| 7. | Other financial products determined and publicly notified by the Financial Services Commission as similar to those under subparagraphs 1 through 6. |
| (2) | "Businesses prescribed by Presidential Decree" in the proviso, with the exception of the items, of subparagraph 2 of Article 2 of the Act means any of the following businesses: |
| 4. | Other businesses determined and publicly notified by the Financial Services Commission as similar to those under subparagraphs 1 through 3. |
| (3) | "Finance-related statute prescribed by Presidential Decree" in the proviso, with the exception of the items, of subparagraph 3 of Article 2 of the Act means any of the following businesses: |
| 1. | The Act on the Guarantee of Workers' Retirement Benefits; |
| 13. | Other information determined and publicly notified by the Financial Services Commission as similar to those under subparagraphs 1 through 12. |
| (4) | "Other activities prescribed by Presidential Decree" in subparagraph 4 (b) of Article 2 of the Act means the following: |
| 2. | Financial product advisory provided by fund rating companies, bond rating companies, credit rating companies, and other similar entities under the "capital market and financial investment services act" in accordance with the relevant laws; |
| 3. | Financial product advisory provided by a financial product seller incidental to the financial product sales business without separate compensation; |
| 4. | Other advices determined and publicly notified by the Financial Services Commission as similar to financial products under subparagraphs 1 through 3. |
| (5) | "Persons prescribed by Presidential Decree" in subparagraph 6 (f) of Article 2 of the Act means the following: |
| 1. | Financial product direct sellers and financial product advisors registered pursuant to under Article 12 (1) of the Act; |
| (6) | "Persons prescribed by Presidential Decree" in subparagraph 7 (h) of Article 2 of the Act means the following: |
| 1. | Financial product distribution agents or brokers who register pursuant to under Article 12 (1) of the Act; |
| b. | A person who registers a loan brokerage business pursuant to Article 3 (1) or (2) of the Act on Registration of Loan Business, etc. and Protection of Financial Users, and arranging loans through brokerage by concluding a consignment contract with a credit service provider (hereinafter referred to as "loan broker"); |
| 3. | The National Credit Union Federation of Korea under the Credit Unions Act (limited to mutual aid businesses); |
| 6. | Other persons determined and publicly notified by the Financial Services Commission as similar to those under subparagraphs 1 through 5. |
| (7) | "Person prescribed by Presidential Decree" in the proviso, with the exception of the items, of subparagraph 9 of Article 2 of the Act means any of the following persons: |
| 1. | In cases of loan products under subparagraph 2 of Article 3 of the Act (hereinafter referred to as "loan products"): corporations, associations, or organizations with five or more full-time employees; |
| 2. | In cases of investment products under subparagraph 3 of Article 3 of the Act (hereinafter referred to as "investment products"), any of the following persons: |
| (a) | A listed corporation under the items of subparagraph 9 (d) of Article 2 of the Act; |
| (c) | A corporation, cooperative, organization that manages a mutual aid business pursuant to relevant Acts; |
| (f) | A listed corporation on a foreign securities market; |
| 3. | In cases of indemnity products under subparagraph 4 of Article 3 of the Act (hereinafter referred to as "investment products"), any of the following persons: |
| a. | A person who fall under subparagraph 2 (a), (b), (f) or (g); |
| b. | Any of the following foreign corporations: |
| (ii) | A person provided in paragraph (6) 3 through 6; |
| (8) | "A financial company prescribed by Presidential Decree" in subparagraph 9 (c) of Article 2 of the Act means any financial companies: |
| (9) | "Concluding a contract for an investment product or conducting other relevant transactions prescribed by Presidential Decree" in subparagraph 9 (d) of Article 2 of the Act means the conclusion of a contract for over-the-counter derivatives under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "over-the-counter derivatives"); or soliciting or accepting an offer to conclude a contract. |
| (10) | "Other persons prescribed by Presidential Decree" in subparagraph 2 (9) e of Article 2 of the Act means the amount classified as follows: <Amended on Dec. 8, 2022; Aug. 1, 2023> |
| 1. | In cases of deposit products under subparagraph 1 of Article 3 of the Act (hereinafter referred to as "deposit products"), any of the following persons: |
| (e) | A person falling under any of paragraph (6) 3 through 6; |
| (f) | A person who falls under paragraph 7 (2) b or c; |
| (g) | A person who does not fall under any of the following: |
| (ii) | A person under adult guardianship and limited guardianship; |
