ASSET-BACKED SECURITIZATION ACT
Act No. 5555, Sep. 16, 1998
Amended by Act No. 6073, Dec. 31, 1999
Act No. 6181, Jan. 21, 2000
Act No. 6275, Oct. 23, 2000
Act No. 6429, Mar. 28, 2001
Act No. 6642, Jan. 26, 2002
Act No. 6916, May 29, 2003
Act No. 7428, Mar. 31, 2005
Act No. 7615, Jul. 29, 2005
Act No. 8635, Aug. 3, 2007
Act No. 8703, Dec. 21, 2007
Act No. 8863, Feb. 29, 2008
Act No. 9071, Mar. 28, 2008
Act No. 9258, Dec. 26, 2008
Act No. 9617, Apr. 1, 2009
Act No. 10303, May 17, 2010
Act No. 10522, Mar. 31, 2011
Act No. 10580, Apr. 12, 2011
Act No. 10682, May 19, 2011
Act No. 10692, May 19, 2011
Act No. 10924, Jul. 25, 2011
Act No. 11599, Dec. 18, 2012
Act No. 12989, Jan. 6, 2015
Act No. 13797, Jan. 19, 2016
Act No. 14131, Mar. 29, 2016
Act No. 14242, May 29, 2016
Act No. 15148, Nov. 28, 2017
CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to enhance the soundness of the financial structure of financial institutions and general corporations by facilitating their financing activities, and to secure the basis of housing through stable supply of long-term housing loans with the establishment of a system of asset-backed securitization, as well as to protect the investors in the asset-backed securities, therefore contributing to the sound development of the national economy.
The terms used in this Act shall be defined as follows: <Amended by Act No. 6073, Dec. 31, 1999; Act No. 6181, Jan. 21, 2000; Act No. 6275, Oct. 23, 2000; Act No. 6429, Mar. 28, 2001; Act No. 6916, May 29, 2003; Act No. 7615, Jul. 29, 2005; Act No. 8635, Aug. 3, 2007; Act No. 8863, Feb. 29, 2008; Act No. 10303, May 17, 2010; Act No. 10522, Mar. 31, 2011; Act No. 10682, May 19, 2011; Act No. 11599, Dec. 18, 2012; Act No. 12989, Jan. 6, 2015; Act No. 14131, Mar. 29, 2016; Act No. 14242, May 29, 2016>
| 1. | The term "asset-backed securitization" means the activities falling under any of the following items: |
| (a) | A series of activities involving issuance of asset-backed securities by a special purpose company (including foreign corporations specializing in the business of asset-backed securitization) using securitization assets transferred from the originator as the underlying assets, and payment of the principal and interest or dividends with respect to the asset-backed securities out of the earnings or loans, etc. accruing from the management, operation, or disposition of the securitization assets concerned; |
| (b) | A series of activities involving issuance of asset-backed securities by a trust business entity under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "trust business entity") using securitization assets received in trust from the originator as the underlying assets, and payment of the proceeds of the asset-backed securities out of the earnings or loans, etc. accruing from the management, operation, or disposition of the securitization assets concerned; |
| (c) | A series of activities involving acquisition by a trust business entity of securitization assets by transfer from the originator, using the funds received in trust through issuance of asset-backed securities, and payment of the proceeds of the asset-backed securities out of the earnings or loans, etc. accruing from the management, operation, or disposition of the securitization assets; |
| (d) | A series of activities involving issuance of asset-backed securities by a special purpose company or a trust business entity using securitization assets, or asset-backed securities issued on the basis of such securitization assets as the underlying assets, which are transferred or entrusted to the special purpose company by another special purpose company or trust business entity, and payment of principal and interest, dividends, or returns of the asset-backed securities issued by itself out of the earnings or loans, etc. accruing from the management, operation, or disposition of the securitization assets or asset-backed securities initially transferred or trusted; |
| 2. | The term "originator" means any of the following persons who are in possession of securitization assets: |
| (e) | Deleted; <by Act No. 10692, May 19, 2011> |
| (h) | and (i) Deleted; <by Act No. 8635, Aug. 3, 2007> |
| (n) | Deleted; <by Act No. 11599, Dec. 18, 2012> |
| (p) | Corporations of good credit (including foreign corporations and Korea subsidiaries established by foreign corporations) for whose assets the Financial Services Commission recognizes a need of securitization in accordance with the standards prescribed in advance by the Financial Services Commission; |
| (t) | Other persons corresponding to the provisions of items (a) through (s), who are prescribed by Presidential Decree; |
| 3. | The term "securitization assets" means claims, immovable property and other property rights that are subject to the asset-backed securitization; |
| 4. | The term "asset-backed securities" means subscription certificates, bonds, beneficial certificates, and other securities or certificates issued pursuant to the asset-backed securitization plan mentioned in Article 3, using securitization assets as underlying assets; |
| 5. | The term "special purpose company" means a company established pursuant to Articles 17 and 20, engaging in the business of asset-backed securitization. |
CHAPTER II REGISTRATION OF ASSET-BACKED SECURITIZATION PLAN AND TRANSFER OF SECURITIZATION ASSETS, ETC.
