Law Viewer

Back Home

ENFORCEMENT DECREE OF THE ACT ON ISSUANCE AND DISTRIBUTION OF SHORT-TERM ELECTRONIC BONDS, ETC.

Presidential Decree No. 24220, Dec. 4, 2012

Amended by Presidential Decree No. 27037, Mar. 11, 2016

CHAPTER I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of this Decree is to provide for matters delegated by the Act on Issuance and Distribution of Short-term Electronic Bonds, Etc. and other necessary matters for the enforcement thereof.
 Article 2 (Scope of Electronic Short-term Bond, Etc.)
"Bonds prescribed by Presidential Decree“ in subparagraph 2 (c) of Article 2 of the Act on Issuance and Distribution of Short-term Electronic Bonds, Etc. (hereinafter referred to as the "Act") means local government bonds among debt securities under Article 4 (3) of the Financial Investment Services and Capital Markets Act.
 Article 3 (Scope of Account Manager)
"Organization prescribed by Presidential Decree" in subparagraph 5 (e) of Article 2 of the Act means a person that falls under any of the following institution or person:
1. A securities finance company which obtained authorization of securities financing business under Article 324 (1) of the Financial Investment Services and Capital Markets Act and a merchant bank under Article 336 (1) of the same Act;
2. Other persons from among those who manage securities of a third person under other Acts, specified and publicly notified by the Financial Services Commission as an account manager.
CHAPTER II ACCOUNT OPENING
 Article 4 (Matters Recorded in Issuer Management Account Book)
"Matters prescribed by Presidential Decree" in Article 4 (2) 3 of the Act means matters falling under any of the following matters:
1. Issuance limit under the former part of Article 30 of the Act (hereinafter referred to as “issuance limit”);
2. Outstanding issuance balance;
3. Other necessary matters to be recorded in the issuer management account book prescribed under Article 4 (2) of the Act, which are prescribed by the Korea Securities Depository established under Article 294 of the Financial Investment Services and Capital Markets Act (hereinafter referred to as the “Korea Securities Depository”) as the provisions for registration business under Article 7 (1) of the Act (hereinafter referred to as “registration business provisions”).
 Article 5 (Matters Registered in Client Account Book)
"Matters prescribed by Presidential Decree" in Article 5 (2) 7 of the Act means cause of increase and decrease of the value of electronic short-term bonds, etc, registered in the client account book under Article 5 (2) of the Act (hereinafter referred to as “client account book”).
 Article 6 (Matters Registered in Client Management Account Book)
"Matters prescribed by Presidential Decree" in Article 5 (4) 3 of the Act means cause of increase and decrease in the value of electronic short-term bonds, etc, recorded in the client management account book under Article 5 (4) of the Act (hereinafter referred to as “client management account book”).
 Article 7 (Scope of Opener of Account Manager Proprietary Account)
"Any person prescribed by Presidential Decree including fund established by the Act” in Article 6 (1) of the Act means a person falling under any of the following funds or persons: <Amended by Presidential Decree No. 27037, Mar. 11, 2016>
1. Funds established pursuant to an Act and corporations which manage and operate such funds;
3. Financial companies authorized to perform liquidation under Article 36-3 (1) of the Depositor Protection Act;
5. Other persons prescribed by the provisions for registration business, who need to open an account manager proprietary account under Article 6 (1) of the Act (hereinafter referred to as "account manager proprietary account”) for the efficient management of electronic short-term bonds, etc.
CHAPTER III METHOD AND PROCEDURE OF REGISTRATION OF ELECTRONIC SHORT-TERM BOND, ETC.
 Article 8 (Method and Procedure for Registration of Issuance)
Registration of Issuance of electronic short-term bonds, etc. under Article 8 (4) of the Act shall follow the orders and methods under the classification of the following subparagraphs:
1. Where the matter shall be registered in a client account book:
(a) The Korea Securities Depository shall record the matters under each paragraph of Article 4 (2) of the Act in an issuer management account book;
(b) The Korea Securities Depository shall record the matters under each paragraph of Article 5 (4) of the Act in a client management account book of an account manager and notify the relevant account manager of such fact;
(c) The account manager shall register the matters prescribed under each paragraph of Article 5 (2) of the Act in a client account book in accordance with the notification without delay;
2. Where the matter shall be registered in an account manager proprietary account:
(a) The Korea Securities Depository shall record the matters under each paragraph of Article 4 (2) of the Act in an issuer management account book;
(b) The Korea Securities Depository shall record the matters under each paragraph of Article 5 (2) of the Act in the relevant account manager proprietary account.
