Alert Sheet-New Requirements for adding removing share classe
Dear Sir/Madam,
Please be advised that the Securities Investment Trust and Consulting Association (SITCA) has announced new requirements for adding or removing a share class for offshore funds, which represents a significant change to current practice and will take effect from November 1, 2013.
Under the new requirements, the addition or removal of share classes will be subject to the SITCA's approval with a copy to the Taiwan Depository and Clearing Corporation (TDCC).
Master agents must then apply to the TDCC within three (3) days of obtaining the SITCA's approval and upload the basic information of the fund, an updated prospectus (if any); and also an updated investor brochure within two (2) days of receiving a notice of completion of the process from the TDCC.
We summarize the key information required in the filing below:
1. The SITCA have produced a new standard reporting form, basic information sheet and checklist for adding/removing share classes.
For adding a new share class, in addition to the three new standard documents, approval of the fund domicile, meeting minutes of the shareholders or board, or prospectus (in English and/or Chinese) which states the share class in question shall also be provided as applicable.
When removing a share class, a notice to investors shall be provided in addition to the three new standard documents.
An updated investor brochure (Part I Fund Specific Information) is also required for both adding and removing a share class.
2. The basic information sheet requires the following key information:
(1) For adding a new share class: target investors (institutional or general investor) of new shares; dividend distribution policy; dividend distribution frequency (yearly, half-yearly, quarterly, monthly, etc); whether the dividend distribution can be from the principal; whether administrative fees will be deducted before distribution; significant differences between the new and existing share classes (it is required to present a table with the names of current shares, definition, items and calculation method of fees); and reasons for adding the new share class; and
(2) For removing a share class: the reason for removing the share class and the amount invested by Taiwanese domestic investors in the share class to be removed upon filing (market value with date of the information).
