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Article 18
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Before an offshore structured product can be offered to non-professional investors for trust investment, brokerage trade or linking to investment-linked insurance policies in the Republic of China, the offshore structured product shall meet the following requirements and its issuer or master agent shall submit the application documents provided in Paragraph 1, Article 19 herein to the trade association of the trustee or sub-distributor for review in accordance with the review procedure and method, review criteria, information disclosure requirement and relevant regulations set forth pursuant to Paragraph 1 and Paragraph 4 of Article 20 herein, and subsequently, the trustee or sub-distributor shall review the application pursuant to Paragraph 1 and Paragraph 2 of Article 20 herein and sign an agreement with the issuer or master agent:<br/>1. The long-term credit rating of the issuing institution or the guarantor, or the issue rating of the offshore structured product is at a certain level or higher given by a credit rating agency approved or recognized by the FSC.<br/>2. The product shall be denominated in U. S. Dollars, British Pounds, Euros, Australian Dollars, New Zealand Dollars, Hong Kong Dollars, Singapore Dollars, Canadian Dollars, Japanese Yen or RMB.<br/>3. The product shall not be linked to any of the following:<br/>(1) NTD interest rate or exchange rate indices.<br/>(2) Securities issued in Taiwan.<br/>(3) Securities issued overseas by a domestic enterprise.<br/>(4) Beneficiary certificates issued overseas by a domestic securities investment trust enterprise.<br/>(5)Taiwan stock indices compiled by domestic and foreign institutions and relevant financial products. The preceding provision does not apply to indices compiled by Taiwan Stock Exchange Corporation or GreTai Securities Market in collaboration with a foreign institution and not using stocks listed in Taiwan as the main constituent stocks.<br/>(6) Any of the following products or contracts that is associated with Mainland Area:<br/>a. Securities in the securities markets of Mainland Area.<br/>b. Securities issued or traded by a government, enterprise or institution in Mainland Area.<br/>c. Stock indices and stock index futures in Mainland Area.<br/>d. Bonds or interest rate indexes related to a money market in Mainland Area.<br/>e. RMB exchange rate indices.<br/>f. Other products falling under the Act Governing Relations between Peoples of the Taiwan Area and the Mainland Area and related regulations prescribed under the Act.<br/>(7) Offshore funds not approved by or not effectively registered with the FSC for offering and sale in Taiwan.<br/>(8) Privately placed offshore securities.<br/>(9) The underlying assets of derivatives other than equities, interest rates, exchange rates, funds, exchange-traded funds (ETF), indices, commodities and related indices. However in the case of ETFs, it is limited to ETFs listed and traded on securities markets approved by the FSC that invest mainly in stocks and bonds and do not have leveraging or short-selling effect.<br/>4. Close-ended structure products:<br/>(1) The principal guaranteed rate at maturity shall be at least 100% of the principal in the denominated currency.<br/>(2) The product shall not have target-redemption design, nor contain options for early redemption by the issuing institution.<br/>5. The dynamic principal guaranteed rate of the open-ended structured products shall be at least 80% of the principal in the denominated currency.
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