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CHAPTER 1 GENERAL PROVISIONS
Article 1     These Guidelines are promulgated in accordance with Paragraph 2 of Article 14 of the Regulations Governing Securities Investment Consulting Enterprises, Article 22 of the Regulations Governing Securities Investment Trust Enterprises, Paragraph 2 of Article 50 of the Regulations Governing Offshore Funds, Article 6 of the Regulations Governing the Management of the Securities Investment Trust and Consulting Association ("SITCA"), and Article 7 of The Self-Regulatory Code of the Securities Investment Trust and Consulting Association.
Article 2     Members of SITCA and their sales agents shall comply with the Securities Investment Trust and Consulting Act, relevant laws, and these Guidelines when undertaking advertisements, public seminars, or other business activities to operate, conduct or promote securities investment trust, securities investment consultation, discretionary investment, and offshore fund-related business, so as to enhance self-discipline, maintain its professional image, and protect rights of investors.
Article 3     When a sales agent appointed by a securities investment trust enterprise ("SITE") breaches the provisions herein while undertaking advertisements, public seminars, or other business activities for securities investment trust fund, the SITE shall be held liable in accordance with relevant laws, except matters that it is not held accountable for.
Article 4     When a sales agent appointed by a master agent breaches these guidelines herein while undertaking advertisements, public seminars, or other business activities, the master agent and sales agent shall be responsible for any liabilities according to the relevant laws and rules.
    A master agent or its appointed sales agent may engage other entities to undertake the advertisement and business activities while conducting the offering and sale of offshore funds. However, when the engaged entities breach any of the provisions herein, the master agent and sales agent shall be responsible for any liabilities according to the relevant laws and rules, except matters for which they are not held accountable for.
Article 5     The "advertisement" mentioned herein refers to the delivery, distribution or dissemination of the business under Article 2 and its relevant affairs through the following media for the purpose of promoting the business:
  1. Newspaper and magazine;
  2. DM, advertisement letter, sticker, calendar, prospectus, leaflet, and telephone book;
  3. Poster, bulletin board, banner, advertisement on buses or other transportation vehicles;
  4. TV, movie, slide, broadcasting, running text;
  5. Automatic telephone system, website, e-mail, electronic board or other electronic broadcasting methods;
  6. Press releases;
  7. Any other format of advertisement.
    The "Marketing Materials" mentioned herein refers to the prospectus or its Chinese translation, investment information summary, or any other material provided along with the aforementioned documents to the investors, including information related to the subscription of the fund.
Article 6     The "Public Seminars and other Business Activities" mentioned herein refers to the promotion or solicitation of business through workshops, seminars, presentations, or any other business activity, or SICE to present analysis activity or recommendation related to securities investment to public through the aforementioned method or media in Paragraph 1 of the preceding article
CHAPTER 2 SECURITIES INVESTMENT TRUST AND OFFSHORE FUNDS BUSINESS
Article 7     The SITE, master agent, and its appointed sales agent must ensure the accuracy of the announced press releases related to the fund so as to avoid misleading the public investors, and also shall comply with the following principles:
  1. In relation to the press releases announcing the application to the Financial Supervisory Commission of the Executive Yuan (“FSC”) regarding to the public offering of new fund, the contents shall be limited to the public announced items on FSC website;
  2. Contents of the press releases involving the promotion of funds or the company contact information shall be reported to SITCA. Contents of press releases are investment analysis opinions of managers are not requested to report but shall comply with the relevant laws and rules;
  3. A company may, before the announcement of the press release, report to SITCA through the prescribed reporting process.
Article 8     The SITE, the master agent, and the sales agent are not permitted to do the following activities while engaging in advertisements, public seminars and any other business activities:
  1. Using the approval from FSC or the report of effectiveness of the fund to FSC as a verification of the application relevant matters or a guarantee of the fund's value for the purpose of promotion;
  2. Misleading others to believe that the security of principal or profitability can be guaranteed. However, this shall not apply to the principle guarantee funds, which are with guarantor institutions and have the guarantee contents fully disclosed in the prospectus;
  3. Offering gifts or financial benefits, such as interest rate markup of deposit, interest rate markdown of loan, or any other incentives or methods to induce others to purchase funds, unless otherwise exempted by FSC;
  4. Exaggerating past business records or carrying out advertisements to attack other market players;
  5. Engaging in deceptive conducts, fraudulent conducts, or other misleading conducts;
  6. Undertaking advertisements, public seminars, or promotions for funds that are not approved or reported for effectiveness by FSC;
  7. Using contents, which are in breach of laws, securities investment trust agreements, licensing agreements of relevant offshore fund institutions, or fund prospectus;
  8. Using the fund manager as the main appeal or headline of the advertisement;
  9. Predicting performance of fund;
  10. Predicting the trend of NT Dollar exchange rate;
  11. Using contents that may disparage the reputation of the industry for marketing purposes;
  12. Using contents with incorrect information, or using words, arts or images that are incorrect, inelegant, and inconsistent with the content of the Marketing Materials;
  13. Advertising open-end funds by using wordings such as "No-Discount Risk";
  14. Aiming at donating income from sales or management fee , or using wordings irrelevant to investors' rights;
  15. Using partial contents of newspapers or magazines as advertisement;
  16. Advertising or promoting the funds by interviewing investors;
  17. Advertising the profits or dividend yield but failing to report the risks involved;
  18. Using dividend yield as the main headline for advertisements;
  19. Using wordings such as "better than time deposits", "defeat inflation" and any other similar wordings as the main appeal;
  20. Failing to state or explain which parties and contents are exempted from tax in the tax-exempt statement;
  21. Using the credit rating of funds or fund rating of market risk remuneration obtained, including funds approved by FSC but not yet established, as advertisement or promotion, but failing to clearly state the nature, meaning, or source of information of the credit rating or fund rating, and, in the case that a fund is not yet established, failing to state that the fund has not yet been established;
  22. Failing to indicate that prospectuses (or Chinese translations) or investment information summary are available in the Marketing Materials of the fund, and failing to indicate the method that investors to obtain or consult the prospectus or the investment information summary;
  23. Failing to clearly indicate the method of fee collection, including subscription fees for front-end load funds or back-end load funds, redemption fees payable for short-term trading of funds, or other fees, which are directly paid by investors in the marketing materials, and failing to disclose a statement which is similar to "The fees payable of the funds (distribution fees included for offshore funds) are disclosed in the prospectus or investment information summary of the fund, and the investor may search on the Market Observation Post System website and Fund Clear website for more information."
