share certificate which has a par value of over ten million Vietnamese dong, before accepting a request for issue of a new share certificate, the legal representative of the company may request that the owner of the share certificate publish a notice on the fact that the share certificate has been lost, torn, burnt or otherwise destroyed and make a request to the company to issue a new share certificate within fifteen (15) days from the date of posting the notice.

4. If  share  certificates  of  the  company  are  listed  on  the  securities  market,  then  registration  of  share certificates shall be governed by the law on securities.

Article 16. Register of shareholders

1. A  shareholding  company  shall  establish  and  maintain  a  register  of  shareholders  from  the  date  of issuance of its licence for establishment and operation. The register of shareholders may be in the form of a document or electronic data files, or both.

2. The register of shareholders must contain the following main particulars:

(a) Name and address of head office of the company;

(b) Total number of shares which may be offered for sale, classes of shares which may be offered for sale and number of shares of each class which may be offered for sale;

(c) Total number of shares of each class already sold and value of paid-up share capital;

(d) Full name, permanent address, nationality, number of people’s identity card, passport or other lawful personal identification in respect of a shareholder being an individual; name, permanent address, nationality, number of decision on establishment or number of business registration in respect of a shareholder being an organization;

(dd) Number of shares of each class of each shareholder and date of share registration.

3. The register of shareholders shall be retained at the head office of the company or at the Securities Depository Centre. Shareholders shall have the right to examine, look up or make an extract or copy of the register of shareholders during business hours of the company or of the Securities Depository Centre.

Article 17. Shareholders

1. A shareholder of the Company means a legal entity or individual owning at least one issued share of the Company.

2. A founding shareholder of the Company means a shareholder participating in the formulation, passing and signing of the initial company Charter.

3. A founding shareholder must  undertake  to contribute  …% charter  capital  in ….VND,  equivalent  to .…ordinary shares (founding shareholders must register to contribute at least twenty per cent of the charter capital of the Company).

4. Right to assign shares:

Founding shareholders shall not be permitted to assign their shares within 3 years from the date of issuance  of  the  licence  for  establishment  and  operation,  except  where  they  are  assigned  to  other founding shareholders of the Company.

5. Structure of capital contribution by founding shareholders:

Article 18. Rights of ordinary shareholders

1. Ordinary shareholders shall have the following rights:

(a) To attend and express opinions at the General Meeting of Shareholders and to exercise the right to vote directly or through an authorized representative; each ordinary share shall carry one vote;

(b) To receive dividends at the rate decided by the General Meeting of Shareholders;

(c) To be given priority in subscribing for new shares offered for sale in proportion to the number of ordinary shares each shareholder holds in the company;

(d) To freely assign their shares to other shareholders and to non-shareholders;

(dd) To sight, look up and make an extract of information in the list of shareholders with voting rights and to request amendment of incorrect information;

(e) To sight, look up and make an extract or copy of the company Charter, the book of minutes of meetings of the General Meeting of Shareholders and resolutions of the General Meeting of Shareholders;

(g) Upon dissolution or bankruptcy of the company, to receive a part of the remaining assets in proportion to the number of shares contributed to the company;

(h) Other rights stipulated in this company Charter.

2. A shareholder or a group of shareholders holding more than ten (10) per cent of the total ordinary shares for a consecutive period of six months or more, or holding a smaller percentage as stipulated in the company Charter, shall have the following rights:

(a) To nominate candidates to the Board of Management and the Inspection Committee (if any);

(b) To sight and make an extract of the book of minutes and resolutions of the Board of Management, mid-year and annual financial statements according to the forms of the Vietnamese accounting regime and reports of the Inspection Committee;

(c) To request the convening of a General Meeting of Shareholders in the case stipulated in clause 3 of this article;

(d) To request the Inspection Committee to inspect each particular issue relating to the management and administration of the operation of the company where it is considered necessary. The request must be in writing, must contain the full name, permanent address, nationality, number of people’s identity card, passport or other lawful personal identification of a shareholder being an individual; name, permanent address, nationality, number of the decision on establishment or number of business registration of a shareholder  being  an organization; number of shares  and time of registration of shares of each shareholder, total number of shares of the group of shareholders and the percentage of ownership in the total number of shares of the company; issues to be inspected and purposes of the inspection;

(dd) Other rights stipulated in this company Charter.

3. A shareholder or a group of shareholders stipulated in clause 2 of this article shall have the right to request the convening of a General Meeting of Shareholders in the following cases:

(a) The Board of Management makes a serious breach of rights of shareholders, obligations of managers or makes a decision which falls outside its delegated authority;

(b) The term of the Board of Management has expired for more than six months and no new Board of Management has been elected to replace it;

(c) Other cases as stipulated in the company Charter.

The request must be in writing, must contain the full name, permanent address, nationality, number of people’s identity card, passport or other lawful personal identification in respect of a shareholder being an individual; name, permanent address, nationality, number of decision on establishment or number of business registration in respect of a shareholder being an organization; number of shares and  time  of  registration  of  shares  of  each  shareholder,  total  number  of  shares  of  the  group  of shareholders and the percentage of ownership in the total number of shares of the company; and grounds and reasons for the request to convene a meeting of the General Meeting of Shareholders. The  request  must  be  accompanied  by  documents  and  evidence  on  the  breaches of the Board of Management, the seriousness of such breaches, or on the decision which falls outside its authority.

4. Except where otherwise stipulated in the company Charter, the nomination of candidates to the Board of Management and the Inspection Committee stipulated in sub-clause (a) of clause 2 of this article shall be carried out as follows:

(a) Ordinary shareholders who voluntarily form a group which satisfies the stipulated conditions to nominate candidates to the Board of Management and the Inspection Committee must notify attending  shareholders  of  the  group  formation  no  later  than  the  beginning  of  the  General Meeting of Shareholders;

(b) Based on the number of members of the Board of Management and the Inspection Committee, the shareholders or group of shareholders stipulated in clause 2 of this article shall have the right to nominate one or more persons as decided by the General Meeting of Shareholders as candidates to the Board of Management and the Inspection Committee. Where the number of candidates nominated by a shareholders or group of shareholders is lower than the number of candidates they are entitled to nominate as decided by the General Meeting of Shareholders, the  remaining  candidates  shall  be  nominated  by  the  Board  of  Management,  the  Inspection Committee and other shareholders.

Article 19. Obligations of ordinary shareholders

1. To pay in full for the shares subscribed for as undertaken, in accordance with the law on securities and securities market; to be liable for debts and other property obligations of the company within the amount of capital contributed to the company.

Not to withdraw the capital contributed by ordinary shares from the company in any form, except where shares are redeemed by the company or other persons. Where a shareholder withdraws a part or all of the share capital contributed not in accordance with this clause, members of the Board of Management and the legal representative of the company shall be jointly liable for debts and other property obligations of the company within the value of shares withdrawn.

2. To comply with the Charter and the internal management rules of the company.

3. To observe decisions of the General Meeting of Shareholders and the Board of Management.

4. To perform other obligations as stipulated in this company Charter.

5. An ordinary shareholder must bear personal responsibility where he or she performs one of the following acts in any form in the name of the company:

(a) Breaches the law;

(b) Conducts business and other transactions for the personal benefit of himself or herself or other organizations or individuals;

(c) Pays debts prematurely before the company is likely to be in financial danger.

Article 20. Voting preference shares and rights of voting preference shareholders

1. A voting preference share is a share which shall carry more votes than an ordinary share. The number of votes per voting preference share is stipulated in the Charter at…).

2. Voting preference shareholders shall have the rights:

(a) To vote on matters which fall within the authority of the General Meeting of Shareholders with the number of votes in accordance with clause 1 of this article;

(b) Other rights as ordinary shareholders, subject to the exception in clause 3 of this article.

3. Voting preference shareholders may not assign such shares to other persons.

Article 21. Dividend preference shares and rights of dividend preference shareholders

1. A dividend preference share is a share for which dividend shall be paid at a rate higher than that paid for an ordinary share or at an annual fixed rate. Annually paid dividends shall include fixed dividends and bonus dividends. Fixed dividends shall not depend on the outcome of the business of the company. The specific rate of fixed dividends and method for determination of bonus dividends shall be stated in dividend preference share certificates.

2. Dividend preference shareholders shall have the following rights:

(a) To receive dividends at the rates stipulated in clause 1 of this article;

(b) Upon dissolution or bankruptcy of the company, to receive a part of the remaining assets in proportion to the number of shares contributed to the company after the company has paid in full its creditors and redeemable preference shareholders;

(c) Other rights as ordinary shareholders, subject to the exception in clause 3 of this article.

3. Dividend preference shareholders shall not have the right to vote, the right to attend General Meetings of Shareholders or the right to nominate candidates to the Board of Management and the Inspection Committee.

Article 22. Redeemable preference shares and rights of redeemable preference shareholders

1. A redeemable preference share is a share which shall be redeemed by the company at any time upon demand by its owner or in accordance with the conditions stated in the redeemable preference share certificate.

2. Redeemable preference shareholders shall have other rights as ordinary shareholders, subject to the exception in clause 3 of this article.

3. Redeemable preference shareholders shall not have the right to vote, the right to attend General Meetings of Shareholders or the right to nominate candidates to the Board of Management and the Inspection Committee.

Article 23. Payment of dividends

1. Dividends paid to preference shares shall be in accordance with the conditions applied separately to each type of preference share.

2. Dividends paid to ordinary shares shall be determined on the basis of the net profit performed and payment  for  dividends  shall  be  sourced  from  profits  retained  by  the  company.  A  shareholding company may only pay dividends to shareholders when the company has fulfilled its tax obligations and other financial obligations in accordance with  law; has appropriated all funds of the company and  fully  covered  previous  losses  in  accordance  with  law  and  the  company  Charter;  and  upon payment of all intended dividends, the company is still able to satisfy its debts and other property obligations which become due.

Dividends may be paid in cash, by shares of the company or by other assets stipulated in the company Charter. Where payment is made in cash, it must be made in Vietnamese dong and may be made by cheque or money order posted to the permanent address of shareholders.

Dividends may be paid by bank transfer where the company has sufficient bank details of a shareholder to directly transfer [dividends] to such shareholder’s bank account. If the company has made a bank transfer based on the exact banking details as informed by a shareholder, the company shall not be liable for any loss arising from such transfer.

3. The Board of Management shall prepare a list of shareholders to be paid dividends and determine the rate of dividend paid for each share and the time-limit and method of payment no later than thirty (30) days prior to each payment of dividends.  The notice on payment of dividends must be sent by a method guaranteed to reach the registered addresses of all shareholders no later than fifteen (15) days prior to the actual payment of dividends.  The notice must specify the name of the company; full name,  permanent  address,  nationality,  number  of  people’s  identity  card,  passport  or  other  lawful personal  identification  in  respect  of  a  shareholder  being  an  individual;  name,  permanent  address, nationality, number of decision on establishment or number of business registration in respect of a shareholder being an organization; the number of shares of each class held by such shareholder, the dividend rate for each share and the total dividends to be paid to such shareholder, and the time and method  for  payment  of  dividends;  full  name  and  signature  of  the  chairman  of  the  Board  of Management and the legal representative of the company

4. Where shares are assigned between the completion of the list of shareholders and the time of payment of dividends, the assignor shall receive the dividends from the company.

Article 24. Recovery of money paid for redeemed shares or paid as dividends

Where the Company pays shareholders for redeemed shares not in accordance with clause 1 of article 12 or pays dividends not in accordance with article 23 of this Charter, all shareholders must surrender to the company  the  amount  of  money  or  other  assets  they  received  otherwise  they  shall  be  jointly  liable  with members of the Board of Management for all debts or other property obligations of the company within the scope of the money and assets paid to them.

B. A LIMITED LIABILITY COMPANY:

LIMITED LIABILITY COMPANY WITH TWO OR MORE MEMBERS:
[Articles 25 to 31 are applicable to a Limited Liability Company with Two or More Members:]

Article 25. Members of the company

1. The Company is established by the following members:

(a) (Here list the) full name, permanent address, nationality, number of people’s identity card in respect of an individual; permanent address; amount of contribution:

……….

……….

……….

(b) (Here  list  the)  name  of  company,  head  office  address,  nationality,  number  of  establishment decision or number of business registration;   and full name, permanent address, nationality, number of people’s identity card of the authorized representative; amount of contribution:

……….

……….

……….

2. A founding member means a capital contributor participating in the formulation, passing and signing of the initial company Charter.

3. A founding member must undertake to contribute …% charter capital in ….VND, (founding members must register to contribute at least twenty per cent of the charter capital of the Company).

4. Right to assign shares:

Founding members shall not be permitted to assign their capital contribution within 3 years from the date of issuance of the licence for establishment and operation, except where it is assigned to other founding members of the Company.

Article 26. Paying in capital contribution and issuance of capital contribution certificates

1. Members must contribute capital in full and on time as undertaken.

2. Upon  full  payment  of  the  capital  contribution  portion,  a  member  shall  be  issued  with  a  capital contribution certificate by the company.   A capital contribution certificate shall contain the following main particulars:

(a) Name, address of the head office of the company;

(b) Number and date of issuance of the licence of the company;

(c) Charter capital of the company;

(d) Full name, permanent address, nationality, number of people’s identity card, passport or other lawful  personal  identification  in  respect  of  a  member  being  an  individual;  name,  permanent address, nationality, number of establishment decision or number of business registration in respect of a member being an organization;

(dd) Capital contribution portion of the member and its value;

(e) Number and date of issuance of the capital contribution certificate;

(g) Full name and signature of the legal representative of the company.

3. Where a capital contribution certificate is lost, torn, burnt or otherwise destroyed, the member shall be re-issued by the company with a capital contribution certificate.

Article 27. Register of members

1. The  company  must  establish  a  register  of  members  immediately  after  issuance  of  its  licence  for establishment and operation.  The register of members must contain the following main particulars:

(a) Name, address of the head office of the company;

(b) Full name, permanent address, nationality, number of people’s identity card, passport or other lawful  personal  identification  in  respect  of  a  member  being  an  individual;  name,  permanent address, nationality, number of establishment decision or number of business registration in respect of a member being an organization;

(c) Value  of  portion  of  capital  contribution  at  the  time  of  contribution  and  capital  contribution of each member and time it is paid in;

(d) Signatures of members being individuals or of legal representatives of members being organizations;

(dd) Number and date of issuance of capital contribution certificates of each member.

2. The register of members shall be retained at the head office of the company.

Article 28. Rights and obligations of members

1. A member of the company shall have the following rights:

(a) To attend meetings of the Members’ Council; to discuss, make recommendations and vote on the matters within the authority of the Members’ Council;

(b) To have the number of votes in proportion to its capital contribution portion;

(c) To examine, sight, look up, copy or make an extract of the register of members, transaction monitoring records, books of account, annual financial statements, minutes of meetings of the Members’ Council and other papers and documents of the company;

(d) To be distributed with profit in proportion to its capital contribution after the company has paid taxes in full and discharged all other financial obligations in accordance with law;

(dd) To be distributed with the remainder of the value of assets of the company in proportion to its capital contribution in the company upon dissolution or bankruptcy of the company;

(e) To  be  given  priority  in  making  additional  capital  contributions  to  the  company  upon  any increase of charter capital of the company; to be entitled to assign a part or all of its capital contribution in accordance with this Charter;

(g) To make a complaint or commence a court action against the director or general director in the event that the director or general director fails to perform fully his or her obligations and causes loss to the interests of such member or of the company as stipulated by law;

(h) To  dispose  of  its  capital  contribution  by  way  of  assignment,  inheritance,  donation  or  other methods in accordance with law and this Charter;

(i) Other rights stipulated in this Charter.

