A Study of the Sale of Mutual Funds through Internet Banking

• Main Authors: Hui-Tzu Lai, 賴惠慈
• Other Authors: Wen Chieh Wang
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/79813665072949512566

碩士 === 國立交通大學 === 管理學院碩士在職專班科技法律組 === 95 === The development of e-commerce has brought tremendous impact on the conventional model of business transactions. As the Internet technology was introduced to banks over the past years, Internet banking has become one of the major development trends for the financial service industry. Among the various financial services offered online, mutual fund sales break the geographic boundaries and facilitate the investors to make decisions instantly. Furthermore, the Internet is a convenient channel with abundant information, such as research reports and performance ranking, based on which the investors can make their decisions. Thus, online mutual fund sales as a wealth management service have become the most popular Internet banking service for consumers. Mutual fund sales via Internet banking can be divided into two major categories: (1) the bank is purely a sales channel; (2) the bank sells mutual funds in the form of non-discretionary fund contracts. The second one obviously takes up the lion’s share. On the Internet, the bank sells mutual funds in the form of non-discretionary fund contracts. It appears that the bank is entrusted by the consumer for the fund. In reality, the consumer subscribes/redeems mutual funds via the non-discretionary fund with the intention to profit from such an investment. The intention is no different from other forms of mutual fund subscription/redemption. Therefore, the paper aims at first clarifying the legal relationships involved in mutual fund sales via Internet banking and then exploring the bank’s responsibilities for the consumer in an act of selling mutual funds via the Internet. Although mutual fund sales via Internet banking fall into the jurisdiction of civil private acts, civil law governs conventional transactions. How does that apply to mutual fund sales via Internet banking? Do current regulations offer sufficient protection for the consumers who invest in mutual funds via Internet banking? These are the questions this study aims to answer. This paper addresses the substantive law disputes of the legal relationships involved in mutual fund sales via Internet banking: the declaration of intent for electronic contract, risk allocation and burden of proof for hacker acts, protection of the consumer’s financial information, the right to rescind the purchase contract for Extraordinary Purchase and Sale under the Consumer Protection Law, and mutual fund advertisements. The paper looks into the applicability of civil law or the other civil special laws in mutual fund transactions on the Internet. In addition, it analyzes the shortcoming and insufficiency of the current legal framework on governing mutual fund transactions via Internet banking. Dispute settlements and procedures derived from mutual fund sales on the Internet are diverse. In addition to defining the right of jurisdiction, admission of electronic evidence and analysis of their effects, the paper also introduces the emerging topic of today – Online Dispute Resolution (ODR) and analyzes the feasibility of settling Internet banking mutual fund disputes through the ODR mechanism.