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SECURED BOND TRUST ACT

Act No. 991, Jan. 20, 1962

Amended by Act No. 5453, Dec. 13, 1997

Act No. 5505, Jan. 13, 1998

Act No. 5747, Feb. 5, 1999

Act No. 6627, Jan. 26, 2002

Act No. 8635, Aug. 3, 2007

Act No. 8863, Feb. 29, 2008

Act No. 10303, May 17, 2010

Act No. 10580, Apr. 12, 2011

Act No. 10765, May 30, 2011

Act No. 15413, Feb. 21, 2018

CHAPTER I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of this Act is to facilitate general investment in bonds by instructing on and supervising the trust service of secured bonds and protecting bond holders concerning the issuance of secured bonds.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 2 (Definition)
The term "trust company" in this Act means a person who conducts the trust business concerning secured bonds.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 3 (Issuance of Bonds)
To set secured mortgages for bonds, bonds shall be issued according to the trust contract between a company that issues such bonds (hereinafter referred to as "trust enterprise") and a trust company.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 4 (Types of Secured Mortgage)
(1) Secured mortgages that may be established for bonds shall be limited to the following: <Amended by Act No. 15413, Feb. 21, 2018>
1. A pledge of movable property;
2. A pledge of credit with certificates;
3. A pledge of stock;
4. Security over real estate or other securities recognized by statutes and regulations;
5. Security interest prescribed by the Act on Security over Movable Property and Claims;
6. Other security interests having property values, as prescribed by Presidential Decree.
(2) To set stocks issued by a company other than a listed company provided for in Article 542-2 of the Commercial Act as the object of a secured mortgage, authorization shall be obtained from the Financial Services Commission. <Amended by Act No. 15413, Feb. 21, 2018>
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 5 (Registration of Trust Business)
(1) A person who intends to engage in the trust business concerning secured bonds shall register with the Financial Services Commission.
(2) A person eligible for registration under paragraph (1) shall be limited to trust companies under the Financial Investment Services and Capital Markets Act and banks under the Banking Act.
(3) A person who intends to obtain registration pursuant to paragraph (1) shall file with the Financial Services Commission, an application for registration stating the following information:
1. Trade name;
2. Address of main office;
3. Information on capital;
4. Information on senior executives;
5. Other information necessary for the examination of registration, which is prescribed by Ordinance of the Prime Minister.
(4) An application for registration under paragraph (3) shall be accompanied by the following documents:
1. The Articles of Incorporation;
2. Balance sheets for the previous year;
3. A document stating shareholders' names and the number of stocks held by each shareholder;
4. A Corporation Registration Certificate.
(5) The Financial Services Commission shall not deny registration for which an application is filed pursuant to paragraph (1), unless a false statement on important information or an omission of such information is made in the application itself or any of its accompanying documents, and shall, upon completion of the registration, issue to the applicant a certificate of registration with the following descriptions:
1. Number and date of registration;
2. Trade name and principal place of business of the company;
3. Representative's name;
4. Details of registration.
(6) Where the Financial Services Commission has denied registration pursuant to paragraph (5), it shall immediately notify the applicant of the grounds of such denial.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 6 Deleted. <by Act No. 5747, Feb. 5, 1999>
 Article 7 (Supervision of Business)
The Financial Services Commission shall supervise the trust service.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 8 (Examination of Business)
(1) The Financial Services Commission may occasionally examine the property status of the business of a trust company or may have a trust company report on its business.
(2) When deemed necessary, the Financial Services Commission may entrust the examination under paragraph (1) to the Governor of the Financial Supervisory Service (hereafter referred to as the "Governor" in this paragraph) under Article 24 of the Act on the Establishment of Financial Services Commission. In such cases, the Governor may collect examination fees, as determined by the Financial Services Commission.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 9 (Business Alteration and other Orders)
When the Financial Services Commission recognizes that the affairs or property status of a trust company is inappropriate for executing entrusted business, it may order the suspension of such business or alteration of method of conducting affairs or issue other orders necessary to protect the interests of trust enterprises or bond holders.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 10 (Revocation of Registration)
The Financial Services Commission may issue an order to suspend the business of a trust company, demand it to dismiss a senior executive, or revoke its registration, if the company falls under any of the following subparagraphs:
1. Where the trust company violates statutes and regulations, its articles of incorporation, or an order issued under this Act;
2. Where the trust company commits an act harmful to the public interest.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 10-2 (Hearings)
The Financial Services Commission shall hold a hearing where it intends to revoke a registration of a trust business pursuant to Article 10.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 11 (Offering of Bonds Overseas)
(1) A person who intends to offer bonds to which a secured mortgage is attached may conclude a trust contract with a foreign company, with authorization from the Financial Services Commission.
(2) Where a foreign company that acquires trust pursuant to paragraph (1) has no branch in the Republic of Korea, it shall designate a representative who resides in the Republic of Korea.
(3) A commercial company may become a representative under paragraph (2).