 Article 9 (Application for Registration of Transfer of Securities between Accounts and Method and Procedure of Registration)
(1) Application for a registration of transfer of securities between accounts under Article 9 (3) of the Act shall be filed by a person who intends to transfer securities between accounts for a transfer, etc. of electronic short-term bond, etc. (hereinafter referred to as “transferer, etc.” in this Article): Provided, That where the transferer, etc. agrees that a person who intends to receive the transfer of securities between accounts (hereinafter referred to as “transferee, etc.” in this Article) may file an application, attaching a consent of the transferer, etc, the transferee, etc. may do so.
(2) Notwithstanding paragraph (1), where requiring the right for electronic short-term bond, etc. by an order or judgement of a court, inheritance or other general succession, a general successor may file an application for register of transfer of securities between accounts, attaching a document evidencing the acquisition of right.
(3) Transfer of securities between accounts shall be registered by registering a reduced amount in the account of transferer, etc. and registering an increased amount in the account of transferee, etc., prescribed by the registration business provisions.
 Article 10 (Application for Registration of Establishment and Cancellation of Pledge Right and Method and Procedure for Registration)
(1) Application for Registration of establishment of pledge right under Article 10 (3) of the Act shall be filed by a pledger: Provided, That where a pledger agrees that a pledgee may file an application, attaching a consent of the pledger, a pledgee may do so.
(2) Application for registration of revocation of pledge right shall be filed by a pledgee: Provided, That where a pledgee agrees that a pledger may file an application, attaching a consent of the pledgee, a pledger may do so.
(3) Establishment or revocation of the pledge right shall be registered in an account manager proprietary account book or a client account of a pledgee.
(4) The Korea Securities Depository or an account manager which registered the establishment of the pledge right, upon the request of a pledgee shall issue a document verifying the registration of the establishment of pledge right.
 Article 11 (Application for Registration of Indication and Revocation of Trust Property and Method and Procedure of Registration)
(1) Application for Registration of indication of trust property under Article 11 (3) of the Act shall be filed under the following classifications:
1. Where an electronic short-term bond, etc. falls under trust property by an application of transfer of securities between accounts from the account of a truster to that of a trustee: a truster shall file an application;
2. Where an electronic short-term bond, etc. falls under trust property by means other than those prescribed under paragraph (1); a trustee shall file an application.
(2) Application for registration of revocation of trust property under Article 11 (3) of the Act shall be filed by a trustee.
(3) Indication or revocation of the pledge right shall be registered in an account manager proprietary account book or a client account of a trustee.
 Article 12 (Cancellation of Registration by Application)
(1) "Grounds prescribed by Presidential Decree" in each subparagraph of Article 12 (1) of the Act means matters falling under any of the following cases:
1. Where the right in an electronic short-term bond, etc. was altered to a dividend bond by a bankruptcy of an issuer;
2. Where a creditor expresses his/her intention to exempt the obligation for electronic short-term bonds, etc.;
3. Other cases where the right in electronic sort-term bonds, etc. clearly extinguished and the Financial Services Commission deems the revocation of registration necessary.
(2) Any person who intends to file an application for revocation of registration under Article 12 (1) of the Act shall prove the payment of principal and interest or the occurrence of the grounds under each subparagraph of paragraph (1) to the Korea Securities Depository or an account manager where the relevant electronic short-term bond, etc is registered.
(3) Revocation of registration by application shall follow the orders and methods under the classification of the following subparagraphs:
1. Cases of application for revocation of electronic short-term bond, etc. registered in a client account book:
(a) An account manager shall revoke the register of the relevant electronic short-term bond, etc. in an client account book and notify the Korea Securities Depository of such fact without delay;
(b) The Korea Securities Depository shall record the reduced value in a client management account book of the relevant account manager in accordance with the notification without delay;
(c) The Korea Securities Depository shall record the reduced value in an issuer management account book;
2. Cases of application for revocation of electronic short-term bonds, etc. registered in an account manager proprietary account book:
(a) The Korea Securities Depository shall revoke the registration of the relevant electronic short-term bond, etc. in an account manager proprietary account book;
(b) The Korea Securities Depository shall record the reduced value in an issuer management account book.
