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Title: The Securities Investment Trust and Consulting Association Guidelines for Advertisements and Business Activities Performed by Members and Their Sales Agents
Date: 2020.01.07 (Amended) (Note: If there is any translation discrepancy between the Chinese and English versions, the Chinese version shall prevail.)

Article Content

 
Chapter 1 General Provisions
Article 1     The 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 Management of Securities Investment Trust and Consulting Association ("SITCA")," and Article 7 of the "Self-Regulatory Agreement for Members of the SITCA."
Article 2     The SITCA members and their sales agents shall comply with the "Securities Investment Trust and Consulting Act", relevant laws and regulations and the Guidelines when undertaking advertisements, public informational meetings and other business activities for operating, handling or promoting securities investment trust, securities investment consulting, discretionary investment, and offshore fund related business, so as to enhance self-discipline, maintain professional images, and protect rights and interests of investors.
Article 3     Where a sales agent engaged by a securities investment trust enterprise ("SITE") breaches a provision herein when undertaking advertisements, public informational meetings and other business activities for a securities investment trust fund, the SITE shall be liable in accordance with relevant laws and regulations except for matters that the SITE is not accountable for.
Article 4     Where a sales agent engaged by a master agent breaches a provision herein when undertaking advertising, public informational meetings and other business activities, the master agent and sales agent shall be liable in accordance with relevant laws and regulations.
    A master agent or its engaged sales agent conducting offering and sales of offshore funds may engage other enterprises to undertake its advertisement and business activities, provided that the master agent and sales agent shall be liable for any breach of a provision herein by the engaged enterprises handling the relevant activities according to relevant laws and regulations except for matters that the master agent or its engaged sales agent is not accountable for.
Article 5     The "advertisement" mentioned herein refers to delivery, dissemination or promotion for business under Article 2 and relevant affairs through the following media to promote the business:
  1. Publications such as newspapers and magazines, journals or other printed publications;
  2. DMs, advertisement letters, stickers, calendars, investment memorandum, leaflets, telephone books, posters, advertisement drafts, slides, prospectuses or other printed matters;
  3. Bulletin boards, banners, signs, stands, advertisements on buses or any other transportations or fixed or movable tools or facilities in any other forms;
  4. Televisions, movies, telephones, computers, faxes, text messages, slide shows, podcasts, radio stations, electronic scroll boards or other electronic communication media;
  5. Internet, e-mails, electronic boards, electronic video, electronic voice or other electronic communication equipment in relation to the public;
  6. Press releases; or
  7. Any other forms of advertisement promotion.
    The "marketing materials" mentioned herein refers to prospectuses or their Chinese translation, investor information summaries, or any other relevant materials provided along with the aforementioned materials which set forth general introductions in relation to the subscription of funds.
Article 6     The "public informational meetings and other business activities" mentioned herein refers to promotion or solicitation of business through holding workshops, seminars, conferences, exhibition or any other public activities, and a securities investment consulting enterprises ("SICE") delivering or conducting any analysis activity or recommendation in relation to securities investment to the public through the aforementioned methods or media stated in paragraph 1 of the preceding article.
    The SITCA members and their sales agents undertaking advertising, business solicitations and business promotional activities shall comply with the following principles in accordance with general social ethics, the principle of good faith and the spirit of protecting investors:
  1. Committing to delivering full financial consumption information and ensuring truthfulness of contents to avoid misleading investors. Obligations to investors shall not be less than contents stated in the advertisement and information or instructions presented during the course of business solicitation or business promotional activities;
  2. Disclosure of financial products or services involving interest rates, fees, returns, and risks shall be in a balanced and prominent way;
  3. Expressing in Chinese and aiming to be simple and easy to understand, and annotating the original text to be annotated when necessary; and
  4. Conducting activities in the name of the company.
Chapter 2 Securities Investment Trust and Offshore Fund Business
Article 7     A SITE, master agent, and its engaged sales agent must ensure accuracy of press releases announced in relation to funds to avoid misleading judgment of public investors and shall comply with the following principles:
  1. For press releases announcing an application for public offering of a new fund filed with the Financial Supervisory Commission ("FSC"), the contents of which shall be limited to those information items announced on the FSC website;
  2. Contents of press releases involving promotion of a fund or company contact information shall be reported to the SITCA. Contents of press releases which are investment analysis opinions of managers according to their professional view on the investment market are not subject to the reporting requirement, provided that the contents of which shall still be in compliance with relevant laws and regulations;
  3. A company shall, before an announcement of the press release, report it to the SITCA through the reporting process prescribed by the same; and
  4. When providing information or press releases to media, a company shall clearly state to the media the regulations for a company to undertake advertising and business activities and its position, and remind the media of focusing on the company's public information without an exaggeration or false report when reproducing the press releases.
Article 8     A SITE, a master agent and a sales agent must not involve in the following activities while undertaking advertising, public informational meetings and other business activities of funds:
  1. Using FSC's approval of a fund or a report to the FSC for effectiveness of a fund as a promotion to prove the subject items in the application (report) or mislead investors that the competent authority has guaranteed the value of the fund;
  2. Misleading others to believe that security of principal or profitability is guaranteed, provided that this shall not apply to capital-guaranteed and principal guaranteed funds with guarantee institutions where guarantee related concrete contents have been fully disclosed in the prospectus;
  3. Offering gifts, or financial products such as interest rate markup for time deposits, interest rate markdown for loans, or any other benefits or methods to induce others to purchase funds, unless otherwise provided by the FSC;
  4. Exaggerating business figures and performances as a promotion or undertaking advertisements to attack other market peers or others or damage business reputation of the same;
  5. Committing deceits, fraud, concealment or other activities likely to mislead others;
  6. Undertaking advertisements, public informational meetings, or promotional activities in advance for funds that have not been approved by the FSC or reported to the FSC for effectiveness;
  7. Using contents in violation of laws and regulations, regulations of the competent authority, self-disciplinary rules, securities investment trust contracts, authorization agreements of relevant offshore fund institutions, or fund prospectuses;
  8. Using a fund manager as a major appeal or subject of an advertisement;
  9. Forecasting the investment performance of a fund;
  10. Speculating about the New Taiwan Dollar (NTD) exchange rate trend;
  11. Using contents that may degrade the reputation of the overall industry as a promotion;
  12. Using contents with incorrect words, arts or images or those inconsistent with contents set forth in marketing materials or are disgraceful;
  13. Advertising open-end funds by using the term of "No-Discount Risk" or other similar terms;
  14. Using donating income from sales or management fees or using terms irrelevant to investors' rights and interests as an appeal;
