| 2003.09.24 |
Regulations Governing Information to be Disclosed in Investment Memorandums for Private Placement of REIT or REAT Beneficiary Securities by a Trustee
[Chinese]
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Regulations Governing Information to be Disclosed in Investment Memorandums for Private Placement of REIT or REAT Beneficiary Securities by a Trustee
1. Full 4 articles adopted and issued per 24 September 2003 Order No. Tai-Tsai-Rong-(IV)-0924000857 of the Ministry of Finance; for enforcement from the date of promulgation.
Article 1
These Regulations are adopted pursuant to Article 15, paragraph 3, and Article 36 by mutatis mutandis application of Article 15, paragraph 3, of the Real Estate Securitization Act ("the Act").
Article 2
The investment memorandum provided by a trustee conducting a private placement of REIT beneficiary securities to specified persons shall specify the following information:
1. Terms and conditions of issuance of the beneficiary securities: shall include, at least, the duration of the fund, type (closed- or open-end), total monetary amount of the private placement, total number of beneficiary units, method of delivery of the beneficiary securities, delivery date, maturity date, purchase price per beneficiary unit, fees, and other matters relating to beneficial interests.
2. Overview of related participant institutions such as the trustee and real estate management institution, and matters they are required to perform: shall include at least an institution profile, business operations overview, most recent credit rating results, and duties and responsibilities.
3. The major academic and work experience, qualifications, and limits to the authority of fund operation and management personnel.
4. Conditions establishing the validity or non-validity of the private placement of the fund, and the method for handling non-validity.
5. Basic policies, scope, and investment strategy for fund utilization.
6. Assessment methods, evaluation bases, and expert opinions regarding expected returns on the trust property.
7. Explanation of funds borrowed by, and fee burdens of, the fund:
(1) Purpose of borrowed funds and their effect on beneficial interests.
(2) Ceilings on borrowed funds.
(3) Status of the distribution and use of borrowed funds.
(4) Methods of controlling and managing the use of borrowed funds.
(5) Interest calculations for borrowed funds.
(6) Itemized fee burdens.
(7) Fee calculation methods.
(8) Fee payment methods and schedule.
(9) Method for handling insufficiency for payment of fees.
8. Method for the use of idle funds.
9. Credit rating results and credit enhancement methods:
(1) Credit rating agency.
(2) Credit rating results and explanation thereof.
(3) Credit enhancement institution.
(4) Credit enhancement methods.
10. Items, schedule, and payment methods for distribution of investment income.
11. Method for, and limits on, the transfer of the beneficiary securities.
12. Method for calculating net asset value per beneficiary unit.
13. The following matters shall be disclosed:
(1) The value of trust property not guaranteed by the trustee.
(2) Potential investment risks, and related rights, of beneficiary securities holders.
(3) Important matters concerning the REIT contract.
14. Other matters specified by the Competent Authority.
Article 3
The investment memorandum provided by a trustee conducting a private placement of REAT beneficiary securities to specified persons shall specify the following information:
1. Terms and conditions of issuance of the beneficiary securities: shall include, at least, the total monetary amount of the private placement, total number of beneficiary units, method of delivery of the beneficiary securities, delivery date, maturity date, purchase price per beneficiary unit, fees, and other matters relating to beneficial interests; if beneficiary securities of different types or durations are under private placement, their respective stipulated beneficiary rights, order of priority of payment, and duration.
2. Overview of related participants such as the trustor, trustee, real estate management institution, and professional appraiser, and matters they are required to perform: shall include at least an institution profile, business operations overview, most recent credit rating results, and duties and responsibilities of the participants.
3. The major academic and work experience, qualifications, and limits to the authority of operations and managerial personnel.
4. Conditions establishing the validity or non-validity of the private placement of the beneficiary securities, and the method for handling non-validity.
5. Status of the trust property:
(1) The types and composition of the trust property, and their values as appraised by a professional appraiser.
(2) Assessment methods, evaluation bases, and expert opinions regarding expected returns on the trust property.
(3) Any encumbrances on the trust property, and the method by which such encumbrances are handled.
6. Trust property management and disposal methods:
(1) Trust property management methods.
(2) Trust property disposal methods.
(3) Matters regarding the appointment of a real estate management institution.
7. Explanation of any borrowed funds of the trust property:
(1) Purpose of borrowed funds and their effect on beneficial interests.
(2) Ceilings on borrowed funds.
(3) Status of the distribution and use of borrowed funds.
(4) Methods of controlling and managing the use of borrowed funds.
(5) Interest calculations for borrowed funds.
(6) Itemized fee burdens.
(7) Fee calculation methods.
(8) Fee payment methods and schedule.
(9) Method for handling insufficiency for payment of fees.
8. Method for the use of idle funds.
9. Results of the credit rating for the beneficiary securities and methods of credit enhancement:
(1) Credit rating agency.
(2) Credit rating results and explanation thereof.
(3) Credit enhancement institution.
(4) Credit enhancement method.
10. Distribution method of the trust property principal and any profit, interest, or other proceeds generated by that principal.
11. Method for and restrictions on the transfer of the beneficiary securities.
12. Calculation method for the net asset value per beneficiary unit.
13. The following matters shall be disclosed:
(1) The value of trust property not guaranteed by the trustee institution.
(2) Potential investment risks and the related rights of beneficiary securities holders.
(3) Important matters concerning the REAT contract.
14. Other matters specified by the Competent Authority.
Article 4
These Regulations shall enter into force from the date of promulgation.