| 2009.01.21 |
Amended Clauses of the Real Estate Securitization Act
[Chinese]
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Article 3
The competent authority as referred to in this Act shall be the Financial Supervisory Commission, Executive Yuan.
Where matters governed by this Act are related to those administered by the authority in charge of the target enterprise concerned, the competent authority and the authority in charge of the target enterprise concerned shall jointly administer such matters.
Article 4
The terms used in this Act are defined as follows:
1. “Real estate” shall mean land, construction improvements, roads, bridges, tunnels, rails, wharfs, parking lots, as well as other structures of economic value affixed to land and appended facilities thereto, provided such facilities, if separated from the land and structures affixed to land, cannot create value alone, thereby resulting in impairment of value of the land and structures affixed to it.
2. “Related rights of real estate” shall mean superficies and other rights approved by the central authority in charge of the target enterprise concerned.
3. “Real estate related securities” shall mean the beneficiary securities or asset-backed securities issued or delivered by a trustee or a special-purpose company in accordance with this Act or the Financial Assets Securitization Act, where the asset pool contains real estate, related rights of real estate or mortgage secured by real estate.
4. “Securitization” shall mean an act by which a trustee establishes a real estate investment trust (REIT) or real estate asset trust (REAT) pursuant to the provisions of this Act, and acquires funds from issuing beneficiary securities to non-specific persons through public offering or delivering beneficiary securities to specific persons through private placement.
5. “Real estate investment trust (REIT)” shall mean a trust established pursuant to the provisions of this Act to invest in real estate, related rights of real estate, real estate related securities, as well as other investment objects approved by the competent authority, whereby the beneficiary securities of REIT are issued to non-specific persons through public offering or delivered to specific persons through private placement.
6. “Real estate asset trust (REAT)” shall mean a trust established pursuant to the provisions of this Act, by which trustors transfer their real estate or relevant rights to a trustee to issue REAT beneficiary securities to non-specific persons through public offering or deliver REAT beneficiary securities to specific persons through private placement, evidencing the beneficiaries’ rights to the real estate of such trust, relevant rights, or profits, interests, and other proceeds accrued therefrom.
7. “Beneficiary securities” shall mean the following REIT beneficiary securities and REAT beneficiary securities:
(1) “REIT beneficiary securities” shall mean the document of title or certificate issued or delivered by the trustee for a REIT fund, evidencing the beneficiaries’ rights of such trust property and the profits, interests, and other proceeds accrued therefrom.
(2) “REAT beneficiary securities” shall mean the document of title or certificate issued or delivered by the trustee for the REAT, evidencing the beneficiaries’ rights of the principals of such trust property and the profits, interests, and other proceeds accrued therefrom.
8. “Trustee” shall mean an institution that may manage and dispose of trust property and publicly offer or privately place beneficiary securities under mandate.
9. “REIT fund” shall mean the trust property under a REIT contract that includes the proceeds and the profits, interests, and other income accrued therefrom from public offering or private placement of REIT beneficiary securities as well as the assets or rights purchased with the aforementioned.
10. “Trust supervisor” shall mean a person appointed by the trustee in accordance with the agreement of the REIT contract or REAT contract or the resolution adopted by a beneficiaries’ meeting to exercise the powers as prescribed under this Act for the interest of the beneficiaries.
11. “Interested party” shall mean the interested party as defined in Article 7 of the Trust Enterprise Act.
12. “Real estate management institution” shall mean a real estate investment enterprise, construction enterprise, construction management enterprise, real estate purchase/sale and leasing enterprise, or other institutions approved by the competent authority that is engaged by a trustee to manage or dispose trust property.
13. “Closed-end fund” shall mean a fund where its investors may not request the trustee to repurchase the beneficiary securities held by them during the duration of the fund.
14. “Open-end fund” shall mean a fund where its investors may request the trustee to repurchase the beneficiary securities held by them during the duration of the fund.
15. “Professional appraisers” shall mean real estate appraisers or other professionals engaged in real estate appraisal pursuant to other laws.
