CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to facilitate the issuance and distribution of electronic short-term bond, etc. and the exercise of the rights thereof and to heighten the efficiency of the capital market by prescribing necessary matters concerning the registration and management of electronic short-term bonds, etc.
The definitions of terms used in this Act shall be as follows:
| (a) | The amount of each bond shall be at least one hundred million won; |
| (b) | The maturity shall not exceed one year; |
| (c) | The bond amount shall be paid in lump sum; |
| (d) | The intention of paying the full amount of principal and interest in lump sum at maturity shall be prescribed; |
| (e) | No convertible rights, preemptive rights to new stocks, and other rights to convert it to other securities or to obtain other securities are granted on bond; |
| 2. | The term "electronic short-term bond, etc" means any of the following items: |
| (a) | An electronic short-term bond; |
| (c) | Other bonds prescribed by Presidential Decree, which meet the requirements of each item of subparagraph 1 and are registered by electronic means; |
| 3. | The term “a right holder” means a creditor, pledgee, or other interested person prescribed by Presidential Decree; |
| 4. | The term “registration” means the statement, by electronic means, of the type, item, amount, a holder and details of a right, issuance condition, etc. of the electronic short-term bond, etc. in the client account book under Article 5 (2) and the account manager proprietary account book under Article 6 (2); |
| 5. | The term “account manager” means any institution falling under any of the following institutions, which manages the client account under Article 5 (1): |
| (e) | Other organization prescribed by Presidential Decree, taking into consideration the nature of the business. |
| Article 3 (Relation to Other Acts) |
Except as expressly provided for in this Act, matters concerning electronic short-term bond, etc. shall be governed by the Commercial Act or other Act and subordinate statute on which is the issuance of the relevant electronic short-term bond, etc. is based.
CHAPTER II ACCOUNT OPENING AND REGISTRATION BUSINESS PROVISIONS
| Article 4 (Opening, etc. of Issuer Management Account) |
| (1) | Any person who intends to issue an electronic short-term bond, etc. shall open an issuer management account in the Korea Securities Depository. |
| (2) | Where the issuer management account is opened under paragraph (1), the Korea Securities Depository shall prepare an issuer management account book for each issuer (referring to a person who opened the issuer management account under paragraph (1); hereinafter the same shall apply) by recording matters falling under each of the following subparagraphs: |
| 1. | The name and corporate registration number of the issuer; |
| 2. | The type, the item and each amount of such item, of the electronic short-term bond, etc. issued by the issuer; |
| 3. | Other matters prescribed by Presidential Decree. |
| (3) | Where matters falling under each subparagraph of paragraph (2) are revised, the issuer shall notify the details thereof to the Korea Securities Depository without delay and the Korea Securities Depository shall revise the record in the issuer management account book in accordance with the notification without delay. |
| Article 5 (Opening, etc. of Client Account and Client Management Account) |
| (1) | Any person who intends to be a rightholder of electronic short-term bond, etc. shall open a client account in an account manager. |
| (2) | Where the client account is opened under paragraph (1), the account manager shall prepare a client account book for each righholder by recording matters falling under each of the following subparagraph: |
| 1. | The name or title of a right holder and his/her address; |
| 2. | The title of the issuer; |
| 3. | The type, the item and each amount of such item, of an electronic short-term bond, etc.; |
| 4. | Where a pledge right is established over an electronic short-term bond, etc., such fact; |
| 5. | Where an electronic short-term bond, etc., is trust property, such fact; |
| 6. | Where the disposition of an electronic short-term bond, etc., is limited, such fact; |
| 7. | Other matters prescribed by Presidential Decree. |
| (3) | An account manager shall open a client management account in the Korea Securities Depository in order to manage the total amount of electronic short-term bond, etc. registered in the client account book under paragraph (2). |
| (4) | Where the client management account is opened under paragraph (3), the Korea Securities Depository shall prepare a client management account book for each account manager by recording matters falling under the following subparagraphs: |
| 1. | The name and address of the account manager; |
| 2. | The type, the item and each amount of such item, of electronic short-term bond, etc.; |
| 3. | Other matters prescribed by Presidential Decree. |
| Article 6 (Opening, etc. of Account Manager Proprietary Account) |
| (1) | Notwithstanding Article 5 (1), where an account manager or any person prescribed by Presidential Decree including fund established by the Act intends to be a right holder of electronic short-term bond, etc., he/she/fund may open an account manager proprietary account in the Korea Securities Depository. |
