MEMBER FUND

1. What is member fund?

According to the provisions of the Securities Law 2019, A member fund is a securities investment fund with a number of capital contributors from 02 to 99 members and includes only members who are professional securities investors. Member funds are distinguished from public investment funds by the limit on the number and subjects of investment in the fund. Thus, with this definition, it can be seen that there aretwo main constraints to determine whether a securities investment fund is a member fund or not.

• Number of members: only from 2 to 99 members (different from open-ended funds with unlimited number of members)
• Regarding the standards for investors: investors participating in investing in the fund must be professional securities investors

2. CONDITIONS FOR SETTING UP A MEMBER FUND

According to the provisions of the Securities Law 2019 in order for a member fund to be established, it must meet the following criteria:

• About capital contribution: The minimum level of capital contribution is VND 50 billion.
• About the number of members and conditions for members: The number of capital-contributing members is limited to about 02-99 members, and these members must be professional securities investors.
• About the management company: Member funds must be managed by a securities investment fund management company.
• About the fund’s asset custody: The custody of the fund’s assets must be carried out at a bank that is completely independent of the securities investment fund management company.

3. INVESTMENT OBJECTIVES OF MEMBER FUNDS

Because of the non-public nature of the Member Fund, the investment scope of the Member Fund is wider than that of other public funds. Member funds can invest or contribute capital to establish businesses, participate in many high-risk investment fields, so the expected return will also be very high for investors who contribute capital.