2. A member or a group of members holding more than twenty five (25) per cent of the charter capital or a  smaller  percentage  as  stipulated  in  this  Charter, except  as  stipulated  in clause  3  of  this  article, shall  have  the  right  to  request  that  a  meeting  of  the  Members’  Council  be  convened  to  deal  with issues within its authority.

3. Where a member of the company holds more than 75% of the charter capital and the Charter does not stipulate a smaller percentage pursuant to clause 2 of this article, the minority members joining together shall automatically have the right stipulated in clause 2 of this article.

4. Obligations of members:

(a) To contribute in full and on time the amount of capital as undertaken and to be liable for the debts  and other  property  obligations  of  the  company  within  the  amount  of  capital  they undertake  to  contribute  to  the  company;  not  to  withdraw  the  contributed  capital  from  the company in any form, except in the cases provided in articles 8, 29, 30 and 31 of this Charter.

(b) To comply with this Charter.

(c) To observe decisions of the Members’ Council.

(d) To bear personal responsibility when performing the following acts in the name of the company:

(i) Breaching the law;

(ii) Conducting  business  or  other  transactions  not  for  the  interest  of  the  company  and [thereby] causing loss to other persons;

(iii) Paying debts prematurely before the company is likely to be in financial danger.

Article 29. Redemption of capital contribution portion

1. A member may demand the company redeem its capital contribution if such member votes against a decision of the Members’ Council on the following issues:

(a) Amendment of or addition to the provisions of the company Charter relating to the rights and obligations of members and of the Members’ Council;

(b) Re-organization of the company;

(c) Other cases stipulated in the company Charter.

The demand for redemption of shares of capital contribution must be made in writing and sent to the company within fifteen (15) days from the date on which a decision is passed on an issue stipulated in sub-clauses (a), (b) and (c) of this clause.

2. Where a member makes a demand as stipulated in clause 1 of this article and a price cannot be agreed, the company must redeem the capital contribution of such member at the market price or at the price calculated in accordance with the provisions of the company Charter within fifteen (15) days from the date of receipt of such demand. Payment may only be made if, after the full payment for such redeemed capital contribution, the company is still able to meet all debts and other property obligations.

3. Where the company does not redeem the share of capital contribution as stipulated in clause 2 of this article, such member shall have the right to assign its capital contribution to another member or a non-member.

Article 30. Assignment of capital contribution portion

Except for the case stipulated in clause 6 of article 31 of this Charter, a member of the company shall have the right to assign a part or all of its share of capital contribution to other persons in accordance with the following provisions:

1. [A member wishing to assign a part or all of its share of capital contribution] must offer to sell such share  of  capital  contribution  to  all  other  members  in  proportion  to  their  capital  contribution  in  the company on the same terms;

2. Assignment to non-members shall only be permitted where the other members of the company do not purchase or do not purchase in full within thirty (30) days from the offering date.

Article 31. Dealing with capital contribution portion in other cases

1. In the case of a member being an individual who dies or who is declared dead by a court, his or her heir by will or by law shall be a member of the company.

2. In cases where the capacity for civil acts of a member is restricted or lost, the rights and obligations of such member in the company shall be exercised by his or her guardian.

3. The capital contribution of a member shall be redeemed by the company or assigned in accordance with articles 29 and 30 of this Charter in the following cases:

(a) An heir does not wish to become a member;

(b) A donee as stipulated in article 5 of this clause is not approved by the Members’ Council to become a member;

(c) A member being an organization is dissolved or becomes bankrupt.

4. Where a member being an individual dies intestate or where his or her heir disclaims the inheritance or the right to inherit is deprived, such capital contribution shall be dealt with in accordance with civil law.

5. A member may donate a part or all of its share of capital contribution in the company to other persons.

Where the donee is a blood relation of such member up to the third generation, the donee shall automatically become a member of the company. In other cases, the donee shall only become a member of the company upon approval of the Members’ Council.

6. Where a member uses its share of capital contribution to pay a debt, the payee may use such share of capital contribution in either of the two following manners:

(a) To become a member of the company upon approval of the Members’ Council;

(b) To offer for sale and assign such share of capital contribution in accordance with article 39 of this Charter.

A ONE MEMBER LIMITED LIABILITY COMPANY:
[Articles 32 to 34 are applicable to a One Member Limited Liability Company:]

Article 32. Rights of company owner

1. A company owner being an organization shall have the following rights:

(a) To make decisions on the contents of the company Charter, and on amendments of and additions to the company Charter;

(b) To make decisions on strategies for development and annual business plans of the company;

(c) To  make  decisions  on  the  organizational  and  management  structure  of  the  company,  to appoint, remove or dismiss managerial positions of the company;

(d) To  make  decisions  on  investment  projects  valued  at  fifty  (50)  or  more  per  cent  of  the  total asset  value  recorded  in  the  most  recent  financial  statements  of  the  company  or  a  smaller percentage as stipulated in the company Charter;

(dd) To make decisions on plans for market development, marketing and technology;

(e) To  approve  loan  agreements  and  other  contracts,  as  stipulated  in  the  company  Charter, valued  at  fifty  (50)  or  more  per  cent  of  the  total  asset  value  recorded  in  the  most  recent financial  statement  of  the  company  or  a  smaller  percentage  as  stipulated  in  the  company Charter;

(g) To make decisions on sale of assets valued at fifty (50) or more per cent of the total asset value recorded in the most recent financial statements of the company or a smaller percentage as stipulated in the company Charter;

(h) To make decisions on increase in the charter capital of the company; on assignment of all or part of the charter capital of the company to other organizations or individuals;

(i) To make decisions on establishment of subsidiary companies or on capital contribution to other companies;

(k) To organize supervision and assessment of the business operation of the company;

(l) To make decisions on the use of profits after discharge of tax obligations and other financial obligations of the company;

(m) To make decisions on re-organization or dissolution and to petition for bankruptcy of the company;

(n) To recover all of the value of assets of the company after the company completes dissolution or bankruptcy [procedures];

(o) Other rights stipulated in this company Charter.

2. A company owner being an individual shall have the following rights:

(a) To make decisions on the contents of the company Charter, and on amendments of and additions to the company Charter;

(b) To make decisions on investment, business and internal management of the enterprise, unless otherwise stipulated by the company Charter;

(c) To assign all or part of the charter capital of the company to other organizations or individuals;

(d) To make decisions on the use of profits after discharge of tax obligations and other financial obligations of the company;

(dd) To make decisions on re-organization or dissolution and to petition for bankruptcy of the company;

(e) To recover all of the value of assets of the company after the company completes dissolution or bankruptcy [procedures];

(g) Other rights stipulated in this company Charter.

Article 33. Obligations of company owner:

1. To contribute capital in full and on time as undertaken.

2. To comply with the company Charter.

3. To identify and separate assets of the company owner from assets of the company.

A company owner being an individual must separate his or her personal expenditure and expenditure for his or her family from the expenditures for him or her as the chairman of the company and the director or general director of the company.

4. To comply with the law on contract and relevant law with respect to any purchase, sale, borrowing, lending, lease or rent and other transactions between the company and the company owner.

5. To perform other obligations in accordance with this Law and the charter of the company.

Article 34. Restrictions on rights of company owner

1. A company owner may only withdraw capital by way of assignment of a part or all of the charter capital to other organizations and individuals; in the case of withdrawal of all or part of its contributed capital from the company in another form, [the company owner] shall be jointly liable for debts and other property obligations of the company.

In the case of assignment  of  part  of  the  charter  capital  to  other  organizations  or  individuals,  the company  must  register  for  conversion  into  a  limited  liability  company  with  two  or  more  members within a period of fifteen (15) days from the date of assignment.

2. The company owner may not withdraw profit of the company when the company has not paid in full all debts and other property obligations which become due.

Chapter III

STRUCTURE OF ORGANIZATION AND MANAGEMENT OF THE COMPANY

Article 35. Structure of organization and management of the company

The Company shall operate in the form of a one member limited liability company with one organization or individual acting as owner, or in the form of a limited liability company with two or more members in which organizations  or  individuals  may  be  capital  contributing  members,  or  in  the  form  of  a  shareholding company.

Article 36. Director or General Director

The director or general director is the person who manages the day-to-day business operation of the company, and shall be liable before the law and to the Members’ Council/chairman of the company/Board of Management for implementation of his or her rights and duties.

Article 37. Rights and duties of Director or General Director:

(a) To organize implementation of decisions of the Members’ Council/Board of Management or of the chairman of the company;

(b) To make decisions on all matters relating to the day-to-day business operation of the company;

(c) To organize the implementation of the business plan and investment plan of the company;

(d) To issue the rules on internal management of the company;

(dd) To appoint, remove or dismiss persons to managerial positions in the company, except for the positions falling within the authority of the Members’ Council/Board of Management or of the chairman of the company;

(e) To sign contracts in the name of the company, except for cases falling within the authority of the chairman of the Members’ Council or of the chairman of the company;

(g) To make recommendations with respect to the organizational structure of the company;

(h) To submit the final annual financial statements to the Members’ Council or the chairman of the company;

(i) To recommend the plan for use of profits or for dealing with losses in business;

(k) To recruit employees;

(l) Other rights stipulated in the company Charter and in the labour contract which the director or general director enters into with the chairman of the company or the chairman of the Members’ Council.

Article 38. Criteria and conditions for being Director or General Director

1. A director or general director must meet the following criteria and conditions:

(a) To have full capacity for civil acts and not to be prohibited from management of enterprises as stipulated in the Law on Enterprises;

(b) As an individual owns at least ten per cent of the charter capital of the company or satisfies other conditions stipulated in this Charter;

(b) Not to be an affiliated person of a member of the Members’ Council or of the chairman of the company,  of  the  person  authorized  to  directly  appoint  the  authorized  representative  or  the chairman of the company;

(c) To satisfy conditions stipulated in the law on securities and securities market to act as director or general director.

2. A director or general director of a subsidiary of a company in which the State owns more than fifty per cent of the charter capital must not be the spouse,  parent,  adoptive  parent,  child,  adopted  child  or sibling of any managerial person or of a person with the power to appoint such managerial person.

Article 39. Remuneration, wages and bonuses of managers of the company

1. The Company may pay remuneration, salary and bonuses to members of the Members’ Council, the chairman of the company, members of the Board of Management, the director or general director and other managerial personnel in accordance with business results and efficiency.

2. Remuneration and salary paid to the abovenamed shall be included in business expenses in accordance with provisions of the law on corporate income tax and other relevant law, and be recorded as a separate item in annual financial statements of the company.

Article 40. Internal control

1. A company shall have an internal control department at its head office. Staff of the internal control department  must  satisfy  requirements  in  accordance  with  the  law  on  securities  and  the  securities market. Staff working in the internal control department may concurrently work in other departments of the company, except for activities being the management of funds and of investment portfolios of investors.

2. The internal control department shall be responsible to supervise activities of the company, to ensure the operation of the company and its officials and staff comply with law and the professional rules of the company. Specific rights and liabilities of the internal control department shall be stipulated in the internal control rules of the company.

A. A LIMITED LIABILITY COMPANY

A LIMITED LIABILITY COMPANY WITH TWO OR MORE MEMBERS:
[Articles 41 to 50 are applicable to a Limited Liability Company with Two or More Members:]

Article 41. Members’ Council

1. The  Members’  Council  shall  comprise  all  members  and  shall  be  the  highest  decision-making authority  of  the  company.    Where  a  member  is  an  organization,  such  member  shall  appoint  its authorized representative to be on the Members’ Council. The Members’ Council shall meet at least once a year (on the ………).

2. The Members’ Council shall have the following rights and duties:

(a) To make decisions on annual business plans and development strategies of the company;

(b) To make decisions on the increase or reduction of the charter capital and on the timing and method of raising additional capital;

(c) To make decisions on the form of investment and investment projects valued at more than fifty (50)  per  cent  of  the  total  value  of  assets  recorded  in  the  most  recently  publicized  financial statements of the company (or a smaller percentage as stipulated in this Charter);

(d) To make decisions on solutions for market development, marketing and technology transfer; to approve loan agreements and contracts for sale of assets valued at fifty (50) per cent or more of the value of assets recorded in the most recently publicized financial statements  of  the company (or a smaller percentage as stipulated in this Charter);

(dd) To elect, remove or discharge the chairman of the Members’ Council; to make decisions on the  appointment,  removal,  dismissal,  signing  and  termination  of  contracts  of  the  director  or general  director,  chief  accountant  (and  other  managerial  personnel  as  stipulated  in  this Charter);

(e) To  make  decisions  on  salary,  bonus  and  other  benefits  for  the  chairman  of  the  Members’ Council, the director or general director, chief accountant (and other managerial personnel as stipulated in this Charter);

(g) To  approve  annual  financial  statements,  plans  for  use  and  distribution  of  profit  or  plans  for dealing with losses of the company;

(h) To make decisions on the organizational and management structure of the company;

(i) To make decisions on the establishment of subsidiary companies, branches and representative offices

(k) To make amendments of or additions to this Charter;

(l) To make decisions on restructuring of the company;

(m) To make decisions on dissolution or to request bankruptcy of the company.

Article 42. Authorized representatives

1. The appointment of an authorized representative must be in writing, and must contain the following main contents:

(a) Name, address of the head office, nationality, number and ate of the decision on establishment or the business registration;

(b) The ratio of capital contribution, number and date of the capital contribution certificate;

(c) Full name, permanent address, nationality, number of people’s identity card, passport or other lawful personal identification of the appointed authorized representative;

(d) Term of authorization;

(dd) Full  name  and  signature  of  the  legal  representative  of  the  member  and  of  the  authorized representative of the member.

The replacement of an authorized representative must be notified in writing to the company and the SSC within seven working days from the date of the decision and shall take effect from the date the company is notified.

2. An authorized representative must meet the following criteria and conditions:

(a) Have full capacity for civil acts;

(b) Not be a person prohibited from establishing and managing enterprises;

(c) Have professional qualifications and experience in business management or in the main lines of business of the company;

(d) In  the  case  of  a  subsidiary  company  where  the  State  share  of  capital  contribution  or  State owned capital accounts for over 50% of the charter capital, the spouse, father, adoptive father, mother, adoptive mother, children, adopted children and siblings of the managers and of the person authorized to appoint the managers of the parent company may not be appointed as authorized representative of the subsidiary company.

3. An authorized representative shall perform the rights and obligations of a member of the Members’ Council in the name of such member in accordance with this Charter. All restrictions of a member on its  authorized  representative  in  the  performance  of  the  rights  of  members  through  the  Members’ Council shall have no legal validity in respect of a third party.

4. An  authorized  representative  shall  be  obliged  to  attend  all  meetings  of  the  Members’  Council;  to perform the rights and obligations of a member of the Members’ Council in an honest and diligent manner  and  to  his  or  her  best  ability  for  maximum  protection  of  the  legitimate  interests  of  the member and the company.

5. An authorized representative shall have the number of votes in proportion to the authorized capital contribution portion.

Article 43. Chairman of Members’ Council

1. The Members’ Council shall elect a member to be its chairman. The chairman of the Members’ Council may concurrently work as the director or general director of the company.

