S
M
L

Search Result

Title Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals CH
Date 2003.06.27 ( Amended )

Article Content

Article 1 These Regulations are adopted in accordance with the provisions of paragraph 4 of Article 8 of the Act Governing Investment in Taiwan by Overseas Chinese and paragraph 4 of Article 8 of the Act Governing Investment by Foreign Nationals.
Article 2 Overseas Chinese and foreign nationals may invest in securities by the following means: 　1. investment in trust fund beneficiary certificates issued by ROC securities investment trust enterprises ("SITEs") and sold offshore ("Offshore Beneficiary Certificates"); 　2. investment in ROC securities; 　3. investment in corporate bonds issued or privately placed overseas by ROC issuing companies ("Overseas Corporate Bonds"); 　4. investment in depositary receipts, sponsored by ROC issuing companies, that are issued or privately placed overseas ("Overseas Depositary Receipts"); or 　5. investment in stocks issued, privately placed, or traded overseas by ROC issuing companies ("Overseas Stocks").
Article 3 The term "qualified foreign institutional investor" ("QFII") as used in these Regulations shall mean foreign banks, insurance companies, securities firms, fund management institutions, and other institutional investors located outside of the territory of the Republic of China (ROC) that meet the qualifications and conditions prescribed by the competent authority for the securities industry. "Overseas Chinese and foreign nationals within the ROC" shall mean natural persons residing within the territory of the ROC and holding an alien resident certificate, or branch offices established within the territory of the ROC by foreign juristic persons. 　"Overseas Chinese and foreign nationals outside the ROC" shall mean overseas Chinese and foreign nationals outside the territory of the ROC who are not among the QFIIs set forth in paragraph 1.
Article 4 ROC securities in which QFIIs or overseas Chinese and foreign nationals outside the ROC may invest shall be limited to the following: 　1. stocks, bond conversion entitlement certificates, and Taiwan depositary receipts issued or privately placed by listed, over-the-counter ("OTC"), or emerging-stock companies; 　2. security investment trust fund beneficiary certificates; 　3. government bonds, financial bonds, ordinary corporate bonds, convertible corporate bonds, and corporate bonds with warrants; 4. beneficial securities placed publicly or privately by trustee institutions, or asset-backed securities placed publicly or privately by special-purpose companies; 5. call warrants and put warrants; and 6. other securities as approved by the competent authority for the securities industry. Where funds have been transferred to Taiwan for the purchase of any of the securities listed in the preceding paragraph but the funds have not yet been invested, the Ministry of Finance may, depending on domestic economic and financial conditions and the state of the securities market, limit the use of such funds. The percentage of any investment cap shall be determined by the competent authority for the securities industry after consultation with the competent authority for foreign exchange business. Investors who have already invested in ROC securities pursuant to the provisions of paragraph 1 may, as necessary for hedging purposes, engage in futures trading in the ROC futures market. Applicable regulations shall be prescribed by the competent authority for the securities industry after consultation with the competent authority for foreign exchange business. Where a trust fund offered and issued overseas by a SITE invests in ROC securities, the range of securities in which it is allowed to invest shall be subject to the provisions of the Regulations Governing Securities Investment Trust Funds. Except as otherwise provided by law, overseas Chinese and foreign nationals located within the ROC may invest in an unrestricted range of securities, and may furthermore engage in futures trading subject to the mutatis mutandis application of the provisions of paragraph 3.ROC securities in which QFIIs or overseas Chinese and foreign nationals outside the ROC may invest shall be limited to the following: 　1. stocks, bond conversion entitlement certificates, and Taiwan depositary receipts issued or privately placed by listed, over-the-counter ("OTC"), or emerging-stock companies; 　2. security investment trust fund beneficiary certificates; 　3. government bonds, financial bonds, ordinary corporate bonds, convertible corporate bonds, and corporate bonds with warrants; 4. beneficial securities placed publicly or privately by trustee institutions, or asset-backed securities placed publicly or privately by special-purpose companies; 5. call warrants and put warrants; and 6. other securities as approved by the competent authority for the securities industry. Where funds have been transferred to Taiwan for the purchase of any of the securities listed in the preceding paragraph but the funds have not yet been invested, the Ministry of Finance may, depending on domestic economic and financial conditions and the state of the securities market, limit the use of such funds. The percentage of any investment cap shall be determined by the competent authority for the securities industry after consultation with the competent authority for foreign exchange business. Investors who have already invested in ROC securities pursuant to the provisions of paragraph 1 may, as necessary for hedging purposes, engage in futures trading in the ROC futures market. Applicable regulations shall be prescribed by the competent authority for the securities industry after consultation with the competent authority for foreign exchange business. Where a trust fund offered and issued overseas by a SITE invests in ROC securities, the range of securities in which it is allowed to invest shall be subject to the provisions of the Regulations Governing Securities Investment Trust Funds. Except as otherwise provided by law, overseas Chinese and foreign nationals located within the ROC may invest in an unrestricted range of securities, and may furthermore engage in futures trading subject to the mutatis mutandis application of the provisions of paragraph 3.
