CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to prescribe special cases of the Civil Procedure Act with respect to securities-related class actions in order to efficiently seek a relief for collective losses arising in the course of trading securities, and ultimately to enhance the operational transparency of companies. [This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
The terms used in this Act shall be defined as follows:
| 1. | The term "securities-related class action" means an action for damages filed by one or more representative parties when any damage arises to many persons in the course of the trade or other transactions of securities; |
| 2. | The term "class" means all of the victims who have common interests in claiming compensation for damage when any loss arises to many persons in the course of the trade or other transactions of securities; |
| 3. | The term "class member" means each and every victim comprising the class; |
| 4. | The term "representative party" means one or more class members who file a securities-related class action for the class after obtaining permission from a court; |
| 5. | The term "opt-out notice" means a report filed by a class member to a court that the class member intends not to be bound by the res judicata effect of the judgment in a securities-related class action; |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 3 (Scope of Application) |
| (1) | A securities-related class action may be filed only for the following claims for damages: |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
Securities-related class actions shall be under the exclusive jurisdiction of the collegiate panel of a district court which has jurisdiction over the location of a defendant's general forum.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 5 (Appointment of Attorneys) |
| (1) | The plaintiff and defendant of a securities-related class action shall appoint lawyers as their attorney. |
| (2) | No person who has a conflict of interest with a class to the extent that the person is deemed inappropriate to serve as an attorney in any legal proceedings referred to in this Act on the grounds that the person owns any securities subject to the securities-related class action or has any direct monetary interest in such securities or on other grounds shall serve as an attorney for the plaintiff in the relevant securities-related class action. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 6 (Application of the Civil Procedure Act) |
Unless otherwise specifically provided for in this Act, the Civil Procedure Act shall apply to securities-related class actions. [This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
CHAPTER II FILING LAWSUITS AND PROCEDURES FOR PERMISSION
| Article 7 (Filing Lawsuits and Applications for Permission) |
| (1) | A person who files a securities-related class action lawsuit to become a representative party shall file a complaint and an application for permission for the lawsuit with the competent court. |
| (4) | A court shall immediately notify any exchange designated by the Financial Services Commission from among those that have obtained permission for an exchange under the Financial Investment Services and Capital Markets Act (hereinafter referred to as the "designated exchange") of the fact that the complaint and the application for permission of the lawsuit have been filed under paragraph (1) and the designated exchange shall publicly notify such fact to the public. <Amended by Act No. 11845, May 28, 2013> |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 8 (Matters to be Stated in Complaints) |
The following shall be stated in a complaint:
| 1. | The person who files a lawsuit pursuant to Article 7 (1) and his/her legal representation; |
| 2. | The attorney for the plaintiff; |
| 4. | The intent and cause of the claim; |
| 5. | The scope of the class. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 9 (Matters to be Stated in Applications for Permission for Lawsuit and Accompanying Documents) |
| (1) | The following shall be stated in an application for permission of a lawsuit: |
| 1. | The person who files a lawsuit pursuant to Article 7 (1) and his/her legal representation; |
| 2. | The attorney for the plaintiff; |
| 4. | The scope of the class; |
| 5. | Careers of the person who files a lawsuit pursuant to Article 7 (1) and of the attorney for the plaintiff; |
| 6. | The intent and cause of the application for permission; |
| 7. | Agreement on attorneys' fees. |
| (2) | The person who files a lawsuit pursuant to Article 7 (1) shall file an application for permission of a lawsuit accompanied by the documents stating the following matters: |
| 1. | The fact that the person has not acquired securities with respect to the securities-related class action in order to file the securities-related class action, or in accordance with the instructions given by the attorney; |
| 2. | Details of the securities-related class actions that the person has been involved in as a representative party during the preceding three years. |
| (3) | An application for permission of a lawsuit shall be accompanied by the documents stating the following matters by the attorney: |
| 1. | Details of the securities-related class actions that the person has been involved in as an attorney during the preceding three years; |
| 2. | The fact that the attorney does not violate Article 5 (2). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 10 (Public Notices of Lawsuit and Appointment of Representative Party) |
