A SITE may privately place certificates of beneficial interest with the following entities:
1.Banking enterprises, bills finance enterprises, trust enterprises, insurance enterprises, securities enterprises, financial holding companies, or other juristic persons or institutions approved by the FSC.
2.Natural persons, juristic persons, or funds that meet FSC-imposed requirements.
The total number of offerees under subparagraph 2 of the preceding paragraph may not exceed 99 persons.
Prior to completion of the offering, the SITE bears the obligation of providing financial, operational, or other information relevant to the given placement of certificates of beneficial interest in response to reasonable requests from the entities listed under paragraph 1, subparagraph 2.
A SITE privately placing a fund with specific persons may not engage in normal advertising activities or publicly offer inducements during the period of offering and sale.
Any SITE violating the provisions of the preceding paragraph will be deemed to have made a public offering to non-specified persons.

Offerees and subscribers of a privately placed fund may not, except under one of the following circumstances, re-sell certificates of beneficial interest:
1.When making application to a SITE for redemption.
2.When making assignment to an entity with the qualifications under Article 11, paragraph 1 of the Securities Investment Trust and Consulting Act.
3.When making a valid transfer under applicable laws and regulations.
4.Other circumstances where approval is granted by the FSC.
The restriction on assignments under the preceding paragraph shall be set out in conspicuous text on the beneficiary certificate, and shall also be noted in the related documents delivered to the offeree or subscriber.

Within five days after receiving full payment of the price for the privately placed certificates of beneficial interest, a SITE shall submit the following documents to file for recordation with the FSC:
1.The securities investment trust fund agreement.
2.A record of deliberation at the board of directors' meeting on the resolution for private placement of a fund.
3.A photocopy of documents showing qualification of the fund manager under the Regulations Governing Responsible Persons and Associated Persons of Securities Investment Trust Enterprises.
4.An affidavit stating that none of the circumstances under Article 59 apply to the fund's custodian institution.
5.An investment prospectus.
6.An affidavit stating that the beneficiaries meet the qualifications required under Article 11, paragraph 1 of the Securities Investment Trust and Consulting Act.
7.A bank deposit certificate for the fund's dedicated account.
8.For funds placed privately overseas for domestic investment or for funds placed privately domestically for investment overseas, a photocopy of the Central Bank of China's letter of approval shall be included.
Any change to the trust agreement for a privately placed fund shall be reported to the FSC within five days.

A SITE shall invest the assets of a privately placed fund in accordance with the provisions of the trust agreement, and shall comply with the following provisions except where otherwise provided by the FSC:
1.The fund may not invest in securities other than those listed under Article 6 of the Securities and Exchange Act.
2.The fund may not engage in transactions other than for securities-related products.
3.The fund may not loan funds.
4.The fund may not engage in trading of securities or securities-related products with the various funds, collective trust funds, discretionary accounts, or accounts for trading of securities with self-owned funds under the management of the SITE, provided that this shall not apply in the case of cross-trades unintentionally occurring on a centralized securities exchange market or on Over-the-Counter Markets.
5.The fund may not invest in securities issued by the SITE under which it is managed or in securities issued by an interested company in relation to the SITE.
6.The fund may not be used to purchase the certificates of beneficial interest of that same fund, provided that this restriction shall not apply in the case of beneficiaries' requests for redemption of certificates of beneficial interest or when certificates of beneficial interest are redeemed due to the discontinuance of all or some part of the fund.
7.The fund may not transfer or sell proxy forms for the shareholders' meeting of an issuing company whose shares are purchased by the fund.
8.Amounts held in the manners described in Article 18, paragraph 1, subparagraphs 2-4 may not exceed the ratios prescribed by regulation.
9.The fund may not accept the designation of a specific person that it assist in evading income tax or any other operation that would influence its performance in accordance with the principles of good faith and professional investment management.
10.The fund may not engage in any other activity prohibited by the FSC.
The provisions of Article 11 shall apply mutatis mutandis to defining "an interested company in relation to the SITE" as referred to in subparagraph 5 of the preceding paragraph.
The term "various funds" in paragraph 1, subparagraph 4 includes securities investment trust funds and futures trust funds publicly or privately offered by a SITE.
Risk exposure in the trading of securities or securities-related products by a privately offered fund may not exceed 40 percent of the net asset value of the fund.
A SITE shall expressly state in the trust agreement for a privately offered fund the limits applicable to trades of securities-related products, securities margin trades, securities borrowing, and borrowing for financing, and shall set out related measures for monitoring and control of risk in the offering memorandum.
A SITE that has received FSC approval for concurrent operation of a futures trust enterprise may be exempt from the restrictions of paragraph 4 in regard to trading ratios only when it has reported to and received approval from the FSC for its internal control system with regard to risk control mechanisms in the utilization of a privately offered fund to trade in securities-related products. Risk exposure, however, may not exceed 100 percent of the net asset value of the given fund.
The internal control system of the preceding paragraph shall make an assessment of the possible types of risk for each respective type of securities-related product being traded, and shall adopt a sound and thorough plan for control and management that includes the method of assessing each type of risk, relevant parameters, standards for assessment, and mechanisms for periodic testing.

When a SITE makes a private placement of an index fund as defined in Article 32 and invests in securities to achieve conformity with the index's composition, it need not be subject to the restrictions of paragraph 1, subparagraph 5 of the preceding article.

The provisions of Articles 1-7, the provisions of Article 9, paragraphs 1 to 3 in regard to methods of calculating risk exposure and paragraph 5 of the same article, and Articles 10-1, 14, 14-1, 19, 20, 22, 57, 59 to 64, 66 to 77, and 79 to 89 shall apply to privately placed funds.
Except where otherwise provided in the trust agreement for a privately placed fund, Articles 23, 25 to 34, 42 to 50, and 65 shall also apply.

A SITE that offers a privately placed fund shall calculate the net asset value of the fund every business day in accordance with the provisions of Article 72 herein, and may report the net asset value of beneficiary units to beneficiaries in accordance with the trust agreement without regard to the Article 73 provisions regarding announcement.
Procedures for redemption of privately placed funds and deadlines for payment of the redemption price shall be governed by relevant provisions of the trust agreement, without regard for the provisions of Articles 70 and 71.
The annual financial report of a privately placed fund shall be presented to beneficiaries in accordance with the trust agreement, without regard for the Article 72, paragraph 2 provisions regarding announcement.
The provisions of Article 79, paragraph 5 regarding announcement do not apply when a privately placed fund is discontinued or the trust agreement expires. The method of liquidation and distribution of proceeds shall be reported to beneficiaries in accordance with the trust agreement without regard for the requirements of Article 80, paragraph 2 in regard to fund liquidation and distribution.
When a trust enterprise concurrently engages in securities investment trust business and privately places a fund whose assets it also keeps in custody, the obligations of the fund custodian institution shall be executed by the trust enterprise, which shall designate staff to be exclusively responsible for executing those obligations.