2. The chairman of the Members’ Council shall have the following rights and duties:

(a) To prepare or to organize the preparation of working programs and plans of the Members’ Council;

(b) To prepare or to organize the preparation of programs, agenda and documents for meetings of the Members’ Council or for collecting opinions of members;

(c) To convene and chair meetings of the Members’ Council or to organize the collection of opinions of members;

(d) To supervise or to organize the supervision of the implementation of decisions of the Members’ Council;

(dd) To sign decisions of the Members’ Council on behalf of the Members’ Council;

(e) Other rights and duties stipulated in this Charter.

3. The term of the chairman of the Members’ Council shall not exceed five years.  The chairman of the Members’ Council may be re-elected for an unrestricted number of terms.

4. In his or her absence, the chairman of the Members’ Council shall authorize a member in writing to perform the rights and obligations of the chairman of the Members’ Council. Where no member is authorized or the chairman of the Members’ Council is unable to work, all other members shall elect one person from the members to temporarily perform the rights and obligations of the chairman of the Members’ Council on the principle of simple majority.

Article 44. Convening meetings of the Members’ Council

1. A meeting of the Members’ Council may be convened at any time upon request by the chairman of the Members’ Council or request by a member or a group of members as stipulated in clauses 2 and 3 of article 28 of this Charter. A meeting of the Members’ Council must be held at the head office of the company (except where this Charter otherwise stipulates).

The  chairman  of  the  Members’  Council  shall  prepare  or  organize  the  preparation  of  programs, agenda and documents and convene meetings of the Members’ Council. A member shall have the right to make written recommendation on the agenda. A recommendation must contain the following main particulars:

(a) Full name, permanent address, nationality, number of people’s identity card, passport or other lawful  personal  identification  in  respect  of  a  member  being  an  individual;  name,  permanent address, nationality, number of establishment decision or number of business registration in respect  of  a  member  being  an  organization; signatures  of  the  member  or  authorized representative;

(b) The ratio of capital contribution, number and date of issuance of capital contribution certificate;

(c) Items recommended for inclusion in the agenda;

(d) Reason for the recommendation.

The chairman of the Members’ Council must approve a recommendation and include it in the agenda of a meeting of the Members’ Council if such recommendation contains all the stipulated particulars and is sent to the head office of the company at least one working day before the date of the meeting of the Members’ Council; where a recommendation is submitted immediately prior to a meeting, it shall be approved if the majority of the attending members so agree.

2. The  invitation  to  a  meeting  of  the  Members’  Council  may  be  in  the  form  of  letter  of  invitation, telephone,  fax,  telex  or  other  electronic  means  and  shall  be  sent  directly  to  each  member  of  the Members’ Council. The invitation must specify the time, venue and agenda of the meeting.

The  agenda  and  documents  for  a  meeting  must  be  sent  to  members  of  the  company  prior  to  the opening  day  of  the  meeting.  Documents  to  be  used  in  a  meeting  relating  to  decisions  on amendments of or addition to this Charter, approval of the developmental direction of the company, approval of annual financial statements, restructuring or dissolution of the company must be sent to members no later than two working days prior to the date of the meeting. The period for sending other documents shall be stipulated by the company.

3. Where the chairman of the Members’ Council does not convene a meeting of the Members’ Council upon the request of a member or group of members as stipulated in clauses 2 and 3 of article 28 of this Charter within fifteen (15) days from the date of receipt of such request, such member or group of members shall convene a meeting of the Members’ Council; in this case, if considered necessary, they  may  request  the  SSC  to  supervise  the  organization  and  convening  of  the  meeting  of  the Members’ Council; and at the same time, shall have the right to take legal action in their name or in the  name  of  the  company  against  the  chairman  of  the  Members’  Council  for  not  performing management obligations, causing loss to their legitimate interests.

4. Where it is not stipulated in this Charter, the request to convene a meeting of the Members’ Council as provided in clause 3 of this article must be in writing and contain the following main particulars:

(a) Full name, permanent address, nationality, number of people’s identity card, passport or other lawful  personal  identification  in  respect  of  a  member  being  an  individual;  name,  permanent address, nationality, number of establishment decision or number of business registration in respect of a member being an organization; ratio of capital contribution and number and date of issuance of capital contribution certificate of each requesting member;

(b) Reason for the request to convene a meeting of the Members’ Council and the issues to be dealt with;

(c) Full name and signature of each requesting member or its authorized representative.

5. Where  a  request  to  convene  a  meeting  of  the  Members’  Council  does  not  contain  all  the  items stipulated in clause 4 of this article, the chairman of the Members’ Council must notify the member or groups of members concerned in writing within seven working days from the date of receipt of the request.

In other cases, the chairman of the Members’ Council must convene a meeting of the Members’ Council within fifteen (15) working days from the date of receipt of the request.

Where the chairman of the Members’ Council does not convene a meeting of the Members’ Council as stipulated, he or she must bear personal responsibility before the law for any loss arising to the company and the relevant members of the company. In this case, the requesting member or group of members have the right to convene a meeting of the Members’ Council. The reasonable expenses for  convening  and  conducting  a  meeting  of  the  Members’  Council  shall  be  reimbursed  by  the company.

Article 45. Conditions and procedures for conducting meetings of the Members’ Council

1. A meeting of the Members’ Council shall be conducted where the attending members represent at least seventy five (75) per cent of the charter capital (or another specific percentage as stipulated in this Charter).

2. Where a meeting does not take place because the condition stipulated in clause 1 of this article is not satisfied, the meeting may be convened for a second time within fifteen (15) days from the date on which the first meeting was intended to be opened.   A meeting of the Members’ Council which is convened for a second time shall be conducted where the attending members represent at least fifty (50) per cent of the charter capital (or another specific percentage as stipulated in this Charter).

3. Where  a  meeting  which  has  been  convened  for  a  second  time  does  not  take  place  because  the condition  stipulated  in  clause  2  of  this  article  is  not  satisfied,  it  may  be  convened  for  a  third  time within ten (10) working days from the date on which the second meeting was intended to be opened.

In this case, the meeting of the Members’ Council shall be conducted irrespective of the number of attending members and of the amount of charter capital represented by attending members.

4. A  member  or  an  authorized  representative  of  a  member  must  attend  and  vote  at  meetings  of  the Members’ Council.

Article 46. Decisions of the Members’ Council

1. The  Members’  Council  shall  pass  decisions  within  its  authority  by  way  of  voting  at  meetings, collecting written opinions or other forms as stipulated by the company.

Where it is not otherwise stipulated by the company, the following issues must be passed by way of voting at meetings of the Members’ Council:

(a) Amendments of or addition to the charter of the company;

(b) Decisions on the developmental direction of the company;

(c) Election, discharge, removal of the chairman of the Members’ Council; appointment, dismissal or removal of the director or general director;

(d) Approval of annual financial statements;

(dd) Restructuring or dissolution of the company

2. A decision of the Members’ Council shall be passed in a meeting in the following cases:

(a) It is approved by the number of votes representing at least sixty five (65) per cent of the aggregate capital of the attending members (or another specific percentage as  stipulated in this Charter);

(b) In respect of decisions relating to the sale of assets valued at fifty (50) (or smaller as stipulated in this Charter) per cent or more of the total asset value recorded in the most recent financial statements of the company, the restructuring or dissolution of the company, the approval by a number of votes representing at least seventy five (75) per cent of the capital of the attending members shall be required (or a smaller percentage as stipulated in this Charter).

3. A decision of the Members’ Council shall be passed by way of collection of written opinions if it is approved by members representing at least seventy five (75) per cent of the charter capital (or a smaller percentage as stipulated in this Charter).

Article 47. Minutes of meetings of the Members’ Council

1. All meetings of the Members’ Council must be recorded in the book of minutes of the company.

2. Minutes of each meeting of the Members’ Council must be completed and approved immediately prior to the closing of the meeting. The minutes must include the following main particulars:

(a) Time and venue of the meeting; purpose and program of the meeting;

(b) Full  name,  ratio  of  capital  contribution,  number  and  date  of  issuance  of  capital  contribution certificate of members and authorized representatives attending the meeting; full name, ratio of  capital  contribution,  number  and  date  of  issuance  of  capital  contribution  certificate  of members and authorized representatives not attending the meeting;

(c) Matters discussed and voted upon; summary of opinions of members on each of the matter discussed;

(d) Total number of votes for, against or abstentions on each matter voted upon;

(dd) Decisions passed;

(e) Full names and signatures of members and authorized representatives attending the meeting.

Article 48. Procedures for approving decisions of Members’ Council by obtaining written opinions

Where it is not otherwise stipulated by the company, the authority and procedures for collection of written opinions of members to pass a decision shall be carried out as follows:

1. The chairman of the Members’ Council makes a decision in writing on collection of written opinions of members of the Members’ Council to pass decisions within his authority;

2. The chairman of the Members’ Council shall be responsible to organize the preparation and delivery of reports and submissions on the issues to be decided upon, and draft decision and opinion form to members of the Members’ Council.

An opinion form must contain the following main particulars:

(a) Name, address of head office, number and date of the business registration certificate, registered business location of the company;

(b) Full  name,  address,  nationality,  number  of  people’s  identity  card,  passport  or  other  lawful personal  identification,  and  ratio  of  capital  contribution  represented  by  the  member  of  the Members’ Council;

(c) Matters  on  which  opinions  are  collected  and  corresponding  responses  in  the  order  of  for, against and no opinion.

(d) Time-limit for sending the opinion form to the company;

(dd) Full names and signatures of the chairman and members of the Members’ Council.

An  opinion  form  which  contains  full  and  accurate  particulars  and  is  sent  by  a  member  to  the company within the stipulated time-limit shall be deemed valid.

3. The chairman of the Members’ Council shall organize the counting of opinion forms, prepare a report thereon and notify the results thereof and the passed resolution to members within seven working days  from  the  time-limit  for  opinion  forms  to  be  sent  to  the  company  by  members.  The  report  on results of form counting must contain the main particulars stipulated in clause 2 of article 47 of this Charter.

Article 49. Obligations of members of Members’ Council, Director or General Director

1. A member of the Members’ Council, the director or general director of the company shall have the following obligations:

(a) To exercise the delegated rights and perform the delegated duties honestly and diligently and to his or her best ability to assure the best lawful interests of the company and the company owner;

(b) To be loyal to the interest of the company and the company owner; not to use information, know-how  or  business  opportunities  of  the  company;  not  to  abuse  his  or  her  position  and power nor to use assets of the company for the personal benefit of himself or herself or other organizations or individuals;

(c) To notify the company in a prompt, complete and accurate manner of any enterprises of which he  or  she  or  any  affiliated  person  is  the  owner  or  holds  shares  or  a  controlling  capital contribution. This notice shall be displayed at the head office and branches of the company;

(d) To perform other obligations stipulated by law and by the company.

2. The director or general director shall not be entitled to any pay rise or bonus when the company is unable to pay all of its due debts.

Article 50. Contracts and transactions which must be approved by the Members’ Council

1. A contract or transaction between the company and the following persons must be approved by the Members’ Council:

(a) A member, the authorized representative of a member, the director or general director (or the legal representative of the company);

(b) An affiliated person of the persons stipulated in sub-clause (a) of this clause;

(c) A manager of the parent company or the person authorized to appoint managers of the parent company;

(d) An affiliated person of the persons stipulated in sub-clause (c) above; (The legal representative of the company) must send to the members of the Members’ Council, and at the same time display at the head office and branches of the company the draft of such contract or the main contents of the transaction it is intended to conduct. The Members’ Council must make a decision on approval of the contract or transaction within fifteen (15) days from the date of display; in this  case,  the  contract  or  transaction  shall  be  approved  where  it  is  so  agreed  by  the  members representing  at  least  seventy  (75)  per  cent  of  the  total  number  of  shares  with  voting  rights.  The members concerned in such contracts or transactions may not vote.

2. A  contract  or  transaction  shall  be  void  and  be  dealt  with  in  accordance  with  law  where  it  is  not executed in accordance with the provisions in clause 1 of this article.   (The legal representative of the company), the member concerned and the affiliated persons of such member must compensate for any loss arising and return to the company any benefits gained from the performance of such contract or transaction.

A ONE MEMBER LIMITED LIABILITY COMPANY:
[Articles 51 to 55 are applicable to a One Member Limited Liability Company:]

Article 51. Members’ Council

(This article only applies when the company owner is an organization appointing two or more authorized representatives):

1. The  Members’  Council  shall,  in  the  name  of  the  company  owner,  organize  the  implementation  of rights and obligations of the company owner; shall have the right to implement rights and obligations of the company in the name of the company; shall be responsible before the law and to the company owner for the implementation of delegated rights and obligations in accordance with this Charter and relevant laws.

2. The company owner shall appoint the chairman of the Members’ Council. The term of office, powers and  duties  of  the  chairman  of  the  Members’  Council  shall  be  as  stipulated  in  article  43  of  this Charter.

4. A  meeting  of  the  Members’  Council  shall  be  conducted  where  there  are  at  least  two  thirds  of  the members attending. Where it is not stipulated in the Charter, each member shall have an equal vote. The Members’ Council may pass a decision by way of collection of written opinions.

5. A decision of the Members’ Council shall be passed when approved by over a half of the attending members.  Any  amendment  of,  addition  to  the  charter  of  the  company,  re-organization  of  the company, assignment of a part or all of the charter capital of the company must be approved by at least three quarters of the attending members.

A decision of the Members’ Council shall take legal effect from the date of passing, except where approval of the company owner is required as stipulated in this Charter.

6. All  meetings  of  the  Members’  Council  must  be  recorded  in  the  book  of  minutes. The content of minutes of meetings of the Members’ Council shall be as stipulated in article 47 of this Charter.

Article 52. Chairman of the company

1. The chairman of the company shall, in the name of the company owner, organize the implementation of  rights  and  obligations  of  the  company  owner;  shall  have  the  right  to  implement  rights  and obligations of the company in the name of the company; shall be responsible before the law and to the company owner for the implementation of delegated rights and obligations in accordance with this Charter and relevant laws.

2. A decision of the chairman of the company on the implementation of rights and obligations  of the company  owner  shall  take  legal  effect  from  the  date  of  approval  by  the  company  owner  (except where otherwise stipulated in this Charter).

Article 53. Inspectors

1. The  company  owner  appoints  one  to  three  inspectors  for  a  term  not  exceeding  three  years. Inspectors shall be responsible before the law and to the company owner for the implementation of their rights and duties.

2. Inspectors shall have the following duties:

(a) To  check  the  lawfulness,  honesty  and  care  of  the  Members’  Council,  the  chairman  of  the company and the director or general director  in  organizing the implementation of ownership rights and in managing the business of the company;

(b) To  evaluate  financial  statements,  reports  on  business  situations,  reports  on  assessment  of management and other reports before submitting them to the company owner or relevant State bodies; to submit evaluation reports to the company owner;

(c) To make recommendations to the company owner on solutions for amendments of, additions to,  the  organizational  and  management  structure  and  administration  of  the  business  of  the company;

(d) Other duties as requested or decided by the company owner.

3. An inspector shall have the right to sight any document or paper of the company at the head office or a branch or representative office of the company. Members of the Members’ Council, the chairman of the company, the director or general director and other managers shall be obliged to provide in full and   on   time   information   on   the   implementation   of   ownership   rights   and   on   management, administration and the business of the company at the request of an inspector.