| Article 3 (Registration of Asset-backed Securitization Plan) |
| (1) | When a special purpose company, or a foreign corporation or a trust business entity specializing in the business of asset-backed securitization (hereinafter referred to as a "special purpose company, etc.") intends to be governed by this Act in relation to asset-backed securitization, it shall register with the Financial Services Commission an asset-backed securitization plan, including the scope of securitization assets, classes of asset-backed securities, the management methods of securitization assets, etc. (hereinafter referred to as an "asset-backed securitization plan"). This provision shall also apply to the cases of changing the asset-backed securitization plan: Provided, That the same shall not apply to the case of changing minor items as prescribed by Presidential Decree. <Amended by Act No. 8635, Aug. 3, 2007; Act No. 8863, Feb. 29, 2008> |
| (2) | The number of asset-backed securitization plan to be registered by a special purpose company, etc. (excluding trust business entities) pursuant to paragraph (1) shall be limited to only one. <Amended by Act No. 8635, Aug. 3, 2007> |
| (3) | A special purpose company, etc. shall, when it intends to register pursuant to paragraph (1), furnish the documents prescribed by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008> |
| (4) | Deleted. <by Act No. 8635, Aug. 3, 2007> |
| Article 4 (Asset-backed Securitization Plan) |
The asset-backed securitization plan shall include each of the following:
| 1. | Matters concerning the name of a special purpose company, etc. and the locations, etc. of offices thereof; |
| 2. | Matters concerning the originator; |
| 3. | The planning period of the asset-backed securitization; |
| 4. | Matters concerning the relevant securitization assets such as their types, total amount and valuation; |
| 5. | Matters concerning the asset-backed securities such as their classes, total amount, and issuing terms and conditions; |
| 6. | Matters concerning the administration, operation, and disposition of the securitization assets; |
| 7. | Matters concerning the caretaker mentioned in Article 10 (1); |
| 8. | Other matters prescribed by Presidential Decree. |
| Article 5 (Refusal, etc. of Registration) |
| (1) | The Financial Services Commission may, when there exists a ground falling under any of the following subparagraphs, refuse the registration of an asset-backed securitization plan or demand the changes of the contents thereof: <Amended by Act No. 8863, Feb. 29, 2008> |
| 1. | When the application document for registration contains false information or lacks necessary information; |
| 2. | When the asset-backed securitization plan contains matters that are in contravention of Acts and subordinate statutes; |
| 3. | When there is a violation of Acts and subordinate statutes in relation to the establishment of a special purpose company. |
| (2) | The Financial Services Commission shall, when it intends to refuse the registration of an asset-backed securitization plan or demand the changes in the contents thereof pursuant to paragraph (1), notify the special purpose company, etc. of the reasons therefor in writing by specifying the details without delay. <Amended by Act No. 8863, Feb. 29, 2008> |
| Article 6 (Registration of Transfer, etc. of Securitization Assets) |
| (1) | When securitization assets (including the claim for return to a third party when such party occupies the securitization assets; hereafter in this Article the same shall apply) are transferred, entrusted, returned, pledged or mortgaged in accordance with an asset-backed securitization plan, either the originator or the special purpose company, etc. shall register this fact with the Financial Services Commission in accordance with the following classifications without delay: <Amended by Act No. 8635, Aug. 3, 2007; Act No. 8863, Feb. 29, 2008> |
| 1. | The originator shall effect the registration in any of the following items: |
| (a) | When securitization assets are transferred to a special purpose company, etc. in accordance with the asset-backed securitization plan; |
| (b) | When securitization assets are entrusted to a trust business entity in accordance with the asset-backed securitization plan; |
| 2. | The special purpose company, etc. (in the case of item (b), referring to the special purpose company that transfers the securitization assets or to which such assets are returned) shall effect the registration in any of the following items: |
| (a) | When the special purpose company, etc., in accordance with the asset-backed securitization plan, transfers the securitization assets to the originator or returns the same to the originator on the ground of cancellation of the transfer, etc.; |
| (b) | When the special purpose company, in accordance with the asset-backed securitization plan, transfers the securitization assets to another special purpose company or recovers the securitization assets concerned from the same special purpose company; |
| (c) | When the special purpose company, etc., in accordance with the asset-backed securitization plan, creates or cancels a pledge or mortgage on the securitization assets in favor of a third party on behalf of the investors of the asset-backed securities. |
