GUIDE TO SECURITIES TRADING IN VIETNAM International Institutional Clients

2021.01OFFSHORE FUND

Guide to Securities Trading in Vietnam for Offshore Fund 1

TABLE OF CONTENTS

1. LOCAL CUSTODY AND SECURITIES TRADING ACCOUNT OPENING FOR OFFSHORE FUND .. 3

1.1 Option for Securities Custody in Vietnam for Offshore Fund ...... 3 1.2 Three Steps to Onshore Custody ...... 4 1.3 Securities Trading Account Opening ...... 4 1.4 Trading Days and Hours: ...... 4 1.5 Price Ranges ...... 6 1.6 Order Types ...... 6 1.7 Matching Principles ...... 8 1.8 Modification and Cancellation of Orders: ...... 8 1.9 Price Unit ...... 8 1.10 Trading Units (Board Lots) ...... 8 1.11 Trading of Foreign ...... 9 1.12 Foreign Ownership Limits...... 9 2. SETTLEMENT AND TAX RULES ...... 9

2.1 Settlement Procedure ...... 10 2.2 Tax Regulations ...... 11 3. OTHER PROCEDURES FOR LOCAL CUSTODY ...... 11

3.1 Transferring Foreign Currency or VND to the IICA ...... 11 3.2 Withdrawal or outbound transfer of funds ...... 12 Our Contact ...... 13

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1. LOCAL CUSTODY AND SECURITIES TRADING ACCOUNT OPENING FOR OFFSHORE FUND

1.1 Options for Securities Custody in Vietnam for Offshore Funds I. Use an offshore offering custodian services for Vietnamese securities outside Vietnam. II. Use an onshore custodian and setup to directly hold securities and cash accounts in Vietnam.

List of Custodian Banks in Vietnam:

No. Bank Address Website Phone/Email International Center, 1st Citibank 1 Floor, 17 Ngo Quyen Street, www.citibank.com.vn [email protected] - Ha Noi Branch Ha Noi 4th Floor, Saigon Center Deutsche Bank AG - 2 Tower, District 1, 65 Le Loi www.db.com +84 286 299 9000 Ho Chi Minh Branch Boulevard, Ho Chi Minh City Far East National 2A-4A Ton Duc Thang Street, 3 Bank - Ho Chi Minh www.fareastnationalbank.com +84 283 822 0566 District 1, Ho Chi Minh City Branch Unit 1505, Floor 15, Saigon Tower, 29 Le JP Morgan Chase - 4 Duan Street, Ben Nghe www.jpmorgan.com +84 283 823 6270 Ho Chi Minh Branch Ward, District 1, Ho Chi Minh City The Metropolitan, 235 5 HSBC Vietnam Dong Khoi Street, District 1, www.hsbc.com.vn +84 283 829 2288 Ho Chi Minh City 138-142 Hai Ba Trung Street, Da Kao Ward, 6 Shinhan Vietnam www.shinhan.com.vn +84 283 829 1581 District 1, Ho Chi Minh City Floor 34, Keangnam Hanoi Landmark Tower, E6 Pham Woori Bank Vietnam [email protected] 7 Hung Street, Me Tri Ward, www.woori.com.vn Limited om.vn Nam Tu Liem District, Ha Noi City Ground floor, CDC Building, Standard Chartered 25 Le Dai Hanh Street, Le Dai 8 Vietnam - Ha Noi www.sc.com +84 243 696 0000 Hanh Ward, Hai Ba Trung Branch District, Hanoi City 3, 4th Floor, TTC Tien Phong 9 building, Duy Tan Street, www.tpb.com.vn +84 243 768 8998 Commercial JS Bank Cau Giay District, Hanoi JS Commercial Bank 198 Tran Quang Khai 10 for Foreign Trade of Street, Hoan Kiem www.vietcombank.com.vn +84 243 934 3137 Vietnam (VCB) District, Hanoi City JS Commercial Bank 74, Tho Nhuom Street, for Investment and Tran Hung Dao Ward, 11 www.bidv.com.vn +84 243 941 1831 Development of Hoan Kiem District, Vietnam (BIDV) Hanoi City

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1.2 Three Steps to Onshore Custody In order to directly invest in Vietnamese securities, foreign institutional investors must complete the following steps:

Step 1: Open custody accounts including securities and cash accounts (Indirect Investment Capital Account) at a custodian bank. Step 2: Obtain a Securities Trading Code (“STC”), your unique account code. This code also assists in monitoring foreign ownership limits (“FOL”). Step 3: Open trading account(s) with a licensed broker: Mirae Asset Securities (Vietnam).