4. Inspectors must meet the following criteria and conditions:

(a) To have full capacity for civil acts and not to be prohibited from management of enterprises as stipulated in the Law on Enterprises;

(b) Not to be affiliated to a member of the Members’ Council, the chairman of the company, the director or general director or the person authorized to directly appoint an inspector;

(c) To have professional qualifications or work experience in accounting and auditing or professional  qualifications and practical  experience  in  the  main  lines  of  business  of  the company or other criteria or conditions as stipulated by the company.

Article 54. Obligations of members of Members’ Council, Chairman of the company, Director or General Director and Inspectors

1. Members of the Members’ Council, the chairman of the company, the director or general director and inspectors shall have the following obligations:

(a) To comply with the law, this Charter and decisions of the company owner in the implementation of delegated rights and duties;

(b) To perform delegated rights and duties honestly, diligently and to their best ability to ensure the maximum lawful interest of the company and the company owner;

(c) To be loyal to the interests of the company and the company owner; Not to use information, know-how, business opportunities of the company, or to abuse his or her position and power nor  to  use  assets  of  the  company  for  the  personal  benefit  of  himself  or  herself  or  other organizations or individuals;

(d) To notify the company in a prompt, complete and accurate manner of the enterprises of which he  or  she  or  any  affiliated  person  is  the  owner  or  holds  shares  or  a  controlling  capital contribution. This notice shall be displayed at the head office and branches of the company;

(dd) Other obligations stipulated by the company.

2. The director or general director shall not be entitled to any pay rise or bonus when the company is unable to pay all of its due debts.

Article 55. Contracts and transactions of the company with affiliated persons

1. Contracts and transactions between a one member limited liability company being an organization with  the  following  subjects  must  be  considered  and  voted  upon  by  the  Members’  Council  or  the chairman of the company, director or general director and inspectors on the principle of majority with one vote for each person:

(a) The company owner and a person affiliated to the company owner;

(b) The authorized representative, the director or general director and inspectors;

(c) An affiliated person of the persons stipulated in sub-clause (b) of this clause;

(d) Managers of the company owner, the person authorized to appoint such managers;

(dd) An affiliated person of the persons stipulated in sub-clause (d) of this clause;

(The legal representative of the company) must send to the Members’ Council or the chairman of the company, director or general director and inspectors; and at the same time, display at the head office and branches of the company, the draft of such contract or contents of such transaction.

2. The  contracts  and  transactions  stipulated  in  clause  1  of  this  article  may  only  be  approved  upon satisfaction of the following conditions:

(a) The parties executing a contract or performing a transaction are independent legal entities with separate rights, obligations, assets and interests;

(b) The price used  in  a  contract  or  transaction  is  the  market  price  at  the  time  the  contract  is executed or the transaction is performed;

(c) The company owner complies with the obligations stipulated in clause 4 of article 33 of this Charter.

3. A contract or transaction shall be void and be dealt with in accordance with law if its execution or performance does not comply with clause 1 of this article. The legal representative of the company and the parties to the contract must compensate for any loss arising and return to the company any benefits gained from the implementation of such contract or transaction.

4. A contract or transaction between a one member limited liability company being an individual with the company  owner  or  an  affiliated  person  of  the  company  owner  must  be  recorded  and  retained  as separate files of the company.

B. A SHAREHOLDING COMPANY

 [Articles 56 to 84 are applicable to a Shareholding Company:]

GENERAL MEETING OF SHAREHOLDERS

Article 56. General provisions

The  General  Meeting  of  Shareholders  shall  include  all  shareholders  which  may  vote  and  shall  be  the highest decision-making authority of the shareholding company.

Article 57. Powers and duties of General Meeting of Shareholders

1. The General Meeting of Shareholders shall have the following rights and duties:

(a) To pass the developmental direction of the company;

(b) To make decisions on the classes of shares and total number of shares of each class which may be offered for sale; to make decisions on the rate of annual dividend for each class of shares, unless the company Charter otherwise provides;

(c) To  elect,  remove  or  discharge  members  of  the  Board  of  Management  and  members  of  the

Inspection Committee;

(d) To make investment decisions or decisions on sale of assets valued at fifty (50) or more per cent of the total asset value recorded in the most recent financial statements of the company unless the company Charter stipulates some other percentage;

(dd) To  make  decisions  on  amendments  of  and  additions  to  the  company  Charter,  except  for adjusting  the  charter  capital  as  a  result  of  sale  of  new  shares  within  the  number  of  shares which may be offered as stated in the company Charter;

(e) To approve annual financial statements;

(g) To make decisions on redemption of more than ten (10) per cent of the total number of shares of each class already sold;

(h) To  consider  and  deal  with  breaches  by  the  Board  of  Management  and  the  Inspection Committee which cause loss to the company and its shareholders;

(i) To make decisions on re-organization and dissolution of the company;

(k) Other rights and duties stipulated by the company.

2. Shareholders  which  are  organizations  shall  have  the  right  to  appoint  one  or  more  authorized representatives to exercise their shareholders rights in accordance with law; in a case where more than one authorized representative is appointed, then the specific number of shares and the specific number of votes of each representative must be specified. The appointment, termination or change of an authorized representative must be notified in writing to the company at the earliest possible time. The notification must contain the following basic particulars:

(a) Name, permanent address, nationality, number and date of establishment decision or business registration of the shareholder;

(b) Number of shares, classes of shares and date of registration as a shareholder with the company;

(c) Full name, permanent address, nationality, number of people’s identity card, passport or other lawful personal identification of the legal representative;

(d) Number of shares for which a representative has been appointed;

(dd) Term of authorized representation;

(e) Full name and signature of the authorized representative and of the legal representative of the shareholder.

The company must send the notification about the authorized representative stipulated in this clause to  the SSC within a time-limit of five working days from the date the company receives the notification.

Article 58. Authority to convene the General Meeting of Shareholders and cases in which the General Meeting of Shareholders must be convened

1. The General Meeting of Shareholders shall take place on an annual or ad-hoc basis, and there shall be  a  General  Meeting  of  Shareholders  at  least  once  per  year.  The  location  of  a  meeting  of  the General Meeting of Shareholders must be within the territory of Vietnam.

2. The General Meeting of Shareholders must hold an annual meeting within a time-limit of four months from the end of the financial year. At the request of the Board of Management, the SSC may extend that time-limit, but not beyond six (6) months as from the end of the financial year.

A regular meeting of the General Meeting of Shareholders shall debate and pass the following issues:

(a) Annual financial statements;

(b) Report of the  Board  of  Management  assessing  the  actual  status  of  the  work  of  business management in the company;

(c) Report  of  the  Inspection  Committee  regarding  company  management  by  the  Board  of Management, the director or general director;

(d) Amount of dividend payable on each class of share;

(dd) Other matters within its authority.

3. The Board of Management must convene an ad-hoc meeting of the General Meeting of Shareholders in the following cases;

(a) The Board of Management considers it necessary to do so in the interests of the company;

(b) The number of the remaining members of the Board of Management is less than the number of members required by law;

(c) Upon request by a shareholder or a group of shareholders as stipulated in clause 2 of article 18 of this Charter;

(d) Upon request by the Inspection Committee;

(dd) In other cases stipulated by law and the regulations of the company.

4. If the company Charter does not stipulate a time-limit, then the Board of Management must convene a General Meeting of Shareholders within a time-limit of thirty (30) days as from the date on which the number of remaining members of the Board of Management is as stipulated in sub-clause (b) hereof or from the date of receipt of the request stipulated in sub-clauses (c) and (d) of clause 3 of this article.

If the Board of Management fails to convene a General Meeting of Shareholders as stipulated, the chairman of the Board of Management must be responsible before the law and must compensate for any loss arising to the company.

5. Where the Board of Management fails to convene a meeting of the General Meeting of Shareholders as  stipulated  in  clause  4  of  this  article,  then  within  the  following  thirty  (30)  days  the  Inspection Committee   shall   replace   the   Board   of   Management   in   convening   the   General   Meeting   of Shareholders in accordance with this Charter.

If the Inspection Committee fails to convene a meeting as stipulated, then the head of the Inspection Committee must be responsible before the law and must pay compensation for any loss arising to the company.

6. Where the Inspection Committee fails to convene a meeting as stipulated in clause 5 of this article, the  requesting  shareholder  or  group  of  shareholders  stipulated  in  clause  2  of  article  18  of  this Charter shall have the right to replace the Board of Management and the Inspection Committee in convening the General Meeting of Shareholders in accordance with this Charter.

In this case, the shareholder or group of shareholders convening the General Meeting of Shareholders may request the SSC to supervise the convening and conduct of the meeting if they consider it necessary.

7. The convenor must  prepare  a  list  of  shareholders  entitled  to  attend  the  General  Meeting  of Shareholders, provide information and resolve complaints relating to the list of shareholders, prepare the program and agenda of the meeting, prepare documents, determine the time and venue of the meeting, and send an invitation to the meeting to each shareholder entitled to attend the meeting in accordance with this Charter.

8. The expenses for convening and conducting a meeting of the General Meeting of Shareholders as stipulated in clauses 4, 5 and 6 of this article shall be reimbursed by the company.

Article 59. Convening the General Meeting of Shareholders

1. The  convenor  of  the  General  Meeting  of  Shareholders  shall  send  a  written  invitation  to  all shareholders  entitled  to  attend  the  meeting  no  later  than  seven  working  days  prior  to  the  date  of opening,  if  this  Charter  does  not  stipulate  the  time-limit.  The  written  invitation  must  be  sent  by  a method guaranteed to reach the permanent address of each shareholder.

The written notice must have the name, head office address, number, date and place of issuance of the business registration certificate of the company; name and permanent address of the shareholder or of the authorized representative of the shareholder; time and location of the meeting.

2. The invitation shall be accompanied by a sample form of appointment of an authorized representative to attend the meeting, the agenda, voting slip, and discussion documents as the basis for passing decisions, and draft resolutions on each of the items in the agenda.

If the company has a website, then the invitation to attend the meeting together with all accompanying documents must be announced on the website at the same time it is forwarded to the shareholders.

Article 60. List of shareholders who have the right to attend the General Meeting of Shareholders

1. The  list  of  shareholders  entitled  to  attend  the  General  Meeting  of  Shareholders  shall  be  prepared based on the register of shareholders of the company.   When a decision to convene a meeting is made,  the  list  of  shareholders  entitled  to  attend  the  General  Meeting  of  Shareholders  must  be prepared  and  completed  no  later  than  thirty  (30)  days  prior  to  the  opening  date  of  the  General Meeting of Shareholders unless the company Charter stipulates a shorter time.

2. The list of shareholders entitled to attend the General Meeting of Shareholders shall include the full name and permanent address, nationality and number of people’s identity card, passport or other lawful  personal  identification  in  respect  of  shareholders  being  individuals,  and  the  name  and permanent address, nationality, number of establishment decision or number of business registration in  respect  of  shareholders  being  organizations;  and  the  number  of  shares  of  each  class,  and  the number and date of registration of each shareholder.

3. Shareholders  shall  have  the  right  to  inspect,  sight,  make  an  extract  of  and  copy  the  list  of shareholders entitled to attend the General Meeting of Shareholders; and to request correction of wrong information or addition of necessary information about themselves in the list of shareholders entitled to attend the General Meeting of Shareholders.

Article 61. Right to attend and authority to appoint a proxy to attend the General Meeting of Shareholders

1. Shareholders being individuals or authorized representatives of shareholders which are organizations  may  attend  the  General  Meeting  of  Shareholders  in  person  or  authorize  another person in writing to do so. A shareholder being an organization which does not have an authorized representative  pursuant  to  the  provisions  in  clause  3  of  article  57  of  this  Charter  shall  authorize another person to attend the General Meeting of Shareholders.

2. The authorization for a representative to attend the General Meeting of Shareholders must be made in writing on the form stipulated by the company and must bear signatures in accordance with the following provision:

(a) Authorization to represent a shareholder being an individual must bear the signatures of both that shareholder and the person authorized to attend the meeting;

(b) Authorization on behalf of a shareholder being an organization which is the principal must bear the signatures of the authorized representative, of the legal representative of the shareholder and of the person authorized to attend the meeting;

(c) In  other  cases  the  authorization  must  bear  the  signatures  of  the  legal  representative  of  the shareholder and of the person authorized to attend the meeting.

Any  person  authorized  to  attend  a  General  Meeting  of  Shareholders  must  submit  his  written authorization prior to entering the meeting room.

3. In the cases stipulated in clause 4 of this article, the voting slip of the person authorized to attend a meeting within the scope of his authorization shall remain effective in either of the following cases:

(a) The principal dies, or his capacity for civil acts is lost or is restricted;

(b) The principal terminates the authorization.

4. The provision in clause 2 of this article shall not apply if the company receives written notification about one of the circumstances stipulated in clause 3 of this article no later than twenty four (24) hours prior to the time of opening of the General Meeting of Shareholders.

5. Where  shares  are  assigned  between  the  date  of  completion  of  the  list  of  shareholders  and  the opening date of the General Meeting of Shareholders, the assignee shall be entitled to attend the General Meeting of Shareholders in place of the assignor in respect of the assigned shares.

Article 62. Change of program and agenda of a meeting of the General Meeting of Shareholders

1. The shareholder or group of shareholders stipulated in clause 2 of article 18 of this Charter has the right to recommend items to be included in the program of the General Meeting of Shareholders. The  recommendation  must  be  made  in  writing  and  be  sent  to  the  company  no  later  than  three working days prior to the date of opening, unless the company Charter stipulates some other time- limit. The recommendation must specify the name of the shareholder, the number of shares of each class of the shareholder, the number and date of registration of the shareholder with the company, and the items recommended to be included in the program.

2. The  convenor  of  the  General  Meeting  of  Shareholders  may  only  refuse  the  recommendation stipulated in clause 1 of this article in one of the following cases:

(a) The recommendation is not sent on time, is insufficient, or is in relation to an irrelevant matter;

(b) The  item  recommended  does  not  fall  within  the  decision-making  authority  of  the  General Meeting of Shareholders;

Other cases stipulated in the company Charter.

3. The convenor of the General Meeting of Shareholders must accept and include the recommendations  stipulated  in  clause  1  of  this  article  into  the  draft  program  and  agenda  for  the meeting,  except  in  the  cases  stipulated  in  clause  2  of  this  article;  the  recommendation  shall  be officially added to the program and agenda for the meeting if the General Meeting of Shareholders so agrees.

Article 63. Conditions for conducting the General Meeting of Shareholders

1. The General Meeting of Shareholders shall be conducted when the number of attending shareholders represents at least sixty five (65) per cent of the voting shares. The specific percentage shall be stipulated in the company Charter.

2. Where the first meeting cannot take place because the condition stipulated in clause 1 of this article is  not  satisfied,  the  meeting  may  be  convened  for  a  second  time  within  thirty  (30)  days  of  the intended opening of the first meeting.  The General Meeting of Shareholders which is convened for a second time shall be conducted where the number of attending shareholders represents at least fifty one (51) per cent of the voting shares. The specific percentage shall be stipulated in the company Charter.

3. Where a meeting convened for a second time cannot take place because the condition stipulated in clause 2 of this article is not satisfied, it may be convened for a third time within twenty (20) days from the date of the intended opening of the second meeting.   In this case, the General Meeting of Shareholders   shall   be   convened   irrespective   of   the   number   of   attending   shareholders,   and irrespective of the percentage of shares with voting rights of shareholders attending the meeting.

