Thông tư 97/2020/TT-BTC hoạt động VP đại diện công ty chứng khoán, quản lý quỹ nước ngoài tại Việt Nam

CIRCULAR

Guiding the operation of Vietnam-based representative offices and branches of foreign securities companies and foreign fund management companies

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Pursuant to the Law on Securities dated November 26, 2019;

Pursuant to the Government’s Decree No. 87/2017/ND-CP of June 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

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

The Minister of Finance promulgates the Circular guiding the operation of Vietnam-based representative offices and branches of foreign securities companies and foreign fund management companies.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. This Circular guides the operation of Vietnam-based representative offices and branches of foreign securities companies and foreign fund management companies.

2. Subjects of application of this Circular include:

a) Vietnam-based representative offices, branches of foreign securities companies and foreign fund management;

b) Individuals and organizations involved in operation of Vietnam-based representative offices and branches of foreign securities companies and foreign fund management companies.

Article 2. Interpretation of terms

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

1. Valid copy means a copy issued from the master register or copy certified as true copy by a competent agency or organization, or copy proved to match its original after comparison.

2. Parent company means a securities trading organization established in a foreign country and registering the operation of a Vietnam-based representative office or registering the establishment of a Vietnam-based branch. The parent company takes responsibility before Vietnamese law for all activities and obligations of their Vietnam-based representative offices or branches.

3. Vietnam-based branch of a foreign securities company or foreign fund management company means a dependent unit of such company, which has no legal person status, is established according to Vietnamese law and has its parent company taking responsibility before Vietnamese law for all of its activities in Vietnam.

4. Branch director means head of a Vietnam-based branch of a foreign securities company or foreign fund management company.

5. Vietnam-based representative office of a foreign securities company or foreign fund management company means a dependent unit of such company, which has no legal person status, is established according to Vietnamese law.

6. Chief of a representative office means head of a Vietnam-based representative office of a foreign securities company or foreign fund management company.

7. Competent representatives of foreign securities trading organizations mean:

a) Chairpersons of Boards of Directors, chairpersons of Members’ Councils, the companies’ presidents, Chief Executive Officers of foreign securities trading organizations, owners of foreign securities trading organizations;

b) People authorized in writing by subjects as prescribed at Point a of this Clause;

c) Competent people according to charters of foreign securities trading organizations to sign documents as prescribed in this Circular and to perform relevant tasks under their assigned competence.

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

Article 3. Head offices of representative offices and branches

1. Head office of a Vietnam-based representative office or branch of a foreign securities company or foreign fund management company is located in Vietnam, is contact address of such representative office or branch, has determined address, telephone number, fax number, email (if any) and must comply with the Vietnamese law on securities, order, occupational safety and health and relevant law regulations.

2. Vietnam-based representative offices, branches of foreign securities companies and foreign fund management companies must not lend or sublease their head offices.

Article 4. Language used in transactions

Official documents of transaction of foreign securities trading organizations, Vietnam-based representative offices and branches of foreign securities companies and foreign fund management companies in Vietnam must be in Vietnamese or in both Vietnamese and a commonly used foreign language.

Article 5. Names of Vietnam-based representative offices, branches of foreign securities companies and foreign fund management companies

1. Name of a Vietnam-based representative office or branch of a foreign securities company or foreign fund management company must be written in letters in the Vietnamese alphabet, letters F, J, Z and W, numerals and symbols.

2. Name of a Vietnam-based representative office or branch of foreign securities company or foreign fund management company must contain name of such foreign securities company or foreign fund management company and comply with the following principles:

a) Suitable with the Law on Enterprises, the Commercial Law and other relevant regulations;

b) Name of the representative office must be in the following order: “Representative office - name of the foreign securities company or foreign fund management company - in a province or central affiliated city”;

c) Name of the branch must be in the following order: “Branch - name of the foreign securities company or foreign fund management company - in Vietnam”.

3. Names of a Vietnam-based representative office or branch of a foreign securities company or foreign fund management company must be affixed at the head office of such representative office or branch.

Article 6. Responsibilities of chiefs of representative offices and branch directors

1. Chief of a Vietnam-based representative office or a branch director of a foreign securities company or foreign fund management company must be responsible before Vietnamese law and its parent company for his/her activities and activities of such representative office or branch in the scope of authorization by its parent company.