| (2) | Where the originator or the special purpose company, etc. intends to make registration of the transfer, trust, or return of securitization assets or the creation of a pledge or mortgage on securitization assets pursuant to paragraph (1), it shall submit an application for such registration and a contract for transfer, etc. of securitization assets to the Financial Services Commission. <Amended by Act No. 6181, Jan. 21, 2000; Act No. 8863, Feb. 29, 2008> |
| (3) | An application for registration under paragraph (2) shall specify the following matters, and the matters of subparagraph 1 shall be prepared and submitted by using electronic means or other similar means: <Newly Inserted by Act No. 6181, Jan. 21, 2000; Act No. 8863, Feb. 29, 2008> |
| 1. | Specification of securitization assets; |
| 2. | Method and plan for the transfer, trust, or return of securitization assets, and method of payment thereof; |
| 3. | If the securitization assets are claims, whether or not the requirements for setting up against the transfer of such claims are satisfied; |
| 4. | Requisites for revocation of a contract for transfer, etc. of securitization assets; |
| 5. | If a transferee disposes of the securitization assets concerned, whether or not the transferor, etc. thereof has the right of preference purchase; |
| 6. | Other necessary matters concerning protecting investors as prescribed by the Financial Services Commission. |
| (4) | A special purpose company, etc. shall keep and manage a contract for transfer, etc. of securitization assets, registration completion certificate, notice of registration completion data, registration certificate, and other documentary evidence, as prescribed by Presidential Decree; and shall comply with a request for inspection of such documents from the Financial Services Commission or investors in the securitization securities. <Newly Inserted by Act No. 6181, Jan. 21, 2000; Act No. 8863, Feb. 29, 2008; Act No. 10580, Apr. 12, 2011> |
| (5) | Necessary matters concerning the form, entry method, and handling procedures of the registration application, etc. under paragraph (3) shall be prescribed by the Financial Services Commission. <Newly Inserted by Act No. 6181, Jan. 21, 2000; Act No. 8863, Feb. 29, 2008> |
| Article 7 (Special Cases for Requisite for Setting-up against Transfer of Claims) |
| (1) | A transfer, trust, or return of claims in accordance with an asset-backed securitization plan shall not be effective against the obligor of the claims, unless the transferor (including a truster; hereinafter the same shall apply) or transferee (including a trustee; hereinafter the same shall apply) gives a notice to or obtains a consent from the obligor: Provided, That if the transferor or the transferee sent a notice of transfer of claims (including the trust or return of claims; hereinafter the same shall apply in this Article) to the obligor at either of the addresses specified below not less than twice by content-proof mail, but such notice was returned to the transferor or the transferee because of the failure to locate the obligor, etc., the transferor or the transferee may place a public notice of transfer in two or more daily newspapers (including at least one daily newspaper of nationwide circulation) which cover the area of the address of the obligor as a main area of circulation; in such case the notice shall be deemed to have been given to the obligor on the date of such public notice: <Amended by Act No. 6181, Jan. 21, 2000> |
| 1. | The address of the obligor as shown on the registry or registration books of the relevant mortgage (if the address shown on the registry or registration books is not the last address of the obligor, and if the transferor or transferee knows the last address of the obligor, then such last address of the obligor); |
| 2. | The last address of the obligor, if there is no address shown on the registry or registration books of the relevant mortgage or there is no such registry or registration book, and if the transferor or transferee knows the last address of the obligor. |
| (2) | When, with respect to the transfer, trust, or return of claims in accordance with an asset-backed securitization plan, a registration is completed pursuant to Article 6 (1), the requirement of effective transfer provided in Article 450 (2) of the Civil Act shall be deemed to be satisfied as of the date of the registration under Article 6 (1) with respect to such transfer as far as its effectiveness against any third parties other than the obligor of the concerned claims (including the third party who occupies securitization assets in case of a transfer of claims for return of such securitization assets; hereinafter the same shall apply) is concerned. <Amended by Act No. 6181, Jan. 21, 2000> |
| Article 7-2 (Fixing Amount of Claims Secured by Maximal-Mortgage) |
When securitization assets to be transferred or entrusted pursuant to the asset-backed securitization plan are claims secured by the maximal-mortgage, and the originator has sent the obligor a notice expressing his intention to transfer or entrust all of the claims, fixing the amount of claims secured by the maximal-mortgage with no additional claim, by content-proof mail, the claims shall be deemed to have been fixed on the day following the date of service of the notice: Provided, That this shall not apply where the obligor has raised an objection thereto within 10 days therefrom.