Article 5 The competent authority for the securities industry shall determine the trust funds that SITEs are allowed to issue and sponsor overseas, and shall also determine the issuing companies in whose securities overseas Chinese and foreign nationals are allowed to invest. Such investment may be exempted from the prohibitions and restrictions on investment by overseas Chinese and foreign nationals in specific industries as set forth in the Executive Yuan's negative list, except where other applicable acts or re gulations prohibit investment by foreign nationals or limit the percentage of equity holdings by overseas Chinese or foreign nationals. Where other applicable acts or regulations limit the percentage of equity holdings by overseas Chinese or foreign nationals in a particular issuing company, and where total investments by SITE-managed offshore trust funds, overseas Chinese, and foreign nationals in any of the following instruments issued by such company amount to less than the legally specified maximum, in the amount that such total investments fall short of the legally specified maximum, the issuing company may: privately place or apply to offer and issue overseas convertible corporate bonds and Overseas Corporate Bonds with warrants; issue Overseas Stocks; and sponsor issuance of Overseas Depositary Receipts: 　1. ROC stocks; 　2. shares and bond conversion entitlement certificates that serve as the underlying instruments for conversions, swaps, or warrant exercise transactions involving ROC corporate bonds; 　3. shares and conversion entitlement certificates that can be obtained through conversions, swaps, or warrant exercise transactions carried out by the holder of ROC corporate bonds for which corporate shares serve as the underlying instruments for conversions, swaps, or warrant exercise transactions; 　4. shares that can be obtained through conversions, swaps, or warrant exercise transactions carried out by the holder of Overseas Corporate Bonds for which corporate shares serve as the underlying instruments for conversions, swaps, or warrant exercise transactions; or 　5. Overseas Stocks.The competent authority for the securities industry shall determine the trust funds that SITEs are allowed to issue and sponsor overseas, and shall also determine the issuing companies in whose securities overseas Chinese and foreign nationals are allowed to invest. Such investment may be exempted from the prohibitions and restrictions on investment by overseas Chinese and foreign nationals in specific industries as set forth in the Executive Yuan's negative list, except where other applicable acts or re gulations prohibit investment by foreign nationals or limit the percentage of equity holdings by overseas Chinese or foreign nationals. Where other applicable acts or regulations limit the percentage of equity holdings by overseas Chinese or foreign nationals in a particular issuing company, and where total investments by SITE-managed offshore trust funds, overseas Chinese, and foreign nationals in any of the following instruments issued by such company amount to less than the legally specified maximum, in the amount that such total investments fall short of the legally specified maximum, the issuing company may: privately place or apply to offer and issue overseas convertible corporate bonds and Overseas Corporate Bonds with warrants; issue Overseas Stocks; and sponsor issuance of Overseas Depositary Receipts: 　1. ROC stocks; 　2. shares and bond conversion entitlement certificates that serve as the underlying instruments for conversions, swaps, or warrant exercise transactions involving ROC corporate bonds; 　3. shares and conversion entitlement certificates that can be obtained through conversions, swaps, or warrant exercise transactions carried out by the holder of ROC corporate bonds for which corporate shares serve as the underlying instruments for conversions, swaps, or warrant exercise transactions; 　4. shares that can be obtained through conversions, swaps, or warrant exercise transactions carried out by the holder of Overseas Corporate Bonds for which corporate shares serve as the underlying instruments for conversions, swaps, or warrant exercise transactions; or 　5. Overseas Stocks.