  24. Failing to disclose in the marketing materials or advertisements that the fund's distribution fee, paid by investors, is reflected in the fund's net asset value and the proportion it represents, or failing to refer investors to the prospectuses for the above information;
  25. Using "no subscription fee" as the main appeal of the advertisement in cases where the subscription fee belongs to back-end load funds, and failing to disclose the collection method of deferred fees or to refer investors to the prospectuses for the above information;
  26. Failing to indicate the company name, address and telephone number on the written documents, which are used to promote business, prepared by the aforementioned enterprises. SICEs fails to indicate the business license number;
  27. Advertising offshore funds that have not yet been approved or reported for effectiveness by FSC;
  28. Placing the marketing materials of the fund specifically provided for use by financial consultant at counters or propaganda areas for investors to obtain and read by themselves;
  29. Using the fund sales ranking as the content of advertisement;
  30. Other matters, which affect the management of the enterprise or investor’s rights.
    The SITE, the master agent, and the sales agent are not permitted to do the following activities while engaging in advertisements, public seminars and any other business activities:
  1. Using the approval from FSC or the report of effectiveness of the fund to FSC as a verification of the application relevant matters or a guarantee of the fund's value for the purpose of promotion;
  2. Misleading others to believe that the security of principal or profitability can be guaranteed. However, this shall not apply to the principle guarantee funds, which are with guarantor institutions and have the guarantee contents fully disclosed in the prospectus;
  3. Offering gifts or financial benefits, such as interest rate markup of deposit, interest rate markdown of loan, or any other incentives or methods to induce others to purchase funds, unless otherwise exempted by FSC;
  4. Exaggerating past business records or carrying out advertisements to attack other market players;
  5. Engaging in deceptive conducts, fraudulent conducts, or other misleading conducts;
  6. Undertaking advertisements, public seminars, or promotions for funds that are not approved or reported for effectiveness by FSC;
  7. Using contents, which are in breach of laws, securities investment trust agreements, licensing agreements of relevant offshore fund institutions, or fund prospectus;
  8. Using the fund manager as the main appeal or headline of the advertisement;
  9. Predicting performance of fund;
  10. Predicting the trend of NT Dollar exchange rate;
  11. Using contents that may disparage the reputation of the industry for marketing purposes;
  12. Using contents with incorrect information, or using words, arts or images that are incorrect, inelegant, and inconsistent with the content of the Marketing Materials;
  13. Advertising open-end funds by using wordings such as "No-Discount Risk";
  14. Aiming at donating income from sales or management fee , or using wordings irrelevant to investors' rights;
  15. Using partial contents of newspapers or magazines as advertisement;
  16. Advertising or promoting the funds by interviewing investors;
  17. Advertising the profits or dividend yield but failing to report the risks involved;
  18. Using dividend yield as the main headline for advertisements;
  19. Using wordings such as "better than time deposits", "defeat inflation" and any other similar wordings as the main appeal;
  20. Failing to state or explain which parties and contents are exempted from tax in the tax-exempt statement;
  21. Using the credit rating of funds or fund rating of market risk remuneration obtained, including funds approved by FSC but not yet established, as advertisement or promotion, but failing to clearly state the nature, meaning, or source of information of the credit rating or fund rating, and, in the case that a fund is not yet established, failing to state that the fund has not yet been established;
  22. Failing to indicate that prospectuses (or Chinese translations) or investment information summary are available in the Marketing Materials of the fund, and failing to indicate the method that investors to obtain or consult the prospectus or the investment information summary;
  23. Failing to clearly indicate the method of fee collection, including subscription fees for front-end load funds or back-end load funds, redemption fees payable for short-term trading of funds, or other fees, which are directly paid by investors in the marketing materials, and failing to disclose a statement which is similar to "The fees payable of the funds (distribution fees included for offshore funds) are disclosed in the prospectus or investment information summary of the fund, and the investor may search on the Market Observ
Article 8-1     When the SITE, the master agent and the sales agent engages in promotional activity of the fund business, it may provide gifts to encourage investors to obtain relevant fund information, provided that such gift may not be combined with fund subscription and the following principles are complied with:
  1. The gift activity may not covertly induce investors to purchase funds, and shall avoid the misuse of such gifts to maintain reasonable competition.