(4) Where a foreign company has designated a representative pursuant to paragraph (2), it shall immediately report the representative's name and address or trade name and main office to the Financial Services Commission.
(5) The representative of a foreign company in the Republic of Korea shall have the same authority concerning trust services as a director of a trust company or an employee who represents the trust company does.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
CHAPTER II TRUST DEEDS
 Article 12 (Trust Contracts)
A trust contract shall be concluded by a trust deed.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 13 (Matters to be Stated in Trust Deeds)
A trust deed shall include the following matters and the representatives of a trust enterprise and trust company shall affix their signatures and seals thereon:
1. Trade names of the trust enterprise and trust company;
2. Total amount of bonds;
3. Amount of each bond;
4. Prices or minimum prices of issued bonds;
5. Interest rates for bonds;
6. Method and deadline for bond repayment;
7. Method and deadline for interest payment;
8. Indication of matters to be stated in bonds and, where coupons are attached to such bonds, an indication of such fact;
9. Type of security, subject matter, priority, amount of bonds to which prioritized security is set, and other indication of rights that may be exercised against a mortgagee with regard to subject matter;
10. Where relevant bonds are bonds under Article 28 (1), such fact and the share to be encumbered by each company.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 14 (Details to be Stated for Issuance in Tranches)
(1) Where the total amount of bonds are issued in several tranches, a trust deed shall include the following matters in lieu of matters under subparagraphs 3 through 8 of Article 13:
1. Indication that the total amount of bonds are issued in several tranches;
2. Ceiling on the interest rate of bonds.
(2) With regard to trust contracts, when the amount of issuance and matters under subparagraphs 3 through 8 of Article 13 for bonds issued on the first occasion and thereafter are determined, the status thereof shall also be stated in.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 15 (Additional Contracts for Issuance in Tranches)
(1) Where the total amount of bonds is issued in several tranches, when matters under Article 14 (2) are not determined in a trust contract, a trust enterprise shall determine such matters whenever it issues bonds through a contract with a trust company.
(2) Representatives of a trust enterprise and trust company shall affix their signatures and seals in a contract under paragraph (1).
(3) A contract under paragraph (1) shall have the same effect as a trust contract.
(4) Articles 16 and 25 shall apply mutatis mutandis to contract deeds under paragraph (2).
(5) The face value of each bond shall be equal to the total amount of bonds or divided by the minimum amount.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 16 (Preservation and Perusal of Trust Deeds)
(1) A trust enterprise and trust company shall each preserve a copy of the trust deed.
(2) The original of a trust deed under paragraph (1) shall be kept at the main office, and a certified copy thereof at each branch office.
(3) When shareholders of a trust enterprise, bond holders or applicants for bonds request, the original or certified copy of a trust deed under paragraph (2) shall be available for perusal or reproduction at anytime during business hours.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
CHAPTER III OFFERING BONDS
 Article 17 (Public Announcement of Offering)
(1) A company that offers bonds for which a secured mortgage is established according to a trust contract shall provide public announcement of the following matters:
1. Matters under subparagraphs 1 through 7 and 10 of Article 13;
2. Indication of bonds for which a secured mortgage is established;
3. Indication of trust deed;
4. Indication of details of matters under subparagraph 9 of Article 13 to the extent necessary for notifying the price of security;
5. Indication of the result of investigating the price of security by a trust company;
6. When the company has offered bonds previously, the total amount of bonds still outstanding;
7. The company's total capital and share capital paid in;
8. Amount of property existing according to the final balance sheet;
9. Date and location on which an applicant may peruse or reproduce a trust deed or a certified copy thereof.
(2) Where the total value of bonds is issued in several tranches, the company shall provide public announcement of the following matters as well as the matters under each subparagraph of paragraph (1): Provided, That matters under subparagraphs 3 through 7 of Article 13 shall be applicable to bonds issued for the relevant tranche:
1. Indication of the purport that the total amount of bonds is issued in several tranches, and the value of issuance for each tranche;
2. Amount of each tranche already issued, the amount of outstanding issues and its interest rate and payment deadline;
3. When a trust deed under Article 15 (1) exists with regard to the issuance in the relevant tranche, the indication of such deed;
4. Date and location on which an applicant may peruse or reproduce a contract deed under subparagraph 3 or a certified copy thereof.
(3) The public announcements under paragraphs (1) and (2) shall be made with approval from a trust company.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 18 (Entrustment of Offering)
A trust enterprise may entrust the offering of bonds to a trust company pursuant to a trust contract. In such cases, when not provided for by a trust contract, the trust company shall have the authority to conduct all acts concerning the issuance of bonds, repayment of bonds and payment of interest.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 19 (Vicarious Execution of Public Notification of Offering)
(1) In cases under Article 18, a trust company shall provide public announcement under Article 17.
(2) The public announcement under paragraph (1) shall include the purport that a trust company offers bonds on behalf of a trust enterprise.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 20 (Underwriting Bonds by Trust Companies)
(1) A trust company may underwrite the total value of bonds, as prescribed by a trust contract.
