Chương II Thông tư 98/2020/TT-BTC : Quỹ thành viên

Chapter II

PRIVATE FUNDS

Article 5. Fund’s investments and investment portfolio

1. The fund's investment portfolio must be conformable with its investment objectives and policies specified in the fund's charter and prospectus.

2. The fund may invest in the following assets:

a) Deposits at commercial banks as prescribed by the Law on banking;

b) Money market instruments, including financial instruments and negotiable instruments as prescribed by law;

c) Government’s debt instruments, Government-backed bonds and municipal bonds;

d) Listed shares, shares registered for trading, bonds listed on SE, and public fund certificates;

dd) Unlisted shares of issuers that are operating under the law of Vietnam; shares of joint-stock companies or stakes of limited liability companies;

e) Rights arising in connection with securities held by the fund;

g) Other securities and assets as prescribed by law.

3. The fund management company shall only make deposits and invest in money market instruments as prescribed in Points a, b Clause 2 of this Article at the credit institutions approved by the fund’s representative board.

4. Private funds are allowed to contribute capital to establish joint-stock companies or limited liability companies in accordance with regulations of the Law on enterprises. If permitted in the fund’s charter and approved in writing by the General Meeting of Investors, the private fund may invest in eligible real estate as prescribed in the Law on real estate business.

5. When managing a private fund, the fund management company shall:

a) Not use the fund’s capital and assets to make investments in that fund;

b) Not use the fund’s capital and assets to provide loans or loan guarantees; not underwrite the offering of securities;

c) Invest in public fund certificates and shares of public securities investment companies managed by other fund management companies, but ensure the following limits:

- Not invest in more than 10% of total outstanding fund certificates of a public fund or total outstanding shares of a public securities investment company;

- Not invest more than 20% of total value of its assets in fund certificates of a public fund or shares of a public securities investment company;

- Not invest more than 30% of total value of its assets in public fund certificates or shares of public securities investment companies.

d) If permitted in the fund’s charter, the fund is allowed to get mortgage loans, overdraft facility or loans in other form from the custodian bank, borrow money to purchase securities (margin trading) according to the following principles:

- Borrowing of assets must be conformable with regulations of law;

- Borrowing limit shall be decided by the General Meeting of Investors, provided that total debts and amounts payable of the fund shall not exceed 30% of total value of the fund's assets at any time;

- Organizational structure and operations of the credit department of the custodian bank must be separated from the fund’s depository department; credit activities are independent from depository activities and fall beyond the scope of the depository contract;

- The fund management company shall provide information about rights and interests of the custodian bank and potential conflict of interest for the General Meeting of Investors for consideration.

6. The fund management company and organizations contributing capital to establish the private fund are not allowed to use means of mass media for advertising or raising capital.

7. Private funds may make indirect outward investments according to Clause 9 Article 24 hereof.

Article 6. Fund's NAV and asset transactions

1. The fund management company shall calculate or authorize the custodian bank that provides fund management service to monthly calculate the fund's NAV and NAV per fund certificate. Calculation of the fund’s NAV shall comply with Clauses 1, 2, 3 and 8 Article 20 hereof. The list of quotation service providers and valuation manual must be approved by the fund’s representative board.

2. When buying or selling assets for a private fund, the fund management company must comply with Article 21 hereof.

Article 7. Profit distribution

1. The fund shall distribute profit whether in cash or by fund certificates. At least 15 days before distribution of profit, the fund management company shall send notification in an appropriate manner to registered contact addresses or email addresses of investors. Such a notification shall contain the primary information in the form in Appendix VII enclosed herewith.

2. The fund’s distribution of profits shall comply with the following rules:

a) Profits distributed to investors are derived from the profits earned in the period or accumulated profits after the fund has fulfilled its tax liabilities and other financial obligations as prescribed by law;

b) The rate of profits distributed must be conformable with the fund’s profit distribution policy specified in its charter and approved by the General Meeting of Investors;

c) After profits are distributed, the fund is still able to fully pay its debts and other liabilities when they are due, and the fund’s NAV shall not be lower than VND 50 billion;

d) If profits are distributed in fund certificates, the fund must have sufficient counterpart funds from its undistributed after-tax profits according to the latest audited or reviewed financial statements.

3. Information about the fund’s distributed profits must be included in the modified prospectus.

Article 8. Fund’s expenses

The fund’s expenses include:

1. Fund management fees paid to the fund management company.

2. Depository fees and supervision fees (if any) paid to the custodian bank or supervisory bank.

3. Audit fees paid to audit organizations.

4. Valuation fees paid to valuation firms (if any); costs of legal counseling service, quotation service, and other services, remunerations paid to the fund’s representative board.

