| 2003.09.29 |
Standards for the Establishment of Trust Enterprises
[Chinese]
|
Standards for the Establishment of Trust Enterprises
3. Articles 1, 3, 5, 6, 8, and 15 amended and promulgated, and Article 18-1 added, on 29 September 2003 per Order No. Tai-Tsai-Rong-(IV)-0924000878 of the Ministry of Finance
Article 1
These Standards are adopted pursuant to Article 10, paragraph 3, of the Trust Enterprise Act (hereinafter, the "TEA") and Article 4, paragraph 3, of the Real Estate Securitization Act (hereinafter, the "RESA").
Article 2
To promote the sound and robust operations and development of trust enterprises, the Ministry of Finance (MOF), when necessary, may add conditions to a permit or approval it grants under these Standards.
Article 3
To apply to establish a trust company, minimum paid-in capital of NT$2 billion is required. The capital contributions of promoters and shareholders shall be made in cash only. Notwithstanding the foregoing, the minimum paid-in capital required for a trust company engaging only in real estate investment trust (REIT) business under the RESA is NT$1 billion; the minimum paid-in capital for a trust company engaging only in real estate asset trust (REAT) business is NT$300 million; and the minimum paid-in capital for a trust company engaging only in REIT and REAT business is NT$1 billion.
The MOF may adjust the minimum paid-in capital set out under the preceding paragraph after taking into account the economic and financial conditions and actual needs.
Where a trust company fails to meet a minimum paid-in capital requirement after an adjustment has been made under the preceding paragraph, the MOF shall order it to carry out a capital increase and pay in the capital in full within a designated time limit; the MOF may restrict its lines of business and business volume if it fails to pay in the capital in full within that time limit.
A trust company shall be a public company.
Article 4
The promoters of a trust company, at the time of promotion, shall fully subscribe the total issued shares in the amount of the paid-in capital, and pay up at least 20 percent of the share capital.
The original promoters shall, within the limits set forth in Article 6, paragraph 2, be jointly and severally liable for subscribing and paying for any shares that have been subscribed but not yet paid for; the same shall also apply for any shares that have been subscribed but for which the subscription has been withdrawn.
Article 5
A trust company shall, among its promoters and shareholders, have professional promoters and shareholders meeting any of the following qualification requirements who have subscribed for shares in a combined total of no less than 40 percent of the paid-in capital; provided, this restriction shall not apply where promoters and shareholders are financial holding companies that have subscribed more than 50 percent of the shares:
1. A bank having experience in international finance, securities, or trust business, and having been ranked in the past year among the world's top 1,000 banks in either assets or net worth.
2. An insurance institution having experience in managing insurance funds and holding a total of NT$20 billion or more in securities and real estate assets.
3. A fund management institution having experience in managing or operating global securities investment trust funds and having under its management, among all the fund assets managed by the institution and by its subsidiaries in which it controls 50 percent of more of the shares, a combined total of not less than NT$65 billion in mutual funds, unit trusts, or investment trusts raised by pubic offering and invested in securities or real estate.
A trust company engaging only in REIT or REAT, in accordance with the RESA, may have as a professional promoter or shareholder required under the preceding paragraph a real estate management institution that has experience in real estate management, has been established for at least five years, has paid-in capital of not less than NT$1 billion, and has gone public.
Any transfer of shares by a promoter meeting the qualification requirements under paragraph 1 or the preceding paragraph shall be submitted to the MOF for recordation in advance.
A promoter under paragraph 1 or 2 holding 50 percent or more of the total issued shares of a trust company may invest in one trust company only.
Real estate management institutions referred to in paragraph 2 shall be limited to real estate management institutions as defined in the RESA.
Article 6
The stock of a trust company shall be in registered form.
Among the promoters and shareholders of trust companies, a same person or same related parties respectively may not hold shares in a same trust company in an amount exceeding 25 percent of the total number of shares issued thereby. This restriction, however, shall not apply to a promoter or shareholder who is a financial holding company or who otherwise meets the qualification requirements set forth in Article 5.
As used in the preceding paragraph, the term "same person" means a same natural person or a same juristic person; the term "same related parties" includes the person, his or her spouse, blood relatives within the second degree, and enterprises of which the person or his or her spouse is a responsible person.
