For What Purpose May a Securities Investment Fund Management Company Invest in Derivatives?

Short answer: A securities investment fund management company may invest in derivatives securities for the purpose of hedging risks of its investment portfolio, under Point b, Clause 1, Article 16 of Decree 158/2020/ND-CP (a document still in effect).

For what purpose may a fund management company invest in derivatives securities?

Under Point b, Clause 1, Article 16 of Decree 158/2020/ND-CP on derivatives securities and the derivatives securities market, organizations and individuals may invest in derivatives securities on the derivatives securities market for the purpose of hedging risks, except where they are prohibited by a competent authority from conducting securities and securities market activities.

For a securities investment fund management company, investing in derivatives securities must be consistent with the fund’s investment objectives and policies and comply with investment limits and risk management regulations under securities law.

In which cases is a fund management company’s operation terminated?

A securities investment fund management company has its securities business operation terminated in cases prescribed by the Law on Securities 2019 (amended by Law No. 56/2024/QH15) and guiding documents, including: revocation of its Establishment and Operation License; dissolution, bankruptcy; or termination of operations under the decision of a competent state authority.

Applicable legal basis

• Decree 158/2020/ND-CP on derivatives securities and the derivatives securities market (still in effect): Article 16.
• Law on Securities 2019 (54/2019/QH14), amended by Law 56/2024/QH15.

Notes when applying current legal regulations

This article belongs to the Corporate & M&A Knowledge group and is presented for reference, helping readers understand the legal issue at an overview level before preparing dossiers or conducting transactions.

Legal regulations may change according to time, locality, dossier type, and specific circumstances. Where it is necessary to determine exactly the applicable legal basis for your dossier, you should contact the lawyers of ANT Legal at 0966.475.966 for verification and advice before proceeding.

Common risks to note

• Applying legal documents that have been amended, supplemented, or replaced.
• Preparing insufficient dossiers, documents, or evidence.
• Misunderstanding conditions, procedures, time limits, or competent authorities.
• Signing, submitting dossiers, or conducting transactions without fully assessing legal risks.

How can ANT Legal assist?

ANT Legal assists in reviewing specific situations, checking dossiers, determining the applicable legal basis, advising on courses of action, and representing clients in working with individuals, organizations, or competent authorities when necessary.

For quick advice, you can contact a lawyer at 0966.475.966.

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