| (1) | A court shall give public notice of the following matters within ten days from the receipt of a complaint and an application for permission of a lawsuit filed under Article 7: |
| 1. | The fact that a securities-related class action lawsuit has been filed; |
| 2. | The scope of the class; |
| 3. | The intent of the claims and gist of the cause; |
| 4. | A statement that a class member who intends to be a representative party shall file an application with a court within 30 days from the date the public notice is given. |
| (2) | Public notices referred to in paragraph (1) shall be given in the manner specified by the Supreme Court Regulations, such as publishing such public notices on daily newspapers distributed nationwide. |
| (3) | A class member who intends to be a representative party pursuant to paragraph (1) 4 shall file an application stating his/her career and the intent of the application with a court, accompanied by the documents referred to in Article 9 (2). |
| (4) | A court shall rule to appoint a person who is the most appropriate to represent the interests of the class and meets the requirements referred to in Article 11 as a representative party, from among the persons who file a lawsuit pursuant to Article 7 (1) and class members who submit an application pursuant to paragraph (1) 4, within 50 days from the date on which a public notice is given under paragraph (1). |
| (5) | The ruling rendered under paragraph (4) shall not be subject to appeal. |
| (6) | A person appointed as a representative party pursuant to paragraph (4) shall pay the face value of the stamp affixed by a person who fails to be appointed a representative party among the persons who have filed a lawsuit pursuant to Article 7 (1). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 11 (Requirements for Representative Party and Attorney) |
| (1) | A representative party shall be a class member who can represent the interests of the class in a fair and appropriate manner, such as the person who is likely to obtain the largest economic benefit from the relevant securities-related class action among class members. |
| (2) | The plaintiff’s attorney in any securities-related class action shall be a person who can represent the interests of the class in a fair and appropriate manner. |
| (3) | No one who has been involved in at least three securities-related class actions as a representative party or representative party’s attorney during the preceding three years shall serve as a representative party to any securities-related class action or the plaintiff’s attorney, respectively: Provided, That the same shall not apply to a person deemed by a court to have no hindrance in meeting the requirements referred to in paragraphs (1) and (2) in light of the overall circumstances. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 12 (Requirements for Permission for Lawsuit) |
| (1) | Every securities-related class action shall meet the following requirements: |
| 1. | The number of the class members shall be at least 50, and the sum of the securities held by the class members at the time of conducting the activities which are the grounds for the claim shall be at least 1/10,000 of the total number of the outstanding securities of the defendant company; |
| 2. | As a claim for damages referred to in each subparagraph of Article 3 (1), the legally or factually material merits shall be common to all members of the class; |
| 3. | The securities-related class action shall be an appropriate and efficient means to realize the rights of the class and protect their interests; |
| 4. | The matters stated in the application for permission for lawsuit referred to in Article 9 and its accompanying documents shall not contain defects. |
| (2) | Failure to meet the requirement referred to in paragraph (1) 1 after the filing of a securities-related class action shall not affect the effect of the lawsuit filed. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 13 (Procedures for Permission for Lawsuit) |
| (1) | The representative party shall substantiate the grounds for filing an application for permission for a lawsuit. |
| (2) | A judgment on whether to grant permission for the securities-related class action shall be made after examining the person who has filed a lawsuit pursuant to Article 7 (1) and the defendant. |
| (3) | In rendering a judgment under paragraph (2), a court may, ex officio, conduct necessary examinations by requesting a supervisory agency conducting inspections or supervision on the activities which are the grounds for the claims for damages to submit basic investigation data on the activities which are the grounds for the claims for damages. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 14 (Processing of Concurrent Filing of Applications for Permission for Lawsuit) |
| (1) | Where multiple securities-related class actions are filed over the same dispute with the same court, the court shall conduct a consolidated examination thereof. |
| (2) | Where the applications for permission for multiple securities-related class actions are filed over the same dispute with each different court, the immediately higher court having common jurisdiction over the relevant courts shall rule to determine which court conducts an examination, upon the application from the relevant courts, the person who has filed a lawsuit pursuant to Article 7 (1), a representative party, or the defendant. |
