Circular No. 105/2016/TT-BTC dated June 29, 2016 of the Ministry of Finance guiding offshore indirect investment activities of securities businesses, funds investing in securities, securities investment companies, insurance businesses

THE MINISTRY OF FINANCE

Circular No. 105/2016/TT-BTC dated June 29, 2016 of the Ministry of Financeguiding offshore indirect investment activities of securities businesses, funds investing in securities, securities investment companies, insurance businesses

Pursuant to the Law on investment dated November 26, 2014;

Pursuant to the Law on securities dated June 29, 2006;

Pursuant to the Law amending, supplementing a number of articles of the Law on securities dated November 24, 2010;

Pursuant to the Law on insurance business dated December 09, 2000;

Pursuant to the Law amending, supplementing a number of articles of the Law on insurance business dated November 24, 2010;

Pursuant to the Ordinance No. 28/2005/PL-UBTVQH on foreign exchange dated December 13, 2005;

Pursuant to the Ordinance No. 06/2013/PL-UBTVQH dated March 18, 2013 amending, supplementing a number of articles of the Ordinance on foreign exchange;

Pursuant to the Decree No. 215/2013/ND-CP dated December 23, 2013 of the Government defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Decree No. 135/2015/ND-CP dated December 23, 2013 of the Government prescribing offshore indirect investment;

At the proposal of the President of State Securities Committee, the Director of Insurance Management and Supervision Department;

The Minister of Finance promulgates the Circular guiding offshore indirect investment activities of securities businesses, Funds investing in securities, Securities Investment Companies, Insurance businesses.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of application

This Circular regulates on offshore indirect investment activities of securities businesses, Funds investing in securities, Securities Investment Companies, Insurance Businesses and offshore indirect investment trust of Fund Management Companies.

Article 2. Subjects of application

This Circular applies for securities businesses, Funds investing in securities, Securities Investment Companies, Insurance businesses and organizations, individuals related to offshore indirect investment.

Article 3.Interpretation of terms

In addition to terms interpreted under the Decree No. 135/2015/ND-CP dated December 31, 2015 of the Government prescribing on offshore indirect investment (hereinafter referred to as the Decree No. 135/2015/ND-CP, under this Circular, the following terms are interpreted as follows:

1. Securities businesses include securities companies, Fund Management Companies established and operated under the Vietnamese Law;

2. Insurance businesses are life insurance enterprises, non-life insurance enterprises, and health insurance enterprises, reinsurance enterprises

3. Valid dossier is the dossier that contains valid documents as required by the regulations under this Circular; contents are fully completed as stipulated by the law.

4.Institutional trusters are economic institutions that undertake offshore indirect investment through entrustment of foreign-currency capital to a domestic Fund Management Company licensed to undertake investment trust.

Chapter II

PROCEDURES OF GRANTING, REVOKING CERTIFICATE OF OFFSHORE INDIRECT INVESTMENT, APPROVAL DOCUMENTS ON REGISTRATION OF OFFSHORE INDIRECT INVESTMENT

Section 1

SECURITIES BUSINESSES

Article 4.Procedures of granting offshore indirect investment registration certificate

1. Application dossier for granting offshore indirect investment registration certificate of securities businesses includes:

a) Proposal paper on granting offshore indirect investment registration certificate according to the Form as stipulated under Appendix 01 promulgated together with this Circular;

b) Meeting minute and Resolution of Shareholders’ meeting or Decision of the owner on offshore indirect investment and plans on offshore indirect investment;

c) Plans on offshore indirect investment include contents on countries targeted for investment, estimated investment capital, sources of capital, assets planned to invest, expected efficiency of investment and other information;

d) Documents issued by Taxation Department certifying that the company has fully completed financial obligations under Vietnamese Law.

dd) Internal procedures on offshore indirect investment, including internal control mechanism, internal auditing, recognition and risk management related to offshore indirect investment;

e) Explanation on infrastructure of securities businesses detailing order transferring system, storing system serving for offshore indirect investment;

g) Copies of Chartered Financial Analyst Certificate, labor contract, financial analysis practicing certificate (for securities companies) or Fund management practicing certificate (for Fund Management Companies) of at least one employee of the securities business.

h) Report on compliance of regulations on management and use of state capital (for securities businesses owning state capital) in the year preceding the application year.

2. The dossier as stipulated under Clause 1 of this Article shall be made in 01 set, directly submitted or sent by post to the State Securities Committee.

