A securities investment trust enterprise may not publicly offer a securities investment trust fund without first obtaining approval from the Competent Authority or effective registration by filing with the Competent Authority. The Competent Authority shall prescribe regulations governing the documents required to be submitted and the regulations for approval of applications or effective registration filings, conditions for approval or effective registration, and other compliance requirements.
Operational procedures for the public offering, issuance, and sale of funds, and the subscription and redemption thereof, shall be drafted by the Securities Investment Trust and Consulting Association and submitted to the Competent Authority for ratification.
If a fund mentioned in the preceding two paragraphs is an overseas-raised fund investing domestically, or a domestically raised fund investing overseas, approval from the Central Bank is required.

A securities investment trust enterprise may carry out a private placement of beneficiary certificate with the following counterparts:
1.Banks, bills finance enterprises, trust enterprises, insurance enterprises, securities enterprises, or other juristic persons or institutions approved by the Competent Authority.
2.Natural persons, juristic persons, or funds meeting conditions set by the Competent Authority.
The total number of offerees under subparagraph 2 of the preceding paragraph may not exceed 99 persons.
Upon the reasonable request by a counterpart(s) under subparagraph 2 of paragraph 1 prior to consummation of the private placement, a securities investment trust enterprise shall be obligated to provide financial, business, or other information relevant to the current private placement of securities investment trust beneficiary certificate.
Within five days from the date that the price of the privately placed beneficiary certificate has been paid in full, the securities investment trust enterprise shall report the same to the Competent Authority; the particulars required to be reported shall be specified by the Competent Authority. A person intending to raise funds through private placement overseas for investment domestically or to raise funds through private placement domestically for investment overseas shall, when filing the report, submit therewith a photocopy of the Central Bank approval letter.
The restrictions on transfers of privately placed beneficiary certificate shall be conspicuously noted on the beneficiary certificate and shall be stated in the relevant written documentation delivered to the offeree or purchaser.
The provisions of Article 43-7 and Article 43-8, paragraph 1, of the Securities and Exchange Act shall apply mutatis mutandis to privately placed beneficiary certificate.

Unless the Competent Authority provides otherwise, a securities investment trust contract shall specify the following particulars:
1.Name and address of the securities investment trust enterprise and the fund custodian.
2.Name and duration of the securities investment trust fund.
3.Rights, obligations, and legal responsibilities of the securities investment trust enterprise.
4.Rights, obligations, and legal responsibilities of the fund custodian.
5.Rights, obligations, and legal responsibilities of the beneficiaries.
6.Basic policies and scope for using the securities investment trust fund to invest in securities and trade securities-related products.
7.Matters relating to the distribution of proceeds of the securities investment trust.
8.Matters relating to the redemption of beneficiary certificate.
9.Fees to be borne by the securities investment trust fund.
10.Management and custodial fees of the securities investment trust enterprise and the fund custodian.
11.Calculation of the net asset value of the securities investment trust fund and the beneficiary units.
12.Matters relating to termination of the securities investment trust contract.
13.Matters relating to convening of beneficiaries meetings, quorum requirements, voting requirements, and the method for resolutions.
A securities investment trust contract template shall be drafted by the Securities Investment Trust and Consulting Association in consultation with the Trust Association, and submitted to the Competent Authority for ratification.

Depending on market conditions, the Competent Authority may impose ceilings on the fees charged for the purchase or redemption of beneficiary certificate by beneficiaries, and the management or custodial fees charged by securities investment trust enterprises or fund custodians and impose restrictions on the types of fees to be borne by securities investment trust funds.

The Competent Authority will specify the types of securities investment trust funds that securities investment trust enterprises may publicly offer or privately place, the scope of investments or trading thereby, and restrictions thereupon.
If investments or trading by funds under the preceding paragraph involves any item other than securities-related products, the Competent Authority shall first consult with the competent authority for the relevant industry and obtain its consent; if it involves the money market, it shall also consult with and obtain the consent of the Central Bank.

