Classifying securities investment funds according to capital mobilizationmethods and management rights, securities investment funds are divided into twotypes: public funds and member fun
TRƯỜNG ĐẠI HỌC NGÂN HÀNG TP HỒ CHÍ MINH KHOA LUẬT KINH TẾ MÔN: LUẬT CHỨNG KHOÁN Giảng viên hướng dẫn: PGS.TS Viên Thế Giang Sinh viên thực hiện: Nhóm 5 Lớp: D01 DANH SÁCH NHÓM 5 STT Tên MSSV 1 Phạm Thị Hoa 030737210077 2 Nguyễn Thị Thanh Thúy 030737210162 3 Bùi Thị Thanh Thúy 030737210159 4 Lâm Thương Thương 030737210165 5 Nguyễn Hồng Nhung 030737210126 6 Ngô Thị Hồng Hạnh 030737210067 7 Huỳnh Trần Thị Thu Thuận 030737210158 MỤC LỤC I Overview of stock investment funds 1.1 Concept, roles 1.1.1 Concept 1.1.2 Roles 1.2 Classification of securities investment funds 1.2.1 Classifying securities investment funds according to capital mobilization methods and management rights, securities investment funds are divided into two types: public funds and member funds 1.2.2 Based on capital structure, stock investment funds are divided into two types: closed-end investment funds and open-ended investment funds 1.2.3 Based on the organizational structure and operation of the investment fund, it is divided into investment funds in the form of companies and investment funds in the form of contracts 1.2.4 Based on the purpose of the fund's operation, investment funds are divided into exchange-traded funds and real estate investment funds II The reason is that there have not been many securities investment funds established in Vietnam 2.1.Current situation of securities investment funds established in Vietnam today 2.2 The reason is that there have not been many securities investment funds established in Vietnam 2.2.1 The stock market is still young, volatile: Vietnam's stock market is still young 2.2.2 Why there is a lack of open markets 2.2.3 Legal and regulatory restrictions 2.2.4 Lack of knowledge and experience III Proposing solutions to improve the efficiency of establishing many securities investment funds in Vietnam 3.1 International relations 3.2 Solutions to improve the efficiency of establishing many securities investment funds in Vietnam today FIND OUT THE REASON WHY THERE ARE NOT MANY SECURITIES INVESTMENT FUNDS ESTABLISHED IN VIETNAM II Overview of stock investment funds 1.1 Concept, roles 1.1.1 Concept According to the provisions of Clause 37, Article 4 of the Securities Law 2019: " A securities investment fund is a fund established through capital contribution by investors to make investment in securities or other assets, including real estate Investors do not have the right to daily control the investment decisions of the fund" 1.1.2 Roles The securities investment fund model plays an important role in the stock market, is an effective channel to attract investment and contributes to increasing liquidity in the market This is expressed in many aspects: - In macro terms, the activities of securities investment funds contribute to increasing liquidity for the stock market, thereby promoting the development of the capital market, especially attracting capital from foreign investors - For securities investors, when making securities investment through securities investment funds, they will: + Benefit from the knowledge and experience of an investment management company – a professional stock investor + There are many investment choices with relatively small amounts, meaning that the greater the diversification in investments, the lower the risk + Help investors penetrate a number of industries, the investment sector is highly profitable but the stock price trades large that an individual or small investor is unlikely to enter + Save investment costs + Ensure operational transparency 1.2 Classification of securities investment funds 1.2.1 Classifying securities investment funds according to capital mobilization methods and management rights, securities investment funds are divided into two types: public funds and member funds According to Clause 38, Article 4 of the 2019 securities law stipulates: " A public fund is a securities investment fund that publicly offers fund certificates." The fund's capital is mobilized through the issuance of fund certificates to the public With a public fund, investors do not have day-to-day control over the fund's investment decisions Investors can be individuals or legal entities, but most are individual investors Public funds provide small investors with investment vehicles that ensure investment diversification, reduced risk and low investment costs According to Clause 41, Article 4 of the Securities Law 2019, it is stipulated: "A private fund means a securities investment fund that has 02 - 99 capital contributors who are all professional investors." Member funds raise capital by private placement to a small group of investors Due to the nature of the fund, the liquidity will be lower than that of a public fund Investors in private funds often have large amounts of capital And in return they can participate in controlling the fund's investments 1.2.2 Based on capital structure, stock investment funds are divided into two types: closed-end investment funds and open-ended investment funds According to Clause 40, Article 4 of the 2019 Securities Law, it is stipulated: " A closed fund is a public fund whose fund certificates have been offered to the