Chương III Thông tư 98/2020/TT-BTC : Quỹ đại chúng

Chapter III

PUBLIC FUNDS

Section 1. GENERAL PROVISIONS ON PUBLIC FUNDS

Article 13. Initial public offering of fund certificates

1. The initial public offering of fund certificates shall be made only after obtaining the certificate of registration of public offering of fund certificates from SSC.

2. Within 05 working days from the effective date of the certificate of registration of public offering of fund certificates, the fund management company shall disclose information about the offering according to regulations on disclosure of information on securities market, and also send the announcement of public offering of fund certificates made according to the form in Appendix XI enclosed herewith to SSC.

3. The entire capital contributed by investors shall be transferred to a separate account of the fund opened at the supervisory bank, and all baskets of component securities of authorized participants/investors must be deposited at VSDCC and shall be returned only after the effective date of the certificate of registration of fund establishment. The supervisory bank shall pay interests on the capital amounts held in escrow according to the interest rate on demand deposits.

Article 14. Distribution of fund certificates

1. The fund management company, distribution agent and underwriter (if any) shall distribute fund certificates fairly and openly, and allow investors a minimum period of 20 days to subscribe for fund certificates. This time limit shall be specified in the offering announcement.

In case the offering is oversubscribed, the fund management company shall distribute total number of fund certificates offered to investors in proportion to the ratio of fund certificates subscribed by each investor.

2. The fund management company must complete the distribution of fund certificates within 90 days from the effective date of the certificate of registration of public offering of fund certificates. In case the fund management company is unable to complete the distribution within this time limit, it may apply to SSC for an extension as prescribed in Clause 4 Article 26 of the Law on Securities.

3. Within 03 working days from the end of the offering, the fund management company shall disclose information, submit reports to SSC, pay the costs and bear other financial obligations arising from the capital raising, and return the contributed capital, including interests (if any), to investors when any of the following events occurs:

a) The requirements in Clause 1 Article 108 of the Law on Securities are not fully satisfied;

b) The distribution of fund certificates is not completed within the expected time limit.

4. Within 15 days from the end of the offering, the fund management company must complete the return of money to investors as prescribed in Clause 3 of this Article and at incur all costs of the capital raising.

5. The suspension and cancellation of the offering of fund certificates shall comply with Article 27 and 28 of the Law on Securities.

6. If additional closed-end fund certificates are offered to raise capital, procedures for announcement of the additional offering and distribution of call option shall comply with Article 13, Clauses 1, 2 of this Article and relevant regulations on listed organizations laid down in the Law on Securities and regulations of the Law on Enterprises.

Article 15. Certification of ownership of fund certificates

1. Within 05 days from the effective date of the certificate of registration of fund establishment or the modified certificate of registration of fund establishment, the fund management company shall itself, or authorize a transfer agent service provider to, certify the ownership of purchased fund certificates for investors and prepare the investor register which includes the following contents:

a) Name and headquarters address of the fund management company; name and headquarters address of the supervisory bank; full name of the fund; listed securities symbols of the fund (if any);

b) Total fund certificates to be offered, total fund certificates/creation units offered, structure and details of portfolios, and total capital raised;

c) List of investors/authorized participants (if any), specifying: full name, number of ID card, citizen’s identity card, passport or another valid personal identification paper, and contact address (if the investor or authorized participant is an individual); full name, abbreviated name, number of enterprise registration certificate, and headquarters address (if the investor or authorized participant is an organization); number of securities depository account (if any); number of the investor’s account or sub-account enclosed with the number of nominee account; the number of owned fund certificates; ownership percentage; subscription date and payment date;

d) Date of the investor register.

2. A nominee is allowed to open and manage a subsidiary investor register based on the contract signed with the fund management company or transfer agent service provider. The subsidiary investor register shall contain adequate information about investors as prescribed in Clause 1 of this Article. Any fees paid for managing the subsidiary investor register shall not be accounted for as the fund’s expenses.

3. The fund management company and transfer agent service provider must always have adequate information about the ownership of each investor, including those trading via nominee accounts. Information about assets of investors on the primary investor register, including investors conducting transactions on nominee accounts, shall be used as the proof for certifying their ownership of fund certificates. An investor's ownership shall be established from the time when the information about its/his/her ownership is updated in the primary investor register.

4. Within 10 days from the effective date of the certificate of registration of fund establishment, the fund management company or relevant service provider must carry out registration and depositing of listed fund certificates in accordance with law regulations on registration and depositing of securities. The number of ETF creation units offered/redeemed on the next trading day shall be automatically updated, registered and deposited on the system of VSDCC according to its guidelines.

5. Unless the fund management company gets opinions from investors during the offering, within 30 days from the effective date of the certificate of registration of fund establishment, the fund management company shall submit the following documents to SSC:

a) The meeting's minutes or vote counting record and the resolution of General Meeting of Investors;

b) The list and personal records of members of the fund’s representative board.

Article 16. Rights and obligations of investors

1. Investors shall have the following rights and obligations:

a) Rights and obligations in Article 101 of the Law on Securities;

b) Right to equal treatment; each fund certificate will confer upon the owner equal rights, obligations and interests;

c) Right to freely transfer fund certificates, except transfer restriction cases as prescribed by law and in the fund’s charter;

d) Right to access periodically and irregularly disclosed information about the fund’s operations;

dd) Rights and obligations to participate in meetings of General Meeting of Investors and exercise right to vote directly or through authorized representatives or by means of remote communication (by mail, fax, email, online meeting, electronic voting or another electronic voting form);

e) Obligation to fully pay for fund certificates within the time limit specified in the fund’s charter and prospectus, and assume responsibility for debts and other liabilities which are equal to the value of payments for fund certificates;

g) Other rights and obligations as prescribed in the Law on Securities and the fund’s charter.

2. Investors or groups of investors holding at least 5% of total outstanding fund certificates or a smaller ratio prescribed by the fund’s charter shall have the following rights:

a) Access and extract minutes of meetings and resolutions of the fund’s representative board, annual financial statements and reports on the fund’s operations made by the supervisory bank;

b) Request the fund management company to convene an extraordinary General Meeting of Investors in the following circumstances:

- There are grounds that the fund management company or supervisory bank infringes upon investors’ rights, fails to fulfill its obligations, or makes decisions beyond its authority prescribed in the fund’s charter or supervision contract or delegated by the General Meeting of Investors, and thus causes damage to the fund;

- The term of office of the fund’s representative board has expired for more than 06 months without holding a new election;

- Other cases prescribed in the fund's charter.

c) Request the fund management company and supervisory bank to provide explanations about issues concerning the fund’s assets, management and trading of the fund’s assets. Within 15 days from the receipt of the request, the fund management company or supervisory bank must give a response to the requesting investor;

d) Propose additional issues to the agenda of the General Meeting of Investors. The proposal shall be made in writing and sent to the fund management company at least 03 working days before the opening date, unless another period is specified in the fund’s charter;

dd) Perform other rights and obligations as prescribed in the fund's charter.

3. Investors or groups of investors holding at least 10% of total outstanding fund certificates or a smaller ratio prescribed by the fund’s charter shall have the right to nominate candidates to the fund’s representative board. Nomination procedures shall be carried out in accordance with regulations laid down in the Law on Enterprises on nomination of candidates to Boards of Directors by shareholders or groups of shareholders holding at least 10% of total ordinary shares.

4. The request of the investors or groups of investors mentioned in Clauses 2, 3 of this Article must be made in writing and include full name, contact address, number of ID card, citizen’s identity card, passport or another valid personal identification paper; name, headquarters address, nationality, number of establishment decision or enterprise registration certificate of the investor that is an organization; the number of owned fund certificates and time of ownership of each investor, total fund certificates of the group of investors and their holdings in fund; requests and recommendations; grounds and reasons thereof. If an extraordinary General Meeting of Investors is requested as prescribed in Point b Clause 2 of this Article, the request must be accompanied by documents stating the reasons for the extraordinary General Meeting of Investors; or documents and evidences about violations committed by the fund management company, supervisory bank, severity of the violation or about decisions issued beyond its authority specified in the fund’s charter or supervision contract.

Article 17. General meeting of investors

1. The General Meeting of Investors is convened by the fund management company to make decisions on:

a) Revisions to the fund’s charter;

b) Fundamental changes in the fund’s investment policies and objectives specified in the fund’s charter; changes in service fees paid to the fund management company and the supervisory bank; replacement of the fund management company or the supervisory bank;

c) Full or partial division, consolidation, merger or dissolution of the fund; change of charter capital of a closed-end fund; change of operating period of the fund;

d) Profit distribution plan;

dd) Election or dismissal the chairperson and members of the fund’s representative board; remunerations and operating cost of the fund’s representative board; selection of accredited audit organization to audit the fund’s annual financial statements, and independent valuation firm (if any); approval of annual reports on the fund’s finance, assets and operation;

e) Consideration and actions against violations committed by the fund management company, supervisory bank and the fund’s representative board if they cause damage to the fund;

g) Request for transaction documents presented by the fund management company and supervisory bank at the General Meeting of Investors;

h) Other issues within its competence as prescribed in the Law on Securities and the fund’s charter.

2. The annual General Meeting of Investors shall be convened within 04 months from the end of the fiscal year. At the request of the fund’s representative board, the time limit for convening the annual General Meeting of Investors may be extended by up to 06 months from the end of the fiscal year and such extension must be notified to SSC. If permitted in the fund’s charter, the annual General Meeting of Investors may be held by carrying out a questionnaire survey.

3. The fund management company shall convene an extraordinary General Meeting of Investors in the following circumstances:

a) The fund management company, or the supervisory bank, or the fund’s representative board deems it necessary for the fund’s interests;

b) It is convened at the request of investors or groups of investors as prescribed in Point b Clause 2 Article 16 hereof;

c) Other cases prescribed in the fund's charter.

The extraordinary General Meeting of Investors shall be convened within 30 days from the receipt of the request for extraordinary General Meeting of Investors.

4. The agenda of the General Meeting of Investors shall be prepared by the fund management company in accordance with regulations on agenda of the General Meeting of Shareholders laid down in the Law on Enterprises. At least 07 days before the General Meeting of Investors, the fund management company must provide the agenda and relevant documents for SSC, and disclose information about the General Meeting of Investors, including reasons and objectives of the meeting.

5. In case the fund management company refuses to convene the General Meeting of Investors as prescribed in Clause 3 of this Article, it shall assume legal responsibility to make compensation for any damage to the fund. If the fund management company continues refusing to convene the General Meeting of Investors as prescribed in Clause 3 of this Article, within 30 following days, the fund’s representative board or supervisory bank shall convene the General Meeting of Investors on behalf of the fund management company according to procedures laid down herein.

Article 18. Conditions and procedures for meeting and ratifying decisions of General Meeting of Investors

1. The meeting of the General Meeting of Investors shall be conducted when it is participated by a number of investors representing more than 50% of total votes. Investors may cast their votes directly or through their authorized representatives or by means of remote communication (by mail, fax, email, online meeting, electronic voting or another electronic voting form) as prescribed in the fund’s charter.

2. In case the conditions for conducting the first meeting specified in Clause 1 of this Article are not fulfilled, the second meeting will be convened within 30 days from the planned opening date of the first meeting. In this case, the General Meeting of Investors shall be conducted regardless of the number of participating investors.

3. The General Meeting of Investors shall ratify resolutions by voting or questionnaire survey.

4. Resolutions of the General Meeting of Investors on the issues in Points b, c Clause 1 Article 17 hereof shall be ratified by voting at the meeting. In this case, a decision at the meeting shall be ratified when it is voted for by a number of investors representing more than 65% of total votes of all participating investors or a higher ratio as prescribed in the fund’s charter.

5. A decision of the General Meeting of Investors shall be ratified at the meeting when it is voted for by a number of investors representing more than 50% of total votes of all participating investors or a higher ratio as prescribed in the fund’s charter, except the case in Clause 4 of this Article.