A securities investment trust enterprise publicly offering a securities investment trust fund shall deliver a prospectus to prospective subscribers in the manner prescribed by the Competent Authority.
A securities investment trust enterprise privately placing a securities investment trust fund with specific persons shall be obligated to deliver a private placement memorandum to offerees at their request.
A securities investment trust enterprise that fails to deliver a prospectus or private placement memorandum in accordance with the preceding two paragraphs shall be held liable for injury consequently sustained by bona fide trading counterparties.
The provisions of Article 32 of the Securities and Exchange Act shall apply mutatis mutandis to liability for damages for any injury sustained by a bona fide counterparty because of any misrepresentation or concealment in the main required content of a prospectus or private placement memorandum.
The Competent Authority shall prescribe the matters required to be specified in a prospectus under paragraph 1 and a private placement memorandum under paragraph 2.

No person may, themself or as an agent, engage within the Republic of China in the public offer, sale, or investment consultancy of offshore funds without first obtaining approval from the Competent Authority or effective registration upon filing with the Competent Authority.
Private placement of offshore funds shall comply with the provisions of Article 11, paragraphs 1 to 3, and may not involve any act of general advertising or public solicitation. If those provisions are not complied with, it shall be deemed a public offering of offshore funds; the same restriction shall apply to any act of general advertising or public solicitation in respect of investment consultancy for offshore funds.
Securities investment trust enterprises, securities investment consulting enterprises, securities firms, issuers of offshore funds and institutions designated thereby, and other institutions designated by the Competent Authority may engage in the business specified in paragraph 1 within the Republic of China; the Competent Authority shall prescribe regulations governing related qualifications and conditions, application or filing procedures, business items that may be engaged in, and other compliance requirements.
The Competent Authority shall prescribe regulations governing the types, investment or trading scopes, and restrictions thereupon, of offshore funds that may be publicly offered, sold, or addressed in investment consulting within the Republic of China by persons, themselves or as agents, and the relevant application or filing procedures and other compliance requirements.
If the public offer or sale of offshore funds within the Republic of China by a person, themself or as an agent, under paragraph 1, involves inward or outward remittance of funds, approval shall be obtained from the Central Bank.

Assets lawfully acquired in the name of a securities investment trust enterprise or a securities investment consulting enterprise on behalf of its investors shall be kept separate and independent of the enterprise's own property.
Creditors may not make any claim or exercise any other right against the assets under the preceding paragraph to satisfy any debt owed by a securities investment trust enterprise or a securities investment consulting enterprise with respect to its own property.

In managing a securities investment trust fund to invest or trade, a securities investment trust enterprise shall base its decisions on its analysis; it shall keep records of its execution thereof, and shall also submit a review on a monthly basis. Its analysis and decisions shall be founded on reasonable grounds and bases.
The securities investment trust enterprise shall include the analysis, decisions, execution, and review referred to in the preceding paragraph in the internal control system and faithfully implement the system. Records shall be kept of the control activities, and shall be preserved for a certain period of time.
The Competent Authority shall prescribe the period of time for which they shall be preserved.

The Competent Authority shall prescribe regulations governing the methods by which securities investment trust enterprises manage securities investment trust funds in investment and trading, and the giving of instructions for custody, disposition, collection and payment, and other relevant matters.
Assets held by a securities investment trust enterprise in the course of managing a securities investment trust fund shall be registered in the name of the fund account with the fund custodian. Provided, foreign securities and foreign securities-related products that are held may be registered in the manner stipulated in the agreement entered into between the fund custodian and the appointed foreign custodian.

A securities investment trust enterprise shall manage securities investment trust funds in accordance with this Act, regulations authorized and adopted under this Act, and the provisions of the securities investment trust contracts, and is prohibited to do any of the following acts, except where otherwise provided by the Competent Authority:
1.Instruct the fund custodian to make a loan or provide security.
2.Engage in securities margin transactions.
3.Engage in securities trading with any other securities investment trust fund managed by the same securities investment trust enterprise.
4.Invest in securities issued by such securities investment trust enterprise or a company having an interest relationship with such securities investment trust enterprise.
5.Manage the securities investment trust fund to purchase beneficiary certificate of the fund.
6.Instruct the fund custodian to lend securities held by the fund to another person.
The Competent Authority shall define the scope of the term "company having an interest relationship" as used in subparagraph 4 of the preceding paragraph.

