Model charter of fund management one member limited liability companies

Model charter of fund management one member limited liability companies in Vietnam

Post date: 08-12-2014

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Model charter of fund management one member limited liability companies in Vietnam  issued with Circular 212-2012-TT-BTC of the Ministry of Finance dated 5 December 2012 providing guidelines for establishment, organization and operation of fund management companies.

Model charter of fund management one member limited liability companies

Model charter of fund management one member limited liability companies

SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom – Happiness
___________________________________

Model charter of fund management one member limited liability companies

Legal Bases:
- The Law on Securities dated 29 June 2006;
- The Law on Amendment of and Addition to a Number of Articles of the Law on Securities dated 24
November 2010;
- The Law on Enterprises dated 29 November 2005 and its implementing guidelines;
- Decree 58-2012-ND-CP dated 20 July 2012 making detailed regulations and providing guidelines for
implementation of a number of articles of the Law on Securities (amended);
- Circular 212-2012-TT-BTC of the Ministry of Finance dated 5 December 2012 providing guidelines
for establishment, organization and operation of fund management companies;
- Other relevant legal instruments,

(Model charter of fund management one member limited liability companies)

CHAPTER I
General Provisions

Article 1 Definitions
Unless otherwise stipulated in the articles or in the context of this Charter, the following terms have the meaning as defined below:
(a) Company means <name of the company>;
(b) Charter capital means the amount of capital actually contributed by shareholders/members/the owner of the Company and recorded in the Charter of the Company;
(c) Law on Securities means the Law on Securities passed by the National Assembly of the Socialist Republic of Vietnam on 29 June 2006 and Law 62-2010-QH12 dated 24 November 2010 on amendment of and addition to a number of articles of the Law on Securities dated 29 June 2006;
(d) Law on Enterprises means the Law on Enterprises passed by the National Assembly of the Socialist Republic of Vietnam on 29 November 2005;
(e) Date of establishment means the date on which the Company is issued with a licence for establishment and operation.
(f) Law means all legal instruments stipulated in article 1 of the Law on Promulgation of Legal Instruments issued on 12 November 1996 and the Law on amendment of and addition to a number of articles of the Law on Promulgation of Legal Instruments dated 16 December 2002;
(g) Manager of the Company means the Chairman of the Members’ Council, the Chairman of the Company, the Chairman of the Board of Management, a member of the Board of Management, a member of the Members’ Council, the Director or General Director and other managerial positions <as stipulated in the Charter of the Company>;
(h) Related [affiliated] persons means individuals or organizations with interactive relations as stipulated in article 6.34 of the Law on Securities;
(i) Vietnam means the Socialist Republic of Vietnam;
(j) SSC means the State Securities Commission;
(k) LL means limited liability.
2. In this Charter, the reference to any article or document includes documents which amend or supplement or replace such clause or document.
3. Headings are incorporated for reference only and do not affect the meaning of this Charter. Words or terms defined in the Law on Securities and the Law on Enterprises have the same meaning in this Charter if they do not conflict with the subject or context.

Article 2 Name of the Company
1. Full name in Vietnamese:
2. Full name in English:
3. Transaction name:
4. Abbreviated name:
5. Any change to the name of the Company shall be decided by the General Meeting of Shareholders/the Members” Council/the Owner of the Company and must be approved by the SSC.

Article 3 Form of ownership and scope of liability
1. The Company is organized in the form of a LL/shareholding company, and is established, organizes its management and operates pursuant to the Law on Securities and relevant laws on the terms and conditions set out in this Charter.
2. The Owner of the Company (in the case of a one [single] member LL company) and members/shareholders contributing capital to establish the Company are responsible for debts and other property obligations of the Company within the scope of their capital contribution/charter capital of the Company.
3. The Company has legal entity status, has its own seal and bank accounts, and is financially independent.
4. The Company is established on the basis that shareholders/members/the Owner voluntarily participate in contributing capital.

Article 4 Addresses of head office, and offices of branches and representative offices in Vietnam (specify house number, street, ward, district, city and province)
1. Head office of the Company:
- Address:
- Telephone:
- Facsimile:
- Website (if any):
2. Office of the branch(es) of the Company:
- Address:
- Telephone:
- Facsimile:
3. Representative office(s) of the Company:
- Address:
- Telephone:
- Facsimile:
4. The opening or closure of a branch or representative office and any change to the location of the head office or of the office of a branch or representative office shall be decided by the General Meeting of Shareholders/the Members” Council/the Owner of the Company and must be approved by the SSC.

Article 5 Business operations
The Company is permitted to conduct business activities as stated in its licence for establishment and operation issued by the SSC, comprising the following activities:
- Management of securities investment funds;
- Management of securities investment portfolios;
- Securities investment consultancy.

Article 6 Duration of operation
The duration of operation of the Company is … year(s) (or indefinite) commencing from the date of issuance of the licence for establishment and operation, and may be extended in accordance with law at the time of expiry of such duration, unless the operation is terminated pursuant to a decision of the General Meeting of Shareholders/the Members’ Council/the Owner of the Company or pursuant to a decision of a competent State agency.

Article 7 Legal representative
The General Director (Director)/the Chairman of the Board of Management/the Chairman of the Members’ Council/the Chairman of the Company shall be the legal representative of the Company. The legal representative of the Company must permanently reside in Vietnam; in a case where he or she is absent from Vietnam for more than thirty (30) days, he or she must authorize another member of the Company to exercise the rights and perform the obligations of the legal representative of the Company as stipulated in this Charter.
Information about the Legal Representative of the Company:
Mr/Ms:    Gender:
Date of birth:   Nationality:
ID”s card/passport number: Date of issue: Place of issue:
Permanent residential address:

(Model charter of fund management one member limited liability companies)

CHAPTER II
Charter Capital – Owner of the Company

Article 8 Charter capital and increase or decrease of charter capital

1. The charter capital of the Company is VND….. (….. billion Vietnamese dong) contributed in cash by shareholders/members/the Owner of the Company.
2. The charter capital of the Company may increase or decrease depending on the business and investment needs and on the operational scale of the Company in accordance with applicable law.
3. The Company may increase its charter capital in the following forms:………..
4. The Company may decrease its charter capital in the following forms:………..
5. The Company must make a report to the SSC before and after increasing or decreasing the charter capital and must ensure that the increase or decrease of the charter capital of the Company shall comply with law.