16. “Promoters” shall mean owners of real estate, holders of related rights of real estate or cash financiers who are committed to investing in a REIT fund when the trustee applies for or registers the public offering or private placement of the fund.
17. “Arranger” shall mean the entity that arranges and makes overall planning for the public offering or private placement of beneficiary securities.
18. “Real estate or related rights of real estate under development” shall mean real estate or related rights of real estate currently undergoing or under planning of development, construction, reconstruction, or renovation.
The trustee depicted in Subparagraph 8 of the preceding paragraph shall be limited to the trust enterprises as defined in the Trust Enterprise Act that has been established for at least three (3) years and has been rated above a certain level by a credit rating institution recognized by the competent authority.
For those trust enterprises that only engage in the REIT or REAT business, the competent authority shall prescribe separate provisions for the minimum paid-in capital, shareholder structure, qualifications of the responsible persons, special knowledge or experience required of operating and managerial personnel, and business restrictions for such enterprises.
A real estate management institution depicted in Subparagraph 12 of Paragraph 1 hereof shall meet certain requirements and enter a service agreement with the trustee that specifies its power, obligations, responsibilities and matters of compliance.
The certain requirements and particulars to be noted in the service agreement mentioned in the preceding paragraph shall be drawn up by the trust association in consultation with the trade associations of the related real estate management institutions and submitted to the competent authority for approval.
The arranger depicted in Subparagraph 17 of Paragraph 1 hereof shall meet certain requirements; such certain requirements and other rules for the arranger shall be drawn up by the trust association in consultation with relevant trade association and submitted to the competent authority for approval.
Article 5
The beneficiary securities publicly offered or privately placed pursuant to the provisions of this Act shall be under the category of other securities approved by the competent authority as defined in Article 6 of the Securities and Exchange Act.
Article 6
To publicly offer or privately place REIT beneficiary securities, the trustee shall submit the following documents to the competent authority for approval or effective registration. The regulations governing the review process, requirements for approval or effective registration, and other matters of compliance shall be prescribed by the competent authority:
1. The REIT plan;
2. The REIT contract;
3. A comparison table of the REIT contract and the standard contract specimen;
4. The prospectus or investment memorandum;
5. Documentation evidencing that the operating and managerial personnel of the REIT fund are in compliance with the regulations prescribed by the competent authority;
6. Namelist, and documentation of qualifications, and consent letter (to the appointment) of the trust supervisor, if any;
7. Minutes of the resolution adopted by the trustee’s board of directors for public offering or private placement of REIT beneficiary securities;
8. Explanations regarding the methods of managing and disposing the trust property. Where a real estate management institution is appointed to manage or dispose trust property, the appointment agreement or other documentary proofs are required;
9. Case checklist filled out by the trustee and reviewed by a certified public accountant (CPA) or lawyer;
10. Legal opinions of a lawyer; and
11. Other documents as required by the competent authority.
The competent authority shall consult with the central competent authority in charge of the target enterprise concerned for written opinions when examining the documents as prescribed in the preceding paragraph.
Where a REIT fund has promoters, the promoters shall not be misrepresentative , fraudulent or misleading with regard to the information they provide to the trustee for the public offering, issuance or private placement of REIT beneficiary securities.
Where the promoters of a REIT fund violates the preceding paragraph, they shall be held liable for damages sustained by the bona fide purchasers or sellers of the beneficiary securities therefrom.
Where the real estate or related rights of real estate that the promoters plan to assign has lien thereon, the promoters shall remove the lien registration and provide the trustee with relevant proof document.