Article 6 An overseas Chinese or foreign national investing in securities shall appoint an agent or representative within the territory of the ROC to file tax returns and pay taxes on his or her behalf. Documents evidencing such appointment shall be completed and submitted to the competent tax authority for approval. In case of a change of agent or representative, the successor agent or representative shall prepare another set of such documents evidencing its appointment to file and pay taxes on behalf of the clie nt, and shall submit such documents to the competent tax authority for approval. An overseas Chinese or foreign national, when applying for exchange settlement of earnings from securities investments, shall submit the documents set forth under the preceding paragraph evidencing appointment of the agent or representative for tax return filing and tax payment as approved by the tax authorities; provided that during any moratorium on the collection of income from securities transactions, an overseas Chinese or foreign national applying for outward remittance of earnings from securities investment may rely on an agent or representative, appointed under these Regulations, to submit a tax payment certificate issued by the tax authorities and handle the exchange settlement in accordance with applicable foreign exchange acts and regulations. If earnings from investments in the registered shares set forth in Articles 16 and 17 of the Statute for Upgrading Industries [prior to the amendment of 31 December 1999] **See the Translator's note above**or Article 13 of the former Statute for Encouragement of Investment include shares that have been transferred to or deposited in a central depository institution, the agent or the representative shall file a tax return and make tax payment. The format of the documents evidencing the appointment of the agent or representative for tax return filing and tax payment under paragraph 1 shall be prescribed by the Ministry of Finance.
Article 7 A SITE that issues Offshore Beneficiary Certificates for subscription by overseas Chinese and foreign nationals for the purpose of establishing a [SITE-managed offshore] trust fund shall apply to the competent authority for the securities industry for approval within one month after obtaining an approval letter from the competent authority for foreign exchange business. Inward remittance of the funds for subscription to the [SITE Managed Offshore] Fund shall be handled in accordance with the applicable provisions of foreign exchange acts and regulations.
Article 8 Earnings derived from trust funds managed by SITEs may be distributed yearly to the beneficiaries of Offshore Beneficiary Certificates, provided that capital gains and stock dividends are distributed from realized gains only.
Article 9 The beneficiary of Offshore Beneficiary Certificates may, in accordance with the provisions of the applicable foreign exchange acts and regulations, purchase foreign exchange or reinvest in ROC securities using the proceeds from any of the following sources: proceeds from a buyback [of Offshore Beneficiary Certificates]; proceeds from the distribution of trust fund assets by a SITE; or earnings distributed pursuant to the preceding article. A QFII reinvesting in ROC securities in accordance with the preceding paragraph shall enter its investments in the accounts set forth under Article 22, and shall submit a report within five days to the competent authority for foreign exchange business and to the competent authority for the securities industry. Where the total resulting investments exceed the originally approved investment cap or the limit as provided in Article 12, such excess amount shall be exempt from the approval requirement set fort h under Article 10. The provisions of Articles, 16, 17, 20 to 23, the latter part of Article 24, and the first part of Article 31, paragraph 2 shall apply mutatis mutandis to reinvestment, pursuant to paragraph 1 of this article, in ROC securities by overseas Chinese and foreign nationals outside the ROC. The provisions of Article 25 shall apply mutatis mutandis to reinvestment in ROC securities, in accordance with paragraph 1 of this article, by overseas Chinese and foreign nationals within and outside the ROC.