C. One Member Limited Liability Company
[Articles 32 to 34 are applicable to One Member Limited Liability Companies.]

Article 32 Rights of company owners

1. A company owner has the following rights:
(a) To make decisions on the contents of the Charter of the Company, amendments of and additions to the Charter of the Company;
(b) To make decisions on strategies for development and annual business plans of the Company;
(c) To make decisions on the organizational and management structure of the Company, to appoint, remove or dismiss managerial positions of the Company;
(d) To make decisions on investment projects valued at fifty (50) or more per cent of the total value of the assets recorded in the most recent financial statement of the Company, or a smaller percentage as stipulated in the Charter of the Company;
(dd) To make decisions on solutions for market development, marketingand technology;
(e) To approve loan agreements and other contracts as stipulated in the Charter of the Company valued at fifty (50) or more per cent of the total value of the assets recorded in the most recent financial statement of the Company, or a smaller percentage as stipulated in the Charter of the Company;
(g) To make decisions on sale of assets valued at fifty (50) or more per cent of the total value of the assets recorded in the most recent financial statement of the Company, or a smaller percentage as stipulated in the Charter of the Company;
(h) To make decisions on increases in charter capital of the Company; on assignment of all or part of the charter capital of the Company to other organizations or individuals;
(i) To make decisions on establishment of subsidiary companies or on capital contribution to other companies;
(k) To organize supervision and assessment of the business operations of the Company;
(l) To make decisions on use of profits after fulfilment of tax obligations and other financial obligations of the Company;
(m) To make decisions on re-organization or dissolution and petition for bankruptcy of the Company;
(n) To recover all of the value of assets of the Company after the Company completes dissolution or bankruptcy [procedures];
(o) Other rights in accordance with the Charter of the Company.

Article 33 Obligations of company owners
1. To contribute capital in full and on time as undertaken.
2. To comply with the Charter of the Company.
3. To identify and separate assets of the company owner from assets of the Company.
4. To comply with the law on contracts and relevant laws with respect to any purchase, sale, borrowing, lending, lease or rental and other transactions between the Company and the company owner.
5. To perform other obligations in accordance with the Charter of the Company.

Article 34 Restrictions on rights of company owner
1. A company owner may withdraw capital only by way of assignment of a part or all of the charter capital to other organizations and individuals; in the case of withdrawal of all or part of its contributed capital from the Company in another form, the company owner must be jointly liable for debts and other property obligations of the Company.
2. The company owner shall not withdraw profits of the Company in cases where the Company has not
paid in full all debts and other property obligations which are due.

(Model charter of fund management one member limited liability companies)

CHAPTER III
Organizational and Management Structure of the Company

Article 35 Organizational form of the Company

The Company shall operate in the form of a one member LL company.

Article 36 Director or General Director
The Director or General Director of the Company shall manage the day-to-day business operations of the Company, and shall be responsible before the Members’ Council/the Chairman/the Board of Management of the Company and before the law for the exercise of his or rights and the performance of his or her duties.

Article 37 Rights and duties of the Director or General Director
1. To organize the implementation of resolutions of the Members” Council/Board of Management or the Chairman of the Company.
2. To make decisions on all issues relating to the day-to-day business operations of the Company.
3. To organize the implementation of business plans and investment plans of the Company.
4. To issue the regulations on internal management of the Company.
5. To appoint, remove and dismiss managerial positions in the Company, except for those under the scope of authority of the Members” Council/Board of Management or the Chairman of the Company.
6. To sign contracts in the name of the Company, except for those under the scope of authority of the Chairman of the Members” Council or of the Chairman of the Company.
7. To make recommendations with respect to the organizational structure of the Company.
8. To submit the final annual financial statements to the Members’ Council or the Chairman of the Company.
9. To recommend the plan for use of profits or for dealing with losses in business.
10. To recruit employees.
11. Other rights and duties stipulated in the Charter of the Company and in the labour contract which the Director or General Director entered into with the Company and in accordance with a resolution of the Members” Council or of the Board of Management or of the Chairman of the Company.

Article 38 Criteria and conditions to become Director or General Director
1. A Director or General Director must satisfy the following criteria and conditions:
(a) Having full capacity for civil acts and not being prohibited from management of enterprises by the law on enterprises;
(b) Being an individual owning at least ten (10) per cent of the charter capital of the Company, or other conditions as stipulated in the Charter of the Company;
(c) Not being a related person of a member of the Members’ Council or of the Chairman of the Company, of a person authorized to directly appoint the authorized representative or of the Chairman of the Company;
(d) Satisfying conditions to become the Director or General Director as stipulated in the law on securities.
2. In the case of a subsidiary company where the State share of capital contribution or State owned capital accounts for more than fifty (50) per cent of the charter capital, in addition to the criteria and conditions stipulated in clause 1 of this article, the Director or General Director may not be the spouse, father, adoptive father, mother, adoptive mother, child, adopted child or sibling of the managers and of a person authorized to appoint the managers of the parent company.

Article 39 Remuneration, salary and bonus of managers of the Company
1. The Company has the right to pay remuneration, salary and bonus to the members of the Members” Council, the Chairman, the members of the Board of Management, the Director or General Director and other managers of the Company in accordance with its business results and efficiency.
2. The remuneration and salary of the members of the Members” Council, the Chairman, the members of the Board of Management, the Director or General Director and other managers of the Company shall be included in business expenses in accordance with the law on corporate income tax and other relevant laws, and must be recorded as a separate item in annual financial statements of the Company.

Article 40 Internal audit
1. The Company shall establish an internal audit department under the Board of Management or the Members” Council or the Owner of the Company.
2. Personnel of the internal audit department must satisfy the requirements of law applicable to their positions.
3. Responsibilities of the internal audit department
(a) To inspect and evaluate the organizational structure, corporate governance activities, and operation and co-ordination of each department and each position in order to prevent conflicts of interest and to protect the interests of clients;
(b) To inspect and evaluate the completeness, effectiveness, efficiency of and level of compliance with the provisions of law and of the Charter of the Company; internal control system; internal policies and procedures comprising code of professional ethics, professional rules, risk management rules and system, information technology system, accounting, reporting and information disclosure system and rules, procedures for receiving and dealing with denunciations and claims from clients, and other internal regulations;
(c) To check the validity, lawfulness, truthfulness, level of care of and compliance with risk management and professional rules;
(d) To conduct audits of all operations of all departments of the Fund Management Company;
(dd) To make recommendations on solutions for perfecting and improving operational effectiveness and efficiency of the Company; to monitor results of implementation of recommendations after audit as approved by the Board of Management or the Members” Council or the Chairman of the Company.
4. The internal audit activities must ensure the following principles:
(a) Independence
The internal audit department is independent of other departments of the Fund Management Company and is not subject to management by the Executive Committee of the Fund Management Company; the activities of the internal audit department are independent of other activities of the Fund Management Company;
(b) Objectiveness
The internal audit must be conducted objectively, equally, without prejudice, and must not be subject to any influence or interference when it is conducted;
(c) Honesty
The internal audit work must be carried out honestly, prudently and responsibly;
(d) Co-ordination
The internal audit department has the sole right to have unlimited access to information and documents of the Company. Members of the Executive Committee and staff of the Fund Management Company are responsible to co-ordinate with each other and to completely, promptly, honestly and accurately provide relevant information and documents at the request of the internal audit department. All departments of the Company are responsible to notify the internal audit department when any weakness, outstanding issue, default, risk or major loss of assets of the Company or of a client is discovered;
(dd) Confidentiality
The internal audit department and its staff are not permitted to disclose any information obtained during the course of audit, except for the case of disclosure to competent State administrative agencies in accordance with law.