The securities investment trust enterprise and fund custodian shall place the securities investment trust fund prospectus, sales-related documents, securities investment trust contract, and latest financial statements at their place of business and their agent's place of business to make them available for reading, or shall make them available for reading by another method designated by the Competent Authority.

A securities investment trust fund publicly offered or privately placed by a securities investment trust enterprise, the private property of the securities investment trust enterprise, and the private property of the fund custodian shall be independently maintained. Creditors may not make any claim or exercise any other rights against the assets of the fund to satisfy liabilities incurred by the securities investment trust enterprise or the fund custodian of the fund with respect to their own private properties.
The fund custodian shall establish and maintain a separate account for each securities investment trust fund in its custody in accordance with this Act, regulations authorized and adopted under this Act, and the securities investment trust contracts.

An institution to which any of the following circumstances applies may not serve as a fund custodian:
1.It has been subject to a disposition by the Competent Authority under Article 115, and the disposition period has not yet expired.
2.It has not yet obtained a credit rating of a certain grade or higher from a credit rating institution approved or recognized by the Competent Authority.
An institution to which any of the following circumstances applies may not serve as a fund custodian of a securities investment trust enterprise, except with the approval of the Competent Authority:
1.Its investment in the securities investment trust enterprise reaches a certain percentage of the total issued shares of the enterprise.
2.It serves as a director or supervisor of the securities investment trust enterprise, or any of its directors or supervisors serves as a director, supervisor or managerial officer of the securities investment trust enterprise.
3.A certain percentage of its total issued shares is held by the securities investment trust enterprise.
4.The securities investment trust enterprise or its representative serves as a director or supervisor of the institution.
5.It serves as a certifying institution of the securities investment trust fund.
6.The institution and the securities investment trust enterprise are subsidiaries of the same financial holding company or are affiliated enterprises.
7.Other institutions that the Competent Authority specifies as inappropriate to serve as a fund custodian.
Where a director or supervisor is a juristic person, the provisions of subparagraph 2 shall apply mutatis mutandis to its representative or person appointed to exercise its duties on its behalf.
The "certain percentage" in subparagraphs 1 and 3 of paragraph 2 shall be prescribed by the Competent Authority.
The term "subsidiary" in subparagraph 6 of paragraph 2 means a subsidiary as defined in Article 4 of the Financial Holding Company Act.

If a fund custodian learns that a securities investment trust enterprise has violated a securities investment trust contract or an applicable act or regulation, it shall immediately request the securities investment trust enterprise to perform its obligations under the contract or the applicable act or regulations; if there is a likelihood of injury to the rights or interests of beneficiaries, it shall immediately report to the Competent Authority, with a copy to the Securities Investment Trust and Consulting Association.
If a securities investment trust enterprise intentionally or negligently injures assets of the fund, the fund custodian shall seek recovery from the enterprise on behalf of the rights and interests of the fund beneficiaries.

If the fund custodian intentionally or negligently violates this Act, a regulation authorized and adopted under this Act, or a securities investment trust contract, causing injury to assets of the fund, it shall be liable for damages. The securities investment trust enterprise shall furthermore seek recovery from the institution on behalf of the rights and interests of the fund beneficiaries.
A fund custodian institution shall be responsible for any intentional or negligent [act or omission] of its agents, representatives, or employees when performing their obligations under a securities investment trust contract to the same extent that the fund custodian institution is responsible for its own intentional or negligent [acts or omissions].

Where the securities investment trust contract stipulates that the beneficiary is entitled to request redemption of the beneficial interest certificate unless the Competent Authority has provided otherwise, the beneficiary may request in writing or by other stipulated means that the securities investment trust enterprise redeem the beneficial interest certificate, and the securities investment trust enterprise may not refuse to do so; payment of the redemption price may not be delayed.
The Competent Authority shall prescribe regulations governing the calculation of the redemption price, the time limit for payment of the redemption price, issuance of a new beneficial interest certificate upon partial redemption, the temporary suspension of calculation of redemption price, delayed payment of the redemption price, and other compliance requirements with respect to securities investment trust funds.

