Regulations Governing Securities Investment and Futures Trading in Taiwan by Mainland Area Investors Article 12

The scope of Taiwan securities in which a mainland area investor may invest shall be limited to the following:1. Securities of exchange-listed and OTC-listed companies.2. Beneficial certificates of securities investment trust funds or futures trust funds.3. Government bonds, financial bonds, or corporate bonds issued by public companies.4. Beneficial securities or asset-backed securities issued in accordance with the Financial Asset Securitization Act or the Real Estate Securitization Act.5. Call (or put) warrants.6. Other securities approved by the Competent Authority.If funds transferred into Taiwan by a mainland area investor have not yet been invested in Taiwan securities, the Competent Authority may, depending on the economic and financial conditions or the state of the securities market in Taiwan, impose limits on the use of such funds. The percentage at which any such limit is set shall be determined by the Competent Authority after consultation with the competent authority for foreign exchange business.The combined total investment in Taiwan by mainland area investors and by overseas compatriots and foreign nationals may not exceed the amount of any percentage cap on investment by overseas compatriots and foreign nationals set by any other law or regulations.If a mainland area investor, in a single investment or cumulative investments, will obtain 10 percent or more of the shares in an exchange-listed or OTC-listed company, the investor shall apply for approval pursuant to laws and regulations prescribed by relevant government agencies.