Article 8
A REIT plan shall contain the following particulars:
1. Name and address of the trustee; where a real estate management institution is appointed to manage or dispose the trust property, the name and address of the appointed institution; and names and addresses of the promoters and arranger, if applicable;
2. Name and duration of the REIT fund;
3. Matters concerning REIT beneficiary securities as follows:
(1) The total amount of the REIT fund to be publicly offered or privately placed and the total units of beneficial interests; and
(2) Methods and dates of issuance or delivery, the amount of purchasing each unit of beneficial interests, expenses, and transfer restrictions of REIT beneficiary securities;
4. Conditions under which the publicly offered or private placed REIT fund is established or not established, and method of handling in case the REIT fund is not established;
5. Valuation method, valuation bases, and expert opinions regarding the expected income of the trust property;
6. Investment plan: including the types and locations of real estate or other investment objects planned to purchase, manage or dispose, and planned holding period, sources of funds, utilization and management modules, cost recovery, financial projections, and estimated rate of return;
7. Real estate development plan: including the types and locations of real estate or related rights of real estate planned for development, and related market analysis, feasibility study, title search report, appraisal report, planned development schedule and projects, phase plans and control modules for acquisition, development, sale or operation management plans , sources of funds, fund utilization and control modules, cost recovery, financial projections and estimated rate of return, expert opinions, and self-evaluation plan;
8. In case the real estate development project is delayed or not completed , the method of handling, impact on the interests of the beneficiaries, and agreement on rights and obligations among the trustee, the real estate management institution, and the beneficiaries; and
9. Other matters as required by the competent authority.
The experts that offer opinions as prescribed in Subparagraph 5 and Subparagraph 7 of the preceding paragraph shall not be a related party or substantive related party as defined in The Statement of Financial Accounting Standards No. 6 to the trustee or the owners of the real estate.
Article 9
The trustee shall operate the REIT business in accordance with the REIT plan approved by or effectively registered with the competent authority.
The trustee, after publicly offering or privately placing REIT beneficiary securities, shall not alter the REIT plan unless with the resolution of the beneficiaries’ meeting as well as the approval of, or effective registration with the competent authority. However, if the alteration has no significant impact on the rights and interests of the beneficiaries, such alteration may be made with the approval of, or effective registration with the competent authority.
The application or registration as referred to in the preceding paragraph shall be made in an application form or registration form, which shall expressly state the contents of and reasons for the alteration, together with the following documents:
1. The REIT plans before and after alteration as well as the corresponding comparison table;
2. Minutes of the beneficiaries’ meeting, which is exempted if the alteration meets the condition prescribed in the proviso of the preceding paragraph;
3. Evaluation and expert opinions on whether or not the alteration has any significant impact on the rights and interests of the beneficiaries; and
4. Other documents as required by the competent authority.
The competent authority shall consult with the central competent authority in charge of the target enterprise concerned for written opinions when examining the documents as prescribed in the preceding paragraph.
Any additional amount of REIT fund to be publicly offered or privately placed by the trustee beyond the total amount approved by or effectively registered with the competent authority shall obtain the resolution of the beneficiaries’ meeting, and in such event, the provisions in Article 6 herein, instead of the provisions in the preceding three paragraphs shall apply.
Article 15
When a trustee publicly offers beneficiary securities according to the REIT plan, the trustee shall provide the subscribers or purchasers with a prospectus in a manner prescribed in the Securities and Exchange Act.
When a trustee privately places beneficiary securities, the trustee shall provide the subscribers or purchasers with an investment memorandum in a manner prescribed by the competent authority.
The guidelines for information to be published in the prospectus in Paragraph 1 hereof and the investment memorandum as referred to in the preceding paragraph shall be prescribed by the competent authority.
Article 17
The investment or utilization of a REIT fund shall be limited to the following objects:
1. Real estate under development or generating stable income;
2. Related rights of real estate under development or generating stable income;
3. Real estate related securities;
4. Scope of utilization as prescribed in Article 18; and
5. Other investment or utilization objects approved by the competent authority
The minimum investment or utilization ratio of a REIT fund in cash, government bonds as well as investment objects set forth in the preceding Subparagraphs 1 to 3 shall be prescribed by the competent authority.
The investment of a REIT fund in securities set forth in Article 6 of the Securities and Exchange Act shall not exceed a certain ratio and amount of the offering limit. The certain ratio and amount shall be prescribed by the competent authority.
Where a REIT fund plans to invest in real estate or related rights of real estate under development, the REIT fund may not be drawn on until such real estate or related rights of real estate has obtained the construction permits.