An individual account shall be established for each securities investment trust fund publicly offered or privately placed by a securities investment trust enterprise and accounting books and records shall be established as provided by the Competent Authority; they shall be kept in the manner and for the period set forth in the Business Accounting Act and applicable regulations.

The accounting year of a securities investment trust fund shall be from 1 January to 31 December each year unless otherwise stipulated in the securities investment trust contract or otherwise approved by the Competent Authority.

The securities investment trust enterprise shall calculate the net asset value of the securities investment trust fund each business day.
The Securities Investment Trust and Consulting Association shall draft standards for the calculation of the net asset value of securities investment trust funds and submit them to the Competent Authority for approval.

The securities investment trust enterprise shall, on each business day, publicly announce the net asset value per beneficiary unit of the securities investment trust fund for the previous business day. Provided, for securities investment trust funds raised by offering beneficiary certificate overseas, the laws and regulations of the place where they are offered shall govern.
The provisions of the preceding paragraph do not apply to securities investment trust funds privately placed with specific persons by the securities investment trust enterprise. Provided, the net asset value per beneficiary unit of the securities investment trust fund shall be reported to the beneficiaries according to the provisions of the securities investment trust contract.

A securities investment trust enterprise shall keep the assets of each securities investment trust fund in the following manners according to the percentages prescribed by the Competent Authority:
1.Cash.
2.Bank deposits.
3.Short-term bill purchased from bill dealers.
4.Other manners provided by the Competent Authority.
Banks or short-term bills under subparagraphs 2 or 3 of the preceding paragraph shall have obtained at least a certain rating from a credit rating institution approved by the Competent Authority.
The total amount of assets held in the manners in subparagraphs 2 to 4 of paragraph 1 by a securities investment trust fund that is publicly offered or privately placed domestically may not exceed a certain percentage; the percentage shall be set by the Competent Authority in consultation with the Central Bank.

Any profit from investment income of the securities investment trust fund that shall be distributed according to the stipulations of the securities investment trust contract shall be distributed within six months from the close of the accounting year unless otherwise approved by the Competent Authority, and the distribution date shall be specified in the securities investment trust contract.

Beneficiary certificate shall be registered.
Beneficiary certificate may be issued in scripless form and delivered by book-entry transfer.
Regulations governing matters related to beneficiary certificate shall be drafted by the Securities Investment Trust and Consulting Association and submitted to the Competent Authority for ratification.

Where several persons own the same beneficial interest certificate(s), the co-owners shall select one of them to exercise their beneficial rights.
Where a government or juristic person is the beneficiary, it shall appoint one natural person to exercise its beneficial rights on its behalf.

Beneficiary certificate may freely be transferred unless otherwise provided by law.
The transfer of beneficiary certificate shall be effected by endorsement and delivery by the beneficiary, and the transferee's name shall be specified on the beneficiary certificate.
A transfer under the preceding paragraph shall not be asserted as a defense against a securities investment trust enterprise unless the name or title and domicile or residence of the transferee have been specified by the beneficiaries' register of the securities investment trust enterprise.
The preceding paragraph does not apply to the transfer of beneficiary certificate effected by means of book-entry transfer or registration. Regulations governing book-entry transfer or registration shall be promulgated by the Competent Authority.

The beneficial rights of a securities investment trust fund shall be divided equally based on the total number of beneficiary units. The number of beneficiary units of each beneficiary certificate shall be as specified on the beneficiary certificate.
The rights of the beneficiary shall be in accordance with the content specified on the beneficiary certificate and are exercisable according to the number of beneficiary units. Identical beneficial rights shall be enjoyed under any additional public offerings or private placements of the fund.

