High capital threshold mulled for foreign fund managers

Wednesday, April 23, 2008
Foreign fund managers wanting to set up a branch in Viet Nam must have total capital of its funds of at least US$500 million, says the Ministry of Finance's draft statute on foreign investors' operations in Viet Nam just submitted to the prime minister.
A foreign fund manager wanting to build a branch in Viet Nam must also have at least three-years of experiences in fund management, and the securities watchdog of the country where that foreign fund manager is based or registered must have a cooperation deal with Viet Nam's State Securities Commission.
To set up a foreign-owned fund management company in Viet Nam, the applying foreign institution must have an operating license on assets management in its resident country and must manage at least US$300 million in market -value assets in the fiscal year when it applies to set up a firm in Viet Nam.
However, this regulation does not apply to foreign fund managers having maintained representative offices in Viet Nam for over three-years and managing funds investing in Viet Nam.
Prior to Viet Nam's opening of the securities market under its WTO commitments, foreign fund manager's branch or foreign-owned company can provide only asset management services for foreign investors, comprising investors' portfolio management and offshore fund management in Viet Nam.
Foreign fund management company can sell stakes to other foreign fund managers who meet all conditions above. After three-years of operation, a foreign fund management company can sell stakes to Vietnamese partners or mobilise funds from Vietnamese investors to reduce foreign stake to under 49%, all of which must be approved by the State Securities Commission (SSC).
Foreign fund managers and branches of foreign fund managers must have monthly, quarterly, and yearly reports as per the commission's regulation.
Operation time of a foreign fund manager's branch in Viet Nam is not longer than 50 years and of foreign-owned fund company not over 99 years. (Sai Gon Times)