The investment of a publicly offered REIT fund in real estate or related rights of real estate under development shall be limited to the following objects:
1. Land, buildings and related rights of real estate within the scope of an urban renewal business project approved pursuant to the Urban Renewal Act;
2. Public constructions as defined in the Law for Promotion of Private Participation in Infrastructure Projects; and
3. Public constructions in which REIT funds may invest as approved by the central competent authority in charge of the target enterprise concerned.
The investment of a publicly offered or privately placed REIT fund in real estate or related rights of real estate under development shall not exceed a certain percentage of the value of the fund’s trust property. The certain percentage shall be prescribed separately by the competent authority in consultation with the central competent authority in charge of the target enterprise concerned. Notwithstanding the foregoing, the certain percentage shall not exceed thirty percent (30%) for publicly offered REIT funds.
The real estate or related rights of real estate under development as referred to in the two preceding paragraphs may not be any of the following objects:
1. Real estate or related rights of real estate in which the combined investment by enterprises in which the government or the state has more than twenty percent (20%) ownership and funds or juristic persons directly or indirectly controlled by the government exceeds ten percent (10%); or
2. Real state or related rights of real estate for which the government undertakes to assume its debt or guarantees its operating income.
The objects set forth in the preceding paragraph exclude the following:
1. An infrastructure project in which the authority in charge may, on the part of the non self-financing portion, subsidize part of the interest on loans needed or invest in part of the construction pursuant to Article 29 of the Law for Promotion of Private Participation in Infrastructure Projects; and
2. Real estate participating in urban renewal.
Article 19
A trustee may borrow money with the trust property pursuant to the REIT fund contract; however, the purposes of the borrowing shall be limited to that needed for the acquisition, development or operation of the real estate or related rights of real estate, or that for the distribution of profits, interests or other proceeds.
A trustee has the discretion to hypothecate the mortgage or other security interests for the trust property within the scope of the borrowed money. The owner of security interests is only entitled to petitioning to the court for compulsory execution against the trust property within the extent of hypothecation of real estate mortgage or other security interests.
With regard to the money borrowed by a trustee pursuant to Paragraph 1 hereof, the trustee shall make announcements on the local daily newspapers circulated at the place of its principal office or in other manners prescribed by the competent authority within two (2) days after the contract of borrowing enters into force.
To ensure the financial health of REIT funds, the competent authority may prescribe an upper limit of the ratio for the money borrowed by the trustee pursuant to Paragraph 1 hereof. When the money borrowed exceeds the upper limit, the trustee shall make adjustments within the time prescribed by the competent authority
Article 23
For the utilization of the REIT fund, a trustee shall make investment decisions based on the investment analysis report, put into execution, produce the investment decision records and implementation records, and submit the review reports to the board of directors periodically.
The investment analysis report as referred to in the preceding paragraph shall contain analysis essentials, bases and suggestions. The investment decision record shall contain the types and quantities of invested objects and timing of investment. The implementation record shall contain actual investments or the types, quantities, and prices of objects traded and time of trading, and explain the reasons for the disparity between the decision and the actual investment or trading.
With regard to the utilization of the REIT fund, whether the trust property is managed or disposed by the trustee itself or an appointed real estate management institution, the trustee shall prepare a written management report according to the planning, acquisition, development, sale and operational phases, and shall submit the respective review report of each phase to the board of directors every quarter.
The written information referred to in the preceding three paragraphs shall be recorded sequentially and retained in file by the trustee; the period of retention shall not be less than five (5) years from the expiration date of the trust.
