| Article 1 |
（Purpose of legislation）
This Act is enacted to develop national economy, improve the liquidity of financial assets through securitization, and protect investments. |
| Article 2 |
（Scope of application of laws）
The establishment and legal relationship of special purpose trusts shall be governed by this Act; matters not fully provided for in this Act shall be governed by other laws.
The establishment, management, and supervision of special purpose companies shall be governed by this Act; matters not fully provided for in this Act shall be governed by other laws. |
| Article 3 |
（Competent authority）
The competent authority as referred to in this Act shall be the one as set forth in the Banking Act. |
| Article 4 |
（Terms and definitions）
The definitions of the terms used in this Act are as follows:
1. "Originator" shall refer to a financial institution or an institution approved by the competent authority which entrusts financial assets (hereinafter referred to as the "Assets") to a Trustee or transfers the Assets to a special purpose company (hereinafter referred to as a "SPC") pursuant to the provisions of this Act, whereby the Trustee or SPC issues Beneficial Securities or Asset-Backed Securities o n the basis of such Assets.
2. "Assets" shall refer to the following assets profited and disposed of by the Originator:
(1) rights under a utomobile loans or other chattel secured loans, along with their respective security interests;
(2) rights under housing loans or other loans secured by real estate mortgage, along with their respective security interests;
(3) rights under leases, credit cards, account receivables, or other monetary rights;
(4) beneficial interests derived from the trust contract entered into by and between the Originator and a trust enterprise with regard to the Assets set forth in the preceding three items; or
(5) other rights approved by the competent authority.
3. 'Securitization" shall refer to the act that the Originator entrusts the Assets to a trustee or transfers the Assets to a SPC pursuant to this Act, whereby the Trustee or SPC issues Beneficial Securities or Asset-Backed Securities on the basis of such Assets to raise funds.
4. "Special Purpose Trust (SPT)" shall refer to the trust relationship established for the purpose of asset securitization in accordance with the provisions of this Act.
5. "Special Purpose Company" shall refer to a company-limited-by-shares incorporated in accordance with this Act with the approval of the competent authority for the purpose of engaging in the business of asset securitization.
6. "Beneficial Securities"shall refer to the document of title or certificate issued by the Trustee of a SPT in accordance with the asset trust securitization plan, evidencing the beneficiaries' interests in the trust property in terms of the principal (hereinafter referred to as the "Principal Holding") or the profits, interest, or other proceeds accrued therefrom (hereinafter referred to as the "Profits Holding").
7. "Asset-Backed Securities" shall refer to the document of title or certificate issued by the SPC in accordance with the asset securitization plan, evidencing the rights of the holders in the Assets transferred to the SPC.
8. "Asset Pool" shall refer to the pool of assets of the Originator entrusted to a trustee or transferred to a SPC.
9. "Residual beneficiary" shall refer to a person entitled to the interests in the remaining property in the Asset Pool after the settlement of the Beneficial Securities or Asset-Backed Securities.
10. "Supervisory Institution" shall refer to a bank or a trust enterprise selected by the SPC in accordance with the asset securitization plan to protect the interests of the Asset-Backed Security holders.
11. "Servicer" shall refer to an institution appointed by the Trustee or appointed or entrusted by the SPC to manage and dispose of the trust property or transferred Assets.
12. "Financial institutions" shall refer to the following institutions:
(1) banks and credit card companies as defined in the Banking Act and bill financing companies as defined in the Act Governing Bills Finance Business;
(2) insurance companies established in the form of a company-limited-by-shares in accordance with the Insurance Act;
(3) securities firms established in accordance with the Securities and Exchange Act; and
(4) other relevant financial institutions approved by the competent authority.
13."Trust Supervisor" shall refer to a person appointed by the Trustee in accordance with the SPT contract or selected pursuant to the resolutions adopted in the beneficiaries' meeting to exercise the powers and duties granted under this Act for the benefit of the beneficiaries.
The Trustee referred to in the preceding paragraph shall be limited to the trust enterprise defined in the Trust Enterprise Act and shall have been rated above certain level by a credit rating institution recognized by the competent authority. |
| Article 5 |
（Originator’s methods of announcement）
After the approval from or an effective registration with the competent authority pursuant to Article 9, Paragraph 1 or Article 73, Paragraph 1 hereof and prior to the entrustment or the transfer of the Assets, the Originator shall make announcements of the variety, quantity, and content of the major Assets entrusted to the Trustee or transferred to the SPC in accordance with the provisions of this Act for three consecutive days in the daily local newspapers circulated at the place of its principal office or in other ways prescribed by the competent authority.
The form and content of the announcement referred to in the preceding paragraph shall be prescribed by the competent authority.
The Originator, which fails to make the announcement as described in Paragraph 1, or has made announcements not in compliance with the requirement prescribed by the competent authority, shall not hold the trust or transfer against a third party. |
| Article 6 |
（Conditions for setting the trust against the debtor）
When the Originator entrusts the Assets to the Trustee or transfer the Assets to the SPC in accordance with this Act, the transfer of rights shall not be held valid against the debtor unless the debtor has been notified of such transfer or a certificate evidencing the announcement described in Paragraph 1 of the preceding article has been mailed to the debtor, except for the following circumstances:
1. the Originator is appointed or entrusted by the Trustee or the SPC as the Servicer to collect the rights from the debtor and such appointment or entrustment has been announced pursuant to Paragraph 1 of the preceding article; or
2. the Originator and the debtor have entered into a contract under which it can use other means to replace the notification or mailing of the certificate of announcement as required under Paragraph 1 of the preceding article.
When the Originator entrusts the Assets to the Trustee or transfers the Assets to the SPC, the Originator and the debtor may agree to other means in the contract to replace the acceptance as required under Article 301 of the Civil Code.
The form and content of the certificate of announcement as described in Paragraph 1 shall be prescribed by the competent authority. |
| Article 7 |
（Except for beneficiary securities and asset-based securities that are short-term bills, others are considered securities）
The Beneficial Securities and Asset-Backed Securities, other than those recognized by the competent authority as short-term bills, shall be deemed as other securities approved by the Financial Supervisory Commission in accordance with Article 6 of the Securities and Exchange Act. |
| Article 8 |
（Regulations on information to be provided by the originator）
Article 48, Paragraph 2 of the Banking Act shall not apply when the Originator provides the information regarding the trust property or the transferred Assets to the Trustee or the Supervisory Institution pursuant to the asset trust securitization plan or the asset securitization plan.
The Trustee, SPC, Trust Supervisor, Supervisory Institution, Servicer, and their respective responsible persons or staff shall keep confidential the information regarding transactions and other information of the Originator's clients obtained as a result of the entrustment of the trust property or transfer of the Assets, unless otherwise provided by other laws or the competent authority. |