(2) In cases under paragraph (1), public announcements under Articles 17 and 19 are not required.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 21 (Issuance of Bonds in Tranches)
(1) In cases under Article 20 (1), a trust company may subdivide bonds it has underwritten and request a trust enterprise to issue bonds corresponding thereto.
(2) When a trust company holds the authority to issue bonds according to a trust contract, it may issue bonds under paragraph (1) after notifying a trust enterprise thereof.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 22 (Transfer of Underwritten Bonds)
(1) and (2) Deleted. <Amended by Act No. 15413, Feb. 21, 2018>
(3) If a person who intends to acquire bonds requests, a trust company shall allow him or her to peruse or reproduce a trust deed or a certified copy thereof at anytime during business hours.
(4) When a trust company has transferred bonds, he or she shall have the authority to conduct any act concerning the repayment of such bonds and payment of interest, in lieu of a trust enterprise. <Amended by Act No. 15413, Feb. 21, 2018>
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 23 (Acquisition of Total Value of Bonds by Third Parties)
(1) A trust enterprise or a trust company may allow a third party to acquire the total value of bonds, as prescribed by a trust contract.
(2) The acquisition of the total value of bonds pursuant to paragraph (1) shall be deemed a commercial act.
(3) A person who has acquired the total value of bonds pursuant to paragraph (1) may request a trust enterprise to subdivide the bonds and request a trust enterprise to issue bonds corresponding thereto.
(4) Where a trust company has the authority to issue bonds according to a trust contract, it may make a request under paragraph (3) to a trust enterprise.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 24 (Mutatis Mutandis Application of Acquisition of Total Value of Bonds)
(1) Articles 20 (2) and 22 (4) shall apply mutatis mutandis where a third party acquires the total value of bonds pursuant to Article 23 (1). <Amended by Act No. 15413, Feb. 21, 2018>
(2) Where a third party acquires the total value of bonds pursuant to Article 23 (1), the indication of the result of investigating the price of security by the third party may substitute for matters under Article 17 (1) 5.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 25 (Issuance of Certified Copy of Trust Deed)
(1) A trust enterprise or trust company shall issue a certified copy of a trust deed to a person who has acquired the total value of bonds pursuant to Article 23 (1).
(2) The representative of a trust enterprise or trust company shall affix his or her signature and seal on a certified copy under paragraph (1) and certify that it is identical to its original counterpart.
(3) Article 22 (3) shall apply mutatis mutandis to a certified copy under paragraph (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 26 (Period of Issuance of Bonds in Tranches)
Where the total value of bonds is issued in several tranches, the issuance of the final tranche shall be made within five years from the date on which a trust deed is prepared.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 27 (Issuance in Tranches and Reduction in Total Value of Bonds)
(1) Where the total value of bonds is issued in several tranches, if the issuance of some bonds is incomplete, a trust enterprise may reduce the total value of bonds to the value already issued, through a contract with a trust company. In such cases, such trust company shall not refuse to conclude such contract without good cause.
(2) Damage suffered by a trust company due to the conclusion of a contract under paragraph (1) shall be indemnified by a trust enterprise.
(3) Articles 15 (2) and 67 shall apply mutatis mutandis to a contract under paragraph (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 28 (Issuance of Joint Bonds)
(1) A company may jointly issue bonds. In such cases, it shall entrust the offering of bonds to a trust company or have a trust company underwrite the total value of bonds.
(2) In cases under paragraph (1), a trust company shall have the authority to conduct all acts concerning the issuance of bonds, repayment of bonds and payment of interest.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 29 (Acquisition of Bonds in Tranches)
Where the total value of bonds is issued in several tranches, the acquisition of value issued in each tranche shall be deemed the acquisition of the total value of bonds.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 30 Deleted. <by Act No. 5747, Feb. 5, 1999>
CHAPTER IV BONDS
 Article 31 (Details to be Stated in Bonds)
Bonds issued under a trust deed shall include the following details:
1. Details under subparagraphs 1 through3 and 5 through 7 of Article 13;
2. Details under Article 17 (1) 2 and 3;
3. Details under Article 17 (2) 1 and 3, when the total value of bonds is issued in several tranches;
4. Serial numbers of bonds.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 32 (Verification of Bonds)
(1) When a trust enterprise has issued bonds that satisfy the provisions of a trust contract, on request, a trust company shall verify such bonds are bonds issued under a trust deed and transfer such bonds to the trust enterprise or a designated person.
(2) Verification under paragraph (1) shall be stated in each bond, and a director or a representative employee of such trust company shall affix his or her signature and seal thereon.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 33 (Nullity of Bonds)
Bonds under a trust deed shall have no effect without the verification under Article 32.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 34 (Vicarious Issuance of Bonds)
(1) When a trust company has issued bonds in lieu of a trust enterprise, it shall state such purport in each bond and a director or a representative employee of the trust company shall affix his or her signature and seal thereon.
