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Article 15
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Upon discovery that a sub-distributor, in handling the offering and sale of an offshore fund, or a participating dealer, in handling the purchase or redemption of an offshore ETF, is in violation of any law or regulation or contract, or is exceeding its authority, or is damaging the rights or interests of investors, the master agent shall immediately see that improvements are made by the sub-distributor, and immediately notify the FSC.
Where rights or interests of investors are harmed due to any intentional [act or omission], negligence, or violation of a contract or law or regulation by the master agent, a sub-distributor, a participating dealer, or any director, supervisor, manager, or employee thereof, such persons shall be liable for damages.
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Article 31
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After a master agent has filed and obtained approval or effective registration from the FSC for the offering and sale of offshore funds, the FSC may suspend the offering and sale of such funds, or void or revoke its approval or effective registration in any of the following circumstances:
- A falsehood or misrepresentation in any document under Article 27, paragraph 1, Article 27-1, or Article 28, paragraph 1.
- A violation of the statement set out in Article 27, paragraph 1, subparagraph 9, , where serious in nature.
- A serious violation of the Article 12, paragraph 6 provision requiring prior FSC approval of changes, in which a change was made even though the FSC had rejected or disapproved the change.
- A serious violation of the total amount that may be offered and sold in Taiwan under Article 26-1.
- A violation of any subparagraph of Article 40, where serious in nature.
- Any other violation of these Regulations, or of any restriction or prohibition imposed by the FSC at the time of approval of the application or effective registration, where serious in nature.
- A violation of any other mandatory or prohibitive provision, where it would affect the rights and interests of investors, and is serious in nature.
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Article 40
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Unless otherwise provided by law, the master agent and the sub-distributor(s) may not:
- Offer or sell offshore funds by means of fraud, coercion, or other improper means;
- Agree with an investor to share profits or losses on investments in offshore funds;
- Engage in any false or deceptive act or other conduct obviously inconsistent with facts or intended to mislead others;
- Engage in any act contrary to the intent of the instructions of an investor or the investor's interests, without the consent of the investor, with intent to profit for itself or any third party;
- Utilize an investor's funds in breach of the investor's instructions;
- Continue to offer or sell an offshore fund after the offering and sale has been suspended, voided, or revoked by the FSC in accordance with Article 31 hereof;
- Allow any third party to use the name of the master agent, the sub-distributor, or an associated person of the master agent or the sub-distributor to engage in offering and sale of offshore funds, or appoint an unqualified distributor or associated person to engage in the offering and sale of offshore funds;
- Violate any law or regulation or any code of conduct set by a self-regulatory institution when engaging in the advertising and business promotion of an offshore fund;
- Engage in any other activity that is prohibited by a law or regulation or self-regulatory code.
The offshore fund institution and the master agent may not pay the sub-distributor or its personnel any remuneration, fees, or other benefits not specified in the sub-distribution agreement.
In conducting the business of selling offshore funds, the sub-distributor and its personnel may not receive from the offshore fund institution or master agent any remuneration, fees, or other benefits not specified in the sub-distribution agreement.
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