Note: For step 1 and step 2, instruction will be provided by custodian bank. Step 3 will be instructed in the 1.3 section.

1.3 Securities Trading Account Opening According to Circular No. 74/2011/TT-BTC following by Official Letter No. 2327/UBCK-PTTT, Clients can use the services of more than one (1) securities company (i.e., more than one broker can be chosen for execution services).

List of required documents to open a securities trading account at Mirae Asset Securities (Vietnam) (“MAS”):

No. Document Number of copy

1 Securities trading code (“STC”) 1 copy 1 original with signature and stamp 2 Securities company Account Opening Contract (if any) Fund establishment license OR Trustee agreement of fund and Business Registration of asset 3 1 copy management company (in case client does not have the fund establishment license) Passport ID of portfolio manager or 4 1 copy company's legal representative POA full rights: for authorized person who will sign dossiers with 1 original with signatures and stamp 5 MAS on behalf of portfolio manager or legal representative (if (if any) any) 6 Passport ID of the authorized people (if any) 1 copy POA for traders: to appoint attorneys/traders to place orders 1 original with signatures and stamp 7 with MAS (if any) 8 Passport ID(s) of trader(s) 1 copy for each

TRADING RULES

1.4 Trading Days and Hours: Trading days: Monday to Friday (except national holidays) Trading sessions in a trading day:

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 Trading hours on the HSX

Session Trading Hours Trading Method Order Type Opening periodic order-matching to determine opening 09:00-09:15 LO, ATO price

Morning 09:15-11:30 Continuous Matching session I LO, MP

Put-through transactions 09:00-11:30 - Block equities trading/ Bond trading

Break 11:30-13:00

13:00-14:30 Continuous Matching session II LO, MP

Afternoon 14:30-14:45 Closing periodic order-matching to determine closing price LO, ATC

Put-through transactions 13:00-15:00 - Block equities trading/ Bond trading

 Trading hours on the HNX

Session Trading Hours Trading Method Order Type LO, MTL, MAK, Morning 09:00-11:30 Continuous Matching and Put through transactions MOK

Break 11:30-13:00

LO, MTL, MAK, 13:00-14:30 Continuous Matching MOK Closing periodic order-matching to determine closing 14:30-14:45 LO, ATC price Afternoon 14:45-15:00 After-hours trading session PLO

13:00-15:00 Put-through transactions

 Trading hours on the UPCoM

Session Trading Hours Trading Method Order Type

Morning 09:00-11:30 Continuous Matching and Put through transactions LO

Break 11:30-13:00

Afternoon 13:00-15:00 Continuous Matching and Put through transactions LO

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1.5 Price Ranges For shares/ certificates:

HSX HNX UPCoM Ceiling price = Reference price + 7% Ceiling price = Reference price + Ceiling price = Reference price + 10% 15% Floor Price = Reference price - 7% Floor Price = Reference price - 10% Floor Price = Reference price - 15% On the first listing day, a particular On the first listing day, a particular On the first listing day, a particular stock can fluctuate + or – 20% to stock can fluctuate + or – 30% to stock can fluctuate + or – 40% to the reference price the reference price the reference price

Note on reference prices:

 For HSX and HNX, the reference price of the particular stock/investment fund certificate is its closing price from the previous day. For UPCoM, the reference price of the particular stock/investment fund certificate is its average trading price on the previous day.  The closing price of the particular stock/investment fund certificate is the matching price of the closing periodic order matching session (session 3). If a security is not transacted in session 3, then the closing price of that particular stock/investment fund certificate will be the last price at which it was transacted that day.  On the ex-right date, the reference price shall be determined by adjusting the previous trading day’s closing price by the value of dividend or right accordingly.  The reference price for the first listing stock is announced by the listed company with the approval from the listing exchange.

For Bonds: No price range

1.6 Order Types

Limit Order (LO): o Orders to be matched at a pre-specified price or better price. o Limit orders receive the lowest priority compared to other orders. o Limit orders can be entered into the system at any time. The orders remain effective until the end of the trading day or until canceled in the system.

