The internal control department of the joint stock company In what cases can a securities investment fund management company perform the internal audit function?

In what cases can the internal control department of a securities investment fund management company perform the internal audit function?

Pursuant to Point h, Clause 2, Article 6, Circular 99/2020/TT-BTC has the following provisions:

Internal control

1. The fund management company must establish an internal control system consistent with the company’s organizational and management structure, establish an internal control department under the Executive Board and promulgate regulations on internal control including mechanisms, policies, procedures and internal regulations.

2. The internal control department is responsible for:

a) Supervise and ensure that the operations of each position, each department and the entire company’s operations comply with legal regulations, policies, professional processes, and internal regulations of the company;

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d) Supervise and ensure that the net asset value of the trust portfolio, securities investment fund, and securities investment company is valued in accordance with the provisions of law and internal regulations; The company’s assets and resources are managed safely and effectively; Entrusted customer assets are managed separately and independently; Financial reports, operational reports, reports on financial safety indicators and other reports of the company are prepared honestly, accurately, promptly, and fully updated according to the provisions of law;

e) Supervise and ensure the financial and management information system is honest, complete, timely and accurate; have a backup information system to promptly handle arising incidents such as natural disasters, fires, explosions, ensuring continuous operation of the company;

g) Propose plans to resolve and handle disputes, conflicts of interest, and complaints from customers and partners; Backup plans to overcome consequences when incidents occur;

h) Perform internal audit function in case the fund management company does not have to establish an internal audit department.

Thus, according to the above regulations, the internal control department of the securities investment fund management company can perform the internal audit function in cases where the fund management company does not have to establish an internal audit department.

What requirements must the head of internal control department of a securities investment fund management company meet?

Pursuant to point c, clause 4, Article 6 of Circular 99/2020/TT-BTC has the following provisions:

Internal control set

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4. The personnel structure of the internal control department must have at least:

a) A compliance control officer with a university degree or higher in law and at least 01 year of experience working in law;

b) An employee with accounting and auditing certificates specified in Clause 5, Article 5 of this Circular; or have a university diploma or higher in accounting or auditing and have at least 01 year of working experience in accounting or auditing;

c) The head of the internal control department must meet the provisions in point a or b of this clause.

5. Within 07 working days from the date of appointment, dismissal, or change of internal control staff, the fund management company shall notify the State Securities Commission and enclose the following documents:

a) Decision of the General Director (Director) of the company on the appointment, dismissal, and change of internal control staff;

b) List with personal profile and reasons The judicial calendar is issued no more than 06 months from the date of application submission (for new employees); Valid copies of other documents ensuring that the staff and personnel structure of the internal control department meet the provisions of Clauses 3 and 4 of this Article.

6. The fund management company must submit an annual internal control report to the State Securities Commission. The report must clearly indicate potential risks in the company’s activities, entrusted asset management activities and inspection and supervision activities in each unit, each department, and each licensed professional activity.

Thus, according to the above regulations, the head of the internal control department of a securities investment fund management company must have a university degree or higher in law and have at least 1 year of experience working in law;

Or have accounting and auditing certificates specified in Clause 5, Article 5 of this Circular; or have a university diploma or higher in accounting or auditing and have at least 1 year of work experience in accounting or auditing.

Do employees of a securities investment fund management company have to report to the internal control department before trading?

Pursuant to Clause 4, Article 11 of Circular 99/2020/TT-BTC there are provisions as follows:

Restrictions on the activities of the fund management company and its employees fund management company

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4. All securities transactions of members of the Executive Board and employees of the fund management company must be reported to the internal control department before and immediately after the transaction. The transaction reports of the above individuals must include: name of traded securities, quantity, transaction price, total transaction value, execution time, implementation method, trading account number, securities company where the trading account is opened. Transaction reports of individuals must be stored and managed at the internal control department and provided to the State Securities Commission upon request.

Thus, according to the above regulations, employees of the securities investment fund management company must report to the internal control department before and immediately after the transaction.