Management of Mutual Fund
8. Sale and repurchase of investment units
8.1 An increase or reduction the number of investment units on the next business day.
8.2 The payment for redemption of the investment units within the period specified in the schemes, the timing which should not exceed the following limits:
(1) In the case of ASEAN Collective Investment Schemes (ASEAN CIS), not exceeding seven business days under the common regional standards;
(2) In the case of an Asia Region Funds Passport (ARFP), not exceeding seven business days according to the common regional standards;
(3) In the case of a Foreign Investment Fund (FIF), not exceeding five business days from the day the investment units are repurchased. In this case, any holidays in a foreign country will not be counted as business days;
(4) For other cases, not exceeding five business days from the day the investment units are repurchased.
8.3 The mutual fund management company shall accept all purchase or the redemption orders except for the following cases :
(1) The Stock Exchange / the over-the-counter centers are unable to open for normal business;
(2) Under one of the following circumstances, and approved by the mutual fund supervisor, the operation may be reject or suspense but not longer than one business day:
(2.1) The assets or securities of the open-end fund cannot be reasonably disposed of, distributed or transferred due to reasonable circumstances;
(2.2) The NAV cannot be calculated fairly and appropriately;
(2.3) There are causes and necessities in order to protect the benefit of the investors.
Should the mutual fund management company require to stop the operation longer than 1 business day, the mutual fund management company shall request a waiver from the SEC.
(3) Any other cases for which the fund management company reserved the rights (only for accepting purchasing orders) as provided for in the scheme.
(4) For the mutual fund that invest in foreign countries :
(4.1) The stock exchanges in the country where the mutual fund invest with over 10% of their NAV cannot open for normal business;
(4.2) Impossible to exchange currency freely cause of interruptions in fund transfers to and from overseas ;
(4.3) An event that prevents the mutual fund from receiving payments from the invested securities on a regular schedule. Such incidents are beyond the control of the mutual fund management company and the mutual fund supervisor is informed and acknowledged about the situation.
(5) The mutual fund is in a transition period for another management company to take over. The transition period shall not be longer than three business days.
(6) The mutual fund is in the process of dissolution, as the mutual fund management company considered that dissolving the fund after the redemption of over two-third of the fund will benefit the unitholders.
(7) The mutual fund management company suspects the investors of involvement in an offense of money laundering or financial support to terrorist. The assets are seized or sequestered by the authority.
(8) The SEC is empowered to instruct the mutual fund management company to suspend purchasing and redemption orders for no more than 20 business days consecutively in the following cases :
(8.1) To protect the interests of the unitholders;
(8.2) To maintain the economic and financial stability of the country;
(8.3) To maintain the stability of the financial market system.
8.4 Postponement of the redemption payment
A mutual fund management company may postpone a redemption payment upon approval of the mutual fund supervisor, since there is an event that prevents the company from receiving payment from securities or assets on a regular schedule. The fund supervisor recognizes that the events prevent the company from reasonably disposing of, distributing or transferring securities or assets of the funds; and the impacts of the events are beyond the control of the mutual fund management company. The postponement can be made for no longer than ten business days, except that the SEC grants a waiver of compliance.
8.5 A Money Market Fund (MMF) may make a redemption payment on the same day the redemption order is submitted. The redemption amount is subject to the maximum limits of investment units that each unitholder can make a redemption as specified by the mutual fund management company and disclosed in the scheme:
(1) An individual limit;
(2) A total limit of the mutual fund in proportion to the investment in or the holding of liquidity assets.
8.6 Redemption payment in the form of securities or other assets in lieu of cash (Pay in Kind) when :
(1) The conditions and procedures for such payment are clearly specified in the commitment;
(2) The specified procedures are practical and fair to all unitholders.
The conditions can be in one or more of the following cases:
(1) It is specified that the fund may generally make a redemption payment in the form of securities or other assets or lieu of cash;
(2) The objective of such redemption payment is to enable unitholders to purchase investment units of another fund under management of the same mutual fund management company by using such securities or other assets;
(3) The mutual fund management company is unable to make a redemption payment in cash;
(4) The unitholders agree to accept the redemption payment in the form of securities or other assets in lieu of cash and the mutual fund management company has obtained approval from the mutual fund supervisor or a resolution of support from the unitholders.