| (iii) | A person who is 65 years of age or older; |
| (h) | Other persons as similar to those provided in items (a) through (f), as determined and publicly notified by the Financial Services Commission; |
| 2. | In cases of a loan product, any of the following persons: |
| (b) | A corporation, association, or organization with at least five full-time employees; |
| (c) | A financial product agent and broker dealing with loan products; |
| (d) | Corporations determined and publicly notified by the Financial Services Commission, among corporations established for specific purposes, such as acquisition of assets or financing; |
| (e) | A person falling under subparagraph 1 (a) through (f); |
| (f) | Other persons as similar to those provided in items (a) through (3), determined and publicly notified by the Financial Services Commission; |
| 3. | In cases of an investment product, any of the following persons: |
| (d) | A financial product agent and broker dealing with investment products; |
| (e) | A person falling under subparagraph 1 (a) through (f); |
| (f) | Other persons as similar to those provided in items (a) through (3), determined and publicly notified by the Financial Services Commission; |
| 4. | In cases of an indemnity product, any of the following persons: |
| (d) | A financial product agent and broker dealing with indemnity products; |
| (e) | A person falling under subparagraph 1 (a) through (f); |
| (f) | Other persons as similar to those provided in items (a) through (3), determined and publicly notified by the Financial Services Commission; |
| (11) | Notwithstanding paragraph 10 (3), if any of the following persons enters into a contract with a financial product seller or financial product advisory business regarding over-the-counter derivatives or makes an offer to enter into a contract, he or she shall be deemed a professional financial consumer only if he or she notifies the financial product seller or financial product advisor in writing of his or her intention to be treated the same as a professional financial consumer. <Newly Inserted on Dec. 8, 2022> |
| 1. | A person who falls under paragraph 10 (3) b or c; |
| 2. | A person who falls under paragraph 10 (3) e and under subparagraph 1 (f) of the same paragraph; |
| 3. | A person determined and publicly notified by the Financial Services Commission, from among those referred to in subparagraph 3 (f) of Article 10; |
| Article 3 (Types of Financial Products) |
| (1) | The term "financial products prescribed by Presidential Decree" under subparagraph 1 of Article 3 of the Act means the following financial products: |
| 3. | Financial products under Article 2 (1) 7 designed to borrow money from financial consumers and pay them the money and interest, etc. related thereto in the future as consideration, which are determined and publicly notified by the Financial Services Commission; |
| (2) | The term "financial products prescribed by Presidential Decree" under subparagraph 2 of Article 3 of the Act means the following financial products: |
| 4. | Financial products under Article 2 (1) 7 designed to provide financial consumers with money or other items of property value (hereinafter referred to as "money, etc."), and receive money, etc. and interest related thereto in the future, which are determined and publicly notified by the Financial Services Commission; |
| (3) | The term "financial products prescribed by Presidential Decree" under subparagraph 3 of Article 3 of the Act means the following financial products: |
| 3. | Discretionary investment contract; |
| (4) | The term "financial products prescribed by Presidential Decree" under subparagraph 4 of Article 3 of the Act means the following financial products: |
| 1. | Mutual aid referred to in Article 2 (1) 2 (hereafter referred to as "mutual aid"); |
| 2. | Financial products under Article 2 (1) 7 similar to insurance products under the Insurance Business Act, determined and publicly notified by the Financial Services Commission; |
| Article 4 (Classification of Financial Companies and Other Relevant Persons by Type of Business) |
Persons falling under subparagraph 7 (h) of Article 2 of the Act under subparagraph 16 of Article 4 of the Act, are classified as financial product direct sellers, financial product sales agents or brokers, or financial product advisors as follows: | 1. | Persons falling under Article 2 (6) 1: financial product distribution agents or brokers; |
| 2. | Persons falling under Article 2 (6) 2 (a): financial product direct sellers; |
| 3. | Persons falling under Article 2 (6) 2 (b): financial product distribution agents or brokers; |
| 4. | Persons falling under Article 2 (6) 3: financial product direct sellers; |
| 5. | Persons falling under Article 2 (6) 4: financial product direct sellers or financial product distribution agents or brokers; |
| 6. | Persons falling under Article 2 (6) 5: financial product direct sellers; |