3. Within 30 days since the full receipt of the dossier as stipulated under Clause 1, Clause 2 of this Article, State Securities Committee shall grant offshore indirect investment registration certificate for securities businesses, and send the certificate to the State Bank of Vietnam. If refusal, State Securities Committee shall reply in writing and clearly mention reasons of refusals.

4. Within 24 hours since the offshore indirect investment registration certificate is effective, securities businesses shall publish information on its website on offshore indirect investment registration certificate.

Article 5.Procedures of revoking offshore indirect investment registration certificate

1. If securities businesses voluntarily propose for revocation of offshore indirect investment registration certificates, the dossier includes:

a) Proposal application for revocation of offshore indirect investment registration certificate according to the Form as stipulated under Appendix No. 02 promulgated together with this Circular.

b) Meeting minute and Resolution of Shareholders’ meeting or Decision of the owner on termination of offshore indirect investment;

c) Documents explaining on termination of offshore indirect investment, of which clearly mention reasons of termination, results of investment, capital refund ability, time expected to terminate investment, plans on finalizing offshore indirect investment and other issues;

d) Originals of offshore indirect investment registration certificates;

2. Documents as stipulated under Clause 1 of this Article shall be made in 01 set, submitted directly or by post to the State Securities Committee.

3. Within 07 days since the full receipt of the dossier as stipulated under Clause 1, Clause 2 of this Article, State Securities Committee shall issue a decision to revoke offshore indirect investment registration certificates, and send the Decision to the State Bank of Vietnam.

4. Securities businesses are forced to revoke offshore indirect investment registration certificates in the following cases:

a) Failing to meet conditions as stipulated under Point d Clause 2 Article 14 of the Decree No. 135/2015/ND-CP. Within 30 days since the deadline for fixing is over, if securities businesses still can’t meet these requirements as stipulated under Point d Clause 2 Article 14 of the Decree No. 135/2015/ND-CP, the State Securities Committee shall issue the Decision on revocation of offshore indirect investment registration certificate and send the Decision to the State Bank of Vietnam;

b) The application dossier for granting offshore indirect investment registration certificate contains misleading information or fails to meet conditions on granting establishment license as stipulated by current regulations or becomes one of subjects as stipulated under clause 4 Article 2 of the Decree No. 135/2015/ND-CP. Within 30 days since securities businesses are forced to be revoked, State Securities Committee shall issue the Decision on revocation of offshore indirect investment registration certificates and send the Decision to the State Bank.

5. Since the effective day of the Decision on revocation of offshore indirect investment registration certificates, securities businesses shall:

a) Publish information within 24 hours on its websites on the Decision on revocation of offshore indirect investment registration certificates;

b) Not allowed to undertake other offshore indirect investment or extend offshore indirect investment;

c) Finalize offshore indirect investment, securities (including rights, obligations, benefits related offshore indirect investment).

d) For investment items that are not finalized, securities businesses shall report monthly to the State Securities Committee on finalization according to the Form as stipulated under Appendix 09, Appendix 10 promulgated together with this Circular until investment items’ finalization is finished.

Section 2

FUNDS INVESTING IN SECURITIES, SECURITIES INVESTMENT COMPANIES

Article 6.Procedures for approval of offshore indirect investment permission

1. Funds investing in securities, Securities investment companies through Fund Management Companies shall submit the proposal dossier for approval of offshore indirect investment permission by the State Securities Committee. The dossier includes:

a) Written proposal for offshore indirect investment permission according to the Form as stipulated under Appendix 03 promulgated together with this Circular.

b) Copies of the charter of Funds investing in securities, Securities investment companies on regulations on offshore indirect investment;

c) Copies of depository contract among depository banks, supervising banks in Vietnam of Funds investing in securities, Securities investment companies and depository institutions in foreign countries attached together with copies of depository operation registration certificate or equivalent papers of depository institutions in foreign countries;

d) Copies of international certificate CFA, labor contract of at least 01 managing staff of Funds investing in securities, Securities investment companies;

dd) Other documents as stipulated under Point dd, e Clause 1 Article 4 of this Circular;

2. Securities investment companies shall submit the dossier to the State Securities Committee for approval of offshore indirect investment permission. The dossier includes:

a) Documents as stipulated under Point a, b, c Clause 1 of this Article;

b) Internal procedures onoffshore indirect investment including mechanism on internal control, internal audit, and recognition and risk management related to offshore indirect investment;

c) Explanation on infrastructure of securities investment companies detailing order transferring system, storing system serving for offshore indirect investment;

d) Copies of Chartered Financial Analyst Certificate, labor contract, fund management-practicing certificate of at least one employee of securities investment companies.

