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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 7
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SIGNATURE EDWIN C. LAURENSON
TITLE PRINCIPAL ATTORNEY
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 348,701,722
<INVESTMENTS-AT-VALUE> 397,625,226
<RECEIVABLES> 4,039,786
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</TABLE>
THE R.O.C. TAIWAN FUND
EXHIBITS TO
FORM N-SAR
SEMI-ANNUAL REPORT
FOR REGISTERED INVESTMENT COMPANIES
FOR THE PERIOD ENDING
DECEMBER 31, 1996
<PAGE>
2
ATTACHMENTS INDEX
The following attachments to Form N-SAR are being filed with the Securities and
Exchange Commission on behalf of The R.O.C. Taiwan Fund (811-5617) (CIK-
836267):
Sub-Item Description Page Number
77B Accountant's Report On Internal 3
Control
77Q1 By-Laws of The R.O.C. Taiwan 5
Fund, Amended Through
December 9, 1996
77Q2 Compliance During 1996 with 19
Required Filings Pursuant to
Section 30(f) of the Investment
Company Act
Response to Item 77B
--------------------
KPMG PEAT MARWICK
6th Fl. No. 18, Sec. 1, Chang-An East Road, Telephone (02) 567-6199, 523-8686
Taipei, 104, Taiwan, R.O.C. Telefax (02) 523-8797, 567-5802
The Board of Trustees
The R.O.C. Taiwan Fund
In planning and performing our audit of the financial statements of The R.O.C.
Taiwan Fund for the year ended December 31, 1996, we considered its internal
control structure, including procedures for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of Form N-SAR, not
to provide assurance on the internal control structure.
The management of The R.O.C. Taiwan Fund is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and transactions
are executed in accordance with management's authorization and recorded properly
to permit preparation of financial statements in accordance with generally
accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and may not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it may
become inadequate because changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure does not reduce to a
relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
December 31, 1996.
<PAGE>
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
KPMG Peat Marwick
Taipei, Taiwan
January 8, 1997
BY-LAWS
OF
THE R.O.C. TAIWAN FUND
Amended through December 9, 1996
<PAGE>
BY-LAWS
OF
THE R.O.C. TAIWAN FUND
ARTICLE I
DEFINITIONS
The terms "COMMISSION," "CUSTODIAN," "DECLARATION," "INVESTMENT
MANAGER," "MAJORITY SHAREHOLDER VOTE," "1940 ACT," "SHAREHOLDER," "SHARES,"
"TRANSFER AGENT," "TRUST," "TRUST PROPERTY" and "TRUSTEES" shall have the
respective meanings given them in the Amended and Restated Declaration of Trust
of The R.O.C. Taiwan Fund dated May 8, 1989, as amended from time to time.
ARTICLE II
OFFICES
Section 1. PRINCIPAL OFFICE. Until changed by the Trustees, the
principal office of the Trust shall be in such place as the Trustees shall
determine.
Section 2. OTHER OFFICES. The Trust may have offices in such other
places without as well as within the Commonwealth of Massachusetts as the
Trustees may from time to time determine.
ARTICLE III
SHAREHOLDERS
Section 1. MEETINGS AND QUORUM. An annual meeting of the
Shareholders shall be held at such place within or without the Commonwealth of
Massachusetts on such day and at such time as the Trustees shall designate.
Special meetings of the Shareholders may be called at any time by a majority of
the Trustees. Except as required by law, the holders of one third of the
outstanding Shares present in person or by proxy shall constitute a quorum at
any meeting of the Shareholders, PROVIDED that the Trust shall conduct a general
solicitation of proxies from the Shareholders in connection with any such
meeting. In the absence of a quorum, a majority of the Shares present in person
or by proxy may adjourn the meeting from time to time until a quorum shall be
present. Except as otherwise required by law, the rules of any stock exchange or
quotation system upon which the Shares are listed or traded, the Declaration or
these By-laws, Trustees shall be elected by a plurality of the Shares voted that
are represented in person or by proxy at a meeting of Shareholders, provided
that a quorum is present in person or by proxy at such
<PAGE>
2
meeting, and any other Shareholder action to be taken at a meeting shall be
taken by holders of a plurality of Shares voted that are represented in person
or by proxy at such meeting, provided that a quorum is present in person or by
proxy at such meeting.
