The President promulgated Articles 11, 17, 30, 62, 105, 108, and 111 of the Securities Investment Trust and Consulting Law (hereinafter, the “Law”) as amended and the addition of Articles 6-1, 16-1 and 105-1 to the Law via the President-Hua-Zhong-One-Yi-Zi10700012041 Directive of January 31, 2018. The amendments are highlighted below:
1. Relaxation on the number of subscribers to privately placed funds
Article 11 of the Law as amended eases the restriction on the number of subscribers to beneficiary certificates from 35 subscribers to 99 subscribers.
2. The requirement that assets obtained by a securities investment trust or consulting enterprise for investors shall be segregated from its own assets
Article 16-1 of the Law as amended provides that the assets obtained by a securities investment trust enterprise or a securities investment consulting enterprise shall be segregated from its own assets, and that creditors shall not assert the satisfaction of any claim over such enterprise’s own assets with the above assets or exercise other rights so as to ensure the security of investors’ assets.
3. Eased restrictions on discretionary services for offshore funds
In view of the fact that professional investment institutions such as offshore funds have their own custodians, have sufficient expertise or trading experience with financial products and are capable of negotiating matters relating to discretionary services, Article 62, Paragraph 7 of the Law as amended specifically eases relevant restrictions so that a provider of discretionary investment services that meets the criteria set by the competent authority is not subject to the requirement that the assets shall be placed under custody, a discretionary service agreement or a trust deed shall be executed, or records and a status report on the transactions of the customer’s assets shall be regularly prepared and delivered each month.
4. Specific stipulation on criminal offenses and penalties on practitioners of investment trust or consulting enterprises for breach of duty
Article 105-1 is added to the Law to specifically provide that a director, supervisor, managerial officer or employee of a securities investment trust or consulting enterprise who breaches his/her duties will be subject to imprisonment of three to ten years; and a fine of NT$10 million to NT$200 million may be additionally imposed. In addition, if the money or benefits obtained from criminal acts reach NT$100 million, imprisonment of not less than seven years will be imposed; and a fine of NT$25 million to NT$500 million may be additionally imposed.