3. The dossier as stipulated under Clause 1, Clause 2 of this Article shall be made in 01 set, directly submitted or sent by post to the State Securities Committee.

4. Within 30 days since the full receipt of the dossier as stipulated under Clause 1, Clause 2, Clause 3 of this Article, State Securities Committee shall issue the decision on offshore indirect investment permission for Funds investing in securities, securities investment companies, and send the approval documents to the State Bank of Vietnam. If refusal, State Securities Committee shall reply in writing and clearly mention reasons of refusal.

5. Within 24 hours since offshore indirect investment permission is effective, fund management companies, fund investment companies shall publish information on their websites on being approved on offshore indirect investment permission by the State Securities Committee.

Article 7.Procedures for termination of offshore indirect investment

1. If Funds investing in securities, securities investment companies terminate offshore indirect investment, the dossier for termination of offshore indirect investment includes:

a) Application for termination of offshore indirect investment according to the Form as stipulated under Appendix 04 promulgated together with this Circular;

b) Meeting minute and Resolution of Shareholders’ meeting or Decision of the owner on termination of offshore indirect investment;

c) Documents explaining on termination of offshore indirect investment, of which clearly mention reasons of termination, results of investment, capital refund ability, time expected to terminate investment, plans on finalizing offshore indirect investment and other issues;

2. Documents as stipulated under Clause 1 of this Article shall be made in 01 set, submitted directly or by post to the State Securities Committee.

3. Within 07 days since the full receipt of the dossier as stipulated under Clause 1, Clause 2 of this Article, State Securities Committee shall issue a decision on termination of offshore indirect investment, and send the Decision to the State Bank of Vietnam.

4. Funds investing in securities and securities investment companies are forced to revoke offshore indirect investment registration certificates in the following cases:

a) Failing to meet conditions as stipulated under Point d Clause 2 Article 14 of the Decree No. 135/2015/ND-CP. Within 30 days since the deadline for fixing is over, if Funds investing in securities and securities investment companies can’t meet these requirements as stipulated under Point d Clause 2 Article 14 of the Decree No. 135/2015/ND-CP, the State Securities Committee shall issue the Decision on termination of offshore indirect investment and send the Decision to the State Bank of Vietnam;

b) The application dossier for approval on offshore indirect investment registration permission of Funds investing in securities, securities investment companies contains misleading information or fails to meet conditions on granting establishment license as stipulated by current regulations or becomes one of subjects as stipulated under clause 4 Article 2 of the Decree No. 135/2015/ND-CP. Within 30 days since Funds investing in securities, securities investment companies are forced to terminate, State Securities Committee shall issue the Decision on termination of offshore indirect investment and send the Decision to the State Bank.

5. Since termination of offshore indirect investment takes effect, Funds investing in securities, securities investment companies shall:

a) Publish information within 24 hours on its websites on termination of offshore indirect investment;

b) Not allowed to undertake other offshore indirect investment or extend offshore indirect investment;

c) Finalize offshore indirect investment (including rights, obligations, benefits related offshore indirect investment).

d) For investment items that are not finalized, Funds investing in securities, securities investment companies shall report monthly to the State Securities Committee on finalization according to the Form as stipulated under Appendix 13 promulgated together with this Circular until investment items’ finalization is finished.

Section 3

INSURANCE BUSINESSES

Article 8.Procedures for grant of offshore indirect investment registration certificates

1. The application dossier for granting offshore indirect investment registration certificates includes:

a) Proposal on granting certificate of offshore indirect investment according to the Form as stipulated under Appendix 05 promulgated together with this Circular;

b) Approval documents of competent agencies as stipulated under the Charter of insurance businesses through enterprises undertake offshore indirect investment;

c) Plans on offshore indirect investment include contents on countries targeted for investment, estimated investment capital, sources of capital, assets planned to invest, expected efficiency of investment and other information;

d) Documents issued by Taxation Department certifying that the company has fully completed financial obligations to the State.

dd) Internal procedures on offshore indirect investment, including internal supervision mechanism, internal auditing, recognition and risk management related to offshore indirect investment;

e) Explanation on infrastructure of securities businesses detailing order transferring system, storing system serving for offshore indirect investment;

g) Copies of Chartered Financial Analyst Certificate, labor contract, financial analysis practicing certificate (for securities companies) or Fund management practicing certificate (for Fund Management Companies) of at least one employee of the securities business.

h) Report on compliance of regulations on management and use of state capital (for insurance businesses owning state capital as stipulated by the law on management and use of state capital to invest in business production) in the year preceding the application year.

