Act No. 16183, Dec. 31, 2018
| Article 1 (Purpose) |
| Article 2 (Definitions) |
| 1. | The term "finance-related statutes or regulations" means finance-related statutes specified in the attached Table and statutes or regulations prescribed by Presidential Decree; |
| 2. | The term "financial services" means the financial and insurance activities (excluding a holding company which is not a financial holding company under Article 2 (1) 1 of the Financial Holding Companies Act) classified in the Korea Standard Industrial Classification publicly notified by the Commissioner of Statistics Korea under Article 22 (1) of the Statistics Act and other affairs closely related thereto, prescribed by Presidential Decree; |
| 3. | The term "financial companies, etc." means any of the following companies: |
| (a) | A bank established with authorization under the Banking Act; |
| (b) | A financial investment business entity and merchant bank under the Financial Investment Services and Capital Markets Act; |
| (c) | An insurance company, insurance agency (limited to a corporation), and certified insurance broker (limited to a corporation) under the Insurance Business Act; |
| (d) | A mutual savings bank under the Mutual Savings Banks Act; |
| (e) | A specialized credit finance business company under the Specialized Credit Finance Business Act; |
| (f) | A financial holding company under the Financial Holding Companies Act; |
| (g) | The Korea Development Bank under the Korea Development Bank Act; |
| (h) | The Industrial Bank of Korea under the Industrial Bank of Korea Act; |
| (i) | The Export-Import Bank of Korea under the Export-Import Bank of Korea Act; |
| (j) | The Nonghyup Bank, local agricultural cooperatives, local livestock industry cooperatives, special cooperatives, and the National Agricultural Cooperative Federation under the Agricultural Cooperatives Act; |
| (k) | The Suhuyp Bank, fisheries cooperatives, and the National Federation of Fisheries Cooperatives under the Fisheries Cooperatives Act; |
| (l) | A forestry cooperative and the National Forestry Cooperatives Federation under the Forestry Cooperatives Act; |
| (m) | A credit union and the National Credit Union Federation of Korea under the Credit Unions Act; |
| (n) | A community credit company and the Korea Federation of Community Credit Cooperatives under the Community Credit Cooperatives Act; |
| (o) | An electronic financial business entity and subsidiary electronic financial business entity under the Electronic Financial Transactions Act; |
| (p) | An institution prescribed by Presidential Decree, including a public corporation or a fund, established under an individual statute to engage in financial services; |
| 4. | The term "innovative financial service" means any of the financial services acknowledged as differentiated from existing financial services in details, methods, forms of service delivery, etc. or services provided in the course of conducting business affairs related to such financial services; |
| Article 3 (Relationship to Other Statutes or Regulations) |
| (1) | This Act shall prevail over finance-related statutes or regulations. |
| (2) | Except as otherwise provided for in this Act, the matters with regard to which regulatory exceptions are granted under this Act shall be deemed compliant with the statutes or regulations providing a legal basis for the relevant regulation (referring to the statutes or regulations applicable when regulatory exceptions are not granted with regard to the relevant matters) so that such statutes or regulations shall apply. |
| Article 4 (Designation of Innovative Financial Services) |
| (1) | The Financial Services Commission may designate innovative financial services for a period not exceeding two years after review of the Innovative Finance Review Committee under Article 13 and with the consent of an agency having administrative authority related to application for designation as innovative financial services under Article 5 (hereinafter referred to as “related administrative agency”). |
| (2) | Each of the following shall be included where innovative financial services are designated under paragraph (1): |
| 1. | Matters concerning the scope of business affairs, including types and details of the relevant innovative financial services; |
| 2. | Matters concerning the target business affairs, including the scope of users of the relevant innovative financial services; |
| 3. | Matters concerning business methods of the relevant innovative financial services; |
| 4. | Matters concerning supervision, including data submission and inspection; |
| 5. | Matters concerning regulatory exceptions, such as the provisions of finance-related statutes or regulations that are exempt from application; |
| 6. | Other matters deemed necessary by the Financial Services Commission, including the effective period of designation as innovative financial services (hereinafter referred to as “designation period”). |
| (3) | Where designating innovative financial services pursuant to paragraph (1), the Financial Services Commission may attach conditions necessary for protecting financial consumers, or stabilizing the financial market, financial order, etc. |
