Chapter 3 Investing in Domestic Securities |
| Article 10 | Offshore overseas Chinese and foreign nationals wishing to invest in domestic securities shall apply to the TWSE for registration in accordance with the TWSE operating rules and bylaws by submitting the relevant documents; provided, however, that this requirement shall not apply to onshore overseas Chinese and foreign nationals investing in government bonds, financial bonds that do not confer equity rights, straight corporate bonds, or open-ended beneficial certificates.
Offshore overseas Chinese and foreign nationals applying to complete the registration set forth under the preceding paragraph shall submit an application form together with the following documents:
- The power of attorney for agent or letter of appointment for representative.
- Identification documents conforming to Article 3, paragraph 2.
- Other documents as required by the FSC.
Overseas Chinese and foreign nationals that have already completed registration with the Taiwan Futures Exchange Corporation (TAIFEX) and obtained qualification to engage in domestic futures trading are exempted from carrying out the registration procedures referred to in paragraph 1.
|
Info |
| Article 11 | When an overseas Chinese or foreign national carries out the registration referred to in paragraph 1 of the preceding article, the TWSE may reject the application if any of the following situations exists:
- The registered documents or particulars thereof are found to be fraudulent or untrue.
- The registered documents are incomplete or have not been fully filled out, and the applicant has failed, upon notification, to provide the missing information within the specified time period.
- The registrant has committed a major violation of these Regulations or of securities or futures trading laws or regulations.
- Its registration has been cancelled by the TAIFEX pursuant to futures trading laws or regulations.
After an overseas Chinese or foreign national has registered, the TWSE may cancel the registration if any one of the circumstances set forth under the preceding paragraph is discovered.
|
Info |
| Article 12 | The limits on investment in domestic securities by offshore overseas Chinese and foreign natural persons shall be set by the FSC following consultation with the competent authority for foreign exchange business.
|
Info |
| Article 13 | An offshore overseas Chinese or foreign national applying for exchange settlement of funds in connection with an investment in domestic securities shall act in accordance with the applicable foreign exchange acts and regulations, annexing the approval letter of the TWSE.
|
Info |
| Article 14 | An offshore overseas Chinese or foreign national investing in domestic securities may apply for exchange settlement of investment capital, earnings on investments, and proceeds from the sale of borrowed securities; provided, however, that exchange settlement is only permitted for those capital gains and stock dividends that constitute realized gains.
Applications for foreign exchange settlement pursuant to the preceding paragraph shall be handled in accordance with the applicable foreign exchange acts and regulations.
|
Info |
| Article 15 | Under any of the circumstances listed below, an offshore overseas Chinese or foreign national that has received approval for investment in domestic securities shall be deemed to be making an outward remittance of investment capital; all remittances shall be recorded in the accounts set forth under Article 22, reported within 5 days to the competent authority for foreign exchange business, and at the same time shall be provided to the TWSE for registration:
- The investor invests in depositary receipts issued by a foreign issuer in the ROC, and subsequently asks the depository institution to redeem such receipts for the underlying securities evidenced thereby.
- The investor invests in stocks issued by a foreign issuer in the ROC and denominated and settled in New Taiwan Dollars, and subsequently resells those stocks in an offshore securities market.
- The investor invests in New Taiwan Dollar-denominated straight corporate bonds, convertible corporate bonds, or corporate bonds with warrants issued by a foreign issuer in the ROC, and subsequently makes a request overseas to redeem such instruments or convert them into stock.
- The investor uses its securities holdings as [the underlying securities for] depositary receipts, sponsored by an issuing company, that that are issued or privately placed overseas, or the investor re-issues overseas depositary receipts in accordance with Article 31, paragraph 1.
|
Info |
| Article 16 | An offshore overseas Chinese or foreign national investing in domestic securities shall appoint a local agent or representative to undertake matters such as opening accounts for trading in domestic securities; applying to exchange, convert into, or subscribe to domestic corporate bonds; exercising rights in purchased securities; applying for exchange settlement; and paying taxes.
