The purpose of this Act is to provide for fundamental matters regarding the issuance, registration, redemption, etc. of State bonds, thereby ensuring the stable management of the State bond market and the efficient performance of affairs related to State bonds.
The terms used in this Act are defined as follows:
| 1. | The term “State bond” means a bond issued by the Government to secure funding, etc. for a public purpose under this Act or any other statute; |
| Article 3 (Relationship to Other Statutes) |
State bonds shall be governed by this Act, except as otherwise expressly provided for in any other statute.
| Article 4 (Types of State Bonds) |
| (1) | Types of State bonds shall be classified as follows: <Amended on Apr. 11, 2023> |
| (a) | State bonds issued without restriction on eligibility for purchase of them (hereinafter referred to as "National Treasury bonds"); |
| (b) | State bonds issued under a restricted condition that individuals are only eligible to buy them (hereinafter referred to as "State bonds for retail investors"); |
| 2. | State bonds issued at the expense of an account, other fund, or a special account under any other statute if such other statute otherwise provides so. |
| (2) | The items of National Treasury bonds and of State bonds for retail investors shall be determined by the Minister of Economy and Finance, by maturity or type of National Treasury bonds or of State bonds for retail investors, in consideration of financial demand, the situation of the State bond market, and other relevant factors. <Amended on Apr. 11, 2023> |
| Article 5 (Issuance of State Bonds) |
| (1) | State bonds shall be issued by the Minister of Economy and Finance with approval from the National Assembly. |
| (2) | State bonds shall in principle be issued in the open market. |
| (3) | Notwithstanding paragraph (2), the Minister of Economy and Finance may issue State bonds for retail investors at an interest rate the Minister has publicly announced in advance. <Newly Inserted on Apr. 11, 2023> |
| (4) | Notwithstanding paragraph (2), the Minister of Economy and Finance may require a specific person to purchase a State bond or issue to a specific person a State bond in lieu of cash payment, pursuant to Article 13 or any other statute. In such cases, the interest rate of the State bond shall be determined at an appropriate level in accordance with the purpose of issuance thereof, giving due consideration to the maturity and market interest rate as at the time it is issued. <Amended on Apr. 11, 2023> |
| (5) | In cases of State bonds provided in Article 4 (1) 2, the head of a central administrative agency who manages an account, other fund, or a special account under any other statute shall request to the Minister of Economy and Finance for the issuance of the State bonds as prescribed by Presidential Decree. <Amended on Apr. 11, 2023> |
| (6) | Matters necessary for the methods of issuing State bonds under paragraphs (2) through (4) shall be prescribed by Ordinance of the Ministry of Economy and Finance. <Amended on Apr. 11, 2023> |
| (7) | Except as provided in paragraphs (1) through (6), matters necessary for the detailed terms, scope, etc. of issuing State bonds shall be determined by the Minister of Economy and Finance. <Amended on Apr. 11, 2023> |
| Article 6 (State Bonds Denominated in Foreign Currencies) |
Where State bonds denominated in won or a foreign currency are issued overseas or State bonds denominated in a foreign currency are issued domestically, such shall be separately approved by the National Assembly.
| Article 7 (Issuance of Consolidated National Treasury Bonds) |
| (1) | If necessary to adjust the liquidity of State bonds, the Minister of Economy and Finance may consolidate and issue National Treasury bonds at the same interest rate, maturity, etc., which may be treated as those of the same issue, for a fixed period not exceeding three years. |
| (2) | If deemed necessary for the stable management, etc. of the State bond market, the Minister of Economy and Finance may reissue the National Treasury bonds consolidated and issued under paragraph (1) even after the fixed period expires. |
| (3) | Matters necessary for the terms, scope, etc. of issuance and reissuance of National Treasury bonds under paragraphs (1) and (2) shall be determined by the Minister of Economy and Finance. |
| Article 8 (Registration, and Cancellation of Registration, of State Bonds) |
| (1) | State bonds issued under Article 5 shall be registered in the State bond register (in cases of State bonds for retail investors, referring to the electronic register defined in subparagraph 3 of Article 2 of the Act on Electronic Registration of Stocks and Bonds) without issuing physical certificates, as registered or bearer bonds, in electronic form by using the computerized information processing system: Provided, That registered or bearer bonds may be issued in certificated form, in times of war, incident, or national emergency equivalent thereto. <Amended on Apr. 11, 2023> |
| (2) | The registration of a State bond under paragraph (1) shall be canceled if the right to the State bond lapses due to the redemption of the principal, the purchase or exchange under Article 13, the completion of extinctive prescription, or any other similar reason. |
| (3) | An entity that performs affairs regarding registration under paragraphs (1) and affair regarding cancellation of registration under paragraph (2) shall be the Bank of Korea established under the Bank of Korea Act (hereinafter referred to as the "Bank of Korea"): Provided, That an entity that performs affairs regarding registration of State bonds for retail investors and cancellation of such registration shall be an electronic registration agency that has obtained permission under Article 5 of the Act on Electronic Registration of Stocks and Bonds (hereinafter referred to as "electronic registration agency"). <Amended on Apr. 11, 2023> |
| (4) | The registration, changes in registration and cancellation of registration of State bonds, the issuance of instruments and other necessary matters thereon under paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| Article 9 (Transfer of Registered State Bonds) |
| (1) | In cases of the transfer (including sale, conveyance as a gift, and all other activities involving a change in the right) of a State bond registered under Article 8 (hereinafter referred to as “registered State bond”) or in cases of the establishment of a pledge right over a registered State bond, no claim or defense may be raised against the Government or any third party unless the fact of the transfer or the establishment of such right is registered. <Amended on Apr. 11, 2023> |