Article 10 A QFII wishing to invest in ROC securities shall apply to the competent authority for the securities industry for approval. For investments equal to or exceeding a specified amount, the QFII shall also obtain a letter of approval from the competent authority for foreign exchange business. The specified amount contemplated under the preceding paragraph shall be set by the competent authority for the securities industry following consultation with the competent authority for foreign exchange business. A QFII applying for approval under paragraph 1 of this article shall file an application specifying the intended amount of investment, and shall annex the following documents: 　1. a Power of Attorney for Agent or Letter of Appointment for Representative; 　2. documents evidencing the applicant's conformance with the qualification requirements set by the competent authority for the securities industry; 　3. a duplicate of the custody contract; and 　4. other documents as required by the SFC. QFIIs are not required to annex the above documents when subsequently applying again for approval for investment in ROC securities, unless there is a change in any such document. If the QFII is a securities firm, in addition to the documents specified in paragraph 3, a description of the source of funds is also required. A QFII may apply to open an investment sub-account after submitting documents which specify the relationship between the master account and sub-account, and which evidence the necessity of opening a sub-account, provided that the QFII meets any one of the following conditions: 　1. The source of funding is a fund under management by the QFII, wholly owned subsidiaries, or a contractual customer. 　2. Investment strategy requires contracted outside managers to manage a pension fund, mutual fund, or unit trust. 　3. Hedging is necessitated by an issue of call (put) warrants, or has been requested by the issuer of call (put) warrants. 　4. A sub-account is otherwise required for operational purposes. Where either of the following applies to the QFII's master account or any of its sub-accounts, the QFII's ROC agent or representative shall apply to the competent authority for the securities industry to cancel the relevant investment account, and after the account has been canceled such cancellation shall be reported by letter to the competent authority for the securities industry for recordation: 　1. no funds have been deposited into the account for three consecutive years, and there are no assets in the account; or 　2. all assets have been withdrawn from the investment account.A QFII wishing to invest in ROC securities shall apply to the competent authority for the securities industry for approval. For investments equal to or exceeding a specified amount, the QFII shall also obtain a letter of approval from the competent authority for foreign exchange business. The specified amount contemplated under the preceding paragraph shall be set by the competent authority for the securities industry following consultation with the competent authority for foreign exchange business. A QFII applying for approval under paragraph 1 of this article shall file an application specifying the intended amount of investment, and shall annex the following documents: 　1. a Power of Attorney for Agent or Letter of Appointment for Representative; 　2. documents evidencing the applicant's conformance with the qualification requirements set by the competent authority for the securities industry; 　3. a duplicate of the custody contract; and 　4. other documents as required by the SFC. QFIIs are not required to annex the above documents when subsequently applying again for approval for investment in ROC securities, unless there is a change in any such document. If the QFII is a securities firm, in addition to the documents specified in paragraph 3, a description of the source of funds is also required. A QFII may apply to open an investment sub-account after submitting documents which specify the relationship between the master account and sub-account, and which evidence the necessity of opening a sub-account, provided that the QFII meets any one of the following conditions: 　1. The source of funding is a fund under management by the QFII, wholly owned subsidiaries, or a contractual customer. 　2. Investment strategy requires contracted outside managers to manage a pension fund, mutual fund, or unit trust. 　3. Hedging is necessitated by an issue of call (put) warrants, or has been requested by the issuer of call (put) warrants. 　4. A sub-account is otherwise required for operational purposes. Where either of the following applies to the QFII's master account or any of its sub-accounts, the QFII's ROC agent or representative shall apply to the competent authority for the securities industry to cancel the relevant investment account, and after the account has been canceled such cancellation shall be reported by letter to the competent authority for the securities industry for recordation: 　1. no funds have been deposited into the account for three consecutive years, and there are no assets in the account; or 　2. all assets have been withdrawn from the investment account.
Article 11 When a QFII submits a first or subsequent application for investment in ROC securities, the competent authority for the securities industry may reject the application if any one of the following situations exists: 　1. the application documents or particulars thereof are found to be fraudulent or untrue; 　2. the application documents are incomplete or have not been fully filled out, and the applicant has failed, upon notification by the competent authority for the securities industry, to provide the missing information within the specified time period; or 　3. the applicant has committed a major violation of these Regulations or of other securities or regulations.
