In order to strengthen the supervision of securities investment trust enterprises (hereinafter referred to as "SITEs"), the FSC announced the upcoming amendments to the Regulations Governing Securities Investment Trust Enterprises. The key points of the amendment are as follows:
1. In order to improve the business operation of SITEs and protect the rights and interests of investors, it will be added that SITEs shall collect or pay fees in a reasonable manner for their operations, and shall not solicit or engage in their business with unreasonable fees (amendment to Article 5-1). 
2. To strengthen the management of investment in domestic, foreign and mainland enterprises by SITEs:
(1) The authorization rules, internal control requirements and investment limit of SITEs will be stipulated: In order to strengthen the management of enterprises that SITEs invest in and make clear the norms, it will be stipulated that the total investment amount of SITEs in domestic, foreign and mainland enterprises shall not exceed 40% of the net value of the SITEs, SITEs shall establish management and risk assessment mechanisms in the internal control system, and the competent authority will be authorized to specify the scope, investment ratio and qualifications of the investment of SITEs in domestic and foreign enterprises and relevant procedures (amendment to Articles 12 and 12-1).
(2) The following provisions will be added to strengthen the subsequent management of the enterprises that SITEs invest in:
A. Addition of the documents to be attached: The documents to be submitted by SITEs applying for investment in foreign enterprises will be amended, and the documents to be attached for a subsequent application for an investment amount increase will be added (amendment to Article 26).
B. It will be stipulated that major changes shall be reported: It will be stipulated that SITEs shall report to the Commission any changes in the investment items approved for their investment in foreign enterprises, as well as the time of reporting required (amendment to Article 26-1).
C. Regular reporting items will be stipulated: It will be stipulated that SITEs shall regularly report an annual financial report, quarterly business report, monthly financial and business information and operation status of the foreign and mainland enterprises that they invest in (amendment to Article 28).
3. In compliance with the relevant provisions of the current Securities and Exchange Act and the Company Act and for relevant supervision considerations, the following provisions will be amended as appropriate:
(1) In order to strengthen the internal management procedures of SITEs on financial reporting, the provisions of subparagraph 1, paragraph 1, Article 36 of the Securities and Exchange Act are referred to and it will be stipulated that the annual financial report of SITEs shall be signed or sealed by the chairman of the board, the manager and the accounting supervisor (amendment to Article 13).
(2) It will be stipulated that when a SITE distributes earnings or makes up losses in accordance with Articles 228 and 228-1 of the Company Act on a quarterly or semi-annual basis or after the end of each fiscal year, it shall do so in accordance with the financial report audited by a certified public accountant (amendment to Article 17-1).

Contact unit: Securities Investment Trust and Consulting Division, Securities and Futures Bureau
Tel: (02) 2774-7320 
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