WHAT SHOULD OWNERS OF A SECURITIES INVESTMENT FUND MANAGEMENT COMPANY DO WHEN THE COMPANY DOES NOT MEET FACILITIES CONDITIONS?

For each different type of business, Vietnamese law will have its own regulations requiring conditions for businesses to be able to carry out their business activities. So, in case the owner of a securities investment fund management company does not meet the conditions for physical facilities, what should be done? Through today’s article, let’s learn about this issue with Pham Consult!

Pursuant to the provisions of Clause 2, Article 85 of the Securities Law 2019, there are provisions as follows:

Maintain conditions for issuance of License for establishment and securities business operations

1. Maintaining the conditions for issuance of the License for establishment and securities business operations is carried out according to the following regulations:

a) Securities companies must maintain and comply with the licensing conditions as prescribed in Clause 1, Points c and d, Clause 2, Clause 4 and Clause 5, Article 74 of this Law;

b) Branches of foreign securities companies in Vietnam must maintain and comply with the licensing conditions as prescribed in Points b and c, Clause 1, Article 76 of this Law;

c) The securities investment fund management company must maintain and comply with the licensing conditions as prescribed in Clause 1, Point b and Point c, Clause 2, Clause 4 and Clause 5, Article 75 of this Law;

d) Branches of foreign fund management companies in Vietnam must maintain and comply with the licensing conditions as prescribed in Points c, d and dd, Clause 2, Article 76 of this Law.

2. Within 30 days from the date the conditions specified in Clause 1 of this Article are not met or the equity capital is lower than the minimum charter capital, the Board of Directors, Council of Members or company owner Securities, securities investment fund management companies, securities company branches and foreign fund management companies in Vietnam must adopt a remedial plan and report to the State Securities Commission. The maximum time to implement the remedial plan is 06 months for equity conditions, maximum 03 months for other conditions from the date the conditions are not met.

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Thus, according to the above regulations, within 30 days from the date of failure to meet the physical facility conditions, the owner of the securities investment fund management company must approve a remedy plan and report. State Securities Committee.

The maximum time to implement the remedial plan is 06 months for equity conditions, maximum 03 months for other conditions from the date the conditions are not met.

Pursuant to Clause 3, Article 85 of the Securities Law 2019, there are regulations on maintaining the conditions for issuance of Licenses for establishment and securities business operations as follows:

Maintain conditions for issuance of License for establishment and securities business operations

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3. During the implementation of the remedial plan, securities companies, securities investment fund management companies, securities company branches and foreign fund management companies in Vietnam must implement measures Restrict the following activities:

a) Securities companies are not allowed to expand business activities; no profit sharing; Not allowed to buy back shares, except to buy back shares from employees according to regulations on issuing shares to employees or due to correction of transaction errors;

b) Securities investment fund management companies are not allowed to supplement securities trading operations; no profit sharing; are not allowed to mobilize capital to establish a fund or establish a securities investment company; Not allowed to increase charter capital for closed funds, member funds, or securities investment companies under management; Do not sign new investment management contracts, extend the term or receive additional capital from current entrusted customers; are not allowed to establish branches, establish representative offices, or invest abroad;

c) Branches of foreign securities companies and fund management companies in Vietnam are not allowed to transfer branch profits abroad.

Accordingly, the securities investment fund management company is not allowed to sign new investment management contracts during the implementation of the remedial plan because it does not maintain the conditions for issuance of the License for establishment and securities business operations. contract.

If a securities investment fund management company cannot maintain its physical facilities, will its operations be suspended?

Pursuant to Point d, Clause 1 and Clause 2, Article 94 of the Securities Law 2019 stipulates the suspension of operations of securities investment fund management companies as follows:

Suspension of operations of securities companies, securities investment fund management companies, securities company branches and foreign fund management companies in Vietnam

1. The State Securities Commission decides to suspend one, several or all business activities of securities companies, securities investment fund management companies, securities company branches and management companies foreign funds in Vietnam in the following cases:
a) The application file for granting or supplementing the License for establishment and securities business operations contains false information;
b) Failure to remedy the situation as prescribed in Article 92 of this Law;
c) Operating for the wrong purpose or not in accordance with the content specified in the license;
d) Failure to meet the conditions specified in Clause 1, Article 85 of this Law or the condition that the equity capital is not lower than the minimum charter capital after the remedy period specified in Clause 2, Article 85 of this Law.
2. After 06 months from the effective date of the suspension decision, the State Securities Commission shall issue a decision to withdraw the suspended securities trading operation in case the securities company cannot overcome the suspension situation. only specified in Point b or Point d, Clause 1 of this Article.
Thus, according to the above regulations, a securities investment fund management company that cannot maintain the conditions of its facilities may be suspended from one, several or all business activities.
After 06 months from the effective date of the suspension decision, the State Securities Commission shall issue a decision to withdraw the suspended securities trading operation in case the securities investment fund management company cannot overcome the situation. Suspended status of securities investment fund management company.

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