| (2) | If any registered State bond is deposited or bailed as security under a statute or regulation, the fact of the deposit or bailment may be registered in lieu of offering the registered State bond as security. |
| (3) | Notwithstanding paragraphs (1) and (2), State bonds for retail investors shall not be transferred (excluding inheritance, legacy, and compulsory execution) to other persons or be secured by pledges or other similar rights. <Newly Inserted on Apr. 11, 2023> |
| (3) | Matters necessary for the transfer of registered State bonds, the establishment of a pledge right over such bonds, the procedures for offering such bonds as security, and cancellation of registration thereof under paragraphs (1) through (3) shall be prescribed by Presidential Decree. <Amended on Apr. 11, 2023> |
| Article 10 (Suspension of State Bond Registration) |
| (1) | The Minister of Economy and Finance may suspend the registration of a State bond under Article 9 required as a result of transferring any right thereto, as prescribed by Presidential Decree, for a period of not more than one month before the maturity date of the State bond or the date of interest payment thereon: Provided, That the foregoing shall not apply in the case of inheritance, legacy, or compulsory execution. <Amended on Apr. 11, 2023> |
| (2) | Paragraph (1) shall apply mutatis mutandis to where the cancellation of registration under Article 9 (4) is suspended. <Amended on Apr. 11, 2023> |
| Article 11 (Redemption of Principal of and Payments of Interest on State Bonds) |
| (1) | The principal and interest of any State bond shall be redeemed and paid according to the terms stipulated at the time the State bond is issued. In such cases, the redemption date of the principal of the State bond shall be as stipulated at the time the State bond is issued. |
| (2) | Matters necessary for the detailed method, etc. for the redemption of the principal of and for payments of interest on any State bond under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 12 (Deduction due to Defect in Interest Coupons) |
| (1) | In cases of any defect in an interest coupon of a State bond issued in the form of a bearer instrument with the interest coupon attached, the amount corresponding to the portion of the defect shall be deducted from the amount of redemption when the State bond is redeemed. |
| (2) | The bearer of the defective interest coupon under paragraph (1) may claim payment of the amount deducted at any time through redemption of the interest coupon. |
| Article 13 (Purchase or Exchange of State Bonds before Maturity) |
| (1) | Where deemed necessary for maturity diversification, liquidity adjustment, etc. of State bonds, the Minister of Economy and Finance may purchase State bonds prior to maturity. |
| (2) | Simultaneously with the purchase of State bonds under paragraph (1), the Minister of Economy and Finance may issue new State bonds and offer them in exchange for the purchased bonds after adjusting the prices. |
| (3) | The following matters regarding the purchase and exchange of State bonds before maturity under paragraphs (1) and (2), respectively, shall be determined and publicly notified by the Minister of Economy and Finance: |
| 1. | The method of purchasing State bonds prior to maturity under paragraph (1); |
| 2. | The amount of redemption of the State bonds purchased or issued in exchange under paragraph (1) or (2); |
| 3. | The issue of the State bonds to be exchanged under paragraph (2); |
| 4. | The estimated issue price of State bonds required for exchange under paragraph (2); |
| 5. | The maturity date of the State bonds issued in exchange under paragraph (2); |
| 6. | Any other matter necessary for the purchase or exchange of State bonds before maturity. |
| Article 14 (Extinctive Prescription of State Bonds) |
The right to receive payments of principal and interest on State bonds shall be extinguished by completion of prescription unless it is exercised for five years: Provided, That the right to receive interest payments being paid periodically within one year shall be extinguished by completion of prescription unless it is exercised for three years.
| Article 15 (Management of Affairs regarding State Bonds) |
| (1) | The issuance of National Treasury bonds, the redemption of the principal of State bonds, and other affairs regarding State bonds shall be managed by the Bank of Korea (referring to an electronic registration agency in cases of issuance of State bonds for retail investors, affairs regarding the redemption of the principal thereof, and other relevant affairs) as prescribed by Ordinance of the Ministry of Economy and Finance. <Amended on Apr. 11, 2023> |
| (2) | Article 36 (4) and (5) of the Management of the National Funds Act shall apply mutatis mutandis to the receipt, disbursement, and custody of the funds raised by issuing State bonds, the funds needed to redeem the principal and to pay interests accrued on State bonds, and other similar funds, among State bond-related affairs managed by the Bank of Korea or an electronic registration agency under paragraph (1). <Amended on Apr. 11, 2023> |
| Article 16 (Reporting on Management of Affairs regarding State Bonds) |
The Governor of the Bank of Korea and the head of an electronic registration agency shall file a report on the management of affairs regarding State bonds under Article 15 with the Minister of Economy and Finance as determined by Ordinance of the Ministry of Economy and Finance. <Amended on Apr. 11, 2023>
| Article 17 (Request for Provision of Materials and Consultation) |
| (1) | Where necessary to properly issue and manage State bonds, the Minister of Economy and Finance may request the head of a relevant central administrative agency, or the Bank of Korea, an electronic registration agency, the Korea Exchange under Article 8-2 (2) of the Financial Investment Services and Capital Markets Act, or any other agency related to the management of affairs regarding State bonds and prescribed by Presidential Decree (hereinafter referred to as “agency for management of State bond affairs”), to provide materials related to State bonds. <Amended on Apr. 11, 2023> |
| (2) | A person requested to provide materials related to State bonds under paragraph (1) shall comply with such request except in special circumstances. |
| (3) | Where necessary for formulation and operation of policies regarding the State bond market, the Minister of Economy and Finance may consult in advance with the head of a relevant central administrative agency or with an agency for management of State bond affairs. |
ADDENDUM <Act No. 12864, Dec. 30, 2014>
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 19327, Apr. 11, 2023>
This Act shall enter into force one month after the date of its promulgation.