DECISION

ISSUING REGULATIONS ON ESTABLISHMENT AND OPERATION OF REPRESENTATIVE OFFICES OF FOREIGN SECURITIES BUSINESS INSTITUTIONS IN VIETNAM

THE MINISTER OF FINANCE

Pursuant to the Law on Securities dated 29 June 2006;
Pursuant to Decree 14/2007/ND-CP of the Government dated 19 January 2007 implementing the Law on Securities;
Pursuant to Decree 118/2008/ND-CP of the Government dated 27 November 2008 on functions, duties, powers and organizational structure of the Ministry of Finance;
Having considered the proposal of the Chairman of the State Securities Commission;

DECIDES:

Article 1.- To issue with this Decision, Regulations on establishment and operation of representative offices of foreign securities business institutions in Vietnam.

Article 2.- This Decision shall be of full force and effect fifteen (15) days after the date of its publication in the Official Gazette. Any provisions in previous legal instruments which are inconsistent with the provisions in these Regulations shall no longer be effective.

Article 3.- The Head of the Office of the Ministry, the Chairman of the State Securities Commission, representative offices of foreign securities business institutions in Vietnam and other related parties shall be responsible for implementation of this Decision.

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FOR THE MINISTER OF FINANCE
DEPUTY MINISTER




Tran Xuan Ha

REGULATIONS

ON ESTABLISHMENT AND OPERATION OF REPRESENTATIVE OFFICES OF FOREIGN SECURITIES BUSINESS INSTITUTIONS IN VIETNAM
(Issued with Decision 124/2008/QD-BTC of the Ministry of Finance dated 26 December 2008)

Chapter 1

GENERAL PROVISIONS

Article 1.-  Governing scope

These Regulations guide establishment and operation of representative offices of foreign securities business institutions in Vietnam's securities market.

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In these Regulations, the following terms shall be construed as follows:

1. Parent company means a foreign securities business institution ["FSBI"] with a representative office operating in Vietnam.

2. Authorized representative means:

(a) Chairman of the board of management or General Director (Director) of the FSBI;

(b) Any proxy pursuant to a written power of attorney from a person prescribed in sub-clause (a) above;

(c) Any person authorized by the charter of the FSBI to sign documents prescribed in these Regulations and to undertake related work within the scope of authority assigned to such person.

3. Valid copy means a copy which has been notarized [and/or] certified by the competent administrative body of Vietnam.

4. Valid file means a file containing complete and valid documents required by these Regulations and containing complete declarations required by law.

5. Commencement of operation means commencement of conduct of the operation of the representative office.

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Article 3.- General provisions

1. Any securities business institution, legally established and currently operating pursuant to foreign law, which satisfies the condition stipulated in article 4 of these Regulations shall be permitted to open a representative office to operate in Vietnam.

2. Representative offices of FSBIs in Vietnam shall be subject to administration and supervision by the State Securities Commission ["SSC"].

3. Representative offices of FSBIs in Vietnam which were established prior to the date on which the Law on Securities took effect and which have not yet registered their operation pursuant to provisions of the law on securities, must re-register their operation with the SSC. The file for re-registration of the operation of a representative office in Vietnam of a FSBI shall comply with article 5 of these Regulations.

4. The legal rights and interests of representative offices of FSBIs in Vietnam and of people working in such offices shall be protected [by the law of Vietnam] and such offices and people working in them shall be obliged to comply with the law of Vietnam.

Chapter 2

ESTABLISHING A REPRESENTATIVE OFFICE IN VIETNAM

Article 4.- Conditions for establishing a representative office of a FSBI

A FSBI which satisfies the following conditions shall be permitted to establish a representative office in Vietnam:

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2. It is licensed to operate pursuant to foreign law or has business registration with the competent authority in the securities sector in the country of domicile[i] for professional securities operations including one or more professional operations such as securities brokerage, securities self-trading, securities investment consultancy, underwriting securities issues, asset management and management of securities investment funds.

3. It is permitted to open a representative office in Vietnam by the competent authority of the foreign country which licensed its establishment or where it has business registration; or the FSBI is not restricted by foreign law in establishing or registering business of a representative office in Vietnam:

4. The provision in clause 2 of this article shall not apply to foreign institutions operating in the capital market and permitted to provide asset management services for a restricted number of investors satisfying a number of conditions pursuant to foreign law and which manage investment funds established overseas with the intention [and] objective of investing in Vietnam.