2. The dossier as stipulated under Clause 1 of this Article shall be made in 01 set, directly submitted or sent by post to the State Securities Committee.

3. Within 30 days since the full receipt of the dossier as stipulated under Clause 1, Clause 2 of this Article, State Securities Committee shall grant certificate of offshore indirect investment for insurance businesses, and send the certificate to the State Bank of Vietnam. If refusal, State Securities Committee shall reply in writing and clearly mention reasons of refusals.

4. Within 24 hours since the certificate of offshore indirect investment is effective, insurance businesses shall publish information on its website on certificate of offshore indirect investment.

Article 9.Procedures for revocation of offshore indirect investment registration certificates

1. If insurance businesses propose to revoke offshore indirect investment registration certificate, the dossier for revocation of offshore indirect investment registration certificate includes:

a) Application for revocation of offshore indirect investment registration certificate according to the Form as stipulated under Appendix 06 promulgated together with this Circular;

b) Approval documents of competent agencies as stipulated under the Charter of insurance businesses through enterprises undertaking offshore indirect investment;

c) Documents explaining on revocation of offshore indirect investment registration certificate, of which clearly mention reasons of termination, results of investment, capital refund ability, time expected to terminate investment, plans on finalizing offshore indirect investment and other issues;

d) Originals of offshore indirect investment registration certificates;

2. Documents as stipulated under Clause 1 of this Article shall be made in 01 set, submitted directly or by post to the State Securities Committee.

3. Within 07 days since the full receipt of the dossier as stipulated under Clause 1, Clause 2 of this Article, State Securities Committee shall issue a decision on termination of offshore indirect investment, and send the Decision to the State Bank of Vietnam.

4. Funds investing in securities are forced to revoke offshore indirect investment registration certificates in the following cases:

a) Failing to meet conditions as stipulated under Point d Clause 2 Article 14 of the Decree No. 135/2015/ND-CP. Within 30 days since the deadline for fixing is over, if Funds investing in securities and securities investment companies can’t meet these requirements as stipulated under Point d Clause 2 Article 14 of the Decree No. 135/2015/ND-CP, the State Securities Committee shall issue the Decision on revocation of offshore indirect investment registration certificates and send the Decision to the State Bank of Vietnam;

b) The application dossier for offshore indirect investment registration certificate contains untruthful information that directly affects the issuance of Decision of the Ministry of Finance or becomes one of subjects as stipulated under clause 4 Article 2 of the Decree No. 135/2015/ND-CP. Within 30 days since offshore indirect investment registration certificate are revoked, the Ministry of Finance shall issue the Decision on revocation of offshore indirect investment registration certificate and send the Decision to the State Bank.

5. Since the Decision on revocation of offshore indirect investment registration certificate takes effect, insurance businesses shall:

a) Publish information within 24 hours on its websites on the Decision on revocation of offshore indirect investment registration certificate;

b) Not allowed to undertake other offshore indirect investment or extend offshore indirect investment;

c) Finalize offshore indirect investment (including rights, obligations, benefits related offshore indirect investment) within 01 year since the Decision on revocation of offshore indirect investment registration certificate takes effect.

d) For investment items that are not finalized, insurance businesses shall report quarterly to the Ministry of Finance on finalization according to the Form as stipulated under Appendix 14 promulgated together with this Circular until investment items’ finalization is finished.

Chapter III

PROCEDURES OF GRANTING, REVOKING OFFSHORE INDIRECT INVESTMENT TRUST UNDERTAKING REGISTRATION CERTIFICATE

Article 10.Procedures of granting offshore indirect investment trust undertaking registration certificate

1. The application dossier for being granted offshore indirect investment trust undertaking registration certificate includes:

a) Application for being granted offshore indirect investment trust undertaking registration certificate according to the Form as stipulated under Appendix 07 promulgated together with this Circular;

b) Internal procedures on undertaking offshore indirect investment trust, of which contain contents on recognition and risk management related to undertaking offshore indirect investment trust.

c) Documents according to Point d, Point e, Point g Clause 1 Article 4 of this Circular.

2. Documents as stipulated under Clause 1 of this Article shall be made in 01 set, submitted directly or by post to the State Securities Committee.

3. Within 30 days since the full receipt of the dossier as stipulated under Clause 1, Clause 2 of this Article, State Securities Committee shall grant offshore indirect investment trust undertaking registration certificate for Fund Management Companies, and send the certificate to the State Bank of Vietnam. If refusal, State Securities Committee shall reply in writing and clearly mention reasons of refusals.