| 7. | Persons falling under Article 2 (6) 6: financial product distributors or advisors determined and publicly notified by the Financial Services Commission. |
| Article 5 (Requirements for Registration of Financial Product Direct Sellers and Financial Product Advisors) |
| (1) | "Human resources, computer systems, and other physical facilities" in Article 12 (2) 1 of the Act means those classified as follows: |
| 1. | Human resources: human resources of the following items; |
| (a) | At least one person with expertise necessary for conducting business affairs; |
| (b) | At least one person who can professionally operate, maintain, and manage computer system; |
| 2. | Computer system: any of the following computer system; |
| (a) | Information and communications facilities, such as computers; |
| (b) | Facilities necessary for electronic business processing; |
| 3. | Other physical facilities: any of the following facilities; |
| (a) | A permanent establishment; |
| (b) | Office equipment and means of communication; |
| (c) | Facilities for the storage of business-related data and for the prevention of loss; |
| (d) | Security system for safely protecting computer systems, etc.; |
| (2) | "The amount prescribed by Presidential Decree" in Article 12 (2) 2 of the Act means the amount classified as follows: |
| 1. | Financial product sales business: amount determined and publicly notified by the Financial Services Commission in the range of 500 million won or more, regardless of the type and quantity of financial products to be dealt with; |
| 2. | Financial product advisory business: the amount classified as follows: Provided, that where it handles at least two of the following types of financial products, the total amount of equity capital of each financial product (excluding deposit products) shall be prepared: |
| (a) | In cases of dealing with deposit products: 100 million won; |
| (b) | In cases of dealing with loan products: 100 million won; |
| (c) | In cases of dealing with indemnity products: 100 million won; |
| (d) | In cases of dealing with investment products: 250 million won. Provided, where only investment products falling under registration business unit 5-21-1 of attached Table 3 of the "Enforcement Decree of the Capital Market and Financial Investment Services Act" are dealt with, it shall be set at 100 million won. |
| (3) | "Good financial standing and social credibility prescribed by Presidential Decree" in Article 12 (2) 3 of the Act means those classified as follows: <Amended on Dec. 28, 2021> |
| 1. | Good financial standing: The ratio of total liabilities to equity capital shall not exceed the ratio prescribed and publicly notified by the Financial Services Commission within 200/100; |
| (4) | "The amount prescribed by Presidential Decree" in Article 12 (2) 5 of the Act means the amount classified as follows: |
| 1. | In cases of conducting financial product direct sales or financial product advisory business only through automated methods using electronic devices pursuant to the "Electronic Financial Transactions Act": install software that includes standards for preventing conflicts of interest; |
| 2. | In other cases, the following requirements shall be satisfied: |
| (a) | Documenting standards for preventing conflicts of interest; |
| (b) | Establishment of education and training systems to prevent conflicts of interest; |
| (c) | Establishment of a system for taking measures against violations of standards for preventing conflicts of interest; |
| (5) | "Financial business prescribed by Presidential Decree" in Article 12 (2) 6 (a) of the Act means any of the following financial business: |
| (7) | Detailed matters necessary for the requirements for registration of financial product distribution business, etc. under paragraphs (1) through (6) shall be determined and publicly notified by the Financial Services Commission. |
| Article 6 (Requirements for Registration of Financial Product Distribution Agents and Brokers) |
| (1) | "Qualifications prescribed by Presidential Decree, including the completion of educational programs" in Article 12 (3) 1 of the Act means those who have completed education on financial products to be dealt with, protection of financial consumers, etc., as prescribed and publicly notified by the Financial Services Commission. In such cases, if a person who intends to register as a financial product distribution agent or broker is a corporation, the representative or executive of the corporation shall complete the relevant education. |
| (2) | "Requirements prescribed by Presidential Decree, such as standards for conducting business affairs of financial product distribution agents and brokers and the possesion of necessary human resources" in Article 12 (3) 3 of the Act means the following requirements: Provided, That subparagraphs 5 and 6 shall apply only to cases where a person intends to engage in financial product distribution agency or brokerage business only by automated means using electronic devices under the Electronic Financial Transactions Act. <Amended on Dec. 28, 2021> |