Article 5.- File for registration to operate a representative office of a FSBI in Vietnam

1. A file for registration to operate a representative office of a FSBI in Vietnam shall contain:

(a) Request for issuance of a certificate of registration of operation of a representative office4 signed by the authorized representative of the FSBI (on the standard form in Appendix 1 issued with these Regulations).

(b) The following data in the case of a foreign institution which satisfies the conditions stipulated in clauses 1 and 2 of article 4 above:

- Valid copy operational licence, business registration certificate or other data with equivalent legal value issued by the competent authority in the securities sector of the foreign country, certifying that the FSBI satisfies the conditions stipulated in clauses 1 and 2 of article 4 above. If any of the above-mentioned documents stipulate the operational term of the FSBI, then the residual term must be at least one year.

The following data if the FSBI only satisfies the conditions stipulated in article 4.4 above:

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- Foreign law extract proving that the foreign institution is permitted to provide asset management services.

If a foreign institution satisfies the conditions stipulated in article 4.4 above and has registered a trading number for investment activities in Vietnam of investment funds such foreign institution currently manages, then the following additional data:

- List of investment funds operating in Vietnam certified by an authorized person of the foreign institution enclosing a copy of the certificate of registration of the securities trading number of such funds. The List of funds shall include information on the scale of capital raised, the scale of capital proposed to be invested in Vietnam, proposed investment sectors, custodian bank in Vietnam, securities company or fund management company to provide securities services, and bank at which an indirect investment capital account has been opened enclosing valid copy certificate of registration of such account.

If a foreign institution satisfies the conditions stipulated in article 4.4 above but has not yet registered a trading number for investment activities in Vietnam of investment funds such foreign institution currently manages, then the following additional data:

- Valid copy certificate of registration of establishment of fund or equivalent data issued by the competent authority of the country where such institution raised capital to establish the fund or register its operation. If the law of the country of domicile of the fund provides it is unnecessary for the competent authority to issue the above-mentioned data, then the foreign institution may lodge the following data instead, namely an extract from the website of the competent authority of the country of domicile of the fund certifying that the fund has completed registration of its establishment.

- Copy Fund Prospectus or equivalent data.

- Fund Charter/Articles of Association.

- Trust Deed/Fund Contract or Memorandum for Private Placement/Establishment Contract.

- Certificate from depositary or custodian bank certifying the scale of capital contribution.

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(d) Minutes of meeting of the board of management of the FSBI and the board's Resolution on establishment of a representative office in Vietnam and on appointment of a head representative in Vietnam, specifying the operational scope of the representative office in Vietnam, and enclosing a written undertaking from the FSBI to be wholly liable for the operation of its representative office in Vietnam and assuring that such operation will comply with the law of Vietnam.

(e) Valid copy passport or identity card, and summarized curriculum vita of the person proposed to be appointed as head representative in Vietnam (on the standard form in Appendix 2 issued with these Regulations) and certified by the FSBI, or certified by the local authority if the head representative is Vietnamese. A list and summarized curriculum vitae, certified by the competent administrative body, of staff (if any) who will work in the representative office (on the standard form in Appendix 2 issued with these Regulations).

(f) Contract in principle regarding lease of headquarters of the representative office, enclosing certification of ownership or right to lease of the lessor.

(g) Financial statements for the most recent financial year or a certificate certifying discharge of tax or financial obligations in the most recent financial year issued by the competent authority of the country in which the FSBI was established.

(h) Document from the competent authority of the country of domicile of the FSBI permitting such institution to open a representative office to operate in Vietnam; or if the law of such country does not require such approval, then an extract of foreign law proving same.

2. The file stipulated in clause 1 of this article shall be prepared in two sets, one in Vietnamese and one in English, in which:

(a) The set in English must be consularized, except for financial statements directly prepared in English and except for documents which the competent authority of the foreign country sends directly to the SSC.

(b) Copies of Vietnamese documents and translations from English into Vietnamese must be certified by a notary legally practising in Vietnam in accordance with the law on notarization. However the following translations may be certified by an entity authorized to provide translation services in Vietnam, namely translations of the annual financial statements, of

Memorandum for Private Placement/Establishment Contract, or of the Articles of Incorporation or Fund Charter and translations of equivalent data.

