Can a branch of a securities investment fund management company that does not operate in accordance with the content stated in the establishment decision be revoked?

Can a branch of a securities investment fund management company perform securities investment consulting operations?

Pursuant to Clause 1, Article 190 of the Decree 155/2020/ND-CP has the following regulations:

Conditions for establishing and supplementing domestic branch operations of securities companies and securities investment fund management companies

1. Branches of securities companies and securities investment fund management companies may only perform authorized business operations within the scope of licensed business operations of the securities company or securities investment fund management company. Fund management company branches are only allowed to perform securities investment consulting operations.

2. Conditions for establishing and supplementing operations of branches of securities companies and domestic securities investment fund management companies:

a) Maintaining current business licensing conditions for the head office and current branches and transaction offices (if any);

b) Not being in a state of warning, control, special control, or suspension of operations under Vietnamese law law;

c) Have not been sanctioned for administrative violations in the field of securities and stock market within 06 months up to the time the State Securities Commission received the dossier;

d) Have headquarters and equipment to serve securities business activities at the branch;

dd) Branch director has a securities practice certificate appropriate to the business operations securities business of the branch and meet the standards prescribed in Points a and d, Clause 5, Article 74 of the Securities Law or Points a, c, d, Clause 5, Article 75 of the Securities Law. Have at least 02 employees with securities practice certificates appropriate to each branch’s business operations.

Thus, according to the above regulations, the branch of the securities investment fund management company is only allowed to perform securities investment consulting operations.

Can a branch of a securities investment fund management company perform securities investment consulting operations?

Pursuant to Clause 1, Article 190 of Decree 155/2020/ND-CP has the following provisions:

Conditions for establishing and supplementing domestic branch operations of securities companies and securities investment fund management companies

1. Branches of securities companies and securities investment fund management companies may only perform authorized business operations within the scope of licensed business operations of the securities company or securities investment fund management company. Fund management company branches are only allowed to perform securities investment consulting operations.

2. Conditions for establishing and supplementing operations of branches of securities companies and domestic securities investment fund management companies:

a) Maintaining current business licensing conditions for the head office and current branches and transaction offices (if any);

b) Not being in a state of warning, control, special control, or suspension of operations under Vietnamese law law;

c) Have not been sanctioned for administrative violations in the field of securities and stock market within 06 months up to the time the State Securities Commission received the dossier;

d) Have headquarters and equipment to serve securities business activities at the branch;

dd) Branch director has a securities practice certificate appropriate to the business operations securities business of the branch and meet the standards prescribed in Points a and d, Clause 5, Article 74 of the Securities Law or Points a, c, d, Clause 5, Article 75 of the Securities Law. Have at least 02 employees with securities practice certificates appropriate to each branch’s business operations.

Thus, according to the above regulations, the branch of the securities investment fund management company is only allowed to perform securities investment consulting operations.

If a branch of a securities investment fund management company does not operate in accordance with the content stated in the establishment decision, will the decision be revoked?

Pursuant to Clause 2, Article 9 of Circular 99/2020/TT-BTC, it is stipulated as follows:

branch

1. The name of the domestic branch of the fund management company must include the name of the fund management company accompanied by the phrase “branch” and comply with the regulations on branch names according to the provisions of law on enterprises.

2. The domestic branch of a fund management company has its establishment decision revoked in the following cases:

a) The fund management company is dissolved, goes bankrupt or has its license to establish and operate securities business revoked;

b) The application for approval to establish a branch contains false information;

c) Operates for the wrong purpose, inconsistent with the content of the decision to establish the branch branch;

d) Does not meet the conditions of headquarters and equipment serving licensed securities business activities after a maximum correction period of 03 months from the date of failure to meet the conditions;

d) Does not operate within 03 months from the date of issuance of the decision to establish a branch.

3. Within 15 days from the date of receiving written notice from the State Securities Commission about the revocation of the decision to establish a branch, the fund management company shall close the branch and report to the State Securities Commission in accordance with the provisions of law on securities.

Thus, according to the above regulations, a branch of a securities investment fund management company that does not operate in accordance with the content stated in the establishment decision will have its decision revoked.

Can a securities investment fund management company whose operations are suspended be paid dividends?

Pursuant to point c, clause 4, Article 26 of Circular 99/2020/TT-BTC, there are provisions as follows:

Operations of the fund management company during the suspension period dynamic

…

4. During the period of suspension of operations, the fund management company must comply with the following regulations:

a) Do not sign new or extend investment trust contracts or securities investment consulting contracts; Do not accept additional capital from current entrusted customers; must make final settlement and transfer accounts as requested by the customer (if any);

b) Do not mobilize capital to establish a new securities investment fund or new securities investment company; Do not increase charter capital for securities investment funds or securities investment companies currently under management;

For valid investment trust contracts, active securities investment funds, securities investment companies, and fund management companies may only carry out transactions after receiving written approval from the entrusting customer or representative of the entrusting customer (authorized each time). Entrusting customers are solely responsible for authorizing the fund management company to carry out these transactions;

c) Not allowed to pay dividends or distribute profits; Do not convert unsecured debts into secured debts with your assets; are not allowed to buy back shares or capital contributions; are not allowed to establish additional branches, representative offices, expand operating areas, or invest abroad; Not allowed to contribute capital or invest in subsidiaries or affiliated companies; Do not conduct business and investment activities that require approval from the State Securities Commission according to the provisions of law;

Thus, according to the above regulations, a securities investment fund management company whose operations are suspended is not allowed to pay dividends.