| (3) | The court determined to conduct an examination of multiple securities-related class actions pursuant to paragraph (2) shall conduct a consolidated examination thereof. |
| (4) | In conducting a consolidated examination pursuant to paragraphs (1) and (3), a court may appoint a representative party and an attorney to perform the litigation after hearing from the person who has filed a lawsuit pursuant to Article 7 (1), the class members who have filed an application pursuant to Article 10 (1) 4, or a representative party. |
| (5) | A ruling rendered under paragraphs (2) and (4) shall not be subject to appeal. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 15 (Rulings on Permission for Lawsuit) |
| (1) | A court shall rule to permit a securities-related class action, only in cases meeting the requirements referred to in Articles 3, 11 and 12. |
| (2) | The following matters shall be stated in a ruling on permission for a securities-related class action, and the judge who has rendered the ruling shall affix his/her name and seal thereon: |
| 1. | The representative party and the legal representation thereof; |
| 2. | The plaintiff’s attorney; |
| 4. | The scope of the class; |
| 7. | The intent of the claim and gist of the cause; |
| 8. | The period for and methods of giving opt-out notices; |
| 9. | Matters concerning advance payment of costs under Article 16; |
| 10. | Necessary matters, other than those prescribed in subparagraphs 1 through 9. |
| (3) | If deemed significant, a court may rule to grant permission upon adjusting the scope of the class. |
| (4) | An immediate complaint may be raised against the rulings rendered under paragraphs (1) and (3). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 16 (Advance Payment of Costs of Lawsuits) |
A court shall issue an order to make an advance payment of costs associated with the public notices, announcements, appraisal, etc. when rendering a ruling on permission for a lawsuit under Article 15 (1). [This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 17 (Rulings on Dismissal of Lawsuits) |
| (1) | The representative party may immediately complain against a ruling on dismissal of a securities-related class action. |
| (2) | Where the ruling on dismissal of a lawsuit referred to in paragraph (1) becomes final and conclusive, the securities-related class action shall be deemed not to have been filed. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 18 (Notices of Rulings on Permission for Lawsuit) |
| (1) | A court shall immediately notify the relevant class members of the following information when the ruling on permission of lawsuit referred to in Article 15 (1) becomes final and conclusive: |
| 1. | The names, titles, or trade names and addresses of the representative party and the legal representation thereof; |
| 2. | The name, title, or trade name and address of the plaintiff’s attorney; |
| 3. | The name, title, or trade name and address of the defendant; |
| 4. | The scope of the class; |
| 5. | The intent of the claim and gist of the cause; |
| 6. | The period for and method of giving opt-out notices; |
| 7. | The fact that the person who provides an opt-out notice may file a lawsuit as an individual; |
| 8. | The fact that any class member who fails to provide an opt-out notice is bound to the effect of the ruling, etc. on the pending securities-related class action; |
| 9. | The fact that any class member who fails to provide an opt-out notice is eligible to become a representative party after obtaining permission from a court while the securities-related class action is pending; |
| 10. | Agreement on lawyers' fees; |
| 11. | Other matters deemed necessary by the court, in addition to those prescribed in subparagraphs 1 through 10. |
| (2) | A notice referred to in paragraph (1) shall be given in the manner specified by the Supreme Court Regulations as appropriate to inform all members of the class. |
| (3) | The contents of a notice referred to in paragraph (1) shall be published on daily newspapers distributed nationwide. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 19 (Notification of Rulings on Permission for Lawsuit) |
| (1) | A court shall immediately notify the designated exchange of the matters referred to in each subparagraph of Article 18 (1). <Amended by Act No. 11845, May 28, 2013> |
| (2) | Upon receipt of notification under paragraph (1), the designated exchange shall publicly announce the details of such notification to the public. <Amended by Act No. 11845, May 28, 2013> |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 20 (Performance of Lawsuit by Representative Parties) |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 21 (Permission of Representative Party) |
| (1) | Any class member may become a representative party after obtaining permission from a court while the securities-related class action is pending. |
| (2) | Article 13 (2) and (3) shall apply mutatis mutandis to a ruling rendered under paragraph (1). |
| (3) | A ruling rendered under paragraph (1) shall not be subject to appeal. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 22 (Prohibition on Performance of Lawsuit by Representative Party) |
| (1) | A court may rule to prohibit a representative party from performing a lawsuit, either ex officio or upon the application by any other representative party, if the representative party fails to represent the interests of the class in a fair and appropriate manner or if any other material ground exists. |