Section 2. NOTICE OF MEETINGS. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Trustees by mail to each Shareholder at his address as recorded on
the register of the Trust, mailed at least ten (10) days and not more than
ninety (90) days before the meeting. Only the business stated in the notice of
the meeting shall be considered at such meeting. Any adjourned meeting may be
held as adjourned without further notice. No notice need be given to any
Shareholder who shall have failed to inform the Trust of his current address or
if a written waiver of notice, executed before or after the meeting by the
Shareholder or his attorney thereunto authorized, is filed with the records of
the meeting.
Section 3. RECORD DATE FOR MEETINGS. For the purpose of determining
the Shareholders who are entitled to notice of and to vote at any meeting, or to
participate in any distribution, or for the purpose of any other action, the
Trustees may from time to time close the transfer books for such period, not
exceeding thirty (30) days, as the Trustees may determine; or without closing
the transfer books the Trustees may fix a date not more than ninety (90) days
prior to the date of any meeting of Shareholders or distribution or other action
as a record date for the determination of the persons to be treated as
Shareholders of record for such purposes.
Section 4. PROXIES. At any meeting of Shareholders, any holder of
Shares entitled to vote thereat may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of one or more Trustees or one or more of the officers of the Trust.
Only Shareholders of record shall be entitled to vote. Each full Share shall be
entitled to one vote and fractional Shares shall be entitled to a vote of such
fraction. When any Share is held jointly by several persons, any one of them may
vote at any meeting in person or by proxy in respect to such Share, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Share. A proxy
purporting to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. If the holder of any such Share is a
minor or a person of unsound mind, and subject to guardianship or to the legal
control of any other person as regards the charge or management of such Share,
he may vote by his
<PAGE>
3
guardian or such other person appointed or having such control, and such vote
may be given in person or by proxy.
Section 5. INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
shareholders of a Massachusetts business corporation or as may be required by
the 1940 Act.
Section 6. ACTION WITHOUT MEETING. Any action which may be taken by
Shareholders may be taken without a meeting if all of the Shareholders entitled
to vote on the matter consent to the action in writing and the written consents
are filed with the records of the meetings of Shareholders. Such consent shall
be treated for all purposes as a vote taken at a meeting of Shareholders.
Section 7. CIRCUMSTANCES OF CONVERSION VOTE. If the provisions of
Section 8.6 of the Declaration are triggered as a result of the average closing
price of the Shares being less than 90% of the Trust's average net asset value
per Share during any 12-week period, the Trustees' obligation to submit to the
Shareholders, at the next annual meeting of Shareholders, a proposal to convert
the Trust from a closed-end company to an open-end company shall be fulfilled by
submitting such proposal at the annual meeting next occurring after such
criterion is met, unless such criterion is first met during the 10-week period
immediately preceding the date previously fixed by the Trustees (at a meeting of
Trustees occurring before the date upon which such 10-week period commenced) for
such annual meeting. If such criterion is first met during such 10-week period,
such proposal shall instead be submitted to the Shareholders at the next meeting
of Shareholders following the annual meeting so previously scheduled, which
subsequent meeting may be either an annual meeting or a special meeting of
Shareholders.
ARTICLE IV
TRUSTEES
Section 1. MEETINGS OF THE TRUSTEES. The Trustees may in their
discretion provide for regular meetings of the Trustees. Notice of regular
meetings need not be given. Meetings of the Trustees other than regular meetings
("special meetings") shall be held whenever called by the Chairman, or by any
one of the Trustees, at the time being in office. Notice of the time and place
of each special meeting shall be given by the Secretary or an Assistant
Secretary or by the officer or Trustee calling the meeting and shall be mailed
to each Trustee at least five days before the meeting, or shall be telegraphed,
cabled, or telecopied to each Trustee at his business address, or personally
delivered to him at least two days before the meeting. Notice of a meeting need
not be given to any Trustee if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him. Except as otherwise required by the
<PAGE>
4
1940 Act, a notice or waiver of notice need not specify the purpose of any
meeting. Except as otherwise required by the 1940 Act, the Trustees or any
Committee of Trustees may meet by means of a telephone conference circuit or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, which telephone conference meeting shall be
deemed to have been held at a place designated by the Trustees at the meeting.
