|
Article 3
|
The following information, in that order, should be printed on the front cover of the prospectus:
- Name of issuing company and its corporate chop.
- The prospectus is prepared for issuance of ETNs.
- A summary description of the following:
- Name of ETNs.
- Number of units to be issued and total value of issued notes.
- Issue date and period.
- Details of underlying index, including name of institution calculating the index and name of index.
- Issue price.
- How the price is determined, investor's rights and costs to be borne by investors.
- The following language should be shown in conspicuous print:
- The ETNs are valid upon approval of the Financial Supervisory Commission. The approval, however, does not indicate that investing in the ETNs is risk-free.
- The ETNs are non-preferential claim and unsecured securities, do not provide protection on principal and have no third-party guarantee. The securities firm issuing the ETNs only promises to pay investors the returns linked to the performance of the underlying index being tracked after maturity or early redemption of the ETNs, deducting investment services fees or tracking fees. There is no restriction on maximum fluctuations of ETNs tracking foreign indexes.
- The claimable amount of the ETNs upon maturity or early sellback may be lower than the original investment principal due to market fluctuations, the securities firm issuing ETNs being in default, or credit risks, and the principal may be zero in a worst scenario. Investors are advised to carefully review the prospectus and make sure they fully understand the risks and features of the ETNs.
- Securities firms shall not use the fact that they have been accredited to track the underlying index or they have been approved by TWSE or GreTai to issue their proposed ETNs in their promotion as proof of their application or guarantee of value of their ETNs. The securities firm issuing the ETNs and its responsible person and all other parties who have signed or affixed chops in the prospectus shall be held legally liable for any false or concealed information in the prospectus.
- Websites where the prospectus may be accessed, including the website designated by the competent authority for reporting of information, and the website(s) where the securities firm discloses information about the prospectus.
- Where an ETN that tracks an underlying index is composed of an index investment portfolio of spot assets, futures, options, or related indexes (Futures and Options Strategy ETN), the following shall be specified in addition to the above wording that shall be published:
- basis for the calculation of the benchmark value of the Futures and Options Strategy ETN, including the prices of spot assets, futures, options, or related indexes, and the futures price may be higher, equivalent to, or less than the spot asset price.
- risk of change of futures and options, and type of market environment in which performance under the trading strategy is more susceptible to risk of change than a commodity ETF.
- Factors that affect pricing decisions with regard to futures and options commodities, including the underlying price, market rate standard, market making by a market maker, volatility, exchange rate, inflation, re-investment, tax, credit risk, dividend policy of the constituent, price limit etc.
- where the Futures and Options Strategy ETN comprises options and futures long-short trading strategies, the risk of holding futures longs and shorts and long and short positions of an options contract may be higher than that of purely holding call or put options.
- Date of publication.
It should be specified on the front cover of the prospectus prepared for issuing ETNs or follow-on notes that the prospectus is a draft for reporting.
|