In order to effect negotiations with mainland China on operational issues without compromising the government's position on denying the other side's legitimacy, the ROC government under Chiang Ching-kuo created the "Straits Exchange Foundation" (SEF), a nominally non-governmental institution directly led by the Mainland Affairs Council, an instrument of the Executive Yuan. The PRC responded to this initiative by setting up the Association for Relations Across the Taiwan Straits (ARATS), directly led by the Taiwan Affairs Office of the State Council. This system, described as "white gloves", allowed the two governments to engage with each other on a semi-official basis without compromising their respective sovereignty policies.