Conclusion of Inspection No. 58/KL-TT regarding Dragon Capital Vietnam Fund Management Joint Stock Company

On September 5, 2025, the Inspectorate of the State Securities Commission issued Inspection Conclusion No. 58/KL-TT regarding the inspection at Dragon Capital Vietnam Fund Management Joint Stock Company. The full text of the Inspection Conclusion is as follows:

1. General Overview

Dragon Capital Vietnam Fund Management Joint Stock Company was established and operates under Investment Fund Management License No. 45/UBCK-GP dated January 8, 2009, issued by the State Securities Commission (SSC); and the most recent Amended License No. 37/GPĐC-UBCK dated May 29, 2024. At the time of inspection, the Company's licensed business operations included: Management of securities investment funds; Management of securities investment portfolios; Securities investment advisory.

The Company's equity capital as of December 31, 2024, and March 31, 2025, was 844,541.54 million VND and 880,332.123 million VND, respectively, of which the charter capital was 312,011.43 million VND. As of December 31, 2024, the Company had two major shareholders: Dragon Capital Management (HK) Limited (41.33%) and Dragon Capital Markets (Europe) Limited (48.002%).

The Company's headquarters is located on the 15th Floor, Me Linh Point Tower, No. 02 Ngo Duc Ke, Ben Nghe Ward, District 1, Ho Chi Minh City (now Saigon Ward, Ho Chi Minh City). The Chairman of the Board of Directors (BOD) of the Company is Mr. Dominic Timothy Charles Scriven; the Legal Representative of the Company is Mr. Beat Schurch - General Director.

2. Results of Inspection and Verification

2.1. Maintenance of Licensing Conditions

The Company meets the requirements to maintain licensing conditions regarding infrastructure, minimum charter capital, and personnel as stipulated in Clause 1, Clause 4, and Clause 5 of Article 75 of the Securities Law 2019, and Clause 3 of Article 175 of Government Decree No. 155/2020/NĐ-CP dated December 31, 2020, detailing the implementation of some articles of the Securities Law (Decree No. 155/2020/NĐ-CP).

2.2. Regarding the Company's Organizational Structure

• Organizational Structure: The Company's organizational structure according to its Charter is as follows: General Meeting of Shareholders, Board of Directors, Audit Committee, General Director, and business units/departments (including Investment Block (Research Department, Investment Advisory Department, Portfolio Management Department, Investment Execution Department, and Environmental, Social, and Governance Department), Business Development Block, Investment Support Operations Block, Operations Block, Technology Solutions Block, Marketing and Investor Relations Department, Legal and Compliance Department, Communication and External Relations Department, Strategic Planning Department, Project Management Department, Risk Management Department, Internal Audit Department).

• Regarding the Company Charter: The content of the Company Charter (most recently amended in July 2024) is constructed in accordance with the Company's operational model and contains at least the contents specified in the sample charter for fund management companies issued in Appendix XII attached to Circular No. 99/2020/TT-BTC dated November 16, 2020, by the Minister of the Ministry of Finance guiding the operation of securities investment fund management companies (Circular No. 99/2020/TT-BTC).

• Business Processes: The Company has issued complete procedures and regulations related to the operation of the fund management company and licensed businesses as stipulated in Clause 2 of Article 10 of Circular No. 99/2020/TT-BTC.

2.3. Internal Control, Internal Audit, and Risk Management Activities

2.3.1. Internal Control Activities

The Company has established an Internal Control Department. During the inspection period, the personnel structure and staff of the Internal Control Department met the requirements of Clause 3 and Clause 4 of Article 6 of Circular No. 99/2020/TT-BTC.

The Company has submitted Internal Control Reports for 2023 and 2024 to the SSC as required by Clause 6 of Article 6 of Circular No. 99/2020/TT-BTC.

2.3.2. Internal Audit Activities

The Company's Board of Directors appointed one internal auditor according to BOD Resolution No. 171/DCVFM-HĐQT dated November 4, 2024. The internal auditor meets the conditions stipulated in Article 5 of Circular 99/2020/TT-BTC.

