| Title： |
Regulations Governing Offshore Funds(2007.06.15) |
| Date： |
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Article 5-1
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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 9
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A master agent shall meet the following qualifications:
1. Have paid-in capital, appropriated operating capital, or exclusively allocated operating capital of not less than NT$70,000,000;
2. Have net worth per share of not less than par value according to the most recent CPA audited and certified financial report, provided that this requirement shall not apply if it has obtained its business license for less than one full fiscal year;
3. Have the necessary information transmission facilities for real-time access to investment and relevant transaction information of the offshore fund institution;
4. Have not been subject three times or more within the past half year to any disposition imposing a reprimand and requirement of improvements within a specified time limit, or any more severe disposition, under Article 103, subparagraph 1, of the Securities Investment Trust and Consulting Act, Article 66, subparagraph 1, of the Securities and Exchange Act, Article 100, paragraph 1, subparagraph 1, of the Futures Trading Act, Article 44, paragraph 1, subparagraph 1 of the Trust Enterprise Act, or Article 61-1, paragraph 1, of the Banking Act.
5. Have not within the past two years been subject to a disposition as set out in Article 103, subparagraph 2, of the Securities Investment Trust and Consulting Act, Article 66, subparagraph 2, of the Securities and Exchange Act, Article 100, paragraph 1, subparagraph 2, of the Futures Trading Act, Article 44, paragraph 1, subparagraph 2, or paragraph 2, of the Trust Enterprise Act, or Article 61-1, paragraph 1, subparagraph 1 of the Banking Act, or a more severe disposition under such provisions. However, this restriction does not extend to a disposition by the FSC ordering dismissal of personnel;
6. Have business personnel and internal auditors meeting the qualification and staffing requirements as set out in Article 16 hereof;
7. Have such other qualifications as may be prescribed by the FSC.
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Article 13
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On each business day, the master agent shall report the fund names, and the aggregate amounts and numbers of units of confirmed purchases, redemptions, or conversions of the offshore funds represented by it the preceding business day and such other items as are prescribed by the FSC to the FSC or an institution designated by the FSC in the format and with the content specified by the FSC through the information transmission system designated by the FSC.
A master agent shall produce a monthly report for the offshore funds represented by it in the format and with the content prescribed by the FSC and shall, within 10 days after the end of each month, submit the report to the SITCA through the transmission system designated by the FSC, for the SITCA to compile and forward to the FSC and the Central Bank of China (CBC).
A master agent shall produce an annual financial report for the offshore funds represented by it in accordance with the regulations of the place where the fund is registered, and immediately publish it together with a Chinese language summary thereof.
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Article 19
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A sub-distributor shall meet the following requirements:
1. Have net worth per share of not less than par value according to the most recent CPA audited and certified financial report, provided that this requirement shall not apply if it has obtained its business license for less than one full fiscal year;
2. Have not within the past two years been subject, due to its operation of offshore funds or securities investment trust fund business, to a disposition under Article 103, subparagraph 2, of the Securities Investment Trust and Consulting Act, Article 66, subparagraph 2, of the Securities and Exchange Act, Article 100, paragraph 1, subparagraph 2, of the Futures Trading Act, Article 44, paragraph 1, subparagraph 2, or paragraph 2, of the Trust Enterprise Act, or Article 61-1, paragraph 1, subparagraph 1 of the Banking Act, or a more severe disposition under such provisions. However, this restriction does not extend to a disposition by the FSC ordering dismissal of personnel or where there is already concrete improvement in the circumstances regarding its violation and such improvement is recognized by the competent authority.
3. Have associated persons to handle the offering and sale who meet the qualifications for associated persons prescribed in the Regulations Governing Responsible Persons and Associated Persons of Securities Investment Trust and Consulting Enterprises;
4. Have such other qualifications as may be prescribed by the FSC.
Subparagraph 1 of the preceding paragraph does not apply to trust enterprises and securities brokers engaging in the business of investing, on behalf of customers, in offshore funds under non-discretionary trust of money agreements or foreign securities brokerage agreements prior to the issuance of these Regulations.
Where an associated person was already engaging in the business of investing, on behalf of customers, in offshore funds at a trust enterprises under non-discretionary trust of money agreements or at a securities broker under foreign securities brokerage agreements prior to the issuance of these Regulations, and such associated person does not meet the qualifications prescribed in these Regulations, the person shall take corrective measures within one year from the date of issuance hereof; if the corrections have not been completed within that period, such person may not engage in business related to offshore funds.
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Article 42
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When offering and distributing offshore funds, the master agent and sub-distributor(s) shall gain full knowledge of and evaluate the investment knowledge, investment experience, financial condition, and investment risk tolerance level of their investors.
For an investor making a first-time purchase, the master agent and sub-distributor(s) shall require the investor to product an identification document or a document evidencing profit-seeking enterprise business registration from the investor and to fill out basic information.
The master agent and sub-distributor(s) shall put in place internal control systems including effective procedures for fully knowing investors, sales conduct, prevention of short-swing trading, prevention of money laundering, and procedural principles to be complied with under laws and regulations, and submit the systems to the SITCA for review through the master agent.
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