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3. A file may be amended or supplemented if the FSBI considers it necessary or if the SSC so requests. Amending or supplementary documents must be signed by the original signatory to the documents in the original file sent to the SSC, or by a person with the same title as such signatory.

4. The SSC shall, within seven (7) business days from the date of receipt of a complete and valid file requesting issuance of a certificate of registration of operation of a representative office, issue such certificate; and in a case of refusal, the SSC shall provide a written response specifying its reasons.

Article 6.- Announcement of information and commencement of operation

1. The FSBI shall, within thirty (30) days from the date of issuance of the certificate of registration of operation of its representative office, conduct procedures with the police office to request a seal (procedures to be conducted with the Department of Public Security in the city or province under central authority where the representative office is set up) in accordance with guidelines of the police office; and announce such certificate in three consecutive editions of a newspaper or electronic media permitted to be published in Vietnam, such announcement to contain the following particulars:

(a) The name and headquarters [in Vietnam] of the representative office.

(b) Name and headquarters of the FSBI with the representative office operating in Vietnam.

(c) Name and nationality of the head representative.

(d) Number, date of issuance and operational term of such certificate.

Operational items of the representative office.

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Article 7.- Operational duration of a representative office

1. The term of operation of the representative office of a FSBI shall be specifically stated in the certificate of registration of its operation.

2. The term of effectiveness of a certificate of registration of operation of a representative office shall be a maximum of five years but may not exceed the residual term of the operational licence, business registration certificate or equivalent legal document of the FSBI.

Article 8.- Amendment of certificate of registration of operation of a representative office

1. A FSBI must request that the SSC amend or supplement the certificate of registration of operation of its representative office on any of the following changes:

(a) Change of head representative.

(b) Change of name of the representative office.

(c) Change of headquarters of the representative office.

(d) Change of name or address of the headquarters of the FSBI within its country of domicile.

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Change in operation of the FSBI; or change in its legal status or a change relating to division, de-merger or consolidation of the FSBI.

2. A file for amendment of the certificate of registration of operation of the representative office shall contain:

(a) In a case of change of the head representative in Vietnam as prescribed in clause 1(a) above:

- Request for amendment of such certificate signed by the authorized representative of the FSBI (on the standard form in Appendix 3).

- Decision changing and appointing the new head representative, signed by the authorized representative of the FSBI.

- Data proving that the outgoing head has fully discharged tax and financial obligations to the State of Vietnam.

- Valid copy passport or identity card, and summarized CV of the person proposed to be appointed as the new head representative in Vietnam, certified by the FSBI or by the local authority if such person is Vietnamese (on the standard form in Appendix 2).

(b) In a case of amendment of such certificate as a consequence of a change of name or change of headquarters of the representative office as referred to in sub-clauses (b) and (c) of clause 1 above:

- Request for amendment of such certificate, signed by the authorized representative of the FSBI or head of the representative office if he or she has authority from the FSBI (on the standard form in Appendix 3) and enclosing the power of attorney.

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- Copy lease contract for the new location (required for a change of headquarters of the representative office).

(c) In a case of amendment of such certificate as a consequence of a change in the FSBI as referred to in sub-clauses (d), (e) or (f) of clause 1 above:

- Within three months from the date of such change, the FSBI must lodge a request for amendment of such certificate signed by the authorized representative of the FSBI.

- Valid copy operational licence, business registration certificate or legal data proving the change of address of the FSBI within the country where it was established, or the change of name, legal status, headquarters or place of business registration of the FSBI or equivalent valid data of the FSBI certified by the competent authority of its country of domicile.

3. The SSC shall, within seven (7) business days from the date of receipt of a complete and valid file from the FSBI as referred to in clause 2 above, amend such certificate; and in a case of refusal, the SSC shall provide a written response specifying its reasons. This time-limit shall not include any time required by the FSBI to amend or add to its file applying for amendment of the certificate of registration of operation of its representative office.

4. The FSBI shall, within seven (7) days from the date on which such certificate is amended, announce information about amended items in the manner prescribed in article 6.1 of these Regulations.

Article 9.- Extension of certificate of registration of operation of a representative office

1. The certificate of registration of operation of the representative office of a FSBI may be extended when the FSBI satisfies the following conditions:

(a) It continues to legally maintain its operation in accordance with the law of its country of domicile, and satisfies the condition stipulated in article 4 of these Regulations.