| (2) | Where the account manager proprietary account is opened under paragraph (1), the Korea Securities Depository shall prepare an account manager proprietary account by registering matters falling under each subparagraph of Article 5 (2). |
| Article 7 (Provisions for Registration Business) |
| (1) | The Korea Securities Depository shall determine the provisions for the registration business regarding the performance of business, and the method and procedure thereof under this Act, including matters falling under the following subparagraphs: |
| 1. | Matters regarding the opening and closure of the account of an issuer; |
| 2. | Matters regarding the opening and closure of the accounts of a rightholder and an account manager; |
| 3. | Matters regarding preparation and management of an issuer management account book, client account book, client management account book and account manager proprietary account book; |
| 4. | Matters regarding registration, such as a transfer of securities between accounts of electronic short-term bond, etc., the establishment and cancellation of a pledge right, the indication and cancellation of the trust property; |
| 5. | Other necessary matters concerning the management of electronic short-term bond, etc. |
| (2) | Where the Korea Securities Depository intends to establish, amend or repeal the registration business provisions under paragraph (1), it shall obtain approval from the Financial Services Commission. |
CHAPTER III REGISTRATION OF ELECTRONIC SHORT-TERM BOND, ETC. AND EFFECT THEREOF
| Article 8 (Registration of Issuance) |
| (1) | Any person who intends to issue an electronic short-term bond, etc. shall notify matters falling under the following subparagraphs to the Korea Securities Depository without delay: |
| 1. | The type, the item and each amount of such item, of electronic short-term bond, etc. that is issued; |
| 2. | The name or title of a creditor; |
| 3. | Other matters prescribed by the provisions for registration business regarding the registration of issuance of electronic short-term bond, etc. |
| (2) | Upon receipt of the notification under paragraph (1), the Korea Securities Depository shall register the details thereof in an account manager proprietary account book when the full amount of the relevant electronic short-term bond, etc. is paid, record it in an issuer management account book and client management account book, respectively, and notify such fact to the person who is registered in the account manager proprietary account book in which the relevant amount is registered or to the account manager recorded in the relevant client management account book. |
| (3) | Upon receipt of the notification of the matters recorded in the client management account book under paragraph (2), the account manager shall register in the client account book the registered matter in accordance with the notification without delay. |
| (4) | Necessary matters concerning methods and procedures of the registration of an account manager proprietary account book and client account book and the record of issuer management account book and client management account book under paragraphs (2) and (3) shall be prescribed by Presidential Decree. |
| Article 9 (Registrating Transfer of Securities between Accounts) |
| (1) | Any person who intends to transfer securities between accounts for the purpose of the transfering, etc. of electronic short-term bond, etc. shall file an application for the registration of the transfer of securities between accounts with the Korea Securities Depository or the account manager with which the relevant electronic short-term bond, etc. is registered, by specifying the matters falling unde the following subparagraphs: |
| 1. | The type, the item and each amount of such item, of the relevant electronic short-term bond, etc.; |
| 2. | The name or title of the person who intends to transfer securities between accounts and the person who intends to receive the transfer of securities between accounts; |
| 3. | Other matters concerning registration of transfer of securities between accounts of electronic short-term bond, etc., prescribed by the provisions for registration business. |
| (2) | Upon receipt of the application for the registration under paragraph (1), the Korea Securities Depository or an account manager shall register the transfer of securities between accounts of the relevant electronic short-term bond, etc. in an account manager proprietary account book or client account book without delay. |
| (3) | Necessary matters concerning the application for the registration of securities transferred between accounts under paragraphs (1) and (2), and the method and procedure of the registration thereof shall be prescribed by Presidential Decree. |
| Article 10 (Registration of Establishment and Cancellation of Pledge Right) |
| (1) | Any person who intends to establish or cancel a pledge right over electronic short-term bond, etc. shall file an application for the registration of the establishment or cancellation of a pledge right with the Korea Securities Depository or the account manager with which the relevant electronic short-term bond, etc. is registered, by specifically stating the matters falling under the following subparagraphs: |
| 1. | The type, the item and each amount of such item, of the relevant electronic short-term bond, etc.; |
| 2. | The names and titles of a pledger and pledgee; |
| 3. | Other matters concerning the registration of the establishment and cancellation of a pledge right of electronic short-term bond, etc., prescribed by the provisions for registration business. |