  15. Citing reports in newspapers or magazines as an advertisement.
  16. Advertising or promoting a fund by interviewing investors;
  17. For those using profits or distribution yields in an advertisement, failing to report the risks involved to reach a balance;
  18. Using distribution yields or distribution amount as a main headline for an advertisement;
  19. In an advertisement using "distribution" as a headline, including terms for marketing purpose in addition to fund's distribution information;'
  20. Using monthly distribution as a main appeal of advertisements or sales for equity funds;
  21. Using terms of "better than time deposits", "defeating inflation", or other similar terms as a main appeal;
  22. For explanation in relation to tax exemption, failing to state or explain which parties and contents are exempted from tax;
  23. For those using credit rating of funds or market risk return level of funds (including funds established or approved by the FSC but not yet established) as an advertisement or promotion, failing to clearly state nature, meaning, or source of information of the credit rating or fund level, and, in the case that a fund is not yet established, failing to state that the fund has not yet been established;
  24. Failing to indicate that prospectuses (or their Chinese translations) or investor information summaries are available and places or methods available for inspecting the same in marketing materials;
  25. Failing to explain the distribution mechanisms in marketing materials where distributing classes are mentioned for equity funds, including stock dividend distribution status and how to convert dividend income into distribution for each period;
  26. For marketing materials stating fees directly payable by investors (including such as subscription fees for front-end load funds or back-end load funds, redemption fees payable for short-term trading of funds, or other fees), failing to clearly indicate methods of collection for the same; and failing to disclose a statement of "Fees payable by the fund (including distribution fees for offshore funds) have been disclosed in the prospectus or investor information summary of the fund, and the investor may search on the Market Observation Post System website and Fund Clear website for more information" or other similar statements;
  27. For funds requiring investors to pay distribution fees, failing to disclose in marketing materials or advertisements the information in relation to the distribution fee amount reflected in the fund's daily net asset value and the approximate proportion in a prominent way;
  28. For a back-end load fund using "no subscription fee" as a main appeal in an advertisement, failing to disclose collection methods for contingent deferred sales charges or distribution fees;
  29. For written materials produced and printed out for business promotion, intentionally marking notes and restrictions with non-striking fonts, failing to indicate its company name, address and telephone number, failing to indicate business license number in case of a SICE, or infringing or using registered trademarks, service marks or names the same or similar to others' which may confuse investors;
  30. Advertising an offshore fund that has not yet been approved or consented for effectiveness by the FSC;
  31. Placing fund marketing materials exclusively for use of financial sales to be available for free access by investors at counters or marketing material areas;
  32. Applying ranking for fund sales in an advertisement;
  33. Using an average credit rating of a fund portfolio as an appeal for sales. Where an average credit rating of a fund portfolio has been disclosed in a monthly report or a marketing material of a fund to investors for reference, the calculation method of the average credit rating, asset items included for calculation, methods to determine the credit rating of an investment objective and disclosure of relevant proportions based on the credit rating of investment objectives, etc. must be indicated at the same time; or
  34. Other matters affecting operation of the enterprise or rights and interests of investors.
Article 8-1     A SITE, a master agent and a sales agent may provide gifts to encourage investors to ask for fund-related materials when undertaking a promotional activity for fund business on a condition that it shall not be connected with fund subscription and the following principles must be followed:
  1. In order to maintain a reasonable competition order, the gift activity must not induce investors to subscribe funds in a disguised form, and shall avoid misusing the same;
  2. The upper limit for the cost of a single gift price is NTD200. The gift must not be repeatedly received, the amount of which must not be accumulated to exchange for other gifts, and no lucky draw is permitted; and
  3. A Financial product must not be used as a gift.
    When a SITE, a master agent or a sales agent provides gifts to encourage investors to ask for relevant fund materials, the following controls and management operations shall be fully implemented:
  1. Relevant promotional materials (including electronic media) shall state restrictions and conditions if there is any, such as terms, number of participants, quantity and participation method of the gift activities, to avoid disputes;
  2. Information filled out by investors receiving gifts shall be kept, or the investor's' name and contact details must be kept and archived unless the cost or value of a single gift is less than NTD30 with the company name printed on the gift (such as pen or note pad);
  3. The abovementioned personal information of investors kept shall, unless otherwise provided by laws and regulation or by the FSC, be kept confidential and handled in accordance with the "Personal Data Protection Act";
  4. Each gift activity shall be recorded in a report every month in accordance with Appendix 4 which shall be kept for two years together with the promotional materials under subparagraphs 1 and 2, investor information and internal audit records; and
  5. Where a gift is not acquired by cash, value of such gift shall be determined based on the retail price of such gift or similar products, or other evidential receipts and documentations.
    A SITE and a master agent shall prepare a report in accordance with subparagraph 4 in the preceding paragraph for gift activities held last month and report the same to the SITCA by the 10th day of each month using Appendix 4. The reporting is not required if there is no gift activity held last month. In case of a sales agent holding a gift activity, it is only required to report to the SITCA by using Appendix 4 through its SITE or master agent.
Article 8-2     Where a SITE or a master agent engages in activities provided in paragraph 1 of Article 10 or fund promotional activities towards all sales agents, it may provide gifts to encourage the sales agents to understand fund-related information, provided that such gift must not be connected with sales performance and the following principles shall be followed:
  1. The gift activities must be carefully handled to avoid becoming a tool of rewards due to excessive misuse;
  2. The upper limit of cost or value of a single gift is NTD3,000. The gift shall not be repeatedly received, the amount of which must not be accumulated to exchange for other gifts, and no lucky draw is permitted;
  3. A Financial product must not be used as a gift;
  4. A SITE and a master agent must report gift activities held for all sales agents last month to the SITCA by using Appendix 4. The reporting is not required if there is no gift activity held last month; and
  5. Where a gift is not acquired by cash, value of such gift shall be determined based on the retail price of such gift or similar products, or other evidential receipts and documentations.
Article 8-3     A SITE, cooperating with an electronic payment institution to engage in a business which allows investors to subscribe and redeem funds through electronic payment accounts, shall comply with the following principles:
  1. Relevant advertisements and promotions must not have the following misleading behaviors:
    1. Confusing or comparing investment incomes of funds with those of bank deposits; or
    2. Undertaking promotional activities for funds under the cover of such as promoting a wealth management account or a service platform rather than using the names of the funds, or in a disguised form.
  2. There shall be no misleading to investors which makes it difficult to tell the difference between an electronic payment platform and a fund dealing platform.
  3. Services such as instant redemptions, which are sooner than the payment period of redemption for funds, shall not be provided.
  4. An electronic payment institution may only provide a SITE with channels for investors to subscribe or redeem funds, and must not involve any business of sales agents or fund advertisement, public informational meeting or other promotional activity.
  5. Where an electronic payment institution undertakes advertisements, public informational meetings and other promotional activities for acting for payment/collection of funds, the SITE shall review the nature and contents of the advertisements, public informational meetings and other promotional activities in advance.
    A SITE handling the business set forth in paragraph 1 shall disclose to investors that "The fund is not protected by any deposit insurance, insurance guaranty fund or any other related protection mechanism" and investment risks of the fund before investors make online subscriptions.
