How is the personnel structure of the internal audit department of a securities investment fund management company regulated?

The internal audit department of a securities investment fund management company belongs to which council?

The internal audit department of the securities investment fund management company under the council is specified in Clause 1, Article 5 of Circular 99/2020/TT-BTC as follows:

Internal audit

1. A fund management company is a public company or a public fund manager, a public securities investment company must establish an internal audit department. The internal audit department belongs to the Board of Directors or Board of Members or company owners.

2. The internal audit department is responsible for:

a) Inspect and evaluate the organizational structure, corporate governance activities, operating activities, and coordination of each department and each working position to prevent conflicts of interest and protect the rights of customers;

b) Check and evaluate the completeness, effectiveness, efficiency, and level of compliance with the provisions of law and the provisions of the company’s Charter; internal control system; internal policies and processes, including rules of professional ethics, professional processes, risk management processes and systems, information technology systems, accounting, reporting processes and systems, information disclosure, processes for receiving and handling denunciations and complaints from customers and other internal regulations;

c) Check validity, legality, honesty, level of caution, compliance with business processes and risk management;

d) Carry out operational audits according to the annual internal audit plan. The annual internal audit plan must be approved by the Board of Directors or the Board of Members or the company owner before implementation. The annual internal audit plan must ensure the following principles:

– Internal audit is performed annually and unexpectedly;

– Activities, processes, and departments must be assessed for risk according to the company’s internal regulations. Activities, processes, and departments with high levels of risk are focused on resources, prioritized for auditing first, and audited at least once a year;

– The annual audit plan must be adjusted when there are changes in the risk level of activities, processes, and departments;

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Thus, according to the above regulations, the internal audit department of a securities investment fund management company is directly under the Board of Directors or Council of Members or company owner.

How is the personnel structure of the internal audit department of a securities investment fund management company regulated?

In Clause 5, Article 5 of Circular 99/2020/TT-BTC, the personnel structure of the internal audit department of a securities investment fund management company must have at least one employee with an auditor certificate or accountant certificate issued by Vietnam;

Or international certificates in accounting and auditing such as ACCA (Association of Chartered Certified Accountants), CPA (Certified Public Accountants), CA (Chartered Accountants), ACA (Associate Chartered Accountants);

Or have worked for 3 years or more in the legal department, inspection, management, and supervision of financial institutions at state management agencies in the fields of finance, banking, insurance, securities, and state audit.

Do securities investment fund management companies have to report internal audit results periodically on an annual or quarterly basis?

Securities investment fund management companies must report internal audit results on an annual or quarterly basis, then according to the provisions in point d, clause 1, Article 29 of Circular 99/2020/TT-BTC as follows: next

Reporting obligations

1. The fund management company sends the State Securities Commission periodic reports as follows:

a) Monthly and annual reports on the fund management company’s operations according to the form specified in Appendix VI issued with this Circular;

b) Monthly reports on investment portfolio management activities of the fund management company with confirmation from the depository bank where the fund management company opens the depository account, confirmation from the depository member where the entrusting customer opens the account, confirmation from the foreign depository organization according to the form prescribed in Appendix VII issued with this Circular;

c) Six-month report and year on risk management activities of the fund management company according to the form specified in Appendix VIII issued with this Circular;

d) Report on annual internal audit results; annual internal control report of the fund management company;

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Thus, according to the above regulations, securities investment fund management companies must report internal audit results on an annual basis.