Article 29
To publicly offer or privately place REAT beneficiary securities, the trustee shall submit the following documents to the competent authority for approval or effective registration. The regulations governing the review process, requirements for approval or effective registration, and other matters of compliance shall be prescribed by the competent authority:
1. The REAT plan;
2. The REAT contract;
3. A comparison table of the REAT contract and the standard contract specimen;
4. The prospectus or investment memorandum;
5. Documentation evidencing that the operating and managerial personnel of the REAT fund are in compliance with the regulations prescribed by the competent authority;
6. Namelist, and documentation of qualifications, and consent letter (to the appointment) of the trust supervisor, if any;
7. Minutes of the resolution adopted by the trustee’s board of directors for public offering or private placement of REAT beneficiary securities;
8. Explanations regarding the methods of managing and disposing the trust property. Where a real estate management institution is appointed to manage or dispose trust property, the appointment agreement or other documentary proofs are required;
9. Appraisal reports of the trust property;
10. Documents prescribed in Paragraphs 2 and 3 of Article 30 herein;
11. Case checklist filled out by the trustee and reviewed by a certified public account (CPA) or lawyer;
12. Legal opinions of a lawyer; and
13. Other documents as required by the competent authority.
The competent authority shall consult with the central competent authority in charge of the target enterprise concerned for written opinions when examining the documents as prescribed in the preceding paragraph.
The trustor shall provide the trustee with related documents and information on the trust property without any misrepresentation or concealment.
The trustor of a REAT fund that violates the preceding paragraph shall be held liable for damages sustained by the purchasers or transferees of the beneficiary securities therefrom.
Article 30
The property rights transferred pursuant to a REAT contract shall be limited to those prescribed in Subparagraphs 1 and 2, Paragraph 1 of Article 17 herein. The trust property of publicly offered REAT beneficiary securities shall be limited to real estate or related rights of real estate with stable income.
The trustor shall cancel the lien registration on the property rights referred to in the preceding paragraph and submit related documentations to the trustee; in case the trustor is unable to cancel the registration for any reasons, the trustor shall submit a letter of consent notarized by a notary public stating that the mortgagee will not exercise the lien during the duration of the trust contract.
The trustor shall provide the trustee with written documents of debt details and shall specify a period of more than one (1) month to notify the creditors for any objection during such period and submit the documents of such objection to the trustee.
Article 31
A REAT plan shall contain the following particulars:
1. Names and addresses of the trustee and trustor; where a real estate management institution is appointed to manage or dispose the trust property, the name and address of the appointed institution; and name and address of the arranger, if applicable;
2. Name and duration of the REAT fund;
3. Matters concerning the REAT beneficiary securities as follows:
(1) The total amount of the REAT fund to be publicly offered or privately placed and the total units of beneficial interests;
(2) The agreement, the seniority of payment and duration of beneficial interests, when publicly offering or privately placing beneficiary securities of different kinds or durations;
(3) Methods and dates of issuance or delivery, amount of purchasing each unit of beneficial interests, expenses, and transfer restrictions of REAT beneficiary securities;
(4) Conditions under which the publicly offered or private placed REAT fund is established or not established, and method of handling in case the REAT fund is not established;
4. Matters concerning the trust property as follows:
(1) Content of trust property and the value of trust property appraised by the professional appraisers;
(2) Encumbrance of trust property and the methods of disposing of such encumbrance;
(3) Methods for managing and disposing the trust property; and
(4) Valuation method, valuation bases, and expert opinions regarding the expected income of the trust property;
5. Methods for utilizing quid pro quo received by the trustee from the subscribers or purchasers for the public offering or private placement of beneficiary securities;
6. Real estate development plan: including the types and locations of real estate or related rights of real estate planned for development, and related market analysis, feasibility study, title search report, appraisal report, planned development schedule and projects, phase plans and control modules for acquisition, development, sale or operation management, sources of funds, fund utilization and control modules, cost recovery, financial projections and estimated rate of return, expert opinions, and self-evaluation plan;
7. In case the real estate development project is delayed or not completed , the method of handling, impact on the interests of the beneficiaries, and agreement on rights and obligations among the trustee, the real estate management institution, and the beneficiaries;
8. In case that the trustor is the related party to the trustee, explanations of the transaction procedures and internal control methods; and
9. Other matters as required by the competent authority.
The experts that offer opinions as prescribed in Item 4 of Subparagraph 4 and Subparagraph 6 of the preceding paragraph shall not be a related party or substantive related party as defined in The Statement Financial Accounting Standards No. 6 to the trustor or the trustee.
