| Article 3 |
The following items shall be printed in the order below on the cover of the prospectus:
1. Name and seal of the trustee.
2. Name of the real estate management institution.
3. Name of the promoter of the real estate investment trust ("REIT"), or the name of the trustor of the real estate asset trust ("REAT").
4. Name of the arranger.
5. Name of trust supervisor.
6. Name of the beneficial securities.
7. Basic investment policy of the REIT.
8. Date of issuance, maturity date, type, duration, issuance amount, coupon rate, and terms and conditions of issuance of the REAT beneficial securities.
9. The types of trust assets [owned by] the REAT.
10. The credit rating of the beneficial securities, and any credit enhancement provided.
11. The following texts shall be printed prominently:
(1) "The trustee does not guarantee the value of trust assets."
(2) "The subscriber shall carefully consider the risks of this beneficial securities (record the page number where risk disclosure is made). Only those subscribers who fully understand, and are capable of assuming, these risks should invest in these beneficial securities."
(3) If a REIT is permitted to invest in developmental real estate or real estate-related rights, the following shall be printed: "Subscribers: Please note that this beneficial security is permitted to invest in developmental real estate or real estate-related rights, which entail considerable risk."; and the percentage limits on investment in developmental real estate or real estate-related rights shall be specified.
(4) "Approval of these beneficial securities in no way indicates that it is without risk; the trustee may not cite such approval in publicity as verification of application particulars or as a guarantee of the value of the securities."
(5) "The trustee, promoter or trustor, arranger, real estate management institution, their responsible person(s), and other persons that have signed or affixed their seals to this prospectus shall be held legally responsible for misrepresentations or nondisclosures herein."
(6) Web addresses for inquiries regarding this prospectus, including the web address of the information reporting website designated by the Financial Supervisory Commission (FSC) of the Ministry of Finance, and the web address where the trustee discloses the relevant prospectus data.
12. The date of printing.
A prospectus prepared in order to apply to offer beneficial securities shall on its front cover clearly note that it is a draft version for application purposes. |
| Article 4 |
The issuance-related information listed below shall be printed in the following order on the inside front cover of the prospectus:
1. Name, address, web address, and telephone number of the trustee and the real estate management institution.
2. Name, address, web address, and telephone number of the promoter or trustor.
3. Name, address, web address, and telephone number of the arranger.
4. Name, address, web address, and telephone number of the trust supervisor.
5. Name, address, web address, and telephone number of any credit enhancement institution.
6. Name, address, web address, and telephone number of the credit rating institution of the beneficial securities.
7. Name, address, web address, and telephone number of the professional appraiser.
8. Names of the certified public accountant and attorney who issue written opinions, and the names, addresses, web addresses, and telephone numbers of their firms.
9. Name, address, web address, and telephone number of the certification institution.
10. Name, address, web address, and telephone number of the securities underwriter.
11. Prospectus distribution plan: Inform where the prospectus will be displayed, its distribution method, and the method by which it may be obtained upon request.
12. Names, titles, contact telephone numbers, and e-mail addresses of the spokesperson and deputy spokesperson. |
| Article 7 |
The content of the prospectus of REIT beneficial securities shall record the following particulars:
1. The concluding opinion of the trustee.
2. A profile of the beneficial securities.
3. A profile of the investment plan.
4. A profile of the trustee and listing of its duties.
5. A profile of the real estate management institution and listing of its duties.
6. A profile of the promoter.
7. A profile of the arranger and listing of its duties.
8. A profile of personnel involved in fund operation and management.
9. Utilization of borrowed funds and idle funds.
10. How the net asset value of the fund is calculated and announced.
11. The credit rating of the beneficial securities, and credit enhancement arrangements.
12. Disclosure of investment risks.
13. Beneficiaries meetings.
14. Matters of special note.
15. Applicable acts and regulations.
16. Other items as required by the FSC. |
| Article 8 |
The profile of the beneficial securities shall record the information listed below:
1. The issuance date of the beneficial securities, and the duration of the fund.
2. The reference number and date of the competent authority's approval document.
3. Total par value, total number of beneficial units, and par value per beneficial unit of the offering, and whether follow-on issues are permissible (for a follow-on issue, the circumstances at the time the fund was established and at the time of all subsequent follow-on issues shall also be recorded).
4. Fund type (closed-end or open-end), whether redemption requests are allowed, and the timing, volume, and other restrictions applying to redemptions.
5. Purchase price and fees per unit.
6. Basic policy, scope, and investment strategy for fund utilization.
7. Fund utilization status (for a follow-on issue):
(1) List, with respect to the trust assets as of the end of the month preceding the prospectus printing date: the components, values, and proportions; the liability caps, interest rates, and maturity dates of long and short term liabilities; and the operating status.
