These Regulations are adopted under Article 93 of the Securities Investment Trust and Consulting Act.

A securities investment trust enterprise (SITE), or a securities investment consulting enterprise (SICE) that conducts discretionary investment business (hereinafter collectively referred to as "enterprise"), shall establish and operate an internal control system in compliance with these Regulations.

The internal control system of an enterprise is a management process designed by management, passed by the board of directors, and implemented by the board of directors, management, and other personnel, with the aim of promoting sound operations of the enterprise and providing reasonable assurance regarding the achievement of the following objectives:
1. Effectiveness and efficiency of operations.
2. Reliability of financial reporting.
3. Compliance with applicable laws and regulations.
The objective of effectiveness and efficiency of operations referred to in subparagraph 1 of the preceding paragraph includes objectives such as profits, operating performance, and safeguarding of assets.
The objective of reliability of financial reporting referred to in subparagraph 2 of paragraph 1 includes objectives such as the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and transactions being made with proper approval.

An enterprise shall document its internal control system, including internal audit implementation rules, and have them passed by the board of directors. If any director expresses a dissenting opinion, where stated in minutes or in a written statement, the enterprise shall submit the dissenting opinion to each and all supervisors, together with the internal control system that has been passed by the board of directors. The same shall apply to any amendment thereto.
Where an enterprise has established the position of independent director, when it submits its internal control system for deliberation by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinion; where an independent director has an objection or reservation, the objection or reservation shall be recorded in the minutes of the meeting of the board of directors.
Where an enterprise has established an audit committee in accordance with the Securities and Exchange Act, any adoption of or amendment to its internal control system shall be subject to the consent of one-half or more of the entire membership of the audit committee and be submitted to the board of directors for a resolution.
Any matter under the preceding paragraph that has not been approved with the consent of one-half or more of the entire membership of the audit committee may be adopted with the consent of two-thirds or more of the entire board of directors, and the resolution of the audit committee shall be recorded in the board of directors meeting minutes.
The term "entire membership of the audit committee" as used in paragraph 3, and the term "entire board of directors" as used in the preceding paragraph, shall be calculated as the number of members/directors actually in office.