Article 9     Principal guaranteed funds can be classified as capital-guaranteed funds and capital-protected funds depending on whether a fund has a guarantee institution. A SITE, a master agent and a sales agent shall comply with the following principles in addition to the preceding article when undertaking advertising, public informational meetings and other business activities of the funds:
  1. The following matters shall be disclosed in marketing materials:
    1. Information in relation to the guarantee institution of a capital-guaranteed fund: name of guarantee institution, business nature, financial status (e.g. capital, total net asset value or shareholders' capital), and its credit rating or other relevant information;
    2. Information in relation to the guarantee of a capital-guaranteed fund: Terms of the guarantee, including application scope and enforceability of such guarantee and events which may cause the termination of the guarantee, and examples and explanations to clearly state the relevant guarantee mechanisms as well as the method for calculating the potential return higher than the guaranteed amount;
    3. For capital-protected funds with no guarantee institution, that the fund provides no guarantee mechanism by a guarantee institution and the principal is protected through investment vehicles shall be specified, and terms such as "guaranteed", "safe", "risk-free", or other similar terms must not be used;
    4. Detailed explanation on the nature of relevant investment-linked products;
    5. Stating that the actual participation rate may differ from the reference rate indicated for reference, and explaining the time to determine the actual participation rate and the method to notify investors or beneficiaries of the fund of the same; and
    6. Indicating the principal-guaranteed rate and the fund type (capital-guaranteed fund or capital-protected fund) in a striking way on the cover of the investor information summary or prospectus (or its Chinese translation).
  2. The following matters shall be disclosed in the advertisement in striking colors and fonts:
    1. According to the fund type:
      1. Capital-guaranteed fund: fund type, name of guarantee institution, guarantee period, and principal-guaranteed rate.
      2. Capital-protected fund: fund type, principal-guaranteed period, principal-guaranteed rate, and the statement that "This fund does not offer any guarantee mechanism by any guarantee institution. The principal is protected through investment vehicles."
    2. Adding the statement under paragraph 1 of Article 10 according to the fund type.
    3. When reference rate is cited for reference, stating the reference date and that the actual participation rate may differ from the reference rate.
  3. The expected rate of return or similar terms other than the principal-guaranteed rate shall not be used as an appeal for advertisements or promotions.
Article 10     For an advertisement simply containing information about professional knowledge or services of investment management to build a fund institution, group, company or enterprise's brand awareness as an appeal without involving any fund product, no warning statement is required. Other than that, a SITE, a master agent and a sales agent shall provide the following warning statement or similar warning statements in fund advertisements:
  1. Print advertisements:
    1. Except for principal guaranteed funds and funds investing in high yield bonds as an appeal, the following warning statement shall be presented: "The fund having been approved or consented for effectiveness by the Financial Supervisory Commission does not mean that it is risk-free. The past performance of the fund management company does not guarantee a minimum investment return. Apart from exercising the duty of care of a good administrator, the fund management company will not be responsible for profits or losses of the fund, nor guarantee a minimum return. Investors shall read the prospectus of the funds carefully before making a subscription."
    2. Principal guaranteed funds shall make the following warning statement:
      1. For principal guaranteed funds of the capital-guaranteed type, the following statement shall be printed for publication: "The fund having been approved or consented for effectiveness by the Financial Supervisory Commission does not mean that it is risk-free. Investors holding the fund until the maturity date will be entitled to a guarantee on ___% of the principal. There will be no guarantee where an investor redeems before the maturity date or there is any circumstance under which the trust agreement of the fund shall be terminated under Article ___ of the same or in the prospectus. Investors shall bear all relevant fees incurred during the whole investment period and the redemption price shall be calculated according to the then applicable net asset value. Investors shall understand that the net asset value of the offshore fund may fluctuate due to market factors before the maturity date. Investors shall ensure to have fully understood the risks and characteristics of the fund before proceeding with any trading."
      2. For principal guaranteed funds of the capital-protected type, the following statement shall be printed for publication: "The fund does not offer any guarantee mechanism by a guarantee institution and the principal protection function is achieved through investment vehicles. The fund having been approved or consented for effectiveness by the Financial Supervisory Commission does not mean that it is risk-free. Investors holding the fund until the maturity date will be entitled to protection of ____% of the principal. There will be no guarantee where an investor redeems before the maturity date or there is any circumstance under which the trust agreement of the fund shall be terminated under Article ___ of the same or in the prospectus. Investors shall bear all relevant fees incurred during the whole investment period and the redemption price shall be calculated according to the then applicable net asset value. Investors shall understand that the net asset value of the fund may fluctuate due to market factors before the maturity date. As the protection is not a guarantee, any reason such as a default of an issuer of an underlying investment or an occurrence of credit risk will result in a failure of protection of the principal. Investors shall ensure to have fully understood the risks and characteristics of the fund before proceeding with any trading."
    3. Except that audio advertisements shall be subject to subparagraph 2, funds investing in high yield bonds as an appeal shall be specified in a striking font in a different color with a list of suitable type of investors, and the following shall be printed for publication: "Investments in funds investing in high yield bonds as an appeal by an investor shall not account for an overly high percentage of his/her portfolio" and the terms such as below shall be stated: "While the fund has been approved by the Financial Supervisory Commission, it does not mean that it is no risk-free. As high yield bonds' credit rating do not reach the investment grade or has not been rated, and they are 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 issuers in paying the principal or interest or bankruptcy of bond issuers. The fund is not suitable for investors who cannot bear relevant risks. The past performance of the fund management company is not a guarantee of a minimum investment return of the fund; the fund management company shall only bear the duty of care of a good administrator which shall not be liable for the profits and losses of the fund nor guarantee a minimum return. Investors shall read the prospectus of the fund carefully before making a subscription". The types of funds investing in high yield bonds as an appeal mentioned above refer to the following:
      1. Securities investment trust fund:
        1. High yield bond fund.
        2. The total amount of a fund investing in bonds of emerging market countries reaches 60% or more of the fund's net asset value and that in high yield bonds does not exceed 40% of the fund's net asset value.
        3. An exchange traded fund (ETF) and index fund which track, simulate or replicate the performance of an underlying index of high yield bonds.
      2. Offshore fund:
        1. A fund named high yield bond or of which the investment strategy is mainly to invest in high-yield bonds or with an average of 60% or more of the portfolio investing in high yield bonds at the end of each month in the past one year.
        2. A fund of which investment strategy is to invest in high yield bonds with a considerable portion or with an average of 30% or more of the portfolio investing in high yield bonds at the end of each month in the past one year.
      3. Fund investing in high yield bonds as an appeal.
    4. Disclosure of fund's dividend distributions that may involve principal:
      1. Where fund's dividend distributions may be paid out of its principal, the following warning statement shall be specifically presented: "A dividend distribution of the fund may be paid out of the fund's income or principal. Any portion involving payment from the principal may result in a reduction in the original investment amount," then stating that "The source of dividend distribution of the fund may be from its principal" after the fund name in a bold or striking color with the same size font as the fund name.
      2. Where a fund does not deduct the relevant expenses that shall be borne before dividend distribution, the following warning statement shall be presented: "The fund has not deducted the relevant expenses payable before dividend distribution".
      3. A SITE or a master agent shall prepare relevant information of dividend payment from the principal in the past 12 months for investors' inquiry (such as the following table where the guidelines for filling out the forms are as Appendix 5), and disclose the calculation basis for distributable net income through the following table and on the company website.
      4.  ┌───────────────────────────────┐
         │         Dividend distribution Composition                    │    
         ├────┬──────┬───────────┬───────┤
         │ Month  │Distribution│ Distributable net    │Principal/    │
         │        │ per unit   │ income/Distribution  │Distribution  │
         ├────┼──────┼───────────┼───────┤
         │ Year / │            │                      │              │
         │ Month  │            │                      │              │
         ├────┼──────┼───────────┼───────┤
         │ Year / │            │                      │              │
         │ Month  │            │                      │              │
         └────┴──────┴───────────┴───────┘
        
      5. The aforementioned (a) to (c) shall be disclosed in all marketing materials of the funds (including but not limited to prospectuses, simplified prospectuses, or investor information summaries of offshore funds), provided that (c) can be disclosed by simply stating the method or channel for investors' inquiries.