Article 12 The amount that each QFII shall be permitted to invest in ROC securities shall be determined by the competent authority for the securities industry following consultation with the competent authority for foreign exchange business.
Article 13 A QFII investing in ROC securities shall remit the investment funds into the ROC and convert them to local currency within the time period set by the competent authority for the securities industry. Any portion of the funds that has not been remitted or converted to local currency within such period shall not subsequently be remitted in after expiry of such period. Application for exchange settlement pursuant to the preceding paragraph shall be made in accordance with the applicable foreign exchange acts and regulations, annexing the approval letter of the competent authority for the securities industry. Within 10 days of the end of each month, the QFII shall compile data on all inward remittances made during the previous month and file a report with the competent authorities for the securities industry and the foreign exchange business.
Article 14 After receiving approval for investment in the ROC, a QFII may apply for exchange settlement of investment capital and earnings on investments for the purchase of foreign exchange; provided, however, that exchange settlement is only permitted for those capital gains and stock dividends that constitute realized gains. Applications for foreign exchange settlement pursuant to the preceding paragraph shall be handled in accordance with the applicable foreign exchange acts and regulations. Within 10 days of the end of each month, the QFII shall compile data on all outward remittances made during the previous month and submit a report to the competent authorities for the securities industry and foreign exchange business.
Article 15 Under any of the circumstances listed below, a QFII that has received approval for investment in ROC securities shall be deemed to be making an outward remittance of investment capital; all remittances shall be recorded in the accounts set forth under Article 22 and reported within five days to the competent authorities for the securities industry and foreign exchange business: 　1. the QFII invests in depositary receipts issued by a foreign issuer within the ROC, and subsequently asks the depository institution to redeem such receipts for the underlying securities evidenced thereby; 　2. the QFII invests in stocks issued by a foreign issuer within the ROC and denominated and settled in New Taiwan Dollars, and subsequently resells those stocks in an offshore securities market; or 　3. the QFII invests in New Taiwan Dollar-denominated ordinary corporate bonds, convertible corporate bonds, or corporate bonds with warrants issued by a foreign issuer within the ROC, and subsequently makes a request overseas to redeem such instruments or convert them into stock.
Article 16 A QFII investing in ROC securities shall appoint a local agent or representative to undertake matters such as opening accounts for trading in ROC securities; applying to exchange, convert into, or subscribe to domestic convertible corporate bonds; exercising rights in purchased securities; applying for exchange settlement; and paying taxes. The required qualifications for the agent or representative in the preceding paragraph are as follows: 　1. Requirements for an agent: 　(1) If a natural person: Must have legal capacity. If the person is an overseas Chinese or a foreign national, he must be living within ROC territory and possess an Alien Resident Certificate. 　(2) If a juristic person: Must be established in accordance with ROC acts and be qualified to act as an agent. 　(3) If a foreign juristic person: Must have established a branch company within ROC territory and be qualified to act as an agent. 　2. Requirement for a representative: Must be the representative at a representative office established in the ROC, or be the responsible person at a branch office. Where an agent is either a juristic person or a foreign juristic person as set forth under the preceding paragraph, one natural person must be designated to carry out the services of agent.
Article 17 A QFII that invests in ROC securities shall designate a bank, approved by the Ministry of Finance to offer custodial services, to act as its custodian institution and to handle related matters, such as custodianship of funds and certificates related to securities investments, confirmation of trades, transaction settlement, and reporting of relevant information.
Article 18 A QFII investing in ROC securities shall designate an ROC agent to apply for the opening of a New Taiwan Dollar account. The agent designated to open such account must be an ROC securities firm or financial institution. A QFII investing in ROC securities must open a current account or a current savings account denominated in New Taiwan Dollars at an ROC financial institution. Such account must be opened specifically as a custodial account to be used by a custodian institution for the provision of custodial services at the QFII's request. Such account shall only be for the purpose of settling securities transactions.
Article 19 A QFII applying to a securities firm to open an account for securities trading shall submit a letter of approval from the competent authority for the securities industry. Upon completion of the account-opening procedures, the securities firm shall file a letter of notification with the Stock Exchange or the GreTai Securities Market.