| 1. | To establish standards for conducting business affairs; |
| 2. | To secure the following human resources: |
| (a) | At least one person with expertise necessary for conducting business affairs; |
| (b) | At least one person who can professionally operate, maintain, and manage computer system; |
| 3. | To be equipped with the following facilities: |
| (a) | Information and communications facilities, such as computers; |
| (b) | Facilities necessary for electronic business processing; |
| (c) | A permanent establishment; |
| (d) | Office equipment and means of communication; |
| (e) | Facilities for the storage of business-related data and for the prevention of loss; |
| (f) | Security system for safely protecting computer systems, etc.; |
| 5. | To deposit a security deposit determined and publicly notified by the Financial Services Commission in the range of 50 million won or more or subscribe to a product with coverage of the same level or higher to compensate financial consumers for damages; |
| (3) | Detailed matters necessary for the requirements for registration of a financial product distribution agent or broker under paragraphs (1) and (2) shall be determined and publicly notified by the Financial Services Commission. |
| Article 7 (Executive Officers of Financial Product Distributors) |
| Article 8 (Procedures and Methods for Registration) |
| (1) | A person who intends to register as a financial product direct seller, a financial product distribution agent or broker, or a financial product advisor (hereinafter referred to as "financial product distributor or advisor") pursuant to Article 12 (1) through (3) of the Act shall be eligible for the Financial Services Commission; An application for registration determined and publicly notified by the Commission shall be submitted to the Financial Services Commission, along with the following documents: |
| 1. | Articles of incorporation or equivalent business management regulations; |
| 2. | Data on business plans; |
| 3. | Data on financial status; |
| 4. | Data proving that the requirements for registration under article 12 (2) or (3) of the Act are met; |
| (2) | The Financial Services Commission shall determine whether to grant registration within two months from the date of receipt of an application for registration under paragraph (1), and notify the applicant of the result thereof and the grounds therefor in writing without delay. Provided, That the period may be extended only once by up to two months, if there are unavoidable circumstances making it impracticable to make a decision on registration during the relevant period. |
| (3) | The Financial Services Commission may conduct a fact-finding survey, if deemed necessary to verify the requirements for registration under Article 12 (2) and (3) of the Act. |
| (4) | Where the Financial Services Commission deems it necessary for registration under Article 12 (1) through (3) of the Act, it may request relevant institutions, organizations, or experts to submit their opinions or data. |
| (5) | Necessary detailed matters related to the procedure and methods for registration, other than those prescribed in paragraphs (1) through (4), shall be determined and publicly notified by the Financial Services Commission. |
| Article 9 (Registration Fees) |
| (1) | A person who intends to file an application for registration under Article 12 (1) of the Act pursuant to Article 12 (5) of the Act shall pay a fee determined and publicly notified by the Financial Services Commission within the range of one million won. |
| (2) | Fees referred to in Article 12 (5) of the Act may be paid by revenue stamps, cash, or other methods determined and publicly notified by the Financial Services Commission. |
| (3) | Except as otherwise expressly provided for in paragraphs (1) and (2), specific matters necessary for the payment of fees shall be determined and publicly notified by the Financial Services Commission. |
| Article 10 (Internal Control Standards) |
| (1) | "Persons prescribed by Presidential Decree" in Article 16 (2) of the Act means a financial product distributor or advisor excluding the following persons: |
| 2. | Online small investment broker under the Capital Market and Financial Investment Services Act (hereinafter referred to as "online small investment broker") |
| 3. | Credit service providers and loan brokers; |
| 4. | Online investment-linked financial business entities. |
| 5. | Other persons determined and publicly notified by the Financial Services Commission as similar to financial product distributors under subparagraphs 1 through 4. |
| (2) | The internal control standards under Article 16 (2) of the Act (hereinafter referred to as "internal control standards") shall include the following matters: |
| 1. | Job allocation and organizational structure; |