| (2) | Article 13 (2) and (3) shall apply mutatis mutandis to a ruling rendered under paragraph (1). |
| (3) | An immediate complaint may be raised against a ruling under paragraph (1). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 23 (Resignation of Representative Party) |
A representative party may resign after obtaining permission from a court, if justifiable grounds exist.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 24 (Vacancy of Representative Party) |
| (1) | The proceedings shall be stayed if all representative parties are deceased or resign, or are prohibited from performing a lawsuit under Article 22 (1). |
| (2) | In cases falling under paragraph (1), any class member who intends to become a representative party shall take over the proceedings stayed upon permission from a court under Article 21. |
| (3) | Where no application for taking over the proceedings is filed within one year from the stay of the proceedings under paragraph (1), such judicial procedure shall be deemed to have been withdrawn. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 25 (Notices of Changes of Representative Party) |
Where any representative party has been changed pursuant to Article 21, 23, or 24, a court shall notify class members of such fact in an appropriate manner. [This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 26 (Resignation, etc. of Attorneys) |
| (1) | The attorney for the plaintiff in a securities-related class action may resign upon obtaining permission from a court if any justifiable ground exists. |
| (2) | A representative party may dismiss, additionally appoint, or change an attorney upon obtaining permission from a court if any substantial ground exists. |
| (3) | The proceedings shall be stayed if all attorneys of the plaintiff in the securities-related class action are deceased, or resign, or are dismissed. |
| (4) | In cases falling under paragraph (3), a representative party shall appoint an attorney after obtaining permission from a court to take over the proceedings. |
| (5) | Where no application for taking over the proceedings is filed within one year from the stay of the proceedings under paragraph (3), such proceedings shall be deemed to have been withdrawn. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 27 (Changes in Scope of Class) |
| (1) | If deemed necessary, a court shall rule to change the scope of the class either ex officio or upon application. |
| (2) | An immediate complaint may be raised against a ruling rendered under paragraph (1). |
| (3) | A court shall notify persons excluded from the class members and new class members, in accordance with a ruling rendered under paragraph (1), of the details of the ruling. In such cases, the court shall give notice of the matters referred to in each subparagraph of Article 18 (1) to the new class members. |
| (4) | Article 18 (2) and (3) shall apply mutatis mutandis to a notice given under paragraph (3). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 28 (Opt-Out Notices) |
| (1) | A class member may give a written opt-out notice to a court within the period for opt-out notice informed under Article 18 (1) or 27 (3). |
| (2) | A person who has filed a lawsuit as an individual with respect to the same rights as those designated as the object of the securities-related class action before the expiration of the period for opt-out notice referred to in paragraph (1) shall be deemed to have given an opt-out notice: Provided, That the same shall not apply to cases where the lawsuit is withdrawn within the period for opt-out notice. |
| (3) | The defendant in the securities-related class action shall file a report on the lawsuit filed as an individual under paragraph (2) with a court. |
| (4) | A court shall notify the representative parties and the defendant of the matters reported pursuant to paragraphs (1) and (3). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 29 (Effect of Interrupted Prescription) |
The effect of interrupted prescription resulting from the filing of a securities-related class action shall no longer be valid if the lawsuit on such claims is not filed within six months from the date on which any of the following grounds occurs:
| 1. | Where a ruling on dismissal of a lawsuit becomes final and conclusive under Article 17; |
| 2. | Where a person becomes excluded from the class members in accordance with a ruling rendered under Article 27; |
| 3. | Where an opt-out notice is given under Article 28. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 30 (Ex Officio Investigation of Evidence) |
If deemed necessary, a court may investigate evidence, ex officio.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 31 (Examination of Class Members and Representative Parties) |
If deemed necessary, a court may examine any class member and representative party.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 32 (Orders to Submit Documents, etc.) |
| (1) | If deemed necessary, a court may order a person who has documents related to the lawsuit to submit them or may commission the person to send them. |
| (2) | No one subject to an order to submit documents or commissioned to send documents under paragraph (1) shall refuse to do so without any justifiable ground: Provided, That the same shall not apply to any of the following documents: |
| (3) | Representative parties and the defendant may file with a court an application for an order to submit documents, etc. under paragraph (1). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 33 (Preservation of Evidence) |