4. Only  the  General  Meeting  of  Shareholders  may  make  changes  to  the  program  accompanying  the invitation to the meeting as stipulated in article 54 of this Charter.

Article 64. Procedures for conducting the General Meeting of Shareholders

Unless otherwise provided by the company Charter, the procedures for conducting and voting at the General Meeting of Shareholders shall be conducted in accordance with the following provisions:

1. Prior to the opening date of a meeting, procedures shall be carried out for registration for attendance at  the  General  Meeting  of  Shareholders  until  there  is  registration  of  a  sufficient  number  of shareholders with the right to attend the meeting. A person registered to attend the meeting shall be issued with voting cards corresponding to the number of items in the program for the meeting which require a vote.

2. The chairman, secretary and vote counting committee of the General Meeting of Shareholders shall be regulated as follows:

(a) The  chairman  of  the  Board  of  Management  shall  act  as  chairman  of  all  meetings  which  are convened  by  the  Board  of  Management;  in  a  case  where  the  chairman  is  absent  or  is temporarily unable to work, then the remaining members of the Board of Management shall elect one of them to act as the chairman of the meeting; in a case where there is no one who is able to act as chairman, the member of the Board of Management with the highest position shall arrange for the General Meeting of Shareholders to elect the chairman of the meeting from  amongst  the  people  attending  the meeting  and the  person with  the  highest  number  of votes shall act as chairman of the meeting.

(b) In  other  cases,  the  person  who  signed  the  document  convening  the  General  Meeting  of Shareholders shall arrange for the General Meeting of Shareholders to elect a chairman of the meeting and the person with the highest number of votes shall act as chairman of the meeting.

(c) The  chairman  shall  elect  someone  to  act  as  secretary  to  prepare  minutes  of  the  General Meeting of Shareholders.

(d) The General Meeting of Shareholders shall elect a vote counting committee to be comprised of not more than three people on the proposal of the chairman of the meeting.

3. The program and agenda of the meeting must be passed by the General Meeting of Shareholders in the opening session. The program must specify in detail the time applicable to each issue in  the agenda for the meeting.

4. The chairman and secretary of the General Meeting of Shareholders shall have the right to take the necessary  measures  to  direct  the  conduct  of  the  meeting  in  an  appropriate  and  orderly  manner, correctly in accordance with the program as passed and so that it reflects the wishes of the majority of attendees.

5. The General Meeting of Shareholders shall discuss and vote on each issue in the agenda for the meeting. Voting shall be conducted by collecting voting cards agreeing with the resolution, thereafter collecting voting cards which do not agree, and finally checking the overall numbers of votes which agree, which do not agree, and abstentions. The chairman shall announce the results of the voting counts immediately prior to the closing of the meeting.

6. Any  shareholder  or  person  authorized  to  attend  the  meeting  who  arrives  after  the  opening  of  the meeting  shall  be  registered  and  shall  have  the  right  to  participate  in  voting  immediately  after registration. The chairman shall not delay the meeting so that late attendees may register; in such a case, the effectiveness of any voting which has already been conducted shall not be affected.

7. The convenor of the General Meeting of Shareholders shall have the following rights:

(a) To require all people attending the meeting to be checked or subject to other security measures;

(b) To request a competent body to maintain order during the meeting; to expel from the General Meeting of Shareholders anyone who fails to comply with the chairman's right to control the meeting, who intentionally disrupts or prevents normal progress of the meeting or who fails to comply with a request to undergo a security check.

8. The chairman shall have the right to adjourn the General Meeting of Shareholders for which sufficient attendees have registered as required by the regulations to another time or to change the location of the meeting in the following cases:

(a) The location for the meeting does not have sufficient and suitable seating for all the attendees;

(b) There is an attendee who obstructs the meeting or disrupts order, and there is a danger that the meeting might not be conducted fairly and legally.

The maximum time for any adjournment of a meeting shall be three days as from the date of the proposed opening of the meeting.

9. In a case where the chairman adjourns or postpones a General Meeting of Shareholders contrary to the  provisions  in  clause  8 of  this  article,  the  General  Meeting  of  Shareholders  shall  elect  another person from the attendees to replace the chairman in conducting the meeting until its completion, and the effectiveness of voting conducted at such meeting shall not be effected.

Article 65. Minutes of the General Meeting of Shareholders

1. The General Meeting of Shareholders shall be recorded in the minute book of the company.  Minutes must  be  prepared  in  Vietnamese  and  may  also  be  in  a  foreign  language,  and  must  contain  the following main particulars:

(a) Name,  head  office  address,  number  and  date  of  issuance  of  the  business  registration certificate, place of business registration of the company, and number and date of issuance of the licence for establishment and operation;

(b) Time and location of the General Meeting of Shareholders;

(c) Program and agenda of the meeting;

(d) Chairman and secretary;

(dd) Summary of developments at the meeting and of opinions expressed at the General Meeting of Shareholders on each matter set out in the program and agenda of the meeting;

(g) Number of shareholders and total number of votes of attending shareholders, with an appendix listing registered shareholders and representatives of shareholders attending the meeting with the total number of their shares and the corresponding total number of votes;

(h) Total number of votes for each issue voted on, specifying the number of votes for, against, and abstentions; and the corresponding percentage on the total number of votes of shareholders attending the meeting;

(i) Decisions which were passed;

(k) Full names and signatures of the chairman and secretary.

Minutes which are prepared in Vietnamese and minutes which are prepared in a foreign language shall be of equal legal validity.

2. The minutes of the General Meeting of Shareholders must be completed and approved prior to the closing of the meeting.

3. The chairman and secretary of the meeting shall be jointly liable for the truthfulness and accuracy of the contents of the minutes.

The minutes of the General Meeting of Shareholders must be sent to all shareholders within a time- limit of fifteen (15) days as from the date of the closing of the meeting.

The  minutes  of  the  General  Meeting  of  Shareholders,  the  appendix  listing  the  shareholders registered to attend the meeting, the full text of resolutions passed and other relevant documents sent together with the notice of invitation to attend the meeting must be archived at the head office of the company.

Article 66. Passing of decisions by the General Meeting of Shareholders

1. The  General  Meeting  of  Shareholders  shall  pass  decisions  which  fall  within  its  power  by  way  of voting in the meeting or collecting written opinions.

2. If not regulated by the company Charter, then a decision of the General Meeting of Shareholders on the following matters must be passed by way of voting at the General Meeting of Shareholders:

(a) Amendment of or addition to the company Charter;

(b) Approval of the developmental direction of the company;

(c) Decision  on  classes  of  shares  and  the  total  number  of  shares  of  each  class  which  may  be offered for sale;

(d) Appointment, discharge or removal of members of the Board of Management and Inspection Committee;

(dd) Decisions on investments or the sale of assets valued at equal to or more than fifty (50) per cent of the total asset value recorded in the most recent financial statements of the company, if the company Charter does not stipulate another percentage;

(e) Approval of the annual financial statements;

(g) Reorganization or dissolution of the company.

3. A  decision  of  the  General  Meeting  of  Shareholders  shall  be  passed  in  a  meeting  when  all  the following conditions are satisfied:

(a) It is approved by a number of shareholders representing at least sixty five (65) per cent of the total voting shares of all attending shareholders; the specific percentage shall be stipulated in the company Charter.

(b) In respect of decisions on classes of shares and total number of shares of each class which may be offered; on amendments of and additions to the company Charter; on re-organization or dissolution of the company; in respect of investments or sale of assets equal to or more than fifty (50) per cent of the total asset value recorded in the most recent financial statements of the company, unless otherwise provided by the company Charter the approval by a number of shareholders representing at least seventy five (75) per cent of the total voting shares of all attending  shareholders  shall  be  required;  the  specific  percentage  shall  be  stipulated  in  the company Charter.

(c) Voting to elect members of the Board of Management and of the Inspection Committee must be implemented by the method of cumulative voting, whereby each shareholder shall have as his  total  number  of  votes  the  total  number  of  shares  he  owns  multiplied  by  the  number  of members  to  be  elected  to  the  Board  of  Management  or  Inspection  Committee,  and  each shareholder shall have the right to accumulate all his votes for one or more candidates.

4. Decisions passed by the General Meeting of Shareholders with the number of shareholders directly or  by  authorized  persons  participating  which  represents  one  hundred  (100)  per  cent  of  the  total number  of  voting  shares  shall  be  legal  and  shall  be  immediately  effective  even  if  the  order  and procedures for convening the meeting, the program and agenda of the meeting and the procedures for conducting the meeting were not implemented correctly as stipulated.

5. Where a decision is passed by collecting written opinions, the decision of the General Meeting of Shareholders shall be passed when it is approved by a number of shareholders representing at least seventy five (75) per cent of the total voting shares. The specific percentage shall be stipulated in the company Charter.

6. Decisions of the General Meeting of Shareholders must be notified to shareholders entitled to attend the General Meeting of Shareholders within fifteen (15) days from the date the decision was passed.

Article 67. Authority  and  procedures  for  obtaining  written  opinions  of  shareholders  for  approval  of decisions of the General Meeting of Shareholders

Unless otherwise provided by this Charter, the authority and procedures for collecting written opinions in order to pass a decision of the General Meeting of Shareholders shall be implemented in accordance with the following provisions:

1. The Board of Management shall have the right to collect written opinions in order to pass a decision of the General Meeting of Shareholders at any time if considered necessary in the interests of the company.

2. The  Board  of  Management  must  prepare  written  opinion  forms,  a  draft  of  the  resolution  of  the General Meeting of Shareholders and other documents explaining the draft resolution. The written opinion form together with the draft resolution and documents explaining it must be sent by a means which is guaranteed to reach the permanent address of each shareholder.

3. The written opinion form must contain the following basic particulars:

(a) Name, head office address, number, date of issuance of the business registration certificate; place of business registration of the company;

(b) Purpose of collecting written opinions;

(c) Full  name,  permanent  address,  nationality,  and  the  number  of  people’s  identity  card,  of  the passport or other lawful personal identification in respect of a shareholder being an individual; name,  permanent  address,  nationality,  number  of  establishment  decision  or  number  of business registration of a shareholder or authorized representative in respect of a shareholder being  an  organisation;  number  of  shares   of  each  class  and  number  of  votes  of  the shareholder;

(d) Issue on which it is necessary to obtain opinions in order to pass a decision;

(dd) Voting options comprising agreement, non agreement, or no opinion;

(e) Time-limit within which the completed written opinion form must be returned to the company;

(g) Full  name  and  signature  of  the  chairman  of  the  Board  of  Management  and  of  the  legal representative of the company.

4. Any completed written opinion form must bear the signature of a shareholder being an individual, and of the authorized representative or of the legal representative of a shareholder being an organization.

Written opinion forms which are returned to the company must be in a sealed envelope and no one shall  be  permitted  to  open  envelopes  prior  to  counting  of  the  votes.  Any  completed  written  form which is returned to the company after the expiry of the time-limit stipulated in the written opinion form or any form which has been opened shall be invalid.

5. The  Board  of  Management  shall  conduct  counting  of  the  votes  and  shall  prepare  minutes  of  the counting of the votes in the presence of the Inspection Committee or of a shareholder who does not hold a managerial position in the company.

The minutes of counting of votes shall contain the following basic particulars:

(a) Name, head office address, number, date of issuance of the business registration certificate; place of business registration of the company;

(b) Purpose of collection of written opinions and issues on which it is necessary to obtain written opinions in order to pass a decision.

(c) Number  of  shareholders  with  total  numbers  of  votes  who  have  participated  in  the  vote, classifying  the  votes  into  valid  and  invalid,  and  including  an  appendix  being  a  list  of  the shareholders who participated in the vote;

(d) Total number of votes for, against and abstentions on each matter voted upon;

(dd) Decisions which have been passed;

(e) Full  name  and  signature  of  the  chairman  of  the  Board  of  Management,  of  the  legal representative of the company and of the person who supervised the counting of votes.

The members of the Board of Management and the person who supervised the counting of votes shall be jointly liable for the truthfulness and accuracy of the minutes of counting of votes, and shall be jointly liable for any loss arising from a decision which is passed due to an untruthful or inaccurate counting of votes.

6. The minutes of results of counting of votes must be sent to shareholders within a time-limit of fifteen (15) days as from the date the counting of votes ended.

7. Written  opinion  forms  which  were  returned,  the  minutes  of  counting  of  votes,  the  full  text  of  the resolution which was passed and related documents sent with all of the written opinion forms must be archived at the head office of the company.

8. A decision which is passed by the form of collecting written opinions of shareholders shall have the same validity as a decision passed by the General Meeting of Shareholders.

Article 68. Rescission of decision of the General Meeting of Shareholders

Within ninety (90) days from the date the minutes of the General Meeting of Shareholders are received or the  minutes  of  the  results  of  counting  of  votes  being  written  opinions  from  the  General  Meeting  of Shareholders are received, shareholders, members of the Board of Management, the director (or general director) and the Inspection Committee shall have the right to request a court or an arbitrator to consider and cancel a decision of the General Meeting of Shareholders in the following cases:

1. The order and procedures for convening the General Meeting of Shareholders did not comply with the law and the company Charter;

2. The order and procedures for issuing a resolution and the content of the resolution breach the law or the charter of the company.

THE BOARD OF MANAGEMENT

Article 69. Members and terms of the Board of Management

1. The  Board  of  Management  shall  have  at  least  three  members,  and  not  more  than  eleven  (11) members,  unless  otherwise  provided  by  this  Charter.  The  number  of  members  of  the  Board  of Management  who  must  reside  permanently  in  Vietnam  shall  be  as  stipulated  in  this  Charter.  The term of the Board of Management shall be five years. The term of office of members of the Board of Management shall not exceed five years; members of the Board of Management may be re-elected for an unlimited number of terms.

2. The Board of Management of a term which has recently expired shall continue to operate until a new Board of Management is elected and takes over the management work.

3. In a case where an additional member is appointed or a member is appointed to replace a member who was removed or dismissed during a term of office, then the term of office of such new member shall be the residual period of the term of office of the Board of Management.

4. A member of the Board of Management need not necessarily also be a shareholder of the company.

Article 70. Rights and obligations of the Board of Management

1. The Board of Management is the body managing the company and shall have full authority to make decisions in the name of the company and to exercise the rights and discharge the obligations of the company which do not fall within the authority of the General Meeting of Shareholders.

2. The Board of Management shall have the following rights and duties:

(a) To  make  decisions  on  medium  term  development  strategies,  and  plans,  and  on  annual business plans of the company;

(b) To recommend the classes of shares and total number of shares of each class which may be offered;

(c) To make decisions on offering new shares within the number of shares of each class which may be offered for sale; to make decisions on raising additional fund in other forms;

(d) To make decisions on the price of shares and bonds of the company offered for sale;

(dd) To make decisions on redemption of shares in accordance with the provisions in clause 1 of article 11 of this Charter;

(e) To make decisions on investment plans and investment projects within the authority and limits stipulated in the Law on Enterprises or this Charter;

(g) To make decisions on solutions for market expansion, marketing and technology; to approve contracts for purchase, sale, borrowing, lending and other contracts valued at fifty (50) or more per  cent  of  the  total  asset  value  recorded  in  the  most  recent  financial  statements  of  the company,  or  a  smaller  percentage  as  stipulated  in  this  Charter,  except  for  contracts  and transactions stipulated in clauses 1 and 3 of article 79 of this Charter;

(h) To appoint, dismiss or remove, and to sign contracts or to terminate contracts with the director or the general director and other key managers of the company as stipulated in this Charter; to make  decisions  on  salaries  and  other  benefits  of  such  managers;  to  appoint  an  authorized representative  to  exercise  ownership  rights  of  shares  or  of  capital  contributed  to  other companies,  and  to  make  decisions  on  the  level  of  remuneration  and  other  benefits  of  such persons;

(i) To supervise and direct the director or general director and other management personnel in their work of conducting the daily business of the company.

