Data Source:Laws and Regulations Retrieving System of the Banking Bureau

Article 1
These Regulations are enacted pursuant to Paragraph 2, Article 18-1 of Trust Enterprise Act (referred to as the “Act” hereunder).

Article 2
Before conducting businesses provided in Article 16 of the Act and supplementary businesses provided in Article 17 of the Act, a trust enterprise must submit the required application documents to the Competent Authority for approval and complete the registration as required by the Competent Authority.
Unless it is otherwise restricted by the Competent Authority, banks that concurrently conduct trust business and with quality of assets meeting the criteria set forth by the Competent Authority may, within the extent of trust businesses already approved by the Competent Authority, proceed to increase the scope of using trust assets and engage in the types of business under Articles 6 ~ Article 8 of the Enforcement Rules of the Trust Enterprise Act.
Unless it is otherwise restricted by the Competent Authority, trust enterprises that meet the certain criteria set forth by the Competent Authority may, within the extent of trust businesses already approved by the Competent Authority, proceed to offer trust products or new trust products that are the combination of two or more types of trust, and submit the business plan and a specimen of trust contract to the Competent Authority for reference within fifteen (15) days after the offering.
The specific items of trust business, qualification requirements for applying to the Competent Authority for approval, and application procedure for a securities investment trust enterprise, securities investment consulting enterprise, or securities firm that may concurrently conduct trust business pursuant to Paragraph 2, Article 3 of the Act shall be governed by the regulations set forth pursuant to Paragraph 3, Article 3 of the Act in lieu of the preceding three paragraphs.

Article 3
A trust enterprise that intends to use the trust assets for foreign investments shall acquire the prior consent of the Central Bank of the ROC. The scope of and restrictions for such investments shall be prescribed by the Competent Authority in consultation with the Central Bank of the ROC.

Article 4
The types of financial derivatives that a trust enterprise may invest in with the assets under its trust, the limits and management of such investment, and other matters to be complied with shall be drawn up by the Trust Association of the R.O.C. (referred to as “the Association” hereunder), and submitted to the Competent Authority for reference.

Article 5
In the conduct of trust business, except for offering and issuance of beneficial securities in accordance with Article 29 of the Act, Financial Asset Securitization Act, or Real Estate Securitization Act, or as otherwise provided by law or regulations, a trust enterprise shall not make public offering to unspecified people or a large number of people.
The term “a large number of people” referred to in the preceding paragraph shall be defined by the Competent Authority.

Article 6
In the conduct of trust business, except in the trust contract, transaction statement or account statement where beneficiary rights are indicated, a trust enterprise shall not produce and deliver any certificate of entitlement to beneficiary rights, beneficial securities, beneficiary certificates or other documents for evidencing beneficiary rights to the beneficiaries that causes the beneficiaries to misconstrue that such document represents a marketable security. However, the preceding provision does not apply to the issuance of beneficial securities by a trust enterprise pursuant to Article 29 of the Act, Financial Asset Securitization Act, or Real Estate Securitization Act.

Article 7
In the conduct of trust business, a trust enterprise shall specify in the trust contract that the transfer of beneficiary rights must meet the following requirements, unless the transfer is due to inheritance, voluntary transfer by the beneficiary, the result of an auction conducted according to law, or each beneficiary transferring all of his beneficiary rights to only one transferee. However, the preceding provision does not apply to the transfer of beneficiary rights pursuant to Article 29 of the Act, Financial Asset Securitization Act, or Real Estate Securitization Act, or as otherwise provided by law or regulations:
1.The transferee of beneficiary rights is an entity provided in Subparagraph 1 or Subparagraph 2, Paragraph 1, Article 13 of Real Estate Securitization Act;

2.The unit amount represented by the beneficiary rights held by each beneficiary after the transferor beneficiary has splits the rights shall not be less than NT$10,000,000, and the total number of beneficiaries shall not be more than 35;

3.The beneficiary shall provide the trust enterprise with personal information of the transferee(s), the units of beneficiary rights to be transferred, and a transfer agreement, and obtain the consent of the trust enterprise before making the transfer of beneficiary rights.