5. Costs of drafting, printing and sending the prospectus, summary prospectus, financial statements, and other documents to capital contributors; costs of information disclosure; costs of holding General Meeting of Investors, and meetings of the fund’s representative board.

6. Asset transaction costs and other expenses as prescribed by law.

7. Costs arising from replacement of custodian bank, supervisory bank (if any) or other service providers.

Article 9. Investors, General Meeting of Investors and representative board of a private fund

1. Rights and obligations of investors in a private fund are specified in the fund’s charter and conformable with relevant regulations in Article 16 hereof.

2. General Meeting of Investors, conditions and procedures for convening General Meeting of Investors, and ratification of decisions of General Meeting of Investors of a private fund shall comply with Articles 17, 18 hereof, except regulations on information disclosure.

3. The fund’s representative board and its members shall comply with the fund’s charter and relevant regulations in Article 19 hereof. Structure of the fund’s representative board must not comply with Clause 5 Article 19 hereof, unless otherwise prescribed in the fund’s charter.

Article 10. Transfer of stakes in a private fund

1. Capital contributors are entitled to freely transfer their stakes in the fund, except transfer restriction cases as prescribed by law and in the fund’s charter. The transfer of a part or all of stakes in the fund must satisfy the following conditions:

a) The transferee meets relevant requirements laid down in Clause 4 Article 3 hereof;

b) After the transfer of stakes is completed, the fund has 02 - 99 capital contributors who are all professional investors.

2. Within 15 days from the completion of stake transfer, the fund management company shall provide SSC with a report on transfer results made according to the form in Appendix VIII enclosed herewith. In case the value of a transfer transaction equals at least 5% of the fund’s charter capital, the report shall be accompanied by the transfer contract that is signed between capital contributors and bears certification of the fund management company.

3. The fund management company shall prepare and retain the capital contributor register and any information concerning the transfer of stakes between capital contributors. The capital contributor register may be prepared and kept by the custodian bank according to the service contract signed with the fund management company.

Article 11. Consolidation and merger of funds

1. At least 30 days before the General Meeting of Investors is convened, the fund management company shall provide investors with documents about the consolidation or merger of funds, including:

a) Consolidation or merger plan;

b) The draft of the consolidation or merger contract;

c) The audited annual financial statements or latest quarterly financial statements of consolidating funds or acquired funds;

d) The draft charter, prospectus (if any) and summary prospectus (if any) of the consolidated fund or acquiring fund.

2. Within 10 days from the date on which the decision on consolidation or merger is approved by the General Meeting of Investors, the fund management company shall notify such decision to creditors. Within 15 days from the receipt of the notification, creditors are entitled to request the fund to make payments. After this time limit, if the fund management company receives no requests for payment from creditors, payment obligations will be fulfilled by the consolidated fund or acquiring fund.

3. In case consolidating funds or acquired funds are managed by the same fund management company, costs of legal counseling, administrative expenses and costs of other services related to the consolidation or merger of funds shall not be accounted for as the fund’s expenses, unless otherwise decided by the General Meeting of Investors.

4. The fund management company and the fund’s representative board shall:

a) Provide adequate, timely, accurate and truthful information about the consolidation or merger to investors;

b) Settle relevant rights, interests and obligations under agreements between relevant parties according to the voluntariness principle and in conformity with regulations of law;

c) Pay debts to creditors at their request. Payments to creditors that send request the fund as prescribed in Clause 2 of this Article must be completed by the effective date of the certificate of registration of fund establishment to the consolidated fund or acquiring fund.

5. The consolidation or merger date is the date on which the decision on consolidation or merge is approved by the General Meeting of Investors. From the date on which SSC issues a decision on consolidation or merger, the fund management company, custodian bank and supervisory bank (if any) shall:

a) Receive transfer of records, receipts, securities portfolio and other assets, and other documents relating to consolidating funds or acquired funds;

b) Ensure that the consolidated fund or acquiring fund shall inherit all rights and lawful interests, and be responsible for financial obligations, debts, including tax debts, and other financial obligations to the State; continue performing economic contracts of consolidating funds or acquired funds;

c) Complete procedures for registration of the consolidated fund’s or acquiring fund’s ownership of assets transferred from consolidating funds or acquired funds in accordance with relevant laws;

d) Perform obligations on behalf of the consolidated fund or acquiring fund in accordance with regulations of relevant laws.

6. Depending on terms and conditions of the consolidation or merger contract, and the consolidation or merger plan, the fund may combine switching of fund certificates and cash payment. The value of cash payment for a fund certificate shall not exceed 10% of the NAV per fund certificate calculated at the consolidation or merger date.

