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本會 99 年 7 月 15 日第 4 屆第 2 次理監事聯席會通過
CUSTODIAN LETTER FOR FUTURES
Date: _______________
Re: Mainland Area Investors’ Futures Investment in Taiwan
Dear Sirs,
The purpose of this Custodian Letter is to explain to our Mainland Area investor
customer ____________ (the “Client”) various restrictions and requirements stipulated
on existing laws and regulations regarding futures trading conducted by Mainland Area
investors in Taiwan.
A. Background Information
Under current regulations, if the Client intends to engage in futures investment in
Taiwan, the Client must appoint a regulatory agent, which is generally the custodian
bank or rarely a futures broker,
We, ____________, as a custodian bank (the “Bank”) ,and the Client are parties to a
custody agreement dated ____________. The Client has appointed the Bank to act as
the regulatory agent under the Futures Regulations, to carry out functions, such as
open accounts, make FX conversions, submit reports to the authorities, exercise
futures related rights, make tax payment, etc., specified by the authorities.
In order to authorize the Bank to carry out the Futures Agent Functions, the Client shall
execute in favor of the Bank and deliver to the Bank a power of attorney substantially
in the form of SCHEDULE A attached hereto. Capitalized terms not defined herein are
used as defined in the power of attorney in SCHEDULE A.
In its capacity as Regulatory Agent, the Bank shall, to the extent the assistance of the
Regulatory Agent is legally required thereof, assist the Client in obtaining all required
R.O.C. governmental approvals necessary in connection with the Client’s futures
trading on Taiwan Futures Exchange (“TAIFEX”).
B. Client’s Acknowledgement and Agreement:
With respect to the futures trading, the Client shall understand and agree to the
following:
本會 99 年 7 月 15 日第 4 屆第 2 次理監事聯席會通過
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(i)
The Client shall fully comply with the Futures Regulations. For the avoidance of
doubt, the obligation to so comply is solely the Client’s, notwithstanding any
advice the Bank may provide to the Client.
(ii)
The Client acknowledges that the Futures Regulations require the Bank, as the
Client’s Regulatory Agent, to act for the Client to handle (a) payment of initial
margins/margin calls of futures contracts, (b) payment of initial margins and
margin calls on option’s short positions and premiums on option’s long positions,
(c) reporting as required by the Futures Regulations and (d) other related
matters.
(iii) The Client acknowledges that under the Futures Regulations, for both NT dollar
and foreign currency denominated futures products, margin and premium must
be paid and deposited by the Client in the Designated Foreign Currency
(currently USD, JPY, EUR, GBP, AUD and HKD) and margin must also be
withdrawn by the Client in the Designated Foreign Currency (currently USD,
JPY, EUR, GBP, AUD and HKD).
(iv) It shall be the Client’s sole responsibility to assure that the Bank will receive
sufficient cash and timely instructions from the Client for making premium or
margin payments for the Client. The Bank shall have no responsibility in the
event that funds or instructions are not timely received.
(v)
The Client acknowledges that the Bank may receive transaction reports
provided by the futures commission merchants appointed by the Client (“each
an “FCM”) to the extent required by the Futures Regulations; provided, that
such receipt shall not constitute a review or reconciliation or confirmation by the
Bank of any such reports.
(vi) The Client acknowledges that the Bank, as the Client’s regulatory agent, is
required to report to TAIFEX, the Central Bank of China (“CBC”) and/or other
authorities the balance of the FX Account and the information relating to foreign
exchange conversion of the Client’s funds and Client’s client equity in
accordance with the Futures Regulations. The Bank will report the information
relating to foreign exchange conversion of the Client’s funds and Client’s client
equity (the “FX and Client Equity Information”) based upon the information
posted by the relevant FCM(s) on the designated website. The Bank shall not
be liable for the consequences of any discrepancy or error or omission or
insufficiency in the FX and Client Equity Information reported by the Bank based
upon information posted by the relevant FCM(s) on the designated website.
The Client shall hold the Bank harmless from, and indemnify the Bank against,
all costs, expenses, liabilities, claims, penalties, interest and damages arising
from or in connection with any FX and Client Equity Information reported by the
Banks based on the information posted by the relevant FCM(s) on the
designated website.