public and cannot be redeemed at the request of investors." Issued once, through the process of raising capital for the round and does not buy back shares or investment certificates when investors need to resell This form is to help mobilize capital, the certificates will be listed on the stock market According to Clause 39, Article 4 of the Securities Law 2019, it is stipulated: " An open-end fund is a public fund whose publicly offered fund certificates have to be redeemed at the request of the investors." After the initial public offering, investors' buy/sell transactions are carried out periodically based on net asset value This transaction is performed directly with the fund management company or at designated agents 1.2.3 Based on the organizational structure and operation of the investment fund, it is divided into investment funds in the form of companies and investment funds in the form of contracts A company-type investment fund is a legal entity, a company formed in accordance with the laws of each country In this model, the fund management company acts as an investment consultant, responsible for conducting investment analysis, managing investment portfolios and performing other business administration tasks Unlike the investment fund model in the form of a company, the model of an investment fund in the form of a contract is not a legal entity Investors are those who contribute capital to the fund and entrust the investment to the fund management company to ensure the highest profitability from their contributed capital This is an investment trust model 1.2.4 Based on the purpose of the fund's operation, investment funds are divided into exchange-traded funds and real estate investment funds An exchange-traded fund is an open fund formed by receiving and exchanging a portfolio of structured securities for fund certificates Exchange-traded fund certificates are listed and traded on the trading system for listed securities Real estate investment fund means a securities investment fund of an issuer that is a real estate business organization with revenue from ownership, and real estate business is at least 65% of total revenue calculated on the most recent financial statement II The reason is that there have not been many securities investment funds established in Vietnam 2.1.Current situation of securities investment funds established in Vietnam today Legal framework for investment fund operations in Vietnam An investment fund is an intermediary financial institution, operating in the market and governed by law to ensure the health of the investment fund's existence, operation and development, as well as ensuring the health of the investment fund protect the Document continues below Discover more fLruoậmt :doanh nghiệp Law12 Trường Đại học… 90 documents Go to course Trắc-nghiệm-LKD Trường đại học Ngâ… 140 98% (44) Đề thi trắc nghiệm luật kinh tế 3 100% (19) Question and review, problems chapter 3 42 Kinh tế 100% (1) quốc tế Kinh tế quốc tế - tài liệu 100% (1) 11 Kinh tế quốc tế The Path of the Law - nhập môn ngành… 20 Luật doanh 100% (1) nghiệp BTVN BUỔI 1 - bai interests of the investing public In Vietnam, investment fund optearaptions are governed by the Securities Law and by-law documents such as: Decre2e No 155/2020/ND-CP of the Government detailing the implementation of a number ofLuarậtitcldesoaonf hthe Law 100% (1) Stock; Circular No 98/2020/TT-BTC of the Ministry of Financengguhidiệinpg the operation and management of securities investment funds; Circular No 99/2020/TT-BTC guiding the operations of securities investment fund management companies Current status of investment funds in Vietnam Data from the State Securities Commission shows that, as of November 2022, the State Securities Commission has licensed the establishment of 23 new investment funds and licensed public offerings to 4 investment funds , bringing the total number of licensed funds in Vietnam operating in the market to 87 funds, including: 48 open funds, 11 ETF funds, 01 real estate fund, 02 closed funds and 25 member funds The total net asset value of securities investment funds as of October 2022 reached more than 73.4 trillion VND By the end of 2022, there are 44 fund management companies in operation with the total value of assets under management at the most recent time (November 2022) estimated at 546 trillion VND, down 9% compared to the previous year at the end of 2021 However, the business activities of fund management companies are still maintained normally and profitable, many companies have mobilized to establish new securities investment funds, thereby contributing to Stabilize and develop a healthy stock market with the leading role of institutional investors Although the law allows commercial banks and insurance enterprises to distribute fund certificates to take advantage of the extensive network of these organizations, but in reality, the vast majority of fund certificate distribution is directly distributed through fund management companies and securities companies Meanwhile, the network of fund management companies and securities companies is mainly concentrated in large cities, leading to limited access to investors and the development of fund product distribution networks; The quality of operations of fund management companies is uneven Some fund