Article 41 Internal control
1. The Company must establish an internal control system in compliance with the organizational structure of the Company, establish an internal control department directly under the Executive Committee, and promulgate internal control rules comprising professional policies, regulations and procedures and other internal rules. The internal control department has the following responsibilities:
(a) To conduct supervision in order to ensure that the activities of each position and each department and of the entire Company comply with law, professional policies and rules and internal rules of the Company; to supervise the performance of responsibilities by all staff in the Company for the activities delegated or authorized on the following principles:
- The mechanism for delegation and authorization must be clear, specific, transparent, and must separate duties and powers of individuals and departments in the Company. The professional rules must separate functions and duties of each position and each department in the Company from the analysis, evaluation, agreement or approval or decisions on implementation, organization of implementation, reporting and supervision upon implementation;
- An individual is not permitted to concurrently hold multiple positions and perform the duties with conflicting or overlapping purposes or interests; or may independently or on his/her own implement an entire professional process being analysis, evaluation, decision, organization of implementation, reporting and supervision without consulting with other departments or individuals in respect of both business activities of the Company and activities of management of assets of clients;
(b) To participate in formulating and supervising organization of implementation of internal policies, regulations, procedures and rules of the Company in order to prevent conflicts of interest; to supervise implementation of the code of professional ethics; to summarise, archive, conduct statistics and supervise business activities of the Company and personal transactions of staff of the Company;
(c) To participate in formulating rules, and organizing implementation of risk management work for the operation of the Company and for each type of product and each entrusting client; to promptly identify and evaluate the level of risk, establish restrictions on investment in order to mitigate the level of risks and take measures for prevention and management of potential risks in professional activities of the Company;
(d) To conduct supervision in order to ensure that the net asset values of [investment] portfolios and fund certificates are determined in accordance with law and internal rules; that assets and human resources of the Company are managed safely and efficiently; that assets of clients are managed separately and independently; and that financial statements, operational reports, reports on prudential requirements and other reports of the Company are prepared in a truthful, accurate and timely manner and are fully updated in accordance with law;
(dd) To supervise and ensure [operation of] the financial information system and to implement management honestly, completely, timely and accurately; to have a back-up information system which promptly deals with such situations as natural disasters, fire, explosion and so forth, ensuring maintenance of continuous operation of the Company;
(e) To propose options for resolving or dealing with disputes, conflicts of interest and claims from clients or [trading] partners; and to propose back-up plans for remedying consequences upon occurrence of any event;
(g) To perform the function of internal audit where the Fund Management Company is not required to establish an internal audit department as stipulated by law.
2. Personnel of the internal audit department must satisfy the requirements of law applicable to their positions.

B. One Member Limited Liability Company

[Articles 52 to 57 are applicable to One Member Limited Liability Companies.]

Article 52 Members’ Council

(This article only applies when the company owner being an organization appoints two or more authorized representatives)
1. The Members’ Council shall, in the name of the company owner, organize the implementation of rights and obligations of the company owner; has the right to implement rights and obligations of the Company in the name of the Company; shall be responsible before the law and to the company owner for the implementation of delegated rights and obligations in accordance with this Charter and relevant laws.
2. The company owner shall appoint the chairman of the Members’ Council. The term of office, rights and duties of the chairman of the Members’ Council shall be as stipulated in article 44 of this Charter.
3. The authority and methods to convene meetings of the Members’ Council shall be as stipulated in article 45 of this Charter.
4. A meeting of the Members’ Council shall be conducted where at least two thirds (⅔) of the members attend. Unless otherwise stipulated in the Charter of the Company, each member shall have an equal vote. The Members’ Council may pass a resolution by way of collection of written opinions.
5. A resolution of the Members’ Council shall be passed when approved by more than half of the attending members. Any amendment of or addition to the Charter of the Company, any reorganization of the Company, or any assignment of a part or all of the charter capital of the Company must be approved by at least three quarters (¾) of the attending members.
A resolution of the Members’ Council shall take legal effect from the date of passing, except where approval of the company owner is required as stipulated in the Charter of the Company.
6. All meetings of the Members’ Council must be recorded in the book of minutes. The contents of minutes of meetings of the Members’ Council shall be as stipulated in article 48.2 of this Charter.

Article 53 Chairman of Company
1. The chairman of the Company shall, in the name of the company owner, organize the implementation of rights and obligations of the company owner; has the right to implement rights and obligations of the Company in the name of the Company; shall be responsible before the law and to the company owner for the implementation of delegated rights and duties in accordance with this Charter and in relevant laws.
2. A decision of the chairman of the Company on the implementation of rights and obligations of the company owner shall take legal effect from the date of approval by the company owner (unless otherwise stipulated in the Charter of the Company).

Article 54 Inspectors
1. The company owner shall appoint one to three inspectors for a term not exceeding three years. An inspector is responsible before the law and to the company owner for the implementation of his or her rights and duties.
2. Inspectors have the following duties:
(a) To check the lawfulness, honesty and prudence of the Members’ Council, the chairman of the Company and the Director or General Director in organizing the implementation of rights of the Owner and in managing the business of the Company;
(b) To evaluate financial statements, reports on business situations, reports on assessment of management and other reports prior to submission to the company owner or relevant State agencies; to submit evaluation reports to the company owner;
(c) To make recommendations to the company owner on solutions for amendments of and additions to the organizational and management structure and the administration of the business of the Company;
(d) Other duties as requested or decided by the company owner.
3. An inspector has the right to sight any document or paper of the Company at the head office or a representative office of the Company. Members of the Members’ Council, the chairman of the Company, the Director or General Director and other managers have the obligation to provide in full and on time any information on the implementation of rights of the Owner and on management, administration and the business of the Company at the request of an inspector.
4. Inspectors must satisfy the following criteria and conditions:
(a) Having full capacity for civil acts and not being prohibited from management of enterprises in
accordance with the law on enterprises;
(b) Not being a related person of a member of the Members’ Council, of the chairman of the Company, of the Director or General Director or of the person authorized to appoint directly an inspector;
(c) Having professional qualifications or work experience in accounting and auditing or professional qualifications and practical experience in the sector of securities and securities market or [satisfying] other criteria or conditions as stipulated by the Company.

Article 55 Obligations of members of Members’ Council, chairman of Company, Director or General
Director and inspectors
1. A member of the Members’ Council, chairman of the Company, Director or General Director, and inspector has the following obligations:
(a) To comply with the law, the Charter of the Company and the decisions of the company owner in the implementation of delegated rights and duties;
(b) To perform delegated rights and duties honestly, prudently and to their best ability in order to assure the maximum legitimate interests of the Company and the company owner;
(c) To be loyal to the interests of the Company and the company owner; not to use information, know-how, business opportunities of the Company, or to abuse his or her position and power or to use assets of the Company for the personal benefit of himself or herself or other organizations or individuals;
(d) To notify the Company in a timely, complete and accurate manner of the enterprises of which he or she and a related person to him or her is the owner or holds controlling shares or share of capital contribution. This notice shall be displayed at the head office of the Company;
(dd) Other obligations as stipulated by the Company.
2. The Director or General Director is not entitled to any increase in salary or bonus when the Company is not able to pay all of its due debts.