Unless the beneficiary certificate are scripless, the securities investment trust enterprise shall record the required information on them in the format prescribed by the Competent Authority, and issue them after they have been signed by the fund custodian.
The following information is required to be specified on beneficiary certificate under the preceding paragraph:
1.Name of the securities investment trust fund, total number of beneficiary units, issue date, duration, and whether additional issues are permitted.
2.Name and address of the securities investment trust enterprise and the fund custodian.
3.Name (individual or entity) of the beneficiary.
4.Number of beneficiary units represented by the beneficiary certificate.
5.Method for calculating the purchase price per beneficiary unit and the fee.
6.Method for calculating, payment method and times, for the management or custodial fees charged by the securities investment trust enterprise and fund custodian.
7.When the beneficiary requests redemption of the beneficiary certificate, the procedure, time, place, and method for calculating the redemption price and redemption fee, and the time and method of payment of the redemption price by the securities investment trust enterprise.
8.Method for calculating and publicly announcing the net asset value of the beneficiary units.
9.If there are any restrictions on whom beneficiary certificate may be transferred to, the content and effect of the restrictions.
10.Other particulars that the Competent Authority requires to be specified.
Beneficiary certificate issued shall be certified unless the certificates are in scripless form. The certification provisions governing the issuance of stocks and corporate bonds by public companies shall apply mutatis mutandis to the certification of beneficiary certificate.

A beneficiary's right to claim the distribution of proceeds shall be extinguished by prescription if not exercised within five years from the distribution date of the proceeds. Any proceeds that are extinguished by prescription shall be incorporated into the securities investment trust fund.
A beneficiary's right to claim payment of the price for the redemption of beneficiary certificate shall be extinguished by prescription if not exercised within 15 years from the expiration of the time limit for payment of the price.
When exercising the rights referred to in the preceding three paragraphs before extinction by prescription has occurred under this article, a beneficiary may not claim default interest.

The exercise of the rights of beneficiaries shall be done by means of a resolution at a beneficiary's meeting. Provided, this restriction shall not apply to acts done solely for the benefit of a beneficiary themselves.

The following matters shall be done subject to a resolution of a beneficiaries meeting. Provided, this restriction shall not apply where the Competent Authority has provided otherwise.
1.Replacement of the fund custodian.
2.Replacement of securities investment trust enterprise.
3.Termination of the securities investment trust contract.
4.Increase in the management or custodial fees of the securities investment trust enterprise or fund custodian.
5.Material amendment to the basic policies or scope of securities investment or securities-related product trading by the fund.
6.Amendment to the securities investment trust contract that would have a material effect on the rights or interests of beneficiaries.

When any event occurs that by law, regulation, or the securities investment trust contract requires a resolution of a beneficiaries meeting, the securities investment trust enterprise shall convene a beneficiaries meeting. When the securities investment trust enterprise is unable or fails to convene the meeting, the fund custodian shall convene it. When the fund custodian is unable or fails to convene it, it shall be convened as provided in the securities investment trust contract or by the beneficiaries themselves. When all are unable or fail to convene it, a person appointed by the Competent Authority shall convene it.
For beneficiaries themselves to convene a beneficiaries meeting, beneficiaries who have held continuously for at least one year beneficiary certificate representing beneficiary units accounting for at least three percent of the total beneficiary units issued and outstanding of the fund at the time of the proposal shall file an application to the Competent Authority in writing, describing the matters proposed and the reasons for convening the meeting, and convene the meeting themselves after obtaining approval therefrom.
When a beneficiaries meeting is convened by a party other than the securities investment trust enterprise, the securities investment trust enterprise, at the request of the fund custodian, the beneficiaries, or the person appointed by the Competent Authority, shall provide any documents or materials necessary for convening the beneficiaries meeting.

If in conducting fund custodian business, a fund custodian requests a securities investment trust enterprise to perform its obligations as provided in Article 23, paragraph 1, and the enterprise fails to do so, thereby injures the rights or interests of beneficiaries, and the securities investment trust enterprise fails to make corrections by a deadline after being notified in writing to make corrections by the deadline, the institution may, after applying to the Competent Authority and obtaining approval, convene a beneficiaries meeting to replace the securities investment trust enterprise.

The Competent Authority shall prescribe regulations governing the time limits for convening, procedures, resolution methods, meeting protocol, and other compliance requirements with respect to beneficiaries' meetings.
The Competent Authority, if it deems it necessary to protect the public interest or the rights or interests of beneficiaries, may amend, by an order, the provisions of the securities investment trust contract regarding the quorum requirements, voting requirements, and resolution method for the meeting of beneficiaries as provided in the securities investment trust contract.