Article 34-1
When the trust property of a REAT is leased out in part or in whole in accordance with the agreement in the trust contract, the rent therefrom is not subject to provisions in Paragraph 1, Article 97 of The Land Act, whereas the term of the lease is not subject to the limitation of twenty (20) years set forth in Paragraph 1, Article 449 of the Civil Code.
Where the trust property agreed in a REAT contract must be returned to the trustor at the end of the trust, the consent of the trustor shall be acquired in advance, provided the term of the lease on the trust property surpasses the duration of the trust contract. The preceding paragraph does not apply if the lessee is the trustor.
Article 36
Article 7, Articles 11 to 15, Article 18, Article 19, Article 21, Paragraphs 2 and 3 of Article 22, Articles 23, Article 25 to 28 hereof shall apply mutatis mutandis to REAT.
Article 38
The exercise and transfer of REIT or REAT beneficial interests shall be made against the beneficiary securities evidencing such beneficial interests.
The REIT or REAT beneficiary securities shall meet the particular requirements for the head count of holders, and the amount and the percentage of holding; for holders that do not conform to the requirements, their exercise of voting right and distribution of trust profits based on the beneficial interests held may be restricted.
The regulations governing the aforementioned head count of holders, and the amount and the percentage of holding, and restrictions shall be prescribed by the competent authority.
Article 44-1
A trustee shall, within four (4) months after the end of each fiscal year and the completion of the execution of the REIT or REAT plan, produce the following CPA-certified statements and report on the REIT fund or the trust property of the REAT, report the same to the trust supervisor and notify the beneficiaries of the same:
1. Balance sheet.
2. Statement of income.
3. Report on the management and utilization of trust property.
The statements mentioned in the preceding paragraph must be free of misrepresentation and concealment.
For a completed REIT plan or REAT plan, the trustee is not required to produce annual statements and report for the fiscal year, provided it has produced statements and report for the completed execution of the plan as required in Paragraph 1 hereof and the contents of such statements and report are sufficient to cover the information to be presented in the annual statements and report for the fiscal year.
Where a trustee has produced statements and report for the completed execution of a REIT or REAT plan as required in Paragraph 1 hereof before April 30 of the year and the contents of such statements and report are sufficient to cover the information to be presented in the annual statements and report for the previous fiscal year, the trustee is not required to produce annual statements and report for the previous fiscal year.
Article 46-1
Where the prospectus or investment memorandum has misrepresentation or concealment of material information, the following parties shall be held jointly liable for damages sustained by bona fide counterparties therefrom:
1. The promoters and their responsible person.
2. The trustor of REAT and its responsible person.
3. The arranger and its responsible person.
4. The real estate management institution and its responsible person.
5. The trustee and its responsible person.
6. The promoter and the staff of REAT trustor who have signed their names on the prospectus or the investment memorandum to corroborate part or all of the contents therein.
7. The underwriter of beneficiary securities.
8. Accounts, lawyers, professional appraisers, other professional or technical personnel who have signed their names on the prospectus or the investment memorandum to corroborate part or all of the contents therein, or stated their opinions.
Except for the promoter as well as the REAT trustor and its responsible person, the other parties mentioned in Subparagraphs 1 to 7 of the preceding paragraph are exempted from the liability for damages, provided they could show that they have exercised due diligence for the part of the prospectus or investment memorandum not certified by professionals mentioned in Subparagraph 8 of the preceding paragraph and have sound reasons to believe that the material information contained therein is free of misrepresentation or concealment, or have sound reasons to believe that the certified opinions given by the professionals are true. The professionals mentioned in Subparagraph 8 of the preceding paragraph may be exempted from the liability for damages, provided they could show that they have conducted reasonable investigation or survey and have sound reasons to believe that their certification or opinions are truthful.
Article 47
Article 20, provisions in Section 3 of Chapter 2, and Article 42 of the Financial Asset Securitization Act shall apply mutatis mutandis to beneficiary securities issued or delivered through real estate securitization, unless it is otherwise provided for in the trust contract and stated in the prospectus or investment memorandum.