      6. Except that an investor is a professional investment institution under paragraph 2 of Article 4 of the "Financial Consumer Protection Act", a risk notification must be made before the first-time trading where the fund dividend distribution may involve the principal, and a declaration of full understanding of such risk signed by the investor or in a form agreed by both parties must be obtained.
      7. A SITE, a master agent and a sales agent must include the abovementioned matters in their internal control and internal audit systems.
    5. For leveraged ETFs and inverse ETFs, the following statement shall be printed in bold or striking colors and fonts in marketing materials (including but not limited to prospectuses or simplified prospectuses): "The fund has leveraged or inverse risks and its investment profits and losses are deeply subject to market fluctuations and compound interest effects which is different from traditional ETFs. The fund is not suitable for investors pursuing long-term investments and who are not familiar with the fund pursuing returns as an investment objective. Before proceeding with any trading, investors shall read the prospectus of the fund carefully to ensure that they have fully understood the risks and features of the fund. "
    6. Where an advertisement refers to any of the following matters, additional contents shall be stated:
      1. For economic trend forecasts in relation to the fund's investment scope or market (such as an emerging market), the following warning statement shall be added with the same color and font as the warning statement set forth in subparagraph 1(1): "The economic trend forecast 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 where an advertisement only states the fund investment scope without mentioning economic trend forecasts of the investment scope or market.
      2. For an advertisement on the performance of a regular savings plan in a fund, the following warning statement shall be added: "Investors will have different investment performance as a result of different times of market entry, and past performance is not a guarantee of future performance."
      3. For an advertisement on distribution yield of a fund, the following warning statement shall be added: "A distribution yield of the fund does not represent a rate of return of the fund, and the past distribution yield does not represent the future distribution yield; the net asset value of the fund may fluctuate due to causes in the market."
      4. Funds named high yield with an indication of high return or high yield in advertising and promotional materials shall indicate or disclose the corresponding risks in the same format.
      5. For marketing materials or advertisements of funds investing in high yield bond as an appeal, the following text shall be included in bold or striking colors with the same size font following the fund name:
        1. For funds under (a)(ii) and (b)(ii) in subparagraph 1(3) of paragraph 1: the following statement shall be added: "The fund mainly invests in non-investment grade high risk bonds". For example, xx High Yield Bond Fund (The fund mainly invests in non-investment grade high risk bonds). Moreover, a statement in a similar way shall be applied where a dividend distribution policy of a high yield bond fund may cause dividend distributions to be paid out of the principal.
        2. For funds under (a)(ii), (b)(ii) and (iii) in subparagraph 1(3) of paragraph 1, the following statement shall be added: "The fund invests a considerable proportion in non-investment grade high risk bonds". For example, xx Fund (The fund invests a considerable proportion in non-investment grade high risk bonds.)
      6. When using the fund's past performance to simulate a rate of return of the portfolio, not only shall the simulation method and basic hypothesis and restrictions be stated clearly, the following warning statement shall be presented: "The above is only the simulated result of the portfolio based on historical data which does not represent the actual rate of return of the portfolio or a guarantee of future performance. Simulation at different times can also have different results."
      7. For funds with a contingent deferred sales charge receiving a distribution fee, the following warning statement shall be presented: "Although the collection of the subscription fee can be deferred, _% of the distribution fee will still be payable every year which may increase the actual fees payable."
      8. Where an advertisement involves terms for a brand image of a group the company belonging to, the following terms shall be added: "Independently operated by [Company name]."
  2. Audio advertisement of various types of funds: The audio advertisement by image or sound through broadcasting, television, movies, text message, mobile ringback tone or other similar methods shall state: "Risks are inherent in investments. Fund investment may both incur profits and suffer losses. Please read the prospectus (investor information summary) carefully before making a subscription." However, this does not apply where the text message and mobile ringback tone only discloses the following information:
    1. Fund name and offering date
    2. Date and venue for a conference
    3. Fee rate (include favorable rates)
    4. Customer service phone number
    5. Company introduction
Article 11     A SITE, a master agent and a sales agent shall comply with the following principles when presenting warning statements prescribed in the preceding article:
  1. The color, font size, or method shall be in striking forms. Warning statements shall be clearly read out in an audio advertisement. Except for radio broadcast through sound, the warning statements must be made in an easily-identified font for at least five seconds;
  2. The message conveyed shall be clear without ambiguity; and
  3. The font size for the warning statements in print advertisements shall not be smaller than the smallest characters of other sections in the same advertisement, and the warning statements shall be printed in bold so that they can be prominent and easily seen by the general public when people skim through the relevant advertisements.
Article 12     For those advertising or promoting by fund performances and business figures, the following principles shall be complied with:
  1. Any fund performance and business figures (including awards and rankings mentioned) must be accompanied with a note of source and date of information used, provided that where a principal guaranteed fund adopts a complicated calculation mechanism, for the purpose of explaining the mechanism in details, a SITE, a master agent and a sales agent may use hypothetical figures with a clear statement that the figures are for demonstration purpose only which do not represent any actual profit that will be gained by investors in the future.
  2. For an advertisement using fund performances, a full performance or an annual performance may be published only if a fund has been established for six months or more; and requirements in relation to advertising full performance, annual performance and performance of regular savings plan under subparagraph 7 of this paragraph shall be complied with. For those advertising full performance of funds, the performance published shall include the full performance records for the period since its establishment and calculated until the end of the most recent month as the latest date (referring to performances of 3 months, 6 months, 1 year, 2 years and since establishment) which may at the same time present the performance "since the beginning of this year"; where a fund has been established for three years, full performances for the past three years (referring to performances for 1 year, 2 years and 3 years) shall be expressed in a diagram which may at the same time present the performances "since the beginning of this year", of "three months" and "six months", of "five years", of "ten years", or "since the establishment date". For a fund of which the performance ranking in each period is at the top half of the same type of funds, the fund performance may be described in a text form, provided that it must also disclose full performances of the fund as required and either the average performance of the same type of funds or benchmark performance. For those advertising annual performance of funds (referring to performances calculated for a full calendar year from January to December), performances of each year in the most recent ten years shall be disclosed and may at the same time present the performance "since the beginning of this year;" where a fund is established for less than ten years, the performance of each year since establishment shall be stated and may at the same time present the performance "since the beginning of this year;" where a fund is established for less than three years, full performances of the fund (referring to performances for 3 months, 6 months, 1 year, 2 years and since the establishment date) must be disclosed in addition to the annual performances. For a fund of which the performance ranking in each year is at the top half of the same type of funds, the annual performance of the fund may be described in a text form, provided that it must also disclose annual performances of the fund as required and either the average annual performance of the same type of funds or benchmark annual performance. The disclosure of the abovementioned fund performances shall comply with the following principles:
    1. It is not allowed to use the fund performance of one month as an appeal in an advertisement and simply use the performance of a specific period;
    2. The trend of fund performance must not be presented in the form of a line chart which is produced by directly connecting the performance from one point to another;
    3. For a fund performance is presented by using a line chart, the performance of the fund, which has been established for less than three years, shall be presented since establishment. For funds which have been established for three years (inclusive) may be presented at its discretion the performance since establishment or performance for the past three years which must not be compressed or enlarged for any specific period;
    4. When comparing a fund performance with a benchmark, not only shall the comparison period and currency of calculation remain consistent, such benchmark shall also be reported to the FSC by the SITE with relevant supporting documents and stated in the prospectus followed by a notice to the SITCA before the benchmark can be used; for offshore funds, a master agent shall include such benchmark in the investor information summary and report to the SITCA together with relevant supporting documents for verification before it can be used; the same rules apply to any changes to the benchmark; and
    5. (Deleted)
    6. Where the disclosure of performance is not by the primary share class, the class of such share class shall also be disclosed (for example: source of information: Lipper / share class: A Acc).