  2. The single cost price of the gift may not exceed NTD 200, and may not be repeatedly collected, nor may the amount be accumulated to exchange for other gifts or a draw be held.
  3. Financial products may not act as gifts.
    When the SITE, the master agent and the sales agent provide gifts to encourage investors to ask for relevant fund information, it shall duly implement the following controls and management:
  1. The relevant marketing materials (including electronic media) shall state restrictions and conditions such as the period of the gift activity, number of people, quantity and participation method, so as to avoid disputes.
  2. The information completed by investors who have received gifts shall be preserved or the investor's name, contract details shall be recorded and preserved, unless the single cost price of the gift is less than NTD 30 and the company name is printed on the gift (such as pen or note pad).
  3. The abovementioned preserved personal information of the investors shall, unless otherwise provided by law or rulings of the FSC, be kept confidential, and handled in accordance with the Regulations Governing the Protection of Computer-Processed Personal Data.
  4. The various gift activities shall be recorded into a report every month in accordance with Appendix 4 which shall be preserved for two years together with the marketing materials, investor information and internal audit records under Items 1 and 2.
  5. If the gift is obtained free of cash, such value of the gift shall be determined based on the retail price or similar products, or other evidential documentation.
    The SITE and the master agent shall prepare a report in accordance with Item 4 above for gift activities held for the previous month and report to SITCA before the 10th day of each month using Appendix 4. Reporting is not required if no gift activity was held for the previous month. When sales agent holds a gift activity, it only needs to forward Appendix 4 to the SITE or the master agent for reporting to SITCA.     Paragraphs 1 to 3 is not applicable in cases where the SITE and the master agent holds gift activities which target sales agents.
Article 9     A principal-guaranteed fund is distinguished as capital-guaranteed fund and capital-protected fund basing on whether the fund is guaranteed by a guarantor institution. The SITEs, the master agent, and the sales agent must comply with the following principles in addition to the above provisions while undertaking advertisements, public seminars, or other business activities:
  1. The following items shall be disclosed in the marketing materials:
    1. Information related to the guarantor institution of the capital-guaranteed fund: name of guarantor institution, nature of business, financial status (e.g. capital, total net asset value or shareholders capital), and its credit rating or other relevant information;
    2. Information related to the guarantee of the capital-guaranteed fund: provisions of the guarantee, including the scope of application and validity of such guarantee, and events which may terminate the guarantee, and explanations and examples to clearly state relevant guarantee mechanisms, as well as the method for calculating potential return higher than the amount of guarantee;
    3. For capital-protected fund with no guarantor institution, it shall explicitly state that the fund provides no mechanism guaranteed by a guarantor institution and is protected through investment vehicles, and may not use wordings such as "guaranteed", "safe", "risk-free", or other similar terms;
    4. Detailed explanation on the nature of the investment-linked products;
    5. Stating that the actual participation rate may differ from the reference rate, as well as explaining the time required to determine the actual participation rate and the method of notification to investors or beneficiaries;
    6. Indicating the principal-guaranteed rate and the fund type (capital-guaranteed or capital-protected) in a striking way on the cover of investment information summary or in the prospectus (or its Chinese translation).
  2. The advertisement shall disclose the following items in striking color and font:
    1. Basing on fund type:
      1. Capital-guaranteed fund: fund type, name of guarantor institution, period of guarantee, and principal-guaranteed rate;
      2. Capital-protected fund: fund type, period of principal-guarantee, principal-guaranteed rate, and the following statement, "This fund does not offer any mechanism of institutional guarantee. The principal is protected through investment vehicles."
    2. Including the statement under Paragraph 1 of Article 10 basing on the fund type;
    3. When reference rate is cited, it shall state the reference date and that the actual participation rate may differ from the reference rate.
Article 10     The SITE, the master agent, and the sales agent shall state the following or similar warning statement in the fund advertisement, unless the posting information is about the professional knowledge and service of investment management, which aim at improving the image of the offshore fund institution, organization, or company and does not involve advertisement of any fund product.
  1. Print advertisements:
    1. Except for principal-guaranteed funds and funds which appeals in investment in high yield bonds, the following statement must be included in print advertisement. "This fund has been approved or agreed to be effective by FSC. However, there is no guarantee that it is risk-free. The past performance of a fund manager does not guarantee a minimum investment return. Apart from exercising the duty of care of a prudent administrator, the fund manager will not be responsible for the profit or loss of the fund, nor guarantee a minimum return. Investors should read the prospectus carefully before subscription."
    2. The principal-guaranteed funds shall disclose the following statement:
      1. If the principal-guaranteed fund belongs to the capital-guaranteed type, the following statement shall be included in print advertisement: "This fund has been approved or agreed to be effective by FSC. However, there is no guarantee that it is risk-free. Investors holding the funds until the maturity date will receive a ___% principal return guarantee. If investors redeeming before the maturity date or the occurrence of one of the circumstances for termination under Article ___ of the trust agreement of the fund or the prospectus, the principle is not guaranteed. Investors shall bear all relevant fees incurred during the investment horizon and the redemption price shall be calculated according to the net value at that time. Investors shall understand that the net value of this offshore fund may fluctuate due to market before the maturity date. Investors shall fully understand the risks and characteristics of such funds before investment."
