Article 3 |
The following procedures apply to principals who intend to engage an investment trust enterprise/investment consulting enterprise/managed futures enterprise/futures broker/futures trust enterprise/securities firm/securities trust enterprise (hereinafter, "the discretionary investment manager") for the management of their investments, and where assets are mandated under the custody of separate custodians:
- The principal shall submit identity documents and sign a discretionary investment agreement with the discretionary investment manager, and sign a custodian agreement with the custodian to which assets are mandated. The principal shall then open a discretionary investment deposit account at the custodian and complete two copies of the "Securities Ownership Register Consent Form."
- Once the custodian has correctly verified all relevant information, it shall perform an "Account Opening" transaction (transaction code 140) to input data such as the principal's basic profile (the account name shall be the principal's name; if the mandated assets are held in trust, the account name shall be the name of the withholding tax collector that the tax authority has assigned to the trust relationship), the business ID of the investment trust/investment consulting enterprise, and account type (70 for domestic individuals, 72 for domestic institutions, 73 for foreign individuals, and 74 for foreign institutions). However, the mailing address of such accounts shall be input as the address of the custodian. Once the above is completed, the custodian shall perform a "Trust/Discretionary Investment/English Account Name Maintenance" transaction (code 179) to input the number and name of the custodian account as "Discretionary investment account of ○○○ managed by ○○ Company;" where the mandate comprises entrusted properties, the account shall be named "Entrusted properties of ○○○ under fiduciary management of ○○ Company."
- Once the custodian has completed the account setup, it shall submit the "Securities Ownership Register Consent Form" and relevant information to the principal's securities brokerage, where the discretionary investment deposit account will be opened.
- Once the securities brokerage has verified all information correctly, it shall perform a "Custodian Relationship" transaction (code 156) to input the principal's basic profile (the account name shall be the principal's name; if the mandate comprises entrusted properties, the account name shall be the name of the withholding tax collector that the tax authority has assigned to the trust relationship), the business ID of the investment trust/investment consulting enterprise, the custodian account number, and account type (which should be 71).
If the principal is a qualified institutional investor, as defined in "Regulations Governing the Conduct of Discretionary Investment Business by Securities Investment Trust Enterprises and Securities Investment Consulting Enterprises of Securities Investment Trust and Consulting Association of the ROC", the mandate agreement described in Subparagraph 1 of the preceding Paragraph may be replaced by a legal opinion (drafted in Chinese) issued by the principal's lawyer.
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Article 4 |
The following procedures shall apply for trust enterprises that simultaneously engage in discretionary investment services and hold custody of entrusted assets:
- If the trust enterprise is a TDCC participant:
- The trust enterprise needs to create a custodian account according to the nature of the underlying agreement, will, public trust or service arrangement, and perform an "Account Opening" transaction (code 140) to input account information (the account name shall be the name of the withholding tax collector that the tax authority has assigned to the trust relationship), business ID of the investment trust/consulting enterprise, account type (which should be 72) along with other relevant data. The trust enterprise shall then perform a "Trust/Discretionary Investment/English Account Name Maintenance" transaction (code 179) to input the number and name of the custodian account as "○○○ in its capacity as master custodian of ○○○ trust account (under fiduciary management)," or "○○○ in its capacity as master custodian of ○○○ general trust account (under fiduciary management)." Accounts that are used for public trust or are under collective management shall be specified as "(under fiduciary management)."
- The trust enterprise shall perform a "Trust Remarks and Related Party Maintenance" transaction (code 540, transaction type 1: Trust Remarks) to place trust remarks according to the details of the submitted "Trust Account Opening Application." For accounts that are opened based on special agreements, wills or public trusts, the trust enterprise also needs to perform a "Trust Remarks and Related Party Maintenance" transaction (code 540, transaction type 3: Add) to input information of all related parties of the trust arrangement, such as the names, date of birth/date of incorporation, and personal/business ID of the mandate, the principal, and the beneficiary. Once this has been done, the trust enterprise shall perform a "Trust Account Basic Inquiry" transaction (code 541) to print out a change inquiry form for verification.
- Once the trust enterprise has completed the account setup, it shall submit a photocopy of the trust agreement (or summary agreement) or will, along with the "Trust Account Opening Application," the "Securities Ownership Register Consent Form" (not required if owners have placed securities in separate trust accounts) and other relevant information, to the securities brokerage where the discretionary investment deposit account will be opened. Accounts that have been opened as public trusts but are without trust agreements shall be evidenced by a photocopy of the approval letter issued by the competent authority.
- Once the securities brokerage has verified all information correctly, it shall perform a "Custodian Relationship" transaction (code 156) to input the basic profile of the trust enterprise (the account name shall be the name of the withholding tax collector that the tax authority has assigned to the trust relationship), the business ID of the investment trust/investment consulting enterprise, the custodian account number and account type (which should be 71), and add the necessary trust remarks as stipulated in Item B.
