Chapter VI Investment And Trust Companies |
| Article 100 |
（Trust and investment corporation）The term "investment trust company" as used in this Act shall refer to a financial institution which, for a specific purpose and in the trustee’s capacity, accepts, manages and employs trust funds and operates trust properties or, in the investment intermediary’s capacity, engages in special-purpose investment relating to capital markets.
The operations and administration of an investment trust company shall be governed by this Act; matters unregulated in this Act shall be governed by other relevant laws; their administration rules shall be as prescribed by the central competent authority. |
| Article 101 |
（Business scope of trust and investment corporations）An investment trust company may engage in the following businesses:
1.To extend medium-term and long-term loans;
2.To invest in government bonds, short-term notes, corporate bonds, bank debentures and listed stocks;
3.To guarantee the issuance of corporate bonds;
4.To conduct domestic and foreign guarantees;
5.To underwrite and trade in securities for its own account or for customers;
6.To accept, manage and employ various Trust Funds;
7.To offer mutual trust funds;
8.To manage various kinds of property under entrustment;
9.To act as the trustee for the issuance of bonds;
10.To act as attester for the issuance of bonds or stocks;
11.To act as the agent for the issuance, registration and transfer of securities and the distribution of interest and dividends thereon;
12.To execute wills and manage the inheritance under entrustment;
13.To act as a company’s reorganization supervisor;
14.To provide consulting services in connection with the issuance and offering of securities and to engage in agency services related to the businesses prescribed in the preceding subparagraphs; and
15.To conduct other relevant businesses approved by the central competent authority.
With the approval of the central competent authority, an investment trust company may use the non-trust funds to invest directly in manufacturing enterprises or in residential construction and business construction. |
| Article 102 |
（Appropriation and deposit of dedicated funds）An investment trust company which engages in the businesses of securities underwriting or trading for its own account shall allocate a special fund equivalent to at least ten percent (10%) of its net worth in the preceding year exclusively for such operation. Such special fund shall, prior to any appropriation thereof, be deposited in cash with other financial institutions or shall be used for purchasing government bonds. |
| Article 103 |
（Payment of compensation reserve and dedicated funds for securities trading）An investment trust company shall deposit a trust fund reserve with the Central Bank of the Republic of China in cash or securities accepted by the Central Bank of the Republic of China. The ratio of such reserve to the total value of various trust fund agreements shall be prescribed by the Central Bank of the Republic of China within the range between fifteen percent (15%) and twenty percent (20%); provided that the total deposit amount shall not be less than twenty percent (20%) of its total paid-in capital.
At the commencement of operations of the company, the trust fund reserve in the preceding paragraph shall temporarily be based on twenty percent (20%) of the company’s paid-in capital. After one (1) year from the company’s commencement of operations, such reserve shall be adjusted at the end of each month in accordance with the standard in the preceding paragraph. |
| Article 104 |
（Trust contract）In accepting, managing or employing various trust funds and operating trust properties, investment and trust companies and trustors shall enter into trust agreements which state the following matters:
1.Methods and scope of operating the funds;
2.Methods of managing properties;
3.Allocation of income;
4.Responsibility of the investment trust company;'
5.Service of accounting reports;
6.Standards for the payment and collection of various fees and their calculation methods; and
7.Other relevant agreed terms. |
| Article 105 |
（Due diligence）An investment trust company shall exercise the care of good administrators in managing trust funds or trust assets under entrustment. |
| Article 106 |
（Management personnel qualifications）The operation and management of an investment trust company shall be handled by financial personnel with special knowledge and experience, assisted by qualified legal, accounting and various technical personnel necessary for the businesses involved. |
| Article 107 |
（Joint liabilities for compensation）Where an investment trust company violates laws, regulations or trust agreements or, for other reasons attributable to the investment trust company, causes damages to trustors, its responsible directors, officers-in-charge, and the company itself shall be jointly and severally liable for the damages.
The joint and several liability in the preceding paragraph shall be extinguished if no lawsuit has been brought within two (2) years after the registration date of the resignation of the responsible directors or officers-in-charge. |
| Article 108 |
（Prohibitions and restrictions on transactions）Except for the purchase or sale at the market price per the order of court judgments or the written consent of trustors, or the purchase or sale through an open competitive bidding in the centralized market without the trustors’ consent, an investment trust company shall not engage in the following transactions:
1.Acquire the ownership of trust properties;
2.Create or obtain any rights or interests over trust properties;
3.Sell and transfer its own properties or rights or interests to trustors;
4.Other transactions related to the preceding three subparagraphs; and
5.Any transactions related to the trust properties or employing trust funds with the company's directors, staff or third parties who have an interest in the trust funds operated by the company.
The transactions engaged in by an investment trust company in accordance with the proviso of the preceding paragraph shall be filed to the competent authority for records in accordance with regulations and subject to the following restrictions:
1. Where the company decides to engage in a transaction, any director or staff who has a direct or indirect interest in the trust accounts, trust properties or securities in connection with such transaction shall not participate in the decision related to such transaction.
2. Where the investment trust company engages in securities underwriting, securities trading or direct investment for its own account or as mandated by investors, its directors or staff who are concurrently directors or staff of the company issuing related securities or who have direct or indirect interests in such securities shall not participate in the decisions relating to such transaction. |
| Article 109 |
（Limitations on deposit of trust account funds）Prior to the operation pursuant to the trust agreements or prior to the continuing operation after the retrieval of the operation pursuant to the agreement, the investment trust company shall deposit the funds of each trustor only with commercial banks or specialized banks. |
| Article 110 |
（Reserve for management of trust fund and loss of principal）An investment trust company may operate the following trust funds:
1.Trust funds whose uses are designated by the trustors;
2.Trust funds whose uses are determined by the company.
For trust funds whose uses are determined by the company, the investment trust company may agree in the trust agreement that the shall be responsible for compensating the losses of principal.
For the losses of principal to be compensated, the investment trust company shall, at the end of each fiscal year, make a precise assessment and compensate them by allocating funds from the company's special reserve as agreed in the trust agreement.
The special reserve in the preceding paragraph shall be appropriated from the revenue of trust properties annually by the company pursuant to standards approved by the competent authority.
Surpluses after the investment trust company fully compensates the losses of principal in accordance with regulations, shall be credited to the company's revenue; deficits shall be covered by the Company's own funds. |
| Article 111 |
An investment trust company shall not borrow funds for the trust funds. |
| Article 112 |
（Restrictions for accounting and borrowing funds）A creditor of an investment trust company may not apply for attachment or exercise other rights against trust properties. |
| Article 113 |
（Prohibition on the exercise of powers by creditors on trust properties）An investment trust company shall establish a trust property assessment committee to assess the trust properties of each trustor every three (3) months. The assessment result of each trust account shall be reported to the board of directors. |
| Article 114 |
（Regular accounting reports）An investment trust company shall submit to each trustor and to the central competent authority periodic accounting reports in accordance with the trust agreements and the regulations of the central competent authority. |
| Article 115 |
（Approval and management of offered trust funds）An investment trust company, in offering mutual trust funds, shall prepare an issuance plan in advance and submit it to the central competent authority for approval. Administration rules governing the mutual trust funds in the preceding paragraph shall be prescribed by the central competent authority. |
| Article 115- 1 |
（Regulations applying mutatis mutandis to Trust and Investment Corporations）Except for businesses approved by the competent authority in accordance with Article 101, Paragraph 2, Articles 74, 75 and 76 shall apply mutatis mutandis to investment trust companies. |