Article 56 Contracts and transactions of Company with related persons
1. Contracts and transactions between an LL company with one member being an organization with the following subjects must be considered and decided by the Members’ Council or the chairman of the Company, the Director or General Director and the inspectors on the principle of majority with one vote for each person:
(a) The company owner and a related person of the company owner;
(b) The authorized representative, the Director or General Director and the inspectors;
(c) A related person of the persons stipulated in sub-clause (b) of this clause;
(d) A manager of the company owner, the person authorized to appoint such managers;
(dd) A related person of the persons stipulated in sub-clause (d) of this clause.
The legal representative of the Company must send to the Members’ Council or the chairman of the Company, the Director or General Director and the inspectors; and, at the same time, display at the head office of the Company, the draft of any such contract or contents of any such transaction.
2. The contracts and transactions stipulated in clause 1 of this article may be approved only upon satisfaction of the following conditions:
(a) The parties entering into the contract or performing the transaction are independent legal entities with separate rights, obligations, assets and interests;
(b) The price used in the contract or transaction is the market price at the time when the contract is entered into or the transaction is performed;
(c) The company owner complies with the obligations stipulated in article 33.4 of this Charter.
3. A contract or transaction shall be void and be dealt with in accordance with law where it is not entered into in accordance with the provisions of clause 1 of this article. The legal representative of the Company and the parties to the contract must compensate for any damage arising and return to the Company any benefits gained from the performance of such contract or transaction.

(Model charter of fund management one member limited liability companies)

CHAPTER IV
Responsibilities, Obligations and Restrictions during Operation of the Company