Article 20 A QFII consigning trading of ROC securities to a domestic securities firm shall provide a record of the consignment. The appointed custodian institution shall confirm the trade and handle settlement procedures.
Article 21 A QFII shall use investment capital approved for inward remittance for the purpose of investment in ROC securities in accordance with these Regulations and other applicable acts and regulations, and shall, except as otherwise provided by the competent authority for the securities industry, abide by the following provisions: 　1. It shall not engage in securities margin trading. 　2. It shall not sell securities it does not hold. 　3. It shall not extend loans or provide guarantees. 　4. It shall not entrust custody of securities to any juristic person or individual other than a custodian institution or centralized securities depository.
Article 22 A custodian institution shall establish accounts in which information on the utilization of the funds and securities inventories of each QFII shall be recorded on a daily basis and, within ten days of the end of each month, shall produce a statement of trades and securities inventories during the previous month and submit it to the competent authorities for the securities industry and foreign exchange business.
Article 23 The competent authority for the securities industry may, when necessary, require a QFII to submit the following information: 　1. a list of beneficial owners of the investment capital, the amount of the capital, its source, and related information; 　2. information on utilization of inward-remitted investment funds, securities trading details, and inventory information (the competent authority may examine the securities inventories and accounts); 　3. detailed information on derivative products issued or traded offshore for which the stock of ROC public companies serves as the underlying securities; or detailed information on ROC public company stock held on behalf of a principal engaging in derivatives trading; 　4. information on persons giving trading orders for investment in ROC securities, including their name, nationality, contact information, and other related information; and 　5. other information as specified by the competent authority for the securities industry.
Article 24 The limits on investment in ROC securities by overseas Chinese or foreign nationals outside the ROC shall be set by the competent authority for the securities industry following consultation with the competent authority for foreign exchange business. Exchange settlement shall be carried out in accordance with the applicable foreign exchange acts and regulations.
Article 25 Overseas Chinese and foreign nationals within or outside the ROC investing in ROC securities shall file an application for approval with the Stock Exchange in accordance with the operating rules and bylaws of the Stock Exchange, and shall annex the relevant documents; provided, however, that overseas Chinese and foreign nationals within the ROC investing in government bonds, financial bonds, ordinary corporate bonds, and open-ended beneficiary certificates are not subject to this requirement. Overseas Chinese and foreign nationals within or outside the ROC applying with securities firms to open accounts for securities trading shall submit a letter of approval from the Stock Exchange. The qualifications necessary for overseas Chinese and foreign nationals within or outside the ROC to invest in ROC securities shall be set by the competent authority for the securities industry.
Article 26 　An overseas Chinese or foreign national outside the ROC that has received approval for investment in ROC securities shall be deemed to be making an outward remittance of investment capital under any of the circumstances below; all such remittances shall be recorded in the accounts required under Article 25: 　1) Investment in depository receipts issued by a foreign issuer within the ROC, where request is made to the depository institution for redemption into the underlying securities represented by the depository receipts. 　2) Investment in stocks issued by a foreign issuer within the ROC and denominated and settled in New Taiwan Dollars, and resale of those stocks in an offshore securities market. 　3) Investment in New Taiwan Dollar denominated ordinary corporate bonds, convertible corporate bonds, or corporate bonds with warrants issued by a foreign issuer within the ROC, where request is made for overseas redemption or conversion into stock.
Article 27 　ROC issuing companies offering and issuing overseas corporate bonds shall apply to the competent securities authority for approval or for registration effective upon filing.
Article 28 　Overseas Chinese and foreign nationals may, in accordance with the terms of issuance and conversion established by the issuing company, request conversion of their holdings of overseas corporate bonds of ROC issuing companies into securities of those ROC issuing companies. Stock so converted from bonds shall not be subject to the investment percentage limits provided in Paragraph 2 of Article 5.