6. Rules, contents and procedures for questionnaire survey must be specified in the fund’s charter and carried out in accordance with the Law on Enterprises. In this case, the fund management company shall send questionnaires and meeting documents to investors within the same time limit as invitations to the General Meeting of Investors.

7. In case of questionnaire survey, a decision of the General Meeting of Investors shall be ratified when it is voted for by a number of investors representing more than 50% of total votes of all voting investors or a higher ratio prescribed in the fund’s charter.

8. The fund management company and the fund’s representative board shall ensure that all resolutions of the General Meeting of Investors are conformable with laws and the fund’s charter. If a decision of the General Meeting of Investors is contrary to laws and the fund’s charter, investors’ opinions about this case shall be obtained by convening the General Meeting of Investors or questionnaire survey.

9. Investors of an open-end fund that object to a decision, which has been ratified by the General Meeting of Investors, on the issue in Point b or c Clause 1 of Article 17 may request the fund management company to redeem or switch their fund certificates or to another fund of the same type managed by that fund management company. The request must be made in writing and specify the investor’s name and address, quantity of fund units, reasons for redemption or switching. The investor’s request shall be sent to the headquarters of the fund management company or the distribution agent within 15 days from the date on which the decision is ratified by the General Meeting of Investors.

10. Within 45 days from the date of announcement of meeting results by the General Meeting of Investors, the fund management company shall complete the redemption or switching of fund certificates for investors objecting to the decision of the General Meeting of Investors as prescribed in Clause 9 of this Article. In this case, the redemption price shall be determined according to the NAV per fund certificate on the latest fund certificate trading day after the fund management company receives the investor’s request, and the investor shall not pay redemption or switching fees.

Article 19. Fund’s representative board

1. The fund’s representative board represents investors and is composed of 03 - 11 members elected by the General Meeting of Investors or voted for by investors by questionnaire survey.

2. Rights and obligations of the fund’s representative board shall be specified in the fund’s charter, and inter alia, include the followings:

a) Representing the interests of investors; take actions in accordance with regulations of law to protect the interests of investors;

b) Approve the valuation manual which is used for determining the fund's NAV; list of quotation service providers and credit institutions as prescribed in Clause 3 Article 5, Clause 3 Article 20 hereof;

c) Approve the transactions in Clause 2 Article 21 hereof;

d) Decide the levels of profit distributed according to the profit distribution plan approved by the General Meeting of Investors; profit distribution time and method;

dd) Make decisions on issues which cannot be agreed upon between the fund management company and supervisory bank in accordance with regulations of law;

e) If permitted in the fund’s charter and authorized by the latest General Meeting of Investors, the fund’s representative board is entitled to make decisions on the issues specified in Points b, c, d, dd, e, g and h Clause 1 Article 17 hereof. In this case, the fund management company shall disclose information about decisions of the fund’s representative board in accordance with regulations on disclosure of information about decisions of the General Meeting of Investors;

g) Request the fund management company and supervisory bank to provide adequate and timely documents and information about fund management and supervision activities;

h) Perform other tasks as prescribed by law and in the fund’s charter.

3. Members of the fund’s representative board have the following rights and obligations:

a) Perform rights and obligations of members of the fund’s representative board according to regulations on members of Board of Directors of listed companies laid down in the Law on enterprises and the Law on securities, and the fund’s charter;

b) Perform their duties in a truthful and cautious manner for the best interests of the fund; not authorize other persons to perform their rights, obligations and responsibilities towards the fund;

c) Fully participate in meetings of the fund’s representative board and comment of the raised issues.

4. At least two thirds of members of the fund’s representative board are independent members according to the following rules:

a) They are neither related persons nor authorized representatives of the fund management company and supervisory bank;

b) They meet other requirements laid down in the fund’s charter.

5. The fund’s representative board shall have:

a) At least 01 independent member who has professional qualifications and experience in accounting and auditing;

b) At least 01 independent member who has professional qualifications and experience in securities investment analysis or asset management;

c) At least 01 member who has professional qualifications in law.

The representative bard of the real estate investment fund that is a closed-end fund must not comply with Point a of this Clause but shall have at least 01 independent member who has professional qualifications and experience in real estate business and valuation.

6. The term of office, eligibility requirements and procedures for designation, dismissal and addition of members of the fund’s representative board shall be specified in the fund's charter and comply with regulations on members of Board of Directors and Board of Directors laid down in the Law on enterprises and the Law on securities.

7. Within 10 days from the date of designation, dismissal or replacement of members of the fund’s representative board, the fund management company shall notify and provide SSC with the list of members of the fund’s representative board made according to the form in Appendix XII enclosed herewith and their personal records.

8. Within 15 days from the date on which the structure or members of the fund’s representative board no longer satisfy conditions as prescribed, the fund’s representative board shall select qualified persons to act as provisional members of the fund’s representative board. These provisional members shall perform rights and obligations of members of the fund’s representative board until the General Meeting of Investors officially appoint new members.

9. Decisions of the fund’s representative board shall be ratified by voting at the meeting, questionnaire survey or another method specified in the fund’s charter. Each member of the fund’s representative board has one vote.

10. A meeting of the fund’s representative board shall be convened when it is participated by at least two thirds of its members of which more than 50% are independent members. Members who do not directly participate in the meeting may vote by questionnaire survey or in other form as prescribed in the fund’s charter. A decision of the fund’s representative board shall be ratified when it is voted for by the majority of the members and the majority of the participating independent members.

11. The fund management company shall give personnel and technical equipment assistance and draft documents at the meetings of the fund’s representative board. The meeting of the fund’s representative board shall be held at least quarterly or at the request of the fund management company. Procedures for conducting meeting and sending documents about the meeting of the fund’s representative board shall be same as those for meeting of the Board of Directors laid down in the Law on enterprises, and specified in the fund’s charter. The meeting may be participated directly, online through audio-visual means of communications or through other methods prescribed in the fund's charter.

12. The minutes of meeting of the fund’s representative board must be made in detail and clearly. The minutes must bear the signatures of the secretary and chair of the meeting. In case the chair and the secretary of the meeting refuse to sign the minutes, they will be effective if they are signed by all of other participating members and contain adequate information as prescribed. The minutes of the meeting of the fund’s representative board must be retained by the fund management company in accordance with the Law on enterprise and the fund’s charter.

13. Unless otherwise prescribed in the fund’s charter, remuneration and other benefits of members of the fund’s representative board shall be paid as follows:

a) Members of the fund’s representative board shall receive remuneration for their performance of tasks and have the costs of food, accommodation, travel and other reasonable costs reimbursed based on total working days, the nature of work and average daily wage as prescribed in the fund’s charter and decision of the General Meeting of Investors. The fund management company shall deduct income tax of members of the fund’s representative board in accordance with regulations of relevant laws.

b) Total remuneration and costs paid to the fund’s representative board in the year shall not exceed the annual budget for the fund’s representative board approved by the General Meeting of Investors. These amounts shall be included in the fund’s administration expenses and separately recorded in the fund’s annual financial statements.

Article 20. Fund's NAV

1. The fund management company shall determine the fund’s NAV, the NAV per ETF creation unit and the NAV per fund certificate. To be specific:

a) The fund’s NAV is the total value of the fund’s assets minus the value of its liabilities. Total value of the fund’s assets is determined according to the market value or fair value of assets (if the market value is not available). Total liabilities of the fund are debts or payment obligations incurred by the fund by the date before the valuation date. The NAV shall be rounded up in accordance with law regulations on accounting and auditing. Any balance arising from the rounding up of the fund’s NAV shall be accounted for as the fund’s assets. The market value and fair value of assets, and the value of debts and payment obligations shall be determined according to the rules laid down in Appendix XIV enclosed herewith and internally adopted in the valuation manual or approved in writing by the fund’s representative board. The real estate valuation must be carried out every year;

b) The NAV per fund certificate is the fund’s NAV divided by the number of outstanding fund certificates;

c) The NAV per ETF creation unit is the fund’s NAV divided by the number of ETF creation units.

2. The fund management company must formulate the valuation manual which shall, inter alia, include the following contents:

a) Rules and criteria for selection and replacement of a quotation service provider. Quotation service providers must not be related persons of the fund management company and supervisory bank;

b) Rules, procedures and methods for valuation of the fund’s assets. These rules, procedures and methods for valuation must be clear, reasonable and conformable with regulations of law and the fund’s charter.

3. The valuation manual and the list of at least 03 quotation service providers that are not related persons of the fund management company and supervisory bank must be approved by the fund's representative board and provided for the supervisory bank for supervising the determination of NAVs.

4. The fund management company shall:

a) Determine the NAV and the NAV per fund certificate of a closed-end fund every week;

b) Determine the NAV and the NAV per fund certificate of a open-end fund on each trading day but at least once per week;

c) Determine the NAV of an ETF, the NAV per ETF creation unit and the NAV per ETF certificate on daily basis.

5. The fund’s NAV, the NAV per creation unit and the NAV per fund certificate must be confirmed by the supervisory bank. The confirmation may be made in writing or through the electronic information system of the supervisory bank with the approval of the fund management company.

6. NAVs in Clauses 4, 5 of this Article must be published on the websites of the fund management company and SE. NAVs will be provided for investors on the working day following the valuation date. Information about NAVs to be disclosed shall comply with the form in Appendix XXIV enclosed herewith.

7. The fund management company or the iNAV calculation service provider that is authorized by the fund management company shall calculate iNAV based on the market values of recently traded component securities. iNAV is only the reference price and is not used for determining the trading price. iNAV is updated every 15 seconds and published on the website of the fund management company or the SE's system.

8. The fund management company may authorize the supervisory bank to calculate the fund’s NAV, the NAV per creation unit and the NAV per fund certificate. In this case, the fund management company and the supervisory bank must adopt appropriate mechanism and procedures for comparing, reviewing and inspecting to ensure that the NAVs are accurately calculated according to the fund’s charter, valuation manual and relevant laws.

9. Within 24 hours from the detection of miscalculation of NAV, the supervisory bank must notify and request the fund management company to promptly correct the NAV or vice versa in case the NAV is calculated by the supervisory bank.

10. Within 05 working days from the detection of miscalculation of NAV, the fund management company or supervisory bank (if the NAV is calculated by the supervisory bank) shall correct the NAV and disclose information as prescribed, and notify SSC of such miscalculation, including the causes and time of miscalculation and taken remedial actions. This notification must bear certifications of both the fund management company and supervisory bank.

11. Within 03 working days from the date on which the fund’s NAV decreases to less than VND 30 billion, the fund management company must notify it to SSC and propose remedial actions.

Article 21. Fund's asset transactions

1. The fund’s securities which are listed or registered for trading on SE shall be sold and purchased via the SE’s trading system.

2. With regard to transactions in assets which may be traded by put-through method (except transactions conducted on the SE’s trading system), the fund management company shall ensure that:

a) The estimated price range, trading time, transaction partners or criteria for determining transaction partners, and type of traded assets must be approved in writing by the fund’s representative board before the transaction is conducted;

b) If the actual buy price or sell price is respectively higher or lower than the reference price of the quotation service provider, or beyond the approved price range prescribed in Point a of this Clause, the fund management company shall provide explanations for the fund’s representative board.

3. Real estate transactions shall be conducted according to Article 53 hereof.

Article 22. Information provision, advertising and introduction of the fund

1. The fund management company may advertise, provide information and introduce the fund on the mass media, means of communication and other advertising means.

2. The fund management company and relevant entities are not allowed to advertise, provide information or introduce the fund that is not issued with the certificate of registration of public offering of fund certificates or has been shut down, except seminars organized to introduce the fund to officials of competent authorities.

3. Information, advertisement or introduction about the fund must be truthful, objective, accurate and unequivocal to avoid misunderstanding between fund certificates and other financial instruments. Provided information must be up-to-date. The fund management company and relevant entities shall assume responsibility for the contents and legitimacy of the information provided when advertising or introducing its fund certificates.

