According to existing regulations, the percentage of investments in individual offshore funds by Taiwan domestic investors (“percentage of Taiwanese investment in an offshore fund”) cannot, in principle, exceed 70%, and the percentage of investment in the securities markets of Taiwan by an offshore fund cannot exceed 70% of the net asset value of that fund.
The fact that more than 50% of the assets of an offshore fund are held by Taiwan domestic investors is sufficient to demonstrate that such an offshore fund treats Taiwan as the focus market of its global sales. To implement differentiated regulation and encourage offshore fund institutions to devote resources to asset management operations in Taiwan, this Commission has issued letters to reduce the percentage of Taiwanese investment in an offshore fund to 50%. However, if the jurisdiction of domicile for a fund is recognized by Taiwan and revealed to the public, or if the offshore fund institution has made substantive contribution to Taiwan’s asset management operation and development that has been ratified by the Financial Supervisory Commission (FSC), the upper limit for said percentage remains at 70%. The FSC may also reduce the percentage of Taiwanese investment in an offshore fund to 40% for any specific offshore fund, depending on the need to regulate securities markets. Additionally, since investing more than 50% of the assets of an offshore fund in the securities market of a specific country indicates that the major region of investment is that market, this Commission also reduces the percentage of investment in the securities markets of Taiwan by an offshore fund to 50%.
To reduce the impact on the market by this measure, the FSC has created a grace period that allows this measure to come into effect on January 1, 2016. This grace period will give mutual fund companies ample time to respond. By that time, offshore funds that are offered and sold in Taiwan but cannot comply with the new regulations mentioned above will be suspended for new sales until they meet the requirements. Taiwanese citizens who have already invested in such funds are not affected. They may continue to hold or execute redemption or transfer transactions. Existing investors with fixed-interval and fixed-amount purchase may continue to purchase funds under existing agreements.
The FSC also demands that securities investment trust enterprises, master distributors, and sales institutions not to use this new rule as a feature in their advertisements or promotion. If these entities mislead investors to execute fund transactions, the FSC will take disciplinary actions against these entities pursuant to applicable laws.

Contact: Securities Investment Trust and Consulting Division, Securities and Futures Bureau
Phone: +886-2-2774-7168
Please direct your inquiries to:
http：//fscmail.fsc.gov.tw/FSC-SPS/SPSB/SPSB01002.aspx