The required qualifications for the agent or representative in the preceding paragraph are as follows:
- Requirements for an agent:
- If a natural person: Must have legal capacity. In the case of an overseas Chinese or a foreign natural person, he or she must be residing in the territory of the ROC with an Overseas Compatriot Identity Certificate, or holding an ROC passport with an Overseas Compatriot Identity Endorsement, or holding an Alien Resident Certificate.
- If a juristic person: Must be established in accordance with ROC laws and qualified to act as an agent.
- If a foreign juristic person: Must have established a branch company within ROC territory and be qualified to act as an agent.
- Requirement for a representative: Must be the representative at a representative office established in the ROC, or be the responsible person at a branch office.
Where an agent is either a juristic person or a foreign juristic person as set forth under subparagraph 1, items 2 and 3 of the preceding paragraph, one natural person must be designated to carry out the services of agent.
An offshore foreign institutional investor holding shares in a public company shall appoint a domestic agent or representative to exercise the voting rights attaching thereto unless otherwise provided by law.
|
Info |
| Article 17 | An offshore overseas Chinese or foreign national that invests in domestic securities shall designate a bank or securities firm approved by the FSC to act as its custodian institution and to handle related matters, such as custodianship of funds and certificates related to securities investments, confirmation of trades, transaction settlement, and reporting of relevant information. When a securities firm acts as the custodian institution, the funds of its customers shall be deposited in a segregated account opened at a bank approved by the FSC.
|
Info |
| Article 18 | An offshore overseas Chinese or foreign national investing in domestic securities shall designate a domestic agent or representative to apply for the opening of a New Taiwan Dollar account. The agent designated to open such account must be a domestic securities firm or financial institution.
An offshore overseas Chinese or foreign national investing in domestic securities or otherwise utilizing funds [in the ROC] must open a current account or a current savings account denominated in New Taiwan Dollars at a domestic financial institution. Such account must be opened specifically as a custodial account to be used by a custodian institution for the provision of custodial services at the investor's request. Such account shall only be for the purpose of settling transactions.
|
Info |
| Article 19 | An overseas Chinese or foreign national applying to a securities firm to open an account for securities trading shall submit the registration documents from the TWSE or the TAIFEX.
|
Info |
| Article 20 | An offshore overseas Chinese or foreign national consigning trading of domestic securities to a domestic securities firm shall provide a record of the consignment. The appointed custodian institution shall confirm the trade and handle settlement procedures.
|
Info |
| Article 21 | An offshore overseas Chinese or foreign national shall use inwardly remitted investment capital for the purpose of investment in domestic securities in accordance with these Regulations and the provisions of other applicable acts and regulations, and shall, except as otherwise provided by the FSC, abide by the following provisions:
- It shall not engage in securities margin trading.
- It shall not sell securities it does not hold.
- It shall not extend loans or provide security.
- It shall not entrust custody of securities to any juristic person or individual other than a custodian institution or centralized securities depository.
|
Info |
| Article 22 | A custodian institution shall establish accounts in which information on the utilization of the funds and securities inventories of each offshore overseas Chinese or foreign national shall be recorded on a daily basis, and the previous day's inward and outward remittances shall be reported to the competent authority for foreign exchange business. Within 10 days of the end of each month, such party shall produce a statement of trades, inward and outward remittances of funds, and securities inventories for the previous month; this information shall be reported to the competent authority for foreign exchange business, and shall at the same time be provided to the TWSE for registration.
|
Info |
| Article 23 | The FSC may, when necessary, require an offshore overseas Chinese or foreign national to submit the following information:
- A list of beneficial owners of the investment capital, the amount of the capital, its source, and related information.
- Information on utilization of inward-remitted investment funds, securities trading details, and inventory information (the FSC may examine the securities inventories and accounts).
- Detailed information on derivative products issued or traded offshore for which the stock of domestic public companies serves as the underlying securities; or detailed information on domestic public company stock held on behalf of a principal engaging in derivatives trading.
- Information on persons giving trading orders for investment in domestic securities, including their name, nationality, contact information, and other related information.
- Other information as specified by the FSC.
|
Info |