| (2) | Upon receipt of the application for the registration under paragraph (1), the Korea Securities Depository or an account manager shall without delay register the establishment or cancellation of a pledge right of the relevant electronic short-term bond, etc., by registering the pledgees and the fact that the electronic short-term bond, etc. is pledged in the account manager proprietary account book or client account book. |
| (3) | Necessary matters concerning the application for the registration of the establishment or cancellation of the registration of a pledge right under paragraphs (1) and (2), and the method and procedure of the registration thereof shall be prescribed by Presidential Decree. |
| Article 11 (Registration of Indication and Cancellation of Trust Property) |
| (1) | Any person who intends to indicate the fact that an electronic short-term bond, etc. is a trust property or to cancel the indication thereof, shall file an application for the registration of the indication or cancellation of the fact that it is the trust property with the Korea Securities Depository or the account manager with which the relevant electronic short-term bond, etc. is registered, by specifically stating the matters falling under the following subparagraphs: |
| 1. | The type, the item and each amount of such item of, the relevant electronic short-term bond, etc.; |
| 2. | The names and titles of a trustee; |
| 3. | Other matters prescribed by the provisions for registration business, concerning the registration of the indication or cancellation of such fact that an electronic short-term bond, etc. is the trust property. |
| (2) | Upon receipt of the application of the registration under paragraph (1), the Korea Securities Depository or an account manager shall register the indication or cancellation of such fact that an electronic short-term bond, etc. is a trust property, in the account manager proprietary account book and client account book without delay. |
| (3) | Necessary matters concerning the application for the registration of indication or cancellation of such fact that an electronic short-term bond, etc. is the trust property under paragraphs (1) and (2), and the methods and procedures of the registration thereof shall be prescribed by Presidential Decree. |
| Article 12 (Revocation of Registration upon Payment of Principal and Interest, etc.) |
| (1) | Any person who intends to revoke the registration of an electronic short-term bond, etc. due to the payment of principal and interest or other grounds prescribed by Presidential Decree shall file an application for the revocation of the registration with the Korea Securities Depository or the account manager with which the relevant electronic short-term bond, etc. is registered, by specifying the matters falling under the following subparagraphs: |
| 1. | The type, the item and each amount of such item, of the relevant electronic short-term bond, etc.; |
| 2. | The name and title of a creditor; |
| 3. | Other matters concerning the revocation of the registration of an electronic short-term bond, etc., prescribed by the provisions for registration business. |
| (2) | Upon receipt of the application for the revocation of registration under paragraph (1), the Korea Securities Depository or an account manager shall revoke the registration of the relevant electronic short-term bond, etc. in the account manager proprietary account book or client account book without delay. |
| (3) | Notwithstanding paragraphs (1) and (2), where the rights on electronic short-term bond, etc. are extinguished due to the payment of the principal and interest and other grounds prescribed by Presidential Decree, the Korea Securities Depository or an account manager may revoke the registration of the relevant electronic short-term bond, etc. ex officio. |
| (4) | Necessary matters concerning the application for the revocation of the registration under paragraphs (1) through (3), and the methods and procedures for the revocation thereof shall be prescribed by Presidential Decree. |
| Article 13 (Effect of Registration) |
| (1) | Any person who is registered in an account manager proprietary account book and client account book shall be presumed that he/she legitimately has the registered rights on the relevant electronic short-term bond, etc. |
| (2) | In case of transferring electronic short-term bond, etc., only the registration of transfer of securities between accounts of the electronic short-term bond, etc. under Article 9 makes it effective. |
| (3) | In cases of having electronic short-term bonds, etc. be the subject matter of a pledge right, only the registration of creating the pledge right under Article 10 makes it effective. |
| (4) | Notwithstanding Article 3 (2) of the Trust Act, the trust of electronic short-term bonds, etc. may oppose a third party only by registering the fact that the relevant electronic short-term bond, etc. is a trust property under Article 11. |
| (5) | Any person who relies on the details of a right in an account manager proprietary account book or a client account book in good faith and without gross negligence and is registered as a rightholder may legitimately acquire the right on the relevant electronic short-term bond, etc. |
| Article 14 (Ban on Issuance of Physical Securities) |
No person shall issue physical securities for electronic short-term bonds, etc.
