Taiwan Stock Exchange - Rules & Regulations Directory

Amendments

Title:
Registration Directions for Offshore Overseas Chinese and Foreign Nationals to Invest in ROC Securities or to Trade ROC Futures(2006.03.27)

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I. Registration of Offshore Overseas Chinese and Foreign Nationals
1. One. New addition
(1) Basis:
Dealt with according to Article 10 of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals (hereinafter referred to as “the Regulations”), Article 77-4 of the Operating Rules of the Taiwan Stock Exchange Corporation (hereinafter referred to as “TSEC”) and Article 44-4 of the Operating Rules of the Taiwan Futures Exchange Corporation (hereinafter referred to as “TAIFEX”).
(2) Qualification:
The term "offshore overseas Chinese and foreign nationals" means overseas Chinese, foreign natural persons and foreign institutional investors outside the territory of the Republic of China.
1. Offshore overseas Chinese and foreign natural persons mean those who have a nationality other than the Mainland China area, are at least 20 years old and hold an identification certificate.
2. Offshore foreign institutional investors mean those institutions incorporated outside the territory of the Republic of China, according to the laws and regulations of the locale.
(3) Application Documents
1. Registration Application Form: The agent (or the representative) of the offshore overseas Chinese and foreign nationals shall fill out a “Registration Application Form for Offshore Foreign Institutional Investors to Invest in ROC Securities or to Trade ROC Futures” as in Exhibit 1-1-1 and “Registration Application Form for Offshore Overseas Chinese and Foreign Natural Persons to Invest ROC in Securities or to Trade ROC Futures” as in Exhibit 1-1-2.
2. Documents Enclosed: When applying for registration, the offshore overseas Chinese and foreign nationals shall prepare the following documents:
2.1 Power of attorney to agent or letter of appointment to representative.
2.2 Identification certificates
2.2.1 Offshore Overseas Chinese and Foreign Natural Persons: passport, identification certificate or other documents with a photo attached which can prove the applicant’s nationality or status.
2.2.2 Offshore Foreign Institutional Investors
1) Non-fund Type
I. Corporation
Certificate of incorporation issued by a local governing authority such as a company registration certificate ; if there is no company registration certificate, the following documents may serve as replacement:
(i) The articles of incorporation of which the local governing authority has the record.
(ii) Qualification certificate issued by the tax bureau of the country where it is located.
II. Other organizations established according to law such as government investment institutions, non-profit organizations, foundations and academic organizations. The certificate or the letter from the local governing authority approving their establishment should be presented; if there is no such certificate or letter, the following documents may serve as replacement:
(i) The articles of incorporation of which the local governing authority has the record.
(ii) The regulations or rules enacted as the basis for the establishment of the applicant.
(iii) Qualification certificate issued by the tax bureau of that land.
2) Type of Fund
The certificate or the letter from the local governing authority approving its establishment should be presented; if there is no such certificate or letter, the following documents may serve as replacement:
(i) The record published in the web site of the local governing authority showing that the fund has completed its establishment registration.
(ii) Documents such as an offering prospectus, trust contract, or memorandum for private placement of which the local governing authority has the record.
2.3 When necessary, TSEC or TAIFEX might require the offshore foreign institutional investors of the fund type which ticks “hedging” or “investment” and “hedging” in Point 2 of the Declaration Items in the Registration Application Form to provide its articles of incorporation or the establishment contract, or documents explaining the investment or transaction strategies.
(4) Flow of Processing