(k) To  make  decisions  on  the  organizational  structure  and  internal  management  rules  of  the company, to make decisions on the establishment of subsidiary companies, the establishment of branches and representative offices and the capital contribution to or purchase of shares of other enterprises;

(l) To approve the agenda and contents of documents for the General Meeting of Shareholders; to convene the General Meeting of Shareholders or to obtain written opinions in order for the General Meeting of Shareholders to pass resolutions;

(m) To submit annual final financial reports to the General Meeting of Shareholders;

(n) To recommend the dividend rates to be paid, to  make  decisions  on  the  time-limit and  procedures  for  payment  of  dividends  or  for  dealing  with  losses  incurred  in  the  business operation;

(o) To recommend re-organization or dissolution of the company, or to request bankruptcy of the company;

(p) Other rights and duties stipulated in the Law on Enterprises and this Charter.

3. The  Board  of  Management  shall  pass  decisions  by  way  of  voting  at  meetings,  obtaining  written opinions, or otherwise as stipulated in this Charter.  Each member of the Board of Management shall have one vote.

4. When implementing its functions and performing its duties, the Board of Management shall strictly comply with the provisions of law, this Charter and decisions of the General Meeting of Shareholders. If the Board of Management passes a decision which is contrary to law or contrary to provisions of this Charter causing loss to the company, then the members who agreed to pass such decision shall be personally jointly liable for that decision and they must compensate the company for the loss; any member who opposed the passing of such decision shall be exempt from liability. In such a case, a shareholder owning shares in a company for a minimum consecutive period of at least one year shall have the right to request the Board of Management to suspend implementation of a resolution as mentioned above.

Article 71. Chairman of the Board of Management

1. The  Board  of  Management  shall  have  at  least  three  members,  and  not  more  than  eleven  (11) members, unless otherwise provided by the company Charter. The number of members of the Board of  Management  who  must  reside  permanently  in  Vietnam  shall  be  as  stipulated  in  the  company Charter. The term of the Board of Management shall be five years. The term of office of members of the Board of Management shall not exceed five years; members of the Board of Management may be re-elected for an unlimited number of terms.

2. The Board of Management of a term which has recently expired shall continue to operate until a new Board of Management is elected and takes over the managerial work.

3. In a case where an additional member is appointed or a member is appointed to replace a member who was removed or dismissed during a term of office, then the term of office of such new member shall be the residual period of the term of office of the Board of Management.

4. A member of the Board of Management need not necessarily also be a shareholder of the company.

Article 72. Members of the Board of Management

1. Members of the Board of Management must satisfy the following standards and conditions:

(a) Have  full  capacity  for  civil  acts,  and  not  belong  to  the  category  of  persons  prohibited  from managing an enterprise pursuant to the Law on Enterprises;

(b) Be an individual shareholder who owns at least five per cent of the total number of ordinary shares or be another person owns not holding such percentage of shares but with professional expertise and experience in business management or in the line of business which is the main business  of  the  company  or  satisfy  other  standards  and  conditions  as  stipulated  in  this Charter.

2. In the case of a subsidiary company which is a company in which the State owns a total number of shares  worth  more  than  fifty  (50)  per  cent  of  the  charter  capital,  a  member  of  the  Board  of Management may not be a person affiliated to a manager or a person with the authority to appoint managers of the parent company.

Article 73. Discharge, removal of and addition to members of the Board of Management

1. A member of the Board of Management shall be removed and dismissed in the following cases:

(a) Not satisfying the criteria and conditions stipulated in article 72 of this Charter;

(b) Not participating in activities of the Board of Management for (6) consecutive months, except for force majeure cases;

(c) Written resignation notices;

(d) Other cases stipulated in this Charter.

2. In addition to cases stipulated in clause 1 of this article, members of the Board of Management may be dismissed at any time pursuant to a resolution of the General Meeting of Shareholders.

3. Where the number of members of the Board of Management is reduced by more than one third (1/3) of  the  number  stipulated  in  the  company  Charter,  the  Board  of  Management  must  convene  a General Meeting of Shareholders within sixty (60) days from the date the number of members   is reduced by more than one third (1/3), to elect additional members of the Board of Management.

In other cases, the next General Meeting of Shareholders shall elect new members of the Board of Management  to  replace  members  of  the  Board  of  Management  who  have  been  removed  or dismissed.

Article 74. Meetings of the Board of Management

1. If the Board of Management elects the chairman, then the initial meeting of the term of the Board of Management in order to elect the chairman and to pass other decisions within its authority must be conducted within a time-limit of seven (7) working days from the date of completion of the election of the Board of Management for that term. This meeting shall be convened by the member who gains the highest number of votes. If two or more members gain the same highest number of votes, the elected members shall elect by a majority vote a person amongst them to convene the meeting.

2. Meetings of the Board of Management may be held on a regular basis or extraordinary meetings may be held. The Board of Management may meet at the head office of the company or at some other location.

3. The chairman may convene a regular meeting of the Board of Management at any time considered necessary, but there must be at least one meeting every quarter.

4. The chairman of the Board of Management must convene a meeting of the Board of Management when one of the following circumstances occurs:

(a) On the request of the Inspection Committee;

(b) On the request of the director or general director  or on the request of at least five (5) other managerial personnel;

(c) On the request of at least two members of the Board of Management;

(d) In other circumstances stipulated in the company Charter.

The request must be made in writing and must specify the objective and issues which need to be discussed, and resolutions within the authority of the Board of Management.

5. The chairman must convene a meeting of the Board of Management within a time-limit of fifteen (15) days from the date of receipt of a request stipulated in clause 4 of this article. If the chairman fails to convene a meeting of the Board of Management pursuant to a request, the chairman shall be liable for loss caused to the company; and the person making the request shall have the right to replace the Board of Management in convening a meeting of the Board of Management.

6. The  chairman  of  the  Board  of  Management  or  the  convenor  of  the  meeting  of  the  Board  of Management must send a notice of invitation to attend the meeting at the latest five working days prior  to  the  date  of  meeting  unless  otherwise  provided  by  the  company  Charter.  The  notice  of invitation must specify the specific time and location of the meeting, the agenda and issues to be discussed and resolutions. The notice must enclose documents to be used at the meeting and voting forms for the members.

The  notice  of  invitation  shall  be  sent  by  post,  fax,  electronic  mail  or  other  means,  but  they  must ensure arrival at the address of each member of the Board of Management as registered with the company.

7. The chairman of the Board of Management or the convenor must also send the notice of invitation to attend  the  meeting  together  with  the  attached  documents  to  all  the  members  of  the  Inspection Committee, and the director or general director in the same manner as to the members of the Board of Management.

The  members  of  the  Inspection  Committee  and  the  director  or  general  director  who  are  not concurrently members of the Board of Management shall have the right to attend meetings of the Board of Management, and to discuss issues but not to vote.

8. A meeting of the Board of Management shall be conducted where there are three quarters (3/4) or more of the total members attending.  Members not directly attending a meeting shall have the right to  vote  by  sending  a  written  vote.  The  written  vote  must  be  enclosed  in  a  sealed  envelope  and delivered to the chairman of the Board of Management at least one hour prior to the opening of the meeting. Written votes shall only be opened in the presence of all the people attending the meeting.

A decision of the Board of Management shall only be passed when it is approved by the majority of the attending members; in the case of a tied vote, the final decision shall be made in favour of the vote of the chairman of the Board of Management.

9. Members  must  fully  participate  in  all  meetings  of  the  Board  of  Management.  A  member  may authorize  another  person  to  attend  a  meeting  if  the  majority  of  members  of  the  Board  of Management agree.

Article 75. Minutes of the meetings of the Board of Management

1. All meetings of the Board of Management must be recorded in the minute book. Minutes must be prepared in Vietnamese and may also be in a foreign language and shall include the following main contents:

(a) Name, address of the head office, number and date of issuance of the business registration certificate, place of business registration;

(b) Purpose, agenda and content of meetings;

(c) Time and location of meeting;

(d) Full  names  of  each  member  attending  the  meeting  or  the  person  authorised  to  attend  the meeting; name of members not attending the meeting and reasons for not attending;

(dd) Issues discussed and voted in the meeting;

(e) Summary of opinions of each member attending the meeting during the process of the meeting;

(g) Result of voting indicating members who agree, who do not agree and members who abstain from voting.

(h) Decisions passed.

(i) Full names and signatures of all members or representatives authorised to attend the meeting.

The chairman and secretary shall be jointly liable for the accuracy and truthfulness of the minutes of meetings of the Board of Management.

2. Minutes  of  meetings  of  the  Board  of  Management  and  documents  used  in  the  meetings  must  be archived in the head office of the company.

3. Minutes prepared in Vietnamese and a foreign language shall have equal legal validity.

Article 76. Rescission of decisions of the Board of Management

Within  ninety  (90)  days  from  the  date  a  decision  is  passed,  shareholders,  members  of  the  Board  of Management, the director (or general director) and the Inspection Committee shall have the right to request a  court  or  an  arbitrator  to  consider  and  cancel  a  decision  of  the  Board  of  Management  in  the  following cases:

1. The order and procedures for passing the decision did not comply with the law and this Charter;

2. The content of the decision breached the law or this Charter.

Article 77. Public disclosure of relevant interests

1. Members  of  the  Board  of  Management,  members  of  the  Inspection  Committee,  the  general  or general director and other managers of the company must declare their relevant interests with the company, including:

(a) Name, address of the head office, field of business, number and date of the issuance of the business registration certificate, place of business registration of an enterprise in which they own contributed capital or shares; ratio and time of such ownership of contributed capital or shares;

(b) Name,  address  of  the  head  office,  field  of  business,  number  and  date  of  the  issuance  of business registration certificate, place of business registration of an enterprise in which their affiliated persons jointly or separately own shares or distributed capital of more than thirty five (35) per cent of charter capital.

2. The declaration stipulated in clause 1 of this article must be conducted within seven working days from  the  date  the  relevant  interest  arises;  any  amendment  and  addition  shall  be  declared  to  the company within seven working days from the date of amendment and addition.

3. The declaration stipulated in clauses 1 and 2 of this article must be reported to the General Meeting of  Shareholders  at  the  annual  meeting  and  shall  be  posted  and  kept  in  the  head  office  of  the enterprise.  Shareholders,  authorised  representatives  of  shareholders,  members  of  the  Board  of Management, the Inspection Committee and the director or general director shall have the right to review the content declared at any time considered necessary.

4. Members of the Board of Management, the director or general director performing all forms of work on behalf of themselves or on behalf of others within the scope of operation of the company must report the nature and content of that work to the Board of Management [and] Inspection Committee and shall only be permitted to perform [this work] if the majority of the remaining members of the Board of Management agree; if they perform the work without reporting or without approval from the Board of Management, all the income originated from that activity shall belong to the company.

Article 78. Obligations of managers of companies

1. Members  of  the  Board  of  Management,  the  director  or  general  director  and  other  managers  shall have the following obligations:

(a) To exercise their delegated powers and perform their delegated duties strictly in accordance with  the  relevant  law,  the  company  Charter  and  decisions  of  the  General  Meeting  of Shareholders;

(b) To exercise their delegated powers and perform their delegated duties honestly and diligently to their best ability in the best lawful interests of the company and of the shareholders of the company;

(c) To  be  loyal  to  the  interests  of  the  company  and  shareholders  of  the  company;  not  to  use information, secrets, business opportunities of the company, not to abuse their position and powers and assets of the company for their own personal benefit or for the benefit of other organizations or individuals;

(d) To promptly, fully and accurately notify the company of enterprises which they or their affiliated persons own or have contributed capital or controlling shares; this notice shall be displayed at the head office and branches of the company.

2. In addition to obligations stipulated in clause 1 of this article, the Board of Management and director or general director may not increase salary and pay bonuses where the company has not paid in full all the debts due and payable.

3. Other obligations in accordance with rules of the Company.

Article 79. Contracts and transactions which must be approved by the General Meeting of Shareholders or the Board of Management

1. Contracts and transactions between the company and the following parties must be approved by the General Meeting of Shareholders or the Board of Management:

(a) Shareholders and authorised representative of shareholders holding more than thirty five (35) per cent of the ordinary shares of the company and their affiliated persons;

(b) Members of the Board of Management; director or general director;

(c) Enterprises stipulated in clause 1(a) and clause 1(b) of article 77 of this company Charter and affiliated persons of members of the Board of Management, director or general director.

2. Any contract and transaction valued at less than fifty (50) per cent of the total asset value recorded in the  most  recent  financial  statements  of  the  company  or  a  smaller  percentage  stipulated  in  the company Charter shall be approved by the Board of Management. In this case the legal representative shall send to members of the Board of Management and display at the head office and  branches  of  the  company  the  draft  of  the  contract  or  give  notice  of  the  main  content  of  the transaction. The  Board  of  Management  shall  make  a  decision  on  approval  of  the  contract  or transaction within fifty (15) days from the date of the display; the members with the affiliated interest shall not have the right to vote.

3. Other contracts and transactions except for circumstances stipulated in clause 2 of this article shall be approved by the General Meeting of Shareholders. The Board of Management shall submit the draft contract or explain the main content of the transactions at the General Meeting of Shareholders or collect written opinions from shareholders. In this case, the affiliated shareholders shall not have voting  rights;  contracts  and  transactions  shall  be  approved  where  shareholders  representing  sixty five (65) percent of the total remaining votes agree.

4. Any contracts or transactions which have been signed or performed without the approval stipulated in clause 2 and clause 3 of this article shall be invalid and dealt with in accordance with law. The legal representative of the company, shareholders, members of the Board of Management or director or general  director  concerned  shall  be  liable  to  compensate  for  loss  caused  and  must  return  to  the company any benefit gained from the performance of such contract and transaction.

THE INSPECTION COMMITTEE

Article 80. Members and term of the Inspection Committee

1. An Inspection Committee shall have from three (3) to five (5) members (unless otherwise provided by the company); the term of the Inspection Committee shall be not more than five (5) years;  members of the Inspection Committee may be re-appointed with an unlimited number of terms.

2. The members of the Inspection Committee shall elect one of them to be the head of the Inspection Committee. More than half of the members of the Inspection Committee must permanently reside in Vietnam and at least one member from them must be an accountant or auditor.

3. Upon the expiration of the term of the Inspection Committee, if the new Inspection Committee has not  been  elected,  the  Inspection  Committee  whose  term  has  expired  shall  continue  its  rights  and obligations until the new Inspection Committee is elected and takes over the duties.

Article 81. Rights and obligations of the Inspection Committee

1. An Inspection Committee shall supervise the Board of Management, director or general director in the  management  and  administration  of  the  company;  and  shall  be  responsible  to  the  General Meeting of Shareholders for the performance of its assigned duties.