CHAPTER IV EXERCISING RIGHTS OVER ELECTRONIC SHORT-TERM BOND, ETC.
| Article 15 (Excercise of Rights) |
| (1) | A rightholder may receive the principal and interest or exercise other rights on electronic short-term bond, etc. through the Korea Securities Depository. |
| (2) | A right holder who intends to exercise the right under paragraph (1) shall file an application with the Korea Securities Depository by specifying the intention to excercise the right and the details thereof. In such cases, the rightholder registered in the client account book shall request it through an account manager. |
| Article 16 (Certificate of Creditor) |
| (1) | Where a creditor requests the issuance of a document evidencing the registration of electronic short-term bonds, etc. (hereinafter referred to as “certificate of creditor”) in order to prove his/her position, the Korea Securities Depository or an account manager shall issue them under the conditions prescribed by Presidential Decree. |
| (2) | The Korea Securities Depository or an account manager, upon issuance of the certificate of creditor under paragraph (1), shall notify the relevant issuer and other persons prescribed by Presidential Decree (hereinafter referred to as “issuer, etc”) of the fact thereof without delay. |
| (3) | The Korea Securities Depository or an account manager that issued the certificate of creditor under paragraph (1) shall file a registration that limits the disposal of electronic short-term bonds, etc. on which the issuance of the creditor certificate was based, in the account manager proprietary account book or a client account book as prescribed by Presidential Decree, and it shall revoke the registration that limits the disposal when the certificate of creditor is returned. |
| (4) | Where a creditor submits the certificate of creditor issued under paragraph (1) to the issuer, etc., he/she may exercise his/her right as the creditor in relation to the issuer, etc. |
| Article 17 (Notification of Details of Possession) |
| (1) | Upon receipt of the request from a creditor to notify the issuer, etc. of the details of possession of electronic short-term bond, etc., the Korea Securities Depository or an account manager shall notify the term of validity, etc. of the notification details and other matters prescribed by Presidential Decree, by the method prescribed by Presidential Decree. |
| (2) | The Korea Securities Depository or an account manager, upon notifying the possession details under paragraph (1), shall file for registration a fetter on the disposal of electronic short-term bonds, etc. on which the notification was based, in an account manager proprietary account book or a client account book as prescribed by Presidential Decree, and it shall revoke the registration of a fetter on the disposal when the term of validity provided in the notification is expired. |
| (3) | The creditor may exercise his/her right as the creditor to the issuer, etc. of the relevant electronic short-term bond, etc. on the details notified under paragraph (1). |
| Article 18 (Inspection, etc. of Details of Right) |
| (1) | The Korea Securities Depository or an account manager shall have a right holder, who opened an account manager proprietary account or client account in the relevant agency, inspect, print, or copy the details of his/her right through information and communications network. |
| (2) | The Korea Securities Depository or an account manager shall have an issuer, who opened the issuer management account, inspect, print or copy the details of his/her issuance through the information and communications network. |
CHAPTER V PROTECTING RIGHT HOLDER
| Article 19 (Duty to Cancel Excessive Portion) |
| (1) | Where the amount under paragraph (1) exceeds the amount under paragraph (2), an account manager shall without delay cancel the excessive portion as prescribed by Presidential Decree: |
| 1. | The total value of the electronic short-term bond, etc. by items, registered in a client account book; |
| 2. | The total value of the electronic short-term bond, etc. by items, recorded in a client management account book. |
| (2) | Where the value falling under paragraph (1) exceeds the amount under paragraph (2), the Korea Securities Depository shall without delay cancel the excessive portion as prescribed by Presidential Decree: |
| 1. | The sum of the total value of the electronic short-term bond, etc. by items that are registered in a manager proprietary account book and the total value of the electronic short-term bond, etc. by items that are recorded in a client management account book; |
