The assets of a fund managed by a SITE shall be independent of the SITE's own assets and those of the fund's custodian institution.
No creditor in relation to the self-owned assets of a SITE or a fund's custodian institution may make any claim or exercise any other right against the assets of a fund managed by or in the custody of the SITE or custodian institution.
A fund custodian institution shall establish independent accounts for custody of the fund assets of each fund in accordance with the Securities Investment Trust and Consulting Act, orders authorized under that Act, and the provisions of the securities investment trust agreement.

When a trust enterprise concurrently engaging in securities investment trust business privately places a fund and receives FSC permission to keep custody of fund assets, the obligations of the fund custodian institution shall be executed by the trust enterprise and placed under the supervision of the trust supervisor.

Given either of the following circumstances, an institution may not serve as the custodian institution of a fund:
1.The FSC has issued a disposition against the institution pursuant to Article 115 of the Securities Investment Trust and Consulting Act and the effective period of the disposition has not yet lapsed.
2.The institution does not have a credit rating at or above a prescribed level by an FSC-approved or recognized credit-rating institution.
Given any one of the following circumstances, a trust enterprise or a bank that concurrently operates trust business may not serve as the custodian institution for a fund managed by the respective SITE:
1.The trust enterprise or bank is invested in ten percent or more of the total issued shares of the SITE.
2.The trust enterprise or bank serves as director or supervisor of the given SITE; or a director or supervisor of the trust enterprise or bank also serves as a director, supervisor, or manager of the given SITE.
3.The SITE is invested in ten percent or more of the total issued shares of the trust enterprise or bank.
4.The SITE or its representative is a director or supervisor of the given trust enterprise or bank.
5.The trust enterprise or bank serves as the fund's certification agency.
6.The trust enterprise or bank and the SITE are each subsidiaries of the same financial holding company, or are affiliated enterprises.
7.Any other circumstance exists in which the FSC, for the public interest, deems it inappropriate to serve as the custodian institution of a fund.
The provisions of subparagraph 2 of the preceding paragraph apply mutatis mutandis to the representative or designated representative of a juristic person director or supervisor who executes the duties of the juristic person.
"Subsidiary" as used in paragraph 2, subparagraph 6, has the meaning given in Article 4 of the Financial Holding Company Act.
A SITE shall adopt and implement a set of standards governing selection of the custodian institution of a fund.

A custodian institution shall operate in accordance with the Securities Investment Trust and Consulting Act, orders issued pursuant to that Act, and the stipulations of the trust agreement, and shall keep custody of fund assets with the care of a good custodian and exercise its fiduciary duty under the principles of good faith and credit.
Neither a director, supervisor, manager, associated person, nor any other employee of a fund's custodian institution may use information gained through the execution of their duties to carry out securities trading activities, nor may they disclose such information to any third party.

When a fund's custodian institution becomes aware that the SITE has violated the trust agreement or related laws or regulations, it shall immediately request the SITE to perform its obligations under that agreement or under related laws and regulations; where there is a likelihood of injury to the rights and interests of beneficiaries, it shall report the matter to the FSC and copy notification to the Trust Association.
When a fund's assets are negatively affected due to the dereliction or negligence of the SITE, the custodian institution shall seek recovery of the assets in the interests of the fund's beneficiaries.
When in the performance of its custodial duties, a fund's custodian institution requests the SITE to perform its obligations pursuant to the provisions of paragraph 1, and where the SITE fails to perform those obligations with resulting damage to beneficiaries' interests, then following written notification directing the SITE to rectify the matter within a prescribed time period and subsequent failure of the SITE to comply, the custodian institution may, after applying and receiving permission from the FSC, convene a beneficiaries' meeting to transfer management of the fund to another SITE.

When dereliction or negligence on the part of a fund's custodian institution results in violation of the Securities Investment Trust and Consulting Act, orders issued pursuant to that Act, or the stipulations of the trust agreement, with a resulting negative impact on fund assets, the custodian institution shall bear liability for damages.
The SITE shall further seek recovery of damages from the custodian institution on behalf of the fund's beneficiaries.
A custodian institution shall bear liability for the dereliction or negligence of an agent, representative, or employee carrying out their obligations pursuant to the stipulations of the trust agreement in the same degree as it would for its own dereliction or negligence.
When the dereliction or negligence of a trust enterprise that is concurrently operating securities investment trust business and keeping custody of trust fund assets pursuant to FSC approval results in violation of the Securities Investment Trust and Consulting Act, orders issued pursuant to that Act, or the stipulations of the trust agreement, with a resulting negative impact on fund assets, the trust enterprise shall bear liability for damages.
The trust supervisor shall seek recovery of damages from the custodian institution on behalf of the fund's beneficiaries.
When there is dereliction or negligence on the part of an agent, representative, or employee of the trust enterprise referred to in the preceding paragraph during the performance of their obligations under the trust agreement, the trust enterprise shall bear the same degree of liability as it would for its own dereliction or negligence.

When a custodian institution is unable to continue performing its custodial obligations for a fund due to dissolution, suspension or termination of business or the cancellation or voiding of its business approval, the SITE shall seek another custodian institution to succeed to those custodial obligations, subject to the approval of the FSC.
When a SITE is unable to find a successor custodian institution in accordance with the preceding paragraph, another custodian institution will be designated as successor by the FSC; the designated custodian institution may not refuse succession except when, with legitimate reason, it reports to and receives approval from the FSC.
When a custodian institution is obviously deficient in performing its custody obligations for a given fund, the FSC may order it to transfer custody of the fund to another FSC-designated custodian institution.
When a custodian institution resigns from its custodial obligations for a given fund, requiring that a change to another custodian institution be made by means of consultation with the managing SITE or through a resolution of the beneficiaries' meeting, prior approval for the transfer shall be obtained from the FSC.
The successions, transfers, or changes referred to in the preceding four paragraphs shall be announced by the SITE.
Prior to a designation or an order from the FSC under paragraph 2 or paragraph 3, consultation with other custodian institutions for the purpose of finding a successor may be undertaken by the Trust Association.