(2) Investment performance:
1. Trend chart of the net asset value per beneficial unit over the most recent three fiscal years.
2. Dollar amount of gains distributed per beneficial unit in each of the most recent three fiscal years.
3. As of the end of the quarter preceding the prospectus printing date, the net asset value of the fund for the most recent three months, six months, one year, three years, five years, and ten years, and the cumulative return calculated from the date on which the fund was established.
(3) The fund's CPA audit reports, balance sheets, income statement, and trust property management and allocation reports for the two most recent fiscal years.
(4) Other matters that require disclosure.
8. Items, schedule, and payment method for distribution of investment returns.
9. Fees that the fund is required to pay, and method for calculating them (Table 1), payment method, and a schedule thereof.
10. Trustee remuneration, and the types, calculation method, payment schedule, and payment method thereof.
11. Criteria for determining whether the fund has been properly established, and the method by which matters will be handled if it is not properly established.
12. Tax-related requirements.
13. Related rights and transfer limitations of beneficiaries.
14. Important contractual stipulations.
15. Methods for handling lost beneficial certificates.
16. Other items as required by the FSC. |
| Article 9 |
The profile of the investment plan shall record the information listed below:
1. A plan for investment in real estate, real estate-related rights, real estate-related securities, or other investment instruments approved by the competent authority, including the type and location [of the real estate], anticipated holding period, source of funds, utilization, control mechanisms, management methods, timing of disposal, cost recovery, financial forecasts, and expected returns.
2. A plan for investment in developmental real estate or real estate-related rights that includes with respect to the anticipated development: the type and location, a market analysis, feasibility analysis, and title search; plans and control mechanisms for each stage of the anticipated development's schedule, planning, acquisition, development, and sales or operations management; source of funds; whether funds will be raised through borrowing, and the terms and conditions of, and repayment plans for, such borrowing; whether the anticipated development is a sole or joint development; with respect to a joint development: overviews of the terms and conditions of cooperation, equity distribution, other shareholders, and of the hired contractor; utilization and control mechanisms, cost recovery, financial forecast and estimated return, a self-assessment plan, a method for handling a failure to complete, or a delay in, the real estate development plan and the impact upon the rights and interests of beneficiaries of such failure; stipulations regarding the rights and obligations of the trustee, real estate management institution, and the beneficiaries.
3. If any real estate, or real estate-related rights, have already been determined as targets of investment, an overview of the investment targets.
(1) The type of the investment target and its location, area, land use category, zoning status, statutory use, permits or controls on usage, rights status (ownership, scope of rights, and a record of any encumbrance created thereupon); original acquisition date of the real estate by the owner, party (name and relationship) from whom it was acquired, acquisition cost, and litigated and non-litigated matters with a material impact upon the rights and interests of beneficiaries.
(2) Usage status and conditions, method of disposal after termination of the lease, and important stipulations.
(3) The value of the investment target as appraised by a professional appraiser and the principal content of the appraisal report issued pursuant to Article 22 of the Act (which shall include the reason for, and basic assumptions underlying, the use of each assessment method, any discrepancy in discounted cash flow analysis method and an explanation thereof, the relative weighting of each type of appraisal method and an explanation regarding such weighting decisions; if the income approach is adopted, the capitalization rate or discount rate shall also be disclosed), and a statement as to whether the professional appraiser and its appraisers are related parties, or substantially related parties, of the transacting parties for the purposes of Statement of Financial Accounting Standards No. 6.
(4) Any encumbrances on the investment target and the methods for handling them.
(5) Method for management and disposition of the investment target.
(6) The valuation method and assessment bases of the anticipated income on the investment target, an expert opinion to the effect that the subject investment already generates a stable income and is fairly priced, and a statement as to whether that expert, the trustee, and the owner of the real estate are related parties or substantially related parties for the purposes of Statement of Financial Accounting Standards No. 6.
(7) Whether the owner of the real estate or the rights holder of the real estate-related rights is an interested party of the trustee.
(8) Whether the annual depreciation expense for buildings will be calculated, pursuant to Article 53 of the Act, by extending by one-half the service life set forth in the Table of Service Life of Fixed Assets.
4. If developmental real estate or real estate-related rights have already been determined as targets of investment, an overview of those investment targets:
(1) If the investment target is an urban development project, the overview shall disclose its type, location, site area, land use category, zoning status, statutory use, permits or controls on usage; whether the project is a joint, private, or other construction method; projected commencement and completion dates of the construction; projected number of stories to be constructed; projected number of units, projected total floor area, content of rights (ownership, scope of rights, and a record of the creation of any encumbrance), projected amount of sales or rental revenue, projected gross profit margin or rate of return, and any litigated or non-litigated matters with a material impact upon the rights and interests of beneficiaries .