Unless the 1940 Act mandates otherwise, participation in a telephone conference
meeting shall constitute presence in person at such meeting. Except as otherwise
required by the 1940 Act, any action required or permitted to be taken at any
meeting of the Trustees may be taken by the Trustees without a meeting if all
the Trustees consent to the action in writing and the written consents are filed
with the records of the Trustees' meetings. Such consents shall be treated as a
vote for all purposes.
Section 2. QUORUM AND MANNER OF ACTING. A majority of the Trustees
shall be present in person at any regular or special meeting of the Trustees in
order to constitute a quorum for the transaction of business at such meeting and
(except as otherwise required by law, the Declaration or these By-Laws) the act
of a majority of the Trustees present at any such meeting, at which a quorum is
present, shall be the act of the Trustees. In the absence of a quorum, a
majority of the Trustees present may adjourn the meeting from time to time until
a quorum shall be present. Notice of an adjourned meeting need not be given.
Section 3. INSURANCE. The Trustees shall not use, or authorize the
officers of the Trust to use, the assets of the Trust to purchase insurance that
protects or purports to protect a Person against liabilities for willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
ARTICLE V
COMMITTEES
Section 1. EXECUTIVE AND OTHER COMMITTEES. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than three (3) to hold office at the pleasure
of the Trustees, which shall have the power to conduct the current and ordinary
business of the Trust while the Trustees are not in session, including the
purchase and sale of securities (which power may be further delegated to any
Investment Manager) and the designation of securities to be delivered upon
redemption of Shares of the Trust, and such other powers of the Trustees as the
Trustees may, from time to time, delegate to them except those powers which by
law, the Declaration or these By-Laws they are prohibited from delegating. The
Trustees may also elect from their own number other Committees from time to
time, the number composing such Committees, the powers conferred upon the same
(subject to the same limitations as with respect to the Executive Committee) and
the term of membership on such Committees to be
<PAGE>
5
determined by the Trustees. The Trustees may designate a chairman of any such
Committee. In the absence of such designation the Committee may elect its own
Chairman.
Section 2. MEETING, QUORUM AND MANNER OF ACTING. The Trustees may
(1) provide for regular meetings of any Committees, (2) specify the manner of
calling and notice required for special meetings of any Committee, (3) specify
the number of members of a Committee required to constitute a quorum and the
number of members of a Committee required to exercise specified powers delegated
to such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting and (5) authorize the member of a Committee to meet by means
of a telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings
and records of decisions taken without a meeting and cause them to be recorded
in a book designated for that purpose and kept in the office of the Trust.
ARTICLE VI
OFFICERS
Section 1. GENERAL PROVISIONS. The officers of the Trust shall be a
Chairman, a President, a Treasurer and a Secretary, who shall be elected by the
Trustees. The Trustees may elect or appoint such other officers or agents as the
business of the Trust may require, including one or more Vice Presidents, one or
more Assistant Secretaries, and one or more Assistant Treasurers. The Trustees
may delegate to any officer or committee the power to appoint any subordinate
officers or agents.
Section 2. TERM OF OFFICE AND QUALIFICATIONS. Except as otherwise
provided by law, the Declaration or these By-Laws, the Chairman, the President,
the Treasurer and the Secretary shall hold office until his successor shall have
been duly elected and qualified, and all other officers shall hold office at the
pleasure of the Trustees. The Treasurer and the Secretary may be the same
person. The President shall be the Chief Executive Officer of the Trust and
shall hold no other office. The Treasurer shall be the Chief Financial Officer
of the Trust. Except as above provided, any two or more offices may be held by
the same person. Any officer may be but none need be a Trustee or Shareholder.
Section 3. REMOVAL. The Trustees, at any regular or special meeting
of the Trustees, may remove any officer with or without cause by a vote of a
majority of the Trustees. Any officer or agent appointed by any officer or
committee may be removed with or without cause by such appointing officer or
committee.
<PAGE>
6
Section 4. POWERS AND DUTIES OF THE CHAIRMAN. The Chairman may call
meetings of the Trustees and of any Committee thereof when he deems it necessary
and shall preside at all meetings of the Shareholders. Subject to the control of
the Trustees and any Committees of the Trustees, within their respective
spheres, as provided by the Trustees, he shall at all times exercise a general
supervision and direction over the affairs of the Trust. He shall have the power
to employ attorneys and counsel for the Trust and to employ such subordinate
officers, agents, clerks and employees as he may find necessary to transact the
business of the Trust. He shall also have the power to grant, issue, execute or
sign such powers of attorney, proxies or other documents as may be deemed
advisable or necessary in furtherance of the interests of the Trust. The
Chairman shall have such other powers and duties as, from time to time, may be
conferred upon or assigned to him by the Trustees.