Article 86 Provisions on responsibilities and obligations of the Company

1. [The Company must] comply with law and its Charter. It must manage entrusted assets in accordance with the fund charter, the securities investment company charter or the investment management contract. It must comply with the rules of professional ethics, voluntariness, fairness and honesty and must act in the best interests of entrusting clients.
2. The Company shall act as an authorized representative of entrusting clients to exercise the ownership right of assets of the entrusting clients on behalf of the entrusting clients in an honest and careful manner.
3. When managing entrusted assets, the Company must:
(a) Sign depository or supervisory contracts with depository banks in the case of member funds, private securities investment companies and entrusted investment portfolios; sign supervisory contracts with custodian banks in the case of public funds and public securities investment companies; deposit all assets arising in the territory of Vietnam and store completely, promptly and accurately information and data about ownership and original copies of legal documents certifying ownership of assets at depository and/or custodian banks; In the case of investment by way of deposits on behalf of an entrusted client, the Fund Management Company is only permitted to deposit [monies] at a bank named in the list  approved by the entrusted client, and must store the original or a valid copy of the deposit contract or loan agreement at a depository or custodian bank in order for the latter to periodically verify with the bank receiving the deposits; In the case of investment or capital contribution or trading of assets, portion of capital contribution or unlisted shares on behalf of an entrusting client, the Fund Management Company must store the original of any contract, the licence for establishment and operation or the business registration certificate (if any), the register of shareholders or any document certifying ownership of assets at a depository or custodian bank in order for the latter to periodically verify with the organization receiving investment capital;
(b) Set up a system of information to manage accounts of entrusting clients at the Company ensuring the principles of independent and separate management of assets of each entrusting client and separation of entrusted assets from assets of the Company itself; store completely and promptly accounting books, transaction vouchers and documents relating to the trading and ownership of assets of entrusting clients; and compile completely, accurately and promptly information about assets of each entrusting client and places of deposit or storage of such
assets;
(c) Formulate an inspection mechanism, and regularly implement tripartite verification in order to ensure the consistency of data of entrusted assets on the system of accounts of entrusting clients managed at the Company and/or the system of depository of assets of entrusting clients at depository or custodian banks and at issuing organizations, Vietnam Securities Depository, organizations managing the register of shareholders, project owners,
organizations receiving investment capital or banks receiving deposits. The fund management Company is responsible to establish a mechanism for the depository or custodian banks to directly verify, and also to itself verify with the above organizations in order to inspect, supervise and compile complete and accurate information about depository, registration of ownership and management of entrusted assets;
(d) Conduct investment by way of entrusted assets in accordance with law, the fund charter or the securities investment company charter and the investment management contract;
(dd) Assign at least two fund operators to manage each fund or each securities investment company. Such fund operators must have practical experience in asset management activities for at least two years and have not been subject to any administrative penalty in the securities and securities market sector. Information about qualifications, professional qualifications and experience in management of assets of the fund operators must be publicly disclosed in the prospectus.
4. The Company must set up procedures for distribution of trading orders and distribution of traded assets in a reasonable and fair manner when conducting trading for entrusting clients and for the Company itself. Such procedures must be provided to entrusting clients, depository banks and custodian banks, and must be applied consistently. Where the Company purchases or sells the same type of asset at the same time for multiple entrusting clients and for the Company itself, traded assets shall be distributed in the following priority order:
(a) The distribution of traded assets to entrusting clients shall be given priority. The distribution of assets among entrusting clients must be equitable and must be implemented in accordance with the procedures for distribution applied consistently in the Company. The procedures for distribution of assets must specify the principles for implementation, the method of fixing price and the quantity of assets distributed to each client, ensuring compliance with investment objectives, the level of acceptance of risks or other criteria as stipulated in the internal rules of the Company and as notified to entrusting clients. If one asset is purchased or sold at different price levels, the Fund Management Company must use the average price level to distribute assets;
(b) The distribution of assets to the Company itself is only implemented after fulfilment of all asset trading orders for entrusting clients;
(c) The distribution of assets must be notified to the depository or custodian bank for immediate implementation on the trading day.
5. During fund management activities, the Company is responsible to ensure:
(a) Determination of the net asset value of investment portfolios of entrusting clients and the net asset value per fund certificate or share of securities investment companies in accordance with law, the fund charter, the securities investment company charter and the investment management contract;
(b) Preparation, storage and update of the register of investors and/or the register of shareholders in a prompt, complete and accurate manner. The contents of the register of investors and/or the register of shareholders shall accord with relevant provisions of the law on establishment and management of securities investment funds, and the provisions on establishment, organization and operation of securities investment companies.
6. The Company is obliged to promptly and completely provide necessary information about entrusting clients, information about entrusted asset transactions, information about places of depository of entrusted assets and other related information (if any) and to create necessary favourable conditions for custodian or depository banks at their written request to exercise all rights and perform all responsibilities with respect to entrusting clients in accordance with law. At least once every month, the Fund Management Company is obliged to check the list of assets of each entrusting client with custodian or depository banks.
7. Within fifteen (15) days from the date on which a custodian bank discovers and notifies the Company of an entrusted asset transaction contrary to regulations or beyond the authority of the Company as stipulated by law, of the fund charter, the securities investment company charter or the investment management contract, the Fund Management Company must cancel the transaction, or conduct transactions in order to restore the position of the entrusting client. The Company must bear all costs arising in connection with such transactions and losses (if any). If such transactions generate profit, such profit must be accounted to the entrusting client.
8. The Company must formulate and commence uniform application of professional rules, price fixing [setting] manuals and accounting policies in accordance with the relevant provisions of law and [appropriate for] entrusting clients. The Company must formulate detailed internal control rules and professional and ethical rules applicable to each working position. The provisions on compliance with the code of professional ethics of the Company shall be required terms of labour contracts between the Company and its employees.
9. The Company must formulate procedures and establish an organizational structure and/or system of risk management in compliance with the operational scale of the Company and the forms of funds or securities investment companies and clients which the Company currently manages. The system of risk management must be based on risk management policies and procedures established in accordance with international practice and in compliance with the market conditions of Vietnam, ensuring identification of all potential risks and determination of the scale of potential risks in operations of the Company, potential risks in professional rules and systems of the Company, and potential risks in the investment portfolio of each entrusting client. Depending on each form of risk,
the level of complexity of invested assets and requests of entrusting clients, the Company must provide the appropriate level of acceptance of risks.
10. The Company is responsible to compensate for any loss and damage caused to entrusting clients due to a fault of an employee, an incident [breakdown] or error of the technical system or [due to a mistake in] the professional rules of the Company or due to the Company”s failure to properly perform obligations as stipulated in law, in the fund charter, the securities investment company charter and the investment management contract.
11. The Company must purchase professional indemnity insurance for its professional staff (if considered necessary)6, or establish a risk reserve in accordance with law in order to compensate entrusting clients for any loss and damage in the cases stipulated in clause 10 of this article.
12. The Company is responsible to implement or request related distribution agents or service providers to establish or set up a system and organize implementation of the procedures for compilation of information and identification of clients in accordance with the law on anti-money laundering and the law on securities brokerage and trading.
13. The Company shall ensure that the investment by way of assets of entrusted clients being foreign individuals or organizations complies with the law on foreign exchange control and ratio of ownership in Vietnamese enterprises at the time of investment.
14. The use of entrusted assets which are mobilized in Vietnam in order to invest in securities issued by foreign organizations or issuing organizations subject to foreign law, or in securities issued overseas and other assets overseas must comply with the law on offshore investment and foreign exchange control and relevant laws. Such investment may only be conducted if the fund charter, the securities investment company charter or the investment management contract contains the terms which permit such investment. Before conducting investment, the Company must obtain written approval of the general meeting of investors, the general meeting of members or the general meeting of shareholders of securities investment companies, entrusting clients or representatives of entrusting clients and competent State administrative agencies.
15. When conducting trading of assets for an entrusting client, the Company shall ensure that:
(a) With respect to an organization being a public fund or public securities investment company:
- The quantity or value of transactions in one year [conducted] through a securities company must not exceed fifty (50) per cent of the total quantity or value of transactions in the year of such organization; and
- The quantity or value of transactions in one year [conducted] through a securities company being an affiliated [related] person of the Fund Management Company must not exceed twenty (20) per cent of the total quantity or value of transactions in the year of such organization.
(b) With respect to other entrusting clients, the Company must comply with sub-clause (a) of this clause, except where the Company has provided all information about the interests of the Company to the related securities company and the entrusting client provides a written approval permitting not to apply the above provisions.
16. The Company is responsible to keep confidential information about clients, information about asset transactions, investment portfolios of clients and other related information, except for provision of information to the SSC and competent State administrative agencies upon their request.
17. The Company must ensure:
(a) Separation of its head office and information technology infrastructure with those of other economic organizations. If the Company uses the information technology infrastructure of its parent company, of a subsidiary company or of an organization being an affiliated person, the mechanism for delegation and use restriction must be used, ensuring that departments of the parent company, the subsidiary company or the organization being an affiliated person cannot access the computer system or the database of the Company;
(b) Separation of databases between professional departments which may have potential conflicts of interest in the Company, including the separation of the entrusted asset management department, the investment research and analysis department and the investment implementation department. The computer system and the databases shall be delegated to each individual and department in accordance with working positions as stipulated in the
internal control rules.
18. During business activities, the Company shall ensure that:
(a) The operating capital for financial investment activities must be sourced from the equity other than capital borrowed in any form;
(b) The Company must not provide loans or assign its capital to any affiliated person and any other organization or individual in any form, except for deposit of money at credit institutions in accordance with the law on banking or except for investment in bonds issued in accordance with law;
(c) Any economic contract or transaction (if any) between the Company and a shareholder, a member contributing capital equal to thirty five (35) or more per cent of the charter capital, a member of the board of management or of the members” council, a member of the executive committee, a member of the inspection committee, a staff member of the internal audit department or an affiliated person of any of the above entities is only implemented after it is agreed by the shareholders or capital contributing members representing the remaining sixty five (65) per cent or more of the total votes or it is agreed in writing by the owner;
(d) The Company is permitted to use legally mobilized capital including loans in order to conduct investment in real property for the purpose of using such real property as head office. In a case where the head office [space] is not used up, the Company may lease out;
(dd) Within the maximum period of thirty (30) days from the date of completion of investment in subsidiary companies, joint venture companies or affiliates, the Fund Management Company is responsible to notify the SSC of such investment;
(e) The Company is not permitted to contribute capital for establishment of another fund management company or securities company in Vietnam or purchase shares or a portion of capital contribution in another fund management company or securities company in Vietnam, except for the following cases:
- Implementation of consolidation or merger activities; or
- Purchase to own or together with an affiliated person to own no more than five per cent of the number of currently circulating shares of a fund management company or securities company registered for trading or listing on a stock exchange.
19. When managing investment capital of a securities investment company, the Company must ensure that:
(a) The Company is under supervision of the general meeting of shareholders or the board of management of the securities investment company and/or a custodian bank and is responsible before the general meeting of shareholders or the board of management of the securities investment company for exercise of assigned rights and performance of assigned duties and implementation of the provisions in the charter of the securities investment company and in the investment management contract;
(b) The Company shall establish a system, formulate procedures for and implement risk management in accordance with the investment policy and the type of invested asset, and make reports to the general meeting of shareholders and the board of management on the risk management work;
(c) The Company [shall] only make its decisions on investment or de-investment of the securities investment company on a daily basis without obtaining a resolution of the board of management of the securities investment company or of the general meeting of shareholders of the securities investment company in accordance with the charter of the securities investment company and the investment management contract;
(d) The Company shall implement investment policies and resolutions of the general meeting of shareholders or the board of management of the securities investment company in accordance with the latter”s charter; and conduct asset transactions within the restrictions on investment and in accordance with the type of asset permitted to be invested, trading volume and trading entities (if any) as stipulated in the charter of the securities investment company or the investment management contract;
(dd) The Company shall make recommendations on the plan for payment of dividends, the plan for increase or decrease of the charter capital, and the plan for re-structure of the securities investment company;
(e) The Company shall sign contracts in the name of the securities investment company within the authority stipulated in the latter”s charter and in the investment management contract;
(g) The Company shall exercise other rights and perform other duties in accordance with law, the charter of the securities investment company, the investment management contract and resolutions of the general meeting of shareholders or the board of management of the securities investment company.
20. With respect to activities of reporting ownership and disclosure of information about transactions on the securities market, the Company has the following responsibilities:
(a) The Company together with its entrusting clients must comply with the law on reporting ownership and disclosing information on the securities market as applicable to affiliated persons and people with inside information;
(b) Obligations to report ownership and disclose information shall arise as from the time the following events occur:
- The number of shares (if any) owned by the Company and by entrusting clients (if any), including management [of such shares] in a client”s account and assets which are in the name of an entrusting client, reaches five or more per cent of the total number of currently circulating shares of an issuing organization, or
- The Fund Management Company (if any) is a person with inside information as stipulated in the law on securities;
(c) The contents of ownership report, information disclosure and the method of information disclosure shall be as stipulated in the law on information disclosure on the securities market;
(d) The Company must perform other obligations relating to report on ownership and disclosure of information in accordance with the law on information disclosure on the securities market. If an entrusting client is named as the owner of the entrusted assets, such client is responsible to perform the obligations to report ownership and disclose information in accordance with law.
21. The Company is responsible to annually organize training or re-training courses for its staff or request its practising staff to participate in training courses organized by the SSC (if any), ensuring that the skills, expertise, professional knowledge and legal knowledge of its staff are updated.Information about such activities of the Company must be enclosed with the annual report on its operational situation to be sent to the SSC.