(2) Articles 32 and 33 shall not apply to cases under paragraph (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 35 (Rights and Obligations of Vicarious Bond Issuers)
When a trust company has issued bonds in lieu of a trust enterprise, a trust company shall enter matters under Article 479 of the Commercial Act and provisions applicable mutatis mutandis thereunder, and a request under Article 480 of the Commercial Act and provisions applicable mutatis mutandis thereunder shall be made to a trust company.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
CHAPTER V BOND REGISTER
 Article 36 (Details to be Stated in Bond Register)
(1) When a company has issued bonds with a secured mortgage attached, it shall state the following details in the bond register as well as matters under each subparagraph of Article 488 of the Commercial Act:
1. Details under subparagraphs 1, 9 and 10 of Article 13;
2. Details under Article 17 (1) 2 and 3;
3. When bonds are entrusted under Article 18 or acquired under Article 20 (1), such fact;
4. When there is an acquirer under Article 23 (1), such fact and the name or trade name of such acquirer.
(2) Where a company issues the total value of bonds in several tranches, it shall also state details under Article 17 (2) 1 and 3 in the bond register, along with details under paragraph (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 37 (Preparation of Certified Copies)
(1) A trust enterprise shall prepare a certified copy of the bond register and issue it to a trust company or to a person who has acquired the total value of bonds pursuant to Article 23 (1).
(2) A director or representative employee of a trust enterprise shall affix his or her signature and seal on a certified copy under paragraph (1) and certifies that it is identical to its original counterpart.
(3) A trust company shall keep a certified copy under paragraph (2) at its main office and, at the request of a bond holder, make it available for perusal or reproduction at anytime during business hours.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 38 (Vicarious Preparation of Bond Register of Issuer and Issuance of Certified Copies)
(1) When a trust company has issued bonds in lieu of a trust enterprise, the trust company shall prepare a bond register and keep it at its main office, and shall issue a certified copy thereof to the trust enterprise and a person who has acquired the total value of bonds pursuant to Article 23 (1).
(2) Articles 37 (2) and (3) and 39 of this Act and Article 396 (2) of the Commercial Act shall apply mutatis mutandis to cases under paragraph (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 39 (Cases in which Bond Register is Altered)
(1) Whenever details in the bond register are altered, a trust enterprise or a trust company shall notify the other company by a document on which its director or representative employee affixes his or her signature and seal.
(2) When a trust company or trust enterprise receives a document under paragraph (1), it shall store it attached to the certified copy of the bond register.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 40 (Handling Alterations to Bond Register)
Whenever a trust enterprise, trust company or a person who has acquired the total value of bonds pursuant to Article 23 (1) handles any matter that may alter details in the bond register, it shall notify a company that stores the bond register of such fact in writing.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
CHAPTER VI ASSEMBLY OF BONDHOLDERS
 Article 41 (Convening Assembly of Bond Holders)
A trust company or a person who has acquired the total value of bonds pursuant to Article 23 (1) may convene an assembly of bond holders (hereinafter referred to as "assembly") whenever necessary.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 42 (Right to Request Assembly to Convene)
(1) A trust enterprise or a bond holder who holds 1/10 of the total value of bonds may request an assembly to convene, by submitting a document that includes the purpose of an assembly and grounds for convening an assembly to a trust company or a person who has acquired the total value of bonds pursuant to Article 23 (1).
(2) If a person in receipt of a request under paragraph (1) fails to proceed with the procedures for convening an assembly within two weeks from such request, the person who has requested may convene an assembly with authorization from the Financial Services Commission.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 43 (Convening Assembly Autonomously)
(1) A bond holder who holds 1/10 of the total value of bonds may convene an assembly autonomously under Article 78, 83 or 87.
(2) Where not expressly provided for by a trust contract, an assembly under paragraph (1) shall be convened at the seat of the main office of a trust company.
(3) A trust enterprise may convene an assembly autonomously under Article 83 or 87.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 44 (Mutatis Mutandis Application of the Commercial Act)
Article 363 (1) through (3) of the Commercial Act shall apply mutatis mutandis to convening an assembly.
 Article 45 (Proceedings of Assembly)
(1) Where not expressly provided for by a trust contract, proceedings of an assembly shall be decided by the majority of voting rights exercised: Provided, That matters under Articles 55, 57 (1), 65, 74, 75 and 86 (1) shall not be decided unless bond holders who hold at least half of the total value of bonds and constitute at least half of persons holding registered bonds and persons who have deposited bonds pursuant to paragraph (2) exercise voting rights.
(2) Article 368 (2) through (4) of the Commercial Act shall apply mutatis mutandis to resolution at an assembly.
(3) Unless otherwise provided for in a trust contract, a bond holder who does not attend an assembly may exercise his or her voting right by way of a document.
(4) A bond holder shall have 1 vote for each minimum of bond: Provided, That the voting right of a bond holder who has not less than 11 times the minimum of bond may be limited by a trust contract.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 46 (Bond Acquirers' Rights to Attend)
A person who has acquired the total value of bonds pursuant to Article 23 (1) or his or her representative may attend an assembly and make comments or present his or her opinion by way of a document.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 47 (Right of Representatives of Trust Companies to Attend)
Except where an assembly is convened for matters prescribed in Article 78 (2), the representative of a trust company may attend an assembly and make comments or present his or her opinion by way of a document.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 48 (Notification to Convene Assembly)
(1) A person who convenes an assembly shall notify a person under Articles 46 and 47 or his or her representative that an assembly is to be convened.