4. Within 24 hours since the offshore indirect investment trust undertaking registration certificate is effective, Fund Management Companies shall publish information on its website on offshore indirect investment trust undertaking registration certificate.

Article 11.Procedures of revoking offshore indirect investment trust undertaking registration certificate

1. If Fund Management Companies propose to revoke offshore indirect investment trust undertaking registration certificate, the dossier for revocation of offshore indirect investment trust undertaking registration certificate includes:

a) Application for revocation of offshore indirect investment trust undertaking registration certificate according to the Form as stipulated under Appendix 08 promulgated together with this Circular;

b) Meeting minute and Resolution of Shareholders’ meeting or Decision of the owner on termination of undertaking offshore indirect investment trust;

c) Documents explaining on termination of offshore indirect investment trust, of which clearly mention reasons of termination, results of investment, capital refund ability, time expected to terminate investment, plans on finalizing offshore indirect investment and other issues;

d) Originals of revoking offshore indirect investment trust undertaking registration certificate;

2. Documents as stipulated under Clause 1 of this Article shall be made in 01 set, submitted directly or by post to the State Securities Committee.

3. Within 07 days since the full receipt of the dossier as stipulated under Clause 1, Clause 2 of this Article, State Securities Committee shall issue a decision on revocation of revoking offshore indirect investment trust undertaking registration certificate, and send the Decision to the State Bank of Vietnam.

4. Fund Management Companies are forced to revoke offshore indirect investment trust undertaking registration certificate in the following cases:

a) Failing to meet conditions as stipulated under Point e Clause 2 Article 23 of the Decree No. 135/2015/ND-CP. Within 30 days since the deadline for fixing is over, if Fund Management Companies can’t meet these requirements as stipulated under Point e Clause 2 Article 23 of the Decree No. 135/2015/ND-CP, the State Securities Committee shall issue the Decision on revocation of offshore indirect investment trust undertaking registration certificate and send the Decision to the State Bank of Vietnam.

Since failing to meet regulations as stipulated under Point e Clause 2 Article 23 of the Decree No. 135/2015/ND-CP, Fund Management Companies are not allowed to sign, extend offshore indirect investment trust undertaking contract.

b) The application dossier for offshore indirect investment registration certificate of Fund Management Companies contains untruthful information or fails to meet conditions as stipulated by current regulations. Within 30 days since offshore indirect investment trust undertaking registration certificates are revoked, the State Securities Committee shall issue the Decision on revocation of offshore indirect investment trust undertaking registration certificate and send the Decision to the State Bank.

5. Since the Decision on revocation of offshore indirect investment trust undertaking registration certificate takes effect, Fund Management Companies shall:

a) Publish information within 24 hours on its websites on the Decision on revocation of offshore indirect investment trust undertaking registration certificate;

b) Not allowed to sign new offshore indirect investment trust undertaking contract (applied for cases as stipulated under Clause 1, Point b Clause 4 of this Article).

c) Terminate transactions and asset management in foreign countries, except for transactions with a view to finalizing investment items of customers;

d) Liquidate offshore indirect investment trust undertaking contract, finalize investment items (closing or transferring), transfer all amount of money and securities at the request of customers or hand over responsibilities to the Fund Management Company that replaces and is granted offshore indirect investment trust undertaking registration certificate;

dd) For offshore indirect investment trust undertaking contract that are not liquidated, Fund Management Company shall report quarterly to the State Securities Committee on liquidation according to the Form as stipulated under Appendix 12 promulgated together with this Circular until liquidation of trust undertaking contract is finished.

Chapter IV

Section 1

DEALING FOR OFFSHORE INDIRECT INVESTMENT

Article 12. General provisions on dealing for offshore indirect investment

1. Insurance businesses, securities businesses, Funds investing in securities, Securities Investment Companies undertaking offshore indirect investment according to the law on investment and the law on banks after being granted an offshore indirect investment registration certificate, approval documents licensing offshore indirect investment and after obtaining the State Bank of Vietnam’s written certification of their dealing limit registrations.

2. Insurance businesses, securities businesses, Funds investing in securities, Securities Investment Companies shall conduct dealing limit registration as stipulated under regulations of the State Bank.

3. Dealing institutions that have foreign capital (under the subjects as stipulated under Clause 1 Article 23 of the Law on Investment) are not allowed to undertake offshore indirect investment.

4. Dealing institutions are granted offshore indirect investment registration certificates and offshore indirect investment registration certificate is still effective, dealing institutions are not allowed to undertake offshore indirect investment through institutional trustees.