Article 87 Restrictions on operations of the Company and staff working at the Company
1. The Company is not permitted to raise [capital] and manage a member fund which consists of thirty one (31) or more capital contributing members.
2. The Company must not be an affiliated person of the custodian bank or the depository bank of any fund or of any securities investment company which is managed by the Company. Members of the Board of Management or of the Members” Council, staff of the internal audit department, the Inspection Committee (if any), the company chairman, the Executive Committee or staff of the Company are not permitted to work in departments which provide depository, supervisory and fund management services at such [custodian or depository] bank or vice versa.
3. Affiliated persons of the Company are only permitted to conduct trading of certificates in a public fund or shares in a public securities investment company which is managed by the Company when permitted by the fund charter or the securities investment company charter. Transactions in a public offer tranche to acquire or in a public offer or issue tranche shall be conducted through the trading system at a stock exchange (applicable to closed funds, public securities investment companies and real property investment funds), or by the methods stipulated in the fund charter or in the prospectus (applicable to open funds).
4. The Company, and the parent company, subsidiary companies, joint venture companies, affiliated [companies], members of the Board of Management or the Members” Council, the Inspection  Committee (if any), the Executive Committee and staff of the Company are only permitted to purchase the assets included in the portfolio of entrusted assets or sell [assets] in the portfolio of [entrusted assets of] entrusting clients currently managed by the Company on the following principles:
(a) A transaction carried out by the method of centralized order matching through the trading system at a stock exchange;
(b) In the case of a transaction carried out by the agreement method or traded assets not being securities listed or registered for trading on a stock exchange, a written approval of the entrusting client or of its representative permitting conduct of the transaction is required. The approval must specify the type of traded assets, the method of fixing the trading price, trading fees, trading partner or criteria for identifying the trading partner, the time the transaction is [to be] carried out and other conditions (if any).
5. All securities transactions conducted by a member of the Executive Committee or staff of the Fund Management Company must be reported to the internal control department prior to and immediately after such transaction is conducted. A report on a personal transaction must contain information about the class (code) of securities, volume, trading price, total value of the transaction, trading time, trading method, trading account number and securities company at which the trading account is opened. Such report must be centrally stored and managed at the internal control department and must be provided to the SSC when requested.
6. Members of the Board of Management or of the Members” Council or of the Executive Committee and staff of the Company are not permitted to request, require or receive, in the name of any individual or of the Company, any remuneration, profit or benefit except for the types of fees and fee rates specified in the fund charter, the securities investment company charter or in the investment management contract.
7. With respect to entrusted asset management activities, the Company [must] ensure that:
(a) It shall not use assets of any fund or of any securities investment company in order to invest in another fund or securities investment company which it manages;
(b) It shall not use entrusted assets in order to invest in other public funds or public securities investment companies which it manages, or vice versa. This provision does not apply if the entrusting client is a foreign individual or organization with one hundred (100) per cent foreign owned capital and has approved the implementation of the above transaction;
(c) It shall not use the assets of any public fund or of any public securities investment company in order to invest in the Company itself; it shall not invest in any organization being its affiliated person; it shall not invest in any organization in which a member of the Board of Management or the Members” Council, a member of the Executive Committee or staff of the Company is a shareholder or member holding more than ten (10) per cent of the charter capital;
The Company may use capital of any member fund or private securities investment company or assets of any entrusting client during portfolio management activities to invest in the above organizations if the fund charter, the private securities investment company, the investment management contract or the minutes of agreement on capital contribution contains provisions permitting the Fund Management Company to conduct such investment at an appropriate management fee rate;
(d) It shall not use entrusted assets in order to provide loans in any form or guarantee loans in any form or pay debts of the Fund Management Company, its affiliated persons or of other organizations or individuals;
This provision does not apply to provision of loans in the form of investment by way of deposits at credit institutions in accordance with the law on banking, or purchasing issued bonds or conducting trading of bonds in accordance with law, or where the entrusting client is a foreign individual or organization with one hundred (100) per cent foreign owned capital and has approved the implementation of the above transaction;
(dd) It shall not provide any commitment or guarantee on investment results except for investment in products generating fixed income, and shall not sign any contract for receipt of investment entrustment in bonds at an interest rate not complying with the practical conditions of the market and the results of investment analysis of the Company itself; it shall directly or indirectly cover part or all losses of entrusting clients resulting from investment activities; it shall not carry out any transaction which reduces the profit of one entrusting client for the purpose of
increasing the profit of another entrusting client; it shall not enter into any contract or carry out any transaction on unreasonably unfavourable terms without legitimate reasons.
8. Except where it results from consolidation or merger of issuing organizations, the Company may only use the equity and capital of entrusting clients to purchase and own (not taking account of the number of shares in the portfolios of entrusting clients being exchange traded funds) more than twenty five (25) per cent of the total number of currently circulating shares of a public company upon satisfaction of the following conditions:
(a) The Company obtains a written approval from the entrusting clients or their representatives of the public offer to acquire, offer price, volume of assets proposed to be offered and method of distribution of assets after making the offer to acquire;
(b) The Company makes a public offer to acquire in accordance with the provisions of the law on securities regarding public offers to acquire.
9. The Company is not permitted to authorize [other entities to provide] or hire external organizations in the territory of Vietnam to provide services of securities investment consultancy and entrusted asset management.