[This Article Newly Inserted by Act No. 6181, Jan. 21, 2000]
| Article 8 (Special Cases for Acquisition of Mortgage, etc.) |
| (1) | When the claims transferred or entrusted in accordance with an asset-backed securitization plan are secured by a pledge or mortgage, the special purpose company, etc. shall acquire the pledge or mortgage upon registration pursuant to Article 6 (1). <Amended by Act No. 6181, Jan. 21, 2000> |
| (2) | When the Korea Asset Management Corporation or the Korea Land and Housing Corporation, in accordance with an asset-backed securitization plan, transfers or entrusts to a special purpose company, etc. immovable property acquired for the resolution of non-performing assets of a financial institution, for the support of a self-rescue plan of a failing company or for the restructuring of a company, the special purpose company, etc. shall acquire the ownership of such property upon registration pursuant to Article 6 (1). <Amended by Act No. 6073, Dec. 31, 1999; Act No. 11599, Dec. 18, 2012> |
| Article 9 (Public Disclosure of Registered Documents, etc.) |
| (1) | The Financial Services Commission shall make available for public view the documents related to registration and registration for modification mentioned in Articles 3 and 6 and the documents concerning the cancellation of registration under Article 38-2 (1). <Amended by Act No. 8703, Dec. 21, 2007; Act No. 8863, Feb. 29, 2008> |
| (2) | The trust business entity, the caretaker mentioned in Article 10 (1), and those entrusted with business pursuant to Article 23 (1) shall prepare and maintain the details of the securitization assets and documents relating to their status and make them available for perusal by investors in the special purpose company, etc. <Amended by Act No. 8635, Aug. 3, 2007> |
| Article 10 (Entrustment of Asset Management) |
| (1) | A special purpose company, etc. (excluding trust business entities) shall entrust the management of the securitization assets to any of the following subparagraphs (hereinafter referred to as a "caretaker") by entering into an asset management service agreement: <Amended by Act No. 6181, Jan. 21, 2000; Act No. 8635, Aug. 3, 2007; Act No. 9617, Apr. 1, 2009> |
| 3. | Such other persons specializing in the management of assets as meet the requirements prescribed by Presidential Decree. |
| (3) | When an asset management service agreement is terminated before its expiry date, the special purpose company, etc. shall not be entitled to assert rights against the obligors of the claims constituting the securitization assets on the ground that the caretaker's right to receive payments has been terminated: Provided, That this provision shall not apply to the cases where the obligor knew or should have known that the caretaker's right to receive payments has been terminated. <Amended by Act No. 6181, Jan. 21, 2000> |
| Article 11 (Management of Securitization Assets) |
| (1) | The caretaker shall manage separately from its own assets the securitization assets entrusted to him pursuant to Article 10 (1) (including the funds and other property rights received as a result of the management, operation, and disposition of such assets; hereafter the same shall apply in subparagraph 1 of Article 40). <Amended by Act No. 6181, Jan. 21, 2000> |
| (2) | The caretaker shall prepare and keep separate books for the management of the securitization assets. |
| Article 12 (Bankruptcy, etc. of Caretaker) |
| (1) | In the event of the bankruptcy of the caretaker, the securitization assets managed in trust pursuant to Article 10 (1) (including the funds and other property rights received as a result of the management, operation, and disposition of such assets; hereafter the same shall apply in this Article) shall not constitute the caretaker's bankrupt estate, and the special purpose company, etc. may require the caretaker or the trustee in bankruptcy to return such assets. <Amended by Act No. 6181, Jan. 21, 2000> |
| (3) | The creditors of the caretaker may not execute compulsorily the securitization assets managed in trust by the caretaker pursuant to Article 10 (1), and such assets shall not be subject to a preservation order or injunction order under the Debtor Rehabilitation and Bankruptcy Act. <Amended by Act No. 7428, Mar. 31, 2005> |
| Article 13 (Method of Transfer) |
The transfer of securitization assets shall be effected in the following manner, in accordance with the asset-backed securitization plan. In such case, the transfer shall not be deemed as a creation of security interest: <Amended by Act No. 6181, Jan. 21, 2000>
| 1. | The transfer should be effected by means of sale and purchase or exchange; |