4. Advertising materials and documents introducing the fund shall not contain any statements which mislead investors about the increasing value of investments, or guarantees or forecasts about investment returns in the future. These provisions shall not apply to open-end funds that invest entirely in bonds or fixed-income securities, and capital preservation funds.

5. The fund management company and relevant entities shall not give any firm guarantee that the fund's investment results will be better than those of other funds, reference portfolio provided in the prospectus or any other economic indicators.

6. If any information, advertising materials or introduction about the fund refers to regulatory authorities, they must clearly specify that such authorities only certify the legitimacy during the establishment and operation of the fund, and not guarantee such provided information, advertising materials, the fund’s investment objectives and strategies, the fund’s assets, the value of fund units, profitability and risk levels. The fund’s advertising or introduction documents shall not use the name, logo, image, position, reputation or mails of regulatory authorities or their officials, or thank-you letters of investors to advertise or introduce the fund or offer fund certificates.

Article 23. Recommendations

1. The information, advertising and introduction documents about the fund must contain the following recommendations:

a) Investors should carefully read the prospectus before buying fund certificates and pay attention to service fees when conducting fund certificate transactions;

b) Trading prices of fund certificates may vary depending on market developments, and investors may suffer losses on their capital invested in the fund;

c) Any previously disclosed information about the fund’s business performance is for reference only and does not mean that the investment will be profitable.

2. Information, advertising and introduction documents must indicate potential risks investors may incur when investing in the fund.

Section 2. CLOSED-END FUNDS

Article 24. Investment portfolio and limits

1. The investment portfolio of a closed-end fund 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) Eligible real estate as prescribed in the Law on real estate business.

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. The structure of the fund’s investment portfolio must be conformable with the fund’s charter and the following provisions:

a) The fund shall not invest in more than 10% of total value of outstanding securities of an issuer, except Government’s debt instruments;

b) The fund shall not invest more than 20% of total value of its assets in outstanding securities and other assets (if any) specified in Points a, b Clause 2 of this Article of an issuer, except Government’s debt instruments;

c) The fund shall not invest more than 10% of total value of its assets in the assets specified in Points dd, g Clause 2 of this Article;

d) The fund shall not invest more than 30% of total value of its assets in the assets specified in Points a, b, d, dd Clause 2 of this Article of companies in the same group of: parent company-subsidiaries; companies holding more than 35% of each other’s shares/stakes; subsidiaries of the same parent company;

dd) The fund shall not invest in its fund certificates;

e) The fund may invest in other public fund certificates and public securities investment companies managed by other fund management companies, but shall not:

- Invest in more than 10% of total outstanding fund certificates of a public fund or total outstanding securities of a public securities investment company;

- Invest more than 20% of total value of its assets in fund certificates of a public fund or outstanding shares of a public securities investment company;

- Invest more than 30% of total value of its assets in public fund certificates or shares of public securities investment companies.

5. A closed-end fund’s investments may only exceed the limits specified in Points a, b, c, d and e Clause 4 of this Article for the following reasons:

a) Price fluctuation of the assets in the fund’s investment portfolio;

b) Making payments of the fund as prescribed by law;

c) Full or partial division, consolidation or merger of the issuers;

d) The fund is newly established, increases its capital, or is established from consolidation or merger of funds within the last 06 months from the issue date of the certificate of registration of fund establishment or the modified certificate of registration of fund establishment;

dd) The fund is undergoing dissolution.

6. Within 03 months from the day on which the investment limits are exceeded due to the reasons in Points a, b, c and d Clause 5 of this Article, the fund management company shall notify it to SSC and adjust the investment portfolio in conformity with Clause 4 of this Article.

7. If the excess investments are caused by the fund management company’s failure to comply with the investment limits prescribed by law or the fund’s charter, the fund management company shall adjust the investment portfolio within 15 days from the occurrence of such excess. The fund management company shall pay compensation for any damage incurred by the fund and incur all costs arising from the adjustment of the investment portfolio. Any profits earned will be accounted for as the fund’s profits.

8. Within 05 working days from the completion of the adjustment of the investment portfolio, the fund management company shall disclose information as prescribed and notify SSC of the investments exceeding the limits, causes, time of occurrence or detection of the excess investment, damage and compensation to the fund (if any) or profits earned by the fund (if any), remedial measures, implementation period and results.

9. The fund shall make indirect outward investments in accordance with regulations of the Law on investment after obtaining SSC’s approval, and must comply with the following rules:

a) The fund has obtained the indirect outward investment limits set by SBV;

b) The fund shall only make indirect outward investment in the assets specified in the fund’s charter and in conformity with SBV’s regulations;

c) The fund’s outward investment shall not exceed 20% of its NAV and its registered investment limit certified by SBV.

d) The fund’s indirect outward investments, indirect outward investment limits and adjustment thereof shall comply with regulations on investments, investment limits and adjustment thereof laid down in this Article.

Article 25. Borrowing, lending, repo transactions and margin trading

1. The fund management company is not allowed to use the fund’s capital and assets to provide loans or loan guarantees.

2. The fund management company must not get loans to make investments, except short-term loans prescribed by the banking law for covering necessary costs of the fund or paying for fund certificate transactions with investors. Total value of short-term loans of the fund shall not exceed 5% of its NAV at any time and the loan term shall not exceed 30 days.

3. The fund management company is not allowed to use the fund’s assets to conduct margin trading (borrow money to purchase securities) for the fund or any entity, or to conduct short sale or lend securities.

4. If permitted by the fund’s charter, the fund may conduct repo transactions in the Government’s debts in accordance with the Ministry of Finance’s regulations on management of transactions in Government’s debts.

Article 26. Distribution of fund’s profits and expenses

1. The fund shall distribute profits to investors according to Article 7 hereof.

2. The fund's expenses shall comply with Article 8 hereof.

Article 27. Consolidation and merger of funds

The consolidation and merger of funds shall comply with Article 11 hereof.

Article 28. Dissolution of funds

1. The dissolution of funds shall comply with Article 12 hereof.

2. Within 05 working days after obtaining the written approval for dissolution from SSC, the fund management company shall follow procedures for delisting and deregistration of fund certificates.

Section 3. OPEN-END FUNDS

Article 29. Trading accounts and sub-accounts of investors

1. Investors shall open fund certificate trading accounts at distribution agents. Investors are entitled to open one of two following trading accounts:

a) Investor’s account (in the name of the investor);

b) Trading sub-account on the nominee account opened in the name of the nominee (hereinafter referred to as “investor’s sub-account”).

2. Before opening accounts for investors, including investor’s sub-accounts, distribution agents shall consolidate and verify identification information about investors, beneficiaries (if any) and anti-money laundering information according to the form in Appendix XV enclosed herewith. The fund management company, distribution agents and relevant service providers shall establish their own systems for managing and storing adequate information and data about investors in accordance with regulations of the Law on anti-money laundering and relevant laws.

3. When requesting investors to provide information as prescribed in Clause 2 of this Article, distribution agents may decide whether to meet investors in person or not. If the fund management company and its distribution agent decide not to meet investors in person, they must adopt measures, methods and technologies for identifying, adequately collecting and verifying information about investors in accordance with regulations of the Law on securities, the Law on anti-money laundering, the Law on electronic transactions and relevant laws on security and confidentiality of investors’ information. If information about investors is not satisfied, distribution agents are entitled to refuse to open accounts or sub-accounts for such investors.

4. An investor’s account or sub-account shall, inter alia, have the following contents:

a) Trading account/sub-account number;

b) The number of fund units;

c) Increase or decrease in fund units and reasons thereof;

d) Other personal information of the investor, including:

- If the investor is an individual: Full name, number of ID card, citizen’s identity card, passport or another valid personal identification paper, contact address, telephone number and email address (if available);

- If the investor is an organization: Name, headquarters address, number of license for establishment and operation, number of enterprise registration certificate of the organization; full name, number of ID card, citizen’s identity card, passport or another valid personal identification paper, contact address, telephone number and email address (if available) of the organization’s authorized representative.

5. Accounts and sub-accounts of investors must be managed according to the following rules:

a) The fund management company, distribution agents and relevant service providers shall separately and independently open and manage accounts for each nominee and each investor. Distribution agents shall provide information about opening and closing accounts of investors for the fund management company and relevant service providers;

b) Nominees shall independently and separately open and manage sub-accounts for each investor. The sum of balances on sub-accounts of investors must match the balance on the nominee account; the balance on each sub-account must match the data about the investor's ownership of fund certificates in the primary investor register;

c) The nominee shall provide information about each investor’s sub-account for the fund management company and/or relevant service provider; and regularly check to ensure that the balance on each investor’s sub-account corresponds to data about that investor’s ownership of fund certificates in the primary investor register.

6. Before opening trading accounts, foreign investors shall carry out procedures for registration of securities trading codes as prescribed.

7. Distribution agents, fund management company and relevant service providers shall promptly, adequately and accurately update securities trading codes of foreign investors and their ownership status, and provide them for competent authorities as requested.

Article 30. General provisions on fund certificate trading

1. Within 30 days from the effective date of the Certificate of registration of the fund establishment, the fund management company shall arrange the trading of the fund certificates for investors. Trading of fund certificates shall be arranged on a periodical basis as prescribed in the fund’s charter and the prospectus or summary prospectus. The trading frequency is at least twice a month.

2. Investors shall conduct fund certificate transactions at distribution agents mentioned in the prospectus or summary prospectus or on the website of the fund management company. The fund management company, distribution agents and relevant service providers must establish a system for receiving trading orders to ensure that investors can place trading orders at distribution agents.

3. Distribution agents shall only receive trading orders from investors when order forms are filled with complete and accurate information according to the form in Appendix XVI enclosed herewith. Order forms shall be kept by distribution agents in accordance with regulations of the Law on Securities. The time of receiving orders and information about receivers must be also recorded in an adequate, accurate, timely and explicit manner. Receipt of investor’s trading orders via telephone, fax, electronically or by other electronic devices and transmission lines must comply with regulations on electronic transactions, and order forms shall be stored in the form of data files.

4. The fund management company and relevant service providers shall only implement orders received prior to the closing time of the order book. Orders received after the closing time of the order book shall be either cancelled or executed on the following fund certificate trading day as prescribed in the fund’s charter and prospectus.

5. Within 03 working days from the fund certificate trading day and before the next fund certificate trading day, the fund management company, distribution agents and relevant service providers shall adequately update information about investors’ ownership of fund certificates on the primary investor register, and provide investors with transaction confirmations made according to the form in Appendix XVII enclosed herewith.

6. Within 02 working days from the fund certificate trading day (but before distribution of fund certificates), if a transaction error which is caused by mistakes in consolidating information, receiving, transferring or inputting trading orders into the system is detected, the distribution agent shall notify it to the fund management company or relevant service provider and request for error correction. After the abovementioned time limit, the distribution agent shall assume responsibility before the investor for the transaction error.

7. The fund management company, distribution agents and relevant service provider shall prepare and keep order books recording adequate information about fund certificate trading orders of investors according to the form in Appendix XVIII enclosed herewith. Distribution agents shall provide statements of trading accounts or sub-accounts at the request of investors.

8. In case the fund management company manages two or more open-end funds, investors may switch between such funds if permitted in charters of such funds and prospectuses. The switching order shall be implemented as follows:

a) Redemption orders shall be implemented first, and then orders for subscription of target fund certificates will be implemented;

b) Orders shall be implemented on fund certificate trading days of corresponding funds;

c) Investors shall only pay switching fees (if any) as prescribed in the fund's charter, and shall not pay redemption or issuance fees for implementing orders as prescribed in Points a, b of this Clause.