At the Opening Order (ATO) o Orders to be matched at the opening price. ATO orders are only placed during the opening periodic order- matching to determine opening price. o ATO orders receive higher priority than limit orders. o ATO orders cannot be cancelled once inputted into the trading system. Partially filled or unmatched ATO orders will be automatically canceled at the end of the opening session.

At the Closing Order (ATC) o Orders to be matched at the closing price. ATC orders are only placed during the closing periodic order- matching to determine closing price. o ATC orders receive higher priority than limit orders.

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o ATC orders cannot be cancelled once inputted into the trading system. Partially filled or unmatched ATC orders will be automatically canceled at the end of the closing session.

Market order (MP) o It is an order to buy or sell shares immediately at the best available current price. o Once inputted into the trading system, the MP sell order will be immediately executed at the highest bid price and the MP buy order will be immediately executed at the lowest offer price. o If the MP order is executed partially, the remaining volume of the MP buy order and the MP sell order will be changed to next higher price unit and next lower price unit respectively compared to the last executed price. o If the last executed price is ceiling price/floor price, the MP order will be changed to limit order at ceiling price/floor price. o The MP order is valid in continuous order-matching session only. o The MP order will be automatically cancelled if there is no corresponding limit order at the time the MP order is input into the trading system. o The MP orders of foreign investors will be automatically cancelled if the Foreign Ownership Limited (FOL) of the certain stock is no longer available.

Market to limit order (MTL) o A market order if not fully executed, the remaining of the order will be changed to a buying limit order with price higher than the latest executed price one more tick size or the celling price if the latest equal to ceiling price (for buy order) / a selling limit order with price lower than the latest executed price one more tick size or the floor price if the latest is floor price (for sell order).

Market Fill or Kill order (MOK) o A market order that must be entire executed; otherwise, the order will be cancelled immediately after input into the trading system.

Market Fill and Kill order (MAK) o A market order that is executed fully or partially, the remaining of the order will be cancelled immediately after matching.

Post Close Order (PLO) o PLO is a buy/sell order at the closing price after the end of ATC session. o Order is entered into the trading system in the after-hours trading session. o Order is executed right after input into the trading system if available counter order. The executed price is the closing price of the trading date. o PLO is not allowed to adjust/cancel. o In case in the continuous order matching session and the closing periodic order matching session cannot determine the executed price, PLO will not be entered into the system. o End of after-hours trading session, the PLO which is not executed or the rest of order is not fully executed will be cancelled automatically.

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1.7 Matching Principles Price priority o Buy orders at higher prices take precedence. o Sell orders at lower prices take precedence.

Time priority o For buy or sell orders at the same price, those entered into the trading system earlier shall take precedence in execution.

1.8 Modification and Cancellation of Orders: Modification and cancellation of orders are implemented for unmatched buy/sell orders or the rest of partially- filled orders which have not been executed. In the continuous order matching, Limit orders are allowed to modify price, volume and cancel on the trading time. The priority of modified orders is determined as follows: o Modify to reduce volume: the priority of modified orders is unchanged. o Modify to increase volume and / or modify price: the priority of modified orders is determined since the modified orders are put into the trading. Cancellation/Amendment of orders in periodic order-matching session is not allowed (including orders in previous continuous order matching session).

1.9 Price Unit

On HSX:

Price level (VND) Shares, Certificates (VND) Bonds (VND)

<10,000 10 1

10,000 – 49,950 50 1

≥50,000 100 1 Note: No price tick applied for stock put through on HSX.

On HNX: o Tick size for shares in order matching method: 100 VND o Price tick for ETC fund certificates: 1 VND. o No price tick applied for stock put through. o Bonds: not regulated

1.10 Trading Units (Board Lots)

Trading unit: On HSX, HNX and UPCom: 1 lot = 100 shares Face value of stocks or investment fund certificates: VND10,000

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Face value of bonds: VND100,000 For Put-through transaction: o On HSX: > = 20,000 shares o On HNX: > = 5,000 shares for stock and >= 1,000 bonds for bond

1.11 Trading of Foreign Investors

In the time of order matching trading: o Buying volume of shares and closed fund certificates will be deducted from the number available for foreign investors immediately after the buy order is executed. o Selling volume of shares and closed fund certificates of foreign investors will be added to the number available for foreign investors right after ending the settlement (T+2). o Buy orders or the rest of partially-filled buy orders of foreign investors which are not executed will be automatically cancelled if ownership limit for foreigners is hit and buy orders inputted into the trading system will not be accepted.