Article 48
To protect the rights and interests of the beneficiaries, a trustee may appoint a trust supervisor pursuant to the REIT contract or REAT contract and apply, mutatis mutandis, Paragraphs 2 and 3 of Article 28, Article 29, and Articles 31 to 33 of the Financial Asset Securitization Act.
The trust supervisor shall not be the promoter or an interested party, staff, or employee of the trustee, or the trustor of the REAT.
Article 56
Where the real estate management institution has one of the following situations and fails to make corrections within a given time period as notified by the trustee, the trustee may terminate the appointment agreement and transfer the appointed matters to another real estate management institution, without being restricted by the original appointment agreement, and report the matter to the competent authority for reference after the termination of appointment:
1. Violation of the matters agreed in the appointment agreement; or
2. Severe deficiencies in the business or finance.
The real estate management institution shall settle and transfer the business and finance related to the appointed matters within a time period given by the trustee when the appointment agreement is terminated pursuant to the preceding paragraph hereof. Where the real estate management institution fails to settle and transfer within the given time period, the trustee may proceed with the settlement by itself and the results of the settlement are binding to the real estate management institution.
Machinery and other articles left on the managed real estate by the real estate management institution shall be removed within a given time period. Where the real estate management institution fails to do so, such articles shall be deemed as abandoned and the trustee may dispose of those articles by itself at the expense of the real estate management institution.
If any of the situations as mentioned in Paragraph 1 hereof occurs, the trustee shall make announcements in the daily local newspapers circulated at the place of its principal office or in other ways prescribed by the competent authority within two (2) days after the appointment agreement is terminated.
Article 59
In case of any of the following events that causes damage to the public, other persons, or the trust property, the person(s) responsible for such act shall be punished with imprisonment for not less than six (6) months and not more than five (5) years, and in addition, a fine of not more than Three Million New Taiwan Dollars (NT$3,000,000):
1. Documents or information contained therein provided by the trustee pursuant to Paragraph 1 of Article 6, Paragraph 1 of Article 8, Paragraph 3 of Article 9, Article 15, Paragraph 1 of Article 29, Paragraph 1 of Article 31, Paragraph 3 of Article 32, or Article 36 herein to which Article 15 herein applies mutatis mutandis contain false representation or concealment;
2. The private placement of beneficiary securities violates Paragraph 6 of Article 13 herein to which Paragraph 1, Article 20 of the Securities and Exchange Act applies mutatis mutandis;
3. The arranger, real estate management institution, promoter or trustor of the REAT provides false statements or employs other illicit methods to cause the trustee to record false information in documents as specified in Paragraph 1 of Article 6, Paragraph 1 of Article 8, Paragraph 3 of Article 9, Article 15, Paragraph 1 of Article 29, Paragraph 1 of Article 31, Paragraph 3 of Article 32, or Article 15 herein to which Article 36 herein applies mutatis mutandis;
4. Violating Article 44 herein by providing false statements or having concealed information regarding the state of credit rating and credit enhancement;
5. Violating Paragraph 2 of Article 44-1 by containing false statements or having concealed information in statement or report;
6. The trust supervisor or the person(s) appointed by the beneficiaries’ meeting pursuant to Article 47 herein to which Paragraph 1 of Article 27 of the Financial Asset Securitization Act applies mutatis mutandis acts against his/her duties with the intention of acquiring illegal profits for his/her own or a third party; or
7. The appraisal report made by the professional appraiser pursuant to the provisions of this Act contains false representation or concealment.
Article 61
In case of any of the following situations, the person(s) responsible for such act shall be punished with imprisonment or detention for not, and/or a fine of not more than Three Million New Taiwan Dollars (NT$3,000,000):
1. Reselling privately placed beneficiary securities in violation of Paragraph 6 of Article 13 herein to which Paragraph 1 of Article 43-8 of the Financial Asset Securitization Act applies mutatis mutandis; or
2. Violating Article 15 or Article 36 herein to which Article 15 applies mutatis mutandis by failing to provide the prospectus or investment memorandum in a manner prescribed by the competent authority and causing damages to the public or other persons.