Article 8
Unless it is otherwise provided by law or regulations, a trust enterprise shall comply with the following provisions when placing advertisement, or soliciting or promoting business to the corporate image or the trust businesses it engages in:
1. A trust enterprise shall not place advertisement, solicit or promote business for beneficial securities where the offering of which has not been approved by the Competent Authority or has not been effectively registered.

2. A trust enterprise may not use the offering of trust services as approved by the Competent Authority or the membership of the Association as guarantee for the values of beneficiary rights.

3. A trust enterprise shall not give others the erroneous impression that the security of principal or profit is guaranteed.

4. A trust enterprise shall not solicit business by offering gift or other benefits, unless it is otherwise stipulated by the Competent Authority.

5. The advertisement shall not contain wording or design inconsistent with the content of the application documents submitted to the Competent Authority.

6. Before a trust enterprise releases the advertisement in the preceding subparagraph to the public, it should be reviewed by its chief compliance officer to make sure the content is free of inappropriate or untruthful representation, or statement that misleads the consumers or violates relevant laws and regulations.

7. Materials produced for marketing activities shall carry the name, address, and telephone of the trust enterprise or other information for contracting the trust enterprise.

8. Where the advertisement is placed for the purpose of profit, the advertisement shall also describe associated risks at the same time to achieve a balanced report.

9. A trust enterprise shall not exaggerate its past performance in publicity, and shall be free of falsehood, fraud, concealment, or other behaviors sufficient to mislead others.

10. A trust enterprise shall not act in contravention to laws or regulations, or the content of the trust contract.

11. A trust enterprise shall not violate the self-regulatory rules for advertising and promotional activities drawn up by the Association.

12. A trust enterprise shall not engage in other activities that adversely affect the rights and interests of the beneficiaries.

Article 9
In the conduct of trust business, a trust enterprise shall enter a trust contract with the trustor and sign other contracts or documents as required by law or regulations. Before entering a trust contract, the trust enterprise shall fulfill its obligation to inform as provided in Article 10 herein and give the trustor a reasonable period of time to read and review it.
For a trustor that provides products or services and declares the money paid by his customers to trust under his own name, and names himself the beneficiary, the trust enterprise shall agree on the following matters with the trustor in the trust contract:
1. When the trustor undertakes marketing activities, places advertisements, solicits business or signs contract with clients, the trustor shall inform the targets of marketing, advertisement or business solicitation, or his clients explicitly that the beneficiary of the trust is the trustor, not the trustor’s clients, and the trustor shall not mislead the prospective customers or clients into thinking that the trust enterprise is managing the trust assets on behalf of the clients. Where the trustor enters a contract with his clients, the same shall be stated in the contract.

2. The trustor or the trust enterprise shall provide a copy of the contract clauses provided in the preceding subparagraph upon the request of the trustor’s clients.

Article 10
In the conduct of trust business, a trust enterprise shall fully disclose to and inform the trustor explicitly trustee’s fees, expenses, and method of collection, and possible associated risks. Unless it is otherwise provided by law or regulations, the information to be disclosed and other matters to be complied with shall follow the self-regulatory rules drawn up by the Association.

Article 11
Except for transactions taken place in the centralized trading market, when a trust enterprise uses the trust asset to trade with others, the trust enterprise shall inform the counterparty explicitly that it is conducting a trade in the capacity of a trustee for assets under its trust and shall not give others the erroneous impression that the trust enterprise is trading its own assets.

Article 12
Unless it is otherwise provided by law, regulations or otherwise agreed in the trust contract, a trust enterprise shall, after making a trade for the trust assets, deliver a transaction statement to the trustor and the beneficiaries, and shall produce at least quarterly account statements and deliver them to the trustor and the beneficiaries.
Where a trust enterprise uses the trust assets to conduct a transaction provided in Paragraph 1 of Article 25 or Paragraph 1 of Article 27 of the Act with itself or its related party, the trust enterprise shall indicate so in the transaction statement and account statement.
The matters to be noted in the transaction statement and account statement mentioned in Paragraph 1 hereof, the method and time of delivery, the retention period for those statements and other matters to be complied with shall be established by the Association.

Article 13
These Regulations shall be in force on the date of promulgation, except for Article 7 and Paragraph 1 and Paragraph 2 of Article 12 that will be in force six (6) months after the date of promulgation.