(Internal Control System)
Securities investment trust enterprises, and securities investment consulting enterprises operating business of discretionary investment services for customers, shall establish internal control systems; the Competent Authority shall prescribe regulations governing such systems.

(Prescription of Regulations Governing Concurrent Service of Responsible Persons and Associated Persons and Other Business Matters and Promotional Activities)
Where, pursuant to this Act or another act or regulation, and with the approval of the Competent Authority, a securities investment trust enterprise concurrently operates a securities investment consulting enterprise or vice versa, or either such kind of enterprises concurrently operates another enterprise, or is concurrently operated by another enterprise, they may do nothing that would involve a conflict of interest with or prejudice to the rights or interests of beneficiaries or customers in terms of concurrent appointments of and codes of conduct of their responsible persons or associated persons, sharing and utilization of information, sharing of operating equipment or places of business, or advertising, public informational meetings, or other business promotion activities. The Competent Authority shall prescribe applicable regulations.

(Prescription of Regulations Governing Merger Procedures)
Regulations governing qualification requirements, merger procedures, and other compliance requirements for mergers between securities investment trust enterprises and securities investment consulting enterprises or between such enterprises and financial institutions or other enterprises shall be prescribed by the Competent Authority, except where such matters are otherwise provided for in the Financial Institution Mergers Act, Business Mergers and Acquisitions Act, or other acts.

(Procedures for Handling of Dissolution, Suspension or Termination of Business, or Voidance or Revocation of Business Permission)
Where a securities investment trust enterprise is unable to continue engaging in securities investment trust fund business because of dissolution, suspension or termination of business, or voidance or revocation of its business permission, it shall seek another securities investment trust enterprise to succeed to that business, subject to the approval of the Competent Authority.
When a securities investment trust enterprise is unable to find a successor in accordance with the preceding paragraph, the Competent Authority will designate another securities investment trust enterprise as successor; the designated securities investment trust enterprise may not refuse unless it reports to and receives approval from the Competent Authority based on a legitimate reason.
Where there is obvious mismanagement of a securities investment trust fund by a securities investment trust enterprise, the Competent Authority may order the enterprise to transfer the fund to the management of another securities investment trust enterprise designated by the Competent Authority.
Public announcement of succession or transfer referred to in the preceding three paragraphs shall be made by the successor securities investment trust enterprise.
Paragraphs 1 to 3 shall apply mutatis mutandis where a fund custodian institution is unable to continue engaging in fund custody business because of dissolution, suspension or termination of business, or voidance or revocation of its business permission; public announcement of succession or transfer matters thereof shall be made by the securities investment trust enterprise.

(Procedures for Handling of Discretionary Investment Business upon Dissolution, Voidance or Revocation of Business Permission, Suspension or Termination of Business, or Mismanagement, of a SITE or SICE)
If a securities investment trust enterprise or securities investment consulting enterprise is unable to continue operating discretionary investment business because of dissolution of the enterprise or because of voidance or revocation of its business permission, its discretionary investment contracts shall be terminated.
If a securities investment trust enterprise or securities investment consulting enterprise has suspended or ceased business or is obviously being mismanaged, the Competent Authority may order it to transfer its discretionary investment contracts to be managed by another securities investment trust enterprise or securities investment consulting enterprise designated by the Competent Authority
Under the circumstances in the preceding paragraph, the securities investment trust enterprise or securities investment consulting enterprise shall solicit the opinion of the customer; if the customer disagrees or does not express any intention, its discretionary investment contract will be deemed terminated.

(Winding Up of Business)
Where a securities investment trust enterprise or securities investment consulting enterprise has had its permission voided or revoked, been ordered to suspend business, or ceased business of its own accord, such enterprise shall wind up any securities investment trust or securities investment consulting business that it was doing before such voidance, revocation, suspension, or cessation.
A securities investment trust enterprise or securities investment consulting enterprise whose permission for securities investment trust or securities investment consulting business has been voided or revoked shall continue to be deemed a securities investment trust enterprise or securities investment consulting enterprise within the scope of winding down securities investment trust or securities investment consulting business under the preceding paragraph; a securities investment trust enterprise or securities investment consulting enterprise that has been ordered to suspend business or has ceased business of its own accord shall be deemed not yet to have suspended or ceased business within the scope of its winding down of securities investment trust or securities investment consulting business that it was doing before it suspended or ceased business.