| 2. | The transferee should have the right to make profits from and the right to dispose of the securitization assets. In this case, even if the transferor has the right of preference purchase to the securitization assets at the time when the transferee disposes of the assets, the right to make profits from and the right to dispose of the assets shall be deemed as held by the transferee; |
| 3. | The transferor should not have right to claim back the securitization assets, and the transferee should not have right to claim back the price paid for the transferred securitization assets; |
| 4. | The transferee should undertake risks associated with the securitization assets: Provided, That this shall not apply where the transferor undertakes such risks for a specific period of time or bears warranty liabilities (including the transferor's warranty for the obligor's financial capability). |
| Article 14 (Amendment to or Termination of Facilities Lease Agreements, etc.) |
| (1) | An originator shall not, when he has transferred or entrusted to a special purpose company, etc. claims under a facilities lease agreement or deferred payment sales agreement pursuant to an asset-backed securitization plan, amend or terminate the relevant facilities lease agreement or deferred payment sales agreement unless in accordance with the asset-backed securitization plan. This provision shall also apply to the receiver, interim receiver, administrator and interim administrator of the originator appointed pursuant to the Debtor Rehabilitation and Bankruptcy Act and any other persons discharging similar duties. <Amended by Act No. 7428, Mar. 31, 2005> |
| (2) | When the obligor of the claims under the facilities lease agreement or deferred payment sales agreement has received a notice of, or consented to, the fact that the originator has transferred or entrusted the relevant claims to the special purpose company, etc. in accordance with the asset-backed securitization plan, any amendment made to, or any termination of, the facilities lease agreement or deferred payment sales agreement by the originator in violation of paragraph (1) shall not have any effect. |
| Article 15 (Lease Receivables) |
| Article 16 (Special Cases for Application of Financial Investment Services and Capital Markets Act, etc.) |
| 1. | When the trust business entity acquired securitization assets by transfer pursuant to an asset-backed securitization plan; |
| 2. | When the trust business entity to which securitization assets were transferred or entrusted pursuant to an asset-backed securitization plan manages surplus funds pursuant to such plan. |
| (2) | Notwithstanding Article 3 (1) of the Trust Act and Articles 563 and 596 of the Civil Act, a trust business entity may carry on self-dealings in transferring or trusting securitization assets in accordance with an asset-backed securitization plan. <Amended by Act No. 6181, Jan. 21, 2000; Act No. 8635, Aug. 3, 2007; Act No. 10924, Jul. 25, 2011> |
| (3) | Notwithstanding Article 37 (3) of the Trust Act, a trust business entity shall, in managing and operating securitization assets, handle such assets, even when such entrusted assets are money, separately from its own property or the money belonging to other trust assets. <Amended by Act No. 8635, Aug. 3, 2007; Act No. 10924, Jul. 25, 2011> |
CHAPTER III SPECIAL PURPOSE COMPANIES
| Article 17 (Form of Company) |
| (1) | A special purpose company shall be in the form of limited company. |
| (2) | Chapter V of Part III of the Commercial Act shall apply to the matters relating to special purpose companies unless otherwise provided in this Act. |
| Article 18 (Number of Equity Holders) |
| Article 19 (Equity Holders' Meeting) |
| (1) | Notwithstanding Article 577 (1) and (2) of the Commercial Act, an equity holders' meeting of a special purpose company may be substituted by a written resolution even in the absence of the unanimous consent of the equity holders. |
| (2) | Resolutions of an equity holders' meeting that are contrary to the asset-backed securitization plan or harm the interests of the holders of the asset-backed securities shall be null and void. |
| Article 20 (Restriction on Concurrently Conducting Other Business, etc.) |
| (1) | A special purpose company shall not engage in any business other than those specified in Article 22. |
| (2) | A special purpose company shall not establish business places other than its headquarters, nor hire employees. |
| Article 21 (Prohibition on Use of Similar Names) |
In describing their trade names or type of business, companies other than a special purpose company shall not use any characters indicating a special purpose company.