      2. If the principal-guaranteed fund belongs to the capital-protected type, the following statement shall be included in the advertisement print: "This fund does not offer any mechanism of institutional guarantee. The principal is protected through investment vehicles. This fund has been approved or agreed to be effective by FSC. There is no guarantee that it is risk-free. Investors holding the funds until the maturity date will enjoy a ____% principal return protection. Investors redeeming before the maturity date or the occurrence of one of the circumstances for termination under Article ___ of the trust agreement of the fund or the prospectus are not covered by the protection scope. Investors shall bear all relevant fees incurred during the investment period and the redemption price shall be calculated according to the net value at that time. Investors shall understand that the net value of the fund may fluctuate due to market factors before expiration. As protection does not equal to guarantee, breach of the agreement by the issuer of the underlying investment or the occurrence of credit risk will make it impossible to protect the principal. Investors shall fully understand the risks and characteristics of such funds before investment."
    3. Except for audio advertisement which must be handled in accordance to Item 2, funds which appeals in investment in high yield bonds shall use noticeable font in different color stating the nature of suitable investors and state that "The investment in high yield bond fund by investors should not represent a significant percentage of its portfolio." and disclose that "This fund has been approved by FSC, but there is no guarantee that it is risk-free. As high yield bond's credit rating has not reached the investment level or there is no credit rating, and it is extremely sensitive to fluctuations in interest rates, the fund may suffer losses as a result of a rise in interest rates, decrease in market liquidity, or default by bond issuer in payment of principal or interest or bankruptcy of bond issuer. The fund is not suitable for investors who cannot bear relevant risks. The past performance of the fund management company does not represent a guarantee of the minimum investment yield of the fund; the fund management company shall only exercise the duty of care of a prudent manager and shall not be liable for the losses of the fund, and do not guarantee the minimum yield. The investor shall fully read the prospectus prior to subscription."
      The fund which appeals in investment in high yield bond referred to above means: SITE which offers and issuers securities investment trust fund in accordance with the ruling of FSC dated June 15, 2007 (Jin-Guan-Zheng-4-Zi-09600234264) and any amendments thereof; the offshore funds which the master agent has been approved by FSC to offer and sale has been categorized by Lipper, Morningstar or SysJust as high yield bond fund when rating the fund; funds which appeals in high yield bond.
    4. When the advertisement refers to the following situation, the contents to be stated:
      1. When predicting the economic trend of the fund's investment scope or market (such as emerging market), the following warning statement shall be added with the same color and font as the warning in Item 1: "The prediction of the economic trend referred to herein does not inevitably represent the fund's performance. Please refer to the prospectus for the fund's investment risk." However, this does not apply if the advertisement only states the fund investment scope and does not predict the economic trend of the investment scope or market.
      2. When advertising the performance of regular savings plan, the advertisement shall include the notice statement "Investors will have different investment performance as a result of different time of market entry, and past performance does not represent as a guarantee of future performance."
      3. When advertising the dividend yield of the fund, the advertisement shall include the following statement "Dividend yield of the fund does not represent the return of the fund, and past dividend yield does not represent future dividend yield; the net value of the fund may fluctuate as a result of market factors."
      4. The funds, which emphasize on the appeal of high yield, indicating high return and high yield in the advertisement and propaganda, shall disclose the corresponding risks in the same format.
      5. When using the fund's past performance to simulate the remuneration rate of the portfolio, not only should the simulation method and basic hypothesis and restrictions be stated clearly, it shall also state the warning statement "The above is only the simulated result of the portfolio based on historical data and does not represent the actual remuneration rate of the portfolio or a guarantee of future performance. Simulation at different times can also have different results."
      6. If advertisements involve the image of the corporate group, the following wordings shall be included, "Independently operated by [Company name]."
  2. Audio advertisement of various types of funds: The audio advertisement by image or sound through broadcasting, television, movies, mobile message, mobile ring back tone or other similar methods should state "Risks are inherent in investments. Fund investment may both incur profits and suffer losses. Please carefully read the prospectus (investor brochure) prior to subscription." However, this does not apply where the mobile message and mobile ring back tone discloses the following information:
    1. Fund name and offering date
    2. Seminar date and place
    3. Transaction fee rate (include benefits)
    4. Customer service phone number
    5. Company summary
Article 11     The SITE, the master agent, and the sales agent shall comply with the following requirements when making statements in the preceding article:
  1. The color, font size, or method shall be prominent; an audio advertisement shall clearly read out the warning and, apart from broadcasting through sound, must display the statement for at least five seconds in an easily-identified font;
  2. The message conveyed shall be clear and unambiguous;
  3. The font size for statements in print advertisements cannot be smaller than the smallest characters of the part excluding the statement, and shall be in bold so as to make it noticeable while being read fast along with other relevant advertisements by ordinary persons.