7. Within 07 working days from the consolidation or merger date, the fund management company shall disclose information about that consolidation or merger. Information to be disclosed includes:

a) The consolidation or merger date;

b) Rules for determination of NAV per fund certificate of consolidating funds or acquired funds at the consolidation or merger date; fund certificate switching ratio; ratio of cash payment per fund certificate (if any).

8. From the effective date of the certificate of registration of fund establishment of the consolidated fund or acquiring fund:

a) Consolidating funds or acquired funds cease to exist, and the consolidated fund or acquiring fund inherits all assets, debts, rights and lawful interests, and other obligations from consolidating funds or acquired funds;

b) Investors of consolidating funds or acquired funds shall receive assets in the form of fund certificates of the consolidated fund or acquiring fund according to the switching ratio determined on the consolidation or merger date;

c) Fund certificates of consolidating funds or acquired funds are canceled.

Article 12. Dissolution of funds

1. The General Meeting of Investors shall vote on the dissolution date. From the dissolution date, the fund management company, custodian bank and supervisory bank (if any) shall not:

a) Make investments or purchase assets for the fund;

b) Convert unsecured debts into debts secured with the fund’s assets;

c) Give or donate the fund’s assets;

d) Finalize contracts in which the value of the fund’s obligations is greater than that of the other party; or pay debts to the creditors who are also the fund’s debtors without offsetting;

dd) Perform other transactions for the purpose of illegally liquidating the fund’s assets.

2. The assets of a fund undergoing dissolution include:

a) The fund’s assets and asset rights existing at the time of compulsory dissolution;

b) Profits, assets and asset rights to be acquired by the fund from transactions confirmed before it is compulsorily dissolved;

c) Assets put up as collateral for fulfillment of the fund’s obligations. If the collateral is used for paying secured debts and the value of the collateral exceeds the amounts payable, the excess is considered the fund's assets.

3. The General Meeting of Investors shall designate an accredited audit organization or maintain the current fund’s representative board to inspect, assess and supervise the liquidation and distribution of the fund’s assets.

4. The fund management company or custodian bank, supervisory bank (if the fund management company is not available) shall carry out the liquidation and distribution of assets to investors according to the plan approved by the General Meeting of Investors. The time limit for liquidation or distribution of assets to investors shall comply with the dissolution plan but not exceed 02 years from the dissolution date. After this time limit, the fund management company or custodian bank, supervisory bank (if any) shall return the investment portfolio to investors according to Clause 6 of this Article. During the liquidation of assets, management fees, supervision fees and other costs shall be paid according to the schedule of service fees approved by the General Meeting of Investors.

5. When carrying out the liquidation of assets, the fund management company or custodian bank, supervisory bank (if any) shall ensure the followings:

a) Listed or registered securities shall be liquidated through the SE’s trading system;

b) The liquidation of assets other than listed or registered securities must be approved by an independent audit organization or the fund’s representative board as prescribed in Clause 3 of this Article.

6. The fund management company or custodian bank, supervisory bank (if any) shall return the investment portfolio to investors in proportion to their holdings. The investment portfolio shall be returned to investors according to the following principle:

a) The fund is able to fulfill its payment obligations according to regulations and order in Points a, b Clause 4 Article 104 of the Law on securities;

b) The investment portfolio returned to investors must sufficiently have the same assets and structure as the fund’s portfolio;

c) The transfer of assets that are registered and deposited securities to investors shall be carried out the fund management company or custodian bank, supervisory bank (if any) according to VSDCC’s guidelines.

With regard to assets of which the ownership must be registered, the fund management company or custodian bank, supervisory bank (if any) shall request investment-receiving organizations, issuers and organizations managing shareholder registers to carry out registration of asset ownership for investors. The return of investment portfolio is considered complete when investors’ ownership of assets has been successfully registered.

7. Asset liquidation results must be certified by the custodian bank, supervisory bank (if any) and/or the fund management company, and approved by an independent audit organization or the fund’s representative board (if any) in charge of supervising the asset liquidation.

8. From the dissolution date to the date of completion of the dissolution, the fund management company shall send monthly reports to SSC and provide investors with NAVs, reports on assets and investment portfolio of the fund according to the forms in Appendix IX and Appendix X enclosed herewith.

9. The fund management company or custodian bank, supervisory bank (if any) and relevant entities shall be responsible for the accuracy, truthfulness and adequacy of the report on dissolution results. In case the report on dissolution results contains incorrect information or forged documents, the fund management company, custodian bank, supervisory bank (if any) and relevant entities shall bear joint responsibility for unpaid debts and personal responsibility for the consequences that occur within 05 years from the day on which the report on dissolution results is sent to SSC.