During the inspection period, the Company submitted internal audit activity reports for 2023 and 2024 to the SSC as required by Article 5 of Circular No. 99/2020/TT-BTC.

2.3.3. Risk Management Activities

The Company has established a Risk Management Department and issued risk management strategies, policies, and procedures. Basically, the Company's risk management strategy, policies, and procedures meet the requirements of Clause 4 of Article 10 of Circular No. 99/2020/TT-BTC.

Basically, the Company's risk management activities meet the requirements of Clause 4 of Article 10 of Circular No. 99/2020/TT-BTC.

During the inspection period, the Company submitted periodic semi-annual and annual risk management reports to the SSC as required by point c, Clause 1, Article 29 of Circular No. 99/2020/TT-BTC.

2.4. Securities Investment Fund Management Activities

During the inspection period, the Company managed 06 open-end funds (DC Bond Fund, DC Dividend-Focused Equity Fund, DC Dynamic Securities Fund, DC Fixed Income Plus Bond Fund, VFM Select Vietnam Equity Fund, VFM Dynamic Vietnam Fund (currently undergoing liquidation)), and 03 Exchange Traded Funds (ETFs) (DCVFMVN30 ETF, DCVFMVN DIAMOND ETF, and DCVFMVN MIDCAP ETF).

2.4.1. DC Bond Fund (DCBF)

• The DCBF Fund was established as an open-end fund under Fund Registration Certificate No. 04/GCN-UBCK issued by the SSC on June 10, 2013, with an initial charter capital of 99,574.82 million VND and an indefinite operational period. The custodian and supervising bank is Standard Chartered Bank Vietnam. The transfer agent is the Vietnam Securities Depository and Clearing Corporation (VSDC). The Fund currently has 03 members of the Fund Representative Board and 02 fund managers. The Fund has 08 fund certificate distribution agents. The number of investors holding fund certificates as of May 31, 2025, was 13,143 investors.

• The Fund Representative Board held meetings ensuring at least quarterly sessions as required by Clause 11, Article 19 of Circular No. 98/2020/TT-BTC dated November 16, 2020, by the Minister of the Ministry of Finance guiding the operation and management of securities investment funds (Circular No. 98/2020/TT-BTC) and Article 33 of the Fund Charter. The Company organized the Annual General Meeting of DCBF Fund Investors for 2023, 2024, and 2025 as required by Article 21 of the Fund Charter.

According to the Fund's May 2025 activity report, as of May 31, 2025, the total portfolio value of the Fund was 1,572,749.87 million VND, the net asset value per fund certificate was 27,857.32 VND, and the investment performance (cumulative from the beginning of the year) was 42,742.4 million VND.

2.4.2. DC Dividend-Focused Equity Fund (DCDE)

• The DCDE Fund was established as an open-end fund under Public Fund Registration Certificate No. 06/GCN-UBCK issued by the SSC on December 16, 2013, with an initial charter capital of 806,460 million VND and an indefinite operational period. The custodian and supervising bank is Standard Chartered Bank Vietnam. The transfer agent is VSDC. The Fund has 03 members of the Fund Representative Board and 02 fund managers. The Fund has 10 fund certificate distribution agents. The number of investors holding fund certificates as of May 31, 2025, was 18,411 investors.

• The Fund Representative Board held meetings ensuring at least quarterly sessions as required by Clause 11, Article 19 of Circular No. 98/2020/TT-BTC and Article 33 of the Fund Charter. The Company organized the Annual General Meeting of DCDE Fund Investors for 2023, 2024, and 2025 as required by Article 23 of the Fund Charter.

According to the Fund's May 2025 activity report, as of May 31, 2025, the total portfolio value of the Fund was 628,165.03 million VND, the net asset value per fund certificate was 27,088.33 VND, and the investment performance (cumulative from the beginning of the year) of the DCDE Fund was 6,014.00 million VND.

