These Regulations are adopted pursuant to Article 20, Article 70, Article 72, Article 81 paragraph 2, and Article 95 of the Securities Investment Trust and Consulting Act (below, the "Trust and Consulting Act").

A securities investment trust enterprise (SITE) shall establish an internal control system pursuant to Article 93 of the Trust and Consulting Act.
A SITE's business operations shall be governed by law and regulation, the enterprise's articles of incorporation, and the internal control system referred to in the preceding paragraph.
The internal control system referred to in paragraph 1 shall be submitted for approval by the SITE's board of directors prior to its adoption or any subsequent amendment, and shall be retained on file for reference. When the Financial Supervisory Commission ("the FSC") gives notice requiring amendment of the internal control system, such amendment shall be made within the period of time prescribed.

A SITE shall report to the FSC for prior approval when any of the following circumstances occur:
1. A change in the company name;
2. Suspension or resumption of business;
3. Dissolution or merger;
4. Assignment of all or a major portion of operations or assets;
5. Acquisition of all or a major portion of another's operations or assets;
6. A change in the amount of capitalization;
7. A change in the place of business of the enterprise or a branch unit;
8. Other matters requiring approval pursuant to FSC regulations.

In addition to complying with relevant laws and regulations, a SITE shall report any of the following matters by letter to the Securities Investment Trust and Consulting Association of the R.O.C. ("the SITCA") within 5 business days of their occurrence, which shall in turn notify the FSC:
1. A change of director, supervisor, or manager;
2. The occurrence of litigation, non-litigation, or mediation by the SITCA, arising out of business operations or the performance of duties by an associated person;
3. A change in the shareholdings of a director, supervisor, or any shareholder holding five percent or more of the total outstanding shares of the enterprise;
4. Other matters to be reported pursuant to FSC regulations.
Subparagraphs 1, 3, and 4 of the preceding paragraph do not apply to an enterprise in another line of business that concurrently operates SITE business.

A SITE shall report to the FSC any matter having a material influence on the rights and interests of beneficiaries within 2 days from the date of its occurrence, with a copy of the report to the SITCA.
"Matters having a material influence on the rights and interests of beneficiaries" refers to the following:
1. Return of a check for insufficient funds, refusal of a transaction, or any other loss of creditworthiness;
2. Any instance of a material adverse effect on the finances or operations of the company due to litigation, non-litigation, administrative disposition, or administrative litigation;
3. Application to a court for reorganization;
4. A change in the chairperson, general manager or one third or more of the directors;
5. A change in the certifying CPA of the enterprise or a securities investment trust fund it manages, provided that this shall not apply when the change resulted from an internal change at the accounting firm;
6. Any of the circumstances of Article 3, subparagraphs 2 through 5;
7. Any purchase of real estate from a company that is an affiliated enterprise as defined in Chapter 6-1 of the Company Act; from a director, supervisor, or manager of that company; from a shareholder holding five percent or more of the total outstanding shares of the company; or from a related party of such a shareholder;
8. Suspension or resumption of calculation of the redemption price for a securities investment trust fund publicly offered by the SITE;
9. Transfer of a securities investment trust fund managed by the SITE for succession by another SITE;
10. The merger of a securities investment trust fund publicly offered by the SITE;
11. Termination of the fund contract of a securities investment trust fund publicly offered by the SITE.
The term "related party" in subparagraph 7 of the preceding paragraph refers to any of the following:
1. In the case of a natural person, the person's spouse, a blood relative within the second degree of kinship, or any enterprise of which the person or the person's spouse is responsible person;
2. In the case of a juristic person, a juristic person controlled from the same source or with which the juristic person has a relationship of mutual control.

A SITE shall operate its business in a fair and reasonable manner. Factors including operating costs, transaction risks, reasonable profits, and the degree of impact on the market or company finances shall be taken into consideration in determining the fees to be collected or spent. It is prohibited for a SITE to use unreasonable fees to solicit or engage in business.

No SITE director or supervisor, nor any shareholder holding five percent or more of the SITE's total outstanding shares, may concurrently hold five percent or more of the outstanding shares of another SITE.
No entity that is an affiliated enterprise (as defined in Chapter 6-1 of the Company Act) of a director, supervisor, or SITE shareholder holding five percent or more of the SITE's total outstanding shares may act as a director, supervisor, or shareholder holding five percent or more of the total outstanding shares of another SITE.
Where merger results in non-compliance with the preceding two paragraphs, compliance shall be effected within 1 year from the date of merger.
Shares held by the shareholder's spouse or minor children or held under others' names shall be included in calculation of the shareholdings of five percent or more of outstanding shares under paragraphs 1 and 2 above.

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A SITE shall have one or more shareholders possessing the qualifications set forth under Article 8 of the Standards Governing the Establishment of Securities Investment Trust Enterprises whose total shareholdings, excluding shareholdings from distributions of new shares for employee bonuses or from issuance of new shares reserved for subscription by employees or other qualified persons, may not be less than 20 percent of the total outstanding shares of the SITE.
A SITE shall report to the FSC for recordation prior to any transfer of shares by the shareholders described in the preceding paragraph.

Except for shareholders in conformance with the qualifications in Article 8 of the Standards Governing the Establishment of Securities Investment Trust Enterprises or the circumstances in Article 9, paragraph 2 of the same Standards, the total shares held by a SITE shareholder, related parties of the shareholder, and any other person under whose name the shareholder holds shares may not exceed 25 percent of the total outstanding shares of the SITE.
The term "related party" in the preceding paragraph refers to any one of the following:
1. In the case of a natural person, the person's spouse, a blood relative within the second degree of kinship, or any enterprise of which the person or the person's spouse is responsible person;
2. In the case of a juristic person, a juristic person controlled from the same source or with which the juristic person has a relationship of mutual control.

A SITE may not act as director or supervisor of a company whose issued shares are purchased by one of the SITE's funds, provided that this restriction shall not apply where the FSC so provides.