| 2. | The total value of the electronic short-term bond, etc. by items, recorded in a issuer management account book. |
| (3) | Where failing to carry out the duties of canceling the excessive portion under paragraphs (1) or (2), in whole or in part, the account manager or the Korea Securities Depository which has a duty to cancel shall have a duty to pay the principal and interest of electronic short-term bonds, etc., equivalent to the excessive portion which is not canceled, as prescribed by Presidential Decree. |
| (4) | The account manager and the Korea Securities Depository, which performs the duties under paragraphs (1) through (3), may respectively exercise the right to indemnity to the person who is responsible for the occurrence of the excessive portion. |
| Article 20 (Limitation on Exercise of Right to Excessive Portion) |
| (1) | Where an excessive portion under Article 19 (1) occurs, a person prescribed by Presidential Decree, who is registered as a creditor of the relevant electronic short-term bond, etc. in the client account book of the account manager to which the duty arose and prescribed by Presidential Decree, shall not claim any amount calculated as prescribed by Presidential Decree to the issuer until the duty under Article 19 (1) is carried out. |
| (2) | Where an excessive portion under Article 19 (2) occurs, a person prescribed by Presidential Decree, who is registered as a creditor of the relevant electronic short-term bond, etc., shall not claim any amount calculated as prescribed by Presidential Decree to the issuer until the duty under Article 19 (2) is performed. |
| Article 21 (Security of Registration Information, Etc.) |
| (1) | No one shall input false information or fraudulent order, or input or alter the information without authority, in the information system for the registration and management of electronic short-term bond, etc. of the Korea Securities Depository or an account manager. |
| (2) | No one shall destroy or damage any registered or recorded information kept in the Korea Securities Depository or an account manager. |
| (3) | No one shall invade any information and communications network for the registration and management of an electronic short-term bond, etc. of the Korea Securities Depository or an account manager, without justifiable access authority or exceeding the allowed access authority. |
| Article 22 (Ban on Utilization of Information concerning Duty) |
| (1) | The Korea Securities Depository and an account manager shall not use nonpublic information acquired in the course of performing their duties for its own interest or a third party's interest without justifiable grounds. |
| (2) | Paragraph (1) shall apply mutatis mutandis to an executive or an employee of the Korea Securities Depository or an account manager and a person who was once an executive or an employee thereof. |
| Article 23 (Provisions Applicable Mutatis Mutandis) |
| Article 24 (Data Submission, etc. of Account Manager) |
| (1) | The Korea Securities Depository may request an account manager to report on registration business, submit data, or inspect the relevant account books. In such cases, upon receipt of request for submission of report or data related to the registration business, or inspection on the relevant account books, the account manager shall comply therewith without justifiable ground. |
| (2) | In cases falling under any of the following subparagraph, an account manager shall notify such fact to the Korea Securities Depository without delay: |
| 1. | Where it confirms an excessive portion arising under Article 19 (1); |
| 2. | Suspension of business, revocation of authorization or permission, bankruptcy or dissolution, or occurrence of other cause due to which it is difficult to perform the registration business under normal circumstances. |
| (3) | In cases falling under any of the following subparagraphs, the Korea Securities Depository shall notify such fact to the Financial Services Commission without delay: |
| 1. | Where it confirms the excessive portion arising under Article 19 (2); |
| 2. | Where it receives the notification under paragraph (2); |
| 3. | Other cases where the accidents prescribed by Presidential Decree occur. |
| Article 25 (Restriction on Registration of Transferring Securities between Accounts) |
Where the bankruptcy or dissolution of an account manager or other grounds prescribed by Presidential Decree arise, the Korea Securities Depository may place a fetter on the registration of a transfer of electronic short-term bond, etc. between accounts in accordance with the standard and method prescribed by Presidential Decree.