If deemed necessary, a court may investigate evidence at the request of a party, even if there exists no circumstance where the evidence cannot be used unless an investigation of the evidence has been conducted in advance.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 34 (Calculation of Amount of Damages) |
| (2) | Where it is impracticable to calculate the exact amount of damages under paragraph (1) or through the investigation of evidence, a court shall determine the amount through sampling, average or statistical methods or other reasonable methods in consideration of the overall circumstances. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 35 (Restrictions on Withdrawal, Settlement or Waiver of Claims) |
| (1) | In the case of securities-related class actions, the withdrawal of a lawsuit, settlement of a lawsuit or waiver of claims shall be invalid without leave of a court. |
| (2) | Where a court intends to determine whether to grant the withdrawal or settlement of a lawsuit, or waiver of claims pursuant to paragraph (1), the court shall give a prior notice thereof to the class members and provide an opportunity to present opinions. |
| (3) | Article 18 (2) and (3) shall apply mutatis mutandis to a notice given under paragraph (2). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 36 (Matters to be Stated in Judgment Documents, etc.) |
| 1. | The plaintiff’s attorney and the defendant’s attorney; |
| 2. | The scope of the class; |
| 3. | Class members who have given an opt-out notice. |
| (2) | In rendering a judgment for monetary payment, a court may permit the grace of payment, payment in installments, and payment through other appropriate methods in consideration of the overall circumstances. |
| (3) | A court shall give notice on the text of the judgment and the gist of grounds to the class members. |
| (4) | Article 18 (2) and (3) shall apply mutatis mutandis to a notice given under paragraph (3). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 37 (Subjective Scope of Res Judicata) |
A final and conclusive judgment shall be binding on the class members who fail to give an opt-out notice.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 38 (Restrictions on Withdrawal of Appeals or Waiver of Rights to Appeal) |
| (1) | Article 35 shall apply mutatis mutandis to the withdrawal of appeals or waiver of rights to appeal. |
| (2) | Where any representative party fails to appeal within a specified period, any class member may become a representative party for appeal after obtaining permission from a court within 30 days from the expiration of the period for appeal. |
| (3) | A person who becomes a representative party pursuant to paragraph (2) shall file an appeal within two weeks from the date such permission was granted by a court. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
CHAPTER IV DISTRIBUTION PROCEDURES
| Article 39 (Court in Charge of Distribution) |
The disposition, supervision, cooperation, etc. of the court with respect to distributions provided for in this Chapter shall be under the exclusive jurisdiction of the court of a lawsuit at the first instance.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 40 (Exercise of Rights) |
| (1) | A representative party shall exercise his/her rights without delay when he/she acquires the executive title. |
| (2) | Where a representative party acquires money, etc. by exercising his/her rights, he/she shall retain it, as prescribed by the Supreme Court Regulations. |
| (3) | If a representative party has finished exercising his/her rights, he/she shall report the results thereof to the court. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 41 (Appointment of Distribution Administrators) |
| (1) | A court shall appoint a distribution administrator, either ex officio or upon the application by a representative party. |
| (2) | A distribution administrator under paragraph (1) (hereinafter referred to as "distribution administrator") shall distribute money, etc. acquired from the exercise of rights under the supervision of the court. |
| (3) | A court may replace a distribution administrator, either ex officio or upon application, if the distribution administrator fails to appropriately perform such distribution or if any other material grounds exist. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 42 (Preparation of Distribution Plans) |
| (1) | A distribution administrator shall prepare a distribution plan within the period specified by the court and submit the distribution plan to the court. |
| (2) | The following matters shall be stated in a distribution plan prepared under paragraph (1) (hereinafter referred to as "distribution plan"): |
| 1. | The scope of the class and the total amount of claims; |
| 2. | The face value of the executive title, the value of rights exercised, and the amount to be distributed; |
| 3. | The items to be deducted under Article 44 (1) and the amount thereof; |
| 4. | Distribution criteria and methods; |
| 5. | Period for, and place and methods of reporting the rights; |
| 6. | Methods of verifying the rights; |
| 7. | Period for, and place and methods of receiving the amount distributed; |
| 8. | Matters deemed necessary, in addition to those prescribed in subparagraphs 1 through 7. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 43 (Criteria for Distribution, etc.) |
| (1) | Criteria for distribution shall be governed by the judgment of the grounds in the judgment document or contents of the reconciliation protocol or protocol of recognition and acceptance. |