| (4) | A person who has obtained designation as innovative financial services under paragraph (1) may apply for modification or revocation of any of the matters in paragraphs (2) and (3) by submitting a written statement to the Financial Services Commission, stating the grounds for the modifying the services designated, adding other services, or changing in circumstances, or other justifiable grounds. In such cases, the Financial Services Commission shall determine whether to modify or revoke the relevant matter within two months and shall inform the relevant innovative financial service provider of the results in writing without delay. |
| Article 5 (Application for Designation as Innovative Financial Services) |
| (1) | Persons eligible to apply for designation as innovative financial services under Article 4 are as follows: |
| 1. | Financial companies, etc.; |
| 2. | Companies under the Commercial Act, the business places of which are domestically located. |
| (2) | The Financial Services Commission may determine and publicly announce a period of application for designation as innovative financial services by type of financial services or by the number of times an application is filed; and a person who intends to apply for designation shall file an application for designation as innovative financial services within the period prescribed by the relevant public announcement. |
| (3) | A person who intends to apply for designation as innovative financial services shall complete an application form determined and publicly notified by the Financial Services Commission and shall submit it to the commission by attaching relevant evidential documents. |
| (4) | Where any omission is found or explanation is deemed insufficient as a result of examination of an application, the Financial Service Commission may demand the applicant to supplement the application within a specified period, and the applicant shall comply with such demand. |
| (5) | The Financial Services Commissions (including the Innovative Finance Review Committee) shall notify the details of the application to the head of a related administrative agency, if any; and the head of the related agency shall examine the details of the application and reply in writing to the Financial Services Commissions concerning the results within 30 days. |
| Article 6 (Public Announcement of Designation of Innovative Financial Services) |
| Article 7 (Revocation of Designation of Innovative Financial Services) |
| (1) | In any of the following cases, the Financial Services Commission may revoke designation of innovative financial services or issue a corrective order with the consent of the related administrative agency: |
| 1. | Where the designation as innovative financial services under Article 4 is obtained by fraud or other improper means; |
| 2. | Where criteria for review under Article 13 (4) are not met; |
| 3. | Where an innovative financial service provider violates any subparagraph of Article 18 (1); |
| 4. | Where an innovative financial service provider violates this Act or an order issued under this Act; |
| 5. | Where an innovative financial service provider violates any of the provisions under which the service provider has not been granted regulatory exceptions under this Act; |
| 6. | Where innovative financial services are found to significantly undermine the stability of the financial market or financial order or threaten the interests of financial consumers; |
| 7. | Where it is impractical to fulfill the purposes of innovative financial services. |
| (2) | Where the Financial Services Commission has revoked the designation of an innovative financial service in accordance with paragraph (1), Article 6 shall apply |
| Article 8 (Withdrawal of Designation of Innovative Financial Services) |
| (1) | Innovative financial service providers may request the Financial Services Commission to withdraw the designation of innovative financial services. |
| (2) | Upon request of an innovative financial service provider to withdraw the designation of innovative financial services under paragraph (1), the Financial Services Commission may revoke the relevant designation of innovative financial services pursuant to Article 7. In such cases, the innovative financial service provider shall immediately cease to operate the relevant innovative financial services. |
| (3) | An innovative financial service provider shall faithfully fulfill the obligations of a contract already concluded even when the designation as innovative financial services is revoked under paragraph (2); but if it is impractical to fulfill the obligations, the service provider shall terminate the contract in advance with the consent of users. |
| Article 9 (Expiration of Designation Period) |
| (1) | Where a designation period of innovative financial services expires, an innovative financial service provider shall lose his or her status as an innovative financial service provider: |
| (2) | Where a designation period expires, an innovative financial service provider shall immediately cease to operate the innovative financial services. |