| Article 22 (Business Affairs) |
| (1) | A special purpose company shall engage in the following business affairs in accordance with the asset-backed securitization plan: <Amended by Act No. 8635, Aug. 3, 2007> |
| 1. | Acquisition or assignment of securitization assets by transfer, or entrustment therof to a trust business entity; |
| 2. | Management, operation, and disposal of securitization assets; |
| 3. | Issuance and redemption of asset-backed securities; |
| 4. | Conclusion of the contract necessary for the implementation of the asset-backed securitization plan; |
| 5. | Temporary borrowing of funds necessary for redemption, etc. of asset-backed securities; |
| 6. | Investment of surplus funds; |
| 7. | Other business activities incidental to those mentioned in subparagraphs 1 through 6. |
| (2) | Accounting of a special purpose company shall be operated in accordance with such accounting axioms as prescribed by the Financial Services Commission. <Newly Inserted by Act No. 6181, Jan. 21, 2000; Act No. 8863, Feb. 29, 2008> |
| Article 23 (Entrustment of Business Affairs) |
| (1) | A special purpose company shall entrust its business affairs other than those falling under any of the following subparagraphs to the originator or other third parties pursuant to the provisions of the asset-backed securitization plan: |
| 1. | Matters requiring the resolution of the equity members' meeting; |
| 2. | Matters within the authority of directors to represent the company; |
| 3. | Matters within the authority of a statutory auditor; |
| 4. | Matters relating to the management of the securitization assets; |
| 5. | Other matters inappropriate to mandate to others, as prescribed by Presidential Decree. |
| (2) | The eligible third parties to whom the business can be mandated pursuant to paragraph (1) may be limited by Presidential Decree. |
| Article 24 (Causes for Dissolution) |
A special purpose company shall dissolve for any of the following subparagraphs:
| 1. | Expiration of its corporate period, or occurrence of other causes prescribed in the articles of incorporation or the asset-backed securitization plan; |
| 2. | Full redemption of the asset-backed securities; |
| 4. | Order or decision of a court. |
| Article 25 (Prohibition of Merger, etc.) |
A special purpose company may not merge with another company or change its structure to another company.
| Article 26 (Appointment of Liquidator, etc.) |
Notwithstanding Article 531 of the Commercial Act, which is applicable mutatis mutandis by virtue of Article 613 (1) of the same Act, and Article 355 of the Debtor Rehabilitation and Bankruptcy Act, when a special purpose company is dissolved or bankrupt, the Governor of the Financial Supervisory Service under the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Governor of the Financial Supervisory Service") may recommend to the court a liquidator or receiver, and the court shall appoint the person recommended by the Governor of the Financial Supervisory Service as liquidator or receiver in the absence of any other special reason. <Amended by Act No. 7428, Mar. 31, 2005; Act No. 8863, Feb. 29, 2008>
CHAPTER IV ISSUANCE OF ASSET-BACKED SECURITIES
| Article 27 (Application of Commercial Act, etc.) |
| Article 28 (Issuance of Subscription Certificates) |
| (1) | Notwithstanding Article 555 of the Commercial Act, a special purpose company may issue subscription certificates in bearer form (hereinafter referred to as "subscription certificates") with respect to the shares of its equity holders pursuant to an asset-backed securitization plan. |
| (3) | An equity holder of a special purpose company may request the issuance or redemption of subscription certificate with respect to his/her own equity shares: Provided, That this shall not apply to the cases where the articles of incorporation otherwise provide. |
| Article 29 (Required Information for Investment Certificates) |
The following information shall be included in the subscription certificates, and the directors shall affix their names and seals or sign such certificates:
| 2. | Date of incorporation of the company; |
| 3. | Total number of investment units; |
| 4. | Par value of investment unit; |
| 5. | Cases where there are provisions regarding various equity holdings for which dividends or distribution of or assets are different, the types and particulars of such equity holdings; |
| Article 30 (Exceptions to Transfer, etc. of Equity Holding) |
| (1) | With respect to the transfer of equity shares of an equity holder of a special purpose company, Article 556 of the Commercial Act shall not apply unless otherwise specified in the articles of incorporation. |
| (3) | Notwithstanding Article 462 of the Commercial Act, which is applicable mutatis mutandis by virtue of Article 583 of the same Act, a special purpose company may pay dividends in excess of its profits (referring to the amount of money equal to the assets without liabilities, capital and reserves, as shown on the balance sheets) in accordance with its articles of incorporation. |
| Article 31 (Issuance of Corporate Bonds) |
| (1) | A special purpose company may issue corporate bonds in accordance with the asset-backed securitization plan. |
| (2) | The provisions of Section 8 of Chapter IV of Part III of the Commercial Act (excluding Articles 469 and 470 of the same Act) shall apply mutatis mutandis to the issuance of the corporate bonds pursuant to paragraph (1). <Amended by Act No. 6181, Jan. 21, 2000> |
| Article 32 (Issuance of Beneficiary Certificates) |
| (1) | A trust business entity may issue beneficiary certificates in accordance with the asset-backed securitization plan. <Amended by Act No. 8635, Aug. 3, 2007> |
| Article 33 (Issuing Limit of Asset-backed Securities) |
The total amount of asset-backed securities to be issued shall not exceed the total amount of the purchase price or the valuation price of the securitization assets transferred or entrusted: Provided, That the amount of borrowing pursuant to subparagraph 5 of Article 22 shall not be included in the total amount of issuance.