2. Chief of a Vietnam-based representative office or a branch director of a foreign securities company or foreign fund management company must authorize other person working in such representative office or branch to perform his/her rights and obligations according to law regulations when he/she leaves Vietnam with approval of his/her parent company. The maximum term of authorization is 90 days. Such representative office's chief or branch director is still responsible for performance of authorized rights and obligations.

3. In case the term of authorization as specified in Clause 2 of this Article expires but the chief of such representative office or branch director has not returned to Vietnam and made no other authorization, authorized person must notify his/her parent company. After receiving the notice of the authorized person, his/her parent company shall notify the State Securities Commission of current chief of the representative office or branch director and the appointment of new representative office's chief or branch director (if any). The authorized person has the right to continue performing rights and obligations of representative office’ chief or branch director in the scope of authorization for maximum 30 days after it is approved by the parent company.

4. The parent company must assign the new representative office’ chief or branch director in the following cases:

a) Chief of a Vietnam-based representative office or branch director of a foreign securities company or foreign fund management company is not present in Vietnam for more than 30 consecutive days without authorizing other person to perform his/her rights and obligations;

b) Chief of a Vietnam-based representative office or branch director of a foreign securities company or foreign fund management company is not present in Vietnam for more than 90 consecutive days;

c) Chief of a representative office or branch director is dead, missing, put in temporary detention, imprisoned, has his/her civil act capacity restricted or lost civil act capacity.

5. A chief or staff of a representative office must not concurrently act as one of the following positions:

a) The Vietnam-based branch director of the parent company, chief or staff of a Vietnam-based representative office or branch of a foreign organization;

b) At-law representative, General Director (Director), Deputy General Director (Deputy Director) or staff working for an enterprise that is established according Vietnamese law;

c) At-law representative, member of the Members’ Council or Board of Directors, General Director (Director), Deputy General Director (Deputy Director) of the parent company or other person working for it that has the right to sign economic contracts, asset transactions without the parent company's written authorization on behalf of such parent company.

6. A chief of a representative office may only represent the parent company to sign contracts related to its parent company’s business and investment activities with economic organizations in Vietnam when he/she has a legal written authorization of competent representative of the parent company. The power of attorney must be made separately for each signing and one copy of it must be sent to the State Securities Commission within 10 days from its effective date.

Article 7. Obligations related to tax and accounting of Vietnam-based representative offices and branches of foreign securities companies and foreign fund management companies

1. Vietnam-based representative offices and branches of foreign securities companies and foreign fund management companies and people working in such representative offices and branches shall perform their tax obligation and financial obligations according to law on tax and tax administration in Vietnam.

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

3. Vietnam-based representative offices of foreign securities companies and foreign fund management companies shall fully comply with the regulations of the Vietnamese law on accounting of Vietnam-based representative offices of foreign enterprises.

Article 8. Financial mechanisms of Vietnam-based branches of foreign securities companies and foreign fund management companies

Vietnam-based branches of foreign securities companies and foreign fund management companies must implement the financial mechanisms prescribed by Vietnamese law like domestic securities companies and foreign fund management companies.

Article 9. Examination and inspection of operations of Vietnam-based representative offices and branches of foreign securities companies and foreign fund management companies

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

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

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

Chapter II

OPERATION OF VIETNAM-BASED REPRESENTATIVE OFFICES OF FOREIGN SECURITIES COMPANIES AND FOREIGN FUND MANAGEMENT COMPANIES

Article 10. Scope of operation, rights and obligations of representative offices and their staffs

1. The scope of operation of Vietnam-based representative offices of foreign securities companies and foreign fund management companies shall comply with Clauses 2 and 3, Article 78 of the Law on Securities.