Article 31. Fund certificate subscription orders

1. Subscription orders shall be implemented according to the following rules:

a) An investor’s subscription order must be accompanied by valid documents certifying the investor's payment made to the fund’s account or shall be accepted after the supervisory bank has given a confirmation to the fund management company, distribution agent or relevant service provider that it has received the full payment for fund certificates from the investor or nominee. The payment confirmation may be made in writing, by email, or through the electronic information system of the supervisory bank with the approval of the fund management company;

b) A nominee is allowed to make payment according to the difference between subscription orders and redemption orders;

c) Investors may pay for fund certificates by bank transfer or other methods as prescribed in the fund’s charter and the prospectus. Payments for fund certificates shall be transferred directly to the fund’s account opened at the supervisory bank as prescribed in Clause 2 of this Article and shall not transferred to other accounts of distribution agents;

d) The value of a subscription order shall not be smaller than the minimum buying value (if any) prescribed in the fund's charter and the prospectus;

dd) The number of fund units sold to an investor or nominee may be an odd number in decimal format, and up to the second decimal place.

2. The fund management company shall open an account at the supervisory bank to receive payments for fund certificates from investors and nominees. Nominees shall open deposit accounts at the supervisory bank as prescribed in Point d Clause 3 Article 77 hereof for receiving payments from investors for their transactions conducted via nominee accounts.

3. Payments for fund certificates shall be transferred to the fund's account opened at the supervisory bank and used for making investments immediately on the fund certificate trading day. The supervisory bank shall pay interests to the fund according to the applicable interest rate on demand deposits after the fund receives payments for fund certificates from investors.

4. If the subscription order and payment for fund certificates are made by an entity other than the investor, the order form and documents certifying the payment must include name, number of trading account or sub-account or number of ID card, citizen's identity card, passport or another valid personal identification paper, or number of enterprise registration certificate and payment value.

Article 32. Fund certificate redemption orders

1. Redemption orders shall be implemented according to the following rules:

a) A redemption order shall be implemented only when the investor or nominee has enough fund certificates for redemption and the remaining number of fund certificates of the investor after redemption transaction shall not be lower than the prescribed minimum number of fund certificates (if any) for maintaining the investor’s account or sub-account prescribed in the fund’s charter and prospectus;

b) A redemption order may not be implemented or may be implemented partially as prescribed in Clause 1 Article 33 hereof;

c) The payment shall be made by the deadline prescribed in the fund’s charter and prospectus and within 05 working days from the fund certificate trading day except the case in Clause 3 Article 33 hereof;

d) Payment for the sold fund certificates shall be transferred to the investor’s or nominee’s bank account or another account designated by the investor.

2. Within 03 working days from the receipt of payment as prescribed in Point c Clause 1 of this Article, the nominee shall make payment to the investor.

3. If permitted by the fund’s charter and prospectus, the fund management company may partially transfer the portfolio instead of cash payment to the investor. The transfer of portfolio must comply with the following provisions:

a) The fund management company deems it necessary to avoid negative impacts on the fund’s NAV. The portfolio transfer must be approved in writing by the fund's representative board and reported in the next General Meeting of Investors;

b) The investor (the transferee) approves the transfer in writing;

c) The value of the redemption order is more than VND 50 billion or a higher value as prescribed in the fund’s charter and prospectus;

d) The structure of the portfolio transferred to the investor must be same as that of the fund’s portfolio.

4. The supervisory bank shall check and guarantee that the portfolio transfer is conformable with Clause 3 of this Article.

Article 33. Partial redemption and suspension of open-ended fund certificate trading

1. The fund management company is entitled to partially satisfy an investor’s subscription, redemption or switching order in one of the following cases:

a) Total value of redemption orders (including those in switching activities) minus total value of subscription orders (including those in switching activities) on a fund certificate trading day is higher than 10% of the fund’s NAV;

b) The implementation of all of trading orders of investors will lead to one of the following facts:

- The fund’s NAV falls below VND 50 billion; or

- The value of remaining fund units or total number of remaining fund units on the investor’s account is lower than the minimum value or number of fund units required to maintain the investor’s account as prescribed in the fund's charter and prospectus (if any); or

- The remaining NAV or the remaining number of fund units is lower than the minimum NAV or the minimum number of outstanding fund units prescribed in the fund's charter and prospectus (if any); or

- The number of outstanding fund units exceeds the maximum quantity (if any) prescribed in the fund's charter and prospectus.

c) Other cases prescribed in the fund's charter and prospectus.

2. In case of partial implementation of subscription, redemption or switching orders as prescribed in Clause 1 of this Article, the fund's charter and prospectus, the fund management company is allowed to apply one of the following principles:

a) Temporal priority principle: trading orders will be implemented on a first-come, first-served basis;

b) “same ratio” principle: the processed value shall be distributed to all investors at the same ratio between the processed value and the registered value.

3. In the case prescribed in Point a Clause 1 of this Article, if permitted in the fund’s charter and prospectus, the fund management company may extend the payment time limit up to 30 days from the fund certificate trading day with the approval of the fund's representative board.

4. The fund management company may suspend a fund certificate transaction in any of the following events:

a) The fund management company is unable to redeem fund certificates as requested due to force majeure events;

b) The fund management company is unable to determine the fund’s NAV on the date of determination of redemption price due to suspension of trading of securities on the fund's portfolio under the SE's decision;

c) Other events specified in the fund’s charter or considered necessary by SSC.

5. The fund management company shall submit a report to the fund’s representative board and SSC within 24 hours from the occurrence of any of the events mentioned in Clause 4 of this Article, unless otherwise requested by SSC, and shall redeem open-ended fund certificates after the end of the event.

6. The period of suspension of fund certificate trading shall comply with the fund’s charter but not exceed 90 days from the suspension date.

7. Within 30 days from the end of the suspension period of fund certificate trading prescribed in Clause 6 of this Article, the fund management company shall hold a meeting to get opinions of the General Meeting of Investors about the dissolution or partial division of the fund or extension of the suspension period.

8. Within the time limit for convening the General Meeting of Investors, if the event causing the suspension of fund certificate trading has ended, the fund management company may cancel the meeting of the General Meeting of Investors.

Article 34. Prices of initial offering, selling and redemption of open-end fund certificates

1. Initial offering price of a fund unit shall be prescribed by the fund management company in the fund’s charter and prospectus.

2. The selling price of a fund unit is the price that investors must pay to the fund management company and is equal to the NAV per fund unit calculated at the fund certificate trading day plus the issuance fee (if any).

3. The redemption price of a fund unit is the price which the fund management company must pay to investors and is equal to the NAV per fund unit calculated at the fund certificate trading day minus the redemption fee (if any).

4. Redemption, issuance and switching fees may vary depending on the fund certificate holding period, investment or investment value. Maximum service fees must be specified in the fund’s charter and prospectus. Specific service fees are specified in the prospectus or summary prospectus or on the website of the fund management company or distribution agent. The maximum issuance fee is 5% of the trading value. The maximum redemption or switching fee is 3% of the trading value.

5. Service fees may be increased, provided that a new service fee shall not exceed the limit specified in Clause 4 of this Article. This new service fee shall be applied 60 days after it is published by the fund management company on its website.

Article 35. Investment portfolio and limits of open-end funds and index funds

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) Shares initially offered to the public, bonds offered to the public; corporate bonds privately placed by listed organizations with payment guarantee by credit institutions or with the issuer's commitment to repurchase at least 30% of the value of the bond offering at least once every 12 months;

e) Derivatives listed on SE and used for prevention of risks to underlying securities held by the fund;

g) Rights arising in connection with securities held by the fund.

3. The investment in the assets specified in Point dd Clause 2 of this Article must satisfy the following conditions:

a) The investment is prescribed in the fund’s charter and prospectus;

b) The fund’s representative board approves securities types, code, quantity, trading value and time in writing;

c) There are documents proving payment guarantee or the issuer’s repurchase commitment.

4. The structure of the investment portfolio of an open-ended fund must ensure the following investment limits:

a) Except deposits on the fund’s checking account opened at the supervisory bank, the open-end fund shall not use more than 49% of total value of the fund’s assets to invest in the assets specified in Points a, b of this Article. This regulation does not apply to bond funds;

b) The fund shall not invest in more than 10% of total value of outstanding securities of an issuer, except Government’s debt instruments;

c) The fund shall not invest more than 20% of total value of its assets in outstanding securities and other assets (if any) specified in Points a, b Clause 2 of this Article of an issuer, except Government’s debt instruments;

d) The fund shall not invest more than 30% of total value of its assets in the assets specified in Points a, b, d, dd and e Clause 2 of this Article of companies in the same group of: parent company-subsidiaries; companies holding more than 35% of each other’s shares/stakes; subsidiaries of the same parent company. In which, the investment in derivatives shall be the value agreed upon in the contract determined according to Appendix XIV enclosed herewith;

dd) The fund shall not invest more than 10% of total value of its assets in the assets specified in Point dd Clause 2 of this Article;

e) Total value of major investments in the fund’s investment portfolio shall not exceed 40% of total value of its assets, except bond funds. A major investment is an investment in the assets specified in Points b, d, dd and g Clause 2 of this Article (except deposit certificates) of an issuer, which is worth at least 5% of total value of the fund’s assets;

g) Total value of derivative transactions, outstanding debts and amounts payable of the fund shall not exceed the fund’s NAV at any time;

h) The fund shall not invest in its fund certificates;

i) The fund may invest in other public fund certificates and public securities investment companies managed by other fund management companies, but shall 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;

- 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;

- Invest more than 30% of total value of its assets in public fund certificates or shares of public securities investment companies;

k) The fund shall not directly invest in real estate, precious stones and precious metals;

l) It must hold securities of at least 06 issuers, except bond funds.

5. An open-end fund’s investments may only exceed the limits specified in Points a, b, c, d, dd, e and i Clause 4 of this Article for the following reasons:

a) Price fluctuation of the assets in the fund’s investment portfolio;

b) Making payments of the fund as prescribed by law, including implementation of trading orders of investors;

c) Full or partial division, consolidation or merger of the issuers;

d) The fund is newly established or established from a partial division, consolidation or merger of funds within the last 06 months from the issue date of the certificate of registration of fund establishment or the modified certificate of registration of fund establishment;

dd) The fund is undergoing dissolution.

6. The fund management company shall submit reports, disclose information and adjust the fund’s investments as prescribed in Clauses 6, 7, 8 Article 24 hereof.

7. 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 on the list approved by the fund’s representative board.

8. Open-end funds may make indirect outward investments according to Clause 9 Article 24 hereof.

9. The fund’s borrowing, lending, repo transactions, margin trading and short sale shall be carried out in accordance with Article 25 hereof.

10. Index funds shall disclose information according to Clause 2 Article 49 hereof. The tracking error will be determined according to Appendix XIX enclosed herewith. Where this tracking error exceeds the maximum one prescribed in the fund’s charter, the fund management company shall disclose reasons thereof and suspend fund certificate trading or adjust the fund’s investment portfolio for rectification as prescribed in the fund’s charter.

Article 36. Compensation to funds and investors

1. The fund management company shall pay compensation to the fund and investors when the fund’s NAV is miscalculated as follows:

a) The error is at least 0,75% of the NAV of the bond fund;

b) The error is at least 1% of the NAV of another fund.

2. The fund management company shall formulate the plan for rectification and compensation to the fund and investors according to the following order:

a) Re-calculate the NAVs which have been miscalculated;

b) Determine compensation to the fund and investors due to miscalculation. The fund management company must not pay compensation to investors that incur damage assessed at less than VND 100.000 (or a smaller value prescribed in the fund's charter) but its total payment must be made to the fund, unless otherwise decided by the General Meeting of Investors;

c) Within 15 days from the date of revaluation of the NAV, the fund management company shall submit a report to SSC on the plan for compensation to the fund and investors. The compensation plan must indicate the reasons, miscalculation period, and damage incurred by the fund/investors, enclosed with the list of investors, and compensation paid to each investor;

d) Within 07 working days from the reporting date, the fund management company shall carry out procedures for paying compensation to the fund and investors.