management companies operate stably and develop well mainly due to the support of shareholders who are large financial institutions such as insurance companies, credit institutions, and securities companies For example, the insurance company's supported fund management company is Bao Viet Fund Management Company (BVF) Reality in the world and the development process in Vietnam shows that open funds are the type of fund that accounts for the majority of investment funds on the market Open funds are also the foundation product for designing fund models that link the stock market with other markets such as the insurance market and government bond market In fact, in recent times, the business operations of fund management companies have developed in both breadth and depth, thus showing that securities investment fund management in Vietnam has matured rapidly and achieved many important milestones to contribute to the sustainable development of the Vietnamese stock market Assessing the current situation of securities investment funds in Vietnam: Vietnam's securities investment funds have gradually asserted their position in the stock market The contributions of securities investment funds to the development of the economy in general and the stock market in particular are undeniable During the development process, securities investment funds have achieved certain results and contributions, which are: - Although the trading value of fund certificates accounts for a very small proportion compared to the total value of securities in the entire market, the continuous increase in the trading value of fund certificates and the turnover speed over the years have contributed significantly Which shows the success of stock investment funds in building trust with the investing public - The number of funds and trading scale of securities investment funds have changed a lot compared to the early stages when the stock market first came into operation Some securities investment funds invest with high efficiency, affirming their position, name and reputation with investors such as Vietnam Securities Investment Fund (VF1), Ban Viet Health Fund of Ban Viet Fund Management Company, VIEF Fund of Vietnam Industry and Energy Fund Management Company, FPT Fund of FPT Fund Management Company, MBC1 Fund of MB Fund Management Joint Stock Company and SSIMF Fund of the Company SSI Fund Management Company - Securities investment funds have actively contributed to creating "demand" in SOE equitization programs, government bond and corporate bond issuance activities Through the movement and trading behavior of stock investment funds, it contributes to creating a new investment culture for inexperienced investors on the stock market On the other hand, the increase in activities of securities investment funds, including foreign securities investment funds, has contributed to improving the capacity and efficiency of State management according to the requirements of the market economy Setting new requirements as well as creating new tools and capabilities for State management in general and corporate governance in particular Corporate governance has been made more serious and effective due to requirements on corporate financial reporting and transparency of information related to securities that businesses have and will issue Consulting services, judicial support, credit rating determination, insurance, accounting and market information must strive to mobilize and develop on the basis of international standards Since then, they have contributed Stronger development of parts and overall Vietnamese financial market However, some issues that need to be raised are: - Number and type of activities of securities investment funds The number of securities investment funds as well as the diversity of fund types is not commensurate with the size and development trend of the market In particular, there is a lack of open funds and specialized investment funds such as real estate funds and index funds - these are considered key products that are popular and have many advantages in countries with a fund industry develop - The ability of public funds to attract investors is low According to Tuoi Tre online newspaper, for closed public funds such as fund certificates listed on the Ho Chi Minh City Stock Exchange, the market price of daily traded fund certificates is usually lower than the asset value Its net assets (NAV) range from 15%-40%, in some cases up to nearly 50% discount This has greatly affected the psychology of investors in funds as well as the ability of fund management companies to mobilize capital to establish new funds - Operational capacity of fund management companies The operating capacity of Vietnam's fund management companies is assessed to be uneven, and some limitations still exist in the majority of fund management companies During their operations, most fund management companies still have inadequacies in implementing risk management processes, market forecast research as well as the implementation of operations between departments In addition, the ability of fund management companies to mobilize and create funds is not high 2.2 The reason is that there have not been many securities investment funds established in Vietnam In general, the situation of securities investment funds in our country has