Proposal to add two new types of investment funds

The State Securities Commission proposed adding two new types of investment funds to develop the fund management industry.

The Ministry of Finance and the State Securities Commission are widely soliciting opinions from units, organizations and individuals on the Draft Circular amending and supplementing a number of articles of Circular 98/2020/TT-BTC dated November 16, 2020, guiding the operation and management of securities investment funds.

According to the State Securities Commission's submission, the amendment is an urgent requirement to concretize the Party and Government's policies on capital market development, promoting the fund management industry to become an important medium- and long-term capital mobilization channel of the economy . In the draft, the drafting agency proposed to add two new types of funds and adjust the investment activities of index funds to diversify products on the market.

There will be two new types of investment funds on the stock market.

PHOTO: NGOC THANG

First, adding the Infrastructure Bond Investment Fund. This is a closed-end fund, investing at least 65% of its net asset value in bonds issued for infrastructure development, government debt instruments, government-guaranteed bonds, local government bonds, deposits and deposit certificates. The goal is to mobilize medium- and long-term capital for infrastructure projects, in line with Resolution 68 of the Politburo on private economic development and mobilizing social resources for socio-economic development.

The second is the Money Market Fund (MMF). This is an open-ended fund that invests at least 80% of its net asset value in deposits, certificates of deposit, government debt instruments and short-term fixed income assets (less than 12 months). This is an internationally popular fund model, suitable for investors looking for highly liquid, low-risk and stable yield products.

The draft also adds a risk prevention mechanism for index funds, regulations on handling discrepancies between fund portfolios and reference indices, to enhance transparency and facilitate the development of domestic ETFs - an important component of the modern capital market. In parallel, the draft adds a liquidity management mechanism for open-end funds, allowing fund management companies to apply flexible measures such as partially responding to sell orders, temporarily suspending fund certificate trading or applying a "liquidity protection" level. These are measures recommended by the International Organization of Securities Commissions (IOSCO) to limit systemic risks...

Source: https://thanhnien.vn/de-xuat-co-them-hai-loai-hinh-quy-dau-tu-moi-185251113113137299.htm