Article 12     When advertising or promoting the fund performance and business records, the following principles shall be complied with:
  1. Any fund performance and business record including awards and rankings shall note the source and date of information used. However, if a principal-guaranteed fund requires complicated calculations, the SITE, the master agents, and the sales agent shall use hypothetical figures to explain the calculation to investors, and also clearly state that the calculation is for demonstration only instead of the actual return will be received;
  2. The fund performance may be advertised only if the fund is established for at least six months. In addition, except the fund performance of regular savings plan, which is regulated under Paragraph (f) of this article, the performance published shall include the whole performance records for the period since establishment and calculated until the end of the month of the latest date (referring to performances for 3 months, 6 months, 1 year, 2 years and since establishment) , and may at the same time show the performance for "one month" and "since the beginning of this year". Moreover, one-month performance and the performance for selective period shall not be advertised. If the fund has been established for three years, all performances for the past three years (referring to performances for 1 year, 2 years and 3 years) shall be expressed in a diagram, and may at the same time show the performance for "one month" and "since the beginning of this year", or "three months" and "six months", or "five years", or "ten years", or "since establishment date". The revelation of the abovementioned fund performance shall comply with the following principles:
    1. It may not be presented in a line chart, which directly connects the dots-to-dots of the performance during the abovementioned periods;
    2. If the fund performance is presented using a line chart, funds which have been established for less than three years shall show the performance of the fund since establishment, and funds which have been established for more than three years (inclusive) may show at its discretion the performance since establishment or performance for the past three years, and it may not compress or enlarge specific periods of the aforementioned performance period;
    3. When comparing the fund performance with the benchmark, not only shall the comparison period and currency of calculation remain consistent, such benchmark shall also be reported to FSC by SITE with the relevant supporting documents and stated in the prospectus and then notify SITCA before the benchmark may be used; as for the offshore fund, the master agent shall include such benchmark in the investor brochure and report to SITCA together with the relevant supporting documents for the check of correctness before it may be used; the same applies for any changes to the benchmark;
    4. When explanatory wordings are added to the fund performance, not only shall all the fund performance (for funds which have been established for six months or more, the performance for three months, six months, one year, two year and since establishment date; for funds which have been established for three years or more, the performance for one year, two years and three years) and the average or benchmark of similar types of fund performance be shown, the performance ranking of such fund during various periods shall be in the top half of similar type of funds;
    5. If the disclosure of performance is not by the primary share class, the class of such share class shall also be shown (for example: source of information: Lipper / share class: A ACC).
  3. When advertising a performance of the fund, the evaluation shall be developed by experts and scholars appointed by SITCA, Lipper, Morningstar or SysJust;
  4. When comparing the fund performance with other securities investment trust funds or offshore funds, the statistics or analysis used shall be from the same domestic or foreign institutions, and the comparison of performance shall be made basing on the same fund type and currency base. The performance of all funds of a certain type may be substituted by the average of the group of such type;
  5. When using past performance simulation as advertisement, the operation model or module and assumptions of such performance simulation shall be noted in detail at the side, and a balanced report on risks shall be made basing on the regulations prescribed by SITCA (refer to Appendix 1). The font size may not be smaller than the font size of the performance simulation advertisement;
  6. When the performance of regular savings plan has been used as advertisement, it shall use the rating information stated in Item 3 of this paragraph as the standard, but adjustments may be made based on the fund's withholding status provided that the accuracy of the figures shall be duly verified, and it must comply with:
    1. The calculating period for investment performance and the withholding date must be stated; and if the investment performance is shown using a currency other than the original denominating currency, the investment performance which is converted into the original currency or NTD shall also be disclosed;
    2. The fund must be established for at least one year;
    3. If the fund is established for less than three years, the performance for one year, two year, and since establishment shall be disclosed; if the fund is established for more than three years, the performance for at least three years shall be disclosed; The aforementioned performance shall be the latest information and may not show the investment performance for less than one year (exclusive).
  7. If advertising the fund performance using a currency other than the original denominating currency, the investment performance which is converted into the original currency or NTD shall also be disclosed.
  8. All diagrams shown in the advertisement must clearly display its contents without distortion;
  9. Except specific funds which principally seek for a certain target return which has been disclosed in the prospectus and is consistent information, the fund may not be advertised or promoted by using words similar to "seek __% return, or __% annual return, or __% absolute return". However, if the specific fund, which fulfils the aforementioned conditions using such words, the return may not be presented in different colors or inappropriately proportion with other words, and all performances since establishment shall be disclosed for the balanced coverage of risk;
  10. The fund performance data or ranking (of any period) may not be used as the headline of the advertisement, or appeal, or any special identification, and when the advertisement publishes fund performances, it may not use eye-catching formats, such as colored borders, enlarged fonts, bold fonts, or different colors to highlight or emphasize;
  11. For advertisements using business records other than fund performance, the statistic or analysis of domestic and foreign institutions under Appendix 2 may be adopted. Only one same source is allowed to use when comparing funds of the same type. The aforementioned business records include the business records announced by the SITE, the master agent and the offshore fund management institution.
    Domestic and foreign institutions, which provide the statistic or analysis and fulfill the following standards, may apply to SITCA to be recognized and added to the list of recognized institutions which is referred in Paragraph (11):
  1. There is no conflict of interest between the institution and SITE (offshore fund manager);
  2. The evaluation method used by the institution shall be fair, just, objective and publicly recognized;
  3. The evaluation scope shall be comprehensive, and may not merely be selective or select certain parts for evaluation;
  4. The evaluation or selection performed by the institution shall be regular and continuous.
Article 13     The SITE, the master agent and the sales agent, which place the fund advertisement or propaganda at a place other than the preceding enterprises for investors, shall not place fund account opening, subscription, or redemption application forms only, and the personnel at such place shall not accept fund subscription or redemption documents on their behalf.
CHAPTER 3 SECURITIES INVESTMENT CONSULTING BUSINESS
Article 14     The consultation of fund investment shall be performed by the approved securities investment consulting enterprises (“SICEs”). The advertisements and business activities conducted by such enterprises for the consultation of fund shall comply with this Chapter.
