Chương I Thông tư 98/2020/TT-BTC : Quy định chung

Chapter I

GENERAL PROVISIONS

Article 1. Scope and regulated entities

1. This Circular provides guidance on operation and management of securities investment funds, including private funds, closed-end funds, open-end funds, exchange-traded funds (ETFs), real estate investment funds, public securities investment companies, private securities investment companies, and real estate securities investment companies.

2. This Circular applies to:

a) Securities investment fund management companies (hereinafter referred to as “fund management companies”), supervisory banks and custodian banks;

b) Vietnam Securities Depository and Clearing Corporation (VSDCC);

c) Vietnam Exchange and its subsidiaries (hereinafter referred to as “SE”);

d) Representative boards, their members and investors of securities investment funds;

dd) Boards of Directors, their members and shareholders of securities investment companies;

e) Authorized participants, distribution agents and other entities involved in management of securities investment funds.

Article 2. Definitions

For the purposes of this Circular, the terms below are construed as follows:

1. “valid copy” means a copy that is extracted from the master register or authenticated by a competent authority or organization or that has been compared and certified to correspond with its original.

2. “component securities” means underlying securities included in the structure of benchmark indexes of an ETF, excluding derivatives.

3. “distribution agent” means an organization that has entered into a fund certificate distribution contract with a fund management company.

4. “nominee” means a distribution agent which owns a nominee account to conduct transactions in fund certificates on behalf of investors in the subsidiary investor register.

5. “iNAV” means the net asset value (NAV) of an ETF certificate determined in the trading session.

6. “Personal records” include a personal information sheet made according to the form in Appendix XIII enclosed herewith and a valid copy of a foreigner’s passport or other valid personal identification papers.

7. “exchange trading” means the exchange of a basket of component securities for an ETF creation unit or vice versa. This transaction is conducted between an ETF and its authorized participant or investor meeting relevant requirements laid down in the fund’s charter.

8. “exchange trading order" includes a subscription order whereby the authorized participant or investor requests the fund to receive the component securities basket and issue ETF creation units and a redemption order whereby the authorized participant or investor requests the fund to receive ETF creation units and return the component securities basket.

9. “ETF creation unit” includes at least 100.000 ETF certificates. The ETF creation unit is the trading unit used in exchange transactions between an ETF and its authorized participants/investors.

10. “fund certificate trading day” means the day on which the fund management company, on behalf of the fund, creates and redeems fund certificates or creation units from authorized participants/investors according to the fund’s trading mechanism.

11. “valuation date” means the date on which the fund management company determines the net asset value (NAV) of the fund or securities investment company.

12. “beneficiary” means an entity that is not a registered owner of an asset but has the full ownership of that asset.

13. “fund executive” means a certified securities professional who has a fund management certificate and is assigned by the fund management company to manage investments of the fund or securities investment company.

14. “bond fund” means a fund that invests primarily in bonds, money market instruments, term deposits and other fixed-income instruments with an investment proportion that makes up at least 80% of the fund’s NAV.

15. “index fund” means an open-end fund that invests in a portfolio of underlying securities making up a securities index which is built and managed by an SE in Vietnam in accordance with law regulations on ETFs.

16. “real estate management unit” means an enterprise that provides real estate management services in accordance with regulations of the Law on real estate business, and is authorized by the fund management company, acting on behalf of the real estate investment fund, or the real estate securities investment company, to maintain, preserve, manage and operate the real estate under a real estate management agreement.

17. “authorized participant” means a securities company that is licensed to provide securities brokerage and proprietary trading services or a custodian bank that has entered into an ETF establishment agreement with the fund management company.

18. “ETF market maker” means a securities company that is an authorized participant and is selected by the fund management company to enter into the ETF market making agreement.

19. “relevant service provider” means a custodian bank or VSDCC that is authorized by the fund management company to provide one or several investment fund management or transfer agent services.

20. “investment fund management services” include the following activities:

a) Recording fund transactions: recording changes in cash inflows and outflows of the fund;

b) Preparing financial statements of the fund; cooperating with and assisting the fund's audit organization during the fund audit;

c) Determining the fund’s NAV, the NAV per creation unit, and the NAV per fund certificate in accordance with regulations of law and the fund’s charter;

d) Performing other activities in accordance with regulations of law and the fund’s charter.

21. “transfer agent services” include the following activities:

a) Preparing and managing the primary investor register; opening, monitoring and managing the system of personal accounts and nominee accounts; certifying ownership of open-end fund certificates;

b) Recording exchange orders, subscription orders, redemption orders and switching orders placed by authorized participants/investors; transferring the ownership of fund certificates; updating the primary investor register;

c) Supporting authorized participants/investors in exercising their rights related to their ownership of fund certificates;

d) Organizing meetings of the fund’s representative board and general meetings of investors of the fund; maintaining the communication channel with investors, distribution agents, regulatory authorities and other competent organizations;

dd) Providing investors with financial statements and operational reports of the fund, prospectus, summary prospectus, trading account statements, transaction confirmations and other documents.

