Article 101: Private Placement Requirements of a Foreign Fund

Article 101: Private Placement Requirements of a Foreign Fund

a. No securities issued by a foreign fund may be offered unless the distributor meets the following requirements:

1) notify the Authority in writing in accordance with the format set out in Annex

(6) of these Regulations at least (15) days prior to the proposed date of the offer;

2) submit to the Authority a declaration in accordance with the terms set out in Annex )8) of these Regulations;

3) submit to the Authority copies of any offering documents to be used in advertising the offer; and

4) conduct a due diligence check of the foreign fund and its manager before the distribution of securities issued by such fund, and provide the Authority with it upon request within (5) days from the date of request.

5) pay such registration fees as the Authority may prescribe.

6) submit any another information that the Authority requires.

b. If having received a private placement notification and the information and documents provided under paragraph (a) of this Article and the Authority considers that the proposed offer of securities may not be commensurate with the distributor's ability or may result in a breach of the Capital Market Law or its Implementing Regulations, then it may take any of following actions:

1) carry out any enquiries which it considered appropriate including requiring the concerned person or its representative to appear before the Authority to answer the questions of the Authority and to explain any matters that the Authority considers relevant to the private placement offering; or

2) require the concerned person or others to provide additional information or to confirm that the information provided is accurate, in such manner as the Authority may specify.

c. Where the Authority determines that the private placement may not be commensurate with the distributor's ability or may result in a breach of the Capital Market Law or its Implementing Regulations, the Authority may issue a “notification” to the distributor stating that the private offer is not permissible or publish a “notice” prohibiting the offer.

d. Where the Authority has not taken any actions stated in Paragraph (c) of this Article, the Authority shall, on the request of the distributor, issue a notice stating it has no objection to the offering of securities in the foreign fund.

e. The distributor must provide the Authority within (10) days of the end of the initial offer period of the foreign fund (if any) a statement of the results of the offer.

f. Where the offer is not completed by the proposed offer end date (if any) specified in the private placement notification provided to the Authority in accordance with Subparagraph

(1) of Paragraph (a) of this Article, the Fund’s Terms and Conditions, and relevant offering documents, the distributor must provide the Authority within (10) days with a notification in writing signed by the distributor confirming that the offer has failed to complete, the distributor must return to the securities holders their full subscriptions monies together with any returns generated from investing the subscriptions monies without any deduction to securities holders.