(2) Article 363 (1) and (2) of the Commercial Act shall apply mutatis mutandis to notification under paragraph (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 49 (Right to Require Attendance at Assembly)
When recognized necessary at an assembly or a person who has convened an assembly recognizes it necessary, such assembly may give notice to a trust enterprise and require the attendance of its representative.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 50 (Right to Request Declaration to Nullify Resolution)
(1) When any procedure for convening an assembly or method of passing a resolution has violated this Act or any provision in a trust contract, a trust enterprise, trust company or each bond holder may file a claim with the court to nullify such resolution.
(2) Claims under paragraph (1) shall be filed within one month from the date of resolution.
(3) A bond holder who files a claim under paragraph (1) shall deposit his or her bonds and, if a person who has convened an assembly files a claim, such person shall provide appropriate security.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 51 (Matters for Resolution)
Except as otherwise provided for in this Act, matters for resolution at an assembly shall be limited to these determined in a trust contract.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 52 (Preparation and Perusal of Minutes)
(1) The person who has convened an assembly shall prepare minutes of the meeting.
(2) When a person, other than a trust company, has prepared minutes, he or she shall preserve the original thereof and issue a certified copy thereof to the trust company.
(3) A trust company shall keep the original or a certified copy of the minutes of an assembly at its main office and branch offices.
(4) If a trust enterprise or bond holder requests, a trust company shall make the minutes under paragraph (3) available for perusal or reproduction at anytime during business hours.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 53 (Bearing of Expenses)
Except where a trust company or a person who has acquired the total value of bonds pursuant to Article 23 (1) convenes an assembly, the expense incurred from an assembly shall be borne by the person who convenes the assembly.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 54 (Performer of Resolution)
Resolutions at an assembly shall be performed by a trust company: Provided, That when the nature of a resolution is incompatible with execution by the trust company, a person to execute resolutions shall be determined at an assembly.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 55 (Entrustment of Matters of Resolutions)
(1) Where not expressly provided for by a trust contract, an assembly may appoint one or more representatives and entrust them with a decision on matters subject to resolution.
(2) Representatives shall be appointed, from among persons who have acquired the total value of bonds pursuant to Article 23 (1) or persons who have at least 1/10 of the total value of bonds.
(3) Where not separately determined by an assembly, if there are several representatives, matters that belong to the authority of representatives shall be decided by an affirmative vote of a majority thereof.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 56 (Public Announcement of Taking Office by Representatives and their Authority)
(1) Where representatives have taken office, the details thereof shall be publicly announced, and such fact shall be notified to a trust enterprise, trust company and a person who has acquired the total value of bonds pursuant to Article 23 (1).
(2) In cases falling under the proviso of Article 54, representatives may autonomously execute matters under their authority or delegate others to execute such matters.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 57 (Dismissal of Representatives and Alteration of Authority)
(1) An assembly may dismiss any representative or alter his or her authority at anytime.
(2) In cases under paragraph (1), an assembly shall provide public announcement of such fact and send notice to a trust enterprise or a person who has acquired the total value of bonds pursuant to Article 23 (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 58 (Resolutions at Assembly in Cases of Issuance of Bonds in Tranches)
(1) Where the total value of bonds is issued in several tranches, matters that effect bond holders of a certain tranche and does not harm bond holders of the other tranches shall be determined by a resolution at an assembly of bond holders of such specific tranche.
(2) When a resolution at an assembly harms bond holders of a certain tranche, a resolution shall be made at an assembly of bond holders of such specific tranche.
(3) Provisions concerning assemblies shall apply mutatis mutandis to an assembly of bond holders under paragraph (2).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
CHAPTER VII EFFECT OF TRUST CONTRACTS
 Article 59 (Obligations of Trust Companies)
A trust company shall carry out its affairs fairly and sincerely, and in good faith, and carry out the trust business with due care of a good administrator for a trust enterprise and bond holders.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 60 (Reversion of Secured Mortgages)
(1) A secured mortgage under a trust contract shall revert to a trust company for the total bonds written in a trust deed.
(2) A trust company shall preserve and exercise a security right for total bond holders.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 61 (Bond Holders' Profits)
A bond holder shall receive dividends from security in equal proportion to the relevant value of bonds.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 62 (Effect of Secured Mortgages)
A secured mortgage under a trust contract shall have effect even before the establishment of bonds.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 63 (Application of the Civil Act and the Commercial Act Excluded)
Article 336 of the Civil Act and Article 59 of the Commercial Act shall not apply to a security right by a trust contract.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 64 (Increasing Security)
A trust company may add security by contract with a trust enterprise.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 65 (Alteration of Security)
A trust company may alter security by contract with a trust enterprise through resolution at an assembly.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 66 (Effect of Increased or Amended Contracts)
Contracts under Articles 64 and 65 shall have the same effect as a trust contract.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 67 (Public Announcement of Increased or Amended Contracts)
(1) Contracts under Articles 64 and 65 shall be made in the form of a document on which each representative of a trust enterprise and trust company affixes his or her and signature and seal and the trust enterprise and trust company shall publicly announce such without delay: Provided, That such public announcement shall be made separately to known bond holders and persons who have acquired the total value of bonds pursuant to Article 23 (1).