Article 7
For a trust company being established, all directors, supervisors, and managers shall meet the requirements set out in the Regulations Governing Qualification Requirements for Responsible Persons and Trust Expertise or Experience Requirements for Operating and Managerial Personnel of Trust Enterprises (the "Regulations").
For a trust company being established, a person to whom any of the circumstances in Article 2 of the Regulations applies may not serve as a promoter of the trust company.
Article 8
To establish a trust company, the promoters shall within the required time limit submit the following documents, each in triplicate, to apply with the MOF for a permit for establishment; an application will not be processed if submitted after the time limit:
1. Trust Company Establishment Permit Application Form.
2. Business plan, specifying the business scope, business principles and policies, and specific implementation methods (including premises and facilities, internal organization and segregation of duties, personnel recruitment and training, business development plan, and financial forecasts for the coming three years).
3. A register of promoters and relevant evidentiary documentation.
4. Promoters meeting minutes
5. A written statement that none of the circumstances in Article 2 of the Regulations applies with respect to the promoters.
6. Certification that the promoters have opened a segregated account for deposit of share capital pursuant to Article 12, paragraph 1.
7. An explanation of the sources of the promoters' funds.
8. Documents evidencing the qualifications of the general manager, assistant general managers, and deputy assistant general managers.
9. Articles of association of the trust company.
10. Corporate bylaws and business operating procedures of the trust company.
11. Review opinions by a certified public account and a lawyer.
12. Other documents as required by the MOF.
Article 9
To operate trust business concurrently, a bank shall file a permit application with the MOF, submitting the following documents:
1. An application form.
2. A photocopy of the business license.
3. Articles of incorporation or equivalent documents.
4. Business plan, specifying the lines of business, business operating principles, internal organization and segregation of duties, register of managers and business personnel, personnel recruitment, summary of premises and equipment, the working capital earmarked for use exclusively in the trust business, business development plan, and financial forecasts for the coming three years.
5. Board meeting minutes.
6. Register of directors and supervisors.
7. A written declaration stating that none of the circumstances in Article 2 of the Regulations applies with respect to the managers.
8. Corporate bylaws and business operation procedures for the trust business.
9. Certifications of manager qualifications, and a roster of personnel possessing trust expertise or experience as required under the Regulations and certifications of their qualifications.
10. Other documents as required by the MOF.
A bank applying to operate trust business concurrently shall apply for issuance of a new business license within six months from the granting of a permit by the MOF.
Article 10
A trust company's articles of incorporation shall include the following information:
1. Company name.
2. Lines of business.
3. Total capital shares issued and value per share.
4. Company location.
5. Means of public notice.
6. The numbers of directors and supervisors, their terms of service, and rules governing their appointment and discharge.
7. The responsibilities of the board of directors, and segregation of duties between the board of directors and the management.
8. The year, month, and date of adoption of the articles of incorporation.
Article 11
The term "corporate bylaws" of a trust company as referred to in Article 8, subparagraph 10 includes:
1. Organizational structure and department functions.
2. Personnel staffing, management, and training.
3. Internal control system (including business management and accounting systems).
4. Internal audit system.
5. Business principles and policies.
6. Operations manual and segregation of powers and duties.
7. Other matters.
Article 12
To establish a trust company, a bank shall be appointed to collect share capital that is to be deposited into a segregated account opened in the name of preparatory office.
The share capital deposited in the segregated account under the preceding paragraph may not be used before commencement of business. However, the same shall not apply where any of the following circumstances arises after the establishment permit is obtained:
1. To purchase fixed assets necessary for business operations and to pay organization costs out of the share capital paid by the promoters, as agreed unanimously by the directors and supervisors elected by the promoters.
2. To use on liquidity assets as set out in Article 36 of the TEA after the company license is obtained.
Article 13
In any of the following circumstances, the MOF may reject an application for establishment of a trust company:
1. Promoter qualifications or shareholding do not comply with Article 5.
2. Promoter shareholding in a same trust company does not comply with Article 6, paragraph 2.
3. The application documents are found to contain false statements or information.
4. Failure to make supplementation or correction within a designated time limit on matters required by the MOF, or circumstances in which supplementation or correction is impossible.
