Security Investment Companies, commonly known as investment firms or asset management companies, play a pivotal role in the global financial ecosystem. These entities facilitate the process of investing and managing various securities on behalf of individuals, institutions, and corporations. For more detail, please contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline: (+84) 903.419.479
Security Investment Companies, commonly known as investment firms or asset management companies, play a pivotal role in the global financial ecosystem. These entities facilitate the process of investing and managing various securities on behalf of individuals, institutions, and corporations. For more detail, please contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline: (+84) 903.419.479
According to the provisions of Article 114 of the Law on Securities in 2019, a securities investment company is a securities investment fund organized in the form of a joint stock company to invest in securities. There are two types of securities investment companies, namely private securities investment companies and public securities investment companies.
The State Securities Commission shall grant the establishment and operation license of securities investment companies. After being granted the establishment and operation license by the State Securities Commission, the securities investment company shall register its business in accordance with the Law on Enterprises.
Regulations On Securities Investment Companies
2. Conditions for issuance of licenses for establishment and operation of securities investment companies
Conditions for granting establishment and operation licenses of securities investment companies are specified in Article 259 of Decree 155/2020/ND-CP as follows:
2.1. Capital requirements include
- The minimum actual contributed charter capital is VND 50 billion. A public securities investment company must entrust capital to a securities investment fund management company for management. An individual securities investment company may manage its own investment capital or entrust its capital to a securities investment fund management company to manage;
- All assets of the public securities investment company must be deposited at the custodian bank.
2.2. Conditions of headquarters
Conditions for office include: having a working office for securities investment activities. A public securities investment company, a securities investment company that entrusts capital to a securities investment fund management company for management may use the head office of the securities investment fund management company as its head office.
2.3. Personnel conditions
- Public securities investment companies, securities investment companies entrusting capital to securities investment fund management companies to manage may not recruit personnel and have a General Director (Director), Deputy General Director Director (Deputy Director) is the fund operator appointed by the securities investment fund management company.
- An individual securities investment company that manages its own capital has a General Director (Director) who meets the criteria specified in Clause 5, Article 75 of the Law on Securities and at least 02 employees with a certificate of financial analysis practice or fund management practice certificate.
2.4. Conditions on shareholders
Conditions for shareholders include:
- A public securities investment company with at least 100 shareholders who are not professional securities investors;
- An individual securities investment company has a maximum of 99 shareholders. In which, institutional shareholders must contribute at least VND 03 billion and individual shareholders must contribute at least VND 01 billion. In case of self-management, the domestic shareholder must be an organization licensed by a specialized management agency in charge of securities, banking and insurance, or a member of the Board of Directors, the General Director (Director). At least 2/3 of the members of the Board of Directors of a public securities investment company must be independent from the securities investment fund management company or custodian bank.
2.5. Conditions on assets contributed as capital
Shareholders may contribute capital in the form of securities being listed and registered for trading at the Stock Exchange in accordance with the provisions of the charter of the individual securities investment company and must ensure:
- Securities to be contributed must comply with investment objectives and investment policies of the company; not subject to transfer restrictions, suspension, suspension of transactions, cancellation of listing; is not being pledged, mortgaged, escrow, blocked or secured in other security transactions as prescribed by law;
- The capital contribution by securities must be approved by all shareholders and is considered completed only after the legal ownership of the contributed securities has transferred to a separate securities investment company.
- The price of securities contributed as capital is determined by the depository bank on the basis of the end-of-day price at the completion of the procedures for transferring ownership at the Vietnam Securities Depository and Clearing Corporation and in accordance with the charter of the investment company individual securities.
Regulations On Securities Investment Companies
3. Dossier for issuance of license for establishment and operation of a public securities investment company
Article 260 of Decree 155 stipulates dossiers for issuance of establishment and operation licenses of public securities investment companies. Accordingly, the dossier includes:
- Certificate of establishment and operation registration according to form No. 92 in the Appendix issued with this Decree.
- A report on the results of the offering, made according to form No. 102 of the Appendix issued with this Decree, enclosed with a written certification of the custodian bank of the proceeds in the offering and the number of shares sold.
- List of shareholders according to form No. 105 in the Appendix issued with this Decree.
- The minutes summarizing shareholders opinions on the appointment of members of the Board of Directors and other content collected together with the personal information and criminal records of the members of the Board of Directors (if any).
4. Dossier for issuance of license for establishment and operation of a separate securities investment company
Article 261 of Decree 155 provides for the application for a license for the establishment and operation of a separate securities investment company, whereby the application includes:
- Certificate of registration of establishment and operation, made according to form No. 92 of the Appendix issued together with this Decree, enclosed with a written authorization for the securities investment fund management company or shareholder representative to carry out the procedures for establishment of the company.
- The company charter according to the form prescribed by the Ministry of Finance.
- Depository contract with the depository bank.
- Minutes of agreement of shareholders on the establishment of a separate securities investment company, clearly stating the name of the company, securities investment fund management company (if any), depository bank, bank supervision (if any), capital contribution shareholders and the amount of capital contributed by each shareholder.
- The depository bank confirmation on the size of contributed capital, the list of securities to be contributed capital (if any), clearly stating the number and code of each shareholder contributing capital by securities, and the date of accounting for the portfolio securities into the depository account of the securities investment company together with a record of securities valuation established by the depository bank.
- List of shareholders, Certificate of enterprise registration, decision of a competent authority on capital contribution to establish a securities investment company for shareholders being organizations; Judicial records of members of the Board of Directors, General Director (Director) issued within 06 months from the date of application submission.
- In case the securities investment company entrusts capital to the securities investment fund management company for management.
- In case the securities investment company manages its own capital, supplementing the office lease contract, documents on the ownership of the head office and the right to use the head office.
Security Investment Companies play a crucial role in the financial world by providing individuals and institutions with professional management, diversification, and access to a wide range of investment opportunities. Please feel free to contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline - 0903.419.479 for legal advice and support.
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