 Article 13 (Revocation of Register ex officio)
(1) "Grounds prescribed by Presidential Decree" in each subparagraph of Article 12 (3) of the Act means any of the following matters:
1. Where a right in an electronic short-term bond, etc. was altered to a dividend bond due to a bankruptcy of an issuer;
2. Payment of principal and interest, or cases other than subparagraph 1, where it is clear that the right in an electronic short-term bond, etc. extinguished and the Financial Services Commission deems the revocation of registration necessary.
(2) Revocation of registration ex officio shall follow the orders and methods under the classification of the following subparagraphs:
1. Cases of electronic short-term bond, etc. registered in a client account book:
(a) The Korea Securities Depository shall record the reduced value in a client management account book of an account manager where the relevant client account is opened;
(b) The Korea Securities Depository shall record the decrease in an issuer management account book and notify the relevant account manager of such fact without delay;
(c) An account manager shall revoke the registration of electronic short-term bond, etc. in the relevant client account book without delay and notify the Korea Securities Depository of the outcomes thereof without delay;
2. Cases of electronic short-term bonds, etc. registered in an account manager proprietary account book:
(a) The Korea Securities Depository shall revoke the registration of the relevant electronic short-term bond, etc. in an account manager proprietary account book;
(b) The Korea Securities Depository shall record the reduced value in an issuer management account book.
CHAPTER IV EXERCISE OF RIGHTS ON ELECTRONIC SHORT-TERM BOND, ETC.
 Article 14 (Certificate of Creditor)
(1) Certificate of creditor under Article 16 (1) of the (hereinafter referred to as “certificate of creditor”) shall be issued under the classification of the following subparagraphs:
1. Electronic short-term bonds, etc. registered in an account manager proprietary account book: the Korea Securities Depository;
2. Electronic short-term bonds, etc. registered in a client management book: an account manager.
(2) The Korea Securities Depository or an account manager shall record the following matters in a certificate of creditor:
1. The name and address of a creditor (in cases of a corporation, referring to the title and the location of the main office);
2. The type, item and amount of the electronic short-term bond, etc. to be evidenced;
3. The details of rights to be exercised;
4. Other necessary matters deemed by the Korea Securities Depository regarding the evidence of the status of a creditor.
(3) "Persons prescribed by Presidential Decree" in Article 16 (2) of the Act means, where a creditor files an application with or apply to a court, or file a lawsuit, to exercise the right for an electronic short-term bond, etc, the relevant court.
(4) The Korea Securities Depository or an account manager which issued a certificate of creditor shall without delay indicate in an account manager proprietary account book or a client account book, that the cause of a fetter on disposal is the issuance of a certificate of creditor, under Article 16 (3) of the Act.
 Article 15 (Notification of Details of Possession)
(1) Notification of the details of ownership under Article 17 (1) of the Act shall follow the classification of the following subparagraphs:
1. Electronic short-term bonds, etc. registered in an account manager proprietary account book: the Korea Securities Depository;
2. Electronic short-term bonds, etc. registered in a client management book: an account manager.
(2) "Term of validity of the notification details and other matters prescribed by Presidential Decree” in Article 17 (1) of the Act means the following matters:
1. The term of validity of the notification;
2. Matters falling under each subparagraph of Article 14 (2) of the Act.
(3) "Method prescribed by Presidential Decree” in Article 17 (1) of the Act means the following methods:
1. In writing or by fax;
2. By e-mail or other similar electronic communication;
3. Other method which the Financial Services Commission determined and provided public notice of.
(4) The Korea Securities Depository or an account manager which notified the details of ownership shall without delay indicate in an account manager proprietary account book or a client account book, a period of fetter on disposal and the fact that the cause of fetter on disposal is the notification of the details of ownership, under Article 17 (2) of the Act.
CHAPTER V PROTECTING HOLDER OF RIGHT
 Article 16 (Revocation Method, etc. of Excessive Portion)
(1) Where an excessive portion arises under Article 19 (1) of the Act, an account manager shall confirm the client account where the excessive portion occurs and revoke the registration of the excessive portion without delay; where an excessive portion arises under Article 19 (2) of the Act, the Korea Securities Depository shall confirm the account manager proprietary account or client management account where the excessive portion occurs and revoke the registration of the excessive portion without delay.
