What professional certification must the personnel of the internal audit department of a securities investment fund management company have?

Who does the internal audit department of a securities investment fund management company belong to?

Pursuant to Clause 1, Article 5, Circular 99/2020/TT-BTC has the following provisions:

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;

d) Conduct audits of all operations of all departments in the company at least once every two years;

e) Recommend solutions to improve the effectiveness and efficiency of the company’s operations; Monitor the results of implementing post-audit recommendations approved by the Board of Directors or Council of Members or company owners.

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.

What professional certification must the personnel of the internal audit department of a securities investment fund management company have?

Pursuant to Point c, Clause 4, Article 5, Circular 99/2020/TT-BTC has the following provisions:

Internal audit

…

4. When appointed, internal audit department personnel must ensure:

a) Not in the case of being prosecuted for criminal liability or serving a prison sentence or banned from practicing securities according to the provisions of law;

b) Have not been sanctioned for administrative violations in the field of securities and stock market within the latest 06 months up to the time of appointment;

c) Have a certificate to practice asset management in countries that are members of the Organization for Economic Cooperation and Development (OECD) or have passed the international certificate of investment analysis CFA level II or higher (Chartered Financial Analyst level II) or CIIA (Certified International Investment Analyst – Final Level); or have a securities practice certificate; or have a certificate of Basic issues of securities and stock market and a certificate of Law on securities and stock market.

5. The personnel structure of the internal audit department 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.

Thus, according to the above regulations, the internal audit department personnel of the securities investment fund management company must have an asset management practice certificate in countries that are members of the Organization for Economic Cooperation and Development (OECD).

– Or have passed the international certificate of investment analysis CFA level II or higher (Chartered Financial Analyst level II) or CIIA (Certified International Investment Analyst – Final Level);

– Or have a securities practice certificate;

– Or have a certificate of Basic issues of securities and stock market and a certificate of Law on securities and stock market.

Does the securities investment fund management company send to the State Securities Commission a report on internal audit results annually or quarterly?

Pursuant to Clause 1, Article 29 of Circular 99/2020/TT-BTC there are provisions as follows:

Reporting obligations report

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

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

b) Periodic monthly reports on the investment portfolio management activities of the fund management company with confirmation from the depository bank where the fund management company opens depository account, confirmation of the depository member where the entrusting customer opens the account, confirmation of the depository institution abroad according to the form specified in Appendix VII issued with this Circular;

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

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

đ) Quarterly financial reports; The 6-month financial statements have been reviewed, the annual financial statements have been audited by an approved auditing organization of the fund management company according to the provisions of law on accounting for fund management companies;

Thus, according to the above regulations, the securities investment fund management company sends the State Securities Commission annual internal audit results reports.