| (2) | Where the total amount of rights verified by report during the period for reporting rights exceeds the amount to be distributed, the distribution shall be made proportionally. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 44 (Costs Excluded from Distribution, etc.) |
| (1) | A distribution administrator may deduct the following costs from the amount acquired from the exercise of rights: |
| 1. | Costs of lawsuit and attorneys' fees; |
| 2. | Costs incurred in exercising rights; |
| 3. | Costs for distribution (including the amount of fees deemed appropriate to be paid to a distribution administrator). |
| (2) | A distribution administrator shall obtain permission from a court when the administrator intends to pay costs referred to in paragraph (1) 1 through 3 before obtaining authorization of a distribution plan under Article 46 (1). |
| (3) | A court may reduce the attorneys' fees referred to in paragraph (1) 1 at the request of a distribution administrator, representative party or class member, in consideration of the overall circumstances, such as proceedings or the result thereof. In such cases, the court shall examine the applicant and the representative party’s attorney. |
| (4) | A request referred to in paragraph (3) shall be made prior to the authorization of a distribution plan under Article 46 (1). |
| (5) | An immediate appeal may be filed against a ruling rendered under paragraph (3). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 45 (Amount Insufficient for Payment of Costs) |
| (1) | A court shall rule that no distribution will be made where the amount acquired from the exercise of rights is insufficient to pay the costs referred to in each subparagraph of Article 44 (1). |
| (2) | Where a ruling under paragraph (1) is rendered, a distribution administrator shall distribute the amount acquired from the exercise of rights upon permission from a court to the costs referred to in each subparagraph of Article 44 (1) in an appropriate manner. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 46 (Authorization of Distribution Plans) |
| (1) | A court shall rule to authorize a distribution plan if the distribution plan is deemed fair and equitable. |
| (2) | A court may authorize a distribution plan after making an ex officio amendment thereto, if deemed reasonable. In such cases, the court shall examine the distribution administrator in advance. |
| (3) | A ruling rendered under paragraphs (1) and (2) shall not be subject to appeal. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 47 (Notice of Distribution Plans) |
If a court has authorized a distribution plan, it shall give notice of the following matters to the class members in an appropriate manner:
| 1. | The gist of the executive title; |
| 2. | The name and address of a distribution administrator; |
| 3. | The gist of the distribution plan. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 48 (Amendments to Distribution Plans) |
| (1) | A court may rule to amend a distribution plan, either ex officio or upon the application by a distribution administrator, if it deems that reasonable grounds exist. |
| (2) | A ruling rendered under paragraph (1) shall not be subject to appeal. |
| (3) | A court shall notify the class members of the details of the amendment in an appropriate manner, if deemed necessary when amending a distribution plan. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 49 (Reporting and Verification of Rights) |
| (1) | Every class member shall report his/her rights to a distribution administrator within the period for reporting rights, as specified in the distribution plan. |
| (2) | Where a class member fails to file a report within the period for reporting rights due to any cause not attributable to the class member, he/she may file a report by not later than one month after such cause ceases to exist: Provided, That such report shall be filed before the expiration of the period for requesting withdrawal of deposits under Article 53. |
| (3) | A distribution administrator shall verify the rights reported. |
| (4) | A distribution administrator shall notify the results of the verification of rights to a person who has reported his/her rights and the defendant. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 50 (Objections to Verification of Rights) |
| (1) | Where a person who has reported his/her rights or the defendant has an objection to the verification of rights, he/she may file a motion to seek verification of such rights with a court within two weeks from the receipt of a notice of the verification results given under Article 49 (4). |
| (2) | A court shall rule to render a judgment with respect to a motion filed under paragraph (1). |
| (3) | A ruling rendered under paragraph (2) shall not be subject to appeal. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 51 (Deposit of Residual Amount) |
If any residual amount exists after the expiration of the period for receiving the amount distributed, a distribution administrator shall deposit the residual without delay.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 52 (Distribution Reports) |
| (1) | A distribution administrator shall submit a distribution report to a court after the expiration of the period for receiving the amount distributed. |
| (2) | The following matters shall be stated in a distribution report submitted under paragraph (1): |