(2) Notwithstanding Article 1, where a person acquires the right on the excessive portion lawfully under Article 13 (5) of the Act (hereinafter referred to as “good faith acquirer of the excessive portion”), the relevant account manager or the Korea Securities Depository shall revoke the registration of electronic short-term bonds, etc., the amount of which is equivalent to that of excessive portion acquired in good faith (hereinafter referred to as “item registered in excess”) without delay. In such cases, the account manager or the Korea Securities Depository which fails to have the item registered in excess shall acquire an item registered in excess and cancel the registration thereof.
(3) Liability to pay the principal and interest assumed by the account manager or the Korea Securities Depository which fails to perform the duty to cancel excessive portion under Article 19 (3) of the Act shall be as follows:
1. An account manager: liability to pay the principal and interest calculated under Article 17 (2) of this Decree to the creditor under Article 20 (1) of the Act;
2. The Korea Securities Depository: liability to pay the principal and interest calculated under Article 17 (3) of this Decree to the creditor under Article 20 (2) of the Act.
 Article 17 (Limitation on Exercise of Right to Excessive Portion)
(1) "A person prescribed by Presidential Decree” in Article 20 (1) and (2) of the Act means the following persons:
1. Where no good faith acquirer of the excessive portion exists: a person who is registered as a creditor of the excessive portion;
2. Where a good faith acquirer of the excessive portion exists: a person who is registered as a creditor of items registered in excess.
(2) "Amount calculated as prescribed by Presidential Decree” in Article 20 (1) of the Act means the amount calculated under the classification of the following subparagraphs:
1. A creditor, where no good faith acquirer of the excessive portion exists: the amount registered in the client account book of each creditor, among the excessive portion under Article 19 (1) of the Act;
2. A creditor, where a good faith acquirer of the excessive portion exists: the amount calculated using the following formula:
Amount acquired in good faith among the excessive portion under Article 19 (1) of the Act×Amount of items registered in excess which are registered in each creditor’s client account book
Total amount of items registered in excess which are registered in the relevant account manager’s entire client account book
(3) "Amount calculated as prescribed by Presidential Decree” in Article 20 (2) of the Act means the amount calculated under the classification of the following subparagraphs:
1. A creditor, where no good faith acquirer of the excessive portion exists: the amount registered in the account manager proprietary account book of each creditor among the excessive portion under Article 19 (2) of the Act;
2. A creditor, where a good faith acquirer of the excessive portion exists: the amount calculated using the following formula:
Amount acquired in good faith among the excessive portion under Article 19 (2) of the Act×Amount of items registered in excess which are registered in each creditor’s account manager proprietary account book or client account book
Total amount of items registered in excess which are registered in the entire account manager proprietary account book and client account book
 Article 18 (Report on Accident)
"Accidents prescribed by Presidential Decree” in Article 24 (3) 3 of the Act means cases, where the Financial Services Commission deems it difficult to engage in business for registration, record or management of electronic short-term bond, etc. under normal circumstances due to natural disaster, an interruption of an electronic computer system or occurrence of any other similar events.
 Article 19 (Fetter on Registration of Transferring Securities between Accounts)
(1) "Grounds prescribed by Presidential Decree” in Article 25 of the Act means the following grounds:
1. Revocation of authorization, permission or registration, etc. or suspension of business for an account manager;
2. Grounds similar to those under subparagraph 1, or bankruptcy or dissolution of an account manager, due to which the Financial Services Commission deems it difficult to perform registration business for transfer of securities between accounts under normal circumstances.
(2) Fetter on registration of transferring electronic short-term bonds, etc. between accounts under Article 25 of the Act may be limited to the electronic short-term bond, etc. registered in a client account book. In such cases, where it is deemed necessary by the Financial Services Commission, registration of transferring securities between accounts may be limited by types or items of electronic short-term bond, etc.
(3) Where the Korea Securities Depository places a fetter on the registration of transferring securities between accounts under paragraph (2), it shall give a public notice of the details thereof in advance.
 Article 20 (Keeping Registration Information, Etc.)
(1) The Korea Securities Depository shall keep the information registered in an account manager proprietary account book and the information recorded in a client management account book under Article 26 (2) of the Act for ten years from the date the registration or record is revoked.
(2) An account manager shall keep the information registered in a client account book under Article 26 (2) of the Act for ten years from the date the registration is revoked.