Article 29 The provisions of Articles 16 to 18 and Articles 21 to 23 shall apply mutatis mutandis where a QFII or an overseas Chinese or foreign national outside the ROC exchanges, converts into, or subscribes to the securities of an ROC company pursuant to the preceding article. The provisions of Articles 10, 19 and 25 shall apply mutatis mutandis where an overseas Chinese or foreign national exchanges, converts into, or subscribes to the securities of an ROC company pursuant to the preceding article; provided, however, that the provisions of said articles shall not apply to overseas Chinese or foreign nationals who have received approval from the competent authority for the securities industry, or from the Stock Exchange, to invest in ROC securities. Where overseas Chinese or foreign nationals act before the [27 June 2003] amendments to these Regulations enter into force to open a dedicated account for the conversion of overseas convertible corporate bonds in accordance with regulations, after submitting the necessary documentation they shall apply to the competent authority for the securities industry, or to the Stock Exchange, to process a transfer of assets.
Article 30 Overseas Chinese and foreign nationals may apply for exchange settlement of distributions received for securities obtained under Article 28, and of proceeds obtained from the sale of such securities. Overseas Chinese and foreign nationals may apply for exchange settlement, in one lump sum, of proceeds obtained from any allocation of residual assets of the company issuing the corporate bonds. Overseas Chinese and foreign nationals applying for exchange settlement pursuant to the preceding two paragraphs shall comply with the applicable foreign exchange acts and regulations.
Article 31 Where an overseas Chinese or foreign national exchanges, converts into, or subscribes to the securities of an ROC company under Article 28, the inward remittance of funds deemed to be investment capital shall be entered into the accounts set forth under Article 22, and within five days shall be reported to the competent authorities for foreign exchange business and for the securities industry. Where an inward remittance contemplated under the preceding paragraph is made, the amount thereof shall be added to the total figure for investments already made in ROC securities [by the investor in question]. If this inward remittance increases a QFII's total investments to more than its approved investment cap, the QFII shall apply for approval in accordance with the provisions of Article 10.
Article 32 Overseas Chinese and foreign nationals who have obtained stock shares pursuant to Article 28 may subscribe to new shares in accordance with the applicable provisions of the Company Law when the issuing company in which they have invested carries out a cash capital increase, and may apply for inward remittance of the funds necessary for such subscription. Overseas Chinese and foreign nationals making inward remittances of funds for share subscriptions pursuant to the preceding paragraph shall do so in compliance with the applicable foreign exchange acts and regulations.
Article 33 Overseas Chinese and foreign nationals may request redemption of Overseas Depositary Receipts in which they have invested. When applying for redemption, they may request that the securities evidenced by the Overseas Depositary Receipts be transferred to them by the depository institution, or may request the sale of the depository institution sell the securities evidenced by the Overseas Depositary Receipts and forward payment to them of the proceeds therefrom after deduction of taxes and relevant fees. With respect to their holdings of privately placed Overseas Depositary Receipts and any depository receipts subsequently distributed in connection with an issue of stock dividends or new shares out of earnings or capital reserves, overseas Chinese and foreign nationals shall not, after redemption for shares issued by an ROC issuer, sell such shares on an ROC market until at least three years after the Overseas Depositary Receipts have been delivered and the ROC issuer has reported a supplemental public i ssuance to the competent authority for the securities industry.
Article 34 When a QFII, or an overseas Chinese or foreign national outside the ROC, who has invested in Overseas Depositary Receipts, requests to redeem such receipts for the securities evidenced thereby, the provisions of Articles 16, 17, 20, 21, and 23 shall apply mutatis mutandis. The provisions of Articles 10, 19, 25, and 30 to 32 shall apply mutatis mutandis to the handling of matters related to investments by overseas Chinese and foreign nationals in Overseas Depositary Receipts; provided, however, that this provision shall not apply to overseas Chinese or foreign nationals who have received approval from the competent authority for the securities industry, or from the Stock Exchange, to invest in ROC securities. Where overseas Chinese or foreign nationals act before the [27 June 2003] amendments to these Regulations enter into force to open a dedicated account for the redemption of Overseas Depositary Receipts in accordance with applicable regulations, after submitting the necessary documentation they shall apply to the competent authority for the securities industry, or to the Stock Exchange, to process a transfer of assets.