2. Rights and obligations of Vietnam-based representative offices of foreign securities companies and foreign fund management companies:

a) To open an account in foreign currencies or Vietnam dong of foreign currency origin at a commercial bank licensed to conduct foreign exchange business in Vietnam and only use this account in the operation of the representative office.  The opening, use and closure of the representative office’s account must comply with the relevant provisions of law;

b) To recruit Vietnamese and foreign employees to work in the representative office in accordance with Vietnamese law. Within 30 days after the recruitment of a foreign employee to work in the representative office in Vietnam, the parent company or representative office shall notify the State Securities Commission of the recruitment of foreigners together with documents certifying the approval of competent state management agencies according to Labor Code;

c) To have its own seal in accordance with Vietnamese law and only use this seal in transaction documents within the powers and functions of the representative office;

d) To perform only activities according to the content and within the operation duration specified in the certificate of operation registration of the representative office; not to perform securities business activities in Vietnam; not to perform asset management and investment capital management for investors, including investment capital of its parent company in Vietnam and other securities business activities in Vietnam;

dd) To have other rights and obligations as prescribed by law.

Article 11. Official operation date

Within 15 days from the official operation date, the Vietnam-based representative office of a foreign securities company or foreign fund management company shall send the State Securities Commission its report according to form prescribed in Appendix V to this Circular and documents on confirmation of the operation information disclosure according to the Law on Securities.

Article 12. Obligations of reporting and archiving dossiers of representative offices

1. Vietnam-based representative offices of foreign securities companies and foreign fund management companies must send quarterly and annual report on their operation to the State Securities Commission. Contents of reports shall be prescribed in Appendix I attached to this Circular.

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

a) For quarterly reports: Within 20 days after the last day of the quarter;

b) For annual reports: Within 90 days after the last day of the year;

3. For periodical reports specified in Clause 1 of this Article, the report data shall be taken:

a) For quarterly reports: From the first day to the last day of the reporting quarter;

b) For annual reports: From January 01 to December 30 of the reporting year;

c) A Vietnam-based representative office of a foreign securities company or foreign fund management company whose operation period is less than one reporting period, the reporting period shall be from the date of issuance of certificate of operation registration to the last day of the reporting period.

4. Vietnam-based representative offices of foreign securities companies and foreign fund management companies shall send the State Securities Commission periodical reports in electronic or paper form.

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

Chapter III

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

Section 1

OPERATION OF VIETNAM-BASED BRANCHES OF FOREIGN SECURITIES COMPANIES

Article 13. Organizational structure, governance and management of Vietnam-based branches of foreign securities companies

1. Organizational structure, governance and management of Vietnam-based branches of foreign securities companies shall be decided by their parent companies and must be in conformity with Vietnamese law on organizational structure, governance, management and internal control of domestic securities companies.

2. A compliance controller of a Vietnam-based branch of foreign securities company shall not be an affiliated person of the branch director; has graduated from university in finance, banking, law, accounting or audit. The compliance controller must possess certificates of professional qualifications in securities, including certificate of major issues about securities and securities market and certificate of law on securities and securities market or certificate of securities practice in foreign countries and certificate of law on securities and securities market.

3. Vietnam-based branches of foreign securities companies shall ensure that their employees working the following tasks must possess certificate of securities practice:

a) Providing consultancy and explanation for contracts signed with their customers;

b) Signing in the securities analysis results, securities analysis reports;

c) Providing recommendations related to securities purchase, sale or holding.

Article 14. Scope and contents of operation of Vietnam-based branches of foreign securities companies

1. Scope of operation

Vietnam-based branches of foreign securities companies may only perform securities investment consultancy.

2. Contents of operation

Contents of operation of Vietnam-based branches of foreign securities companies include provision of analysis results, analysis reports and recommendations to customers with or without charges in the following cases:

a) Providing reports on results of analysis of transactions on the securities market and providing investment recommendations;

b) Providing reports on results of analysis of operations of public companies, listed companies and other enterprises, and providing investment recommendations;

c) Signing securities investment consultancy contracts with customers.

Article 15. Rights of Vietnam-based branches of foreign securities companies

Vietnam-based branches of foreign securities companies have the following rights:

1. To collect consultancy service charges according to agreement with customers and law regulations.

2. To open an account in foreign currencies or Vietnam dong of foreign currency origin at a commercial bank licensed to conduct foreign exchange business in Vietnam and only use this account in the operation of the branch. The opening, use and closure of the account of a Vietnam-based branch of a foreign securities company must comply with the relevant provisions of law.

3. To recruit Vietnamese and foreign employees to work in the branch in accordance with relevant law.

4. To have its own seal in accordance with Vietnamese law and only use this seal in transaction documents within the powers and functions of the branch.