CHAPTER V SUPPLEMENTARY PROVISIONS
| Article 34 (Investigation) |
The Governor of the Financial Supervisory Service may, when deemed necessary for the protection of the investors, request the production of materials relating to the business activities or assets of a special purpose company, etc., those entrusted with the business from a special purpose company, etc. and the caretaker, or, cause his/her subordinates to investigate into their business activities or assets in such manner as determined by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>
| Article 35 (Order for Business Improvement) |
The Financial Services Commission may, when it finds that the management of business conducted by a special purpose company, etc. or a caretaker might harm the interests of investors, to the extent necessary for investor protection, order the special purpose company, etc. or the caretaker to change the type and method of business, to deposit its assets, or to take measures necessary to improve the management of business activities. <Amended by Act No. 8863, Feb. 29, 2008>
| Article 36 (Special Cases on Resolution of Non-Performing Assets, etc. of Financial Institutions, Support for Self-Rescue Plan of Failing Companies and Restructuring of Companies) |
When the Korea Asset Management Corporation or the Korea Land and Housing Corporation transfers or entrusts to a special purpose company, etc. in accordance with an asset-backed securitization plan, the immovable property acquired for the resolution of non-performing assets of a financial institution, for the support of a self-rescue plan of a failing company or for the restructuring of a company, the following provisions shall not apply: <Amended by Act No. 6073, Dec. 31, 1999; Act No. 6181, Jan. 21, 2000; Act No. 6642, Jan. 26, 2002; Act No. 6916, May 29, 2003; Act No. 9071, Mar. 28, 2008; Act No. 11599, Dec. 18, 2012; Act No. 12989, Jan. 6, 2015; Act No. 13797, Jan. 19, 2016>
| Article 36-2 (Exemption from Duties to Purchase National Housing Bonds) |
Article 8 of the Housing and Urban Fund Act shall not apply, where securitization assets are transferred, entrusted, or mortgaged in accordance with an asset-backed securitization plan. <Amended by Act No. 6916, May 29, 2003; Act No. 12989, Jan. 6, 2015> [This Article Newly Inserted by Act No. 6181, Jan. 21, 2000]
| Article 37 (Provision and Use of Information about Obligors) |
| (1) | Notwithstanding the provisions of Article 4 of the Act on Real Name Financial Transactions and Guarantee of Secrecy, an originator or a special purpose company, etc. may provide information about the solvency of the obligors of claims constituting the securitization assets to the investors, transferees and other interested parties to the extent necessary for the implementation of the asset-backed securitization plan. |
| (2) | Those to whom securitization assets are transferred or entrusted pursuant to an asset-backed securitization plan (including those to whom the relevant business has been mandated) shall not use the information about the solvency of the obligors of claims constituting the securitization assets for any purpose other than obtaining the payment of such claims. |
| Article 38 (Mandate of Business Affairs) |
| (1) | The Financial Services Commission may mandate all or part of any of the following business affairs to the Governor of the Financial Supervisory Service: <Amended by Act No. 8863, Feb, 29, 2008> |
| 1. | Registration of an asset-backed securitization plan pursuant to Article 3; |
| 2. | Registration of a transfer of assets pursuant to Article 6; |
| 3. | Public disclosure of registration documents, etc. pursuant to Article 9. |
| (2) | The Financial Services Commission shall, when it mandates all or part of any business affairs to the Governor of the Financial Supervisory Service pursuant to paragraph (1), publicly announce the fact. <Amended by Act No. 8863, Feb. 29, 2008> |
| Article 38-2 (Cancellation of Registration of Asset-backed Securitization Plan) |
| (1) | The Financial Services Commission may cancel the registration of asset-backed securitization plan in cases where a special purpose company, etc. falls under any of the following subparagraphs: <Amended by Act No. 8863, Feb. 29, 2008> |
| 1. | Where registration or registration for modification under Article 3 (1) has been made by fraud or unjust method; |
| 2. | Where asset-backed securitization plan has been modified without registration for modification under the latter part of Article 3 (1); |
| 3. | Where registration has not been made under Article 6 (1) or has been made by fraud; |
| 4. | Where a special purpose company has operated a business other than the business under Article 22 in violation of Article 20 (1); |
| 5. | Where the order for business improvement under Article 35 has not been executed. |
| (2) | In cases where the Financial Services Commission intends to cancel the registration under paragraph (1), it shall hold a hearing. <Amended by Act No. 8863, Feb. 29, 2008> |
[This Article Newly Inserted by Act No. 8703, Dec. 21, 2007]
CHAPTER VI PENAL PROVISIONS
| Article 39 (Penal Provisions) |
Any person falling under any of the following subparagraphs shall be punished by imprisonment for not more than three years or by a fine not exceeding 20 million won: <Amended by Act No. 6181, Jan. 21, 2000>