2.4.3. DC Dynamic Securities Fund (DCDS)

• The DCDS Fund was established as an open-end fund under Fund Registration Certificate No. 05/GCN-UBCK issued by the SSC on October 8, 2013, with an initial charter capital of 1,000,000 million VND and an indefinite operational period. The custodian and supervising bank is Standard Chartered Bank Vietnam. The transfer agent is VSDC. The Fund currently has 04 members of the Fund Representative Board and 02 fund managers. The Fund has 10 fund certificate distribution agents. The number of investors holding fund certificates as of May 31, 2025, was 34,537 investors.

• The Fund Representative Board held meetings ensuring at least quarterly sessions as required by Clause 11, Article 19 of Circular No. 98/2020/TT-BTC and Article 33 of the Fund Charter. The Company organized the Annual General Meeting of DCDS Fund Investors for 2023, 2024, and 2025 as required by Article 21 of the Fund Charter.

According to the Fund's May 2025 investment activity report, as of May 31, 2025, the total portfolio value of the Fund was 3,124,330.44 million VND, the net asset value per fund certificate was 85,368.51 VND, and the investment performance (cumulative from the beginning of the year) of the DCDS Fund was 169,700.64 million VND.

2.4.4. DC Fixed Income Plus Bond Fund (DCIP)

• The Fund was established and operates under Public Fund Registration Certificate No. 36/GCN-UBCK issued by the SSC on April 3, 2019 (initially); and Certificate No. 14/GCN-UBCK issued by the SSC on May 24, 2021, regarding the fund name change. The Fund's initial charter capital was 56,697.4 million VND, with an indefinite operational period. The custodian and supervising bank is Standard Chartered Bank Vietnam. The transfer agent is VSDC. The Fund currently has 03 members of the Representative Board and 02 fund managers. The Fund has 05 distribution agents. The number of investors holding fund certificates as of May 31, 2025, was 21,386 investors.

• The Fund Representative Board holds meetings ensuring at least one session per quarter as required by Clause 11, Article 19 of Circular No. 98/2020/TT-BTC and Article 33 of the Fund Charter. The Company organized the Annual General Meeting of DCIP Fund Investors for 2023, 2024, and 2025 as required by Article 21 of the Fund Charter.

According to the Fund's May 2025 investment activity report, as of May 31, 2025, the total portfolio value of the Fund was 1,300,335.8 million VND, the total net asset value of the Fund was 1,274,820.4 million VND, the net asset value per fund certificate was 11,495.50 VND, and the investment performance (cumulative from the beginning of the year) was 26,646.2 million VND.

2.4.5. VFM Select Vietnam Equity Fund (VFMVSF)

• The VFMVSF Fund was established as an open-end fund under Fund Registration Certificate No. 31/GCN-UBCK issued by the SSC on March 2, 2018, with an initial charter capital of 70,798.45 million VND and an unlimited operational period. The custodian and supervising bank is Standard Chartered Bank Vietnam. The transfer agent is VSDC. The fund certificate distribution agent is DCVFM. The Fund currently has 03 members of the Fund Representative Board and 02 fund managers. The number of investors holding fund certificates as of May 31, 2025, was 18 investors.

• The Fund Representative Board holds meetings ensuring at least one session per quarter as required by Clause 11, Article 19 of Circular No. 98/2020/TT-BTC and Article 33 of the Fund Charter. The Company organized the Annual General Meeting of VFMVSF Fund Investors for 2023, 2024, and 2025 as required by Article 21 of the Fund Charter.

According to the Fund's May 2025 activity report, as of May 31, 2025, the total portfolio value of the Fund was 8,735,322.78 million VND, the total net asset value of the Fund was 8,460,596.05 million VND, the net asset value per fund certificate was 16,050.21 VND, and the investment performance (cumulative from the beginning of the year) was -232,300.63 million VND.

2.4.6. VFM Dynamic Vietnam Fund (VFMVFA)

• The VFMVFA Fund was issued Fund Registration Certificate for Closed-End Public Fund No. 14/UBCKN-GCN on April 2, 2010, and Fund Registration Certificate for Open-End Public Fund No. 03/GCN-UBCK on April 18, 2013, with an initial charter capital of 240,437.6 million VND and an unlimited operational period. The custodian and supervising bank is Standard Chartered Bank Vietnam.