3. If the fund has been undervalued, the compensation paid to the fund and investors shall be determined as follows:

a) If an investor has bought fund certificates before the miscalculation of the fund’s NAV and sold such fund certificates within the miscalculation period, the compensation shall be determined according to the error margin and the number of fund certificates sold;

b) The compensation paid to the fund shall be determined according to the error margin and the number of fund units which have been offered during the miscalculation period and are still outstanding.

4. If the fund has been overvalued, the compensation paid to the fund and investors shall be determined as follows:

a) If an investor has bought fund certificates within the miscalculation period and still holds such fund certificates after this period, the compensation shall be determined according to error margin and the number of fund units bought and held by that investor;

b) The compensation paid to the fund shall be determined according to the error margin and the number of fund units which have been offered before the miscalculation period and redeemed within such period by the fund.

5. The fund management company shall incur all costs of compensation to the fund and investors. If permitted in the fund’s charter and approved by the General Meeting of Investors, the costs of compensation to investors as prescribed in Point a Clause 3 and Point a Clause 4 of this Article may be accounted for as the fund’s expenses.

6. The fund management company is liable to pay compensation to the fund in the following cases:

a) Fail to comply with investment policies or invests in restricted assets as prescribed by law and the fund’s charter;

b) Use the borrowed capital improperly or inconsistently with regulations of law; or take loans in excess of the limits specified in the fund's charter and regulations of law;

c) Make investments in excess of the investment limits, except the cases in Clause 5 Article 35 hereof.

7. The compensation paid to the fund in any of the cases in Clause 6 of this Article shall be determined according to the damage incurred from the investment made inconsistently with law or beyond the prescribed limit or the loan amount. Any profits earned from the abovementioned investments or business operations shall be accounted for as the fund’s profits.

8. The compensation shall be paid to the fund and investors as prescribed in Clause 1 and Clause 6 of this Article through the supervisory bank. The fund management company shall establish a mechanism for cooperation in payment with the supervisory bank so as to punctually give orders to make payments to the fund and investors.

9. The fund management company shall include the compensation to the fund and investors in its annual operational report as prescribed in Clause 2 Article 79 hereof, including the reasons, damage, the number of investors receiving compensation, compensation amount paid to each investor, compensation paid to the fund, compensation form, payment method and other remedial actions (if any).

Article 37. Distribution of fund’s profits and expenses

1. The fund shall distribute profits to investors according to Article 7 hereof.

2. If prescribed in the fund’s charter and prospectus, the fund management company may distribute the fund’s assets to investors more than the realized profits, provided that, after such distribution, the fund’s NAV shall not be lower than VND 50 billion. The distribution plan or roadmap, assets to be distributed, or funding sources must be approved by the General Meeting of Investors.

3. The fund’s expenses:

a) Expenses prescribed in Article 8 hereof; costs of provision of transaction confirmations, account statements and other documents to investors;

b) Costs of fund management services, transfer agent services and other payments made by the fund management company to relevant service providers;

4. Brokerage and transfer service fees on the fund’s asset transactions shall be paid to securities companies, and exclude any other fees, including other service fees or fees paid to a third party (soft commission).

5. The fund management company and distribution agents shall pay costs of printing and release of advertising materials and documents on the fund’s products.

Article 38. Full and partial division of an open-end fund

1. At least 30 days before the General Meeting of Investors, the fund management company shall provide investors with documents about the full or partial division of the fund, including:

a) The plan for full or partial division of the fund;

b) The draft charters of new funds.

2. The fund management company shall act on behalf of the fund to pay all debts and fulfill all financial obligations of the fund before its full or partial division.

3. The date of full or partial division of the fund is the date on which the decision on full or partial division of the fund is approved by the General Meeting of Investors. Within 15 days from the date on which SSC issues a decision to approve the full or partial division of the fund, the supervisory bank and relevant service providers shall fully or partially divide the fund’s investment portfolio and carry out procedures for registration of asset ownership for new as prescribed by law.

4. Within 07 working days from the effective date of the certificate of registration of fund establishment of a new fund, the fund management company, relevant service providers and nominees shall:

a) Complete the preparation of the primary/subsidiary investor registers of the new fund;

b) Determine the fund’s NAV and the NAV per fund certificate of the new fund;

c) Certify the ownership of fund certificates for each investor after the full or partial division;

d) Disclose information about the full or partial division of the fund as prescribed by law.

Article 39. Consolidation and merger of funds

1. The consolidation and merger of funds shall comply with Article 11 hereof.

2. The fund management company may suspend fund certificate trading within 30 days in order to complete the consolidation or merger, except the redemption or switching of fund certificates for investors that object to the consolidation or merger.

3. Within 15 days from the effective date of the certificate of registration of fund establishment of the fund established after the consolidation or merger, the fund management company shall receive and implement redemption, subscription and switching orders of the consolidated fund or the acquiring fund.

Article 40. Dissolution of funds

1. The dissolution of funds shall comply with Article 12 hereof.

2. The fund management company and relevant service providers shall not organize programs for advertising or introduction of the fund in order to receive and implement fund certificate subscription, redemption and switching orders from the date of the compulsory dissolution of the fund.

Section 4. ETFs

Article 41. Tracking error

1. The fund management company shall ensure that the difference between the NAV per creation unit and benchmark index of the ETF shall not exceed the maximum tracking error prescribed by SE. The tracking error will be determined according to Appendix XIX enclosed herewith.

2. Where this tracking error exceeds 80% of the maximum one prescribed by SE, the fund management company shall report this event to SSC and SE, and disclose information as prescribed within 24 hours from the occurrence of the event. Within 03 months from the occurrence of the event, the fund management company shall adjust the fund’s investment portfolio to ensure that the tracking error will not exceed 80% of the prescribed maximum one.

Article 42. Authorized participants, distribution agents and market makers

1. Rights of an authorized participant:

a) Provide brokerage services for investors conducting exchange transactions as prescribed in Article 43 hereof.

b) Conduct proprietary transactions by exchanging its basket of component securities for ETF creation units of the ETF and vice versa;

c) Borrow component securities for exchanging for ETF creation units; or borrow ETF creation units for exchanging for baskets of component securities. Borrowing of securities or ETF creation units must be conducted through the securities borrowing and lending system and according to VSDCC’s guidelines.

d) Conduct transactions in ETF certificates and component securities when corresponding orders are matched and assets are sufficient for making payment as prescribed in Clause 2 Article 44 hereof.

2. Responsibilities of an authorized participant:

a) Receive trading orders from each investor (whether directly or through distribution agents) and transfer them to the fund management company, VSDCC and/or relevant service providers in an adequate, timely and accurate manner. This regulation only applies to authorized participants that are securities companies;

b) The authorized participant shall not consolidate and offset trading orders of investors. Trading orders of investors must be processed independently and separately from those of the authorized participant. In exchange transactions, the authorized participant shall only use assets on its proprietary trading account or its assets to exchange for ETF creation units, and is not allowed to use assets of investors;

c) Ensure that investors have sufficient money and securities for conducting transactions as prescribed by law;

d) Separately manage assets on each investor’s account, which must be independent from its assets. The authorized participant is not allowed to use assets of investors in any form; deposit, withdraw, transfer, or conduct transactions relating to assets of investors; or receive authorization from investors to transfer money or assets between their accounts. Investors’ asset transactions shall only be conducted if they are conformable with regulations of law and follow lawful orders or directions or written requests of investors;

dd) Maintain uninterrupted and direct communication with investors to accurately, adequately and promptly provide information to investors and respond to their queries about products offered by the fund; consolidate and provide account statements and transaction confirmations at the request of investors; provide investors with the prospectus, summary prospectus, financial statements of the fund, documents about meetings of the General Meeting of Investors, and other information; submit reports and disclose information with authorization of the fund management company;

e) Consolidate and keep detailed information about investors and their transactions. This information will be provided to the fund management company, SE, VSDCC, relevant service providers and SSC at their requests;

g) Comply with rules for operations of distribution agents.

3. Within 05 working days from the date of change of authorized participants, the fund management company shall provide SSC with a notification and the following documents:

a) Lists of authorized participants before and after change;

b) Record of liquidation of the authorized participant agreement (if it is terminated);

c) The new authorized participant agreement, enclosed with documents proving that the new authorized participant meets eligibility requirements (if new authorized participant is accepted).

4. The fund management company may designate one or some authorized participants to act as ETF market makers. ETF market making shall comply with regulations on market making formulated and promulgated by SE. Within 05 working days from the date of signing of the market maker agreement, the fund management company shall send the copy of the signed market maker agreement to SSC.

Article 43. ETF exchange transactions (primary transactions)

1. Within 30 days from the date on which the fund is listed, the fund management company shall conduct ETF exchange transactions of investors. Exchange transactions must be conducted on a periodical basis prescribed in the fund’s charter and announced in the prospectus or summary prospectus. The exchange trading frequency is at least twice a month.

2. Exchange transactions shall be conducted according to the following rules:

a) Only authorized participants are allowed to conducted exchange transactions directly with the fund management company;

b) Investors may only conduct exchange transactions at authorized participants where their securities trading accounts are opened and after they have entered into service contracts for conducting exchange transactions;

c) Exchange trading unit is an ETF creation unit. The minimum number of ETF certificates of an ETF creation unit prescribed in the fund’s charter is 100.000 ETF certificates. If permitted in the fund’s charter, the fund management company may adjust the number of ETF certificates in an ETF creation unit. New creation units shall be applied at least 15 days after information about the scale of a new creation unit is published on the websites of SE, VSDCC, fund management company, authorized participants and distribution agents;

d) Authorized participants shall only receive trading orders from investors when order forms are filled with complete and accurate information according to the form in Appendix XVI enclosed herewith. Order forms shall be kept by authorized participants in accordance with regulations of the Law on Securities. The time of receiving orders and information about receivers must be also recorded in an adequate, accurate, timely and explicit manner. Receipt of investor’s trading orders via telephone, fax, electronically or by other electronic devices and transmission lines must comply with regulations on electronic transactions, and order forms shall be stored in the form of data files.

dd) An exchange trading order shall be executed when the following conditions are satisfied:

- The exchange trading order is completed and sent by the authorized participant to the fund management company or the transfer agent service provider before the closing time of the order book. Orders received after the closing time of the order book shall be either cancelled or executed on the following exchange transaction day as prescribed in the fund’s charter and prospectus;

- VSDCC has confirmed that the investor or authorized participant has sufficient component securities baskets or creation units, and the supervisory bank has confirmed the investor’s or authorized participant’s payment made on the settlement date. In case of redemption of ETF certificates, the remaining number of ETF certificates of the authorized participant shall not be lower than the minimum number of ETF certificates (if any) required to maintain the status of the authorized participant under terms and conditions of the agreement signed with the fund management company.

e) Exchange of a basket of component securities for ETF creation units and vice versa shall be executed in the form of entries on depository accounts of authorized participants, investors and the ETF at VSDCC. The transfer of baskets of component securities and ETF certificates shall be carried out according to the procedures in the prospectus or the summary prospectus and guidelines of VSDCC and supervisory bank.