Article 15     The relevant documents prepared by the SICE which provide with recommendation and consultation services of funds in response to the client's request shall comply with the following requirements:
  1. When providing with recommendation and consultation services of offshore funds, a SICE may neither involve in offer, issuance or trade of offshore funds without prior approval from FSC, nor achieve the purpose of advertisement or promotion of certain offshore funds through advertisements, other promotional activities or news reports;
  2. The relevant provisions under Chapter 2 of these Guidelines shall be complied with.
Article 16     When undertaking advertisements, public seminars, or other business activities, whether by self-production, media connection or live interview, call-in program, or any other means, the SICEs and their employees shall meet the qualifications of associated personnel under the Regulations Governing Responsible Persons and Associated Persons of Securities Investment Consulting Enterprises, and shall not engage in the following conducts:
  1. Performing investment analysis for a client by means of divination or an appeal to spirits;
  2. Encouraging or inducing others to refuse to perform securities trading settlement obligations, to protest, or engage in other acts that would disturb the order of the trading markets;
  3. Using non-full-time personnel to solicit clients, or providing with unreasonable commissions;
  4. Conducting activities under a name not registered with SITCA;
  5. Using deception or other improper means to induce an investor to participate in a securities investment analysis activity or execute an engagement agreement for the purpose of soliciting clients;
  6. Making unsubstantiated advertisement to claim that the effectiveness, content, or methods of its own securities investment analyses are superior to those of other SICEs;
  7. Revealing in advertisement the matters advantageous to the SICE only, or other exaggerated presentation of content;
  8. Making advertisements that may mislead others that the SICE engages in discretionary trading when the SICE has not received approval for such trading;
  9. Making representations to guaranteeing that investments will be profitable or that the SICE will bear losses;
  10. Advertising to solicit clients while undertaking investment analysis in the broadcasting media;
  11. Engaging in conduct involving conflict of interest, fraud, misrepresentation, deception, rude criticism, or other conduct contrary to facts, which are sufficient to mislead others or with the intent to influence securities market prices;
  12. Forecasting the future price of a specific security;
  13. Recommending or soliciting non-specified persons to trade in a specific security on the radio or television during the trading hours of the centralized securities exchange market or over-the-counter market, and within one hour before or after trading hours;
  14. Providing analytical opinions to non-specified persons on industry, finance, or business information of a specific company on the radio or television except the time prescribed in the preceding subparagraph, or making recommendations for trading in a specific security without providing reasonable analytical basis;
  15. Making trading recommendations regarding a specific security to unspecified persons, in a public venue or a broadcast media other than radio or television, without providing an analytical basis;
  16. Failing to provide a reasonable analytical basis for judgments in relation to market prices, market analysis, or industry trends of the securities market;
  17. Using collusion among investors, group speculation, insider information, or other improper or unlawful information in appeals to solicit customers or as the basis for recommending specific securities;
  18. Using letters of recommendations, letters of thanks, records of past performance, or any other text or representation likely to cause a belief in the certainty of profit;
  19. Failing to list the company registered name, address, telephone number, or business license number in written documents, which are made for the purpose of promoting business;
  20. Recruiting members, holding securities investment analysis activities or making written documents in the name of an associated person, internal research department, or a name other than that of the SICE;
  21. Analyzing investment in futures or derivatives without approval of concurrently operation of futures consulting business;
  22. Attacking industry competitors;
  23. Offering gifts or other benefits to solicit customers;
  24. Inducing investors to sign contracts by having investment consultation service as gifts or gifts not of equivalent value to the securities investment consulting mandate agreement;
  25. Aiming at donating consultation fee or appointment fee, or using language unrelated to the rights of the appointer;
  26. Using the approval for business operation from FSC as a verification of the application content or as a guarantee of the investment analysis performance for promotion;
  27. Using its qualification as national certified analyst as guarantee;
  28. Failing to state through speech or words that "the Company's business license number that has been approved by the competent authority is (##)Zheng-Guan(or Gin-Guan)-Tou-Gu-Zi-No.##" when producing audio advertisement;
  29. Failing to state the name of the company, business license number approved by FSC or formerly approved by the Securities and Futures Commission, and a statement that "the information provided in this program is for reference only" before or after the program when producing radio program for securities investment analysis;
  30. Failing to state the name of the company and business license number approved by FSC or formerly approved by the Securities and Futures Commission, and failing to make a noticeable statement that “the information is for reference only” when producing television program for securities investment analysis;
  31. Prediction of the NTD exchange rate trend;
  32. Other conducts prohibited by FSC.
    For other enterprises that concurrently operate securities investment consulting enterprise, the disclosure requirement is changed from the business license number under Paragraphs 19, 28, 29 and 30 to the approval date and reference number of the approval from FSC for the enterprises that currently operate such business and providing their clients with the method to search the preceding information.