Section 5. POWERS AND DUTIES OF THE PRESIDENT. In the absence or
disability of the Chairman, the President shall perform all the duties and may
exercise any of the powers of the Chairman, subject to the control of the
Trustees. The President shall perform such other duties as may be assigned to
him from time to time by the Trustees or the Chairman.
Section 6. POWERS AND DUTIES OF VICE PRESIDENTS. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Trustees shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees or the President.
Section 7. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall
be the principal financial and accounting officer of the Trust. He shall deliver
all funds of the Trust which may come into his hands to such Custodian as the
Trustees may employ pursuant to Article X of these By-Laws. He shall render a
statement of condition of the finances of the Trust to the Trustees as often as
they shall require the same and he shall in general perform all the duties
incident to the office of Treasurer and such other duties as from time to time
may be assigned to him by the Trustees. The Treasurer shall give a bond for the
faithful discharge of his duties, if required so to do by the Trustees, in such
sum and with such surety or sureties as the Trustees shall require.
Section 8. POWERS AND DUTIES OF THE SECRETARY. The Secretary, if
any, shall keep the minutes of all meetings of the Trustees. He shall perform
such other duties and have such other powers in addition to those specified in
these By-Laws as the Trustees shall from time to time designate.
Section 9. POWERS AND DUTIES OF ASSISTANT TREASURER. In the absence
or disability of the Treasurer, any Assistant Treasurer designated by the
Trustees shall perform all the duties, and may exercise any of the powers of the
Treasurer. The
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Assistant Treasurer shall perform such other duties as from time to time may be
assigned to them by the Trustees. Each Assistant Treasurer shall give a bond for
the faithful discharge of his duties, if required so to do by the Trustees, in
such sum and with such surety or sureties as the Trustees shall require.
Section 10. POWERS AND DUTIES OF ASSISTANT SECRETARIES. In the
absence or disability of the Secretary, any Assistant Secretary designated by
the Trustees shall perform all of the duties, and may exercise any of the powers
of the Secretary. The Assistant Secretaries shall perform such other duties as
from time to time may be assigned to them by the Trustees.
Section 11. COMPENSATION OF OFFICERS AND TRUSTEES. Subject to any
applicable provisions of the declaration, the compensation of the officers and
Trustees shall be fixed from time to time by the Trustees or, in the case of
officers, by any Committee or officer upon whom such power may be conferred by
the Trustees. No officer shall be prevented from receiving such compensation as
such officer by reason of the fact that he is also a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall be the calendar year.
ARTICLE VIII
SEAL
The Trustees may adopt a seal which shall be in such form and shall
have such inscription thereon as the Trustees may from time to time prescribe.
ARTICLE IX
WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law, the
Declaration or these By-Laws, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto, unless the 1940 Act requires
otherwise. A notice shall be deemed to have been telegraphed, cabled or
telecopied for the purposes of these By-Laws when it has been delivered to a
representative of any telegraph, cable or telecopy company with instruction that
it be telegraphed, cabled or telecopied. Any
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8
notice shall be deemed to be given at the time when the same shall be mailed,
telegraphed, cabled or telecopied.
ARTICLE X
CUSTODIAN
Section 1. APPOINTMENT AND DUTIES. The Trustees shall at all times
employ one or more Custodians meeting the requirements of the 1940 Act:
(1) to hold the securities owned by the Trust and deliver
the same upon written order;
(2) to receive and receipt for any monies due to the Trust
and deposit the same in its own banking department or elsewhere as the Trustees
may direct;
(3) to disburse such funds upon orders or vouchers;
(4) if authorized by the Trustees, to keep the books and
accounts of the Trust and furnish clerical and accounting services; and
(5) if authorized to do so by the Trustees, to compute the
net income of the Trust;
all upon such basis of compensation as may be agreed upon between the Trustees
and such Custodian. If so directed by a Majority Shareholder Vote, the Custodian
shall deliver and pay over all property of the Trust held by it as specified in
such vote.