3. Exchange transaction procedures:

a) Before the exchange trading session or at the end of the day preceding the exchange trading day, the fund management company shall notify information about the basket of component securities exchanged for 01 ETF creation unit to authorized participants, and publish it on its website and the websites of SE and VSDCC. Such information includes symbols of component securities, weight and quantity of each component securities symbol in the basket. This component securities basket shall be determined according to the closing price of the trading day before the exchange trading day;

b) Exchange trading orders of investors shall be sent directly to authorized participants or through distribution agents as prescribed in the fund’s charter and prospectus or summary prospectus. If an authorized participant is unable to receive orders from investors because the distribution agent or the authorized participant is dissolved, declared bankrupt, has its license for establishment and operation revoked, or its operations suspended or terminated, or due to the IT system's failure or other force majeure events, investors' orders may be sent directly to the fund management company;

Authorized participants shall send their exchange trading orders and those of investors to the fund management company or the transfer agent service provider or VSDCC before the market closing time as prescribed in the fund’s charter, the ETF establishment agreement and guidelines of VSDCC;

c) Within 02 working days from the exchange trading day (but before distribution of ETF certificates), if a transaction error which is caused by mistakes in placing orders, consolidating information, receiving, transferring or inputting trading orders into the system is detected, the distribution agent or authorized participant shall notify it to the fund management company, supervisory bank and VSDCC, and request for error correction according to the procedures/guidelines adopted by VSDCC. After this time limit, the distribution agent or authorized participant shall assume responsibility before investors for that transaction error;

d) After receiving orders from investors and authorized participants, the fund management company shall, through VSDCC and supervisory bank, verify clients’ capacity to meet such orders as prescribed in Point dd Clause 2 of this Article, confirm and execute trading orders of investors and authorized participants according to this Clause and guidelines of VSDCC.

dd) Within 03 working days from the exchange trading day but before the following fund certificate trading day, VSDCC and supervisory bank shall complete the transfer of component securities baskets from depository accounts of investors or authorized participants to the depository account of the ETF or vice versa, and register/deposit ETF certificates on accounts of investors or authorized participants; receive or return cash payments as prescribed in Clause 4 of this Article; the fund management company or transfer agent service provider shall confirm the completion of transaction and ownership of authorized participants and investors.

4. Baskets of component securities shall be the primary payment facilities in exchange transactions between the ETF and its authorized participants or investors, except the following cases:

a) In the exchange of the basket of component securities for ETF creation units, the value of the basket of component securities is lower than the NAV of ETF creation units. The authorized participant or investor shall pay the difference by transferring money to the ETF’s account opened at the supervisory bank before or on the settlement date. Cash payments, including payment for odd-lot component securities, payment for component securities of which the authorized participant or investor is restricted from transfer; dividends and interests of component securities, and other cash payments, shall be made according to the fund’s charter and relevant laws;

b) In the exchange of ETF creation units for a basket of component securities, the value of ETF creation units received by the fund management company from authorized participants or investors is higher than the value of the basket of component securities. The fund management company or supervisory bank shall pay the difference by transferring ETF certificates to depository accounts of investors or authorized participants on the settlement date or in cash as prescribed in the fund’s charter.

5. If permitted in the fund’s charter and specified in the prospectus or summary prospectus, investors may make payments in cash or other assets to authorized participants or distribution agents. Authorized participants and distribution agents shall purchase sufficient baskets of component securities for investors before placing exchange trading orders for investors. Payments, margin ratio and additional margin made by investors to authorized participants and distribution agents while these entities purchase component securities for exchange shall comply with the fund’s charter and the prospectus or summary prospectus.

6. If the ETF receives ETF creation units from an investor and returns the basket of component securities to that investor resulting in that investor’s holding of component securities exceeding the maximum one prescribed by law (calculated on the date of transfer of ownership of component securities to the investor) or that investor’s holding of at least 25% of outstanding shares of an issuer or the investor’s holding of its shares, VSDCC shall notify the fund management company and request the fund management company, authorized participants and investors to perform the following acts:

a) With regard to a foreign investor, the fund management company shall sell the exceeding number of component securities and make cash payment to this investor;

b) In case the return of the basket of component securities to the investor leads to that investor’s holding of at least 25% of outstanding shares of an issuer or that investor’s holding of its shares but procedures for tender offers or treasury stock transactions are not yet completed as prescribed by relevant laws, the fund management company shall sell the number of securities exceeding the holding of securities requiring the tender offer or sell all securities issued by that investor and make cash payment to that investor;

Cash payments made to investors as prescribed in this Clause shall depend on the selling of the number of securities exceeding the maximum holding or the holding requiring the tender offer or margin trading as prescribed. The payment made to an investor is the trading value after deducting taxes and transaction fees as prescribed in relevant laws.

c) If an investor’s ownership is restricted as prescribed by law or in its charter, the investor shall sell the number of component securities exceeding its maximum holding on the trading day following the settlement date. While the investor’s holding is not yet adjusted according to the limit prescribed by law, the investor is not allowed to exercise the voting right at the General Meeting of Shareholders of the issuer.

7. The fund management company is entitled to temporarily stop receiving and executing exchange trading orders of investors in the following cases:

a) SE changes the benchmark portfolio;

b) The issuer of securities with a certain weight in the ETF’s investment portfolio as prescribed in the fund's charter and the prospectus or summary prospectus is declared bankrupt or dissolved; or securities with a certain weight in the ETF’s investment portfolio as prescribed in the fund's charter and the prospectus or summary prospectus are suspended from trading or delisted; or the basket of component securities or NAV of the ETF cannot be determined on the trading day before the exchange trading day because securities on the fund's investment portfolio are suspended from trading according to SE’s decision;

c) The investment portfolio is restructured to minimize the tracking error;

d) The fund management company, supervisory bank or VSDCC is unable to perform the exchange trading due to force majeure events;

dd) Other cases prescribed in the fund’s charter and the prospectus or summary prospectus or deemed necessary by SE.

8. Within 24 hours from the occurrence of any of the events in Clause 7 of this Article, the fund management company shall send a report to SSC and disclose information on SE’s website. The fund management company, authorized participants and distribution agents shall continue receiving and executing exchange trading orders for investors immediately after the event ends.

9. The period of suspension of exchange trading is specified in the fund’s charter but shall not exceed 30 days from the suspension date. If the suspension of exchange trading is caused by the event in Point a or b Clause 7 of this Article, the suspension period shall not exceed 03 working days before and after the event ends.

10. Within 30 days from the end of the suspension period of exchange trading prescribed in Clause 9 of this Article, if the event causing the suspension is not yet rectified, the fund management company shall hold an extraordinary General Meeting of Investors to decide whether to dissolve the fund or extend the suspension period. Within the time limit for convening the General Meeting of Investors, if the event causing the suspension of exchange trading has ended, the fund management company may cancel the holding of the General Meeting of Investors.

11. Issuance fee or redemption fee (if any) charged to an authorized participant is specified in the signed authorized participant agreement and shall not exceed 0,5% of trading value. Service fees may be adjusted according to agreements between the fund management company and the authorized participant but shall not exceed this prescribed limit.

12. Issuance fee or redemption fee (if any) charged to an investor shall not exceed 1% of trading value. Maximum service fees must be specified in the fund’s charter. Specific service fees are specified in the prospectus, or summary prospectus, and published on the websites of the fund management company and distribution agents. Service fees may be increased, provided that a new service fee shall not exceed 1% of trading value. This new service fee shall be applied 60 days after it is published by the fund management company on its website.

Article 44. Trading of ETF certificates on SE (secondary transactions)

1. Investors and authorized participants may conduct transactions in listed ETF certificates through the SE’s trading system according to the following rules:

a) Investors and authorized participants shall place trading orders on their securities trading accounts. Transactions and payment for transactions shall be carried out in accordance with regulations on securities trading adopted by SE and VSDCC;

b) Trading unit is prescribed by SE;

c) ETF certificates may be lent in margin trading and other operations in conformity with regulations of the Law on securities.

2. Authorized participants may only sell ETF certificates (or component securities) through the SE’s trading system when they have sufficient ETF certificates (or component securities) for transfer before the settlement date as prescribed by VSDCC. This number of ETF certificates (or component securities) includes those existing on the authorized participant’s account at the trading day, and those received before the settlement date from exchange transactions according to the baskets of component securities (or ETF creation units) acquired from successful subscription transactions or borrowing transactions conducted on the system of VSDCC.

Article 45. ETF’s investments and investment portfolio

1. The structure and asset weight on an ETF’s investment portfolio must be conformable with those of the benchmark portfolio, and the ETF must ensure that the tracking error determined according to Clause 1 Article 41 hereof shall not exceed the maximum tracking error specified in the fund’s charter, SE’s regulations and relevant laws.

2. An ETF’s investment portfolio includes component securities on the benchmark portfolio and assets in Vietnam as prescribed in Points a, b, c, d, e and g Clause 2 Article 35 hereof. Investments in derivatives are only made for the purposes of preventing risks and minimizing the tracking error;

3. The ETF’s investment portfolio must be conformable with the fund’s charter and the following provisions:

a) The ETF shall not invest in more than 10% of total value of outstanding securities of an issuer, except Government’s debt instruments;

b) The ETF shall not invest more than 20% of total value of its assets in outstanding securities and other assets (if any) specified in Points a, b Clause 2 of Article 35 hereof of an issuer, except Government’s debt instruments;

c) Except component securities on the benchmark portfolio, the ETF shall not invest more than 30% of total value of its assets in the assets specified in Points a, b, d and e Clause 2 of Article 35 hereof of companies in the same group of: parent company-subsidiaries; companies holding more than 35% of each other’s shares/stakes; subsidiaries of the same parent company;

d) The ETF shall not invest in its ETF certificates;

dd) The ETF may invest in public fund certificates and shares of public securities investment companies managed by other fund management companies, but shall ensure the following limits:

- It shall not invest in more than 10% of total outstanding fund certificates of a public fund or total outstanding securities of a public securities investment company;

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

- It shall not invest more than 30% of total value of its assets in public fund certificates or shares of public securities investment companies;

e) It shall not invest in real estate, unlisted or unregistered shares of public companies, stakes in limited liability companies, privately placed bonds, except those received by the ETF from the exercise of owner’s rights;

g) It shall not invest in securities issued by the fund management company, its related persons or authorized participants, except component securities on the benchmark portfolio;

h) Total value of derivative contracts and outstanding debts of the ETF shall not exceed its NAV at any time.

4. The ETF’s borrowing, lending, repo transactions, margin trading and short sale shall be carried out in accordance with Article 25 hereof.

5. An ETF’s investments may only exceed the limits specified in Points a, b, c, dd Clause 3 of this Article for the following reasons:

a) The reasons in Points a, b, c, dd Clause 5 Article 35 hereof;

b) Changes in the structure of the benchmark portfolio;

c) The ETF is newly established within the last 03 months from the issue date of the certificate of registration of fund establishment.

6. The fund management company shall submit reports, disclose information and adjust the ETF’s investments according to Clauses 6, 7, 8 Article 24 hereof.

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

8. The fund management company shall only make deposits and invest in money market instruments as prescribed in Points a, b Clause 2 of Article 35 hereof at the credit institutions on the list approved by the ETF’s representative board.

Article 46. Distribution of ETF’s profits and expenses

1. ETFs shall distribute profits to investors according to Article 7 hereof.

2. An ETF’s expenses include:

a) The expenses prescribed in Clauses 3, 4 Article 37 hereof;

b) Fees paid to authorized participants;

c) Fees paid to the organization managing and operating benchmark indexes.

3. Costs of printing and release of advertising materials shall comply with Clause 5 Article 37 hereof.

Article 47. Dissolution of ETFs

1. The dissolution of an ETF shall comply with Clauses 1, 2, 3, 5, 6, 7, 8 and 9 Article 12, Clause 2 Article 28 hereof.

2. The asset liquidation and the time limit for completing the liquidation of assets shall comply with the dissolution plan approved by the General Meeting of Investors, provided that the liquidation of assets must be completed within 06 months from the date on which the dissolution notice is made available. 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.

3. The fund management company and supervisory bank shall transfer the baskets of component securities to investors in proportion to their holdings at the ETF. If requested in writing by investors or the number of fund certificates is too small as prescribed in the fund’s charter, the fund management company shall sell assets and make cash payments to investors. The liquidation of assets which are listed or registered securities is made through the SE’s trading system or by adopting other methods which ensure the ETF’s best interests and are conformable with the dissolution plan approved by the General Meeting of Investors.