5. Determination by the MOF that it is likely to be unable to operate trust business in a sound and effective manner.
6. Other noncompliance with requirements of these Standards.
Article 14
Upon being granted an establishment permit, a trust company shall completely install the computer facilities for its principal business before commencing its business operations.
Article 15
The MOF may revoke a permit for the establishment of a trust company if there is any change in promoter prior to the company's incorporation registration. However, this restriction shall not apply in any of the following circumstances where the company has filed an application with the MOF for approval of the change within two weeks after occurrence of the change:
1. A promoter is missing or dies.
2. A promoter is declared interdicted.
3. A circumstance set out in Article 2 of the Regulations is found to apply to a promoter after the application for establishment has been submitted.
4. A promoter, if a company, is subject to a court ruling for reorganization, or otherwise to a material loss of creditworthiness.
For any change other than to a promoter, a report specifying a legitimate reason shall be submitted to the MOF for approval in advance, except that where circumstances do not allow the report to be submitted for approval in advance, it shall be submitted to the MOF for approval within two weeks after the change. The MOF may revoke the permit if a report is not submitted and approved.
Article 16
To establish a trust company, an application shall be filed with the Ministry of Economic Affairs (MOEA) for company incorporation registration within six months after the approval by the MOF, and, within three months after completion of the incorporation registration, the following documents shall be submitted in triplicate in an application to the MOF for issuance of a business license:
1. Business license application form.
2. Company registration documents.
3. Capital verification certificate.
4. Articles of incorporation of the trust company.
5. Promoters meeting minutes.
6. Shareholders register and shareholders meeting minutes.
7. Register of directors and meeting minutes of the board of directors.
8. Register of managing directors and meeting minutes of the board of managing directors.
9. Supervisors register and supervisors meeting minutes.
10. A written statement that none of the circumstances in Article 2 of the Regulations applies with respect to the directors, supervisors, and managers.
11. Certification of qualifications of the general manager, assistant general manager, auditor general, deputy assistant general manager, and head-office manager.
12. The trust enterprise's roster of responsible persons and of personnel possessing trust expertise or experience as required by the Regulations, and certification of their qualifications.
13. Corporate bylaws and business operation procedures of the trust company.
14. Records of simulated business operations for a period of not less than two weeks.
Before the expiration of the time limits set forth in the preceding paragraph for applications for company incorporation registration and issuance of the business license, an extension may be applied for, if there is legitimate reason; extensions for incorporation registration and business license issuance may not exceed six months and three months, respectively, and shall be limited to one time each. If an extension is not approved, the MOF may revoke the permit.
Article 17
The MOF shall revoke the establishment permit granted to a trust company that has failed to commence its business operations after a period of six months following issuance of the business license, require the company to surrender the business license for cancellation within a designated time limit, and issue a notice to the MOEA. However, an extension may made if there is a justifiable reason that has been approved by the MOF, to be granted for no more than six months and to be granted only once.
Article 18
The MOF may restrict the establishment of new trust companies in consideration of domestic economic and financial conditions.
Article 18-1
A trust company engaging only in REIT or REAT business in accordance with the RESA and with a permit by the MOF, may engage only in the businesses activities allowed by the RESA.
The aggregate balance of trust property accepted for management and/or disposal by a trust company under the preceding paragraph that has paid-in capital of less than NT$1 billion may not exceed 20 times its net worth.
The MOF may adjust the multiple set out in the preceding paragraph in consideration of economic and financial conditions and actual needs.
Article 19
With respect to matters related to the establishment of a trust company, the MOF may from time to time appoint personnel to conduct audits, and may further order the applicant applying to establish the trust company, within a time limit, to submit necessary documents and information or to designate personnel to appear before the MOF and provide explanations.
Article 20
The MOF my revoke a permit it has granted for establishment of a trust company if after granting the permit it finds any material misrepresentation in the original application.
Article 21
The formats for application documents required to be submitted under these Standards shall be separately prescribed by the MOF.
These Standards shall take force from the date of promulgation.