Regulations Governing the Conduct of Discretionary Investment Business by Securities Investment Trust Enterprises and Securities Investment Consulting Enterprises Article 2

"Discretionary investment services" in these Regulations means services in which a securities investment trust enterprise (SITE) or a securities investment consulting enterprise (SICE) performs value analyses and makes investment judgments with regard to securities, securities-related products, or other items approved for investment or trading by the Financial Supervisory Commission (FSC), and based on such judgments, undertakes investments or trades on behalf of a customer using discretionary investment assets that the customer delivers by a mandate or transfers under a trust.A securities broker, futures broker, managed futures enterprise, or futures trust enterprise concurrently operating a SICE that provides discretionary investment services shall be governed by Chapter 2, Chapter 4, and Chapter 4-1 herein, and additionally by the provisions of these Regulations regarding provision of discretionary investment services by a SICE.A trust enterprise that concurrently provides mandate-type discretionary investment services shall be governed by Chapter 2, Chapter 4, and Chapter 4-1 herein, and additionally by the provisions of these Regulations regarding operation of mandate-type discretionary investment services by a SICE.If, as described in the latter part of Article 18, paragraph 1 of the Trust Enterprise Act, a trust enterprise undertakes discretionary use of trust assets and invests those assets in the securities named in Article 6 of the Securities and Exchange Act, while also meeting certain conditions, it shall apply to the FSC to concurrently conduct discretionary investment business in accordance with the Standards Governing the Establishment of Securities Investment Consulting Enterprises. Except where the Trust Act or the Trust Enterprise Act provides otherwise, rules governing the use of such assets by the trust enterprise shall be consistent with the provisions of Chapter 4 herein.The "certain conditions" of the preceding paragraph are that the trust assets individually managed or collectively managed through the trust enterprise are invested in the securities referred to under Article 6 of the Securities and Exchange Act in an amount not less than NT$15 million.If, for assets under the special ledger account of an insurance enterprise operating investment-linked insurance business, the policyholder's contract mandates the insurance enterprise with full discretionary authority in the use of such assets and the assets are used for securities as defined under Article 6 of the Securities and Exchange Act, the insurance enterprise shall apply to the FSC in accordance with the Standards Governing the Establishment of Securities Investment Consulting Enterprises for permission to concurrently operate discretionary investment business. The scope of its utilization of the aforesaid assets shall be as set out in Chapter 4-1.In these Regulations, "custodian of the discretionary investment assets" means a bank that maintains custody of investment assets and undertakes other custodial business relating to discretionary investment pursuant to the SITC Act and relevant discretionary investment services contracts, and meets the conditions prescribed by the FSC.