(2) If the investment target is a public construction project, the profile shall disclose the process by which the government concession was awarded, and the legal and regulatory requirements relevant to the plan; a summary of important contract contents relevant to the plan; an introduction to, and the segregation of duties of, the principal operator and evidence that they possess all technical capabilities, financial resources, and other necessary capabilities required by the concession contract; a project construction plan and feasibility analysis; a construction period financial plan which shall include a cash flow forecast, and plans for capital increase, capital decrease, borrowing and repayment; a construction period risk management plan; an operations plan and relevant assumptions; a construction period financial plan which shall include operating revenues, projected operating costs and profits, and projected financial statements, capital increase, capital decrease, borrowing and repayment plans
for each year of the operations period; other special items such as litigated or non-litigated matters that impact the completion or operations of each project, or that have a material impact upon the rights and interests of beneficiaries.
(3) The value of the target investment as appraised by a professional appraiser, and the principal content of the appraisal report issued pursuant to Article 22 of the Act (including the reasons and basic assumptions used for each appraisal method, any discrepancies in the discounted cash flow analysis method and an explanation of such discrepancies, the weightings for each type of appraisal method and relevant information such as explanations regarding such decisions; if the income approach is adopted, the capitalization rate or discount rate shall still be disclosed); explain whether or not the professional appraiser or its appraisers are related parties or substantial related parties, as defined in the Statement of Financial Accounting Standards No. 6, of the transacting parties.
(4) Any encumbrances on the investment target and the method by which such encumbrance will be handled.
(5) Methods for the management and disposal of the investment target.
(6) Assessment methods and evaluation bases for anticipated input costs of, and expected returns on, the investment target; an expert opinion on the appropriateness of the price of the investment target; explain whether the expert is a related party or substantial related party, as defined in the Statement of Financial Accounting Standards No. 6, of the trustee or transacting parties.
(7) Whether the owner of developmental real estate or the holder of real estate-related rights is an interested party of the trustee.
5. Risk management principles regarding investment in real estate and real estate-related rights, real estate-related securities, developmental real estate and real estate-related rights, and other investment instruments approved by the Competent Authority.
6. Range and ratio of current assets. |
| Article 11 |
The profile of the real estate management institution and listing of its duties shall record the information listed below:
1. Profile of the real estate management institution:
(1) A company profile: Show the date of establishment, lines of business, credit rating, business organization, diagram of affiliated enterprises, operational status, financial status, whether the company is an interested party of the trustee or promoter, and principles for the prevention and handling of any conflict of interest.
(2) Selection standards and process.
2. Duties of the real estate management institution:
(1) Real estate management institution obligations and responsibilities.
(2) Remuneration of the real estate management institution, and the calculation method, payment schedule, and payment method thereof.
(3) Other important stipulations in the mandate contract.
(4) Other items as required by the FSC. |
| Article 11-1 |
The profile of the promoter shall record the following matters:
1. If the promoter is a juristic person, the profile shall include an enterprise profile (showing date of establishment, lines of business, and credit rating), enterprise organization, diagram of affiliated enterprises, operational status, and financial status; the proportional share held by the promoter in the real estate or real estate-related rights in which the fund has decided to invest; whether the promoter is an interested party of the trustee; principles for the prevention and handling of conflict of interest; and the circumstances regarding any penalty imposed on the promoter.
2. If the promoter is an individual, the profile shall include the individual's name; the proportional share held by the promoter in the real estate or real estate-related rights in which the REIT fund has decided to invest pursuant to Article 4, paragraph 1, subparagraph 16 of the Act; and whether the promoter is an interested person of the trustee.
3. Other items as required by the FSC. |
| Article 11-2 |
The profile and duties of the arranger shall include the following matters:
1. Arranger profile:
(1) Company profile: show the date of establishment, lines of business, and credit rating, enterprise organization, diagram of affiliated enterprises, operational status, and financial status; whether the company is an interested party of the trustee or promoter; principles for the prevention and handling of conflict of interest; and the circumstances regarding any penalty imposed on the company.
(2) Selection standards and process.
2. Duties of the arranger:
(1) Obligations and responsibilities of the arranger.
