August 2017
Relevant Provisions of the Financial Supervisory Commission on Investment in Overseas Real Estate Investment Trust Funds (Taiwan)
Young Zheng
The Financial Supervisory Commission prescribed the relevant provisions on investment in foreign real estate investment trust funds relating to the objects "which may be invested or used subject to the approval of the competent authority" under Article 17, Paragraph 1 Subparagraph 5 of the Real Estate Securitization Statute by way of the Jin-Guan-Yin-Piao-10540000410 of March 2, 2016 (hereinafter, the "Circular").
Article 17, Paragraph 1, Subparagraph 5 of the Real Estate Securitization Statute provides: "A real estate investment trust fund shall be limited to the investment or operation of the following objects: ...(5) other objects whose investment or operation is approved by the competent authority." The Circular determines that an overseas real estate investment trust fund is an object whose investment and operation is approved under the above statute pursuant to the authorization under the above provision and specifically prescribes the following restrictions:
(1) The aggregate of investment in overseas real estate investment trust funds together with investment in beneficiary securities and asset-backed securities issued or delivered by other trustee organizations or special purpose vehicles in accordance with the Real Estate Securitization Statute or the Financial Asset Securitization Statute shall not exceed 25% of the net asset value of the fund.
(2) The amount of investment in single country real estate investment trust funds shall not exceed 5% of the net asset value of the fund.
(3) The aggregate of investment in overseas real estate and overseas real estate investment trust funds shall not exceed 50% of the net asset value of the fund.
The Financial Supervisory Commission prescribed the relevant provisions on investment in foreign real estate investment trust funds relating to the objects "which may be invested or used subject to the approval of the competent authority" under Article 17, Paragraph 1 Subparagraph 5 of the Real Estate Securitization Statute by way of the Jin-Guan-Yin-Piao-10540000410 of March 2, 2016 (hereinafter, the "Circular").
Article 17, Paragraph 1, Subparagraph 5 of the Real Estate Securitization Statute provides: "A real estate investment trust fund shall be limited to the investment or operation of the following objects: ...(5) other objects whose investment or operation is approved by the competent authority." The Circular determines that an overseas real estate investment trust fund is an object whose investment and operation is approved under the above statute pursuant to the authorization under the above provision and specifically prescribes the following restrictions:
(1) The aggregate of investment in overseas real estate investment trust funds together with investment in beneficiary securities and asset-backed securities issued or delivered by other trustee organizations or special purpose vehicles in accordance with the Real Estate Securitization Statute or the Financial Asset Securitization Statute shall not exceed 25% of the net asset value of the fund.
(2) The amount of investment in single country real estate investment trust funds shall not exceed 5% of the net asset value of the fund.
(3) The aggregate of investment in overseas real estate and overseas real estate investment trust funds shall not exceed 50% of the net asset value of the fund.