- If the trust enterprise is not a TDCC participant:
- The trust enterprise shall submit a photocopy of the trust agreement (or summary agreement) or will, along with the "Trust Account Opening Application," the "Securities Ownership Register Consent Form" (not required if owners have placed securities in separate trust accounts) and other relevant information, to the securities brokerage where the discretionary investment deposit account will be opened. Accounts that have been opened as public trusts but that do not have trust agreements in place shall be evidenced by a photocopy of the approval letter issued by the competent authority.
- Once the securities brokerage has verified all information is correct, it shall perform an "Account Opening" transaction (code 140) to input the basic profile of the trust enterprise (the account name shall be the name of the withholding tax collector that the tax authority has assigned to the trust relationship), the business ID of the investment trust/investment consulting enterprise, and the account type (which should be 98), and perform a "Trust/Discretionary Investment/English Account Name Maintenance" transaction to input account number and name as described in Subparagraph 1, Item A.
- Once the securities brokerage has finished setting up the account, it shall add trust remarks and input information of all related parties of the trust relationship into the system as described in Subparagraph 1, Item B, and print out a change inquiry form for verification.
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Article 5 |
The following procedures apply to principals who intend to engage a discretionary investment manager for the management of their investments, and where assets are entrusted under the custody of separate custodians:
- Based on the terms of the discretionary investment agreement and trust agreement that the principal has established with the discretionary investment manager, the custodian shall perform an "Account Opening" transaction (code 140) to input its basic profile (the account name shall be the name of the withholding tax collector that the tax authority has assigned to the trust relationship), the business ID of the investment trust/consulting enterprise, account type (which should be 72) along with other relevant data. The custodian shall then perform a "Trust/Discretionary Investment/English Account Name Maintenance" transaction (code 179) to input the number and name of the custodian account as "Entrusted properties of ○○○ under fiduciary management of ○○○ Company."
- The custodian shall add trust remarks and input information of all related parties of the trust relationship into the system as described in Subparagraph 1, Item B.
- Once the custodian has completed the account setup, it shall submit the "Securities Ownership Register Consent Form" (not required if owners have placed securities in separate trust accounts) and relevant information to the securities brokerage where the discretionary investment deposit account will be opened.
- Once the securities brokerage has verified all information correctly, it shall perform a "Custodian Relationship" transaction (code 156) to input the basic profile of the custodian (the account name shall be the name of the withholding tax collector that the tax authority has assigned to the trust relationship), the business ID of the investment trust/investment consulting enterprise, the custodian account number and account type (which should be 71), and add the necessary trust remarks as described in Subparagraph 1, Item B.
If the principal is a qualified institutional investor, as defined in "Regulations Governing the Conduct of Discretionary Investment Business by Securities Investment Trust Enterprises and Securities Investment Consulting Enterprises of Securities Investment Trust and Consulting Association of the ROC," the trust agreement described in Subparagraph 1 of the preceding Paragraph may be replaced by a legal opinion (drafted in Chinese) issued by the principal's lawyer.
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Article 6 |
The following procedures shall apply if the principal is a trust enterprise or any FSC-approved business seeking to engage a discretionary investment manager for the management of its investments, and where assets are held in custody by the principal itself:
- If the principal is a TDCC participant:
- Based on the terms of the discretionary investment agreement and trust agreement that the principal has established with the discretionary investment manager, the principal shall perform an "Account Opening" transaction (code 140) to input its basic profile (the account name shall be the principal's name; if the mandated assets are held in trust, the account name shall be the name of the withholding tax collector that the tax authority has assigned to the trust relationship), the business ID of the investment trust/investment consulting enterprise, and the account type (which should be 72). Additionally, the principal shall perform a "Trust/Discretionary Investment/English Account Name Maintenance" transaction (code 179) to input the number and name of the custodian account as "Discretionary investment account of ○○○ managed by ○○ Company;" where the mandate comprises of entrusted properties, the account shall be named "Entrusted properties of ○○○ under fiduciary management of ○○ Company."
- If the mandate comprises entrusted properties, the trust enterprise shall add trust remarks and input information of all related parties of the trust relationship into the system as described in Article 4, Subparagraph 1, Item B.
- Once the principal has completed the account setup, it shall submit the "Securities Ownership Register Consent Form" (not required if owners have placed securities in separate trust accounts) and relevant information to the securities brokerage where the discretionary investment deposit account will be opened.
- Once the securities brokerage has verified all information correctly, it shall perform a "Custodian Relationship" transaction (code 156) to input the principal's basic profile (the account name shall be the principal's name; if the mandate comprises entrusted properties, the account name shall be the name of the withholding tax collector that the tax authority has assigned to the trust relationship), the business ID of the investment trust/investment consulting enterprise, the principal's custodian account number and account type (which should be 71. Mandates that comprise entrusted properties should also have trust remarks added in accordance with Article 4, Subparagraph 1, Item B.
- If the principal is not a TDCC participant:
- The principal shall submit a copy of the discretionary investment agreement that it has signed with the discretionary investment manager, along with the "Securities Ownership Register Consent Form" (not required if owners have placed securities in separate trust accounts) and relevant information, to the securities brokerage where the discretionary investment deposit account will be opened.