(2) Articles 16 and 25 shall apply mutatis mutandis to contract deeds under paragraph (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 68 (Scope of Exercisable Security Rights)
Security rights under a trust contract shall be exercised only in relation to all bond holders.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 69 (Repayment and Interest Payment)
(1) Where a trust enterprise repays some of the bonds on a regular basis, when the repayment is delayed for two months, or where interest is paid, when the payment is delayed for three months, a trust company may send peremptory notice to the trust enterprise, by resolution at an assembly, with the purport that the repayment or payment shall be made within a certain period and that, if the repayment or payment is not made within such period, the benefit of time from the total value of bonds will be lost.
(2) When a trust enterprise fails to repay or pay within the period under paragraph (1), the benefit of time from the total value of bonds shall be lost.
(3) A peremptory notice under paragraph (1) shall be made in writing.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 70 (Public Announcement and Notice of Loss of Benefit of Time)
When a trust enterprise has lost the benefit of time pursuant to Article 69, a trust company shall immediately provide public announcement of such fact: Provided, That a separate notice shall be sent to each known bond holder and a person who has acquired the total value of bonds pursuant to Article 23 (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 71 (Execution of Security Rights)
(1) When a bond is not repaid despite expiry of deadline or when a trust enterprise is dissolved without fully repaying all bonds, a trust company shall immediately exercise a security right by resolution at an assembly.
(2) Article 338 (2) of the Civil Act shall not apply to pledges over movable property under a trust contract.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 72 (Compulsory Execution)
(1) A trust company may conduct compulsory execution for security by an executory exemplification given to all bond holders or apply for or entrust auction under the Civil Execution Act.
(2) In cases under paragraph (1), objections against bond holders may be raised to a trust company.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 73 (Authority concerning Bond Repayment)
Where not expressly provided for by a trust contract, a trust company shall have the authority to conduct all acts necessary for bond repayment for all bond holders.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 74 (Postponement of Payment, Exemption from Liability, or Reconciliation)
A trust company may postpone the payment of total bonds, exempt liabilities generated by failure in execution or reconciliate, by resolution at an assembly.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 75 (Legal Action)
A trust company may take legal action for all bond holders or conduct all acts incidental to bankruptcy proceedings, by resolution at an assembly.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 76 (Public Announcement and Notice of Completed Matters)
Upon completing acts under Articles 71, 74 and 75, a trust company shall immediately make public announcement of such fact: Provided, That a separate notice shall be sent to each known bond holder and person who has acquired the total value of bonds pursuant to Article 23 (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 77 (Provision of Repayment)
(1) A trust company shall immediately pay the principle repaid for bond holders to each bond holder according to the value of bonds.
(2) Article 685 of the Civil Act shall apply mutatis mutandis when a trust company has expended the amount under paragraph (1) on its own account.
(3) Where a bond holder is unknown or when a bond holder refuses or is unable to receive the repayment, a trust company shall deposit the amount under paragraph (1) for the bond holder.
(4) Where deemed necessary, a trust company may entrust acts under paragraphs (1) and (3) to a person who has acquired the total value of bonds pursuant to Article 23 (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 78 (Appointment of Special Agents)
(1) Where a trust company has neglected to conduct acts in relation to all bond holders, the Financial Services Commission may appoint a special agent on request by an assembly and have him or her conduct such acts.
(2) Where a conflict of interests arises between a bond holder and a trust company, paragraph (1) shall also apply when acts for trials or for other purposes are necessary for all bond holders.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 79 (Proxy Acting for Total Bond Holders)
Where conducting acts for proceedings or for other purposes in lieu of all bond holders pursuant to this Act, each bond holder need not be separately indicated.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 80 (Claims for Remuneration)
(1) A trust company may claim due remuneration from a trust enterprise for handling trust services.
(2) Article 686 (2) and (3) of the Civil Act shall apply mutatis mutandis where matters concerning the right to claim for remuneration by a trust company are not expressly provided for in a trust contract.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 81 (Reimbursement of Costs)
(1) A trust enterprise shall reimburse all expenses that a trust company has duly disbursed when handling trust services and interest after the date of disbursement, and compensate all damage suffered by the trust company without its negligence.
(2) A trust company may request a trust enterprise to pre-pay expenses to be incurred in handling trust services.
(3) Paragraphs (1) and (2) shall apply mutatis mutandis to a person who has acquired the total value of bonds pursuant to Article 23 (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 82 (Receipt of Preferential Payments)
(1) A secured mortgage under a trust contract shall also have effect for bonds to be given to a trust company pursuant to Article 81 (1).
