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Article 15
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A securities firm issuing or reopening ETNs may contract with a securities underwriter to underwrite the ETNs, or it may sell the ETNs by itself. The securities firm shall prepare a prospectus and a simplified prospectus and deliver copies of the prospectuses to the securities underwriter and investors and announce their content. However, the securities firm is not required to deliver such prospectuses to investors who purchase the ETNs on the securities exchange market.
Matters required to be stated in the prospectus referred to in the preceding paragraph are as follows:
- The following statements shall be printed conspicuously on the cover page:
- "The Financial Supervisory Commission has allowed the effective registration of the ETNs, but that does not indicate that the ETNs are risk-free."
- "The sum the investors receive when redeeming the ETNs at or prior to maturity may be less than their invested principal (or even zero in the worst case scenario) due to various factors such as market fluctuations or the issuer's default or occurrence of credit risk. Therefore, before trading, the investors should carefully read the prospectus and be certain that they are fully aware of the risks and features of the ETNs."
- In the event there is any misrepresentation or nondisclosure in this prospectus, the issuer, its responsible persons, and any other persons whose signature or seal appear on the prospectus shall be held legally liable.
- Web addresses for inquiries regarding this prospectus, including the web address of the information reporting website designated by the competent authority, and the web address where the securities firm discloses information related to the prospectus.
- Date of printing.
- Overview of the ETNs.
- Name of the securities firm.
- Short description of the ETNs: name, number of units to be issued, total amount to be issued, issue price, issue date, maturity date, issuance period, name of underlying index, market on which the ETNs trade, indicative value, whether income/gains are distributed, investor fees, repayment at maturity, early redemption by the securities firm, purchase and redemption by investors, and other relevant matters.
- Description of the underlying index: essential content of the index license agreement, methods for index construction and calculation, past performance, and the method for making announcements of material events in connection with the underlying index, where those events materially affect investors' rights or interests.
- Methods of calculating and manner of disclosing the intraday indicative value and the closing indicative value and reasons for their deviation from the trading price.
- Method for distribution of income/gains.
- Fees to be borne by investors.
- Use of the funds and hedging strategies.
- Risks for investors.
- Trading on the securities exchange market and how investors can purchase and redeem the ETNs.
- How repayment is made at maturity.
- Conditions and procedures for the securities firm's reopening of the original issue, early redemption, halting or resumption of purchases, and suspension of purchases.
- Matters to be handled and procedures to be followed if the effective registration of the ETNs is voided or revoked by the competent authority or the ETNs are delisted from the TWSE or TPEx.
- Overview of the securities firm.
- List of securities underwriters and liquidity providers and their duties.
- Disclosure of relevant ETN information.
- Any other particulars required by the competent authority.
The simplified prospectus referred to in paragraph 1 shall contain in summary form the key information provided in the prospectus pursuant to the preceding paragraph.
The model templates for the prospectus and the simplified prospectus referred to in the preceding 2 paragraphs, and any amendments thereto, shall be drafted by the TWSE in conjunction with the TPEx and submitted to the competent authority for ratification.
A securities firm shall prepare an ETN prospectus and simplified prospectus in accordance with the provisions of the preceding 3 paragraphs.
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