2. To  inspect  the  reasonableness,  legality,  truthfulness  and  level  of  prudence  in  management  and administration of business activities, in organization of statistics and accounting work and preparation of financial statements.

3. To  evaluate  reports  on  business,  semi-annual  or  annual  financial  statements  and  reports  on evaluation of the management of the Board of Management.

To submit reports on evaluation of the business reports, semi-annual or annual financial statements of the company and reports on evaluation of the management of the Board of Management to the General Meeting of Shareholders at the annual meeting.

4. To review books of accounts and other documents of the company, the management and administration  of  the  activities  of  the  company  at  any  time  deemed  necessary  or  pursuant  to  a resolution  of  the  General  Meeting  of  Shareholders  or  as  requested  by  a  shareholder  or  group  of shareholders as stipulated in clause 2 of article 18 of this Charter.

5. Upon a request by a shareholder or a group of shareholders as stipulated in clause 2 of article 18 of this Charter, the Inspection Committee shall carry out an inspection within a period of seven working days  from  the  date  of  receipt  of  the  request. The  Inspection Committee must  submit  a  report  on results of the inspection of the issues required to be inspected to the Board of Management and the requesting shareholder or the group of shareholders within a period of fifteen (15) days from the date of completion of the inspection.

The  inspections  stipulated  in  this  clause  may  not  disrupt  the  normal  activities  of  the  Board  of Management and shall not interrupt the administration of the business operations of the company.

6. To recommend to the Board of Management or the General Meeting of Shareholders the changes and improvements of the organizational structure, management and administration of the business operations of the company;

7. Upon  discovery  of  a  member  of  the  Board  of  Management,  director  or  general  director  who  is  in breach of the obligations of a manager of the company stipulated in article 78 of this Charter, to give immediate written notice to the Board of Management and request the person in breach to cease the breach and take measures to remedy any consequences.

8. To exercise other rights and perform other duties as stipulated by law, this Charter and decisions of the General Meeting of Shareholders.

9. The Inspection Committee may use an independent consultant to perform the assigned duties.

The  Inspection  Committee  may  consult  the  Board  of  Management  prior  to  submission  of  reports, conclusions and recommendations to the General Meeting of Shareholders.

Article 82. Members and Head of the Inspection Committee

1. Members of the Inspection Committee must meet the following criteria and conditions:

(a) Being at least of twenty one (21) years of age, with full capacity for civil acts and not falling within the scope of subjects not permitted to establish and manage companies in accordance with the Law on Enterprises;

(b) Not being the wife or husband, father, adoptive father, mother, adoptive mother, child, adopted child, sibling of any member of the Board of Management, the director or general director of other managers.

2. Members of the Inspection Committee shall not hold managerial positions of the company. Members of the Inspection Committee need not be shareholders or employees of the company. Obligations of members of the Inspection Committee:

1. To comply with the law, this Charter, decisions of the General Meeting of Shareholders and professional ethics in the exercise of delegated rights and duties.

2. To exercise delegated rights and perform delegated duties honestly, diligently and to the best of their ability in the maximum lawful interest of the company and shareholders of the company.

3. To  be  loyal  to  the  interests  of  the  company  and  of  shareholders  of  the  company;  not  to  use information,  secrets,  business  opportunities  of  the  company,  or  to  abuse  his  or  her  position  and powers and assets of the company for their personal benefit or for the benefit of other organizations or individuals.

4. Other obligations stipulated in this Charter.

5. In the case of breaching the obligations stipulated in clauses 1, 2, 3 and 4 of this article causing loss to the company or to other people, members of the Inspection Committee must bear personal or joint responsibility for compensating for such loss.

All income and other benefits which a member of the Inspection Committee gains directly or indirectly from a breach of the obligations stipulated in clause 3 of this article shall belong to the company.

6. Where it is discovered that a member of the Inspection Committee breaches an obligation during the exercise  of  delegated  rights  and  duties,  the  Board  of  Management  must  notify  the  Inspection Committee  in writing;  requesting  the  person  in  breach  to  cease  the  breach  and  take  measures  to remedy any consequences.

Dismissal and removal of the Inspection Committee:

1. A member of the Inspection Committee shall be dismissed or removed in the following cases:

(a) No longer meeting the criteria and conditions to be a member of the Inspection Committee as stipulated in this Charter;

(b) Not exercising his or her rights and duties in six consecutive months, except in force majeure;

(c) Written resignation notice;

(d) Other cases as stipulated by the company.

2. In addition to the cases stipulated in clause 1 of this article, a member of the Inspection Committee may  be  dismissed  at  any  time  in  accordance  with  a  resolution  of  the  General  Meeting  of Shareholders.

3. Where the Inspection Committee seriously breaches its obligations, threatening to cause loss to the company, the Board of Management shall convene the General Meeting of Shareholders to consider dismissal  of  the  incumbent  Inspection  Committee  and  election  of  a  new  Inspection  Committee  to replace it.

Rights and duties of the Inspection Committee:

1. To prepare the operational program and plans of the Inspection Committee.

2. To prepare the program, agenda and data for meetings of, and to convene and chair meetings of the Inspection Committee.

3. Other rights and duties as stipulated by the company.

In a case where the head of the Inspection Committee is absent or is temporarily unable to work, then the remaining inspectors shall elect one of them to act as the head.

Article 83. Rights of the Inspection Committee to be provided with information

1. The invitation notices to a meeting, written opinion form to obtain opinion from members of the Board of Management and enclosed documents must be sent to members of the Inspection Committee at the same time and in the same manner as for members of the Board of Management.

2. Reports of the director  or  general  director  for  submission  to  the  Board  of  Management  or  other documents  issued  by  the  company  shall  be  sent  to  members  of  the  Inspection  Committee  at  the same time and in the same manner as for members of the Board of Management.

3. Members  of  the  Inspection  Committee  shall  have  the  right  to  access  files  and  documents  of  the company  retained  in  the  head  office,  branches  and  other  locations;  and  have  the  right  to  access locations where managers and employees of the company work.

4. The Board of Management, members of the Board of Management, the director or general director and  other  managers  must  provide  in  full,  accurately  and  on  time  all  information  and  documents relating to the management, administration and business operation of the company upon demand by the Inspection Committee.

Article 84. Remuneration and interests of members of the Inspection Committee

If not stipulated by the company, remuneration and other benefits of members of the Inspection Committee shall be implemented in accordance with the following provisions:

1. Members  of  the  Inspection  Committee  shall  be  paid  remuneration  according  to  their  work  and  be entitled to other benefits as decided by the General Meeting of Shareholders. The General Meeting of Shareholders shall decide on the total remuneration and annual operating budget of the Inspection Committee  based  on  the  estimated  number  of  working  days,  quantity  and  nature  of  work  and average daily rate of remuneration of members.

2. Members of the Inspection Committee shall be reimbursed for expenses for meals, accommodation, travel and for use of independent consultancy services at reasonable rates. The total amount of such remuneration  and  expenses  shall  not  exceed  the  total  annual  operating  budget  of  the  Inspection Committee approved by the General Meeting of Shareholders, except where otherwise decided by the General Meeting of Shareholders.

3. Remuneration  and  operating  costs  of  the  Inspection  Committee  shall  be  included  in  business expenses in accordance with provisions of the law on corporate income tax and other relevant laws, and must be presented in a separate item in the annual financial statements of the company.

Chapter IV

RESPONSIBILITIES, OBLIGATIONS AND RESTRICTIONS DURING OPERATION OF THE COMPANY

Article 85. Regulations on responsibilities and obligations of fund management companies

1. Fund management companies are permitted to conduct the following business activities:

- Management of securities investment funds and securities investment companies;

- Management of investment portfolios.

2. A fund management company shall, as the representative of the interests of an investor, shareholder or client entrusting investment as stipulated in the charter of a Fund or in the charter of a securities investment  company  or  in  an  investment  management  contract,  vote  at  the  General  Meeting  of Shareholders  or at  meetings of  the  Board of  Management of  an issuing  organization  in which the fund,  securities  investment  company  or  client  entrusting  investment  is  a  shareholder;  or  vote  at meetings of the members' council of an enterprise in which the fund, securities investment company or client entrusting investment is a capital contributor.

3. When a fund management company manages a closed investment Fund, an investment portfolio or a securities investment company, it shall be entitled to fees and bonuses in accordance with law and in accordance with the provisions in the charter of the Fund, the charter of the securities investment company or the investment management contract. If such charter or contract provides for bonuses on the basis of investment results, then the Company shall only be entitled to a bonus if the growth rate of the net asset value of the Fund or securities investment company or the growth rate of the value of the portfolio which the Company manages is higher than a reference rate approved by the investor. The amount and payment of bonuses to a fund management company managing a closed public Fund or a public securities investment company shall be determined as follows:

(a) The amount of a bonus shall be calculated on the basis of that part of the profit which exceeds the   market   growth   rate (growth   rate   of   market   indicators)   adjusted   according   to   the investment portfolio structure of the Fund or securities investment company. The amount of a bonus must be stipulated in the  charter of the Fund, the charter of the securities investment company and the prospectus, and must be approved by investors.

(b) The  bonus  must  be  excluded  and  shall not  be  payable  if  the  investment  activities  of  the previous  years  suffered losses  not  yet  offset. The  level  of adjustment must  be  specified  in the charter of the Fund, the charter of the securities investment company and the prospectus, and must be approved by investors.

(c) A  bonus shall only  be  payable  after  payment  of  other  payable  disbursements,  and shall  be calculated on the basis of the audited annual financial statements.

4. A  fund management company  must  comply  with  the  law  of  Vietnam,  the charters  of  Funds  and  of securities investment companies and investment management contracts.

5. A  fund management company  must  act  voluntarily,  fairly  and  honestly  and  in  the  best  interests of Funds, securities investment companies, investors and investors entrusting investment.

6. A  fund management company  must sign  contracts  with  a  depository  bank  and  custodian  bank containing specific clauses on the rights and obligations of the parties during management of assets of Funds and of securities investment companies and entrusted assets.

7. A fund management company  must sign  contracts  with  investors  entrusting  investment  and  with securities investment companies when providing        services being management of investment portfolios or assets of securities investment companies.

8. A  fund management company  must invest assets  of Funds  and  of securities  investment companies and  entrusted  assets  correctly  in  accordance  with law,  and  in  accordance  with  the  charter  of the relevant Fund or securities investment company or the relevant investment management contract.

9. A  fund management company  must compensate for  loss  to  any  Fund,  any securities  investment company,  any  investor  in  a  Fund  or securities  investment  company,  or  to  any  investor  entrusting investment caused  as  a  result  of  the  fund management company or  its  staff  failing  to  correctly discharge their obligations in accordance with law or breaching the law on securities and securities market.  The  amount  of  compensation  must  be  approved  by  investors,  including  investors  who previously  held  fund  certificates  or  share  certificates  in  the  securities  investment  company  and investors  entrusting  investment   who  have  terminated  their  portfolio  management  contract  with the fund management company.

10. A fund management company must  ensure  separate  and  independent  management  of  assets  of each Fund, assets of each securities investment company, assets of each investor, and assets of the Company itself.

11. A  fund management company  must  have  rules  on  distribution  of  traded  assets  which  are  uniform, reasonable  and  fair  when  conducting  trading  for  Funds,  for  securities  investment  companies,  for each investor entrusting investment and for the Company itself. These rules must be approved by investors entrusting investment, by the board of trustees of a Fund, by the Board of Management of a securities  investment  company,  and  by  the  custodian  bank  and  depository  bank. When the fund management company purchases or sells the same type of asset simultaneously for a Fund or a securities investment company which it manages and for the Company itself, traded assets shall be distributed in the following priority order:

(a) Priority distribution to the Fund/s and securities investment company/ies which the fund management company manages, ensuring fair and reasonable treatment of interests as between such Funds and securities investment companies;

(b) Distribution to the company itself only after satisfying the requirement in sub-clause (a) above.

12. A fund management company  must  ensure  liability  of  third  parties  to  which  it  delegates  authority during  management  of  Funds  and  investment  portfolios,  and  must  ensure  that  changes  to  the organizational  and  managerial structure  of  the  fund management company  do not  adversely  affect the  interests  of  investors  in  Funds  and  in  securities  investment  companies  or  the  interests  of investors entrusting investment. The above-mentioned relationship must ensure:

(a) The authorized party is a financial institution licensed to conduct the delegated task;

(b) Basic information about the authorized party is provided to the board of trustees of a Fund, the Board  of Management  of  a  securities  investment  company,  and  to  investors  entrusting investment;

(c) Such delegation of authority must be approved by the board of trustees of a Fund, the Board of Management of a securities investment company, and by investors entrusting investment;

(d) When a fund management company delegates authority it must report to the SSC enclosing the written approval referred to in sub-clause (c) above.

13. A fund management company which delegates authority as referred to in clause 12 above shall be responsible  to  supervise  and  ensure  delegated  tasks  are  implemented  quickly  and  in  compliance with law, with the charter of the Fund or the securities investment company or in compliance with the investment management contract; and it shall bear full liability for losses arising from the delegation of authority and caused to a Fund, securities investment company or investors entrusting investment.

14. A  fund management company  must  conduct  valuations  of  the  net  asset  value  of  a  Fund  and  of  a securities investment company; the net asset value of one fund certificate unit or share certificate in a securities   investment   company;   the   value   of   an   investment   portfolio   and   other   activities   in accordance with law and in accordance with the charter of the relevant Fund or securities investment company  and  the  relevant  investment  management  contract.  All  the  above-mentioned  valuations may  be  provided  by  a  custodian  bank  on  the  basis  of  a  contract  between  such  bank  and  the fund management company, and the fund management company must supervise that any such net asset valuation conducted by the custodian bank complies with current regulations.

15. A fund management company shall be responsible to keep, store and update in a prompt, complete and  accurate  manner  a  register  of  investors  and  a  register  of  shareholders;  and  all  the  above- mentioned  work  may  be  performed  by  a  department  of  the  custodian  bank  or  by  a  Securities Depository   Centre   on   the   basis   of   a   contract   between   such   bank   or   Centre   with   the fund management company;  and  the  fund management company must  supervise  that  the  keeping, storing and updating of the register of investors and register of shareholders by the custodian bank or  Securities  Depository  Centre  complies  with  current  regulations. The contents of the register of investors and of the register of shareholders shall comply with regulations of the Ministry of Finance on  establishment  and  management  of  securities  investment  Funds  and  securities  investment companies.

16. A  fund management company  shall  promptly  provide  written  notice  to  the  custodian  bank  or depository bank about voting rights and instructions for voting which the fund management company authorizes such custodian bank or depository bank to exercise on behalf of and in the interests of any Fund, securities investment company or investor entrusting investment at a meeting of a General Meeting of Shareholders, Board of Management or members' council of an issuing organization or enterprise in which such Fund, company or investor is a shareholder or capital contributor.

17. A  fund management company  must  promptly  provide  complete  essential  information  on  a  Fund, securities  investment  company  and  entrusted  assets  to  the  custodian  bank  or  depository  bank  to enable  the  latter  to  exercise  rights  and  discharge  obligations  in  respect  of  such  Fund,  securities investment  company  and  entrusted  assets  in  accordance  with  law.  At  least  once  per  month  the fund management company  must  verify  with  the  custodian  bank  or  depository  bank  the  assets  of each Fund, securities investment company and investor.