• The Company issued Document No. 1417/VFM-2017 dated February 14, 2017, to the SSC notifying the liquidation of the VFMVFA Fund, as the Fund's net asset value fell below 10 billion VND continuously for 6 months from the valuation date of July 14, 2016. To date, the Fund has not been able to complete the liquidation because it has not been able to complete the refund of funds to some investors. According to the Company's report, the inability to complete liquidation is due to the Company not being able to find investor information because investors changed contact information or bank accounts without updating and notifying the Company. During the inspection period, the Fund's net asset value was 30.97 million VND with a total of 4,570 fund certificates in circulation.

2.4.7. DCVFMVN30 ETF Fund

• The DCVFMVN30 ETF Fund was established as an ETF Fund under Fund Registration Certificate No. 14/GCN-UBCK dated September 18, 2014, with an initial charter capital of 202,000 million VND and an unlimited operational period. The supervising bank is Standard Chartered Bank Vietnam. The transfer agent is VSDC. The Fund currently has 03 members of the Fund Representative Board and 02 fund managers. The Fund has 10 founding members who also serve as fund certificate distribution agents. The number of investors holding fund certificates as of May 31, 2025, was 14,261 investors.

• The Fund Representative Board held meetings ensuring at least quarterly sessions as required by Clause 11, Article 19 of Circular No. 98/2020/TT-BTC and Article 29 of the Fund Charter. The Company organized the Annual General Meeting of DCVFMVN30 ETF Fund Investors for 2023, 2024, and 2025 as required by Article 20 of the Fund Charter.

According to the Fund's May 2025 investment activity report, as of May 31, 2025, the total portfolio value of the Fund was 5,865,297.34 million VND, the total net asset value of the Fund was 5,860,105.35 million VND, the net asset value per fund certificate was 25,011.11 VND, and the investment performance (cumulative from the beginning of the year) was 347,192.47 million VND.

2.4.8. DCVFMVN Diamond ETF Fund

• The DCVFMVN Diamond ETF Fund was established as an ETF Fund under Fund Registration Certificate No. 43/GCN-UBCK issued by the SSC on April 22, 2020, with an initial charter capital of 102,000 million VND and an indefinite operational period. The supervising bank is the Joint Stock Commercial Bank for Foreign Trade of Vietnam - Ho Chi Minh City Branch. The transfer agent is VSDC. The Fund currently has 03 members of the Fund Representative Board and 02 fund managers. The Fund has 08 founding members who also serve as fund certificate distribution agents. The number of investors holding fund certificates as of May 31, 2025, was 6,097 investors.

• The Fund Representative Board held meetings ensuring at least quarterly sessions as required by Clause 11, Article 19 of Circular No. 98/2020/TT-BTC and Article 29 of the Fund Charter. The Company organized the Annual General Meeting of DCVFMVN Diamond ETF Fund Investors for 2023, 2024, and 2025 as required by Article 20 of the Fund Charter.

According to the Fund's May 2025 investment activity report, as of May 31, 2025, the total portfolio value of the Fund was 11,267,780.40 million VND, the total net asset value of the Fund was 11,253,831.82 million VND, the net asset value per fund certificate was 32,062.19 VND, and the investment performance (cumulative) was -656,660.14 million VND.

2.4.9. DCVFMVN MIDCAP ETF Fund

• The DCVFMVN MIDCAP ETF Fund was established as an ETF Fund under Public Fund Registration Certificate No. 40/GCN-UBCK issued by the SSC on August 23, 2022, with an initial charter capital of 60,000 million VND and an indefinite operational period. The supervising bank is Standard Chartered Bank Vietnam. The transfer agent is VSDC. The Fund currently has 03 members of the Fund Representative Board and 02 fund managers. The Fund has 06 founding members who also serve as fund certificate distribution agents. The number of investors holding fund certificates as of May 31, 2025, was 730 investors.