1. Transmission of the Registration Application Form: Once the agent (or the representative) of the offshore overseas Chinese and foreign nationals applying for registration transmits the Registration Application Form online in TSEC’s system, TSEC will, after on-line review of information transmitted through computer has been completed, issue the “Certificate of Registration Completion for Offshore Overseas Chinese and Foreign Nationals” as Exhibit 1-2.
2. The Relevant Material Delivered to TSEC: The agent (or the representative) of the offshore overseas Chinese and foreign nationals shall deliver to TSEC the English version of the registration form signed personally by the applicants applying for registration (identical to the contents of the information transmitted to TSEC), along with the Chinese version of the registration form, the certificate for registration completion and the documents provided in item 2 of the above-mentioned (3), Application Documents, for record. TSEC will review these documents periodically.
3. Registration not permitted: TSEC or TAIFEX may not permit the registration if the offshore overseas Chinese and foreign nationals applying for registration have any of the following situations:
3.1 The registered documents or particulars thereof are found to be fraudulent or untrue;
3.2 The registered documents are incomplete or have not been fully filled out, and the applicant has failed, upon notification by TSEC, to make supplement within five days; or
3.3 There is a serious violation of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals or the laws and regulations concerning securities or futures administration.
2. Amendment
If any content of the registration items of the offshore Chinese and foreign nationals has changed, the agent (or the representative) should apply to TSEC for amendment of the registration therewith.
(1) Application Explanation
1. Name Change
Amendment Registration Application Form: The agent (or the representative) of the offshore Chinese and foreign nationals should transmit the “Registration Application Form for Name Change by Offshore Overseas Chinese and Foreign Nationals” as in Exhibit 1-3-1 online in TSEC’s system. Once TSEC’s system checks online and finds no error, the agent can print out the “Certificate of Amendment Registration Completion for Offshore Overseas Chinese and Foreign Nationals” as Exhibit 1-4, with which the agent can apply to securities brokers or futures commission merchants for name change. The related documents need not be filed for record to TSEC, but TSEC or TAIFEX might require the applicant to provide related information when necessary.
2. Change of the Agent or the Representative
Amendment Registration Application Form: The agent (or the representative) of the offshore Overseas Chinese and foreign Nationals should transmit the “Registration Form for Change of the Agent or Representative by Offshore Overseas Chinese and Foreign Nationals” as in Exhibit 1-3-2 online in TSEC’s system. Once TSEC’s system checks online and finds no error, the agent can print out the “Certificate of Amendment Registration Completion for Offshore Overseas Chinese and Foreign Nationals” as in Exhibit 1-4, with which the agent can apply to securities brokers or futures commission merchants for name change. The related documents need not be filed for record to TSEC, but TSEC or TAIFEX may require the applicant to provide related information when necessary.
3.Change of Other Items: Except the above-mentioned changes, for the change of Item Five of the registration form, the background information of the shareholders, and Item Six, other basic information, the agent (or the representative) of the offshore overseas Chinese and foreign nationals makes such change in TSEC’s system on his own initiative, and the relevant documents and information are not required to be sent to TSEC for record.
3. Cancellation
(1) Explanation of Application Processing
Cancellation Registration Form: The agent (or the representative) of the offshore overseas Chinese and foreign nationals applying for cancellation should transmit the “Cancellation Registration Application Form for Offshore Overseas Chinese and Foreign Nationals” as in Exhibit 1-5, online in TSEC’s system, as well as fax a copy of the power of attorney for tax payment or the letter of consent issued by the Tax Bureau of the Taipei Municipal Government to TSEC. Then the agent can print out the “Certificate of Cancellation Registration Completion for Offshore Overseas Chinese and Foreign Nationals” online in TSEC’s system as in Exhibit 1-6, and can go to the securities firm or futures commission merchant to cancel the account.