Article 88 Authorization of operation
1. Except for the representative function in accordance with authority delegated by an entrusting client, the Company is permitted:
(a) To authorize a depository bank or Vietnam Securities Depository to carry out fund management activities or [to act as] a transferring agent in accordance with the law on establishment and management of various types of securities investment funds, to determine net asset value, to manage the register of investors and the register of shareholders of a securities investment company, and to exercise the voting right and the ownership right of the
entrusting client; and to authorize a distribution agent to provide services of distribution of public fund certificates.
(b) To authorize a foreign organization to provide services of consultancy, management and depository of the portfolio of assets of a fund or securities investment company invested offshore in accordance with law.
2. The authorization stated in clause 1 of this article must ensure that:
(a) The authorization and the principles for authorization must be stipulated in the fund charter, in the securities investment company charter or investment management contract; basic information about the attorney, scope of operation, functions and duties of the attorney must be publicly disclosed in the prospectus and provided to entrusting clients. The general meeting of investors of a fund, the general meeting of shareholders of a securities investment company or an entrusting client has the right to request the Fund Management Company to change the
organization receiving authorization [the attorney] if considered necessary;
(b) The attorney must have adequate capacity, systems, personnel and experience. With respect to the authorization stated in clause 1(b) of this article, the attorney overseas must register its operation or must be issued with a licence for receipt of authorization, and shall also be under supervision by the financial service supervision and management authority in the local country;
(c) The service provision department of the attorney must be separated from the other departments of the attorney regarding organization of personnel, system of professional rules, reporting system and approval of reports;
(d) The attorney is responsible to provide the Fund Management Company with an independent audit report containing contents relating to the authorization, to serve the inspection and supervision activities of the Fund Management Company as stipulated in clauses 3 and 5 of this article;
(dd) The authorization of operation and the attorney as stipulated in clause 1(a) of this article must be specified in the fund charter or the securities investment company charter and must be publicly disclosed in the prospectus. The authorization of operation and the attorney as stipulated in clause 1(b) of this article must be approved in writing by the general meeting of investors, by the general meeting of shareholders of the securities investment company and/or the entrusting client.
3. With respect to the authorized operations, the Company is responsible:
(a) Before signing a contract to use services of the attorney, the Company must evaluate and prepare minutes of assessment of capacity and material facilities, ensuring that the attorney has sufficient material facilities, technical solutions, systematic security, disaster backup systems, hot stand-by systems, professional rules, internal control and risk management systems, and personnel with appropriate experience and professional qualifications in order to implement the authorized operations;
(b) To regularly implement inspection and supervision in order to ensure that the authorized operations are carried out carefully and safely in accordance with law, the fund charter, the securities investment company charter and the investment management contract, ensuring that the quality of services provided satisfies the criteria and requirements of the Company and of the entrusting client (if any). The Company is permitted to use independent consultants and services provided by other professional organizations operating lawfully in order to perform the
responsibilities stipulated in this sub-clause;
(c) To maintain personnel having appropriate experience, expertise and professional knowledge to supervise, identify and manage effectively risks arising from the authorized operations;
(d) To establish systems and set up processes ensuring that at all times the Fund Management Company, an independent auditing firm and the SSC may access necessary information in order to inspect and supervise the authorization activities, and evaluate and manage risks arising from the authorization activities;
(dd) The authorization does not reduce or change the responsibilities of the Company with respect to entrusting clients. The Company is totally responsible for financial and legal issues arising from the authorization, except for legal obligations and fees which a client directly agrees or pays to the attorney on the basis of the investment management contract, the supervisory contract, the depository contract, the fund charter or the securities investment company charter and in accordance with relevant law. The Fund Management Company must ensure
continuity of the authorized operations without interruption and without affecting investment activities and services provided to entrusting clients;
(e) To completely, promptly and accurately provide relevant information to the attorney in order for the attorney to be able to fully and promptly implement all rights, obligations and responsibilities during the authorization activities;
(g) To completely, promptly and accurately store all instructions, requests and documents sent to the attorney to implement authorization activities; the authorization contract must at least contain the contents in the standard form in Appendix 21 to this Circular, accompanied by the minutes of evaluation of capability and material facilities. Such documents must be provided to the SSC when requested;
(h) Within ten (10) days from the date of signing the contract with the attorney with respect to the authorization activities as stipulated in clause 1(b) of this article, the Company must notify the SSC of such authorization, and must enclose the documents certifying that the attorney satisfies the provisions of clause 2 of this article.
4. At least once every year, the Company must prepare a report on evaluation of the quality of services of the authorization activities with the following contents:
(a) Expenses payable to attorneys in comparison with the total operational expenses, profit and income of funds or of securities investment companies and portfolios entrusted to them;
(b) Total expenses payable to each attorney, including expenses for authorization activities and expenses payable for other services provided by the attorney; ratio of the total expenses payable to each attorney and the total business expenses of the Fund Management Company in one year;
(c) Types and level of risks from authorization activities with respect to entrusted assets and measures for prevention and management of the above risks;
(d) Evaluation of ability to maintain material facilities, technical solutions, systematic security, disaster backup system, hot stand-by system, professional rules, internal control and risk management systems and personnel having appropriate experience and professional qualifications, ensuring that the authorization activities are carried out thoroughly without causing any affect on the investment activities and services provided to entrusting clients.
5. Reports on inspection and supervision implemented in accordance with clause 3(b) of this article, reports on evaluation of the quality of services of authorization activities as stipulated in clause 4 of this article and other related documents must be provided to the Board of Management or the Members” Council or the Owner of the Company, the committee of representatives of the fund, the board of management of the securities investment company, the related custodian bank and the SSC within thirty (30) days from the date of compilation of the reports.

Article 89 Termination of rights and obligations with respect to entrusting clients and replacement with another fund management company
1. The Company shall terminate its rights and obligations with respect to an entrusting client in the following circumstances:
(a) The Company voluntary terminates its rights and obligations with respect to the entrusting client in accordance with the fund charter, the securities investment company charter or the investment management contract;
(b) At the request of the general meeting of investors or the general meeting of shareholders of the securities investment company or of the entrusting client;
(c) The licence for establishment and operation is revoked pursuant to article 70 of the Law on Securities;
(d) The Company merges or consolidates with another fund management company;
(dd) The duration of operation of the fund or securities investment company expires, or the investment management contract is no longer effective.
2. The Company must hold a meeting of the general meeting of investors or of the general meeting of shareholders of the securities investment company or of the entrusting client to obtain opinions on the plan for dealing with assets and on a replacement fund management company in the cases stipulated in clauses 1(a), 1(c) and 1(d) of this article.
3. Rights and obligations of the Company with respect to an entrusting client shall only be terminated as from the time of completion of registration and transfer of ownership of entrusted assets, and handover of all assets and documents proving the ownership, vouchers, books and information about entrusted assets and the entrusting client to the replacement fund management company. The transfer of assets must be completed within six months from the date of receipt of written approval of the SSC.
4. The Company must be totally responsible for any debts and property obligations with respect to the entrusting client not completely handed over to the replacement fund management company. In such case, the Company is responsible to resolve and remedy any consequences arising within three years from the date of completion of handover of assets to the replacement fund management company.

Article 90 Principles for resolution of disputes
1. Any dispute as between shareholders or as between the Company and entrusting investors must first be resolved through negotiation and mediation.
2. Where the parties to a dispute fail to reach agreement, then the dispute shall be submitted to a court or an organization having jurisdiction. The decision of such court or organization shall be final and shall be binding upon the parties.

(Model charter of fund management one member limited liability companies)

CHAPTER V
Finance and Accounting, Distribution of Profit and Regime on
Reporting and Disclosure of Information about the Company

Article 91 Financial year

1. A financial year of the Company shall commence on 1 January and end on 31 December each year.
2. The first financial year shall commence on the date of issuance of the licence for establishment and operation and end on 31 December of that year.