18. In a case where the custodian bank discovers that a transaction involving assets of a Fund or of a securities investment company is inconsistent with law or with the charter of the Fund or the charter of the securities investment company, or discovers that a transaction exceeds the authority of the fund management company and this has already been notified to the fund management company, then the fund management company must rescind such transaction or undertake to purchase or sell the assets of the Fund or of the securities investment company in order to restore the status quo as soon as possible.   Such remedying of the consequences must take place within 3 months from the date of discovery of the unlawful transaction.  All expenses arising in relation to this transaction and any  loss  to  the  Fund  or  to  the  securities  investment  company  shall  be  borne  by  the  fund management company, and shall not be included in fund management expenses.

19. A fund management company must purchase professional indemnity insurance for fund practitioners managing  Funds  in  accordance  with  law  or  it  must  establish  a  risks  reserve  in  order  to  pay compensation  for  loss  to  investors  as  a  result  of  breakdowns  or  as  a  result  of  errors  by  fund management practitioners during the course of professional activities.

20. A  fund  management  company  must  formulate  and  issue  professional  rules  applicable  to  each working position within the company, professional rules on internal control and professional ethics applicable to staff working at the company, aimed at preventing conflicts of interest which may arise within  the  company,  between  the  company  and  Funds,  between  the  company  and  securities investment companies  which  the  company  manages,  between the company and clients  entrusting investments,  between  clients  of  the  company,  and  during  transactions  with  affiliated  persons.  A provision  requiring  compliance  with  professional  ethics  shall  be  mandatory  in  the  labour  contracts signed by the company with its employees.

21. Each year, a fund management company must hold training courses to raise the professional skills of its staff, ensuring that their professional skills and knowledge of the law is updated and is appropriate for the working tasks assigned to them.  Information about annual training activities conducted by the company must be sent to the SSC at the same time as the company submits its annual report on operational status.

22. A fund management company shall be responsible to prepare, issue and report to the SSC policies and  professional  rules  on  risk  management  which  are  in  compliance  with  law,  aimed  at  promptly analyzing, assessing and monitoring management of risks during investment activities conducted for Funds, for securities investment companies, and with entrusted assets.

23. A  fund  management  company  must  comply  with  the  regimes  stipulated  by  law  on  accounting, auditing and statistics, discharge of financial obligations, and reporting and disclosure of information.

24. A fund management company must archive complete vouchers and accounts which reflect in detail, accurately  and  promptly  all  daily  trading  orders  of  each  Fund  and  of  each  securities  investment company, all daily trading orders for investment portfolios and for the company itself as well as for staff of the company, including the chronological order in which trading orders were submitted and the order in which transactions were implemented.  The above-mentioned vouchers shall include:

(a) Distribution contracts;

(b) Investment management contracts;

(c) Vouchers relating to offers to sell fund certificates and securities investment company shares;

(d) Other data and vouchers stipulated by law.

25. The vouchers stipulated in clause 24 above must be archived for a minimum duration of 15 years, and they must be supplied to the SSC on request.

26. A fund management company shall be responsible to ensure, while managing investment portfolios and member funds which have foreign participation, that investment of assets by foreign investors complies with the law on restriction on the ratio of ownership, either direct or indirect, of foreigners in Vietnamese enterprises.

27. A fund management company must clearly write on the cover of a prospectus of a Fund and must include in data advertising investment, the following specific warning on risks:

"The investment Fund (here name the fund) described in this Prospectus is a securities investment Fund established pursuant to the Law on Securities passed by the National Assembly on 29 June 2006 and its implementing guidelines. This prospectus has been registered with the SSC on (here give the date).

The fact that the SSC has issued a certificate for a public offer of fund certificates only means that registration  was  implemented  correctly  in  accordance  with  current  regulations,  and  does  not  carry any  implication  guaranteeing  the  contents  of  this  Prospectus  or  the  investment  objectives  and strategies of the Fund.

The value of Fund certificates, the possibility of gaining profit and the level of risks stipulated in this data is purely for reference purposes only and may change at any time depending on the market status. Investment  in  this  Fund  does  not  carry  any  assurance  that  investors  will  make  a  profit. Investors should themselves carefully balance the risks and the level of those risks before they make any decision to invest in this Fund."

28. The use of entrusted assets which are mobilized in Vietnam in order to invest in securities issued by a foreign institution, in securities issued by an issuing organization which is regulated by foreign law, or  in  securities  issued  offshore  must  be  approved  by  the  general  meeting  of  investors  of  a  public Fund, by the general meeting of investors of a member fund, by the general meeting of shareholders of a securities investment company, or by the client entrusting investment. Any offshore investment must comply with the law on offshore investments and with the law on foreign exchange control, and there must be written approval from the competent body.

Article 86. Restrictions with respect to activities of the company and staff working in the company

1. A fund management company shall not be permitted to raise capital and manage a member fund which has from 31 or more members contributing capital.

2. A fund management company must not be an affiliated person or the owner of the custodian bank or the depository bank of a Fund or a securities investment company which is managed by such fund management company. A member of the Board of Management, a member of the Members' Council, the  Chairman,  Director or  Deputy  Director,  General  Director or Deputy  General  Director  or  a  fund management practitioner of the fund management company shall not be permitted to concurrently work for the custodian bank or the depository bank of a Fund or a securities investment company which is currently managed by the company, and vice versa.

3. An affiliated person of the fund management company, a fund management practitioner or a person working in the fund management company shall only be permitted to purchase or sell certificates in a public fund or shares in a public securities investment company which is managed by the company through the trading system by the method of matching orders at the Stock Exchange or a Securities Trading Centre and when permitted by the Fund Charter or the Charter of the securities investment company.

4. Except  in  the  case  of  sale  and  purchase  transactions  as  stipulated  in  clause  3  of  this  article,  an affiliated  person  of  the  fund  management  company,  a  fund  management  practitioner  or  a  person working in the fund management company must not be a partner to other transactions with a public fund or Public securities investment company which is managed by the fund management company.

5. A  fund  management  company,  a  person  affiliated  to  such  company,  and  a  fund  management practitioner at the company shall not be permitted to be a party to a transaction of the purchase or sale  of  investment  assets  in  a  portfolio  which  the  company  manages,  unless  such  transaction  is conducted through the trading system by the method of matching orders at the Stock Exchange or a Securities Trading Centre and is specifically provided for in the investment management contract and is agreed to in writing by the client entrusting investment.

6. All securities transactions conducted by a member of the Board of Management, a member of the Members'  Council,  the  Chairman,  the  Director  or  Deputy  Director,  General  Director  or  Deputy General  Director,  a  member  of  the  Inspection  Committee,  an  Inspector,  a  fund  management practitioner  or  staff  of  the  Fund  Management  Company  must  be  reported  to  the  internal  control department prior to and immediately after such transactions and must be centrally managed at the Company  under  the  supervision  of  the  internal  control  department.  Information  about  the  above- mentioned transactions shall comprise classes of securities, price of securities, trading time, trading methods and the total value of transactions, and shall be archived for fifteen (15) years and shall be provided to the SSC where required.

7. When the Fund Management Company conducts the trading of assets of the Fund, of the securities investment company and entrusted assets, members of the Board of Management, members of the Members'  Council,  the  Chairman,  the  Director  or  Deputy  Director,  the  General  Director  or  Deputy General Director,  fund  management  practitioners  and  all  staff  of  the  Fund  Management  Company shall not be permitted to request, require or  receive, in the name of any individual or of the Fund Management  Company,  any  remuneration,  profit  or  benefit  derived  from  the  implementation  of transactions  of  the  Fund’s  assets,  assets  of  the  securities  investment  company  or  transactions  of assets entrusted by a third party except for fees and bonuses specified in the Fund’s Charter, the Charter  of  the  securities  investment  company  or  in  the  Investment  Management  Contract.  This provision applies to all types of member funds, public funds and securities investment companies.

8. A fund management company shall not be permitted:

(a) To use assets of a Fund or of a securities investment company which it manages in order to invest in the same Fund or the same securities investment company;

(b) To use the assets of a Fund or of a securities investment company which it manages in order to invest in another public Fund or another public securities investment company which it also manages;

(c) To use the assets of a public Fund or of a public securities investment company in order to invest  in  another  investment  Fund  or  another  securities   investment  company  which  it manages;

(d) To use assets of the company, or entrusted assets belonging to an investment portfolio which it  manages  in  order  to  invest  in  public  Funds  or  in  public  securities  investment  companies which were established in Vietnam and which it manages.

9. A  fund  management  company  shall  only  be  permitted  to  use  capital  of  the  company,  entrusted assets belonging to an investment portfolio, assets of a member Fund, or privately placed shares of a securities  investment  company  in  order  to  invest  in  member  Funds,  privately  placed  shares  of securities  investment  companies  established  pursuant  to  the  law  of  Vietnam  which  such  fund management  company  manages  in  cases  where  the  charter  of  the  relevant  Fund,  the  relevant investment management contract, or the relevant minutes of agreement on contribution so permit the fund management company to make these investments; and in this case the company shall only be entitled to the level of management fees approved by the investors.

10. A fund management company shall not be permitted to use assets of a public Fund or of a public securities investment company to make joint venture capital or associated capital contributions or to invest in such fund management company, in an economic organization being an affiliated person of the  fund  management  company  or  in  an  economic  organization  being  an  affiliated  person  of  a member  of  the  Board  of  Management,  a  member  of  the  Members'  Council,  the  Chairman,  the General  Director  or  Deputy  Director,  the  General  Director  or  Deputy  General  Director  of  the  fund management company or a fund management practitioner. The fund management company may use capital of the Member Fund or assets of entrusting investors to implement such investment activities in  the  case  where  provisions  in  the  Fund’s  Charter,  the  investment  management  contract  or  the minutes  of  a  capital  contribution  agreement  permit  the  fund  management  company  to  make  such investments with an appropriate level of fees for management approved by investors.

11. A  fund  management  company  shall  not  be  permitted  to  use  assets  of  a  Fund  or  of  a  securities investment company or entrusted assets in order to provide a loan or to guarantee any loan of the company or of persons affiliated to the company, or to make payment of any debt of the company or of any persons affiliated to the company or to pay the debt of any other person or entity at all.

12. A fund management company must control and ensure that fees for trading assets of public Funds and of public securities investment companies are at an appropriate level and are not higher than the average level of such fees on the market.

13. A  fund  management  company  shall  only  be  permitted  to  manage  investment  capital  of  public securities  investment  companies  and  of  public  Funds  when  the  company  satisfies  the  following conditions:

(a) It  has  at  least  two  fund  management  practitioners  managing  the  Fund  with  experience  in managing  funds  and  investment  portfolios  and  have  such  work  experience  for  at  least  two years;

(b) The fund management practitioners stipulated in sub-clause (a) above have not been subject to an administrative penalty in the securities and securities market sector during the course of their managing funds and investment portfolios.

14. A fund management company must comply with the restrictions on investment during management of public Funds as stipulated in Article 92 of the Law on Securities.

Chapter V

FINANCE – ACCOUNTING, DISTRIBUTION OF PROFIT, REGIME ON REPORTING AND DISCLOSURE OF INFORMATION BY THE COMPANY

Article 87. Financial year

1. The financial year of the Company shall commence on 1 January and end on 31 December each year.

2. The first financial year of the Company shall commence on the date of issuance of the licence for establishment and operation and end on 31 December of that year.

Article 88. Accounting, auditing and tax

1. The Company shall organize statistics and accounting work and pay tax in accordance with current regulations.

2. Annual financial statements of the Company and of funds and of securities investment companies which are managed by such fund management company must be audited by an independent auditor approved by the SSC before submission for consideration and passing by the General Meeting of Shareholders/Members’ Council/Company owner and by the General Meeting of Investors/Members’ Council of the securities investment fund or by the General Meeting of Shareholders of the securities investment company.

Article 89. Distribution of profit

1. After tax profit at the end of the financial year shall be used to set aside reserves in accordance with current regulations, and where the law does not stipulate a ratio then such ratio shall be decided by the General Meeting of Shareholders/Members’ Council/Company owner.

2. The Company may only pay dividends or distribute profit to its members when it generates profit and has fulfilled its tax obligations and other financial obligations in accordance with law; and at the same time must ensure that debts and other property obligations may be paid in full after distribution of profit.

Article 90. Regime on disclosure of information and reporting obligations

1. A fund management company shall be responsible to implement in accordance with law the regime on  disclosure  of  information  and  on  reporting  the  operation  of  the  company  and  of  Funds  and securities investment companies which the fund management company manages.

2. A fund management company shall be responsible to provide information to investors in accordance with law and in accordance with this Charter. The company must ensure that the following information is available at its head office or any branch or representative office, at any office of its distribution agent, and also on the website of the company in order for investors to be able to access the information:

(a) Charters of Funds, charters of securities investment companies, and prospectuses;

(b) Annual reports and reports for the most recent month of Funds and of securities investment companies, at least for the last 5 years;

(c) The most recent reports assessing net asset value and net asset value of one fund certificate and of one share in a securities investment company as stipulated by law;

(d) All the data, reports and contracts referred to in a prospectus;

(e) In  the  case  of  clients  entrusting  investment,  investment  management  contracts  with  the mandatory information which such contracts must possess.

3. The information stipulated in clause 2 of this article must be supplied free of charge on the website of the fund management company.

Chapter VI

DISSOLUTION, BANKRUPTCY, RESTRUCTURING OF THE COMPANY

Article 91. Dissolution of the company

1. The Company shall be dissolved in the following cases:

(a) The duration of operation stated in the Charter expires and there is no decision to extend;

(b) As decided by the General Meeting of Shareholders/Members’ Council/Company owner;

(c) The company's licence for establishment and operation is revoked;

(d) The company is merged or consolidated with another fund management company.

2. Procedures for dissolution:

(a) A resolution on dissolution of the company shall be passed.

(b) Within seven working days after being passed, the resolution on dissolution must be sent to the  SSC  and  to  all  creditors,  persons  having  related  rights,  obligations  or  interests,  and employees in the company and must be publicly posted at the head office and at branches of the enterprise. The resolution on dissolution must be sent to creditors together with a notice of the settlement of the debt.

(c) The SSC must consent to the dissolution.

(d) Liquidation of assets and payment of debts shall be conducted.

(e) Within a time-limit of seven working days after all debts of the company are fully paid, the legal representative of the enterprise must submit documents relating to the dissolution to the SSC.

(f) Where the company's licence for establishment and operation is revoked, the company must be dissolved immediately.

Article 92. Bankruptcy of the company

Bankruptcy of the company shall be implemented in accordance with current regulations.

Article 93. Restructuring of the company

Restructuring  of  the  company  shall  be  as  decided  by  the  General  Meeting  of  Shareholders/Members’ Council/Company owner and shall be implemented in accordance with current regulations.

Chapter VII

IMPLEMENTING PROVISIONS

Article 94. Validity of the charter

This  Charter  shall  be  of  full  force  and  effect  as  from  the  date  of  issuance  by  the  SSC  of  a  licence  for establishment and operation to the Company.

Article 95. Amendment of and addition to the charter

Amendment of and addition to this Charter shall be as decided by the General Meeting of Shareholders/Members’ Council/Company owner and must be reported to the SSC.

Article 96. Registration of the Charter and signing

1. This Charter comprises … chapters and ….articles and is made in ….copies each of equal legal validity.

2. Signatures of founding shareholders/founding members.