• The Fund Representative Board held meetings ensuring at least quarterly sessions as required by Clause 11, Article 19 of Circular No. 98/2020/TT-BTC and Article 29 of the Fund Charter. The Company organized the Annual General Meeting of DCVFMVN MIDCAP ETF Fund Investors for 2023, 2024, and 2025 as required by Article 20 of the Fund Charter.

According to the Fund's May 2025 investment activity report, as of May 31, 2025, the total portfolio value of the Fund was 335,613.7 million VND, the total net asset value of the Fund was 335,086.1 million VND, the net asset value per fund certificate was 11,924.77 VND, and the investment performance (cumulative from the beginning of the year) was 1,617.2 million VND.

2.5. Portfolio Management Activities

During the inspection period, the total number of portfolio management contracts the Company managed at various times were as follows: As of January 1, 2023, and December 31, 2023: 03 contracts, all signed with institutional clients; As of December 31, 2024: 05 contracts, including 03 contracts with institutional clients and 02 contracts with individual clients; As of May 31, 2025: 06 contracts, including 02 contracts with institutional clients and 04 contracts with individual clients.

The Company signed Securities Custody Contracts with the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) - Nam Ky Khoi Nghia Branch, and the Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB); accordingly, BIDV - Nam Ky Khoi Nghia Branch and VCB provide custody and asset management services in the name of the entrusted clients. Specifically, for 01 institutional insurance client, assets are custodied at Standard Chartered Bank Vietnam according to the custody contract signed by the client with Standard Chartered Bank Vietnam.

During the inspection period, the Company had 06 entrusted portfolio clients, including 02 institutional clients and 04 individual clients. Sampling inspection results showed:

For institutional clients, basically, the entrusted clients authorized the Company to make investment decisions and execute related transactions in accordance with the contract provisions and legal regulations. During the inspection period, the Company's entrusted investment clients invested a large proportion in listed/unlisted bonds. The Company implemented portfolio activity reporting for entrusted clients as required. Annually, the Company has issued documents to update information and identify clients as required.

For individual clients, the Company signed Investment Entrustment Contracts with clients and opened custody accounts in the name of each client at BIDV Nam Ky Khoi Nghia Branch and VCB. During the inspection period, the Company's entrusted individual investment clients mainly invested in listed stocks. The Company implemented portfolio activity reporting for entrusted clients as required. Annually, the Company has issued documents to update information and identify clients as required.

2.6. Securities Investment Advisory Activities

During the inspection period, the Company implemented 08 securities investment advisory contracts, including 02 advisory contracts that have been terminated with clients. Sampling inspection results of documents provided by the Company showed that the Company implemented advisory reports including: market analysis reports, bond market and interest rate reports; periodic investment proposals. At the time of inspection, the Company had 04 staff members performing investment advisory business, holding securities business certificates as required.

Revenue from securities investment advisory activities of the Company in 2023, 2024, and Q1 2025, according to the audited financial statements for 2023, 2024, and Q1 2025, were 731,651.197 million VND, 755,887.09 million VND, and 161,992.98 million VND, respectively.

2.7. Anti-Money Laundering Work

• The Company has issued Regulations on implementing measures to prevent and combat money laundering, terrorist financing, and proliferation of weapons of mass destruction.
• The Company has assigned personnel responsible for anti-money laundering work in accordance with anti-money laundering laws and registered with the Department of Anti-Money Laundering under the State Bank of Vietnam as required.
• Regarding reporting and anti-money laundering work activities:

• The Company has prepared and sent to the Department of Anti-Money Laundering - State Bank of Vietnam the basic content of the internal audit on anti-money laundering work for 2023 and 2024 as required by Clause 8, Article 5 of Circular No. 09/2023/TT-NHNN dated July 28, 2023, of the State Bank of Vietnam guiding some articles of the 2022 Anti-Money Laundering Law (Circular No. 09/2023/TT-NHNN). The Company submitted the Internal Audit Report on anti-money laundering work for 2024 to the State Bank (report dated March 26, 2025) late compared to the deadline stipulated in point c, Clause 10, Article 5 of Circular No. 09/2023/TT-NHNN.
• The Company has prepared and sent to the Department of Anti-Money Laundering, State Bank of Vietnam, the Risk Assessment Report on anti-money laundering and terrorist financing for 2023 and 2024 as required by Clause 1, Article 15 of the 2022 Anti-Money Laundering Law and Clause 5, Article 3 of Circular No. 09/2023/TT-NHNN.
• The Company has propagated and disseminated internally the Report on the results of the national risk assessment on the financing of proliferation of weapons of mass destruction issued according to Decision No. 828/QĐ-TTg dated May 31, 2021, by the Prime Minister of the Government.
• According to the Company's report, the Company has accessed and updated blacklists, warning lists, and lists of politically exposed persons according to guidance on the electronic information portal of the State Bank of Vietnam; the Company applies procedures for identifying and updating information about customers and beneficiaries, and measures for verifying customer information as required by Decree No. 81/2019/NĐ-CP dated November 11, 2019, on preventing and combating the proliferation of weapons of mass destruction.

2.8. Reporting and Information Disclosure Regime

The Company has registered with the SSC the person authorized to perform information disclosure.

The Company has established the website http://dragoncapital.com.vn to perform periodic and ad hoc information disclosure obligations as required.

During the inspection period, the Company basically implemented the reporting and information disclosure regime as required.

2.9. Financial Investment Activities

The Company issued the Financial Investment Activity Process on April 1, 2021.

According to the audited financial statements for 2023 and 2024, and the Q1 2025 financial statements of the Company, the total value of the Company's financial investment items at the times of January 1, 2023, December 31, 2023, December 31, 2024, and March 31, 2025, were 602,628.32 million VND, 524,003.17 million VND, 453,591.92 million VND, and 448,467.92 million VND, respectively.

During the inspection period, the Company's financial investment items were mainly short-term financial investments (mainly into fund certificates, unlisted stocks, and unlisted bonds).

2.10. Financial Safety Ratio Reporting

The Company has prepared and submitted periodic reports to the SSC on the financial safety ratio as required by Circular No. 91/2020/TT-BTC dated November 13, 2020, of the Minister of the Ministry of Finance prescribing financial safety indicators and handling measures for securities business organizations that do not meet financial safety indicators (Circular No. 91/2020/TT-BTC).

According to the Company's report, the available capital ratio according to the audited financial safety ratio reports at the times of June 30, 2023, December 31, 2023, June 30, 2024, and December 31, 2024, were 308.67%, 257.27%, 238.52%, and 211.85%, respectively. Basically, the Company's available capital ratio meets the financial safety indicator requirements for securities business organizations as stipulated in Circular No. 91/2020/TT-BTC.

3. Conclusion

3.1. Conclusion on Inspection Contents

During the inspection period, the Company still had violations and shortcomings as stated in Section 2 of the Inspection Conclusion.

3.2. Responsibilities

The Company, General Director, leaders, and staff of relevant departments are responsible for violations regarding the Company's reporting obligations, specifically: Reports not submitted on time according to legal regulations (The Company submitted the Internal Audit Report on anti-money laundering work for 2024 to the State Bank of Vietnam late according to regulations).

4. Handling Measures within Competence

Regarding the Company's violations stated in Section 2 of the Inspection Conclusion (Reports not submitted on time according to legal regulations), the SSC Inspectorate imposes administrative fines on the Company according to legal regulations.

5. Recommendations for Handling Measures

The SSC Inspectorate requests the Company to urgently take measures to rectify and overcome shortcomings after the inspection; ensure full compliance with the obligations of a securities investment fund management company; review and rectify the implementation of reporting obligations, ensuring reports are submitted on time as required.

The SSC Inspectorate requires the Company to immediately implement post-inspection rectification and remediation measures within 30 days from the date of signing the inspection conclusion. Report results...