Article 48. Relevant activities of SE and VSDCC

1. The SE shall:

a) Build, maintain and manage market indexes which are used as benchmark indexes of ETFs, and collect index management service fees as prescribed;

b) Provide guidance on listing, delisting and trading of ETF certificates;

c) Formulate regulations on operations of market makers; supervise market makers’ operations related to ETF certificates;

d) Formulate mechanisms for cooperation with VSDCC in supervising and sharing information about transactions of authorized participants which must comply with Clause 2 Article 44 hereof;

dd) Provide iNAV calculation service for fund management companies;

e) Provide other services under contracts signed with VSDCC, fund management companies and authorized participants.

2. VSDCC shall:

a) Provide guidance on exchange of baskets of component securities for ETF creation units and vice versa;

b) Carry out transfer outside the SE’s trading system when conducting exchange of component securities baskets for ETF creation units and vice versa;

c) Provide guidance on registration, depositing and distribution of ETF certificates;

d) Formulate mechanism for cooperation in providing information for SE about additional offering and redemption of ETF certificates;

dd) Supervise lending and borrowing of component securities and ETF certificates by authorized participants on its system according to Point c Clause 1 Article 42 hereof; supervise to ensure that authorized participants have sufficient securities to make payment when conducting transactions as prescribed in Clause 2 Article 44 hereof;

e) Provide services for ETFs as prescribed in Clauses 20, 21 Article 2 hereof;

g) Charge securities transfer service fees in exchange transactions as prescribed;

h) Provide authorized participants with guidance on borrowing and lending of ETF certificates and component securities in exchange transactions;

i) After each exchange trading day, VSDCC shall notify SE of the volume of ETF certificates issued and redeemed by fund management companies.

Article 49. Information disclosure

1. Within 24 hours from the end of a trading session in the exchange trading day, the fund management company shall disclose on its website and the SE’s website the following information:

a) Baskets of component securities used for exchange if there are any changes thereof compared to those before the exchange trading time;

b) The number of ETF creation units issued and redeemed from authorized participants and investors; differences compared to the previous exchange trading day;

c) Information about the volume of ETF certificates listed and traded on SE;

d) The fund’s NAV, NAV per creation unit, NAV per fund certificate and fluctuation of these values; iNAV fluctuation; benchmark indexes and fluctuation thereof;

dd) Correction and cancellation of transaction errors (if any);

e) Other relevant information (if any).

2. The fund management company shall weekly disclose tracking error on its website.

3. The fund management company shall quarterly disclose the ETF’s investment portfolio as prescribed in the fund's charter on its website.

4. Every 06 months and on an annual basis, the fund management company shall disclose on its website the following information:

a) Information about the ETF’s operational efficiency compared to benchmark indexes (if any); information about profit distribution (if any);

b) Ratio of total expenses of an ETF as prescribed in Clause 2 Article 46 hereof to its average NAV according to the form in Appendix XXVI enclosed herewith;

c) Information about expense ratios shall be made within 45 days from the end of Quarter II and from the end of year.

Section 5. REAL ESTATE INVESTMENT FUNDS

Article 50. General provisions on real estate investment funds

Real estate investment funds are not allowed to perform construction activities, implement and develop real estate projects. Development of real estate projects includes one or some of the following operations:

1. Attend auctions of land use rights and bidding for implementing immovable property projects;

2. Propose projects to competent authorities for granting construction permits;

3. Implement technical infrastructure construction projects, building works and housing works of 1/500-scale detailed planning approved by competent authorities, including detailed design tasks; attend bidding and selection of building contractors; perform and supervise construction activities, etc. as prescribed in the Law on real estate business.

Article 51. Investments and investment portfolio of real estate investment funds

1. The investment portfolio of a real estate investment fund must comply with the provisions in Clause 1, Clause 3 and Clause 9 Article 24 hereof.

2. The investment portfolio of a real estate investment fund shall include the following assets in Vietnam:

a) The assets specified in Points a, b, c, d, dd and e Clause 2 Article 24 hereof;

b) Real estate items meeting the requirements in Clause 4 of this Article.

3. Structure of the investment portfolio of a real estate investment fund must meet the following requirements:

a) At least 65% of the fund’s NAV is invested in real estate in Vietnam to serve the purpose of lease or operation to earn stable profits as prescribed in Clause 4 of this Article; securities issued by real estate enterprises at least 65% of revenue of which comes from ownership and trade in real estate according to their latest annual financial statements (hereinafter referred to as “real estate enterprises”). If the fund only invests in securities issued by real estate enterprises, it must invest in securities of at least 03 issuers;

b) Not more than 35% of the fund’s NAV is invested in the assets specified in Point a Clause 2 of this Article, exclusive of investments in securities issued by real estate enterprises. Investment in these assets shall ensure the following limits:

- Do not invest in more than 10% of total outstanding securities of an issuer or total outstanding fund certificates of a public fund managed by another fund management company, except Government’s debt instruments;

- Do not invest more than 5% of total value of the fund’s assets in securities and other assets (if any) specified in Points a, b Clause 2 of Article 24 hereof of an issuer, or fund certificates of a public fund managed by another fund management company, except Government’s debt instruments;

- Do not invest more than 10% of total value of the fund’s assets in securities issued by companies in the same group of: parent company-subsidiaries; companies holding more than 35% of each other’s shares/stakes; subsidiaries of the same parent company;

- Do not invest more than 10% of total value of the fund’s assets in public fund certificates or shares of public securities investment companies;

- Do not invest more than 5% of total value of the fund’s assets in the assets specified in Points dd Clause 2 Article 24 hereof.

c) The fund shall not invest in its fund certificates;

d) The fund’s borrowing, lending, repo transactions, margin trading and short sale shall be carried out in accordance with Article 25 hereof.

4. A real estate investment fund is allowed to invest in the real estate meeting the following requirements:

a) The real estate is traded in accordance with the Law on real estate business. The real estate must be located in Vietnam and is invested for the purpose of lease or operation to earn stable profits. Types of invested real estate must be conformable with investment objectives and policies stated in the fund's charter and prospectus;

b) The invested real estate is finished house or building as prescribed in the Law on construction. The fund may invest in real estate items which are under construction if they meet the following requirements:

- The real estate is not the vacant land as prescribed in the Law on real estate business and the Law on land;

- The construction project has been being implemented according to the approved progress by the time of capital contribution by the fund;

- There are valid contracts signed with potential clients to ensure that the real estate may be sold, put into use or leased immediately after it is finished;

- Total value of real estate items under construction shall not exceed 10% of total value of the fund’s assets.

5. Investments of a real estate investment fund may only exceed the limits specified in Points a, b Clause 3 of this Article for the following reasons:

a) Price fluctuation of the assets in the fund’s investment portfolio;

b) Making payments of the fund as prescribed by law;

c) Full or partial division, consolidation or merger of the issuers;

d) The fund is newly established, increases its capital, or is established from consolidation or merger of funds within the last 06 months from the issue date of the certificate of registration of fund establishment or the modified certificate of registration of fund establishment;

dd) The fund is undergoing dissolution.

6. If the investment limits are exceeded due to the reasons in Points a, b, c and d Clause 5 of this Article, the fund management company shall adjust the investment portfolio in conformity with Clause 3 of this Article and the following rules:

a) The securities portfolio must be adjusted within 03 months from the day on which the investment limit is exceeded;

b) The real estate portfolio must be adjusted within 01 year from the day on which the investment limit is exceeded.

7. If the excess investments are caused by the fund management company’s failure to comply with the investment limits prescribed by law or the fund’s charter, the fund management company shall immediately adjust the investment portfolio in accordance with regulations of law. The fund management company shall pay compensation for any damage incurred by the fund and incur all costs arising from the adjustment of the investment portfolio according to this Clause. Any profits earned will be accounted for as the fund’s profits.

8. Within 05 working days from the completion of the adjustment of the investment portfolio, the fund management company shall disclose information as prescribed and notify SSC of the investments exceeding the limits, causes, time of occurrence or detection of the excess investment, damage and compensation to the fund (if any) or profits earned by the fund (if any), remedial measures, implementation period and results.

Article 52. Management of real estate in investment portfolio

1. Before investing in real estate, the fund management company shall formulate the plan for operation and use of such real estate for 05-year period. This plan must be approved by the fund’s representative board.

The real estate must be held for at least 02 years from the date of acquisition, unless the asset must be sold as prescribed by law or according to a decision issued by the General Meeting of Investors or the fund’s representative board within its jurisdiction as prescribed in the fund’s charter.

2. The fund management company must establish a department in charge of managing the real estate investment fund, which is composed of operations employees meeting the following requirements:

a) The employee shall not be facing criminal prosecution, serving an imprisonment sentence or being banned from securities trading as prescribed by law;

b) The employee has not incurred any administrative penalties for securities- and securities market-related offences;

c) The fund management company shall assign at least 02 fund executives to manage the securities investment portfolio of the real estate investment fund;

d) The fund management company shall assign at least 02 employees possessing valuer certificate to manage the real estate portfolio of the real estate investment fund. These employees are required to have at least 02 years’ experience of working in real estate valuation at real estate enterprises, real estate service providers or valuation firms.

If the fund executive mentioned in Point c meets the standards in Point d, he/she may concurrently manage the real estate portfolio of the real estate investment fund.

3. The fund management company shall:

a) Act on behalf of the fund to fully exercise the ownership and use rights, and perform obligations and responsibilities towards the fund’s assets in a voluntary and truthful manner for the best interests of the fund;

b) Regularly inspect, supervise and perform any activities to ensure that the project’s investor, seller, lessee, tenant buyer, real estate management unit and other partners of economic contracts on the fund’s real estate to fully perform their obligations as prescribed in the Law on real estate business and relevant laws;

c) Punctually carry out registration of ownership and rights to use the fund’s assets in accordance with regulations of the Law on real estate business. The following documents must be available, including: certificate of real estate ownership, land use rights or lawful documents proving the ownership or use rights over existing real estate as prescribed by law; building permit or approved project dossier and construction drawing of the real estate under construction; construction drawing, as-built dossiers and acceptance test report of the real estate item of which certificate of ownership or use rights is not available; approved project dossier, construction drawing and schedule of off-the-plan house or building; other materials, papers and legal documents as prescribed in relevant laws;

d) If the fund is the co-owner or co-user of the real estate, the fund management company shall ensure that the fund is allowed to freely transfer the fund’s assets at any time with the transfer price which is not subject to any third party, and also ensure the following rights:

- Receive benefits from management and operation of the real estate under the real estate management agreement in proportion to the fund’s holding;

- Give opinions and issue decisions on important issues, including changes in business cooperation contracts, contracts for management and operation of real estate, real estate operation contracts, and other economic contracts and agreements. If the fund owns the real estate indirectly through its holding of shares/stakes of the company owning the real estate, it must have full rights of a shareholder/capital contributor, including the rights to freely transfer assets (shares/stakes);

dd) Conclude real estate management agreements and other economic contracts on the fund’s assets in accordance with regulations of the Law on real estate business and relevant laws. Within 15 days from the day on which the real estate agreement is signed or extended, the fund management company shall send that agreement to SSC;

e) Buy insurance of real estate items in the fund’s investment portfolio. The insurer must be approved by the General Meeting of Investors;

g) Cooperate with the supervisory bank and ensure that all documents relating to the fund’s real estate, especially the documents proving the ownership specified in Point a Clause 2 Article 74 hereof, are kept at the supervisory bank.

4. The fund management company shall authorize the real estate management unit to manage, maintain, repair, upgrade and operate the real estate according to the signed real estate management agreement. Criteria for selection of real estate management unit and principles of a real estate management agreement must be specified in the fund’s charter. The real estate management unit and real estate management agreement must be approved by the General Meeting of Investors.