| 2. | The standards and procedure that executive officers and employees shall comply with in performing their duties; |
| 3. | Organization and human resources for the operation of internal control standards; |
| 4. | Inspection, taking measures, and evaluation of compliance with the internal control standards; |
| 5. | Matters related to job performance training in accordance with internal control standards; |
| 6. | Compensation system for performance of duties and measures to secure responsibility; |
| 7. | The procedure for formulating or amending the internal control standards; |
| 8. | Other matters determined and publicly notified by the Financial Services Commission as similar to those under subparagraphs 1 through 7. |
| (3) | Where a financial product distributor or advisor formulates or amends internal control standards pursuant to Article 16 (2) of the Act, he or she shall obtain approval of the board of directors (if there is no board of directors and the Financial Services Commission determines and publicly notifies it, an internal decision-making body joined by the representative of the financial product distributor, etc. or of its domestic branch). Provided, That in cases of amending minor matters determined and publicly notified by the Financial Services Commission, such approval may be replaced with the approval of the representative. <Amended on Dec. 8, 2022> |
| (4) | When a financial product distributor or advisor formulates or amends internal control standards pursuant to Article 16 (2) of the Act, he or she shall notify the fact as determined and publicly notified by the Financial Services Commission. |
| (5) | Necessary detailed matters related to the procedure and methods for formulating the internal control standards, other than those provided in paragraphs (2) through (4), shall be determined and publicly notified by the Financial Services Commission. |
| Article 10-2 (Preparation of List of Executive Officers and Employees Engaging in Door-to-Door Sales or Telemarketing) |
| (1) | The list of executives and employees involved in door-to-door sales and telemarketing, which a financial product distributor or advisor shall prepare pursuant to Article 16-2 (1) of the Act, shall include the names affiliation, and telephone number of the relevant executives and employees (in the case of an executive or employee who has registered pursuant to the finance-related statutes requiring registration of business corresponding to financial product sales agency or brokerage business; or in the case of an executive or employee who has registered a financial product sales agency or brokerage business pursuant to Article 12 (1) of the Act, including the registration number). |
| (2) | A financial product distributor or advisor operating a website shall enable financial consumers to readily verify via the website that executives and employees engagin g in door-to-door sales and telemarketing under Article 16-2 (1) of the Act belongs to the financial product distributor, etc. |
[This Article Newly Inserted on Oct. 4, 2023]
| Article 11 (Principle of Suitability) |
| (1) | The scope of financial products for which a financial product distributor, etc. shall examine information on an ordinary financial consumer and obtain confirmation thereon from the consumer pursuant to Article 17 (2) of the Act, shall be as follows: <Amended on Dec. 8, 2022> |
| 1. | Indemnity products as follows: |
| (c) | The insurance products under the Insurance Business Act, in which payments of both premiums and proceeds are made in foreign currency (including insurance in which both premiums and proceeds are paid in Korean won) |
| 2. | Investment products excluding the following products: |
| (c) | Other financial products as similar to those referred to in items (a) and (b), determined and publicly notified by the Financial Services Commission in consideration of their characteristics, risks, etc.; |
| (2) | "Methods prescribed by Presidential Decree" in Article 17 (2) of the Act, with the exception of its subparagraphs, means using electronic means ensuring safety and reliability, which meet the standards determined and publicly notified by the Financial Services Commission to convey the intentions of ordinary financial consumers. <Newly Inserted on Dec. 8, 2022> |
| (3) | "Information prescribed by Presidential Decree" in Article 17 (2) 4 of the Act means information classified as follows: <Amended on Dec. 8, 2022> |
| 1. | Indemnity products referred to in paragraph (1) 1: the following information: |
| (a) | Experience in acquiring and disposing of financial products; |
| (b) | Level of understanding of financial products; |
| (c) | Attitudes to risks in consideration of expected profits, expected losses, etc.; |
| 2. | Investment products referred to in paragraph (1) 2: the following information: |
| (a) | The age of the ordinary financial consumer; |
| (c) | Information provided in items (b) and (c) of subparagraph 1: |
| 3. | Loan products provided in paragraph (1) 3: the following information: |