- Once the securities brokerage has verified all information correctly, it shall perform an "Account Opening" transaction (code 140) to input the principal's basic profile (the account name shall be the principal's name; if the mandate comprises entrusted properties, the account name shall be the name of the withholding tax collector that the tax authority has assigned to the trust relationship), the business ID of the investment trust/investment consulting enterprise, and account type (which should be 98), and perform a "Trust/Discretionary Investment/English Account Name Maintenance" transaction to input account number and name as described in Subparagraph 1, Item B.
- If the mandate comprises entrusted properties, the securities brokerage is also required to add trust remarks and input information of all related parties of the trust relationship into the system as described in Article 4, Subparagraph 1, Item B, once it has completed the account setup. A change inquiry form needs to be printed out for verification.
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Article 6-1 |
An investment trust/investment consulting enterprise or securities firm that engages in trust-type discretionary investment services shall mandate a custodian to hold custody of the assets, and proceed according to the following procedures:
- The investment trust/investment consulting enterprise or securities firm shall submit the discretionary investment and trust agreement it signed with the principal, the "Trust Account Opening Application", and the custody agreement signed with the custodian, and open a discretionary investment deposit account at the custodian. It additionally shall submit the "Securities Ownership Register Consent Form" in duplicate (not required if it has provided the trust sub-account number to the custodian for file creation).
- Once the custodian has verified all relevant information, it shall perform an "Account Opening" transaction (transaction code 140) to input the basic profile of the investment trust/investment consulting enterprise or the securities firm (the account name shall be the name of the tax withholding entity that the tax authority has assigned to the trust relationship), the business ID of the investment trust/investment consulting enterprise, and the account type (which should be 72). However, the mailing address of such accounts shall be input as the address of the custodian. Once the above is completed, the custodian shall then perform a "Trust/Discretionary Investment/English Account Name Maintenance" transaction (code 179) to input the number and name of the custodian account as "○○○ in its capacity as master custodian of ○○○ trust account (under fiduciary management)". Accounts that are under collective management shall be specified as "(under fiduciary management)" following the name of the tax withholding entity.
- The custodian shall add trust remarks and input information of all related parties of the trust relationship into the system as described in Article 4 Subparagraph 1, Item B.
- Once the custodian has completed the account setup, it shall submit the "Securities Ownership Register Consent Form" (not required if it has already established a trust sub-account number) and relevant information to the principal's securities brokerage, where the discretionary investment deposit account will be opened.
- Once the securities brokerage has verified all information, it shall perform a "Custodian Relationship" transaction (code 156) to input the investment trust/investment consulting enterprise or securities firm's basic profile (the account name shall be the name of the tax withholding entity that the tax authority has assigned to the trust relationship), the business ID of the investment trust/investment consulting enterprise, the custodian account number, and the account type (which should be 71), and add the necessary trust remarks as described in Article 4, Subparagraph 1, Item B.
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Article 7 |
Changes to discretionary investment deposit account information shall proceed according to the following procedures:
- In cases where the principal engages a discretionary investment manager for discretionary investment, and mandates a separate custodian to hold custody of the assets: the principal shall approach the custodian for a change of account information by submitting a "Customer Profile Amendment Request" stamped or signed with the original seal/signature-of-record. Once the custodian has correctly verified the information provided, it shall perform a "Customer Profile Maintenance" transaction (code 146) to make the requested changes and then submit all relevant documents to the principal's securities brokerage where the relevant changes will be made to discretionary investment deposit account information. Once the securities brokerage has correctly verified all submitted information, it shall perform a "Custodian Relationship Maintenance" transaction (code 157) to make the change.
- In cases where a trust enterprise concurrently engages in discretionary investment services and holds custody of entrusted properties on its own, or where a trust enterprise engages another discretionary investment manager for discretionary investment services but holds custody of investments on its own, or where a principal engages a discretionary investment manager for discretionary investment and entrusts a separate custodian to hold custody of the assets:
- If the trust enterprise or custodian is a TDCC participant, changes of profile information shall proceed according to Subparagraph 1, applied mutatis mutandis. If the trust enterprise is not a TDCC participant, the trust enterprise shall make the changes by submitting all relevant documents to the securities brokerage.
- Changes to the profiles or identities of the principal, the beneficiary or any party relevant to the trust relationship shall proceed in accordance with the TDCC Directions for Securities Trust and Book-entry Operations.
- In cases where the principal is an FSC-approved business that has engaged an discretionary investment manager for the management of its investments, while holding custody of assets on its own:
- Proceed as described in Subparagraph 1, applied mutatis mutandis, if the business is a TDCC participant.
- Approach the securities brokerage and submit all relevant documents if the business is not a TDCC participant.
- When an investment trust/investment consulting enterprise or securities firm engages in trust-type discretionary investment services, and mandates a custodian to hold custody of the assets, changes of profile information shall proceed according to Subparagraph 1, applied mutatis mutandis.
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