In the time of put through trading: o Volume of shares and closed fund certificates available for foreign investors will be deducted immediately if transaction is executed between a buying foreign and a selling domestic investor. o Volume of shares and closed fund certificates available for foreign investors will be increased after the end of settlement if transaction is executed between a selling foreign investor and a buying domestic investor. o Total number of shares, closed fund certificates available for foreign investors will remain unchanged if the transaction is negotiated between two foreign investors.

1.12 Foreign Ownership Limits Regulations regulating the foreign ownership limit (FOL) are covered by Decree 60/2015/ND-CP dated June 26, 2015 in amendment of Decree 58/2012/ND-CP. These decisions provide the FOLs for the Vietnamese securities market and foreign investors’ contribution of capital and purchase of shares in Vietnamese enterprises. Except for the restricted sectors, public companies will now be allowed to decide by themselves their own FOL which is indicated in the company charter. Accordingly, in most cases, it is possible to buy 100% of the capital of a Vietnamese company The FOL of listed or unlisted banks is limited to 30% of the total charter capital and maximum holding for an individual foreign investor is 5%, for an institutional foreign investor is 15%, and for a strategic foreign investor is 20%. A shareholder holding 5% of the total shareholding in a company or more is considered as a major shareholder. A major shareholder directly or through its custodian bank or appointed representative must report to the HSX/HNX when it becomes a major shareholder and must also declare/announce in the daily Stock Exchange Bulletin for certain transactions.

2. SETTLEMENT AND TAX RULES

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2.1 Settlement Procedure

Vietnam is a pre-funding market. Only transactions against payment are allowed. For offshore funds, both stock and cash are kept at custodian bank.

Securities Type Settlement period

Stocks and fund certificates T+2

Bonds T+1

For Equity o On trade date (T date), after trading session closure at 15:00, the HOSE/HNX processes all trades and completes data feeding to the VSD. Depository members receive VSD’s transaction report via VSD system in the afternoon of T date. Upon pre-matching of broker trade confirmations against VSD transaction report, custodians capture such deals into their own systems. o No later than 16:00 p.m. T+1, custodian bank, based on VSD’s notification of cash payable/receivable (netting), transfers respective funds required to the designated bank. It is treated as a violation of VSD’s KOP if fund is transferred after 16:00 T+2. o For equity purchase trades (RVP), the client is required to give trade instructions on T date and settlement instruction on T+1 14:30 p.m. to enable matching or rectification purposes (if any) before T+2 8:30 a.m. per VSD’s key operating procedures (KOP). By law, as mentioned above, the client is required to fund his cash accounts at least one day before T date. By end of T date, his account is blocked with value date T+2 upon receipt of the broker’s deal-done confirmation and the VSD’s reconfirmation.

For Bonds o On T date after trading session closure at 15:00, the HOSE/HNX processes all trades and completes data feeding to the VSD. o Depository members receive VSD’s transaction report via VSD system in the afternoon of T date. Upon pre-matching of broker trade confirmations against VSD transaction report, custodians capture such deals into their own systems. o No later than 11:00 a.m. T+1, custodian bank, based on VSD’s notification of cash payable/receivable (netting), transfers respective funds required to the designated bank. It is a violation of VSD’s KOP if fund is transferred after 11:00 a.m. T+1. o The client is required to give settlement instructions on T date by no later than 16:00 a.m. to enable matching or rectification purpose (if any) to VSD by no later than 8:30 a.m. T+1 per VSD’s KOP.

Pre-Matching o The executed trade report made by the VSD will be downloaded from the VSD’s system by the depository members around 15:30-16:00 on T date. For trades that are mis-matched or un-matched, the broker will notify the custodian bank and investors immediately. The broker will have to send a trade rectification notification, in which custodian bank affirms correct transaction details, to the VSD by no later than 8:30 a.m. on T+2 for equities, and on T+1 for bonds. For trades that are matched, no notification or affirmation from the depository members to the VSD is required.

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2.2 Tax Regulations

Withholding Tax (WHT)

WHT Duties and Tax

Equity dividends Exempt for non-resident institutional investors 5% on coupon received on pay date for non-resident institutional Bond interest investors

Sales Transaction Tax o Non-resident institutional investors are levied a flat tax rate of 0.1% on sale proceeds from selling listed/registered public company’s shares and certificates and bonds.