22. “primary investor register” means a document in the form of written records or electronic records or in both forms which is prepared and managed by the fund management company or transfer agent service provider to record information about investors that own fund certificates.

23. “subsidiary investor register” means a register which records information about investors that own fund certificates, and is prepared and managed by a nominee with the authorization of the fund management company.

24. “open-end fund certificate trading account” means an account via which an investor buys, sells and owns certificates of one or more open-end funds managed by a fund management company. The open-end fund certificate trading account is opened and managed by a distribution agent in cooperation with the transfer agent service provider. There are two types of this account:

a) “investor’s account” means an account owned by and opened in the name of an investor;

b) “nominee account” means an account that is owned by investors in the subsidiary investor register and opened in the name of a nominee. This account is divided into separate and independent sub-accounts corresponding to each investor named in the subsidiary investor register.

25. “deposit account for clearing fund certificate transactions” means a deposit account which is opened by a nominee at a supervisory bank and only used to make payments for fund certificate transactions.

26. “independent member of the fund’s representative board” means a member that is not a related person of either fund management company or supervisory bank.

27. “closing time of order book” means the final time when a distribution agent receives investors’ trading orders which shall be executed on the fund certificate trading day. The closing time of order book shall be specified in the fund’s charter, publicly announced in the prospectus or summary prospectus and shall not be later than the SE’s market closing time on the trading day preceding the fund certificate trading day of an open-end fund or the SE’s market closing time on the ETF certificate trading day.

28. “quotation service provider” means a securities company, fund management company or quotation system selected by the fund management company to provide the quotation of assets other than listed securities or registered securities.

29. “charter capital" of a fund or securities investment company means the amount of capital contributed by investors or shareholders and stated in the charter of a closed-end fund, or private fund, or in the charter of a securities investment company, or the amount of capital raised from the initial public offering of fund certificates of an open-end fund.

Article 3. General provisions on securities investment funds and securities investment companies

1. Securities investment funds and securities investment companies (except private securities investment companies that self-manage their own capital) must be managed by fund management companies and their operations shall be performed through fund management companies.

2. Assets of private funds and private securities investment companies must be deposited at a custodian bank. Assets of public funds and public securities investment companies must be deposited at a supervisory bank. Management of capital and assets of public funds and public securities investment companies must be supervised by the supervisory bank.

3. Assets of securities investment funds and securities investment companies are under the ownership of investors and shareholders in proportion to their contributions, and are not assets of fund management companies, supervisory banks or custodian banks. The fund management company shall only use assets of the securities investment fund or securities investment company for fulfilling payment obligations of that securities investment fund or securities investment company, and shall not use such assets for making payments or fulfilling financial obligations of the fund management company, supervisory bank, custodian bank or any other entity in any form and any case.

4. Regulatory authorities and people’s armed forces of Vietnam are not allowed to contribute capital to establish securities investment funds or securities investment companies; purchase fund certificates or shares of securities investment companies. Credit institutions, insurers, securities companies, fund management companies and state-owned enterprises shall contribute capital to establish securities investment companies or funds, and purchase fund certificates or shares of securities investment companies in accordance with regulations of specialized laws.

Article 4. Charter, prospectus and summary prospectus

1. The fund’s charter or the charter of a securities investment company shall be initially formulated by the fund management company, have the contents prescribed in Article 103 of the Law on securities, and comply with the form in Appendix I or Appendix II enclosed herewith. Investors subscribing for fund certificates or shares initially offered to the pubic of the securities investment company are considered to have approved the charter. The charter of a private fund or private securities investment company shall include relevant contents according to the form in Appendix I or Appendix II enclosed herewith.

2. Revisions to the fund’s charter or the charter of the securities investment company must be approved by the fund’s General Meeting of Investor or the General Meeting of Shareholders of the securities investment company.

3. Within 03 working days from the day on which the fund’s charter or the charter of the securities investment company is revised, the fund management company or the private securities investment company that self-manages its own capital shall submit a report made according to the form in Appendix XXVIII enclosed herewith to SSC.

4. The fund management company is liable to formulate the prospectus or summary prospectus of the fund or securities investment company. The prospectus or summary prospectus must be easily comprehensible and have the primary contents according to the form in Appendix III, IV, V, VI enclosed herewith. The prospectus or summary prospectus must clearly state that the supervisory bank or relevant service provider shall only certify the information concerning its operations and assume responsibility for its operations under terms and conditions of the contract signed with the fund management company and in conformity with regulations of the law, and the information it provides to serve the formulation of the prospectus or summary prospectus.

5. The prospectus or summary prospectus shall be updated upon the occurrence of any significant information or periodically updated according to the frequency specified in the fund’s charter or the charter of the securities investment company. The fund management company shall submit a report to SSC on the modification of the prospectus according to the form in Appendix XXVIII enclosed herewith. If SSC does not give any written opinions within 15 days from the date on which the updated prospectus is sent to SSC, the fund management company is allowed to provide the prospectus for relevant service providers, distribution agents and investors.