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Ⅱ. Registration Application for Onshore Overseas Chinese and Foreign nationals
1.New addition
(1) Basis:
Dealt with according to Article 10 of the Regulations, Article 77-4 of the Operating Rules of the Taiwan Stock Exchange Corporation, and Article 44-4 of the Operating Rules of the Taiwan Futures Exchange Corporation.
(2) Qualifications:
The term "onshore overseas Chinese and foreign nationals" means overseas Chinese, foreign natural persons and foreign institutional investors inside the territory of the Republic of China.
1. Onshore Overseas Chinese and Foreign natural persons: at least 20 years old, residing in the territory of the Republic of China with an overseas Chinese identification certificate or alien resident certificate.
2. Onshore Foreign Institutional Investors: Foreign juristic person which sets up a branch office in the territory of the Republic of China.
(3) Application Documents
1. Registration Form: The onshore overseas Chinese and foreign nationals should fill out the “Registration Form for Onshore Overseas Chinese and Foreign Nationals to Invest in ROC Securities or to Trade ROC Futures” as in Exhibit 2-1.
2. Documents Enclosed: The onshore overseas Chinese and foreign nationals applying for registration should prepare the following documents:
2.1 Onshore Overseas Chinese and Foreign Natural Persons: passport and the alien resident certificate or overseas Chinese identification certificate.
2.2 Onshore Foreign Institutional Investors: The Recognition Certificate from the Ministry of the Economic Affairs, company registration certificate, business registration certificate, the identification certificate or the alien resident certificate or passport of the responsible person.
(4) Flow of Processing
1. The onshore overseas Chinese and foreign nationals applying for registration should prepare those documents as mentioned in the II.1.(3), item 2 above and entrust the securities brokerage firm or futures commission merchant to apply to TSEC.
2. Review of Registration Form: Once the securities brokerage firm or futures commission merchant transmits the registration form filled out online in TSEC’s system, TSEC will immediately review each item of the transmitted material, and provide the result of the registration application online, which is classified as follows:
2.1 Registration Completed: If each item of the transmitted material has been reviewed through computer and the nationality is not of mainland China, the process of registration application to TSEC is complete. After the securities firm or futures commission merchant prints out the registration application form and hands it over for personal signature of the onshore overseas Chinese and foreign nationals, and prints out the Certificate of Registration Completion for Onshore Overseas Chinese and Foreign Nationals as in Exhibit 2-2, they can handle the account opening. After completing the registration, the securities company or futures commission merchant does not need to deliver to TSEC the relevant documents and material of the onshore overseas Chinese and foreign nationals. The securities company should keep the copies of the documents mentioned in (3), Application Documents, the registration application form signed by the applicant, and the Certificate of Registration Completion.
2.2 Duplicate Registration: The material transmitted is exactly the same as the English name, nationality, and date of birth as another foreign investor already approved or completing registration.
3. Registration not permitted: TSEC or TAIFEX may not permit the registration when the onshore overseas Chinese and foreign nationals applying for registration have any of the following situations:
3.1 The contents or items of the registration documents are found to be fraudulent or untrue;
3.2 The registration documents are incomplete or have not been fully filled out; or
3.3 There is a serious violation of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals or the laws and regulations concerning securities or futures administration.
2. Amendment and Cancellation
If the contents of the registration items of the Onshore Overseas Chinese and foreign nationals have been changed or there have cancellation application, the securities firm or futures commission merchant should submit an application to TSEC with following documents:
(1) Onshore overseas Chinese and foreign natural persons: passport and the alien resident certificate or overseas Chinese identification certificate.
(2) Onshore Foreign Institutional Investors: The Recognition Certificate from the Ministry of Economic Affairs, company registration certificate, business registration certificate, the identification certificate, or the alien resident certificate or passport of the responsible person.

