A SITE may mandate a securities investment consulting enterprise, securities broker, bank, trust enterprise, enterprise for insurance of the person, credit cooperative, futures broker, Chunghwa Post Co., Ltd., or other institution approved by the FSC to serve as a distributor for a securities investment trust fund ("fund distributor").
A trust enterprise that serves as a fund distributor under these Regulations may do so by entering into a non-discretionary money trust contract with the investor.

A fund distributor shall meet the criteria listed below:
1. The net worth per share in the CPA-audited and certified financial report of the most recent period is not lower than par value; if it issues shares with no par value, the net worth per share shall be not lower than NT$10. However, this restriction shall not apply if it has had its business license for less than 1 full fiscal year, or if it is a bank whose ratio of regulatory capital to risk-weighted assets for the most recent year satisfies the provisions of Article 5 of the Regulations Governing the Capital Adequacy and Capital Category of Banks.
2. In the past 2 years, has not been subject to a disposition under Article 103, subparagraphs 2 to 5, of the SITC Act; Article 66, subparagraphs 2 to 4 of the Securities and Exchange Act; Article 100, subparagraphs 2 to 4 of the Futures Trading Act; Article 44, subparagraphs 1 to 3 of the Trust Enterprise Act; Article 61-1, paragraph 1, subparagraphs 1 to 8 of the Banking Act; Article 149, paragraph 1, subparagraphs 1 to 6 of the Insurance Act; Article 27, paragraph 1, subparagraphs 1 to 7 of the Credit Cooperatives Act; Article 12, paragraph 1, subparagraphs 1 to 3 of the Postal Remittances and Savings Act; or Article 12-1, paragraph 1, subparagraphs 2 to 5 of the Financial Consumer Protection Act arising from the conduct of offshore fund, securities investment trust fund, or futures trust fund business. However, this shall not apply to dispositions in which an employee is dismissed from their position by order of the FSC, or where the circumstances of the violation have been specifically corrected and the correction has been recognized by the FSC.
3. Shall have appropriate and sufficient associated persons to conduct fund distribution business, and such persons shall meet the criteria set forth in the Regulations Governing Responsible Persons and Associated Persons of Securities Investment Trust Enterprises.
4. Possesses the required information transmission equipment to carry out fund distribution business.
5. Possesses other qualifications as required by the FSC.

A fund distributor that conducts fund distribution business shall enter into a distribution agreement with a SITE for selling its fund shares, and shall comply with the relevant acts and regulations regarding the public offering, issuance, and distribution of funds, as well as their subscription and redemption.
The particulars to be recorded in the distribution agreement that a fund distributor enters into with a SITE under the preceding paragraph, and amendments thereto, shall be drafted by the SITCA, and submitted to the FSC for ratification.

When a SITE mandates a fund distributor to conduct fund distribution business, it shall issue a statement that the fund distributor is qualified, and submit the statement and its distribution agreement with the fund institution to the SITCA for review and approval before the fund distributor may begin to conduct such business.
The SITE may not pay the fund distributor and its personnel any remuneration, fees, or other benefits not stipulated in the distribution agreement.

A fund distributor that conducts fund distribution business shall thoroughly know and assess each customer's investment knowledge, investment experience, financial condition, and degree of investment risk tolerance.
A fund distributor shall deliver a simplified prospectus before a subscriber delivers the subscription application and pays the subscription amount, and shall provide the prospectus to the subscriber upon request.
A fund distributor shall require a first-time subscription customer to present documentary proof of identity or incorporation, and fill out basic information.
For any fund transaction of a certain monetary amount or higher or that is suspected of money laundering, a fund distributor shall retain the complete and accurate transaction records and documents for the subscription, redemption, or transfer, and shall comply with the provisions of the Money Laundering Control Act.
The internal control system of a fund distributor shall encompass know-your-customer, sales conduct, short-term trading control, money laundering control, and operating principles to be followed under laws and regulations, and shall be submitted by the SITE to the SITCA for review.

A fund distributor may not subscribe under its own name to a securities investment trust fund on behalf of an investor except under the non-discretionary money trust method, or with the approval of the FSC.
A fund distributor that conducts fund distribution business, unless subscribing to a securities investment trust fund under its own name on behalf of an investor, shall require the subscriber to transfer the subscription cost directly to a segregated fund account set up by the fund custodian, and shall do so according to the SITCA Rules Governing the Public Offering, Issuance, and Sale of Securities Investment Trust Funds and Their Subscription or Redemption.