| Article 10 (Extension of Designation Period) |
| (1) | Where a designation period of innovative financial services needs to be extended, an innovative financial service provider shall file an application for extension of a designation period of innovative financial services with the Financial Services Commission, attaching a written statement of the ground for extension by no later than three months before the expiration date. |
| (2) | Where an application for extension of a designation period is filed under paragraph (1), the Innovative Finance Review Committee shall complete the review as to whether to allow the extension of the period before the expiration date of the designation period; and the Financial Services Commission shall determine whether to extend the period with the consent of the related administrative agency, based on the review of the Innovative Finance Review Committee, and shall notify the innovative financial service provider who has filed an application for extension of the results in writing. |
| (3) | Whether to extend a designation period under paragraph (2) shall be reviewed in consideration of the following: |
| 1. | Whether the ground for extension specified in the application form is adequate; |
| 2. | Operational performance of the relevant innovative financial services during the designation period which has already elapsed; |
| 3. | The impact on the stability of the financial market or financial order or on the protection of financial consumers following the extension of the designation period; |
| 4. | Other matters deemed necessary by the Innovative Financial Review Committee. |
| (4) | The extension in paragraph (1) may be made only once within two years. |
| Article 11 (Suspension or Modification of Innovative Financial Service) |
| (1) | Where problems unforeseen at the time of designation have arisen, including cases where an innovative financial service causes damage to financial consumers or instability in the financial market or disturbs financial order, the Financial Services Commission may order, with the consent of the related administrative agency, the relevant innovative financial service provider to suspend the relevant service (hereinafter referred to as “order for suspension”) or may modify the matters already determined under Article 4 (2) or (3) (hereinafter referred to as “decision of modification”). |
| (2) | An innovative financial service provider who is issued an order for suspension under paragraph (1) shall promptly prepare supplementary measures and consult with the Financial Services Commission within one month; and the Financial Services Commission may grant permission to resume the services in consideration of the results of review conducted by the Innovative Finance Review Committee on the effectiveness, feasibility, etc. of the supplementary measures; the remaining designation period; and other relevant matters. |
| (3) | Where the Financial Services Commission does not grant permission to resume the services in accordance with paragraph (2) within the designation period, the relevant innovative financial service provider shall lose the status as an innovative financial service provider when the designation period expires. |
| (4) | The suspension of innovative financial services in compliance with an order for suspension issued under paragraph (1) shall not affect the exercise and extinctive prescription of the right to claim damages which financial consumers may bring against an innovative financial service provider. |
| (5) | In the case of an order for suspension issued or a decision for modification made under paragraph (1) and in the case of permission to resume services granted under paragraph (2), Article 6 shall apply |
| Article 12 (Ban on False Advertising) |
| Article 13 (Establishment and Organization of Innovative Finance Review Committee) |
| (1) | The Financial Services Commission shall establish the Innovative Finance Review Committee to review details of an application for designation as innovative financial services under Article 5. |
| (2) | The Innovative Finance Review Committee shall comprise of 25 or fewer members, including one chairperson, and the Chairperson of the Financial Services Commission shall be the Chairperson of the Innovative Finance Review Committee. |
| (3) | Members of the Innovative Finance Review Committee shall be appointed or commissioned by the Chairperson of the Financial Services Commission from among public officials of the Financial Services Commission, including those prescribed by Presidential Decree, and the following persons: |
| 1. | A vice minister of a central administrative agency related to review on designation of innovative financial services or a public official in a position equivalent thereto who is nominated by the head of the relevant agency; |
| 2. | A person who holds the position of associate professor or higher or who worked or has been working for at least seven years for a research institute related to technology or finance; |
| 3. | A person who worked or has been working for at least seven years in the industry related to technology or finance as an executive officer or employee; |