  3. When using a fund performance in an advertisement, the evaluation information developed by experts and scholars engaged by the SITCA or fund evaluation agencies such as Lipper, Morningstar, SysJust or Bloomberg shall be applied as the standard.
  4. When comparing a fund performance with other securities investment trust funds or offshore funds, statistics or analysis used shall be from the same domestic or foreign institutions, and the comparison shall be made based on all funds of the same type by converting into the same currency and with the same calculation basis. The performance of all funds of the same type may be replaced with the average figure of the same group.
  5. When using past performance simulation in an advertisement, relevant information such as operating model or module and assumptions of such performance simulation for the performance shall be noted in detail at the side, and a balanced report on the risks shall be made according to the regulations of the SITCA (as Appendix 1). The font size must not be smaller than that in the performance simulation advertisement.
  6. When using a fund distribution yield in an advertisement, the rate of return (including dividends) or rate of return (excluding dividends) for each period shall be disclosed at the same time, and the calculation method of the rate of return shall be explained; the formula for calculating the annualized distribution yield of the fund distribution is "Distribution amount per unit ÷ net asset value on the day before the ex-dividend date × number of distributions in a year × 100%", and an explanation of "The annualized distribution yield is an estimated value" shall be added.
  7. When using an investment performance of regular saving plan for a fund in an advertisement, the evaluation information stated in subparagraph 3 of this paragraph shall be used as a standard and an adjustment may be made based on the fund deducted for subscription payment under the regular saving plan, provided that the accuracy of the figures shall be duly verified and the followings shall be complied with:
    1. The calculation period for investment performance and the information available as of the latest date as well as the withholding date must be stated; and if the investment performance is shown by using a currency other than the original denominating currency, the investment performance shall also be converted into the original currency or NTD for disclosure at the same time;
    2. The fund shall have been established for one year or more; and
    3. Where the fund has been established for less than three years, the performance of one year, of two years, and since the establishment date shall be disclosed; if the fund has been established for three years or more, the performance of at least three years shall be disclosed. The aforementioned performances shall be the information available as of the latest date and there shall be no disclosure for investment performances of less than one year (exclusive).
  8. For a fund performance using a currency other than the original denominating currency for a fund performance in an advertisement, the investment performance shall also be converted into the original currency or NTD for disclosure at the same time.
  9. All diagrams shown in an advertisement shall clearly display its contents without distortion.
  10. Except for funds that are special types of funds mainly seeking for a specific target return which has been disclosed in the prospectus and the information of which is consistent, there shall be no advertisement or promotion using terms similar to: "Seek __% return, __% annual return, or __% absolute return". However, for special type of funds meeting the aforementioned requirements and applying the terms, the sections in relation to the rate of return must not be displayed in different colors or apparently inappropriate proportion with other words, and a reporting to balance the risks involved is required by disclosing full performances since the establishment date.
  11. Fund performance data or ranking (of any period) must not be used as a headline of an advertisement or as an appeal, or made with any special identification, and when an advertisement is made with fund performance, it must not use striking forms, such as colored borders, enlarged fonts, bold fonts, or different colors to enlarge or emphasize.
  12. For advertisements using business figures other than fund performances in an advertisement, the statistic or analysis of domestic and foreign institutions under Appendix 2 may be applied, provided that only one same source is allowed for comparisons among the same type of subject. The aforementioned business figures include those announced by a SITE, a master agent and an offshore fund management institution.
  13. Where a SITE educates investors on leveraged ETFs and inverse ETFs to assist investors in understanding risks and characteristics of these ETF products, and uses fund performance and leveraged index or inverse index (including the leveraged index or inverse index calculated by a SITE itself) to compare based on a single day or a specific period, it may be exempted from restrictions stipulated in the preamble of the subparagraph 2 that "being published only if a fund has been established for six months or more," and in subparagraphs 2(1), 2(2) and 2(4) of this paragraph.
    Statistics or analysis of domestic and foreign institutions meeting the following standards may apply to the SITCA for recognition to be added to the list as statistic or analysis that can be cited according to subparagraph 12 of the preceding paragraph:
  1. There shall be no conflict of interest between the institution and a SITE (or offshore fund management institution);
  2. The evaluation method used by the institution shall be fair, just, objective and publicly recognized;
  3. The evaluation scope shall be comprehensive which must not merely be selective or select only certain parts for evaluation; and
  4. The evaluation or selection performed by the institution shall be regular and continuous.
Article 12-1     Where the risk return level of a fund is stated in an advertisement of a fund, the "Classification Standards of the Risk Return (RR)" announced by the SITCA shall be applied.
    Where the risk return level of a fund is not stated in an advertisement, the risk of the fund may be disclosed in a narrative manner.
Article 13     When a SITE, a master agent and a sales agent place fund advertisements and leaflets at a place other than premises of the abovementioned enterprises for access by investors, it must not simply place application documents for fund account opening, subscription or redemption, and the personnel at such premises are also not allowed to accept fund application documents for fund subscription or redemption.
Chapter 3 Securities Investment Consulting Business
Article 14     The investment consulting business in relation to funds shall be performed by an approved SICE. The advertisements and business activities undertaken by such enterprise for the consulting services of funds shall comply with this Chapter.
Article 15     Contents of relevant documents prepared by a SICE engaging in the recommendation and consulting services of a fund upon the request of a client shall be subject to the following requirements:
  1. When providing recommendation and consulting services of an offshore fund, a SICE must neither involve offering, issuance or trading of offshore funds without prior approval from the FSC nor achieve the purpose of advertisement or promotion of certain offshore funds through advertisements, other promotional activities or news reports; and