| Article 26 (Keeping Registration Information, Etc.) |
| (1) | The Korea Securities Depository and an account manager shall keep the registration or record information. |
| (2) | Types of the registered or recorded information that shall be kept by the Korea Securities Depository and an account manager under paragraph (1) and the method and period of keeping thereof shall be prescribed by Presidential Decree. |
CHAPTER VI INSPECTION AND SUPERVISION
| (1) | The Korea Securities Depository shall be inspected by the Governor of the Financial Supervisory Service established by the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as "Governor of the Financial Supervisory Service"), for the duties and property status under this Act. |
| (2) | The Governor of the Financial Supervisory Service, if deemed necessary for the inspection under paragraph (1), may request the Korea Securities Depository a report on the duties or property under this Act, submission of data, attendance of witness, testimony and statement of opinion. |
| (3) | Any person who conducts an inspection pursuant to paragraph (1) shall present a certificate indicating its authority to related persons. |
| (4) | When the Governor of the Financial Supervisory Service conducts an inspection pursuant to paragraph (1), he/she shall submit the report to the Financial Services Commission. In such cases, where the Korea Securities Depository is found to violate any provision of this Act, or other orders or disciplinary actions taken under this Act, the Governor shall accompany a written opinion as to how to take action in response to such violation. |
| (5) | The Financial Services Commission may determine and provide public notice of the method and procedure of the inspection, measures standard for the inspection result and other necessary matters regarding the inspection business. |
| (6) | Paragraphs (1) through (5) shall apply mutatis mutandis to the inspection on the registration business of an account manager. |
| Article 28 (Measures against Korea Securities Depository) |
| (1) | The Financial Services Commission may take measures falling under any of the following subparagraphs where the Korea Securities Depository falls under any subparagraph of attached Table 1: |
| 1. | To suspend all or some of its business under this Act for up to six months; |
| 2. | To order transfer of contract regarding the business under this Act; |
| 3. | To order correction or suspension of violation; |
| 4. | To order the Korea Securities Depository to publicize or disclose the measures taken due to violation; |
| 5. | Institutional warning; |
| 6. | Institutional caution; |
| 7. | Other necessary measures prescribed by Presidential Decree to rectify or prevent violation. |
| (2) | The Financial Services Commission may take measures falling under the following subparagraphs where an executive of the Korea Securities Depository falls under any subparagraph of attached Table 1: |
| 1. | Request for dismissal; |
| 2. | Suspension from office for up to six months; |
| 6. | Other necessary measures prescribed by Presidential Decree to rectify or prevent violation. |
| (3) | The Financial Services Commission may request that the Korea Securities Depository take any measures falling under any of the following subparagraphs, where any employee of the Korea Securities Depository falls under any of the following subparagraphs of attached Table 1: |
| 2. | Suspension from office for up to six months; |
| 7. | Other necessary measures prescribed by Presidential Decree to correct or prevent violation. |
| Article 29 (Measures against Account Manager) |
| (1) | The Financial Services Commission may take measures falling under the subparagraphs of Article 28 (1) where an account manager falls under any subparagraph of attached Table 2. |
| (2) | The Financial Services Commission may take measures falling under the subparagraphs of Article 28 (2) where an executive of an account manager falls under any subparagraph of attached Table 2; |
| (3) | The Financial Services Commission may request that the account manager take any measures falling under the subparagraphs of Article 28 (3), where any employee of an account manager falls under any subparagraph of attached Table 2. |
CHAPTER VII SUPPLEMENTARY PROVISIONS
| Article 30 (Special Cases concerning Issuance Procedure and Issuance Limit) |
Notwithstanding Article 469 of the Commercial Act (including the cases applicable mutatis mutandis under other Acts), any person who intends to issue an electronic short-term bond, etc. may delegate the authority for issuing an electronic short-term bond, etc. to the representative director, within the issuance limit determined by the board of directors (based on the issuance balance of the outstanding electronic short-term bond, etc.). In such cases, where the relevant issuer has other instruments, etc. to perform the function of the board of directors or the representative director, regardless of the title thereof, such other instruments are deemed the board of directors or the representative director under this Act, respectively.
| Article 31 (Special Cases concerning Preparation of Bond Register) |
With respect to an electronic short-term bond, etc., no bond register shall be prepared notwithstanding Article 488 of the Commercial Act (including the cases applicable mutatis mutandis under other Acts).
| Article 32 (Special Cases concerning Meeting of Bondholders) |
| Article 33 (Disclosure of Details on Issuance) |
Where an issuer issues an electronic short-term bond, etc., under Article 8, the Korea Securities Depository shall disclose the type, item, amount, issuance condition of the relevant electronic short-term bond, etc. and other matters prescribed by Presidential Decree on the Internet website.
| Article 34 (Civil Execution, Etc.) |
Necessary matters concerning compulsory execution, execution of provisional seizure and provisional disposition, auction or deposit with respect to electronic short-term bond, etc. shall be determined by Supreme Court Regulations.