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Ⅲ. Principle of numbering for identification number
Principles of F numbering
Principles of G-numbering and H-numbering

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Ⅳ. Supplemental registration for existing QFII sub-account
1. Application for supplemental registration
(1) The agent (or representative) for the original QFII sub-account should enter the F number in the Exchange's system.
(2) The system will automatically produce a Form for Registration of Existing QFII Sub-Account as a Master Account, as shown in Table 4-1, in which the F number of the existing sub-account and the Chinese and English names of the existing sub-account will be automatically produced, and the remaining information is to be filled in by the agent (or representative) of the offshore overseas Chinese or foreign national.
(3) Flow of Processing: the sub-account agent (or representative) should transmit the completely filled out supplemental registration application materials online via the Exchange's system. Once the system checks online and finds no error, the agent can print out the completed Certificate of Completion of Supplemental Registration, as shown in Table 4-2, online in the Exchange's system.
(4) Delivery of relevant materials to the Exchange: after transmitting the registration application materials to the Exchange's system, the sub-account agent (or representative) shall deliver the required documents relating to the results of the registration to the Exchange, except in the case of duplicate registration. The Exchange will review these documents periodically. The procedures are identical to the "New addition" procedures in point 1.

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Ⅴ. Registration of opening two or more than two trading accounts in the same securities brokerage firm
1. An offshore foreign institutional investor satisfying any of the following conditions may open two or more investment trading accounts at the same securities broker (including branches); however, such an application may not be filed for an original QFII sub-account unless it has already completed its application for supplemental registration of its identity as an offshore foreign institutional investor.
(1) The investment strategy calls for operation by an external manager.
(2) Internal investment operations use different transaction platforms, e.g.:
1. Different branches must be differentiated by different accounts.
2. Need for accounts to be operated and managed by different internal trading units or traders.
3. Need to differentiate proprietary trading positions and client positions by different accounts.
4. Different policies must be differentiated by different accounts.
(3) It is necessary to assign different external account administrators (e.g. global brokers or global custodian banks) to operate and manage accounts.
(4) Other conditions approved by the Competent Authority.
2. The agent (or representative) of the offshore foreign institutional investor should transmit the completely filled out Registration Application Form for Opening Two or More Than Two Trading Accounts in the Same Securities Brokerage Firm (Table 5-1) online via the Exchange's system, and fax to the Exchange as confirmation the instruction letter for opening two or more trading accounts in the same securities brokerage firm, personally signed by the offshore foreign institutional investor, along with the Registration Application Form for Opening Two or More Than Two Trading Accounts in the Same Securities Brokerage Firm. Only then may the agent (or representative) of the offshore foreign institutional investor carry out the account opening with the securities broker, by presenting it with a copy of the printed-out Certificate of Registration Completion for Opening Two or More Trading Accounts in the Same Securities Brokerage Firm (Table 5-2) and a letter of application for account opening personally signed by the offshore foreign institutional investor.
3. The letter of application for account opening referred to in the preceding paragraph should specify the reasons for the application for account opening, and the following evidentiary documents should be provided therewith:
(1) Where the investment strategy calls for operation by an external manager:
1. Photocopy of the investment management agreement; or
2. Letter issued by the external manager confirming that it has been engaged by the offshore foreign institutional investor for such management operations.
(2) Where internal investment operations use different transaction platforms:
A description of the internal investment operations of the offshore foreign institutional investor and a statement that there is no misrepresentation.
(3) Where different external account administrators are assigned:
1. Photocopy of the management agreement; or
2. Letter issued by the external account administrator confirming that it has been engaged by the offshore foreign institutional investor for such purpose.
4. When opening the account, the securities broker shall suffix the name of the offshore foreign institutional investor with the registered Chinese name, to clearly distinguish the authority and responsibility for each of the different accounts of the same investor, so as to facilitate management.
5. Name change
The offshore overseas Chinese or foreign national or its agent (or representative) should transmit the completely filled out Registration Application Form for Account Name Change Where Two or More Trading Accounts Have Been Opened in the Same Securities Brokerage Firm (Table 5-3) online via the Exchange's system, and fax to the Exchange as confirmation the instruction letter for trading account name change where two or more trading accounts have been opened with the same securities brokerage firm, personally signed by the offshore foreign institutional investor, along with the Registration Application Form for Account Name Change Where Two or More Trading Accounts Have Been Opened in the Same Securities Brokerage Firm. Only then may the agent (or representative) of the offshore foreign institutional investor carry out the name change with the securities broker, by presenting it with a copy of the printed-out Certificate of Amendment Registration Completion for Account Name Change Where Two or More Trading
Accounts Have Been Opened in the Same Securities Brokerage Firm (Table 5-4) and a letter of application for name change personally signed by the offshore foreign institutional investor.
6. Cancellation
The offshore overseas Chinese or foreign national or its agent (or representative) should transmit the completely filled out Account Cancellation Registration Application Form Where Two or More Trading Accounts Have Been Opened in the Same Securities Brokerage Firm (Table 5-5) online via the Exchange's system, and fax to the Exchange as confirmation the instruction letter for trading account cancellation where two or more trading accounts have been opened with the same securities brokerage firm, personally signed by the offshore foreign institutional investor, along with the Account Cancellation Registration Application Form Where Two or More Trading Accounts Have Been Opened in the Same Securities Brokerage Firm. Only then may the agent (or representative) of the offshore foreign institutional investor carry out the name change with the securities broker, by presenting it with a copy of the printed-out Certificate of Account Cancellation Completion Where Two or More Trading Accounts Have Been Opened in the Same Securities Brokerage Firm (Table 5-6) and a letter of application for cancellation personally signed by the offshore foreign institutional investor.

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Ⅵ. These Directions are jointly drafted by TSEC and TAIFEX and come into effect when promulgated after approval by the competent authority. Subsequent amendments hereto shall come into effect in the same manner.

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