本會 99 年 7 月 15 日第 4 屆第 2 次理監事聯席會通過
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(vii) The Client acknowledges that if the Client’s Accumulated NTD Gains exceed
the NTD Allowance, the Bank, as the Regulatory Agent, must instruct one or
more of the relevant FCM(s) to convert the excess into the Designated Foreign
Currency based on the order of FX conversion priority as specified in Appendix I,
if the Client maintains margin accounts in multiple currencies as permitted under
the Futures Regulation, within five business days. The Bank shall notify the
Client immediately after the Bank becomes aware of such an excess and
request the Client to notify the Bank on or prior to the deadline set by the Bank
which FCM(s) the Bank is to instruct to convert the excess into the Designated
Foreign Currency. If the Bank does not receive the relevant notification from the
Client on or prior to the deadline, the Bank shall be entitled, at the Bank’s sole
discretion, to designate any one or more FCM to make the conversion based on
the order of FX conversion priority as specified in Appendix I, if the Client
maintains margin accounts in multiple currencies as permitted under the
Futures Regulation. In no event shall the Bank be responsible for the nonreceipt of the notification and designation of FCM(s) for conversion of the above
excess.
(viii) The Client shall provide the Bank with necessary information and documents for
fulfilling the Bank’s reporting obligations under the Futures Regulations and,
upon requested by the Bank, provide any information and/or documents as may
be requested by the regulatory authorities.
C. Tax Guarantor:
If legally required, the Client shall duly appoint a tax guarantor as contemplated by the
Futures Regulations and in such case, shall at all times during the term hereof
continue to have a tax guarantor, which the Client acknowledges is not the Bank.
Sincerely Yours,
________________________
[Name of the Custodian Bank]
Name:
Title:
本會 99 年 7 月 15 日第 4 屆第 2 次理監事聯席會通過
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SCHEDULE A
POWER OF ATTORNEY (QDII Version)
KNOW ALL MEN BY THESE PRESENTS, that, pursuant to the Custody Agreement
dated ___________ between (the Global Custodian or the Local Custodian) and
(Name of QDII) (the “Client”) and in accordance with the Regulations Governing
Securities Investment and Futures Trading by Mainland Area Investors and related
laws, rulings and directives (collectively, as amended and supplemented from time to
time, the “Futures Regulations”), we, (Name of QDII), a registered Mainland Area
investor with the R.O.C. authorities, with our principal place of business at
____________, do hereby constitute and appoint __________________ (the “Bank”)
as our true and lawful agent with respect to the futures trading to be conducted by us
(as agent is described in such context in the Futures Regulations) (hereinafter,
“Regulatory Agent”) with full power of substitution and revocation to do all acts and
execute all documents necessary or appropriate to (a) open futures trading accounts
with the futures commission merchants (“FCMs”), (b) sign agreements and documents
relating to opening futures trading accounts with FCMs, (c) open foreign currency
deposit account for futures trading (“FX Account”), (d) apply for foreign exchange
conversion, including, without limitation, conversion of the foreign currency funds
withdrawn from the FX Account into NT dollars for the purposes permitted by the
Futures Regulations and converting the NT dollar funds withdrawn from the Client’s NT
dollar cash account with the Bank into the foreign currency designated in the Futures
Regulations (“Designated Foreign Currency”) (currently USD, JPY, EUR, GBP, AUD
and HKD) for futures trading, (e) exercise the rights relating to the futures trading, (f)
instruct the relevant FCM(s) to convert the portion of our aggregate accumulated NT
dollar gains (as calculated in accordance with the formula specified in the Futures
Regulations) (“Accumulated NTD Gains”) into the Designated Foreign Currency, based
on the order of FX conversion priority designated by the Client, if the Accumulated
NTD Gains exceed the limit set out forth in the Futures Regulations (“NTD Allowance”),
(g) make payment of initial margins/margin calls of futures contracts and payment of
initial margins and margin calls on option’s short positions and premiums on option’s
long positions, (h) report as required by the Futures Regulations, (i) make tax payment
(but not acting as a tax guarantor) and (j) do all other acts permitted to be carried out
by a Regulatory Agent under the Futures Regulations on our behalf and in our name
and stead in connection with any and all of our futures trading in the R.O.C. under and
as contemplated by the Futures Regulations and all that may be connected therewith
or reasonably incidental thereto (“Futures Agent Functions”).
This Power of Attorney is in addition to and does not revoke or replace any prior Power
of Attorney issued to the Regulatory Agent which is on file with the R.O.C. authorities.
本會 99 年 7 月 15 日第 4 屆第 2 次理監事聯席會通過
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This Power of Attorney shall be read together with the Custodian Letter for Futures
dated [
] regarding Mainland Area Investors’ Futures Investment in Taiwan (the
“Custodian Letter for Futures”). The Client hereby acknowledges and consents to all of
the terms and conditions set out in the Custodian Letter for Futures.
IN WITNESS WHEREOF, this Power of Attorney has been duly issued as of this ____
day of _____, 2010.
By
Name:
Title:
:
__________________________
本會 99 年 7 月 15 日第 4 屆第 2 次理監事聯席會通過
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Appendix I
The Order of Excessive NTD Realized Gains Conversion Priority:
Currency
1.
2.
3.
4.
5.
6.
本會 99 年 7 月 15 日第 4 屆第 2 次理監事聯席會通過
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