Chapter I General Principles |
| Article 1 | These Regulations are adopted in accordance with Article 16, paragraphs 3 and 4, of the Securities Investment Trust and Consulting Act.
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| Article 2 | No person may act as an agent for the offering and sale of offshore funds within the territory of the Republic of China ("Taiwan") without having first obtained approval from, or effective registration with, the Financial Supervisory Commission (FSC).
"Approval" of an application in the preceding paragraph refers to the FSC reviewing the relevant documents submitted by the master agent and granting approval if no irregularities are found.
"Effective registration" in paragraph 1 refers to the master agent duly submitting a filing with all the relevant documents to the FSC, with the registration for the case becoming effective upon the expiration of a certain number of business days counting inclusively from the date that the FSC receives the filing documents, unless the required content of the filing documents is not fully furnished, supplementation or explanation is required to protect the public interest, or the filing is rejected by the FSC.
"Business days" in the preceding paragraph means trading days in the securities market. |
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| Article 2-1 | The FSC may commission the Taiwan Depository and Clearing Corporation to handle offshore fund offering and sale cases under Article 27, and to prescribe the format of the documents under Article 58.
When the Taiwan Depository and Clearing Corporation has been commissioned by the FSC to handle a case under the preceding paragraph, if after an application has been approved or registration has become effective it subsequently is discovered that there exists a ground for voidance or revocation of the approval or effective registration as set out in these Regulations, the FSC may order the commissioned institution to void or revoke the approval or effective registration. |
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| Article 3 | An offshore fund manager or an institution appointed by the offshore fund manager ("offshore fund institution") shall appoint a single master agent to represent it in the offering and sale of its funds in Taiwan.
A master agent serving as agent in the offering and selling of offshore funds in Taiwan may represent no more than five offshore fund managers.
A sub-distributor may handle the offering and sale of one or more offshore funds in Taiwan.
Unless otherwise provided in these Regulations, the provisions hereof concerning master agents or sub-distributors shall apply to investment in offshore funds through trust enterprises under non-discretionary trust of money agreements or through securities brokers under foreign securities brokerage agreements.
Except in cases of investment in offshore funds through trust enterprises under non-discretionary trust of money agreements, a sub-distributor handling the purchase, redemption, or switch of an offshore fund by investors shall forward the transaction instructions to the offshore fund institution via the master agent.
A participating dealer processing or engaging in the purchase or redemption of offshore exchange traded funds (ETFs) shall do so by the method prescribed by the offshore fund institution, and is not required to go through the master agent when transmitting transaction instructions to the offshore fund institution.
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| Article 4 | Investment consulting services relating to offshore funds shall be conducted by securities investment consulting enterprises ("SICE") with approval to engage in such business.
A SICE that is not also acting as a sub-distributor shall have information equipment to obtain real-time investment research information relating to offshore funds, or sign an information sharing contract with the master agent for purposes of engaging in the business of providing investment consulting services for offshore funds.
The required content of an information sharing contract referred to in the preceding paragraph, and any subsequent amendments thereto, shall be drafted by the securities Investment Trust and Consulting Association (SITCA) and ratified by the FSC.
Offshore funds referred to in paragraph l shall be limited to offshore funds that have been approved by, or effectively registered with, the FSC for offering and sale.
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| Article 5 | The master agent, sub-distributors, and managers or employees of the master agent or sub-distributors shall handle the offering and sale of offshore funds in good faith and with a fiduciary duty of loyalty and duty of care of a good administrator.
Unless otherwise provided by law or regulation, when handling the offering and sale of offshore funds, the enterprises and personnel thereof referred to in the preceding paragraph shall keep confidential all personal information, transaction information, and other relevant information of investors in offshore funds.
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| Article 5-1 | Where a sub-distributor of an offshore fund purchases fund shares in its own name on behalf of investors, it shall faithfully implement the measures to prevent short-swing trading as stated in the prospectus. Where any of such investors engages in any fund transaction that meets the criteria of short-swing trading as set out in the prospectus, the sub-distributor shall provide relevant information on that investor, in the format prescribed by the FSC, either to the offshore fund institution or to the master agent.
Except as otherwise provided by law, the offshore fund institution or master agent shall keep in confidence the information provided by the sub-distributor under the preceding paragraph; if it breaches this confidence, it shall be liable for damages any injury sustained as a result by the sub-distributor or by investors in its funds.
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| Article 6 | The master agent, the sub-distributor, and the centralized securities depository enterprise shall maintain complete and accurate transaction records and documents regarding the purchase, redemption, or switch of offshore funds in any transaction of a specific amount or higher, or suspected of money laundering, and shall comply with the provisions of the Money Laundering Control Act.
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| Article 7 | Matters required to be publicly announced by the master agent pursuant to these Regulations shall be publicly announced by transmission through the information transmission system designated by the FSC.
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