5. Other rights according to relevant regulations.

Article 16. Obligations of Vietnam-based branches of foreign securities companies

Vietnam-based branches of foreign securities companies have the following obligations:

1. To sign written contracts with customers for providing services to the latter; to provide sufficient and truthful information for customers.

2. To collect information about financial status, investment objectives and risk acceptability of customers; to ensure that their investment recommendations and consultancy suit financial status, investment objectives and risk acceptability of every customer, unless customers fail to provide information or provide insufficient and inaccurate information.

3. To refrain from disclosing information about consultancy service users during the course of providing consultancy service, unless such disclosure is consented to by the customers or requested by a competent agency.

4. To update and archive all files of information about customers and documents of customers and branches.

5. To only use allocated capital resource for licensed business activities, not to borrow loans from other organizations or individuals except the parent company.

6. Not to perform directly or indirectly the following acts: Making securities investment decisions on clients’ behalf; Reaching agreement with clients on profit- or loss-sharing; Advertising or declaring that its securities analyses, analysis efficiency or method is of higher value than that of another securities company; Providing untruthful information to entice or call upon clients to purchase or sell a certain type of securities, providing falsified, deceiving or misleading information to clients.

7. Other obligations according to relevant regulations.

Section 2

OPERATION OF VIETNAM-BASED BRANCHES OF FOREIGN FUND MANAGEMENT COMPANIES

Article 17. Organizational structure, governance and management of Vietnam-based branches of foreign fund management companies

Organizational structure, governance and management of Vietnam-based branches of foreign fund management companies shall be decided by their parent companies and must be in conformity with Vietnamese law on organizational structure, governance, management and internal control of domestic fund management companies.

Article 18. Scope of operation of Vietnam-based branches of foreign fund management companies

Vietnam-based branches of foreign fund management companies may only provide asset management services for capital mobilized abroad, including also assets formed in Vietnam from capital raised abroad.

Article 19. Rights of Vietnam-based branches of foreign fund management companies

Vietnam-based branches of foreign fund management companies have the following rights:

1. To use assets mobilized abroad to fund projects and businesses, provide loans and perform investment contracts under instructions of entrusting clients, investment trust contracts, charters of foreign organizations and funds, ensuring the compliance with law regulations on foreign exchange management, banking and relevant law regulations.

2. To remit their profits abroad in accordance with Vietnamese law.

3. To conduct securities trading operations stated in their establishment and operation licenses in accordance with Vietnamese law and treaties to which Vietnam is a contracting party.

Article 20. Obligations of Vietnam-based branches of foreign fund management companies

Vietnam-based branches of foreign fund management companies have the following obligations:

1. Vietnam-based branches of foreign fund management companies may not to raise capital in Vietnam for management in any form.

2. For asset management, Vietnam-based branches of foreign fund management companies must comply with the following regulations:

a) Unless their entrusting clients instruct or their investment trust contracts or charters of foreign organizations otherwise provide, when managing assets of clients, branches of foreign fund management companies shall comply with regulations on depository, separate management of assets of different clients and asset transactions between investment portfolios of entrusting clients according to law regulations applied for domestic fund management companies;

b) To keep confidential information on clients, asset transactions, investment portfolios of clients and other relevant information, except the case of provision of information at the request of the State Securities Commission and competent management agencies;

c) To comply with the laws on foreign exchange and limit of ownership in Vietnamese businesses, anti-money laundering and other relevant laws;

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

dd) Not to offer and issue securities to raise capital in the Vietnamese territory.

3. In reporting on ownership, reporting and disclosing information on trading on the securities market, Vietnam-based branches of foreign fund management companies shall:

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

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

4. Vietnam-based branches of foreign fund management companies may only use allocated capital and capital of entrusting customers (excluding shares in the portfolio of entrusting customers as exchange-traded fund) for public bid according to Article 35 of the Law on Securities when having a written approval of entrusting customers or their authorized representative on public bid, the purchasing offering price, the volume of assets expected for purchasing offering, method to distribute assets after making the purchasing offering. Vietnam-based branches of foreign fund management companies shall conduct the public offering in accordance with the law on securities.