  2. It shall follow the relevant provisions under Chapter 2 herein.
Article 16     When undertaking advertising, public informational meetings and other business activities, whether by self-production, media connection or live interview, call-in program, or any other means, a SICE and its employees shall not only meet the qualifications of associated persons under the "Regulations Governing Responsible Persons and Associated Persons of Securities Investment Consulting Enterprises", but also not engage in the following conduct:
  1. Performing investment analysis for an investor by divination or superficial means;
  2. Encouraging or inducing others to refuse to perform settlement obligation by securities investment transactions, to protest, or engage in other acts that would disturb the order of the trading markets;
  3. Using non-full-time personnel to undertake client solicitation, securities investment analysis activities or other business activities, or providing with unreasonable commissions;
  4. Conducting activities under a name not registered with the SITCA;
  5. For the purpose of client solicitation, using fraud or other improper means to induce an investor to participate in a securities investment analysis activity or execute an engagement agreement;
  6. Exaggerating business performance as a promotion, or indicating that it is better than other market peers in advertisements without evidence of performance, content or method of the securities investment service provided;
  7. Citing false reports from newspapers and magazines in an advertisement intentionally, or revealing in an advertisement only the matters advantageous to the SICE, or including other exaggerated promotional contents;
  8. Making an advertisement that may mislead others to believe that the SICE operates a discretionary investment business where the SICE is not approved for such business;
  9. Making representation to guarantee profits or that the SICE will share losses;
  10. Advertising to solicit clients while undertaking investment analysis in the broadcasting media;
  11. Engaging in conduct involving conflict of interest, fraud, misrepresentation, deceits, concealment and rude criticism or other conduct contrary to facts, which are likely to mislead others or with the intent to influence securities market prices;
  12. Forecasting the future price of specific securities;
  13. Recommending or inducing non-specified persons to trade specific securities on the radio or television media during the trading hours and one hour before or after trading hours of the centralized securities exchange market or over-the-counter market;
  14. Without listing a reasonable analytical basis, providing analytical opinions to non-specified persons on the industry or company financial or business information of specific securities on the radio or television outside the time prescribed in the preceding subparagraph, or making recommendations for trading in specific securities;
  15. Making recommendations for trading of specific securities to non-specified 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 price judgment, market analysis, or industry trends of the securities market;
  17. Using collusion among investors, group speculation, insider information, or other improper or illegal information as an appeal to solicit clients or as a 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 convince others of the certainty of a matter;
  19. For written materials produced or circulated for business promotion, intentionally marking notes and specifying restrictions with unobvious fonts, failing to indicate the company name, address, telephone number and business license number or infringing or using registered trademarks, service marks or names the same as or similar to others' which is likely to confuse investors;
  20. Recruiting members, holding securities investment analysis activities or producing written materials or electronic documents in a name other than that of the SICE, such as that of an associated person or internal research unit;
  21. Operating investment analysis business in futures or derivatives without being approved for concurrent operation of futures consulting business;
  22. Attacking market peers or others or damaging their business reputation;
  23. Providing gifts or other benefits to solicit clients;
  24. Inducing investors to sign contracts by providing an investment consulting service as a gift or a gift not of an equivalent value to the securities investment consulting agreement;
  25. Using donation from consultation fees or service fees or using language unrelated to rights of service acquirers as an appeal;
  26. Using approval for business operation from the FSC to prove the subject matter applied for or as a guarantee of investment analysis performance for the purpose of promotion;
  27. Using the qualifications of a national certified analyst as a guarantee as an appeal;
  28. Failing to declare "the Company's business license number approved by the competent authority is (##)Zheng-Guan(or Gin-Guan)-Tou-Gu-Zi-No.##" by verbal or written statements when producing an audio advertisement;
  29. Failing to specify company name, reference number of business license approved by the FSC or formerly approved by the Securities and Futures Commission, or real names of securities investment analysts before or after broadcasting when producing radio program for securities investment analysis;
  30. Failing to specify company name, reference number of business license approved by the FSC or formerly approved by the Securities and Futures Commission, or real names of securities investment analysts in a striking corner of screen or layout when producing a television program for securities investment analysis;
  31. Involving speculation about the NTD exchange rate trend;
  32. Failing to request personnel to remove promotional materials and advertisements published from e-mails, electronic billboards and Internet systems when leaving their jobs; or
  33. Engaging in investment analysis activities for non-listed (or non-over-the-counter) stocks other than emerging stocks through the media;
  34. Other conduct prohibited by the FSC.
    For other enterprises concurrently operating securities investment consulting business, the disclosure requirement for reference number of business license under paragraphs 19, 28, 29 and 30 shall be changed to approval date and reference number of the approval from the FSC for the enterprises operating such business and a method for searching the above information shall be available to their clients.
Article 16-1     For securities investment analysis program produced by a SICE itself or produced by others through mandate with consideration, the SICE must not use a non-employee as a host of the program or an employee not possessing securities investment analyst qualifications as a host, and shall not only comply with the requirements in the preceding article but also not engage in the following conduct:
  1. Involving securities investment analysis in his/her contents expressed;
  2. Making an analysis or statement on the securities market trend, stock price, or industry trend during an interval of a securities investment analysis by a speaker or guest;
  3. Extending or repeating analysis of the securities market trend, stock price and industry trend made by a speaker or guest, or reiterating or explaining the same;
  4. Providing analysis on securities investment by using questions and answers with a speaker or guest;
  5. Responding to call in or faxes of audiences in relation to securities investment analysis;
  6. Overly promoting performances of securities investment consulting service provided by his/her company, speaker or guest, or expressing a guarantee of profits or sharing of losses;
  7. Promoting or soliciting businesses which have not been approved by the competent authority; or
  8. Other conduct in violation of and prohibited by the securities and futures management related laws or regulations of the FSC.
    The time for a speech made by a host without possessing qualifications as a securities investment analyst must not exceed that made by the speaker and guest, and his/her speech each time is limited to three minutes.
Article 16-2     Where a SICE provides a stock software as an auxiliary tool for service when operating analysis and recommendation of securities investment research, it shall execute written securities investment consulting contracts with clients in accordance with paragraph 2, Article 10 of the "Regulations Governing Securities Investment Consulting Enterprises" and stipulate matters required in paragraph 3 of the same article.
    Where a SICE operates the aforementioned business activities, in addition to complying with Article 16, it shall not have the following conduct:
  1. When explaining the stock software, stating that the investment recommendation provided is better than other market peers or attacking the same, or engaging in other over exaggerative promotions;
  2. Guaranteeing profits;
  3. When explaining system functions of the stock software, recommending or inducing non-specified persons to trade specific securities, or acting with an intention to affect the securities market price; or
  4. The existing relevant regulations shall apply to the qualifications of personnel introducing the stock software and the reporting of the program tapes.
Article 16-3     A SICE, broadcasting a program video (audio) tape recorded by itself, publishing a faxed manuscript or research report or announcing financial reviews or articles about stock recommendation through the Internet built by information technology ("IT") providers or IT equipment such as computer stock software, mobile stock applications or stock machines, or using other methods for the purpose of providing securities investment consulting services, except for free service, shall not only execute a written securities investment consulting contract with a client to confirm rights and obligations between both parties, but also comply with the following matters:
  1. The following personnel shall be employees of the SICE, and not only a speaker shall meet the qualifications specified in Article 4, paragraph 1 of the "Regulations Governing Responsible Persons and Associated Persons of Securities Investment Consulting Enterprises", but also other personnel shall meet one of the qualifications provided in each subparagraph under Article 5, paragraph 1 of the same regulations:
    1. The host and speaker of the program video (audio) tape;
    2. Authors or commenters of faxed manuscripts, research reports, financial reviews or articles about stock recommendation; or
    3. Other persons providing services for the purpose of providing securities investment consulting services;
  2. Clients shall use an account and password issued by the SICE to log in to the website or click on programs, articles or similar materials for the purpose of securities investment consulting services;
  3. An online platform must contain: "xx IT Company only provides webpage/website construction and design. The securities investment analysis contents on this webpage/website belong to XX Securities Investment Consulting Co., Ltd. For the need of related services, please contact the company's customer service phone number: ##-########;"
  4. Where contents of an IT equipment sold by an IT provider contains faxed manuscripts, research reports, financial reviews, stock recommendations or other materials for the purpose of providing securities investment consulting services provided by the SICE, the following shall be specified: "The information is provided by xx Securities Investment Consulting Co., Ltd. For any question or related services required, please contact the company's customer service phone number: ##-########." shall be specified;
  5. In addition to rights and obligations between both parties, the agreement signed between the SICE and the IT provider shall specify the following items:
    1. The IT provider must not be engaged by the SICE to issue client accounts and passwords;
    2. The securities investment consulting service platform provided by the IT provider shall be connected by the company name of the SICE, and not by any name of personnel of the SICE; and