The Trustees may also authorize the Custodian to employ one or more
sub-Custodians from time to time to perform such of the acts and services of the
Custodian and upon such terms and conditions, as may be agreed upon between the
Custodian and such sub-Custodian and approved by the Trustees, provided that in
every case such sub-Custodian shall meet the requirements of the 1940 Act.
The Trustees may employ any Investment Manager of the Trust to serve
as a Custodian provided that such Investment Manager meets the requirements of
this Section 1.
Section 2. CENTRAL CERTIFICATE SYSTEM. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct the
Custodian to deposit all or any part of the securities owned by the Trust in a
system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities
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9
Exchange Act of 1934, or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
Trust or its Custodian.
Section 3. ACCEPTANCE OF RECEIPTS IN LIEU OF CERTIFICATES. Subject
to such rules, regulations and orders as the Commission may adopt, the Trustees
may direct the Custodian to accept written receipts or other written evidence
indicating purchases of securities held in book-entry form in the Federal
Reserve System in accordance with regulations promulgated by the Board of
Governors of the Federal Reserve System and the local Federal Reserve Banks in
lieu of receipt of certificates representing such securities.
Section 4. PROVISIONS OF CUSTODIAN CONTRACT. The following
provisions shall apply to the employment of a Custodian pursuant to this Article
X and to any contract entered into with the Custodian so employed:
(a) The Trustees shall cause to be delivered to the
appropriate Custodian all securities owned by the Trust or to which it may
become entitled, and shall order the same to be delivered by the Custodian only
upon completion of a sale, exchange, transfer, pledge or other disposition
thereof, and upon receipt by the Custodian of the consideration therefor or a
certificate of deposit or a receipt of an issuer or of its Transfer Agent, all
as the Trustees may generally or from time to time require or approve, or to a
successor Custodian; and the Trustees shall cause all funds owned by the Trust
or to which it may become entitled to be paid to the Custodian, and shall order
the same disbursed only for investment against delivery of the securities
acquired, or in payment of expenses, including management compensation, and
liabilities of the Trust, including distributions to Shareholders, or to a
successor Custodian; provided, however, that nothing herein shall prevent
delivery of securities for examination to the broker selling the same in accord
with the "street delivery" custom whereby such securities are delivered to such
broker in exchange for a delivery receipt exchanged on the same day for an
uncertified check of such broker to be presented on the same day for
certification.
(b) In case of the resignation, removal or inability to serve
of any such Custodian, the Trust shall promptly appoint another bank, trust
company or other entity meeting the requirements of this Article X as successor
Custodian. The agreement with the Custodian shall provide that the retiring
Custodian shall, upon receipt of notice of such appointment, deliver the funds
and property of the Trust in its possession to and only to such successor, and
that, in the case of the assets of the Trust held in the United States of
America, pending appointment of a successor Custodian, or a vote of the
Shareholders to function without a Custodian, the Custodian shall not deliver
funds and property of the Trust to the Trust, but may
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10
deliver them to a bank or trust company doing business in Boston, Massachusetts,
New York, New York, or Baltimore, Maryland, of its own selection, meeting the
requirements for a Custodian imposed by the 1940 Act, as the property of the
Trust to be held under terms similar to those on which they were held by the
retiring Custodian.
ARTICLE XI
SALE OF SHARES OF THE TRUST
The Trustees may, by resolution adopted by a majority of the
Trustees in office, from time to time issue and sell or cause to be issued and
sold Shares for cash or other property, which shall in every case be paid or
delivered to the Custodian as agent of the Trust before the delivery of any
certificate for such shares. The Shares, including additional Shares which may
have been repurchased by the Trust (herein sometimes referred to as "treasury
shares"), may not be sold at less than the net asset value thereof (as defined
in Article XII hereof) determined by or on behalf of the Trustees as of a time
within forty-eight hours, excluding Sundays and holidays, next preceding the
time of such determination, except (1) in connection with an offering to the
holders of Shares; (2) with the consent of a majority of the holders of Shares;
(3) upon conversion of a convertible security in accordance with its terms; (4)
upon the exercise of any warrant issued in accordance with the provisions of Sec
tion 18(d) of the 1940 Act; or (5) under such other circumstances as the
Commission may permit by rules and regulations or orders for the protection of
investors.