| 1. | The name and address of the person who has reported his/her rights and the amount reported; |
| 2. | The person whose rights have been verified and the amount verified; |
| 3. | The person subject to distribution and the amount distributed; |
| 5. | Necessary matters, in addition to those prescribed in subparagraphs 1 through 4. |
| (3) | A distribution report shall be kept in a court for the perusal by interested persons until the expiration of the period set in the main sentence of Article 56. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 53 (Payment after Expiration of Receiving Period) |
A class member whose rights have been verified but who fails to receive the amount distributed within the period for receiving such amount, or a person whose rights have been verified by reporting rights after the reporting period expired, may claim the withdrawal of the deposit by not later than six months after the expiration of the receiving period.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 54 (Reports on Termination of Distribution) |
| (1) | A distribution administrator shall submit a report on termination of distribution to a court immediately after the expiration of the period for claiming the withdrawal of the deposit under Article 53. |
| (2) | The following matters shall be stated in a report on termination of distribution submitted under paragraph (1): |
| 1. | The name and address of the person who has received the amount distributed after the expiration of the period for receiving such amount, and the amount distributed; |
| 2. | The total amount distributed; |
| 3. | The details of the disposition of the residual; |
| 4. | Costs for distribution; |
| 5. | Necessary matters, in addition to those prescribed in subparagraphs 1 through 4. |
| (3) | Article 52 (3) shall apply mutatis mutandis to reports on termination of distribution. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 55 (Disposition of Residual Amounts) |
If any residual amount exists when a report on termination of distribution is submitted under Article 54 (1), a court shall pay it to the defendant, either ex officio or upon the request for withdrawal by the defendant. [This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 56 (Claims for Damages to Distribution Administrator) |
A claim for damages to a distribution administrator against the activities conducted in the course of performing duties shall cease to be valid after two years have passed from the submission of a report on termination of distribution: Provided, That the same shall not apply to a claim for damages against the misconduct of a distribution administrator.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 57 (Distribution of Non-Monetary Articles) |
| (1) | Where any non-monetary articles acquired from the exercise of rights are distributed, such articles shall be distributed within the extent not contrary to the nature thereof, under the standards equivalent to those applicable to money. |
| (2) | A distribution administrator may distribute non-monetary articles acquired from the exercise of rights after converting all or some of them into money, upon approval from a court. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 58 (Additional Distribution) |
Where the exercise of any right becomes available after a report on termination of distribution referred to in Article 54 (1) has been submitted, Articles 39 through 57 shall apply mutatis mutandis to procedures for distribution. [This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
CHAPTER V ENFORCEMENT RULES
| Article 59 (Supreme Court Regulations) |
Matters necessary for the enforcement of this Act shall be prescribed by the Supreme Court Regulations.
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
CHAPTER VI PENALTY PROVISIONS
| Article 60 (Receiving Bribe in Breach of Trust) |
| (1) | A person who files a securities-related class action pursuant to Article 7 (1), a representative party, the plaintiff’s attorney or a distribution administrator shall be punished according to the following classification if the person receives, requests, or promises money or other economic benefits in return for an illegal favor with respect to his/her duties: |
| 1. | Cases where the value of the money or other economic benefits received, requested, or agreed on (hereinafter referred to as "amount received") is at least 100 million won: The person shall be punished by imprisonment for life or imprisonment with labor for a limited term of at least ten years and may be punished concurrently by a fine not exceeding an amount equivalent to the amount received; |
| 2. | Cases where the amount received is at least 30 million and less than 100 million won: The person shall be punished by imprisonment with labor for a limited term of at least five years and may be punished concurrently by a fine not exceeding an amount equivalent to the amount received; |
| 3. | Cases where the amount received is less than 30 million won: The person shall be punished by imprisonment with labor for not more than seven years or by a fine not exceeding an amount equivalent to the amount received. |
| (2) | Where a person who files a securities-related class action pursuant to Article 7 (1), a representative party, the plaintiff’s attorney or a distribution administrator makes money or economic benefits provided to a third party or demands or promises that money or economic benefits will be provided to a third party in return for an illegal favor with respect to his/her duties, he/she shall be subject to the same punishment as provided for in paragraph (1). |
