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Article 3
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The term "trust investment" as used in these Regulations means the act of investing in offshore structured products based on a fiduciary relationship; the term "brokerage trade" as used in these Regulations means the act of buying or selling offshore structured products via securities firms.
The term "investor" as used in these Regulations means the principal of a trust investment or brokerage trade or the applicant for investment-linked insurance.
The term "professional investor" as used in these Regulations means an investor that meets one of the following criteria:
1. A professional institutional investor, which includes domestic and foreign banks, insurance companies, bills finance companies, securities firms, fund management companies, government investment institutions, government funds, pension funds, mutual funds, unit trusts, securities investment trust enterprises, securities investment consulting enterprises, trust enterprises, futures commission merchants, futures service enterprises and other institutions approved by the FSC.
2. A juristic person meeting all of the following criteria and having applied in writing to trust enterprises, securities firms and insurance enterprises (referred to as the "trustees or sub-distributors" hereunder) for the status of a high net worth corporate investor：
(1) A juristic person with net worth exceeding NT$20,000,000,000 according to its latest CPA-audited or reviewed financial report ; notwithstanding the foregoing, the financial reports of juristic persons outside of the Republic of China need not be CPA-audited or reviewed.
(2) The person has a dedicated investment unit, staffed by capable professionals and the unit’s manager meets one of the following conditions.
i. The manager worked in financial product investment at a financial, securities, futures or insurance institution for more than three years.
ii. The manager has financial product investment experience of more than four years.
iii. The manager possesses other qualifications or experience that show he/she has financial product investment professional knowledge and management experience and can soundly and effectively manage the business of an investment department.
(3) The person holds securities position or derivatives product portfolio exceeding NT$1,000,000,000 according to its latest CPA-audited or reviewed financial report ; notwithstanding the foregoing, the financial reports of juristic persons outside of the Republic of China need not be CPA-audited or reviewed.
(4) The person’s internal control system has suitable investment procedure and risk management measures.
3. A juristic person or fund meeting all of the following criteria and having applied in writing to the trustee or sub-distributor for the status of a professional investor
(1) A juristic person or fund with total assets exceeding NT$50,000,000 according to its latest CPA-audited or reviewed financial report; notwithstanding the foregoing, the financial reports of juristic persons outside of the Republic of China need not be CPA-audited or reviewed;
(2) The trader authorized by the investor has sufficient professional knowledge, trading experience in financial products; and
(3) The person understands fully that a trustee or sub-distributor is exempted from certain responsibilities towards professional investors in conducting trust investment and agrees to sign on as a professional investor.
4. A natural person meeting all of the following criteria and having applied in writing to the trustee or sub-distributor for the status of professional investor
(1) The person has proof of financial capacity of at least NT$30,000,000; or has made a foreign currency denominated investment equivalent to over NT$3,000,000 in value, and in addition, his/her total assets at the trustee or sub-distributor, including deposits and investments (including the aforesaid investment), worth more than NT$15,000,000, and the person has provided a statement undertaking that his or her total assets exceed NT$30,000,000;
(2)The person has sufficient professional knowledge, trading experience in financial products; and
(3) The person understands fully that a trustee or sub-distributor is exempted from certain responsibilities towards professional investors in conducting trust investment and agrees to sign on as a professional investor.
5. A trust enterprise that has entered into a trust agreement with the trustor and the trustor meets the conditions set forth in Subparagraph 2, 3 or the preceding subparagraph hereof.
The term "non-professional investor" as used in these Regulations means an investor other than one meeting the criteria for professional investor as specified in the preceding paragraph.
The trustee or sub-distributor is responsible for conducting reasonable investigation to verify that an investor meets the qualification criteria for a professional investor as set forth in Paragraph 3 hereof and obtaining reasonable and credible corroborative evidence from the investor. The evaluation method of a trustee or sub-distributor for assessing whether a professional investor has sufficient professional knowledge and trading experience in financial products should be included in the “Know Your Customer” procedure and be approved by the Board. If a trustee or sub-distributor does not have a Board, it should be approved by the responsible person in the ROC.
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