    When undertaking advertisements, public seminars, or other business activities, whether by self-production, media connection or live interview, call-in program, or any other means, the SICEs and their employees shall meet the qualifications of associated personnel under the Regulations Governing Responsible Persons and Associated Persons of Securities Investment Consulting Enterprises, and shall not engage in the following conducts:
  1. Performing investment analysis for a client by means of divination or an appeal to spirits;
  2. Encouraging or inducing others to refuse to perform securities trading settlement obligations, to protest, or engage in other acts that would disturb the order of the trading markets;
  3. Using non-full-time personnel to solicit clients, or providing with unreasonable commissions;
  4. Conducting activities under a name not registered with SITCA;
  5. Using deception or other improper means to induce an investor to participate in a securities investment analysis activity or execute an engagement agreement for the purpose of soliciting clients;
  6. Making unsubstantiated advertisement to claim that the effectiveness, content, or methods of its own securities investment analyses are superior to those of other SICEs;
  7. Revealing in advertisement the matters advantageous to the SICE only, or other exaggerated presentation of content;
  8. Making advertisements that may mislead others that the SICE engages in discretionary trading when the SICE has not received approval for such trading;
  9. Making representations to guaranteeing that investments will be profitable or that the SICE will bear losses;
  10. Advertising to solicit clients while undertaking investment analysis in the broadcasting media;
  11. Engaging in conduct involving conflict of interest, fraud, misrepresentation, deception, rude criticism, or other conduct contrary to facts, which are sufficient to mislead others or with the intent to influence securities market prices;
  12. Forecasting the future price of a specific security;
  13. Recommending or soliciting non-specified persons to trade in a specific security on the radio or television during the trading hours of the centralized securities exchange market or over-the-counter market, and within one hour before or after trading hours;
  14. Providing analytical opinions to non-specified persons on industry, finance, or business information of a specific company on the radio or television except the time prescribed in the preceding subparagraph, or making recommendations for trading in a specific security without providing reasonable analytical basis;
  15. Making trading recommendations regarding a specific security to unspecified persons, in a public venue or a broadcast media other than radio or television, without providing an analytical basis;
  16. Failing to provide a reasonable analytical basis for judgments in relation to market prices, market analysis, or industry trends of the securities market;
  17. Using collusion among investors, group speculation, insider information, or other improper or unlawful information in appeals to solicit customers or as the basis for recommending specific securities;
  18. Using letters of recommendations, letters of thanks, records of past performance, or any other text or representation likely to cause a belief in the certainty of profit;
  19. Failing to list the company registered name, address, telephone number, or business license number in written documents, which are made for the purpose of promoting business;
  20. Recruiting members, holding securities investment analysis activities or making written documents in the name of an associated person, internal research department, or a name other than that of the SICE;
  21. Analyzin
Article 16-1     For securities investment analysis program produced by SICE itself or by payment to others to produce, SICE may not employ a non-employee as the host of the program. For the host which acts by an employee who does not possess a securities investment analyst qualification, he/she shall comply with the aforementioned provisions and may not engage in the following conducts:
  1. The content of speaking/statement involves securities investment analysis;
  2. During the interval of the securities investment analysis by the program speaker or guest, make a judgment or statement on the trend of the securities market, stock price and industry trend;
  3. Continue or repeat the analysis of the securities market trend, stock price and industry trend made by the speaker or guest, or reiterate or explain;
  4. Analyze the securities investment by using questions and answers with the speaker or guest;
  5. Respond to call ins or faxes of audiences/listeners regarding securities investment analysis;
  6. Overly promote the performance of the securities investment consulting service provided by the company, speaker or guest, or express the guarantee the gaining of profit or the bearing of loss;
  7. Promote or solicit businesses which have not been approved by the competent authority;
  8. Other conducts in breach of the securities and futures management laws or rulings of FSC.
    The time of speech made by a program host who is not qualified as a securities investment analyst may not exceed the speaker and guest, and each speech is limited to three minutes.
Article 16-2     Where a SICE provides stock watch software as an auxiliary tool of service and engages in the analysis and recommendation of securities investment research, it shall execute a written securities investment consulting agreement with the client in accordance with Paragraph 2, Article 10 of the Regulations Governing Securities Investment Consulting Enterprise, and stipulate the matters stated in Paragraph 3 of the same article.
    When SICE engages in the aforementioned business activity, it must comply with Article 16, and also may not engage in the following conducts:
  1. When explaining the stock watch software, expresses that the investment recommendation provided is better than other enterprises or attacks others, or engages in other exaggerative promotions.
  2. Guarantees profits.
  3. When explaining the system functions of the stock watch software, recommends or solicits the public to trade specific securities, or intends to affect the securities market price.
  4. The qualification of the personnel introducing the stock watch software and the reporting of the program tapes shall be handled in accordance with the current relevant regulations.
CHAPTER 4 DISCRETIONARY INVESTMENT BUSINESS
Article 17     Members of SITCA shall not engage in the following conducts when soliciting discretionary investment business and engaging in business promotional activities:
  1. Using FSC approval for operating discretionary investment business as a verification of the application content or a guarantee of the value of discretionary investment asset for promotion;
  2. Misleading others to believe the guarantee of security of principal or profitability;
  3. Making representations that it will bear losses;
  4. Soliciting or promoting inappropriately by offering gifts or any other benefits;
  5. Exaggerating past operation performance or carrying out advertisements to attack other market players;
  6. Engaging in fraudulent, misrepresentative, or other misleading actions;
  7. Exaggerating the performance of securities and securities-related products, or other FSC-approved investments, transactions or services though false statement or selective information;
  8. The content of the contract is in breach of laws and rules, or the discretionary investment agreement;
  9. Other conducts which are in breach of the securities and futures laws and rules or which are prohibited by FSC.
Article 18     Members of SITCA shall state the following or similar notice statements in the advertisement for its discretionary investment business, and shall comply with the requirements under Article 11:
  1. Print advertisements: The notice statement shall be made, ?ꆼiscretionary investment is not risk-free. The past operating performance does not guarantee a minimum return for the discretionary investment assts. Apart from exercising the duty of care of a prudent administrator, our company will not be responsible for the profit or loss of the discretionary investment fund, nor guarantee a minimum return. Customers should read through the discretionary investment booklet carefully before signing the contract."
