Can a member of the Board of Directors of a securities investment fund management company be a member of the Board of Directors of another company?

Can a member of the Board of Directors of a securities investment fund management company be a member of the Board of Directors of another company?

Can a member of the Board of Directors of a securities investment fund management company be a member of the Board of Directors of another company, according to the provisions of Clause 2, Article 4 of Circular 99/2020/TT-BTC as follows:

Board of Directors, Board of Members, Board of Supervisors

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2. A member of the Board of Directors or a member of the Board of Members of a fund management company must not be member of the Board of Directors or member of the Board of Members, Executive Board, fund management practitioner of another fund management company or member of the Board of Directors or member of the Board of Members, Executive Board, employee at the depository bank, custodian bank providing services to the securities investment fund, securities investment company that the company is managing.

Thus, according to the above regulations, members of the Board of Directors of a securities investment fund management company cannot be members of the Board of Directors of another company.

Is it necessary for a securities investment fund management company to change members of the Board of Directors to notify the State Securities Commission?

Does a securities investment fund management company that changes members of the Board of Directors need to notify the State Securities Commission? According to the provisions of Point a, Clause 5, Article 29 of Circular 99/2020/TT-BTC as follows:

Reporting obligations

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5. The fund management company must notify the State Securities Commission of the following events:

a) Change, election, dismissal of members of the Board of Directors, member of the Board of members. The notice must be accompanied by a resolution or decision to elect, dismiss, change members of the Board of Directors, members of the Board of Members, and other valid documents to ensure that the new members of the Board of Directors and Members’ Council meet the provisions of the company’s Charter, the provisions of the law on securities and the law on enterprises;

b) Change the Head of the domestic representative office, change the Director of the domestic branch. The notice of change must be accompanied by an appointment decision and other valid documents to ensure that the replacement personnel meets the provisions of securities law;

c) Amending and supplementing the company’s charter. Notice enclosed with amendments and supplements to the Company’s Charter;

d) Complete the transfer transaction of shares and capital contributions of shareholders and capital contributing members of the fund management company, except in cases where the fund management company’s shares have been listed on the Stock Exchange. The notice shall be made according to the form specified in Appendix XI issued with this Circular and enclosed with a valid copy of the contract for transfer of shares and capital contributions between the parties participating in the transaction. In case the fund management company is a public company, if the transfer results in the transferee owning 25% or more of the voting shares of the fund management company, the transferee must comply with the law on public offers to buy shares of public companies;

d) Events that can seriously affect financial capacity and management of entrusted assets.

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Thus, according to the above regulations, a securities investment fund management company that changes members of the Board of Directors must notify the State Securities Commission.

When is the deadline for a securities investment fund management company to announce the dismissal of members of the Board of Directors?

The time limit for a securities investment fund management company to announce the dismissal of members of the Board of Directors is specified in Clause 6, Article 29 of Circular 99/2020/TT-BTC as follows:

Reporting obligation

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6. The time limit for notifying the State Securities Commission of the events specified in Clause 5 of this Article is 03 working days from the occurrence of those events.

7. The fund management company reports to the fund representative board, the Board of Directors of the securities investment company or the customer entrusting the portfolio management in case it detects that the custodian bank or depository bank violates the Fund Charter, Securities Investment Company Charter, supervision contract, depository contract; Report to the State Securities Commission in case these organizations violate legal regulations within 03 working days of discovering the violation.

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Thus, according to the above regulations, the time limit for a securities investment fund management company to notify the dismissal of members of the Board of Directors is 03 working days from the date of change.