Capital Gain Tax o In case of selling unlisted/non-registered public company’s equity, securities, non-resident institutional investors are required to pay 25% on taxable income (i.e. selling price – purchasing price – Transaction related costs). The issuing company is responsible to withhold and declare capital gain tax on behalf of the investors.

Value added Tax (VAT) o Custody and brokerage services are exempt from VAT.

Depository Fees

Services Fee Depository for stocks preparing to be listed but not yet deposited at Free the Vietnam Securities Depository Custody Fee for stocks and fund certificates VND 0.3/ share/ month

Custody Fee for bonds VND 0.2/ share/ month

Transfer depository to terminate accounts (for each ticker) VND 0.5 / share (max VND 500,000)

3. OTHER PROCEDURES FOR LOCAL CUSTODY

3.1 Transferring Foreign Currency or VND to the IICA

For incoming and outgoing funds from the IICA for indirect investment activities of foreign investors, the authorized bank is required to check supporting documents in relation to the transactions. The supporting documents may

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include: the client’s incoming remittance instructions, FX conversion instructions, dividend payment receipts, securities sales proceed advice, settlement instructions, investment contracts/agreements.

Dividend/interest income and capital gains can be freely repatriated with the provision of supporting documents proving that the money had been remitted to and invested in the Vietnamese market and evidence/clearance from the tax office that all tax obligations have been fulfilled.

The local custodian bank normally offers FX facilities through its dealing department, where foreign currency versus VND deals and vice versa can be executed on every business day from 8.00 AM to 3.30 PM.

Under Circular 05, foreign investors are no longer allowed to use balances in the indirect investment capital account (“IICA”) for placing VND term deposits and saving deposits with banks. Payment of interest on IICA balances is not compulsory but can be agreed with the local custodian bank on a case to case basis and is subject to market conditions.

All fund transfers must be transacted in accordance with Vietnamese anti-money laundering laws. Investors are responsible for the legality of the funds transferred into Vietnam for the purpose of trading securities.

3.2 Withdrawal or outbound transfer of funds

There are no restrictions on the repatriation of funds by foreign investors as long as the investor has complied with all current tax laws and regulations.

The use of IICA is restricted to invest in indirect investment, to do FX for repatriation, and to pay legalized fees for services incurred in Vietnam only.

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Our Contact

Mirae Asset Securities (Vietnam) LLC

Address: 7th Floor, Le Meridien Building, 3C Ton Duc Thang, Ben Nghe Ward, District 1, Ho Chi Minh city, Vietnam

Tel: (+84) 28 3911 0016

Fax: (+84) 28 3910 7222

Email: [email protected] (For Trading) [email protected] (Client service, Account opening support, and all non-trading related matters)

14903608 is our Bloomberg UUID

MASVN TRADER is our name on BBG

Alex Steven Brown Thien Dinh (“Peter”) Wholesale Director Head of Institutional Clients Sales Manager Phone: +84 28 3911 0016 Phone: +84 28 3911 2222 Phone: +84 28 3910 2220 (#115) Email: [email protected] Mobile: +84 938 056 725 Email: [email protected] Email: [email protected]

Loan Huynh (“Loan”) Thang Nguyen (“Thang”) My Nguyen (“My”) Trading Manager Senior Trader Trader Phone: +84 28 3910 2222 Phone: +84 28 3910 2220 (#170) Phone: +84 28 3910 2220 (#178) (#105) Email: Email: Email: [email protected] [email protected] [email protected]

Anh Kim (“Anh”) Thu Tran (“Thu”) Tuan Vu (“Tuan”) Trader Trader Trader Phone: +84 28 3910 2220 Phone: +84 28 3910 2220 (#202) Phone: +84 28 3910 2220 (#286) (#183) Email: Email: Email: [email protected] [email protected] [email protected]

Tai Dong (“Tai”) Analyst Phone: +84 28 3910 2220 (#196) Email: [email protected]

Minh Truong (“Minh”) Khoa Nguyen (“Khoa”) Nguyet Nguyen (Nguyet”) Sales Manager Trader Trader Phone: +84 24 7309 3968 Phone: +84 24 7309 3968 (#813) Phone: +84 24 7309 3968 (#800) (#820) Email: Email: Email: [email protected] [email protected] [email protected]

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