The procedures for amending the securities investment trust contract are as follows:
1.For a publicly offered securities investment trust fund, approval shall be obtained from the Competent Authority; the securities investment trust enterprise shall publicly announce the content within two days after approval has been obtained.
2.For a privately offered securities investment trust fund, a report shall be filed with the Competent Authority within five days after the amendment.

Paragraph 3 of Article 6, Article 16, Article 32, paragraphs 1 to 3 of Article 36, Article 39 to paragraph 1 of Article 42, Article 43, and Articles 52 to 59 of the Trust Act do not apply to securities investment trusts.

In any of the following events, a securities investment trust contract shall be terminated after approval has been given by the Competent Authority:
1.The securities investment trust enterprise or fund custodian is dissolved, bankrupted, or its approval is withdrew or revoked, or its management or custodianship of the securities investment trust fund is obviously unsound, and the Competent Authority has ordered that it be replaced, such that it is unable to continue executing its duties, and there is no other suitable securities investment trust enterprise or fund custodian to assume the rights and obligations of the original enterprise or institution.
2.A beneficiaries meeting resolves to replace the securities investment trust enterprise or fund custodian, and no other suitable securities investment trust enterprise or fund custodian assumes the rights and obligations of the original enterprise or institution.
3.The net asset value of the fund is lower than the standard set by the Competent Authority.
4.The securities investment trust fund is unable to continue operating because of market conditions, the characteristics or scale of the fund, or other legal or factual reasons.
5.A beneficiaries meeting resolves to terminate the contract.
6.The securities investment trust enterprise or fund custodian is unable to accept a resolution of a beneficiaries meeting, and no other suitable securities investment trust enterprise or fund custodian assumes the rights and obligations of the original enterprise or institution.
7.Another other reason for termination as set forth in the securities investment trust contract.
Where it is desirable to terminate the securities investment trust contract to protect the public interest or the rights and interests of beneficiaries, the Competent Authority may order its termination.
Where a securities investment trust contract is terminated because of expiration of the duration thereof, a report shall be filed with the Competent Authority for recordation within two days from expiration.
A securities investment trust enterprise shall publicly announce the termination of a securities investment trust contract within two days from the date of filing for recordation or of approval.

Securities investment trust enterprises may conduct mergers of securities investment trust funds; regulations governing the conditions, procedures, or other applicable matters for mergers thereof shall be prescribed by the Competent Authority.

When a securities investment trust contract is terminated, the liquidator shall complete the liquidation of the securities investment trust fund within three months from the date the Competent Authority approves liquidation and shall distribute the balance after liquidation to the beneficiaries pro rata to the number of beneficiary units. Provided that where, for some legitimate reason the liquidation cannot be completed within three months, the liquidator may apply to the Competent Authority before the expiration of the time limit for one extension, which shall be limited to three months.
The liquidator shall report to the Competent Authority and publicly announce, and notify the beneficiaries of, the methods for liquidation and distribution under the preceding paragraph. Within two months from the conclusion of the liquidation procedures, he shall report the results thereof to the Competent Authority for recordation and notify the beneficiaries of the same.

The securities investment trust enterprise shall serve as the liquidator of the fund. Where an event specified in subparagraphs 1 or 2 of paragraph 1 of Article 45 exists with respect to the securities investment trust enterprise, the fund custodian shall serve as the liquidator. Where an event specified in subparagraphs 1 or 2 of paragraph 1 of Article 45 also exists with respect to the fund custodian, a beneficiaries meeting shall select by a resolution a securities investment trust enterprise or fund custodian that complies with the provisions of the Competent Authority to be the liquidator.
When the fund contract is terminated because an event specified in subparagraphs 1 or 2 of paragraph 1 of Article 45 exists with respect to the fund custodian, the liquidator may select a suitable fund custodian to assume, after approval is obtained from the Competent Authority, the fund custody duties during the liquidation period.
Unless otherwise provided by law or contract, the rights and obligations of the liquidator and the fund custodian during the duration of the fund shall be the same as those of the original securities investment trust enterprise and fund custodian.

From the date the conclusion of the liquidation is reported to the Competent Authority, the liquidator shall keep all account books and statements for not less than 10 years.