| (3) | Offenses referred to in paragraphs (1) and (2) shall be concurrently subject to the suspension of qualifications for not more than ten years. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 61 (Giving Bribe in Breach of Trust, etc.) |
| (1) | A person who requests an illegal favor to a person who files a securities-related class action pursuant to Article 7 (1), a representative party, the plaintiff’s attorney or a distribution administrator with respect to his/her duties and provides, promises to provide, or expresses the intention to provide, money or economic benefits shall be punished by imprisonment with labor for not more than seven years or by a fine not exceeding 100 million won. |
| (2) | A person who delivers money to a third party for the purpose of engaging in the activities referred to in paragraph (1) and a person who knowingly takes such money shall be subject to the same punishment as provided for in paragraph (1). |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 62 (Confiscation and Collection) |
Money or economic benefits acquired by a person who commits any offenses referred to in Article 60 or 61 or knowingly acquired by a third party shall be confiscated but, if such confiscation is not available, the value equivalent thereto shall be collected. [This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
| Article 63 (Administrative Fines) |
Any of the following persons shall be punished by an administrative fine not exceeding 30 million won:
| 1. | A person who makes a false statement about the details referred to in Article 9 (1) 4; |
| 2. | A person who attaches falsely prepared documents referred to in Article 9 (2) or (3); |
| 3. | A person who refuses to comply with an order to submit documents or commission to send documents referred to in Article 32 (2) without any justifiable grounds. |
[This Article Wholly Amended by Act No. 10208, Mar. 31, 2010]
ADDENDA
| (1) | (Enforcement Date) This Act shall enter into force on January 1, 2005. |
| (2) | (Applicability) This Act shall begin to apply to the claim for damages arising from the first activity after this Act enters into force. In such cases, activities causing claims for damages under Article 3 (1) 1 and 2 mean cases where a person makes a false indication or statement or omits any material indication or statement in a securities report, prospectus, business report, semiannual report, or quarterly report under Article 8, 12, 186-2, or 186-3 of the Securities and Exchange Act (hereinafter referred to as "securities report, etc.") and then submits it to the Financial Supervisory Commission or the Korea Securities and Futures Exchange or makes it available to the public for the first time after this Act enters into force. |
| (3) | (Applicability to Corporations with Less Than Two Trillion Won in Total Assets) With respect to claims for damages under Article 3 (1) 1, 2, and 4, which are incurred from the trade or other transactions of the securities issued by a stock-listed corporation under Article 2 (13) 3 of the Securities and Exchange Act with less than two trillion won in the total assets as of the end of the preceding business year based on the date this Act enters into force or a corporation registered with the Association under Article 2 (15) of the same Act, this Act shall begin to apply to the claim for damages arising from the first activity after January 1, 2007. |
| (4) | (Special Cases concerning Application to Previous Violation of Accounting Principles) Notwithstanding paragraphs (2) and (3) of the Addenda, this Act shall not apply to cases where activities causing the claims for damages fall under any of the following cases: |
| 1. | Where any amount, etc. are overstated, underestimated, or omitted on the financial statements in the business year, the date of settlement of account of which arises before this Act enters into force, in violation of accounting principles (referring to the principles under Article 13 of the Act on External Audit of Stock Companies); |
| 2. | Where the amount, etc. under subparagraph 1 are reflected in preparing the financial statements after this Act enters into force and so remain unchanged, or the reduction of the overstated amount, etc., an increase in the underestimated amount, etc., or the appropriation of the omitted amount, etc. shall be made in an appropriate manner; |
| 3. | Where a securities report, etc. including the financial statements for the business year, the closing date of which arises by December 31, 2006, indicating the amount, etc. referred to in subparagraph 2, are submitted to the Financial Supervisory Commission or the Korea Securities and Futures Exchange or are made available to the public, under Article 8, 12, 186-2 or 186-3 of the Securities and Exchange Act. |
| (5) | (Special Case concerning Application of Liabilities for Damages) Notwithstanding paragraphs (2) and (3) of the Addenda, this Act shall not apply to liabilities for damages of auditor for cases that are not governed by this Act under paragraph (4). |
ADDENDUM <Act No. 7387, Mar. 10, 2005>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 8635, Aug. 3, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force 18 months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 44 Omitted.
ADDENDUM <Act No. 10208, Mar. 31, 2010>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 11845, May 28, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 17 Omitted.