  2. Audio advertisements: When advertising through broadcasting, television, movies or any other medium by using of images or sound, the following statement shall be made, "Discretionary investment is not risk-free. The past performance of a fund manager does not guarantee a minimum investment return for the discretionary investment assets. Customers should read through the discretionary investment services prospectus carefully before signing the contract."
    The statements are not requested if the posting information is about the professional knowledge and service of investment management, which aim at improving the image of the company, enterprise, or conglomerate without involving discretionary business.
Article 19     The members of SITCA, in order to assist its sales to provide accurate and complete information for clients when promoting discretionary investment business, shall ensure the general information on services, qualification requirements, operating performance, and background of its responsible persons, associated persons and employees in the investment information summary and prospectus are accurate.
CHAPTER 5 FILING PROCEDURES & SELF-DISCIPLINE MANAGEMENT
Article 20     The information prepared by members of SITCA and their sales agents for advertisements, public seminars, or other business activities shall be incorporated under the company’s internal control system and shall be appropriately reviewed by the head of the legal compliance or auditing department, or by the head of the authority department if no legal compliance or auditing department is established before public use to ensure that the content is appropriate with no fraud and violation against relevant laws and rules. In addition, the materials on the advertisements, public seminars or other business activities shall be reported to SITCA within ten days after the occurrence of the aforementioned activities in accordance with procedures prescribed by laws and rules, except press releases which may be reported before its announcement and the following situations:
  1. Advertisements or propagandas related to the alteration on the following items: company name, personnel, location, shareholder structure, business structure, executives or shareholders, telephone number, fax number, websites;
  2. The marketing materials which has been reported without changes;
  3. The materials provided to specific clients by associated persons of sales agent;
  4. Sales agents promote funds through the fee deduction without mentioning the names of funds, or through placing advertisement cards with the names of funds on the counters in their companies;
  5. Educational training materials, prepared for its internal personnel or the appointed sales agent, which have been marked as internal documents;
  6. Other circumstances that are exempted from reporting by FSC or under the laws and rules.
    Regarding to report to SITCA in the preceding Paragraph, the reporting method for various types of propaganda material and detailed provisions refer to Appendix 3.
Article 21     Marketing materials and records of advertisement, public seminars, and other business activities referred in the preceding Article shall be preserved for two years.
    When performing activities of investment analysis via any medium, a SICE shall preserve all records of the programs and further implements self-review and reporting process subscribed by SITCA. The proceeding records shall be preserved for no less than two months, but for the securities investment analysis involving dispute, the records shall be preserved till the dispute is settled.
Article 22     When the advertisement, public seminars, other business activities and gift activities under Article 8-1 undertaken by members of SITCA, which are suspected to violate against these Guidelines through reports by investors and relevant agencies, or are deemed necessary by SITCA, SITCA shall immediately conduct investigation and keep the whistleblowers confidential. If it is deemed as violating against these Guidelines, the breach will be conducted in accordance with the self-regulatory process under SITCA regulations governing appeals against sanctions for violations.
    Members of SITCA and their responsible persons, associated personnel, and employees may not refuse the investigation performed by SICTA in the preceding paragraph.
Article 23     If the information of the advertisement, public seminars, and other business activities carries out by members of SITCA or their sales agents, upon examination by the SITCA, is found to be in violation of the provisions herein, it shall be reported to the disciplinary committee of SITCA for consideration. the disciplinary committee finds that a violation has been indeed committed, SITCA shall, according to the severity of the violation by members of SITCA, handle the incident in accordance with the regulations governing appeals against sanctions for violations. there is also a violation against Paragraph 1 of Article 22 of the Regulations Governing Securities Investment Trust Enterprise, Paragraph 1 of Article 50 of the Rules Governing Offshore Funds, Paragraph 1 of Article 14 of the Regulations Governing Securities Investment Consulting Enterprise, such a violation shall be reported to FSC by SITCA at the end of each month for its handling, if there is a violation against Article 9 of the Rules Governing Offshore Funds, the incident shall be reported to the Central Bank of China. In addition, as to the violation of the member companies of SITCA, it will be conducted under the Regulations Governing Appeals Against Violations for the violations of the Member of SITCA depending on the seriousness of the violation. As to the violation of the sales agents, it will be transferred to FSC and be dealt with lawfully.
    The review of the advertisement, public seminars, and other business activities carried by the members of SITCA or their sales agents may be adjusted to test review depends on the number of reporting cases and necessity.
CHAPTER 6 MISCELLANEOUS
Article 24     The self-regulatory rules for the advertisements or other business activities undertaken by SICEs, which concurrently operates futures consulting business, are handled in accordance with the relevant laws and rules for futures.
Article 25     Appendix 2 may be amended and take effect upon resolution of SITCA's Disciplinary Committee. These Guidelines will take effect after approved by the board of SITCA and FSC for implementation. Any amendments thereafter must be handled in the same manner.