No Shares need be offered to existing Shareholders before being
offered to others. No Shares shall be sold by the Trust (although Shares
previously contracted to be sold may be issued upon payment therefor) below net
asset value during any period when the determination of net asset value is
suspended by declaration of the Trustees pursuant to the provisions of Article
XII hereof, unless in conformity with the 1940 Act. In connection with the
acquisition by merger or otherwise of all or substantially all the assets of an
investment company (whether a regulated or private investment company or a
personal holding company), the Trustees may issue or cause to be issued Shares
and accept in payment therefor such assets at not more than market value in lieu
of cash, notwithstanding that the federal income tax basis to the Trust of any
assets so acquired may be less than the market value, provided that such assets
are of the character in which the Trustees are permitted to invest the funds of
the Trust.
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ARTICLE XII
NET ASSET VALUE OF SHARES
Section 1. TIME OF DETERMINATION. The net asset value of each Share
outstanding shall be determined by the Trustees on the last business day (which
term shall, whenever it appears in these By-Laws, be deemed to mean each day
when the Taiwan Stock Exchange is open for trading) of each week as of the close
of trading on the Taiwan Stock Exchange. The power and duty to determine net
asset value may be delegated by the Trustees from time to time to one or more of
the Trustees or officers of the Trust, or to such other party as the Trustees
may from time to time designate. The Trustees may also determine or cause to be
determined the net asset value as of any particular time in addition to the
closing time of such last business day. Such additional or interim determination
may be made either by appraisal or by calculation or estimate. Any such
calculation or estimate shall be based on changes in the market value of
representative or selected securities or on changes in recognized market
averages since the last closing appraisal, and made in a manner which in the
opinion of the Trustees will fairly reflect the changes in the net asset value.
At any time when the Taiwan Stock Exchange is closed (other than customary
weekend and holiday closings), or when the Trustees determine that available
market quotations of Trust assets do not adequately reflect their fair value,
the Trustees may cause the net asset value to be determined by appraising all
securities at last sale prices, or at not more than the current asked nor less
than the current bid prices, in the over-the-counter or other markets, and all
other assets at fair value in the best judgment of the Trustees, and otherwise
proceeding as above stated.
Section 2. SUSPENSION OF DETERMINATION. The Trustees may declare a
suspension of the determination of net asset value except as prohibited by the
1940 Act and rules, regulations and orders promulgated by the Commission
thereunder or by the regulatory authorities of the Republic of China.
Section 3. COMPUTATION. The net asset value of each Share as of any
particular time shall be computed in United States dollars on the basis of
accounting principles generally accepted in the United States and shall be the
quotient (adjusted to the nearer cent) obtained by dividing the value, as of
such time, of the net assets of the Trust (i.e., the value of the assets of the
Trust less its liabilities exclusive of capital and surplus) by the total number
of Shares outstanding (exclusive of treasury shares) at such time, all
determined and computed as follows:
A. The assets of the Trust shall be deemed to include (a) all cash
on hand, on deposit or on call, including any interest accrued thereon, (b) all
bonds, debentures, bills and notes and accounts receivable and other evidences
of indebtedness, (c) all shares of stock, subscription rights, warrants and
other securities, other than its own Shares, (d) all stock and cash dividends or
distributions receivable by the Trust which have been declared and are
ex-dividend to shareholders of record
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at or before the time as of which the net asset value is being determined, (e)
all interest accrued on any interest-bearing securities owned by the Trust, and
(f) all other property of every kind and nature including prepaid expenses, the
value of such assets to be determined in the manner from time to time approved
by the Trustees and intended to reflect the fair value thereof. The Trustees or
their agents shall be entitled to rely on valuations provided by one or more
pricing services approved by the Trustees.
B. The liabilities of the Trust shall be deemed to include (a) all
bills, notes and accounts payable, (b) all administrative expenses payable
and/or accrued, (c) all contractual obligations for the payment of money or
property, including the amount of any unpaid dividends upon the Shares, declared
to Shareholders of record at or before the time as of which the net asset value
is being determined, (d) all reserves authorized or approved by the Trustees for
taxes or contingencies and (e) all other liabilities of the Trust of whatsoever
kind and nature except liabilities represented by outstanding Shares and capital
surplus of the Trust.
C. For the purpose of this Article XII
(i) Shares sold shall be deemed to become
outstanding immediately after the close of business on the day on which the
contract of sale is made, and the sale price thereof (less commission, if any,
and less any stamp or other tax payable by the Trust in connection with the
issuance thereof) shall thereupon be deemed an asset of the Trust.