5. Fund Management Companies sign depository contracts, supervision contract with depository banks, supervising banks in Vietnam to deposit, supervise assets of Funds investing in securities, Securities Investment Companies; Funds investing in securities are not allowed to authorize depository organizations in foreign countries to deposit assets of offshore indirect investment of Funds investing in securities, Securities Investment Companies.

6.Depository authorization as stipulated under Clause 5 of this Article must comply with the following regulations:

a) Depository trust must be regulated under the charter of Fund investing in securities, Securities Investment Companies and be in accordance with the law;

b) Authorization shall be undertaken based on the authorization contract among depository bank, supervising banks in Vietnam and depository organizations in foreign countries. Authorization contract must specify rights, obligations, and responsibilities of depository bank, supervising banks in Vietnam and depository organizations in foreign countries and must be in accordance with the law;

c) Depository bank, supervising banks in Vietnam shall be responsible for depository authorization, supervise and assess authorized depository.

d) Depository bank, supervising banks in Vietnam must ensure that assets deposited in foreign countries shall be registered to be belonged to Funds investing in securities, securities investment companies that deposit banks, supervising banks providing services;

dd) Fund Management Companies, depository banks and supervising banks in Vietnam must collect all information on depository assets in foreign countries that belong to Funds investing in securities, securities investment companies;

e) Depository banks, supervising banks in Vietnam shall comply with regulations on depository, supervising assets according to the law on establishment and management of Funds investing in securities, the law on establishment, organization and management of securities investment companies and other regulations.

7. Insurance businesses signing depository contract with depository organizations in foreign countries are allowed to provide depository services according to the law of that foreign country.

Insurance businesses may sign a contract with depository banks in Vietnam to deposit offshore indirect investment assets. Depository banks in Vietnam are allowed to authorize depository organizations in foreign countries to deposit offshore indirect investment assets and be responsible for authorized depository.

8. Within 05 working days since the depository contract is signed with offshore depository organizations or since the authorization depository contract is signed with offshore depository organizations, or since offshore depository organization is changed:

a) Insurance businesses shall notify to the Ministry of Finance on signing depository contracts, depository authorization contract attached together with copy of securities depository registration certificate or equivalent documents of offshore depository organizations.

b) Depository banks, supervising banks in Vietnam of Funds investing in securities, securities investment companies shall notify to the State Securities Committee on sign authorization depository contract together with copy of depository activity registration certificate or equivalent documents of offshore depository organizations.

Article 13.Safe investment ratio

1. Only securities businesses licensed to undertake securities dealing are allowed to invest or undertake offshore indirect investment (not including cases as stipulated under Clause 4 Article 19 of the Decree No. 135/2015/ND-CP). Offshore indirect investment shall be conducted by securities businesses or their branches in foreign countries (if any).

2. Securities businesses as stipulated under Clause 1 of this Article are allowed to invest, entrust into investment equipment as stipulated by the State Bank and:

a) Not exceeding their dealing limits as registered with the State Bank;

b) If offshore indirect investment is arisen, the total investment, entrustment of offshore indirect investment is not over 30% of the ownership according to the most recent audited financial statements and limitations on investment, investment ratio according to the law on guidelines on establishment and operation of securities companies determined in this case is domestic investment and offshore investment.

Article 14.Safe investment ratio of Fund Management Companies

1. Fund Management Companies are only permitted to invest at most 20% of owner’s capital in the most recent audited financial statement or semi-annual financial statement and the financial statement of recent quarter and should not exceed registered dealing rate that are confirmed by the State Bank.

2. If investment portfolio of Fund Management Companies exceeds limits as stipulated under Clause 1 of this Article due to market price fluctuation of assets, due to being enjoyed rights related to assets, Fund Management Companies shall implement measures of adjustment to comply with investment limits as stipulated under Clause 1 of this Article within 03 months since the day of exceeding limits starts.

3. Fund Management Companies must comply with regulations on financial investment according to regulations on establishment, organization and operation of Fund Management Companies when conducting offshore indirect investment.

Article 15. Safe investment ratio of Funds investing in securities, securities investment companies

1. Funds investing in securities, securities investment companies are only permitted for offshore indirect investment into investment equipments as stipulated under the charter of Funds investing in securities, securities investment companies and be in accordance with regulations of the State Bank.

2. Funds investing in securities, securities investment companies are only permitted to invest at most 20% of net asset value in the most recent investment operation report and should not exceed registered dealing rate that are confirmed by the State Bank.

3. Structure of offshore indirect investment, limits of offshore indirect investment, and adjustments of offshore indirect investment limits, securities investment companies must comply with regulations on investment structure, investment limits, adjustment on investment limits according to the law on establishment and management of Funds investing in securities and regulations on establishment, organization and management of securities investment companies.