CHAPTER VIII PENAL PROVISIONS
| Article 35 (Penal Provisions) |
| (1) | A person who falls under any of the following subparagraphs shall be punished by imprisonment for not exceeding seven years or by a fine not exceeding 200 million won: |
| 1. | A person who input false information or fraudulent order, or input or altered the information without authority, in the information system for the registration and management of electronic short-term bond, etc. of the Korea Securities Depository or an account manager, in violation of Article 21 (1); |
| 2. | A person who invaded the information and communications network for the registration and management of electronic short-term bond, etc. of the Korea Securities Depository or an account manager, in violation of Article 21 (3). |
| (2) | A person who falls under any of the following subparagraphs shall be punished by imprisonment for not exceeding five years or by a fine not exceeding 100 million won: |
| 1. | A person who destroyed or damaged the registered or recorded information, in violation of Article 21 (2); |
| 2. | A person who used information, which has not been disclosed to public, acquired in the course of performing its duty for his/her own interest or a third party's interest without justifiable grounds, in violation of Article 22 (1) (including the cases applicable mutatis mutandis under paragraph (2) of the same Article); |
| (3) | A person who issued physical securities, in violation of Article, 14 shall be punished by imprisonment for not exceeding three years or by a fine not exceeding 50 million won. |
| (4) | A person who falls under any of the following subparagraphs shall be punished by imprisonment for not exceeding one year or by a fine not exceeding 30 million won: |
| 1. | A person who fails to prepare an issuer management account book or prepared a false issuer management account book, in violation of Article 4 (2); |
| 2. | A person who fails to prepare a client account book or prepared a false client account book, in violation of Article 5 (2); |
| 3. | A person who fails to open a client management account in the Korea Securities Depository, in violation of Article 5 (3); |
| 4. | A person who fails to prepare an account manager proprietary account or prepare a false account manager proprietary account, in violation of Article 6 (2). |
| (5) | In cases of applying crimes under Articles 214 through 217 under the Criminal Law, an electronic short-term bond, etc. is deemed securities and the punishment under each Article for the crimes concerning the securities is applied. |
| Article 36 (Joint Penal Provisions) |
Where a representative of a corporation (including organizations; hereinafter the same shall apply in this Article) or an agent, employee or any other employed person of a corporation or an individual commits any violation falling under Article 35 (1) through (4) with respect to the business of the corporation or the individual, not only shall such offender be punished accordingly, but the corporation or the individual shall be punished by a fine under the relevant Articles: Provided, That the same shall not apply where a corporation or an individual has paid due attention to or diligently supervised the relevant business in order to prevent such violation.
| Article 37 (Fines for Negligence) |
| (1) | A person who falls under the subparagraphs shall be punished by a fine for negligence not exceeding 50 million won: |
| 1. | A person who fails to issue a certificate of creditor, in violation of Article 16 (1); |
| 2. | A person who fails to notify the issuer, etc. of the details of possession of electronic short-term bond, etc., in violation of Article 17 (1); |
| 3. | A person who fails to take necessary measures concerning the inspect, print or copy under Article 18; |
| 4. | A person who fails to keep the registration or record information, in violation of Article 26 (1); |
| 5. | A person who rejects, interferes with, or evades an inspection under Article 27. |
| (2) | A person who falls under the following subparagraphs shall be punished by a fine for negligence not exceeding ten million won: |
| 1. | A person who fails to send notification or sent false notification under Article 4 (3); |
| 2. | A person who fails to comply with the request of the Korea Securities Depository without justifiable cause, in violation of Article 24 (1); |
| 3. | A person who fails to send notification or sends false notification under Article 24 (2). |
| (3) | The fine for negligence under paragraphs (1) and (2) shall be imposed and collected by the Financial Services Commission as prescribed by Presidential Decree. |
ADDENDUM <Act No. 10855, Jul. 14, 2011>
This Act shall enter into force one year and six months after the date of its promulgation.