| 4. | A person who has knowledge and experience in the field of law and at least seven years of work experience; |
| 5. | A person who has knowledge and experience in the field of consumer protection and at least seven years of work experience; |
| 6. | Other persons prescribed by Presidential Decree. |
| (4) | The Innovative Finance Review Committee shall review an application for designation as innovative financial services, based on the following criteria: |
| 1. | Whether the person intending to provide the relevant financial services aims at conducting major activities in the domestic financial market; |
| 2. | Whether the relevant financial services are innovative enough in comparison with the existing financial services; |
| 3. | Whether convenience and benefits for financial consumers are enhanced by providing the relevant financial services; |
| 4. | Whether the relevant financial services, without regulatory exceptions under this Act, may be provided in accordance with other finance-related statutes or regulations, or if a regulatory exception is granted to the relevant financial services, whether such exception may lead the relevant service provider to evade or bypass any other regulation from which he or she may not be exempt; |
| 5. | Whether the applicant is qualified and able to properly engage in the relevant financial services; |
| 6. | Whether the scope or management methods for the relevant financial services intended to be provided are specified, and the business plan is reasonable and sound; |
| 7. | Whether the following measures for financial consumer protection and risk management are well prepared enough: |
| (a) | Measures to limit the scope or the number of users, the maximum amount of each transaction, the number of transactions for every customer, etc.; |
| (b) | Measures to provide information on risks and to obtain consent under Article 20 (1) and (2); |
| (c) | Measures to settle or mediate disputes under Article 28; |
| (d) | Measures to prevent losses or risks to financial consumers that may occur during a designation period; |
| (e) | Measures to ensure assumption of the liability for damage, including purchasing liability insurance policy; |
| (f) | Measures to prevent losses or risks to financial consumers which may occur after a designation period expires; |
| (g) | Others necessary for financial consumer protection and risk management, such as protecting and handling personal information, which are determined and publicly notified by the Financial Services Commission; |
| 8. | Whether the stability of the financial market or financial order is likely to be undermined significantly by the relevant financial services; |
| 9. | Whether the relevant financial services are significantly likely to obstruct the achievement of purposes of finance-related statutes or regulations. |
| (5) | The Innovative Finance Review Committee may recommend that the Financial Services Commission or a relevant administrative agency enact or amend statutes or regulations if deemed necessary for providing continuous innovative financial services after a designation period of innovative financial services expires. |
| (6) | Other matters necessary for establishing or operating the Innovative Finance Review Committee shall be prescribed by Presidential Decree. |
| Article 14 (Period of Review) |
| (1) | The Innovative Finance Review Committee shall complete the review within 30 days after the date the Financial Services Commission receives an application, etc. under Article 5 (3): |
| (2) | The Innovative Finance Review Committee (including the Financial Services Commission) may extend a period of review specified in paragraph (1) up to two times within a maximum of 60 days. |
| (3) | The entire period of review under paragraphs (1) and (2) shall not exceed 90 days, including the period required to supplement under the proviso of paragraph (1): |
| Article 15 (Hearing of Opinions) |
| (1) | To ensure the fairness and efficiency of review, the Innovative Finance Review Committee may hear opinions from an applicant, interested parties, and experts, etc. in related fields. In such cases, the Innovative Finance Review Committee may hold a discussion or public hearing to hear opinions; and may request such applicant, interested parties, or experts in related field, and relevant administrative agency or a corporation or organization or their organs or an individual, etc. delegated or entrusted with such authority, to appear on the date of review or submit written opinions. |
| (2) | Where the Innovative Finance Review Committee intends to hold a discussion, public hearing, etc., it shall notify the related parties in writing and make public on the website, etc. until 10 days before the date the discussion or public hearing is conducted. |
| (3) | An applicant, interested parties, and experts, etc. in related fields may attend a discussion or public hearing to directly present opinions and may submit the written opinions within five days therefrom. |
| (4) | The Innovative Finance Review Committee shall notify a person who has presented his or her opinions under paragraph (3) of the relevant results in writing or shall make public on the website, etc. |