Article 35 Overseas Depositary Receipts must be redeemed before investors can buy (either directly or via a depositary institution) the original securities on an ROC market, and the original securities thus purchased shall not exceed the quantity of shares for which the receipts were redeemed. [Once investors have purchased Overseas Depositary Receipts thus redeemed,] they must place the original securities in the care of a custodian institution before a depositary institution can reissue Overseas Depositary Receip ts evidencing the same securities. The reissuance of Overseas Depositary Receipts contemplated under the preceding paragraph may only take place where it is expressly provided in both the deposit contract and the custody contract that Overseas Depositary Receipts may be reissued following their redemption. Exchange settlement matters arising in connection with the funds required for the transactions contemplated under paragraph 1 shall be handled in accordance with the applicable foreign exchange acts and regulations.
Article 36 Overseas Chinese and foreign nationals may sell on ROC markets Overseas Stocks in which they have invested. Where an overseas Chinese or foreign national holds privately placed overseas shares, or shares received through subsequent distributions out of earnings or capital reserves, such shares shall not be sold on an ROC market until at least three years after the privately placed overseas shares have been delivered and the ROC issuer has reported a supplemental public issuance to the competent authority for the securities industry.
Article 37 Articles 16, 17, 20, 21, and 23 shall apply mutatis mutandis where QFIIs, or overseas Chinese or foreign nationals outside the ROC, apply to sell, on an ROC market, Overseas Stocks in which they have invested. Articles 10, 19, and 25 shall apply mutatis mutandis where overseas Chinese or foreign nationals apply to sell, on an ROC market, Overseas Stocks in which they have invested; provided, however, that this provisions shall not apply to overseas Chinese or foreign nationals who have received approval from the competent authority for the securities industry, or from the Stock Exchange, to invest in ROC securities.
Article 38 When cash dividends or residual assets are distributed by an ROC issuing company with respect to an Overseas Stock, overseas Chinese or foreign nationals may apply for a lump-sum exchange settlement of funds in the amount of the distribution to which they are entitled. Overseas Chinese or foreign nationals who sell Overseas Stocks in accordance with the provisions of Article 36 may apply for a lump-sum exchange settlement of the proceeds. Overseas Chinese or foreign nationals applying for exchange settlement under the preceding two paragraphs shall do so in accordance with the applicable foreign exchange acts and regulations.
Article 39 　Investment in Overseas Stocks by overseas Chinese and foreign nationals shall not be subject to the investment percentage limits in Paragraph 2 of Article 5.
Article 40 　Overseas Chinese and foreign nationals may sell in the ROC market Overseas Stocks in which they have invested, provided, however, that Overseas Stocks of listed or OTC companies issued for capitalization increases by cash may not be sold within three months after issuance.
Article 41 　Articles 15, 16, 18, 19, and 21 shall apply mutatis mutandis where a QFII or overseas Chinese or foreign national outside the ROC applies to sell, in the ROC market, Overseas Stocks in which it has invested. 　Article 23 shall apply mutatis mutandis where an overseas Chinese or foreign national applies to sell, in the ROC market, Overseas Stocks in which it has invested.
Article 42 　When cash dividends or residual assets are distributed by an ROC issuing company with respect to an Overseas Stock, application may be made for a lump-sum remittance of the proceeds distributable therefrom to an overseas Chinese or foreign national invested in such Overseas Stock. 　An overseas Chinese or foreign national may apply for a lump-sum remittance of the proceeds obtained from the sale of an Overseas Stock under Article 40. 　An overseas Chinese or foreign national applying for remittance pursuant to the preceding two paragraphs shall do so in accordance with the Statute for Regulation of Foreign Exchange.
Article 43 　Overseas Chinese and foreign nationals may, after selling an Overseas Stock in the ROC market, purchase issued shares in an amount not exceeding the amount originally sold and trade such shares in an offshore market. Remittance of the necessary funds shall be handled through the custodian institution in accordance with the Statute for Regulation of Foreign Exchange.
Top