    3. The IT provider is not allowed to solicit clients for their own through the platform.
  6. A SICE providing securities investment consulting services by broadcasting program video (audio) tapes recorded by itself shall keep the same for one year from the date of broadcasting which can be stored in electronic media means.
    The "free service" mentioned in the preceding paragraph means: The general public is not required to pay to the SICE or IT provider any consideration or remuneration when obtaining the securities investment consulting services provided by the means under the preceding paragraph from the Internet or IT equipment sold by the IT provider.
Article 16-4     A SICE engaged by a client shall be fully aware of and assess investment knowledge, investment experience, financial status and degree of risk tolerance of the client.
    A SICE engaged by a client to provide analytical opinion or recommendation on securities investment or trading related matters shall enter into a securities investment consulting contract specifying rights and obligations of both parties.
    Contents of a securities investment consulting contract in the preceding paragraph shall not be in violation of matters specified under Article 10 of the "Regulations Governing Securities Investment Consulting Enterprises" and rules in relation to the "Template for securities investment consulting contracts of the SITCA".
Article 16-5     In addition to the conduct specified under subparagraphs 1 to 5, 11, 24, and 33 of paragraph 1 under Article 16 which is prohibited, a SICE engaging in securities investment consulting business shall not engage in the following conduct:
  1. Engaging in securities investment or securities-related product trading activities for others;
  2. Agreeing to share profits or losses from securities investment with a client;
  3. Trading the same securities as those recommended to an investor by the SICE, provided that this does not apply to securities investment trust funds and offshore funds;
  4. Engaging in borrowing or lending of funds or securities with a client, or broking for the same;
  5. Keeping custody of or misappropriating a client's securities, funds, personal seal, or passbook;
  6. Attempting to seek interests of oneself, another client, or a third party through the use of investment research analyses or recommendations, publications issued, or seminars held for clients;
  7. Disclosing matters engaged by a client and other secrets learned while performing its duties by way of illegal inquiries;
  8. Allowing others to conduct businesses in the name of the company or associated person with consent or implied consent;
  9. Delivering trading recommendations to a client without a reasonable analytical basis or source by any means;
  10. Forecasting the future price of specific securities or making trading recommendations in relation to specific securities without a reasonable analytical basis to non-specific persons in a public venue or through a broadcast media other than radio or television; or
  11. Operating business at non-registered business premises.
Article 16-6     A SICE producing and broadcasting securities investment analysis programs on its own or by engaging others with a consideration shall state the following warnings:
  1. Broadcasting securities investment analysis programs:
    1. Before and after broadcasting the program, stating that "There is no improper financial and beneficial relationship between the company and securities recommended and analyzed. Information in the program is for reference only. Investors shall make an independent judgment and carefully assess and bear the investment risks on their own."
    2. In the event that warrants are analyzed or recommended in the program, stating that "Warrants are of the nature of financial leverage with high investment returns. Although there are opportunities to gain great returns at limited costs, it is also possible to suffer a total loss in a short period of time."
    3. In the event that emerging stocks are analyzed or recommended in the program, stating that "conditions for registering emerging stocks are lower compared to listed (or over-the-counter) stocks and there is no daily limit up and limit down. Investors shall carefully evaluate whether the stocks are suitable for their investments."
  2. Television securities investment analysis programs:
    1. Displaying "This information is for reference only. One shall carefully evaluate his/her investment when making an investment" at an apparent area on the screen.
    2. Before the program is ended, reading clearly and displaying in easily recognized fonts that "There is no improper financial and beneficial relationship between the company and securities recommended and analyzed. The program is for reference only. Investors shall make an independent judgment and carefully assess and bear the investment risks on their own" which shall be played for at least five seconds.
    3. In the event that warrants are analyzed or recommended, displaying in an apparent area on screen with easily recognized fonts that "Warrants are of the nature of financial leverage with high investment returns. Although there are opportunities to gain great returns at limited costs, it is also possible to suffer a total loss in a short period of time.".
    4. In the event that emerging stocks are analyzed or recommended in the program, displaying in an apparent area on screen with easily recognized fonts that "Conditions for emerging stocks are lower compared to listed (or over-the-counter) stocks. There is no daily limit up or limit down. Investors shall carefully evaluate whether the stocks are suitable for their investments. "
Article 16-7     When operating a securities investment consulting business, a SICE shall stipulate an internal management system in accordance with the regulations governing internal management systems and the business operation of which shall be conducted in accordance with laws and internal management systems.
Chapter 4 Discretionary Investment Business
Article 17     Members of the SITCA shall not have the following conduct when operating solicitation for discretionary investment business and business promotional activities:
  1. Using FSC approval for operation of discretionary investment business to prove the subject matter applied for or to promote that the value of discretionary investment assets is guaranteed;
  2. Misleading others to believe that security of principal or profitability is guaranteed;
  3. Making representations that it will share losses.
  4. Soliciting or promoting in improper means by providing gifts or other benefits;
  5. Exaggerating business figures and operational performances as a promotion or making advertisements to attack other market peers or others or damage their business reputations;
  6. Committing deceits, fraud, concealment or other misleading conduct;
  7. Making misrepresentations or false information or only use advantageous information to make an exaggerated promotion or intentionally marking notes and restrictions with non-striking fonts in relation to securities, securities-related products and other investments and trading approved by the FSC, or the performance of its service;
  8. Using contents in violation of laws and regulations or the discretionary investment agreement;
  9. Citing false reports from newspapers and magazines in an advertisement intentionally;
  10. Using the discretionary investment manager as a major appeal or subject of an advertisement;
  11. Forecasting the performance of discretionary investment;
  12. Involving speculation about the NTD exchange rate trend;
  13. Using contents that may degrade the reputation of the overall industry as a promotion;
  14. Using contents with incorrect words, arts or images or those inconsistent with contents set forth in the discretionary investment prospectus, or those are disgraceful;
  15. Using donation from commissions or performance remunerations or terms irrelevant to investors' rights as an appeal;
  16. Advertising or promoting by interviewing investors;
  17. Using terms similar to such as "better than time deposits", "defeating inflation" as a main appeal;
  18. Advertising for a specific discretionary investment account;
  19. Other matters affecting operations of the enterprise or rights and interests of investors; or
  20. Other conduct in violation of and prohibited by the securities and futures management related laws or regulations of the FSC.