| 1. | Any person who has falsely prepared an application for registration or a contract mentioned in Article 6 (2); |
| 2. | Any person who has falsely prepared the documents mentioned in Article 9 (2) or has failed to make such documents available for public perusal; |
| 3. | Any person who, in violation of Article 37 (2), has used information about the solvency of an obligor for purposes other than obtaining payment of the claims. |
| Article 40 (Penal Provisions) |
Any person falling under any of the following subparagraphs shall be punished by imprisonment for not more than one year or by a fine not exceeding ten million won:
| 1. | Any person who, in violation of Article 11 (1), has not administered the entrusted securitization assets in distinction from its own assets; |
| 2. | Any person who, in violation of Article 22, has borrowed funds or invested surplus funds otherwise than by the asset-backed securitization plan; |
| 3. | Any person who has failed to comply with an order for business improvement issued pursuant to Article 35. |
| Article 41 (Joint Penal Provisions) |
If the representative of a juristic person, or an agent, an employee or any other employed person of the juristic person or an individual commits an act of violation under Article 39 or 40 in connection with the affairs of the juristic person or the individual, not only such an actor shall be punished, but also the juristic person or the individual shall be punished by a fine under the same Article: Provided, That this shall not apply in cases where the juristic person or the individual has not neglected to give a reasonable attention to or to supervise the affairs concerned in order to prevent the act of violation. [This Article Wholly Amended by Act No. 9258, Dec. 26, 2008]
| Article 42 (Fines for Negligence) |
| (1) | Any person falling under any of the following subparagraphs shall be punished by a fine for negligence not exceeding five million won: |
| 1. | Any person who has failed to prepare or keep the documents mentioned in Article 11 (2); |
| 2. | Any person who, in violation of Article 21, has used any business indication of a special purpose company. |
| (2) | The fine for negligence mentioned in paragraph (1) shall be imposed and collected by the Financial Services Commission in such manner as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008> |
| (3) | through (5) Deleted. <by Act No. 15148, Nov. 28, 2017> |
ADDENDA
| (1) | (Enforcement Date) This Act shall enter into force on the date of its promulgation. |
ADDENDA <Act No. 6073, Dec. 31, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDUM <Act No. 6181, Jan. 21, 2000>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 6275, Oct. 23, 2000>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 and 3 Omitted.
ADDENDA <Act No. 6429, Mar. 28, 2001>
Article 1 (Enforcement Date)
This Act shall enter into force on the date as prescribed by Presidential Decree within two years from the promulgation date of this Act. (Proviso Omitted.)
Articles 2 through 11 Omitted.
ADDENDA <Act No. 6642, Jan. 26, 2002>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 8 Omitted.
ADDENDA <Act No. 6916, May 29, 2003>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 13 Omitted.
ADDENDA <Act No. 7428, Mar. 31, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDA <Act No. 7615, Jul. 29, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDA <Act No. 8635, Aug. 3, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force one and a half years after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 44 Omitted.
ADDENDUM <Act No. 8703, Dec. 21, 2007>
This Act shall enter into force six months after the date of its promulgation.
ADDENDA <Act No. 8863, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 9071, Mar. 28, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2009. (Proviso Omitted.)
Articles 2 through 11 Omitted.
ADDENDUM <Act No. 9258, Dec. 26, 2008>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 9617, Apr. 1, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 13 Omitted.
ADDENDA <Act No. 10303, May. 17, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 10 Omitted.
ADDENDA <Act No. 10522, Mar. 31, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on March 2, 2012. (Proviso Omitted.)
Articles 2 through 28 Omitted.
ADDENDA <Act No. 10580, Apr. 12, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
ADDENDA <Act No. 10682, May 19, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 3 Omitted.
ADDENDUM <Act No. 10692, May 19, 2011>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 10924, Jul. 25, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 11599, Dec. 18, 2012>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 12989, Jan. 6, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2015.
Articles 2 through 6 Omitted.
ADDENDA <Act No. 13797, Jan. 19, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 11 Omitted.
ADDENDUM <Act No. 14131, Mar. 29, 2016>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 14242, May 29, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force on December 1, 2016. (Proviso Omitted.)
Articles 2 through 22 Omitted.
ADDENDUM <Act No. 15148, Nov. 28, 2017>
This Act shall enter into force on the date of its promulgation.