(2) A trust company shall have the right to be paid from security in preference to a bond holder, with regard to bonds under paragraph (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 83 (Deposit Money)
(1) When a trust company has caused secured mortgage to expire or caused its price to decrease by intention or negligence, the Financial Services Commission may have the trust company deposit reasonable amount of money, on request by a trust enterprise or an assembly. In such cases, it shall be deemed that the trust enterprise has established the right of pledge for the deposit money.
(2) The right of pledge under paragraph (1) shall become a secured mortgage under a trust contract.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 84 (Inspection of Security)
(1) A trust enterprise, representative appointed pursuant to Article 55 (1), or a bond holder who holds at least 1/10 of the total value of bonds may inspect the preservation status of security of a trust company at anytime.
(2) A person who has unregistered bonds is not entitled to conduct inspection under paragraph (1) unless he or she deposits such bonds with a trust company.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 85 (Application of the Civil Act Excluded)
Article 324 (3) of the Civil Act shall not apply to the right of pledge by a trust contract.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
CHAPTER VIII SUCCESSION AND TERMINATION OF TRUST SERVICES
 Article 86 (Resignation of Trust Companies)
(1) A trust company may resign after determining a company to succeed its trust services, as prescribed by a trust contract or by obtaining approval from a trust enterprise and an assembly: Provided, That it may resign with authorization from the Financial Services Commission where there is any unavoidable cause.
(2) Article 11 (1) shall apply mutatis mutandis where the company to succeed its trust services is a foreign company.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 87 (Dismissal of Trust Companies)
The Financial Services Commission may dismiss a trust company on request from a trust enterprise or an assembly, where any of the following grounds arise:
1. Where a trust company violates any of its duties;
2. Where a trust company is inappropriate to handle trust services;
3. Where any other good cause to dismiss a trust company exists.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 88 (Appointment of Successors)
When a trust company has resigned or been dismissed pursuant to the proviso of Article 86 (1) or Article 87, or its registration is revoked or a trust company is dissolved, the Financial Services Commission shall reappoint a trust company and have it succeed trust services.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 89 (Formalities of Succession)
(1) Succession to trust services under Article 86 shall take effect when each representative of a trust enterprise, former trust company and new trust company prepares a contract on which he or she affixes his or her signature and seal.
(2) When a contract under paragraph (1) is concluded, a trust enterprise, former trust company and new trust company shall immediately report such to the Financial Services Commission in writing.
(3) Succession under paragraph (2) shall take effect when a written order from the Financial Services Commission is issued to the new trust company.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 90 (Public Announcement of Succession)
Succession to trust services shall be publicly announced immediately by a trust enterprise, former trust company and new trust company in cases under Article 86 and by a trust enterprise and new trust company in cases under Article 88, respectively: Provided, That a separate notice shall be sent to each known bond holder and person who has acquired the total value of bonds pursuant to Article 23 (1).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 91 (Handling Business by Successors)
(1) A new trust company determined pursuant to Article 86 or appointed pursuant to Article 88 shall handle trust services on terms concluded by the former trust company.
(2) The rights and responsibilities reverted to the former trust company for bond holders or a trust enterprise shall be transferred to the new trust company retroactively from the resignation, dismissal, revocation of registration or dissolution of the former trust company: Provided, That liabilities generated by violations of the contract or illegal acts by the former trust company shall be an exception.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 92 (Illegal Disposal)
When a person who has occupied any pledged article due to illegal disposal by the former trust company is in bad faith, the occupation by the new trust company shall be deemed extorted by him or her.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 93 (Procedures for Transfer)
(1) A director of the former trust company, employee who represents the former trust company or trustee in bankruptcy shall immediately transfer the articles preserved for a trust enterprise or bond holders and documents concerning trust services to the new trust company, and shall conduct all acts necessary for transferring other trust services to the new trust company.
(2) When completing a transfer under paragraph (1), a trust enterprise and the former and new trust companies shall jointly report the completion of transfer to the Financial Services Commission in writing.
(3) A list of articles moved shall be attached to a report under paragraph (2).
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 94 (Supervision)
The Financial Services Commission shall supervise affairs concerning succession.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 95 (Public Announcement of Conclusion)
When a trust company has completed trust services, it shall prepare a total bill and provide publicly announce it.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
CHAPTER IX REGISTRATION
 Article 96 (Reckoning Registration Period)
With regard to matters subject to registration by a trust company, which requires authorization from the Financial Services Commission or registration, the registration period shall be reckoned from the date on which a written authorization or certificate of registration arrives.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 97 (Registration of Suspension of Business and Revocation of Registration)
Upon receipt of a request from the Financial Services Commission, the Registrar's Office shall register the suspension of business or revocation of registration decided by the Financial Services Commission pursuant to Article 9 or 10.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Articles 98 and 99 Deleted. <by Act No. 5747, Feb. 5, 1999>
 Article 100 (Entitlement to Registration)
A trust company shall be entitled to registration with regard to the registration of establishment of security rights pursuant to a trust contract.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 101 (Details to Be Stated in Registration of Establishment of Security Rights)
(1) When establishment of security rights under a trust contract is registered, the value of bonds provided for in Article 75 (1) 1 of the Registration of Real Estate Act shall be stated as only the total value of bonds.