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2. A FSBI must conduct procedures of an extension at least thirty (30) days prior to the date on which the certificate of registration of operation of its representative office expires.

3. A file for extension of such certificate shall contain:

(a) Request for an extension signed by the authorized representative of the FSBI (on the standard form in Appendix 3).

(b) The data stipulated in sub-clauses (b), (d) and (g) of article 5.1 of these Regulations.

(c) The data stipulated in sub-clauses (c), (e) and (h) of article 5.1 of these Regulations in a case of a change in the Charter of the FSBI, a change of head representative, or a change of headquarters of the representative office.

4. The time-limit for the SSC to conduct procedures for such extension shall be the same as that stipulated for issuance of a certificate of registration of operation of a representative office in article 5.4 of these Regulations [7 business days]. In a case of refusal, the SSC shall provide a written response specifying its reasons. This time-limit shall not include any time required by the FSBI to amend or add to its file applying for extension of such certificate.

Article 10.- Operational scope; and rights and obligations of representative office and of head representative and staff at the representative office.

1. The operational scope of a representative office of a FSBI in Vietnam may comprise one, a number, or all of the following items:

(a) Implementation of the function of a contact office, and conduct of market research.

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(c) Advancement and supervision of performance of contracts already agreed and signed between the FSBI with Vietnamese economic organizations in the securities sector.

(d) Advancement and supervision of performance of projects which the FSBI finances in Vietnam in the securities sector.

2. The representative office of a FSBI which operates in a number of sectors shall only be permitted to conduct the activities stipulated in clause 1 of this article.

3. A representative office shall have the following rights:

(a) To open an office bank account in foreign currency or in VND sourced from foreign currency, only at a credit institution authorized to conduct foreign exchange activities in Vietnam, and only to use such account for the activities of the representative office. The opening, use and closure of bank accounts of representative offices shall be implemented in accordance with State Bank regulations.

(b) To hire Vietnamese and foreigners to work at the representative office in accordance with the law of Vietnam. The parent company must, within five (5) business days from the date on which it recruits any additional foreigner to work at the representative office, report to the SSC on such recruitment and enclose documents certifying approval by the competent administrative bodies.

(c) A representative office of a FSBI in Vietnam shall have its own seal in accordance with the law of Vietnam, and may only use such seal on transaction documents within the authority and function of the representative office.

(d) Other rights as stipulated by law.

4. A representative office shall have the following obligations:

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(b) To register its employees and conduct other procedures relevant to Vietnamese or foreign employees with the people's committee of the province or city under central authority in accordance with law and guidelines from such people's committee.

(c) Not to conduct business activities in Vietnam, nor to conduct asset management or management of capital of investors including that part of the investment capital of the parent company in Vietnam, nor to conduct other securities business activities in Vietnam.

(d) Other obligations as stipulated by law.

5. The head representative may not concurrently act as:

(a) The person heading a branch of the same FSBI in Vietnam or the head representative or head of the branch of another foreign institution in Vietnam, or the director, deputy director (general director, deputy general director) or a member of staff of a securities business institution in Vietnam.

(b) The legal representative or director, deputy director (general director, deputy general director) of an enterprise established in accordance with the law of Vietnam.

(c) The legal representative of a FSBI; or a member of the board of management or director, deputy director (general director, deputy general director) or other individual with the right to sign economic contracts and conduct asset transactions and who is not required to have a written power of attorney from the FSBI.

6. The head representative may only represent the FSBI in signing contracts relevant to business activities and investments of the FSBI with Vietnamese economic organizations and securities business institutions when he or she has a written power of attorney from an authorized person of the FSBI. A power of attorney must be prepared for each occasion of signing (authorization for each occasion) and a valid copy of such power of attorney must be sent to the SSC within ten (10) business days from the date of its signing.

Article 11.- File and procedures for termination of operation of a representative office

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(a) It voluntarily terminates its operation in accordance with the request of the FSBI.

(b) On expiry of the operational term stipulated in its certificate.

(c) The FSBI is dissolved or declared bankrupt.

(d) The certificate of the representative office of the FSBI is revoked pursuant to article 12 of these Regulations.

2. In the cases referred to in sub-clauses (a) and (b) above, the FSBI must send the SSC a request for termination of operation of its representative office at least thirty (30) days prior to the date on which it is proposed to dissolve or terminate the operation. The file requesting termination shall contain the following documents:

(a) Notice of proposal to terminate operation of the representative office (on the standard form in Appendix 5).