Article 92 Accounting, auditing and tax
1. The Company shall implement the statistics and accounting regimes and perform tax obligations in accordance with applicable law.
2. Annual financial statements of the Company and of funds and of securities investment companies which are managed by the Company must be audited by an independent auditing firm approved by the SSC before they are submitted to the General Meeting of Shareholders/the Members’ Council/the Owner of the Company and the general meeting of investors/the general meeting of members of securities investment funds or general meeting of shareholders of securities investment companies for consideration and approval.
3. Within ninety (90) days from the end of a financial year, the audited annual financial statements of the Company must be sent to the SSC and the competent tax office.

Article 93 Distribution of profit
1. Before distributing profit to shareholders/members/owner, after-tax profit of the Company as at the end of a financial year must be used to establish funds in accordance with applicable law. The ratio for establishment of the funds which is not stipulated by applicable law shall be determined by the General Meeting of Shareholders, by the Members’ Council or by the company owner.
2. The Company shall only distribute profit to its shareholders/members on the following principles: - The Company generates profit from its business and has fulfilled its tax and other financial obligations in accordance with law;
- The Company must ensure that after distribution of profit, it is still able to satisfy all debts and other property obligations due and payable, which means that the Company does not have overdue debts, other property obligations which are overdue and not payable, or debt reversal, and does not use new loans to satisfy other debts and property obligations which are due and payable;
- The Company has sufficient financial sources at the time of distribution in order to distribute profit to its shareholders/members, ensuring that such distribution shall not affect the business activities of the Company.
3. The Board of Management/the Members” Council is responsible to approve the list of shareholders/members entitled to distribution of profit and the time of distribution of profit.
4. When the Company suffers a loss from its business, it is permitted to carry forward such loss to the following year which shall be deductible from taxable income. The period for carrying forward the loss must not exceed the maximum period for carrying forward losses permitted by law.

Article 94 Regime on disclosure of information and obligations to report
1. The Company is obliged to implement the regime on disclosure of information and report in respect of the operations of the Company and of funds and securities investment companies managed by the Company in accordance with law.
2. The Company is responsible to provide information to investors in accordance with law and this Charter. The Company must ensure that all the following documents are available at its head office, its representative offices, offices of its distribution agents, and on its website in order to enable investors to refer to such documents:
(a) Fund charter, securities investment company charter, and prospectuses;
(b) Reports for the most recent month and annual reports of funds and of securities investment companies for the last 5 years;
(c) Latest evaluations of the total net asset value and net asset value per fund certificate unit or per share of securities investment companies in accordance with law;
(d) Documents, reports and contracts referred to in the prospectuses;
(e) Investment management contracts with information required to be included in the contracts applicable to entrusting investors.
3. The information stipulated in clause 2 of this article shall be provided at no cost on the website of the Company.

(Model charter of fund management one member limited liability companies)

CHAPTER VI
Dissolution, Bankruptcy and Re-structure of the Company

Article 95 Dissolution of the Company

1. The Company shall be dissolved in the following cases:
(a) The duration of operation stated in the Charter expires and there is no decision to extend such duration;
(b) Pursuant to a decision of the owner/the Members’ Council/the General Meeting of Shareholders of the Company;
(c) The licence for establishment and operation is revoked.
2. The Company shall only be dissolved when it ensures that it shall pay all debts and other property obligations. In the case of insolvency, the dissolution shall be implemented in accordance with the law on bankruptcy.
3. From the time the SSC provides approval of dissolution, the owner, the Members” Council and the Board of Management are not permitted to carry out any activity prohibited by the law on dissolution of enterprises, and are not also permitted to directly organize the liquidation of assets of the Company, unless otherwise stipulated by the Charter of the Company.
4. The sequence for dissolution of the Company shall be as stipulated in the law on establishment, organization and operation of fund management companies.

Article 96 Bankruptcy of the Company
Bankruptcy of the Company shall be implemented in accordance with the Law on Bankruptcy and relevant guiding documents of the Law.

Article 97 Re-structure of the Company
1. The consolidation or merger must comply with the following principles:
(a) The consolidation or merger, the plan for consolidation or merger, or the contract for consolidation or merger must be passed by the General Meeting of Shareholders, the Members” Council or the owner;
(b) Rights and obligations shall be resolved as agreed by the related parties on the principle of voluntariness and in accordance with law;
(c) The consolidation or merger shall not affect the interests of clients and creditors, including bond creditors;
(d) Information about the consolidation or merger must be provided completely, promptly and accurately to shareholders or capital contributing members;
(dd) Treasury shares of consolidating or merging companies must be destroyed when the ratio for conversion is calculated and the plan or contract for consolidation or merger is prepared;
2. During the course of consolidation or merger, the Company, the Board of Management or the Members” Council, the Inspection Committee (if any) or the Executive Committee must:
(a) Ensure safety of assets of the Company, not conceal or disperse assets of the Company in any form, and be responsible before the law for off-balance sheet issues which are not handed over;
(b) Companies participating in the consolidation or merger have rights and responsibilities with respect to all of their interests and obligations until the Company formed upon consolidation or merger is issued with a licence for establishment and operation or an amended licence”
(c) Comply with the law on information disclosure on the securities market.
3. Any shareholder objecting to the consolidation or merger has the right to request the Company to redeem its shares. The level of price for redemption shall be as agreed by the two parties on the basis of the net asset value per share at the time of redemption. Any creditor has the right to request the Company to repay its loan when implementing consolidation or merger. The above requests must be in writing, specifying the name and address of the shareholder, capital contributing member or  creditor, volume of shares, value of capital contribution or value of the loan, and requests must be sent to the Company within thirty (30) days from the date of passing of the consolidation or merger.
4. The sequence and procedures for consolidation or merger of the Company shall be as stipulated in the law on establishment, organization and operation of fund management companies.

Article 98 Conversion of form of the Company
1. When implementing the conversion, the Company must obtain the approval of the SSC.
2. The sequence and procedures for conversion of the form of the Company shall be as stipulated in the law on establishment, organization and operation of fund management companies.
3. In the case of conversion in combination with private share placement, or public offer to sell shares, or any transaction requiring approval, then the conditions, sequence and procedures for offer to sell shall be as stipulated in relevant laws.

(Model charter of fund management one member limited liability companies)

CHAPTER VII
Implementing Provisions

Article 99 Effectiveness of the Charter

The Charter is of full force and effect as from the date on which the SSC issues the licence for establishment and operation to the Company.

Article 100 Amendment of and addition to the Charter
1. These provisions may be amended or added on the basis of a resolution of the General Meeting of Shareholders/the Members” Council/the owner of the Company. Any amendment of or addition to the Charter must be reported to the SSC.
2. Any matter relating to the operations of the Company which is not mentioned in this Charter shall be governed by applicable relevant laws.

Article 101 Registration of the Charter and signatures
1. This Charter comprises …chapters and ….articles and is made in ….copies with equal validity. Signatures of founding shareholders/founding members/the Chairman of the Company.

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