(ii) Shares purchased by the Trust shall be deemed to
be outstanding at the close of business on the day as of which the purchase
price is determined, and thereafter they shall be deemed treasury stock and,
until paid, the price thereof shall be deemed to be a liability of the Trust.
(iii) Credits and contractual obligations payable to the
Trust in foreign currency and liabilities and contractual obligations payable by
the Trust in foreign currency shall be taken at the current cable rate of
exchange as nearly as practicable at the time as of which the net asset value is
computed.
ARTICLE XIII
DIVIDENDS AND DISTRIBUTIONS
Section 1. LIMITATIONS ON DISTRIBUTIONS. Distributions to
Shareholders paid in respect of any one fiscal year shall, when and as declared
by the Trustees, be made in accordance with the policies stated in the Trust's
effective Registration Statement on Form N-2 with the commission.
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Section 2. DISTRIBUTIONS PAYABLE IN CASH OR SHARES. The Trustees
shall have power, to the fullest extent permitted by the laws of Massachusetts
but subject to the limitation as to cash distributions imposed by Section 1 of
this Article XIII, at any time or from time to time to declare and cause to be
paid distributions payable at the election of any of the Shareholders (whether
exercised before or after the declaration of the distribution) either in cash or
in Shares, provided that (except where the Trust issues Shares below current
market price in connection with any dividend reinvestment plan of the Trust) the
sum of (i) the cash distribution actually paid to any Shareholder and (ii) the
net asset value of the Shares which that Shareholder elects to receive, in
effect at such time as the Trustees may specify, shall not exceed the full
amount of cash to which that Shareholder would be entitled if he elected to
receive only cash. In the case of a distribution payable in cash or Shares at
the election of a Shareholder, the Trustees may prescribe whether a Shareholder,
failing to express his election before a given time, shall be deemed to have
elected to take Shares rather than cash, or to take cash rather than Shares, or
to take Shares with cash adjustment of fractions.
Section 3. STOCK DIVIDENDS. Anything in these By-Laws to the
contrary notwithstanding, the Trustees may at any time declare and distribute
pro rata among the Shareholders a "stock dividend" out of either authorized but
unissued Shares or treasury shares of the Trust or both.
ARTICLE XIV
AMENDMENTS
These By-Laws, or any of them, may be altered, amended or repealed,
or new By-Laws may be adopted by a resolution adopted by a majority of the
Trustees in office, provided, however, that no By-Law may be amended, adopted or
repealed by the Trustees if such amendment, adoption or repeal requires,
pursuant to law or the provisions of the Declaration or these By-Laws (if any),
a vote of the Shareholders.
Response to Item 77Q2
---------------------
Compliance During 1996 With
Required Filings Pursuant to
Section 30(f) of the Investment Company Act
To the knowledge of The R.O.C. Taiwan Fund (the "Trust"), the
following individuals or organizations, which during 1996 were affiliated
persons (as defined in the Investment Company Act of 1940 (the "Investment
Company Act")) of International Investment Trust Company Limited (the
"Adviser"), did not make timely filings, or failed to make filings, required
during or with respect to 1996 by rules of the United States Securities and
Exchange Commission pursuant to Section 30(f) of the Investment Company Act,
with respect to holdings of, or transactions during 1996 or prior years in,
shares of the Trust:
(1) The Kuomintang, which controls Central Investment Holding Co., Ltd.
("CIHC"), an affiliated person of the Adviser through direct or
indirect control of 22.4% of the Adviser's outstanding voting
securities, has failed to make any filings of Forms No. 3, 4 or 5.
However, CIHC, Kuang-Hwa Investment Holding Col, Ltd, Chii-Sheng
Investment Holding Co., Ltd., and Jen-Hwa Investment Holding Co.,
Ltd., all of which are ultimately controlled by the Kuomintang and
have cross ownership with each other, did make timely filings (or
have provided statements in lieu of required filings). In addition,
if CIHC and the Kuomintang are deemed to be controlling persons of
the Adviser, then persons controlled by CIHC or the Kuomintang would
be required to file statements on Forms 3, 4 and 5 with respect to
ownership of, or transactions in, shares of the Trust. No such
persons have made any such filings.
