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Article 2
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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
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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 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; if it issues shares with no par value, the net worth per share shall be not less than NT$10. However, this requirement shall not apply if it has obtained its business license for less than 1 full fiscal year, or if it is a bank whose ratio of regulatory capital to risk-weighted assets for the most recent year satisfies the provisions of Article 5 of the Regulations Governing the Capital Adequacy and Capital Category of Banks.
2. Have not within the past 2 years been subject, due to its operation of offshore fund, securities investment trust fund, or futures trust fund business, to any disposition under Article 103, subparagraphs 2 to 5, of the Securities Investment Trust and Consulting Act, Article 66, subparagraphs 2 to 4, of the Securities and Exchange Act, Article 100, subparagraphs 2 to 4, of the Futures Trading Act, Article 44, subparagraphs 1 to 3 of the Trust Enterprise Act, or Article 61-1, paragraph 1, subparagraphs 1 to 8 of the Banking Act, or Article 12-1, paragraph 1, subparagraphs 2 to 5 of the Financial Consumer Protection Act. 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 1 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 27
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Except for offshore funds subject to Article 27-1 or Article 28 hereof, before an offshore fund may be offered and sold, the master agent of the offshore fund institution shall file a completed application (or filing) accompanied by the following documents with the SITCA, which shall review it and forward it to the FSC for approval or effective registration:
1. Documents evidencing compliance with the qualifications for a master agent of an offshore fund set out in Article 9 hereof;
2. The master agent agreement between the offshore fund institution and the master agent;
3. The personnel training program entered into between the offshore fund institution and the master agent;
4. Document evidencing that the master agent has posted the operating bond in accordance with regulations;
5. The document evidencing approval for public offering from the offshore fund’s place of registration;
6. Where application (or filing) is made to offer and sell more than one offshore fund, an itemized list thereof;
7. Relevant information including the most recent annual financial report of the offshore fund(s) and a Chinese language summary thereof, the investment portfolio, investor information summary, and Chinese translation of the prospectus;
8. Documents evidencing compliance with Article 24 hereof;
9. A written statement issued by the offshore fund institution representing that it will, at the request of the FSC, provide account books and records related to the purchase, redemption, or switch of the offshore fund, and information related to the rights and interests of investors for the FSC to review;
10. A written statement issued by the offshore fund manager representing its compliance with Article 23, paragraph 1, subparagraphs 1 to 5 hereof;
11. The most recent financial report of the offshore fund manager;
12. Document evidencing the credit rating of the custodian institution of the offshore fund(s);
13. An opinion issued by a lawyer stating that the level of protection for the rights and interests of investors in the place of registration of the offshore fund(s) is no less than that in Taiwan;
14. An opinion issued by a lawyer stating that the level of protection for the rights and interests of investors in the place of registration of the offshore fund manager is no less than that in Taiwan;
15. Document evidencing membership in the SITCA;
16. Other documents as may be required by the FSC.
Where the place of registration of the fund and the home country of the offshore fund manager are recognized and publicly announced by Taiwan, the documents listed in subparagraphs 13 and 14 of the preceding paragraph, are not required.
After an application or filing for the offering and sale of an offshore fund has been submitted to and approved by or effectively registered with the FSC, the master agent shall issue a statement that each sub-distributor meets the qualification requirements and submit the statement and the sub-distribution agreement to the SITCA for review and approval before the sub-distributor may begin to conduct such business.
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Article 27-2
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If an offshore fund institution is recognized by the FSC as meeting certain conditions, the effective registration system will be adopted for offshore fund offering and sale cases handled by its appointed master agent.
When the master agent files for an offshore fund offering and sale case as provided in the preceding paragraph, the registration will become effective upon the expiration of 45 business days counting inclusively from the date that the FSC receives the filing documents.
If the filing documents submitted by the master agent are incomplete, the required information is not fully furnished, or an event under Article 32 occurs, then if the master agent submits supplementation in full on its own initiative prior to being notified by the FSC of suspension of the filing for effective registration, the registration shall become effective when the effective registration period of the preceding paragraph has expired, counting inclusively from the date on which the FSC receives the supplementary documentation.
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Article 27-3
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If any of the following circumstances exists with respect to a master agent's filing for an offshore fund offering and sale case, the FSC may suspend its filing from becoming effectively registered:
1. The filing documents are incomplete or the required information is not fully furnished.
2. An event under Article 32 occurs.
3. The FSC considers suspension necessary to protect the public interest.
Beginning from the date on which the master agent is served notice of suspension of the filing for effective registration, it may submit supplementation addressing the reasons for suspension of the filing for effective registration and apply for lifting of the suspension. If the FSC does not further notify it to submit supplementation or reject its case, the registration shall become effective upon the expiration of the effective registration period set out in paragraph 2 of the preceding article, counting inclusively from the date on which the FSC receives the supplementary documentation.
After the master agent's filing for effective registration is suspended by the FSC under paragraph 1, if within 12 business days, counting inclusively from the date on which it receives the written notice of suspension, the master agent does not apply for lifting of the suspension in accordance with the preceding paragraph or it applies for lifting of the suspension but the reasons for the original suspension still exist, the FSC may reject its case.
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Article 30
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Under any of the following circumstances, the FSC may return or reject an application (or filing) for the offering and sale of offshore funds filed by a master agent:
1. The application (or filing) is in violation of law or regulation, and the violation would affect the offering and sale of the relevant offshore funds;
2. The protection for the rights and interests of investors provided by the laws and regulations of the country of registration of the offshore fund is obviously lower than that of the Taiwan;
3. The application (or filing) for the offering or sale of offshore funds has previously been returned, rejected, voided, or revoked by the FSC or withdrawn by the applicant and is being re-filed within 3 months from the date of the master agent’s receipt of the notification thereof from the FSC or the withdrawal;
4. It has filed an application (or filing) for any other offshore fund and has not yet obtained approval or effective registration;
5. A deadline for a supplemental filing set by the FSC due to an application (filing) being incomplete or insufficient is not met;
6. The master agent does not meet the qualifications set out in Article 9 hereof;
7. The master agent has violated these Regulations during the most recent 1 year, where the violation is serious in nature;
8. Any other circumstance where the SFB deems necessary for protection of the public interest.
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