not developed commensurate with the scale and development trend of the market, lack of open markets the ability of public funds to attract investors is low, the operating capacity of funds is uneven And the causes of the above-mentioned conditions include: 2.2.1 The stock market is still young, volatile: Vietnam's stock market is still young (The stock fund was first introduced to the public in 2004), when the distance with the Departments in the region is still quite far In 2020, when the Covid-19 epidemic broke out worldwide, WHO declared the pandemic, Global stock markets have fallen rapidly and dramatically The epidemic situation can create uncertainty and anxiety in the market, leading to sharp fluctuations in stock prices Many businesses may face reduced sales and profits due to social distancing measures and restrictions on business operations This can affect the price of their shares in the stock market So, making stock investors, especially hedge funds, feel the higher risk of putting capital into this unstable market 2.2.2 Why there is a lack of open markets: Because compared to closed-end securities investment funds, open-ended securities investment funds have an unstable capital structure Because investors can withdraw capital anytime they want Because in closed-end investment funds, investors are not allowed to withdraw capital by reselling certificates to the fund and closed-end investment funds have a more stable capital structure because the fund does not return capital to investors by buying back investors' fund certificates when they need it 2.2.3 Legal and regulatory restrictions: Incomplete legal or regulatory restrictions may also make investment funds hesitant to operate in Vietnam In the process of developing Vietnam's stock market, The State has perfected the legal provisions on the securities market to conform to social relations regulating the operation of the securities market and International integration.However, there are some inadequacies in the law governing securities investment funds as follows: a) Inadequacies of the current securities investment fund law First, the Law on securities investment funds is still limited when there are no regulations guiding new types of funds such as: funds of funds, parent funds, subfunds, money market funds, Second, The law on securities investment funds has not diversified distribution channels for fund certificate, Individuals have not been allowed to participate in the distribution of fund certificates and there are no regulations guiding distribution agents to use financial technology in the distribution of fund certificates Third, tax policy has not encouraged the development of securities investment funds, The fund's corporate income tax is not clearly regulated The tax rate of corporate income, personal income when investing in fund certificates is higher than when investing in other assets such as: bonds, deposits, while investors in stock investment funds are small, inexperienced investors b) Inadequacies in law enforcement on securities investment funds First, the process of offering and establishing investment funds is cumbersome and complicated The process of offering and establishing investment funds lasts (30 days The State Securities Commission and fund management companies have not coordinated in implementing online public services Second, the General Meeting of investors of securities investment funds has many shortcomings Must be held annually once a year However, investors usually do not attend the meeting due to the information about the fund that has been published on the market So, It took many times for the stock investment fund to successfully organize the investor meeting It takes time, resources and expenses for the fund management company Third, the law on securities investment funds has allowed commercial banks and insurance enterprises to register as agents for distributing fund certificates However, In the process of implementing commercial banks, insurance enterprises face difficulties in obtaining approval from regulatory agencies allows participation in the distribution of fund certificates 2.2.4 Lack of knowledge and experience There are many inadequacies in regulations as well as in the process of law enforcement on securities investment funds and the lack of professional knowledge about securities, so The vast majority of investors will be hesitant and uncertain when investing in this type of market with many inadequacies If there is demand, there is supply, if the demand is small, there will certainly be few securities investment funds established in Vietnam from a social perspective, Securities investment funds are understood as gathering small, inexperienced investors together to share investment capital through experienced investors, Understand the market to achieve the highest profit with the lowest cost and risk However, 'Trust' in business and investing is a hard thing to be sure of Because investors will want to invest on their own to be able to firmly win Stemming from the above reasons, there are not many securities investment funds in our country, but in the near future, The State Securities Commission will focus on implementing solutions to develop the stock market, on the basis of four pillars:development of quality goods for the stock