| (5) | Where experts, etc. in related fields, other than an applicant or interested parties, attend a discussion or public hearing, are present on the date of review; or submit written opinions, the Financial Services Commission may pay for necessary expenses, including allowances or travel expenses, within budgetary limits. |
| Article 16 (Scope of Business Affairs of Innovative Financial Service Providers) |
| 1. | Where the standards, requirements, etc. applicable to relevant innovative financial services are not provided by finance-related statutes or regulations, or it is not reasonable to apply any relevant provision thereof to such innovative financial services; |
| 2. | Where whether to permit innovative financial services is uncertain, or there are no finance-related statutes or regulations which form the basis to operate such innovative financial services. |
| Article 17 (Regulatory Exceptions to Innovative Financial Service Providers) |
| (1) | The provisions under which regulatory exceptions are granted under Article 4 (2) 5, among those of finance-related statutes or regulations in relation to authorization and permission for, registration of, and reporting on or by, services or service providers; governance, scope of business affairs, soundness, and business activities of service providers; and supervision over or inspection of services providers, shall not apply to innovative financial services in which an innovative financial service provider engages during the designation period. |
| (2) | Notwithstanding paragraph (1), the Financial Services Commission shall not grant regulatory exceptions where the provisions of finance-related statutes or regulations are predicted to cause irreversible damage to property or personal information of financial consumers or to significantly undermine the stability of the financial market or financial order if regulatory exceptions are granted under Article 4 (2) 5. |
| Article 18 (Obligations of Innovative Financial Service Providers) |
| (1) | While engaging in innovative financial services, an innovative financial service provider shall comply with the following: |
| 1. | Details of designation made under Article 4 (1) and decision for modification made under Articles 4 (4) and 11 (1); |
| 2. | Conditions imposed by the Financial Services Commission under Article 4 (3); |
| 3. | Other matters determined and publicly notified by the Financial Services Commission, such as the protection of financial consumers, including protection and handling of personal information, and the stability of the financial market and financial order. |
| (2) | An innovative financial service provider shall submit a progress report on the operation of innovative financial services to the Financial Services Commission according to the following classification; |
| 1. | Initial report: To be submitted within 10 days after 30 days elapse from the first date of the designation period of innovative financial services; |
| 2. | Intermediate report: To be submitted within 30 days after 1/2 of the designation period elapses; |
| 3. | Final report: To be submitted 30 days before the designation period expires. |
| (3) | Details to be included in initial, intermediate, and final reports under paragraph (2) shall be as follows: |
| 1. | The number of uses of innovative financial services and the total amount transacted during the relevant period; |
| 2. | The number of users of innovative financial services during the relevant period and characteristics thereof; |
| 3. | Financial incidents caused in relation to innovative financial services or the status of disputes, including compensation claims made by users during the relevant period; |
| 4. | An operation plan of innovative financial services after the relevant period elapses; |
| 5. | In the case of a final report, a plan for compliance with the regulations from which regulatory exceptions are granted under Article 17 (1); |
| 6. | Others determined and publicly notified by the Financial Services Commission. |
| (4) | Where a designation period is extended under Article 10, a final report to be submitted based on the original designation period shall be replaced by an intermediate report, and unless determined otherwise at the time of determination of the extension, an intermediate report and final report under paragraph (2) shall also be submitted for the extended period. |
| (5) | Where the fulfillment of obligations or operation of innovative financial services under any subparagraph of paragraph (1) is disrupted, an innovative financial service provider shall report thereon to the Financial Services Commission without delay. |
| (6) | An innovative financial service provider shall properly comply with the order issued by the Financial Services Commission as a result of the report under paragraph (2) or (5). |
| Article 19 (Preparation of and Compliance with Measures for Financial Consumer Protection and Risk Management) |
| (1) | An innovative financial service provider shall prepare measures for financial consumer protection and risk management by reflecting the matter specified in each subparagraph of Article 18 (1) and comply therewith. |