Article 16. Safe investment ratio of insurance businesses

1. Insurance businesses are permitted for offshore indirect investment from owner’s capital according to the law.

In all cases, the total offshore indirect investment capital should not exceed the value determined by owner’s capital minus:

- Higher amount between legal capital and minimum solvency margin; and

- Amount used for offshore indirect investment (if any).

2. Insurance businesses are permitted dealing investment into investment equipment regulated by the State Bank but it should not exceed 5% of share volume of a foreign organization (except for foreign government bonds) and should not exceed registered dealing rate that are confirmed by the State Bank.

3. Quarterly, based on financial situations, Insurance businesses shall re-assess their offshore indirect investment. If investment ratio of the enterprise fails to meet regulations as stipulated under Clause 1, Clause 2 of this Article, that enterprise shall implement necessary measures to comply with investment limits as stipulated within 03 months since the last day of the quarter.

Section 2

UNDERTAKING OF OFFSHORE INDIRECT INVESTMENT TRUST

Article 17.General provisions on undertaking of offshore indirect investment trust

1. Fund Management Companies shall their trust undertaking limits as stipulated by the State Bank of Vietnam.

2. Fund Management Companies shall undertake offshore indirect investment trust as stipulated by the law on investment and the law on banks after obtaining the State Bank of Vietnam’s written certificate of their trust undertaking registrations and the State Bank of Vietnam’s written certification of their trust undertaking limit registrations.

3. After undertaking offshore indirect investment trust, Fund Management Companies and institutional trustees shall conduct a written contract; Fund Management Companies shall ensure that institutional trustees meet conditions as stipulated under Article 20 of the Decree No. 135/2015/ND-CP.

Investment trust contract specifies entrusted amount, investment equipment, rights and obligations of parties and in accordance with current regulations. Investment trust contract clearly specifies time to liquidate the contract when Fund Management Companies’ offshore indirect investment trust undertaking registration certificate is revoked.

4. Institutional trustees must meet regulations on capital sources for offshore indirect investment as stipulated under Article 10 of the Decree No. 135/2015/ND-CP and be responsible for risks for capital amounts entrusted for offshore indirect investment.

5. Institutional trustees and Fund Management Companies shall meet regulations as stipulated under Article 19, Article 22 of the Decree No. 135/2015/ND-CP.

6. Fund Management Companies signing depository contract with depository organizations in foreign countries are allowed to provide depository services as stipulated by the law of that country.

Fund Management Companies may sign the contract with depository bank in Vietnam to deposit offshore indirect investment assets of trust organizations. Depository bank in Vietnam is allowed to authorize offshore depository organizations to deposit offshore indirect investment assets of trust organization and shall be responsible for operation of depository that is authorized.

7. Within 05 working days since Fund Management Companies sign depository contract with offshore depository organizations, depository bank in Vietnam shall sign depository authorization contract with offshore depository organizations or change offshore depository organizations, Fund Management Companies shall notify to the State Securities Committee together with depository contract, depository authorization contract, copies of depository activity registration certificate or equivalent documents of offshore depository organizations.

8. Depository activity, offshore indirect investment authorization activity must comply with regulations on establishment, organization and operation of Fund Management Companies and other related regulations.

Chapter V

PROVISION OF INFORMATION AND REPORTING OBLIGATIONS

Article 18. Providing information on Fund Management Company

1. Fund Management Company shall provide the investor with the prospectus, of which contains contents on risks for Funds investing in securities, securities businesses when undertaking offshore indirect investment, responsibility of depository banks, supervising banks in Vietnam for offshore indirect investment, investment portfolio, structure of offshore indirect investment of Securities Investment Funds, Securities Investment Companies.

2. If being required by institutional trusters, Fund Management Company shall provide procedures on risk management and clearly specifies limits on investment, measures to prevent and manage risk used to manage assets.

3. For institutional trusters, Fund Management Company shall:

a) Provide depository contract and other documents attached with depository contracts on offshore indirect investment.

b) Monthly report on investment portfolio as stipulated by the law on establishment, organization and operation of Fund Management Company.

c) Provide statements of investment portfolio account, statements of transactions certified by depository organizations, information on investment management and answer any inquiries at the request of customers.