5. In the course of operation, a Vietnam-based branch of foreign fund management company and its parent company shall:

a) Within 30 days after the parent company completes investments in its subsidiary companies, joint-stock or associated companies in Vietnam, the branch shall notify the State Securities Commission of such investments; the parent company may not contribute capital or purchase to own over 05% of the charter capital of a fund management company in Vietnam;

b) The Vietnam-based branch of foreign fund management company may neither contribute capital nor purchase

shares or capital contributions in fund management companies and securities companies in Vietnam, except when it purchases to own or owns, together with affiliated persons, no more than 05% of outstanding voting stocks of a fund management company or securities company registered for trading or listing on the Stock Exchange.

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

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

Section 3

REPORTS, DOSSIER STORAGE AND INFORMATION DISCLOSURE OF VIETNAM-BASED BRANCHES OF FOREIGN SECURITIES COMPANIES AND FOREIGN FUND MANAGEMENT COMPANIES

Article 21. Reports, dossier storage and information disclosure of Vietnam-based branches of foreign securities companies and foreign fund management companies

1. A Vietnam-based branch of a foreign securities company shall send the State Securities Commission periodical reports on its operation as follows:

a) Monthly and annual operation reports, made according to in forms provided in Appendices II and III to this Circular;

b) Quarterly, biannual and annual financial statements. Biannual financial reports must be reviewed and annual reports must be audited by an approved audit organization;

c) Reports on financial prudential ratios as prescribed by law on financial prudential ratios.

2. A Vietnam-based branch of a foreign fund management company shall send the State Securities Commission periodical reports on its operation as follows:

a) Reports as prescribed in Clause 1 of this Article, in which monthly and annual operation reports shall be made according to form as prescribed in Appendix IV to this Circular;

b) Monthly reports on management of investment portfolios as prescribed in Appendix VI to this Circular; annual financial statements of investment funds that are established in foreign country and investing in Vietnam, made according to regulations of countries of origin.

3. Time limits for submitting reports:

a) For monthly reports: Within 05 working days from the last day of a month;

b) For quarterly reports: Within 20 days from the last day of a quarter;

c) For biannual reports: Within 45 days from the last day of a second quarter;

d) For annual reports: Within 90 days from the last day of a year;

4. For periodical reports specified in Clauses 1 and 2 of this Article, the report data shall be taken:

a) For monthly reports: From the first day to the last day of reporting month (except for data shown at a certain time);

b) For quarterly reports: From the first day to the last day of reporting quarter (except for data shown at a certain time);

c) For biannual reports: From January 01 to June 30 of reporting period (except for data shown at a certain time);

d) For annual reports: From January 01 to December 30 of reporting year (except for data shown at a certain time);

e) A Vietnam-based branch of a foreign securities company or foreign fund management company whose operation period is less than one reporting period, the reporting period shall be from the date of issuance of the license of establishment and operation to the last day of the reporting period.

5. Vietnam-based branches of foreign securities companies and foreign fund management companies shall send the State Securities Commission periodical reports in electronic or paper form.

6. Vietnam-based branches of foreign securities companies and foreign fund management companies shall send the State Securities Commission report on events which may seriously affect their financial capability and operation within 03 working days after such events occur.

7. In addition to cases of reporting as prescribed in this Article, in case of necessity, in order to protect common interests and investor interests, the State Securities Commission may request Vietnam-based branches of foreign securities companies, foreign fund management companies to report on other operations of branches or parent companies in the Vietnamese territory.

8. Vietnam-based branches of foreign securities companies, foreign fund management companies shall report to the State Securities Commission within 48 hours after receiving a request as prescribed in Clause 7 of this Circular.

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

10. Vietnam-based branches of foreign securities companies, foreign fund management companies shall implement information disclosure according to law on information disclosure and law on operations of securities companies and securities investment fund management companies.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 22. Effect

This Circular takes effect on January 01, 2021 and replaces the Circular No. 91/2013/TT-BTC dated June 28, 2013 of the Minister of Finance, guiding the registration of establishment, organization and operation of Vietnam-based representative offices of foreign securities trading organizations and Vietnam-based branches of foreign fund management companies.

Article 23. Implementation organization

The State Securities Commission, Vietnam-based representative offices and branches of foreign securities companies and foreign fund management companies and relevant organizations and individuals shall implement this Circular./.