Article 62
Any of the following events shall be subject to an administrative fine of not less than Two Million New Taiwan Dollars (NT$2,000,000) and not more than Ten Million New Taiwan Dollars (NT$10,000,000), and shall also be ordered to comply or correct within a prescribed time period, and failing to comply or correct within the prescribed time period may be consecutively punished:
1. Altering the REIT plan or the REAT plan in violation of Paragraph 2 of Article 9, or Paragraph 2 of Article 32 herein;
2. The trustee fails to report for the record in violation of Paragraph 4 of Article 13, Paragraph 2 or 3 of Article 14, or Article 36 herein to which Paragraph 4 of Article 13, and Paragraph 2 or 3 of Article 14 herein applies mutatis mutandis;
3. Violating the restrictions on investment objects, ratios or amounts set forth in Paragraphs 1 to 3 and Paragraphs 5 to 7 of Article 17 herein or drawing on the funds in violation of Paragraph 4 of the same article;
4. Violating Article 18 or Article 36 herein to which Article 18 applies mutatis mutandis governing the utilization of idle funds or Paragraph 1 of Article 30 governing the restrictions on the transfer of property rights;
5. Borrowing money in violation of Paragraphs 1 and 2 of Article 19, or Article 36 herein to which Paragraphs 1 and 2 of Article 19 applies mutatis mutandis;
6. Violating Paragraph 1 or Paragraph 3 of Article 22, Article 34, or Article 36 to which Paragraph 3 of Article 22 applies mutatis mutandis governing appraisals;
7. The trust supervisor fails to attend the beneficiaries’ meeting without any justified reasons in violation of Article 47 herein to which Paragraph 2, Article 23 of the Financial Asset Securitization Act applies mutatis mutandis;
8. The trust supervisor fails to attend the meeting of specific type of beneficiaries without any justified reasons in violation of Article 47 herein to which Paragraph 4, Article 26 of the Financial Asset Securitization Act applies mutatis mutandis;
9. The trust supervisor violates Paragraph 1 of Article 48 herein to which Paragraph 2, Article 28 of the Financial Asset Securitization Act applies mutatis mutandis;
10. The trust supervisor refuses to exercise the rights of beneficiaries without any justified reasons in violation of Paragraph 1 of Article 48 herein to which Paragraph 2, Article 31 of the Financial Asset Securitization Act applies mutatis mutandis; or
11. The trust supervisor is an interested party, staff, employee of the trustee, or the trustor of the REAT in violation of Paragraph 2 of Article 48 herein.
Article 63
In case of any of the following events, the trustee shall be subject to an administrative fine of not less than One Million New Taiwan Dollars (NT$1,000,000) and not more than Five Million New Taiwan Dollars (NT$5,000,000), and shall also be ordered to comply or correct within a prescribed time period, and may be consecutively punished if failing to comply or correct within the prescribed time period:
1. Appointing other persons to manage or dispose real estate without stating in the plan or contract of the REIT or REAT in violation of Subparagraph 1, Paragraph 1 of Article 8, Subparagraph 1 of Article 10, Subparagraph 1, Paragraph 1 of Article 31, Subparagraph 5, Paragraph 1 of Article 33 herein;
2. Violating Article 11 or Article 36 herein to which Article 48 of the Financial Asset Securitization Act applies mutatis mutandis;
3. Publicly offering open-end funds without the approval of the competent authority in violation of Article 16 herein;
4. Engaging in the acts prohibited in Paragraph 1 of Article 25or Article 36 herein to which Paragraph 1 of Article 25 applies mutatis mutandis;
5. Failing to report to the trust supervisor in violation of Paragraph 1 of Article 44-1 herein;
6. Refusing the request in violation of Article 47 herein to which Paragraph 2, Article 42 of the Financial Asset Securitization Act applies mutatis mutandis; or
7. Failing to notify the beneficiaries of the fact regarding the appointment of the trust supervisor within the given time period in violation of Paragraph 1 of Article 48 herein to which Paragraph 3, Article 28 of the Financial Asset Securitization Act applies mutatis mutandis.