market; building a fair, open, transparent trading market towards sustainable development;develop increasingly professional and effective intermediaries and securities trading organizations, with good corporate governance in accordance with international practices; Develop a diversified investor base, in which, focusing on developing professional investors to participate in the market to increase market depth Especially, from now until 2025 The State Securities Commission will make efforts to coordinate with relevant agencies and international organizations to upgrade the stock market,further attract foreign investment flows, serving economic development III Proposing solutions to improve the efficiency of establishing many securities investment funds in Vietnam 3.1 International relations In order to draw lessons from which to improve the situation of securities investment funds in Vietnam, we must not only learn from and adjust our own experiences, but also look to the world to see how other countries have addressed this issue From this, we can learn from their experiences Therefore, the group will proceed to analyze some countries with developed securities investment funds in the world, with the hope of using this as a basis to find the optimal solution for the current state of securities investment funds in Vietnam The first country is the United States: According to data from SWFI (Sovereign Wealth Fund Institute) as of October 2021, the United States ranked first in the world in terms of the number of mutual funds with 21,462 funds Far ahead of the No 2 country, the UK has 6,892 stock investment funds So let's take a look at what the U.S did to have such an impressive number: - First, the market economy developed strongly: The United States is the world's largest economy, with the world's largest stock market The U.S stock market offers many attractive investment opportunities for investors, from large companies to startups - Second, favorable legal policy: The United States has a strict legal and regulatory system, creating conditions for securities investment funds to operate and develop - Third, technological advances: The rapid development of information and communication technology has helped mutual funds to access information and manage their portfolios more effectively - Fourth, the United States also has a strong investment culture Many Americans see investing in stocks as a way to build wealth and secure their future This has driven the growth of mutual funds in the United States Here are some specific U.S policies and regulations that have contributed to the growth of securities investment funds: - Securities Act of 1933: This act regulates requirements for registration and listing of shares, helping to protect investors' interests - Securities Act of 1934: This Act provides for the establishment and the activities of securities companies, securities investment funds and securities brokers - Sarbanes-Oxley Act of 2002: This was enacted in the wake of the Enron and WorldCom financial scandals to enhance the transparency and accountability of public companies These policies and regulations have created a safe and transparent regulatory environment for securities investment funds to operate This has contributed to attracting many investors, both domestic and foreign, to U.S securities investment funds The development of stock investment funds in the United States is indisputable, with favorable factors in terms of economic history, culture, geography, The development of mutual funds in the United States is undeniable, with favorable factors in terms of economic history, culture, geography, etc However, there is another country with similarities in culture and history to Vietnam, namely China, which also has an impressive development despite the fact that the Chinese stock market was relatively late to be established compared to the US stock market The first stock exchange in China, the Shanghai Stock Exchange, was established in 1990, while the US stock market was established in the 18th century However, the Chinese stock market has grown rapidly in recent years The total market capitalization of the Chinese stock market has increased from $100 billion in 1990 to over $10 trillion in 2022 The Chinese stock market is currently the second largest stock market in the world, after the US stock market And the number of mutual funds in this country, according to SWFI data as of October 2021, China has 5,670 mutual funds, ranking third in the world, after the United States and the United Kingdom Despite having a similar time period of establishment to the Vietnamese stock market, specifically on July 20, 1998, the Ho Chi Minh City Stock Exchange (HOSE) officially opened for business, marking the birth of the Vietnamese stock market Why could our "neighbor" achieve such outstanding development? Here are some of the main reasons: - First, strong economic growth: China is the second largest economy in the world, with average annual GDP growth of 6-7% in recent years This economic growth has created potential investment opportunities for mutual funds - Second, the development of the stock market: The Chinese stock market has seen strong growth in recent years, with a total market capitalization of over $100 trillion in 2023 The development of the stock market has