Article 18     Members of the SITCA operating discretionary investment business shall provide the following or similar warning statements in advertisements when making an advertisement, and shall apply, mutatis mutandis, the requirements under Article 11:
  1. Print advertisements:
    1. The following warning statement shall be provided: "Discretionary investment is not risk-free. The past management performance of the company does not guarantee a minimum return of discretionary investment assets. In addition to exercising the duty of care of a good administrator, the company shall not be responsible for profits or losses of the discretionary investment assets, nor guarantee any minimum return. Before signing the contract, customers shall fully read discretionary investment prospectus carefully."
    2. When contents of an advertisement refer to any of the followings, the following additional content shall be added:
      1. For economic trend forecasts in relation to the scope or market (such as an emerging market) of discretionary investment, the following warning statement shall be added with the same color and font as the warning statement set forth in subparagraph 1(1): "The economic trend forecast referred to herein does not inevitably represent the performance of discretionary investment business."
      2. For advertisements containing brand images of a group the company belonging to, the following terms shall be added: "Independently operated by [Company name]."
  2. Audio advertisements: Audio advertisements by image or sound through broadcasting, television, movies or other similar methods shall state: "Discretionary investment is not risk-free. The past performance of the company does not guarantee a minimum return of discretionary investment assets. Before signing the contract, customers shall fully read the discretionary investment prospectus carefully."
    The warning statement is not required where an advertisement simply contains professional knowledge or services of investment management to build a company, enterprise or group's brand awareness as an appeal without involving discretionary investment business.
Article 19     Members of the SITCA, in order to facilitate the provision of accurate and complete information for clients' reference when their associated persons solicit discretionary investment business and business promotional activities, shall ensure the basic information on service items, qualifications, management performance, or background of its responsible persons, associated persons and employees in the introductions and explanation are consistent which must not infringe or use registered trademarks, service marks or names the same or similar to others' and may be likely to confuse investors.
Chapter 5 Reporting Procedures and Self-discipline Management
Article 20     Materials prepared by members of the SITCA or their sales agents for advertising, public informational meetings, or other business promotional activities as well as gift activities held for all sales agents shall be incorporated and managed under the company's internal control system subject to appropriate reviews by the legal compliance department of the company, or by the head of the authorized and responsible department if no legal compliance department is established before public use to ensure that the content is appropriate with no misrepresentation, misleading investors or violation of the Guidelines and relevant laws and regulations. Except for press releases which shall be reported before an announcement and the following situations, the materials for the advertisements, public informational meetings or other business promotional activities shall be reported to the SITCA within ten days after the event occurrence date of the aforementioned activities in accordance with procedures prescribed by laws and regulations:
  1. Advertisements or marketing materials in relation to the alteration to the company name, personnel, location, shareholding, business premises, business structure, managers or investors, telephone number, fax number, websites;
  2. Cases in which the content re-used has been reported without any change;
  3. Materials provided to specific clients by associated persons of sales agents;
  4. Promoting funds simply by a fee discount without mentioning the names of funds; or by placing advertisement signs with the names of funds on the counters in their companies; or simply by mentioning the names of funds without involving any other forms of advertisements and promotions;
  5. Educational training materials produced and used for companies' internal personnel or their engaged sales agents which have been marked for internal documents; or
  6. Any other situations that are exempted from reporting by the FSC or under the laws and regulations.
    For the report to the SITCA in the preceding paragraph, please refer to Appendix 3 for the reporting method and detail rules for various types of marketing materials; materials for public informational meetings or other business promotional activities shall be registered online to report the matters such as organizer, date, time, place, subject, speaker, host, interviewee, event type, whether to record or tape record and leaves or written materials in relation to the activities.
    When engaging in public informational meetings or other business promotional activities, a SICE shall report matters including the organizer, date, time, place, theme, speaker, host, interviewee, and written materials to the SITCA through online registration five days before the above-mentioned activities. Where a content reported is changed, such change shall be also reported to the SITCA immediately.
Article 21     Promotional materials, advertisements and relevant records produced for advertising, public informational meetings, and other business activities referred to in the preceding article shall be kept for two years.
    Where a SICE provides an investment analysis program through various media or engages in public informational meetings or other business promotional activities, such SICE shall keep all video and audio records of the programs and activities and fully comply with the SITCA self-review and reporting procedures for SICEs engaging in business promotional activities. The aforementioned video and audio records shall be kept for no less than one year, provided that for programs and activities involving disputes, the records shall be kept till the disputes are settled.
    The entire process of the public informational meetings and other business promotional activities mentioned in the preceding paragraph shall be videotaped and recorded, screens and sounds of which shall be clear and identifiable and shall include the analysis and dialogue content of the speaker, interviewee and host.
Article 21-1     When providing securities investment analysis recommendations, a SICE shall produce an investment analysis report specifying a reasonable analytical basis or source, and a copy and record of which shall be kept for five years from the date of provision which may be stored in electronic media means.
    A securities investment consulting contract made between a SICE and clients to accept a mandate shall be kept for five years from the date when the rights and obligations of the agreement are expired.
Article 22     Where advertising, public informational meetings, other business activities and gift activities under Article 8-1 undertaken by members of the SITCA, which are deemed necessary by the SITCA or suspected to violate the Guidelines through reports by investors and relevant agencies, the SITCA shall immediately investigate to verify and keep the identity of whistleblowers in confidential. If it is deemed to have violated the Guidelines, the violation shall be handled in accordance with the self-disciplinary process under the SITCA regulations governing appeals against sanctions on violations.
    Members of the SITCA and their responsible persons, associated persons, and employees must not refuse the investigation performed by the SICTA in the preceding paragraph.
Article 23     Where advertising, public informational meetings, and materials of other business activities undertaken by members of the SITCA or their sales agents, upon examination by the SITCA, is found to have violated provisions herein, it shall be submitted to the self-disciplinary committee of the SITCA for review and consideration. Where the self-disciplinary committee finds that a violation has been committed, the SITCA shall, according to the severity of the violation, handle the incident in accordance with the regulations governing appeals against sanctions on violations committed by members of the SITCA, except for a violation of paragraph 1 of Article 22 of the "Regulations Governing Securities Investment Trust Enterprises", paragraph 1 of Article 50 of the "Rules Governing Offshore Funds", or paragraph 1 of Article 14 of the "Regulations Governing Securities Investment Consulting Enterprises", which shall be reported to the FSC by the SITCA at the end of each month for its further handling, and for an incident involving subparagraph 9, paragraph 1, Article 50 of the "Rules Governing Offshore Funds" which shall be reported to the Central Bank. Violations committed by sales agents shall be transferred to the FSC for its handling according to laws.
    The review of the advertisements, public informational meetings, and other business activities carried out by the members of the SITCA or their sales agents may be adjusted to sampling review depends on the number of cases reported and necessity.
Chapter 6 Supplementary Provisions
Article 24     Self-disciplinary rules for advertising or other business activities undertaken by SICEs concurrently operating futures consulting business shall be handled according to relevant laws and regulations for futures.
Article 25     Appendix 2 and Appendix 3 may be amended and take effect upon resolution of the SITCA's self-disciplinary committee. The Guidelines will take effect upon approval by the board of the SITCA followed by a report to the FSC for implementation. Any amendment thereafter must be handled in the same manner.