| (2) | Measures for financial consumer protection and risk management under paragraph (1) shall include the matter specified in each item of Article 13 (4) 7. |
| Article 20 (Obligation to Notify Risks) |
| (1) | For providing innovative financial services during a designation period, an innovative financial service provider shall notify users, in advance, of the fact that the relevant services are provided on a trial basis and may cause unexpected risks. |
| (2) | After notifying risks under paragraph (1), an innovative financial service provider shall obtain the consent of users to be provided with the services on a trial basis. |
| (3) | Measures under paragraphs (1) and (2) have no impact on legal obligations that an innovative financial service provider assumes for users. |
| Article 21 (Application by Innovative Financial Service Provider for Authorization or Permission) |
| (1) | To provide continuous innovative financial services in compliance with finance-related statutes or regulations after a designation period expires, an innovative financial service provider may apply for authorization, permission, etc. under finance-related statutes or regulations before the designation period expires. |
| (2) | Where an innovative financial service provider applies for authorization, permission, etc. under paragraph (1), the Innovative Finance Review Committee may submit, to the Financial Services Commission or a related administrative agency, opinions on whether the requirements for the relevant authorization, permission, etc. are partially or fully met, based on the following requirements: |
| 1. | The Innovative Finance Review Committee determines that the purposes of designation of innovative financial services have been achieved, based on the assessment, etc. of reports submitted under Article 18; |
| 2. | The innovative financial service provider shall have already submitted, to Innovative Finance Review Committee, documents proving that he or she is able to comply with financial regulations, the application of which is postponed during the designation period. |
| (3) | An innovative financial service provider who has obtained authorization, permission, etc. under paragraph (1) may engage in financial business, etc. in accordance with the relevant finance-related statutes or regulations: |
| Article 22 (Merger of Innovative Financial Service Providers) |
| (1) | Where an innovative financial service provider whose services are designated as innovative financial services undergoes any structural change due to merger, conversion, etc., the relevant innovative financial services shall lose the effect on designation: |
| (2) | In cases falling under paragraph (1), Articles 6 and 9 shall apply |
| Article 23 (Exclusive Operating Rights) |
| (1) | Where having obtained authorization, permission, etc. under Article 21 after a designation made under Article 4 (1), an innovative financial service provider shall have the right to exclusively operate innovative financial services (hereinafter referred to as “exclusive operating right”). |
| (2) | An exclusive operating rights under paragraph (1) shall be effective until a time limit prescribed by the Financial Services Commission or relevant administrative agency within two years from the date an authorization, permission, etc. is granted. |
| (3) | During a period for exclusive operation under paragraph (2), an innovative financial service provider may request the Financial Services Commission and relevant administrative agency to take measures for protecting its exclusive operating right against a person who commits or is likely to commit any of the following acts: |
| 1. | Providing financial services that are substantially the same as the relevant innovative financial services in terms of details, methods, forms, etc.; |
| 2. | Using the relevant innovative financial services directly or indirectly in providing services similar thereto for any commercial purpose while damaging the reputation of the relevant innovative financial services. |
| (4) | Upon request of an innovative financial service provider under paragraph (3), the Financial Services Commission and relevant administrative agency may order a person who commits or is likely to commit an act described in each subparagraph of paragraph (3) to correct or suspend the relevant services to protect the exclusive operating right of the service provider. |
| Article 24 (Rapid Verification of Regulations) |
| (1) | A person falling under Article 5 (1) 1 or 2, who intends to provide innovative financial services, may request the Financial Services Commission to verify whether statutes, regulations, etc. (referring to statutes and regulations; administrative rules prescribing matters mandated by statutes and regulations or matters necessary for the enforcement of said statutes and regulations; and all other provisions vesting authority in administrative agencies) are applicable, etc. to such person (hereinafter referred to as “rapid verification of regulations”). |