(b) Plan on termination comprising the order and procedures proposed for liquidation of assets and debts of the representative office; method, proposed period and plan on discharging debts, on recovering assets, and resolving rights and obligations of entities concerned; and a plan on remitting money and assets of the representative office overseas.

(c) Decision of the authorized representative or authorized body of the parent company on such termination.

(d) Other documents if so requested by the SSC.

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4. The representative office must, within fifteen (15) days from the date of receipt of written approval in principle from the SSC, complete the following procedures to close the office:

(a) Announce in three consecutive editions of a central or local newspaper where the representative office has its headquarters, the termination of operation in order for entities concerned to go to the office to resolve their interests.

(b) Liquidate the lease contract for its headquarters and labour contracts with its employees and other transactions (if any).

(c) Fully discharge tax and financial obligations to the State in accordance with current regulations.

(d) Conduct procedures to return its seal and its certificate of registration of specimen seal with the body which issued the seal.

(e) Fully discharge other obligations owing to entities concerned.

5. The FSBI shall, after completing the procedures stipulated in clause 4 above, report to the SSC by sending a file containing the following documents:

(a) Notice of termination of operation of the representative office signed by the authorized representative of the FSBI (on the standard form in Appendix 6).

(b) Data proving that the FSBI has completed procedures for liquidation and has fully discharged its obligations to entities concerned as stipulated in sub-clauses (a) to (e) inclusive of clause 4 above (with certification from the tax office; and documents liquidating the lease contract for the headquarters and liquidating labour contracts and so forth) as required by the relevant law of Vietnam.

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6. The SSC shall issue a decision terminating the operation of the representative office within fifteen (15) days from the date of receipt of a complete and valid file as required by clause 5 above.

7. The representative office shall be permitted, after it receives the decision on termination of operation of the representative office from the SSC, to remit overseas the remaining assets of the FSBI after completing liquidation in accordance with current regulations.

Article 12.- Revocation of certificate of registration of operation of a representative office

The certificate of registration of operation of the representative office of a FSBI may, depending on the nature and seriousness of the circumstances, be revoked as follows:

1. The FSBI or its representative office deliberately breaches the regulations of Vietnam on foreign exchange control or regulations in the securities sector, or rigs the market, conducts insider trading, is guilty of fraud, or fails to fully discharge its tax and other financial obligations to the State of Vietnam as required by law.

2. The file of the FSBI requesting issuance of such certificate contained false or inaccurate information or lacked an item which the law stipulates was necessary.

3. The representative office conducted activities for the wrong purpose or function, or incorrectly in terms of the items in its certificate or other provisions of law on activities of representative offices.

4. The representative office failed to send reports to the SSC or other competent bodies on time as stipulated by law, or within the time requested by the SSC or such bodies.

5. The FSBI voluntarily terminates the operation of its representative office in Vietnam.

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7. The representative office fails to conduct operations within a period of twelve (12) months as from the date on which it is licensed.

Article 13.- Reporting regime, and archiving of files by a representative office

1. A representative office must report on its activities to the SSC on a quarterly and annual basis (on the standard form in Appendix 7 issued with these Regulations).

2. The time-limit for lodging the reports stipulated in clause 1 shall be:

(a) Within fifteen (15) business days from the end of a quarter.

(b) Within ninety (90) business days from the end of a year.

3. A representative office must report, provide data and explain issues relevant to its operation, including activities of the FSBI on the securities market of Vietnam, in necessary cases and on written request from the SSC or another competent body pursuant to the law of Vietnam.

Chapter 5

INSPECTION, SUPERVISION, AND DEALING WITH BREACHES

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A representative office of a FSBI and staff working in such office shall be subject to management, inspection and supervision by the SSC and other administrative bodies with authority pursuant to the law on Vietnam.

Article 15.- Dealing with breaches

Any FSBI or representative office which breaches the provisions of these Regulations shall, depending on the nature and seriousness of the breach, be dealt with by the law on dealing with administrative breaches in the securities sector.

Chapter 6

ORGANIZATION OF IMPLEMENTATION

Article 16.- Application of the Law on Securities to representative offices which were established and operating prior to the effective date of these Regulations

Any FSBI with a representative office operating in accordance with the Law on Securities must amend its relevant activities/operation for compliance with these Regulations within three (3) months from the date on which these Regulations take effect.