4. When being required, Fund Management Company shall provide the State Securities Committee with labor contracts together with documents related to institutional trusters as follows:

a) Copies of Financial Statement audited in 5 consecutive year before the year of offshore indirect investment trust as stipulated under Clause 1 Article 20 of the Decree No. 135/2015/ND-CP.

b) Documents of tax agencies certified having fulfilled financial obligations toward the State and owing no tax arrears to the state budget.

c) Having documents to prove that the foreign-currency amount in its account for offshore indirect investment trust is the core foreign currency balance.

d) Having an offshore indirect investment plan approved by its competent body (the Shareholders’ General Meeting, Board of Directors, Members’ Council or the equivalent) or another competent authority in accordance with law.

dd) Report on compliance of regulations on management and use of state capital (in case the institutional truster is an economic institution with state capital) in the year before the year of offshore indirect investment trust.

Article 19. Reporting obligations

1. Reporting obligations for securities companies:

a) Within 03 working days since the State Bank of Vietnam certifies on dealing limit registration on offshore indirect investment, securities companies shall report to the State Securities Committee on dealing limit on offshore indirect investment together with copies of Dealing limit registration certification written by the State Bank of Vietnam.

b) Securities companies shall report to the State Securities Committee monthly on dealing limit situations according to the Form as stipulated under Appendix No. 09 promulgated together with this Circular. Deadline to send the report is 10 working days since the last day of the month.

2. Reporting obligations for Fund Management Company:

a) Within 03 working days since the State Bank of Vietnam certifies on dealing limit registration, trust undertaking limit on offshore indirect investment, Fund Management Company shall report to the State Securities Committee on dealing limit, trust undertaking limit on offshore indirect investment together with copies of trust undertaking limit registration certification written by the State Bank of Vietnam.

b) Fund Management Company shall report to the State Securities Committee monthly on dealing limit situations according to the Form as stipulated under Appendix No. 10 promulgated together with this Circular, situations on trust undertaking limit on offshore indirect investment according to the Form as stipulated under Appendix No. 11 promulgated together with this Circular, management of offshore indirect investment portfolio according to the Form as stipulated under Appendix No. 12 promulgated together with this Circular. Deadline to send the report is 10 working days since the last day of the month.

3. Reporting obligations for Funds investing in securities, Securities Investment Companies

a) Within 03 working days since the State Bank of Vietnam certifies on dealing limit registration on offshore indirect investment, Funds investing in securities, Securities Investment Companies via Fund Management Company shall report to the State Securities Committee on dealing limit on offshore indirect investment together with copies of dealing limit registration certification written by the State Bank of Vietnam.

b) Funds investing in securities, Securities Investment Companies via Fund Management Company shall report to the State Securities Committee monthly on dealing limit situations on offshore indirect investment according to the Form as stipulated under Appendix No. 13 promulgated together with this Circular. Deadline to send the report is 10 working days since the last day of the month.

4. Reporting obligations for insurance businesses

a) Within 03 working days since the State Bank of Vietnam certifies on dealing limit registration on offshore indirect investment, insurance businesses shall report to the Ministry of Finance on dealing limit on offshore indirect investment together with copies of dealing limit registration certification written by the State Bank of Vietnam.

b) Insurance businesses shall report to the Ministry of Finance monthly on dealing limit situations on offshore indirect investment according to the Form as stipulated under Appendix No. 14 promulgated together with this Circular. Deadline to send the report is 10 working days since the last day of the month.

5. Reporting obligations for banks supervising in Vietnam

Banks supervising in Vietnam shall report to the State Securities Committee on supervision of offshore indirect investment of Funds investing in securities, Securities Investment Companies according to the law on establishment and management of Funds investing in securities and regulations on establishment and operation of Securities Investment Companies.

6. Securities businesses, insurance businesses undertaking offshore indirect investment under competent authority-approved plans of economic institutions of which at least 65% of charter capital is owned by the State shall report to competent agencies with 24 hours since permission documents on offshore indirect investment issued by the Prime Minister is received according to Article 9 of the Decree No. 135/2015/ND-CP.

7. Within 5 working days since the date of amending, supplementing internal procedures on offshore indirect investment, securities businesses, and insurance businesses shall send copies of internal procedures on offshore indirect investment that are amended and supplemented to competent agencies.

IMPLEMENTATION ORGANIZATION

Article 20. Implementation provisions

This Circular takes effect on August 18, 2016.

Article 21. Implementation organization

1. Ministry of Finance, State Securities Committee, securities businesses, Funds investing in securities, Securities Investment Companies, Insurance businesses and other related organizations, individuals shall implement this Circular.

2. Amendments, supplementation of this Circular shall be decided by Minister of Finance.

For the Minister of Finance

The Deputy  Minister

Tran Xuan Ha