| (2) | The Financial Services Commission shall reply to a request of rapid verification of regulations under paragraph (1) within 30 days: |
| (3) | Where the request made under paragraph (1) is the affairs under jurisdiction of another administrative agency, the Financial Services Commission shall notify the head of the relevant administrative agency who shall reply whether the affairs are under his or her jurisdiction, or whether the statutes, regulations, etc. are applicable to such person, within 30 days from the date of notification: |
| (4) | The total period needed for reply shall not exceed 90 days, including the period of supplementation under paragraph (2) and the period of reply made by another administrative agency under paragraph (3): |
| (5) | Where the Financial Services Commission and the head of the relevant administrative agency under paragraph (3) deem that the authorization, permission, registration, reporting, etc. are necessary in accordance with statutes, regulations, etc. under their jurisdictions (hereafter referred to as “authorization, permission, etc.” in this Article) as a result of review upon request under paragraph (1), both of them shall reply, accompanied by conditions, procedures, etc. necessary for authorization, permission, etc. and shall expeditiously process the request for authorization, permission, etc. pursuant to relevant statutes or regulations if the person who has requested under paragraph (1) applies for authorization, permission, etc. |
| (6) | Matters prescribed in paragraphs (1) through (5) and other necessary matters shall be determined and publicly notified by the Financial Services Commission. |
| Article 25 (Entrustment to Designated Agent) |
| (1) | The Financial Services Commission may designate a person (hereinafter referred to as “designated agent”) who is able to handle affairs in accordance with entrustment by a financial company (referring to an act of a financial company’s continuous use of services or facilities of a third party to engage in financial services authorized, permitted, etc.) for implementing a pilot program of innovative financial services. |
| (2) | A person falling under Article 5 (1) 1 or 2 who intends to provide innovative financial services may apply for designation as a designated agent under paragraph (1) to the Financial Services Commission. |
| (3) | When appointing a designated agent, the Financial Services Commission shall consider each of the following: |
| 1. | Whether the criteria referred to in Article 13 (4) 1 through 3 are met; |
| 2. | Whether it is possible to operate the relevant innovative financial services by means other than entrustment of affairs; |
| 3. | Whether he or she is ready for a pilot program of innovative financial services after the relevant affairs are entrusted; |
| 4. | Whether the entrustment of affairs is likely to damage the soundness or credit rating of the relevant financial company, to disrupt financial order, or to cause losses to users. |
| (4) | A financial company may entrust affairs to a designated agent under paragraph (1) within the scope necessary for a pilot program of innovative financial services and shall report such fact to the Financial Services Commission if concluding an entrustment agreement. In such cases, the period of entrustment of affairs shall be up to two years. |
| (5) | For systematically managing the entrustment of affairs under paragraph (4), a financial company shall formulate the operational standards for entrusting affairs and comply therewith. |
| (6) | Matters concerning procedures for designating agents under paragraph (1), reporting under the former part of paragraph (4) and operational standards for entrusting affairs under paragraph (5) shall be determined and publicly notified by the Financial Services Commission. |
| Article 26 (Support for Innovative Financial Services) |
| (1) | To expedite the development and advancement of innovative financial services, the Government may fully or partially contribute or subsidize the cost necessary for operating and maintaining a supporting agency for innovative financial services. |
| (2) | Standards for paying contribution or subsidy under paragraph (1) and other necessary matters shall be prescribed by Presidential Decree. |
| (3) | When necessary for operating a supporting agency for innovative financial services, the State or local government may lend the State or public property to such agency free of charge. |
| Article 27 (Compensation for Damage) |
| (1) | Where the provision, suspension, etc. of innovative financial services cause any loss to users, an innovative financial service provider shall be liable to compensate therefor: |
| (2) | An innovative financial service provider shall purchase liability insurance to assume the liability for compensation under paragraph (1): |
| Article 28 (Settlement and Mediation of Disputes) |
| (1) | An innovative financial service provider shall prepare procedures to reflect reasonable opinions or complaints that users or other interested parties (hereinafter referred to as “users, etc.”) have offered or raised in relation to innovative financial services, and to compensate for losses caused by innovative financial services to users, etc., as prescribed by Presidential Decree. |