created favorable conditions for mutual funds to operate - Third, government support policies: The Chinese government has implemented a number of policies to support the development of the stock market, including reducing transfer taxes, encouraging companies to list on the stock market, and opening the stock market to foreign investors In addition, the development of Chinese mutual funds is also driven by a number of other factors, including: - The rise of the middle class: The middle class in China is growing rapidly, with higher incomes and spending power This has created a demand for investment from these groups, and mutual funds are a popular investment channel - The development of financial technology: Financial technology (fintech) is growing rapidly in China, helping mutual funds reach more investors and provide more convenient investment services Economically, it is difficult for Vietnam to achieve the same level of economic development as China currently has However, we can consider and learn from how the Chinese government has supported investment funds as follows: - Reduced transfer tax: The Chinese government reduced the transfer tax from 0.1% to 0.05% in 2023 This helps to reduce investment costs for investors and encourage them to participate in the stock market - Encouraged companies to list on the stock market: The Chinese government has introduced a number of policies to encourage companies to list on the stock market, including tax breaks and financial support This helps to increase the number of companies listed on the stock market, creating potential investment opportunities for mutual funds - Opened the stock market to foreign investors: The Chinese government opened the stock market to foreign investors, helping to increase capital investment in the stock market and promote the development of mutual funds - In addition, the Chinese government has also made efforts to raise awareness of the stock market and investment in mutual funds for the people, including organizing financial education programs and encouraging banks and other financial institutions to provide investment consulting services to customers Government support policies in China have contributed to the development of mutual funds in China, helping the Chinese stock market to become one of the largest stock markets in the world 3.2 Solutions to improve the efficiency of establishing many securities investment funds in Vietnam today The established securities investment fund not only creates a "bridge" to mobilize small savings from the public but also plays an important role in helping small investors and creating investment habits for them At the same time, the investment fund will contribute to limiting investment activities according to trends, stabilizing the market, and improving professionalism in stock investment step by step To promote the development of fund management companies and securities investment funds in Vietnam, it is necessary to effectively implement the goals and solutions/methods below: - Employ professional investment managers, capable of delivering better profit and risk management - Increase asset diversification, type, and volume Improve the quality of goods supplied to the stock market to reduce some unsystematic risks This will help the stock market become more vibrant, attract capital investment strongly, and ensure market operations are safe by having many security investment fund organizations in Vietnam - The government must pay more special attention to securities investment funds in Vietnam and improve the legal framework for the stock market Complete regulatory documents on taxes, fees, accounting, auditing regimes, and foreign exchange management regimes for foreign investors' activities openly to encourage subjects to actively participate in the market, moving towards the effective establishment of securities investment funds - Reinforce and enhance the operating capacity of securities companies Through continuous training and professional ethics education for officials and employees in the securities industry Develop a diverse securities business network, and diversify order-receiving methods to ensure that investors everywhere can participate in the market conveniently with low transaction costs - It is advisable to establish an investment fund according to the joint stock company model because this model has a solid legal status according to the law, creating trust for investors Thereby, it will promote optimal efficiency in capital mobilization and have many advantages in business management and administration More from: Luật doanh nghiệp Law12 Trường Đại học… 90 documents Go to course Trắc-nghiệm-LKD Trường đại học… 140 Luật 98% (44) doanh… Đề thi trắc nghiệm luật kinh tế 3 Luật 100% (19) doanh… Câu hỏi và đáp án môn Luật Dân sự 1 29 Luật 100% (17) doanh… Tổng hợp 100 câu hỏi trắc nghiệm lu… 29 Luật 93% (29) doanh… More from: 38-Trương Văn… 63 Trường Đại học… Discover more Các hoạt động thương mại None 8 Tiểu luận quản trị… Luật Chứng Khoán Nhóm 11 None 26 Luật Kinh doanh Recommended for you Question and review, problems… 42 Kinh tế 100% (1) quốc tế Kinh tế quốc tế - tài liệu 100% (1) 11 Kinh tế quốc tế The Path of the Law - nhập môn ngành… 20 Luật 100% (1) doanh… BTVN BUỔI 1 - 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