In conducting fund distribution business, a fund distributor and its managerial officers and employees shall exercise the due care and fiduciary duty of a good administrator based on the principle of good faith.
In conducting fund distribution business, a fund distributor and its personnel shall maintain confidentiality regarding the personal data, transaction data, and other related information of a fund investor, except where otherwise provided by law or regulation.

A fund distributor that subscribes under its own name to a securities investment trust fund on behalf of an investor shall faithfully implement money-laundering control system measures and short-term trading control system measures specified in the prospectus. Where a fund investor engages in any fund transaction that constitutes short-term trading under the standards defined in the prospectus, the institution shall provide that investor's relevant data to the SITE in the format prescribed by the FSC. The SITE may require that the fund distributor refuse any new, additional subscription by that investor.
A SITE shall maintain the confidentiality of data provided by the fund distributor under the provisions of the preceding paragraph, and shall be liable for compensation for any damage incurred by the fund distributor or an investor in a fund thereof due to any breach of confidentiality.

Fund distributor personnel that conduct fund distribution business may not divert customer funds or beneficial interest certificates for other purposes, or engage in other actions that damage customer rights or interests.
The SITE shall deliver the beneficial interest certificates of a securities investment trust fund as stipulated in the securities investment trust contract for that fund, and may not entrust the fund distributor to do so.

A fund distributor shall properly preserve all vouchers and documents in the conduct of fund distribution business. The method and duration for preserving them shall be in accordance with the applicable provisions of the Commercial Accounting Act.
If an investor subscribing to a securities investment trust fund submits the subscription application in non-written form, the fund distributor shall handle the application in accordance with laws and regulations or the operating rules for electronic transactions adopted by the SITCA.

A fund distributor that subscribes to a securities investment trust fund under its own name on behalf of an investor(s), after receiving notice of a beneficiaries meeting, shall promptly notify the investor(s) of any matter having a material impact on investor rights and interests, and shall collate the opinions of such investors and notify the SITE.

When conducting any advertising, public informational meeting, or other promotional activity for a securities investment trust fund, a fund distributor shall comply with relevant provisions adopted by the FSC and SITCA regarding securities investment trust fund advertising, public informational meetings, or promotional activities by SITEs, and within 10 days from the actual occurrence of such event, the SITE shall file a report with the SITCA. In the event of a violation, the SITE and the fund distributor shall be held liable under relevant laws and regulations.

In conducting fund distribution business, a fund distributor shall, before the commencement of distribution, disclose to the investors any remuneration, fees, or other benefits it receives from the SITE.
The SITE shall promptly give notice to the investors of any change in the information disclosed under the preceding paragraph.
The operational guidelines for content of information to be disclosed and notification of change to be made under the preceding two paragraphs, and any subsequent amendment thereto, shall be drafted by the SITCA and ratified by the FSC.
The fund distributor shall take the actions required by the preceding three paragraphs within 6 months after the issuance of the 3 September 2010 to these Regulations.
In conducting fund distribution business, the fund distributor and its personnel may not receive from the SITE any remuneration, fees, or other benefits not stipulated in the distribution agreement.

A fund distributor that terminates the handling of fund distribution business shall immediately inform the SITE, and within 2 days of the actual date of termination the SITE shall file a report with the SITCA and make a public announcement.
After a fund distributor terminates conduct of the business of the preceding paragraph and before that business is transferred to another fund distributor, it shall assist investors to conduct subsequent fund redemption, transfers, or other relevant functions.

If a fund distributor that conducts fund distribution business violates these Regulations or relevant self-regulatory rules, in addition to handling the violation in accordance with relevant laws and regulations, the FSC may also suspend it from conducting fund distribution business for a period of 6 months.
If a SITE discovers that a fund distributor's conduct of fund distribution business violates any law or regulation or oversteps its scope of authorization, the SITE shall immediately supervise and compel the fund distributor to make corrections, and shall immediately notify the FSC.
If investor rights or interest are damaged through any intentional or negligent conduct or violation of the distribution agreement or a law or regulation by a fund distributor or any of its directors, supervisors, managerial officers, or employees, the fund distributor shall be liable for damages.