| (2) | Users, etc. who have an objection to an innovative financial service may demand the innovative financial service provider to settle their disputes, including compensation for losses, or may file an application for dispute mediation with the Financial Dispute Settlement Committee of the Financial Supervisory Service in compliance with procedures prescribed in paragraph (1). |
| (3) | Detailed procedures and methods for application for settlement or mediation of dispute under paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| (4) | When an innovative financial service provider enters into an agreement on innovative financial services with a user, the service provider shall specify the procedures under paragraphs (1) and (3). |
| Article 29 (Supervision and Inspection) |
| (1) | The Financial Supervisory Service and an institution designated as a supervisory institution pursuant to finance-related statutes or regulations (hereinafter referred to as “designated supervisory institution”) shall, under the directions of the Financial Services Commission and related administrative agencies, supervise whether an innovative financial service provider, designated agent, or financial company that entrusts affairs to a designated agent under Article 25 (4) (hereinafter referred to as “innovative financial service providers, etc.”) complies with this Act (including the provisions of finance-related statutes or regulations other than those of finance-related statutes or regulations under which regulatory exceptions referred to in Article 17 (1) shall be granted) or an order issued under this Act. |
| (2) | When necessary for supervision in paragraph (1), the Governor of the Financial Supervisory Service and the head of a designated supervisory institution may have innovative financial service providers, etc. report on the status of their affairs and property. |
| (3) | The Governor of the Financial Supervisory Service and the head of a designated supervisory institution shall inspect the status of affairs and property of innovative financial service providers, etc. and may request submission of data on the status of affairs and property or attendance of related persons and statement of their opinions, if deemed necessary for the inspection. |
| (4) | A person who conducts an inspection pursuant to paragraph (3) shall carry an identification indicating his or her authority and present it to interested persons. |
| (5) | Where there exists any ground to revoke the designation under Article 7 or where deemed necessary to issue an order for suspension or make a decision for modification under Article 11 as a result of inspection performed under paragraph (3), the Governor of the Financial Supervisory Service and the head of a designated supervisory institution shall suggest the relevant measures to the Financial Services Commission. |
| (6) | Paragraph (3) may limitedly apply to innovative financial service providers, etc. subject to inspection under the Act on the Establishment, etc. of Financial Services Commission within the scope necessary to avoid overlapping, such as submission of data. |
| Article 30 (Immunity from Liability) |
| Article 31 (Entrustment of Authority) |
| Article 32 (Legal Fiction as Public Officials for Purposes of Penalty Provisions) |
| Article 33 (Penalty Provisions) |
| Article 34 (Joint Penalty Provisions) |
| Article 35 (Administrative Fines) |
| (1) | Any of the following persons shall be punished by an administrative fine of not more than 100 million won: |
| 1. | A person who violates Article 9 (2); |
| 2. | A person who fails to comply with an order for suspension issued or a decision for modification made under Article 11 (1); |
| 3. | A person who violates Article 12; |
| 4. | A person who violates Article 18 (1) 1 or 2; |
| 5. | A person who violates Article 19 (1); |
| 6. | A person who violates Article 20 (1) or (2). |
| (2) | Any of the following persons shall be punished by an administrative fine of not more than 10 million won: |
| 1. | A person who fails to comply with a corrective order under the main sentence of Article 7 (1); |
| 2. | A person who violates Article 8 (3); |
| 3. | A person who fails to hold a consultation under Article 11 (2); |
| 4. | A person who violates Article 18 (1) 3; |
| 5. | A person who fails to comply with reporting obligation under Article 18 (2), (4), or (5), or who falsely reports; |
| 6. | A person who violates Article 18 (6); |
| 7. | A person who fails to comply with a corrective or suspension order under Article 23 (4); |
| 8. | A person who violates Article 25 (4) or (5); |
| 9. | A person who fails to purchase liability insurance or prepare compensation measures, in violation of Article 27 (2); |
| 10. | A person who violates Article 28 (1) or (4); |
| 11. | A person who refuses, obstructs, or evade an inspection conducted under Article 29 (3). |
| (3) | Administrative fines under paragraphs (1) and (2) shall be imposed and collected by the Financial Services Commission or a related administrative agency as prescribed by Presidential Decree. |