(3) Registered or recorded information under paragraphs (1) and (2) shall be kept by devices preventing fabrication or alteration, and the same registered or recorded information shall be kept in more than two places. In such cases, one of the information may be commissioned to be kept by a third person who has human resources, data-processing equipment, security equipment and other physical facilities sufficient to protect information.
CHAPTER VI INSPECTION AND SUPERVISION
 Article 21 (Measures regarding the Korea Securities Depository)
(1) "Measures prescribed by Presidential Decree” in Article 28 (1) 7 of the Act means the following grounds:
1. Requesting or recommending the improvement of methods of business management or operation;
2. Requesting compensation for losses;
3. Filing criminal complaints or informing an investigative agency of violations of the Act, if any;
4. Informing a related agency or an investigative agency of violations of other Acts, if any.
(2) "Measures prescribed by Presidential Decree” in Article 28 (2) 6 and Article 28 (3) 7 of the Act means measures under subparagraphs 3 and 4 of Article 1, respectively.
 Article 22 (Grounds for Measures regarding the Korea Securities Depository, Etc.)
(1) "Cases prescribed by Presidential Decree” in Article 28 of the Act and subparagraph 28 of attached table 1 hereto mean the following cases fall:
1. Violations of the provisions for registration business under Article 7 of the Act;
2. Registrations of the intent to place a fetter on the disposal of electronic short-term bonds, etc., by falsity, in violation of Articles 16 (3) and 17 (2) of the Act;
3. Issuance of a certificate of creditor, contrary to the methods under Article 14 (1) and (2) of the Act;
4. Failures to notify details of ownership, following the methods under Article 15 (1) through (3) of the Act.
(2) "Cases prescribed by Presidential Decree” in Article 29 of the Act and subparagraph 25 of attached table 2 hereto mean the following cases:
1. Violations of the provisions for registration business under Article 7 of the Act;
2. Registrations of the intent to place a fetter on the disposal of electronic short-term bonds, etc., by falsity, in violation of Articles 16 (3) and 17 (2) of the Act;
3. Issuance of a certificate of creditor, contrary to the methods under Article 14 (1) and (2) of the Act;
4. Failures to notify details of ownership, following the methods under Article 15 (1) through (3) of the Act;
5. Cases of wrongful receipt of money, etc. from a third person with respect to its business or acquiring money, etc. to deliver it to a third person.
CHAPTER VII SUPPLEMENTARY PROVISIONS
 Article 23 (Publication of Issuance Details)
"Matters prescribed by Presidential Decree” in Article 33 of the Act means the matters falling under any of the following subparagraphs:
1. Issuance limit;
2. Outstanding issuance balance;
3. Other matters specified and publicly notified by the Financial Services Commission, among matters notified by the issuer to the Korea Securities Depository under Article 8 (1) 3 of the Act.
 Article 24 (Management of Sensitive Information and Personally Identifiable Information)
(1) The Korea Securities Depository may manage data that include resident registration numbers, passport numbers or alien registration numbers provided for in subparagraph 1, 2 or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act, where it is essential to conduct the following affairs:
1. Affairs concerning exercising rights in electronic short-term bonds, etc. under Article 15 of the Act;
2. Affairs concerning the issuance of certificates of creditor under Article 16 of the Act;
3. Affairs concerning the notification of the details of ownership under Article 17 of the Act.
(2) An account manager may manage data that include resident registration numbers, passport numbers or alien registration numbers provided for in subparagraph 1, 2 or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act, where it is essential to conduct the following affairs:
1. Affairs concerning the opening of a client account under Article 5 of the Act;
2. Affairs concerning the registration of the establishment or revocation of a pledge right under Article 10 of the Act;
3. Affairs concerning the registration of indication and revocation of trust property under Article 11 of the Act;
4. Affairs concerning exercise of rights in electronic short-term bonds, etc. under Article 15 of the Act;
5. Affairs concerning the issuance of certificates of creditor under Article 16 of the Act;
6. Affairs concerning the notification of the details of ownership under Article 17 of the Act.
CHAPTER VIII PENAL PROVISIONS
 Article 25 (Guidelines for Imposition of Fines for Negligence)
Guidelines for imposition of fines for negligence under Article 37 (3) of the Act shall be as the attached tables hereto.
ADDENDUM
This Decree shall enter into force on June 18, 2010.
ADDENDA <Presidential Decree No. 27037, Mar. 11, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 Omitted.