An insurance enterprise shall, upon permission by the FSC, concurrently operate discretionary investment business in a manner consistent with these Standards.
The concurrent operation of the business under the preceding paragraph shall be subject, in addition to these Standards, to the Discretionary Investment Regulations.
The insurance enterprise that concurrently operates discretionary investment business shall allocate operating capital, earmarked for that business, in an amount not less than that specified in Article 5, paragraph 1, subparagraph 1 of the Discretionary Investment Regulations.
The operating capital allocated under the preceding paragraph may be used only for that exclusive purpose, and, unless otherwise provided in any other law, may not be used for purposes of any non-discretionary investment business or other business.
The insurance enterprise shall have paid-in capital of not less than the total of the earmarked operating capital required to be allocated upon application to concurrently operate discretionary investment business, plus the minimum paid-in capital set out in the Regulations for Establishment and Administration of Insurance Enterprises, and shall carry out a capital increase in case of any shortfall.
A foreign insurance enterprise shall exclusively allocate funds for operational use within the territory of the ROC in an amount of not less than the total of the earmarked operating capital required to be allocated upon application to concurrently operate discretionary investment business, plus the minimum amount to be exclusively allocated for operational use, as set out in the Regulations for Establishment and Administration of Foreign Insurance Enterprises, and shall make up for the insufficiency in case of any shortfall.

An insurance enterprise applying to concurrently operate discretionary investment business shall meet the following conditions:
1.Has net worth per share of not less than par value, as shown in the CPA-audited and attested financial report for the most recent period.
2.Has not, during the last half year, on 3 or more occasions been given an official reprimand or ordered to achieve improvement within a specified period of time in accordance with Article 149, paragraph 1of the Insurance Act.
3.Has not, during the last 2 years, been sanctioned under Article 149, paragraph 1, subparagraphs 1 to 4, or paragraph 2 or 4 of the Insurance Act. The same shall not apply, however, in the case of a sanction by the FSC ordering the removal of any staff member from office.
4.If it has been sanctioned under any provisions of the preceding two subparagraphs and ordered to achieve improvement, concrete improvement has been achieved.

An insurance enterprise intending to concurrently operate discretionary investment business shall apply to the FSC for permission by filling out and submitting an application form, together with the following documents:
1.A photocopy of documentary proof showing conformance to the qualification requirements, as recognized by the FSC Insurance Bureau, for selling investment-linked insurance products involving discretionary control of investments under the Regulations Governing Investment-linked Insurance Investments.
2.A business plan, specifying, with respect to the concurrently operated discretionary investment business: operational principles, internal organization and segregation of duties, and personnel recruitment and training.
3.Minutes of the relevant board of directors meetings, showing [the resolution to] concurrently operate the discretionary investment business. A foreign insurance enterprise may, in lieu of such, submit documentation bearing the signature of an entity or person authorized by the head office.
4.A register of directors and supervisors.
5.A register of qualified personnel meeting the qualification requirements in the Discretionary Investment Regulations, issued by the SITCA after reviewing their qualifications, together with documentary proof of their qualifications.
6.The prospectus required to be prepared by the Discretionary Investment Regulations.
7.Written statement(s) that none of the circumstances in Article 68 of the SITC Act exists with respect to any director, supervisor, managerial officer, any department supervisor engaging in discretionary investment business, or any associated person. A foreign insurance enterprise may, in lieu of written statements from directors and supervisors, submit documentation bearing the signature of an entity or person authorized by the head office.
8.The CPA-audited and attested financial report for the most recent period. If at the time of application 6 months have already elapsed since the beginning of the fiscal year, a CPA-audited and attested financial report for the first half-year shall be additionally submitted.
9.Operating bylaws for the concurrent operation of discretionary investment business.
10.The audit report from a CPA special audit on the internal control system for the discretionary investment business.
11.A written statement that the application form and its attachments contain no misrepresentations or nondisclosures.
The operating bylaws referred to in subparagraph 9 of the preceding paragraph shall set out, with respect to discretionary investment business, a system of internal controls that includes rules for preventing conflict of interest and for segmentation of risks in areas related to business operations, such as operational principles, operating procedures, segregation of authority and duties, resolution of business disputes, personnel training and administration, information sharing, or advertising.
The CPA under paragraph 1, subparagraph 10 may only be a CPA allowed to provide audit and attest services on the financial reports of public companies.

An insurance enterprise applying to concurrently operate discretionary investment business shall, within 6 months from the day the FSC grants permission, carry out the procedures for amendment registration and re-issuance of business license with the FSC Insurance Bureau, submitting the following documents:
1.A photocopy of the permission letter for the concurrent operation of discretionary investment business.
2.A register of qualified personnel, issued by the SITCA after reviewing their qualifications, together with documentary proof of their qualifications.
3.Documentary proof of admission to membership in the SITCA.
4.Documentary proof evidencing allocation of operating capital.
5.The CPA-audited and attested financial report for the most recent period. The report is not required, however, if it covers the same period as that covered by the financial report submitted in the application for permission.
6.Documentary proof showing the deposit of an operating bond required by the Discretionary Investment Regulations.
The permission granted to the insurance enterprise shall be revoked if it fails to apply to the FSC Insurance Bureau for amendment to registration or for re-issuance of a business license for such concurrent operation of discretionary investment business within the period set out in the preceding paragraph. Notwithstanding the foregoing, if there is legitimate reason, an application may be filed with the FSC Banking Bureau before expiration of that period for a maximum extension of 3 months, one time only.
The insurance enterprise permitted to concurrently operate discretionary investment business may not commence such business unless and until it has become a member of the SITCA.

Upon an application by an enterprise in another line of business to concurrently operate discretionary investment business or securities investment consulting business, the FSC may deny permission in any of the following circumstances:
1.Any of the circumstances in Article 9, subparagraphs 2 to 5.
2.The internal control system is not concrete enough or cannot be effectively implemented.
3.Any violation of Article 68 of the SITC Act with respect to any department supervisor engaging in discretionary investment business or securities investment consulting business.
4.Non-compliance with Article 15, paragraph 3, Article 32, paragraph 2, or Article 36, paragraph 5 or 6 with respect to paid-in capital.
5.Denial is otherwise deemed necessary to protect the public interest.