(2) Other items as required by the FSC. |
| Article 16 |
The investment risk disclosure shall list the following risk factors:
1. Risk of illiquidity in the real estate market.
2. Risk of illiquidity in the market for real estate-related securities.
3. Risk of investing in developmental real estate or real estate-related rights.
4. Risk of illiquidity in the market for beneficial securities.
5. Risk of change in expected returns on the trust assets.
6. Other risks.
7. Suitability of subscribers (the following texts shall be printed prominently):
(1) "REIT beneficial securities are not an appropriate investment vehicle for everyone. A subscriber must have sufficient professional knowledge and experience to assess the value and risks of the beneficial securities, and all of the information in this prospectus."
(2) "A subscriber must personally assess the potential influence of the economic environment and other factors on investment returns."
(3) "A subscriber must possess sufficient financial resources and liquidity to bear all risks associated with beneficial securities."
(4) If a REIT fund is of the closed-end type, the trustee may not be requested to effect redemption. |
| Article 19 |
The following applicable acts and regulations shall be listed:
1. Articles 46-1, 57 through 59, and Article 61, of the Act.
2. Articles 32, 40, 174, and 177 of the Securities Exchange Act.
3. Articles 39 through 41 of the Certified Public Accountant Act. |
| Article 20 |
The content prepared for the prospectus for REAT beneficial securities shall record the information listed below:
1. A profile of the beneficial securities.
2. A profile of trust assets.
3. A profile of the trustee and listing of its duties.
4. A profile of the real estate management institution and listing of its duties.
5. A profile of the trustor and professional appraiser.
6. A profile of the arranger and listing of its duties.
7. A profile of operations and management personnel.
8. Utilization of borrowed funds and idle funds.
9. The credit rating of the beneficial securities and the means of credit enhancement.
10. Disclosure of investment risks.
11. Beneficiaries meetings.
12. Matters of special note.
13. Applicable acts and regulations.
14. Other items as required by the FSC. |
| Article 22 |
The profile of trust assets shall record the following:
1. The types of trust assets and their location, property area, land use category, zoning status, statutory use, permits or controls on usage, content of rights (ownership, scope of rights, and a record of the creation of any encumbrance), date the assets were originally acquired by the trustor, the party from whom the assets were acquired (name and relationship) and the acquisition cost, and litigated and non-litigated matters with a material impact upon the rights and interests of beneficiaries.
2. Usage status and conditions, method of disposal after termination of the lease, and important stipulations.
3. Other important information on the trust assets, provided by the trustor pursuant to Article 29, paragraph 3 of the Act.
4. The value of the trust assets, as appraised by a professional appraiser, and the principal content of the appraisal report issued pursuant to Article 34 of the Act (which shall include the reason for, and basic assumptions underlying, the use of each assessment method, any discrepancy in discounted cash flow analysis method and an explanation thereof, the relative weighting of each type of appraisal method and an explanation regarding such weighting decisions; if the income approach is adopted, the capitalization rate or discount rate shall also be disclosed), and a statement as to whether the professional appraiser and its appraisers are related parties, or substantially related parties, of the trustor or trustee for the purposes of Statement of Financial Accounting Standards No. 6.
5. Whether any mortgages on trust assets have been cancelled. Where a mortgage is not canceled, indicate whether the trustor has furnished a letter of consent from the mortgagee notarized by a notary public stating that the mortgage rights will not be invoked for the duration of the trust agreement.
6. Trust asset encumbrances, and how such encumbrances are handled.
7. How considerations received from subscribers for the offering of beneficial securities are utilized by the trustee.
8. Methods for the management and disposal of trust assets.
9. Valuation method and basis of assessment for expected returns on trust assets, and an expert opinion stating that such trust assets already generate a steady income and are fairly priced. In addition, state whether the expert and the trustee or trustor are related parties or substantively related parties as defined in Statement of Financial Accounting Standards No. 6.
10. Where a trustor is an interested party of the trustee, provide an explanation of the trustee's transaction handling procedure and internal control methods.
11. After the trust is terminated, indicate the fee burdens on, and disposal method of, trust assets (whether they will be returned to the trustor, and related arrangements).
12. Indicate whether the annual depreciation expense for buildings will be calculated, pursuant to the provisions of Article 53 of the Act, by extending by one-half the service life set forth in the Table of Service Life of Fixed Assets.
13. Other items as required by the FSC. |
| Article 26 |
The provisions of Article 10, Article 11, Article 11-2, Article 12, Article 13, Article 15, Article 17, and Article 19 apply mutatis mutandis to REAT beneficial securities.
The profile of the real estate management institution under Article 11, and the profile of the arranger under 11-2, as applicable mutatis mutandis to the prospectus for REAT beneficial securities referred to in the preceding paragraph shall include whether the real estate management institution and the arranger are interested parties of the trustor and the principles for preventing and handling any relevant conflicts of interest. |
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