(Obligation to Publicly Announce and File the Annual Financial Report)
A securities investment trust enterprise or securities investment consulting enterprise shall, within three months after the close of each fiscal year, publicly announce and file with the Competent Authority its annual financial report that has been audited and certified by a certified public accountant, approved by the board of directors, and recognized by the supervisors.
The annual financial report referred to in the preceding paragraph shall be submitted to the Securities Investment Trust and Consulting Association for compilation and submission to the Competent Authority.

(Preparation of Annual Financial Reports and Monthly Reports for Funds and Related Compliance Matters)
With respect to the utilization of each securities investment trust fund, a securities investment trust enterprise shall prepare an annual financial report with the format and content prescribed by the Competent Authority within 2 months from the close of each fiscal year, and monthly reports within 10 days from the end of each month, for submission to the Competent Authority.
The annual financial report referred to in the preceding paragraph shall be audited and certified by a certified public accountant approved by the Competent Authority, and signed by the fund custodian institution, and shall be publicly announced by the securities investment trust enterprise.
The annual financial report and monthly reports referred to in paragraph 1 shall be submitted to the Securities Investment Trust and Consulting Association for compilation and submission to the Competent Authority.

(Inspection of Finances and Business)
To protect the public interest or preserve order in the market, the Competent Authority may at any time require a securities investment trust enterprise, securities investment consulting enterprise, fund custodian institution, or full fiduciary custodian institution, or a related party thereof, to submit financial and business reports or other related materials within a time limit, and may, directly or by authorizing an appropriate institution to do so, inspect its financial and business condition and other related matters. Such enterprise, institution, or related party thereof may not evade, impede, or refuse the inspection.
When the Competent Authority deems necessary, it may at any time appoint a lawyer, certified public accountant, or other professional or technical personnel to carry out an inspection under the preceding paragraph and to submit a factual report or opinion to the Competent Authority, with the expense to be borne by the inspected party.
To protect the public interest or preserve order in the market, the Competent Authority may request a relevant competent government authority or financial institution to provide necessary information or records with respect to anyone suspected of conduct in violation of this Act.
Information obtained under paragraph 3 may not be made public or provided to any other person, except as necessary for sound supervision and investor protection.

(Reprimands and Penalties for Violations of Laws and Regulations)
If, when examining a financial or business report or other relevant materials filed by a securities investment trust enterprise, securities investment consulting enterprise, fund custodian institution, or full fiduciary custodian institution, or inspecting the financial or business condition thereof, the Competent Authority discovers any noncompliance with an act or regulation, it may issue an official reprimand and additionally may duly impose penalties in accordance with law.

(Authority to Impose Sanctions for Violations of the Act or Orders Issued Under the Act)
Where a securities investment trust enterprise or securities investment consulting enterprise has violated this Act or any order issued hereunder, in addition to imposing other penalties pursuant to this Act, the Competent Authority may, depending on the severity of the offense, impose any of the following dispositions:
1. a warning.
2. order the securities firm to dismiss a director(s), supervisor(s), or manager(s) from their office.
3. suspend the whole or part of the enterprise's public offering or private placement of securities investment trust funds or acceptance of new [discretionary investment] business for not more than two years.
4. suspend the whole or part of the business of the company or its branch for not more than six months.
5. revoke the business permission of the company or its branch.
6. any other necessary disposition.

(Dispositions With Respect to Violations of the Act by Directors, Supervisors, Managerial Officers, or Employees)
Where a director, supervisor, manager, or employee of a securities investment trust enterprise or securities investment consulting enterprise does anything in the course of executing their duties that violates this Act or other applicable acts or regulations, where sufficient to affect the normal execution of business, the Competent Authority may at any time order the enterprise to suspend such person from exercising business for up to one year or to dismiss such person from their position and, depending on the severity of the violation, may impose a disposition on the enterprise under the preceding article.