(2) When the total value of bonds is issued in several times in applying paragraph (1), notwithstanding Article 75 of the Registration of Real Estate Act, the total value of bonds, the intention that the total value of bonds is issued in several times and the ceiling of bond interest rate shall be stated in the application.
(3) In applying for registration under paragraph (1), matters to be registered pursuant to paragraphs (1) and (2) shall be stated.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 102 Deleted. <by Act No. 5747, Feb. 5, 1999>
CHAPTER X PENALTY PROVISIONS
 Article 103 (Penalty Provisions)
A person who engages in the trust business, in violation of Article 5 shall be subject to a fine not exceeding 10 million won.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 104 (Penalty Provisions)
Where an employee who executes the affairs of a company, director, trustee in bankruptcy, special agent under Article 78 or representative of a foreign company violates an order from the Financial Services Commission under this Act, he or she shall be subject to an administrative fine not exceeding five million won.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 105 (Administrative Fines)
(1) Where an employee who executes the affairs of a company, director, trustee in bankruptcy, special agent under Article 78 or representative of a foreign company falls under any of the following, he or she shall be subject to an administrative fine not exceeding five million won:
1. Where he or she interferes with an inspection by the Financial Services Commission under this Act;
2. Where he or she violates Article 11 (1) or 86 (2);
3. Where he or she fails to state matters to be provided for in bonds under this Act or mistakes them;
4. Where a trust enterprise issues a bond and he or she issues a bond without undergoing procedures under Article 32;
5. Where he or she neglects to preserve or exercise a security right under Article 60 (2);
6. Where he or she violates Article 77 (1) or (3);
7. Where he or she interferes with an inspection under Article 84 (1);
8. Where he or she neglects to transfer the affairs under Article 93 (1);
9. Where he or she is obliged to follow a resolution at an assembly of bond holders and he or she fails to follow such resolution or violates such resolution;
10. Where he or she underreports to an assembly of bond holders or its representatives or conceals facts.
(2) Where an employee who executes the affairs of a company, director, trustee in bankruptcy, person who has acquired the total value of bonds pursuant to Article 23 (1), representative under Article 55, special agent under Article 78 or representative of a foreign company falls under any of the following, he or she shall be subject to an administrative fine not exceeding one million won:
1. Where he or she neglects to report or make public announcement or notification under this Act or makes illegal public announcement or notification;
2. Where he or she fails to issue documents to be issued under this Act or incorrectly states matters in a document;
3. Where he or she unduly fails to allow perusal or reproduction of documents for which perusal or reproduction is allowed under this Act;
4. Where he or she fails to keep documents to be preserved under this Act or fails to state matters to be stated in such documents or incorrectly state such matters.
(3) Administrative fines under paragraphs (1) and (2) shall be imposed and collected by the Financial Services Commission, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10765, May 30, 2011]
 Article 106 Deleted. <by Act No. 5505, Jan. 13, 1998>
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation.
(2) (Repealed Act or Decree) The Secured Bond Trust Act (Decree No. 533 of 1920) enforced in Korea under colonial rule shall be repealed.
ADDENDA <Act No. 5453, Dec. 13, 1997>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1998. (Proviso Omitted)
Article 2 Omitted.
ADDENDA <Act No. 5505, Jan. 13, 1998>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1998. (Proviso Omitted.)
(2) (Transitional Measures Concerning Dispositions) The authorizations and other actions of administrative agencies, etc. made under the previous provisions in force at the time when this Act enters into force or the reports and other actions already made to or against the administrative agencies in accordance with such previous provisions shall be deemed to be the authorizations and actions of, to, or against the administrative agencies made under this Act.
(3) Omitted.
(4) (Transitional Measures Concerning Penalty Provisions) The previous penal provisions shall apply to the offenses committed in violation of the provisions of Article 103, 104 or 105 of the Secured Bond Trust Act in force before this Act enters into force.
(5) Omitted.
ADDENDA <Act No. 5747, Feb. 5, 1999>
(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation.
(2) (Transitional Measures Concerning Trust Companies) It shall be deemed that any persons who engage in the trust business with authorization of the Minister of Economy and Finance at the time when this Act enters into force have completed their registration with the Financial Services Commission in accordance with the amended provisions of Article 5.
ADDENDA <Act No. 6627, Jan. 26, 2002>
Article 1 (Enforcement Date)
4This Act shall enter into force on July 1, 2002.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 8635, Aug. 3, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force on the date one and half year after its promulgation. (Proviso Omitted)
Articles 2 through 44 Omitted.
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. 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 though 10 Omitted.
ADDENDA <Act No. 10580, Apr. 12, 2012>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 though 5 Omitted.
ADDENDUM <Act No. 10765, May 30, 2011>
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 15413, Feb. 21, 2018>
This Act shall enter into force six months after the date of its promulgation.