Multi-manager funds in Vietnam

The concept of multi-manager fund has been introduced under the regulations on investment by foreign investors in Vietnam stock market. In particular, Vietnamese law allows a foreign multi-manager fund trading on the Vietnamese stock market to obtain one separate securities trading codes for each investment portfolio in such fund. Accordingly, an offshore multi-manager fund may have more than one securities trading code. However, the law does not seem to allow a multi-manager fund to be set up onshore in Vietnam. This is because the fund regulations require a member fund to be managed by one fund management company only. In case of public funds, various reports or forms also suggest that a public fund must also be managed by one fund management company.

This post is contributed by Nguyen Bich Ngoc, a VILAF associate.

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Vietnam competition law applies to vertical and/or offshore merger

In a report published by the Vietnam Competition Authority (VCA) in April 2015, the VCA confirms via its comments on the acquisition of Metro's business in Vietnam by a Thai corporation may be regarded as a vertical merger under Vietnamese law. This comment has provided more clarity on vertical merger under Vietnamese law. The VCA also confirmed that it has received a merger filing notice from Maersk, MSC and CMA CGM (P3) regarding a frame agreement to establish a joint operation venture (Network Centre – NC) in UK. Again this reported news also seems to confirm that Vietnam competition law may apply to offshore transaction.

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Confusion about tender offer definition under Vietnamese law

Under Vietnam securities regulations, the legal requirement on tender offer in acquisition of shares in a public joint stock company (the target company) will be triggered in one of the following circumstances:

a. Circumstance 1: An offer to purchase voting shares which results in the ownership of 25% or more of the outstanding voting shares of the target company;

b. Circumstance 2: Any organization or individual together with its related persons holding 25% or more of the voting shares in the target company purchasing further (mua tiếp) 10% or more of the outstanding voting shares of the target company;

c. Circumstance 3: Any organization or individual together with its related person holding 25% or more of the voting shares in the target company purchasing further 5% to less than 10% of the outstanding voting shares of the target company within 1 year from the completion of the previous tender offer; and

d. Circumstance 4: Any organization or individual having intention to conduct a tender offer.

Limitation on caveat emptor rules under Vietnam Civil Code 2015

The new Civil Code 2015 has substantially limited the caveat emptor rules in Vietnam. The Civil Code 2015 requires a party before entering into a contract with another party to disclose to the other party information that may affect such other party’s decision to enter into the contract. Failure to notify will be subject to compensation for damages. On the other hand, the normal caveat emptor rule does not require a seller to disclose information about the seller’s goods to a buyer unless the buyer specifically asks for such information (e.g. by way of a contractual representation).

Vietnam Business Law