5. The real estate management unit shall:

a) Regularly and continuously supervise and manage trading, operation and use of the real estate, ensure that the real estate is managed, operated and used efficiently and safely, and quality of provided service is conformable with criteria and requirements of the fund management company, and terms and conditions of the real estate management agreement;

b) Comply with regulations of the Law on real estate business and relevant laws during the management, operation and use of real estate. All activities must be performed in a prudent, voluntary and truthful manner for the fund’s best interests;

c) Any repair, maintenance, upgradation, expansion or change of structure of the real estate shall be performed only after obtaining the approval from the fund management company or the fund’s representative board of the real estate management agreement;

d) Provide the fund management company with adequate and accurate information on the trading and market developments of the managed real estate. The real estate management unit shall annually send reports on management of real estate to the fund’s representative board and the fund management company for consolidation and submission to the annual General Meeting of Investors. Such reports are prepared according the form in the Appendix XX enclosed herewith;

dd) Protect confidentiality of information relating the managed real estate and its trading and operation. Except competent authorities, the real estate management unit is not allowed to provide the aforesaid information for any entities, even its other departments;

e) The real estate management unit shall pay compensation to the fund for any damage to the fund’s assets caused by its carelessness during its management of the real estate, even if such damage is caused by mistake or fraudulent acts of its employees or of a third party that provides real estate management-related services, unless otherwise decided by the General Meeting of Investors.

Article 53. Fund’s real estate trading

1. When trading in the fund’s real estate, the fund management company shall comply with the following provisions:

a) The buying price and selling price of the real estate shall not exceed 110% and 90% respectively of the reference price provided by the valuation firm within the last 06 months by the trading day, unless otherwise decided by the General Meeting of Investors. The General Meeting of Investors or the fund’s representative board is entitled to request the fund management company or the valuation firm to re-determine the reference price before conducting the transaction;

If the real estate valuation is performed by multiple valuation firms, the reference price is the average price of the prices provided by these valuation firms;

b) The fund management company shall get opinions from the General Meeting of Investors in the following cases:

- The estimated buying price is higher or the estimated selling price is lower than the limit specified in Point a of this Clause; or

- The transaction value is higher than or equal to 20% of total value of the fund’s assets after the transaction; or the transaction leads to total value of the fund’s transactions with the same partner within the last 12 months exceeding or equal to 20% of total value of its assets after the transaction; or

- Other cases prescribed in the fund's charter.

c) The fund management company shall get opinions from the fund’s representative board before conducting the following transactions:

- The transaction value is from 10% to 20% of total value of the fund’s assets after the transaction; or the transaction leads to total value of the fund’s transactions with the same partner within the last 12 months accounted for from 10% to 20% of total value of its assets after the transaction; or

- Other cases prescribed in the fund's charter.

2. The fund management company may conduct real estate transactions between the fund and the following entities if the conditions in Clause 3 of this Article are satisfied:

a) Employees of the fund management company; members of the executive board, Board of Directors or Board of Members or President of the fund management company; major shareholders or capital contributor holding at least 5% of charter capital of the fund management company, or their authorized representatives; the fund management company; supervisory bank; investors holding at least 5% of fund certificates or their authorized representatives (if any); members of the fund’s representative board;

b) Persons whose interests are relevant to the individuals in Point a of this Clause, including:

- His/her spouse and family members;

- The organization of which more than 35% of charter capital is held by that individual and his/her spouse and family members (if any);

- Group of companies having ownership relationship as prescribed in Point dd Clause 1 Article 110 of the Law on securities.

c) The real estate investment funds, including real estate securities investment companies, are managed by the same fund management company;

d) Other cases prescribed in the fund's charter.

3. Conditions for conducting real estate transactions as prescribed in Clause 2 of this Article:

a) Such transactions are permitted in the fund’s charter and specified in the prospectus or summary prospectus;

b) Transaction price meets the requirement in Point a Clause 1 of this Article;

c) IF the transaction value is more than 10% of total value of the fund’s assets after the transaction, or the transaction leads to total value of the fund’s transactions with the same partner within the last 12 months accounted for more than 10% of total value of its assets after the transaction, such transactions must be approved by the General Meeting of Investors. In this case, the investor directly participating in the transaction is not allowed to exercise the voting rights at the General Meeting of Investors and a decision to approve the transaction is ratified if it is voted for by a number of investors holding at least 65% of total votes;

d) The value of the real estate must be determined by two valuation firms, one of which is selected by the General Meeting of Investors and the other is designated by the supervisory bank. Valuation fees shall be recorded as the fund’s expenses;

dd) The valuation firm and legal counseling provider have confirmed all terms and conditions of the transaction contract to be signed are conformable with the market situation, and the transaction is lawful and conformable with relevant laws.

4. After completing the transactions as prescribed in Points b, c Clause 1 and Clause 2 of this Article, detailed information about each transaction must be specified in the prospectus or provided for all investors according to the method specified in the fund’s charter and prospectus. Information about the transaction includes:

a) Adequate information about the transaction partner and its/his/her relationship with the fund;

b) Adequate information about the real estate, including type of real estate; location of real estate; planning information about the real estate; scale and area of the real estate; characteristics, features and economic efficiency of use or operation (occupancy rate/room capacity, etc.), quality of the real estate; actual conditions of infrastructure facilities, technical and social services related to the real estate; legal status of the real estate, including certificate of ownership/rights to use the real estate and documents concerning the construction of the real estate; history of ownership and use of the real estate; limits on ownership/rights to use the real estate (if any); the real estate trading price; rights and interests of third parties, and other information;

c) Certificate of valuation of the traded real estate, including information about the subject real estate; location and scale of the real estate; characteristics and actual status of the real estate; legal status of the real estate; limits on the real estate; valuation approach; valuation time; price of the real estate and relevant contents;

d) Information about profits earned from the operation of the real estate before conducting the transaction (enclosed with documentary evidences), and expected profits;

dd) Other relevant information.

5. In any real estate transactions, the fund management company shall proactively and punctually notify and provide adequate documents and necessary information about transactions (before and after each transaction) for the supervisory bank and fund’s representative board within a time limit which is appropriate for the supervisory bank and fund’s representative board to inspect and supervise such transactions in accordance with regulations of law, the fund’s charter and terms and conditions of the supervision contract.

Article 54. Valuation firms and real estate valuation

1. The General Meeting of Investors shall decide to select at least 01 valuation firm to determine the value of the fund’s real estate for a maximum period of 02 consecutive years. After this period, the fund management company shall select a substitute valuation firm which must be approved by the General Meeting of Investors.

2. A valuation firm must meet the following requirements:

a) It is eligible to provide valuation services as prescribed in the pricing law;

b) It is not a related person of the fund management company, supervisory bank or a major investor of the fund; not a partner in asset transactions of the fund; not a related person of the partner of the transaction in the real estate item of which the valuation is performed;

3. Within 15 days from the day on which the valuation service contract is signed, the fund management company shall send that contract to SSC. The valuation service contract must be approved by the fund's representative board and shall, inter alia, have the following contents:

a) Information sharing mechanism which must ensure that the valuation firm will have adequate information necessary for its valuation;

b) Provision on valuation fees which are not subject to the asset’s value;

c) Provisions on termination, liquidation and extension of contract.

4. The valuation firm and its valuers shall:

a) Not perform the valuation of the real estate of which the valuation firm or its valuer is a transaction partner, or is related to the transaction partner; not provide valuation service to the fund management company of which the valuation firm or its valuer is a shareholder or capital contributor holding at least 5% of charter capital, or of which the valuer’s parent, spouse, child or sibling is a member of the executive board, chief accountant, member of the Board of Directors, or Board of Members, or Company’s President. The valuation firm and its valuers are not allowed to conduct asset transactions with the fund which adversely influence the principle of independence in valuation activities;

b) Not collude with the fund management company or asset transaction partners of the fund or use financial interests, bribery or illegal tricks to force the fund management company or asset transaction partners of the fund to falsify the valuation results, or suggest or receive interests, in any forms, other than the valuation fees specified in the signed contract;

c) Keep valuation documents and records; provide them at the written request of competent authorities;

d) Provide valuation services for a real estate investment fund or real estate securities investment company for a maximum period of 02 consecutive years;

dd) Fulfill responsibilities and obligations as prescribed by the Law on valuation.

5. The valuation of the fund’s real estate must comply with the following rules:

a) The valuation of each real estate item of the fund must be performed at least every year and at other times at the request of the fund’s representative board and/or General Meeting of Investors. Every 03 years, the revaluation of all assets in the fund’s real estate portfolio must be carried out, unless otherwise decided by the General Meeting of Investors. The valuation and revaluation of the fund’s real estate items shall be only performed by the valuation firm approved by the General Meeting of Investors;

b) In addition to the valuation prescribed in Point a, the fund’s real estate items must be also revalued before the transaction or the fund’s offering of additional fund certificates to raise capital. The revaluation of the real estate specified in this Clause is not required in case the transaction is conducted within 06 months from the latest valuation date;

c) The valuation firm shall determine the real estate price at given location and time according to valuation standards and the purposes specified in the valuation certificate;

d) The valuation shall be performed on the basis of the market value and fair value which are determined in accordance with the Law on real estate business and the pricing law. The value of the real estate must be determined by adopting at least two valuation approached. Detailed explanations about the selected valuation approaches and valuation results must be available. The selected valuation approaches must be conformable with the valuation manual approved by the General Meeting of Investors and the fund’s representative board as prescribed in Clause 3 Article 20 hereof, practices and regulations in the Law on real estate business and the pricing law. Procedures and approaches for valuation of real estate shall comply with the pricing law;

dd) Information and data used in valuation must be adequately, accurately and punctually updated, and modified in scientific and rational manner. Plausible explanations must be provided for any modification of information or data;

e) A valuation firm may only carry out the valuation of each real estate item for a maximum period of 02 consecutive years;

g) The valuation firm shall annually prepare and submit a consolidated report on valuation of real estate items performed in the year to the fund’s representative board and the fund management company for submission to the annual General Meeting of Investors. The report on valuation of real estate items shall be prepared according to the form in Appendix XXI enclosed herewith.

6. The valuer who is assigned by the valuation firm to directly perform the valuation of real estate items shall, upon the completion of valuation of each real estate item, prepare a report on valuation results and assume legal responsibility for valuation results and his/her opinions specified in the report on valuation results. The report on valuation results must be prepared in accordance with regulations of the pricing law.

7. The report on valuation results must be prepared in an independent, objective and honest manner, and bear the signatures of the valuer who directly carry out the valuation and General Director (Director) of the valuation firm or the person authorized in writing by General Director (Director) of the valuation firm. Contents in the report on valuation results must be explicit and unequivocal, and include adequate and accurate information.

8. The valuation firm shall notify valuation results in writing by sending a valuation certificate to the fund management company.

9. The valuation certificate must be clear, accurate, adequate and unequivocal to facilitate investors’ making of investment decisions. The valuation certificate shall be only valid for the valued asset at the valuation time, and binding the valuation firm to assume responsibility for valuation results and conclusions contained therein. The valuation certificate must comply with the pricing law.

10. If major changes occur after the valuation date and affect the asset’s value, the valuation firm or valuer shall include such changes in the report on valuation results or valuation certificate. Where necessary, the fund management company shall issue a new prospectus to amend or replace the valuation certificate included in the prospectus.

Article 55. Distribution of profits and expenses of real estate investment funds

1. The real estate investment fund shall distribute profits to investors according to Article 7 hereof. At least 90% of realized profits in the year of the real estate investment fund shall be distributed to investors.

2. Expenses of the real estate investment fund include:

a) The expenses prescribed in Article 8 hereof;

b) The real estate maintenance and operation fees paid to the real estate management unit.

Article 56. Consolidation, merger and dissolution of real estate funds

1. The consolidation and merger of real estate investment funds shall comply with Article 11 hereof.

2. The dissolution of real estate investment funds shall comply with Article 12 hereof. During the dissolution of a fund, the liquidation of the fund’s assets must comply with regulations on trading of assets of the real estate investment fund in Article 53 hereof.

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