| (a) | The age of the ordinary financial consumer; |
| (b) | Objectives of the conclusion of the contract (limited to loans); |
| (4) | The criteria for determining suitability in the latter part of Article 17 (3) of the Act shall be classified as follows: Provided, That where the application of the relevant criteria is deemed substantially unreasonable and falls under the grounds determined and publicly notified by the Financial Services Commission, the criteria specified in the relevant public notice may be complied with. <Amended on Dec. 8, 2022> |
| 1. | Indemnity products or investment products under paragraph (1) 1 and 2: the ability to bear losses shall be at an appropriate level proved by the examination of information on the ordinary financial consumer as determined and publicly notified by the Financial Services Commission; |
| 2. | Loan products under paragraph (1) 3: the ability to bear losses shall be at an appropriate level proved by the examination of information on the ordinary financial consumer as determined and publicly notified by the Financial Services Commission; |
| (6) | Pursuant to the proviso to Article 17 (5) of the Act, ordinary financial consumers who are accredited investors under Article 249-2 of the "Financial Investment Services and Capital Markets Act" shall may request a financial product distributor, etc. under the main clause of that Article to apply Article 17 (5) 1 through 3 by any of the following methods: In such cases, the relevant financial product distributor, etc. shall notify in advance that such request may be made in any of the following methods pursuant to Article 17 (5). <Amended Dec. 8, 2022> |
| 1. | Delivery of documents; |
| 4. | Mobile phone text messages or electronic messages equivalent thereto. |
| (7) | Necessary details regarding the content and scope of information on ordinary financial consumer, standards for determining suitability, etc. pursuant to paragraphs (2) through (6) shall be determined and announced by the Financial Services Commission. <Amended Dec. 8, 2022> |
| Article 12 (Principle of Appropriateness) |
| (1) | The scope of financial products for which a financial product distributor, etc. shall examine information on an ordinary financial consumer pursuant to Article 18 (1) of the Act, shall be as follows: <Amended on Dec. 8, 2022> |
| 1. | Indemnity products pursuant to Article 11 (1) 1; |
| 2. | Investment products as follows: |
| (d) | Other financial products determined and publicly notified by the Financial Services Commission, which are corresponding to items (a) through (c). |
| 3. | The following loan products: |
| (b) | Securities (excluding securities determined and publicly notified by the Financial Services Commission securities market , such as securities for which sales contracts have been concluded in the stock market), intellectual property rights, or loan products in which a contract is concluded using property determined and publicly notified by the Financial Services Commission as collateral; |
| (c) | Other financial products determined and publicly notified by the Financial Services Commission to protect ordinary financial consumers, which are corresponding to financial products under items (a) and (b). |
| (2) | "Information prescribed by Presidential Decree" in Article 18 (1) 4 of the Act means information classified in each subparagraph of Article 11 (3): <Amended on Dec. 8, 2022> |
| (3) | Article 11 (4) and (7) shall apply mutatis mutandis to the standards for determining the appropriateness of financial products under Article 18 (2) of the Act. <Amended on Dec. 8, 2022> |
| (4) | Where a financial product distributor notifies ordinary financial consumers of the fact that the relevant financial product is not appropriate pursuant to the former part of Article 18 (2) of the Act, a financial product distributor shall notify such fact by the methods provided in the subparagraphs of Article 11 (6). In such cases, a financial product distributor shall also provide the following data: <Amended on Dec. 8, 2022> |
| 1. | A document stating the results of determination on the appropriateness of financial products under Article 18 (2) of the Act and the reasons therefor; |
| 2. | A written explanation under Article 19 (2) of the Act (hereinafter referred to as "written explanation"); |
| (5) | "Methods prescribed by Presidential Decree" in the former part of Article 18 (2) of the Act means methods classified in Article 11 (2): <Newly Inserted on Dec. 8, 2022> |
| (6) | Article 11 (5) and (7) shall apply mutatis mutandis to details of information under Article 18 (3) of the Act. <Amended on Dec. 8, 2022> |
| (7) | Article 11 (6) and (7) shall apply mutatis mutandis to the subject matters, methods, and the prior notice of requesting the application of the principle of appropriateness under the proviso to Article 18 (4) of the Act and paragraph (5) of that Article. <Amended on Dec. 8, 2022> |
| Article 13 (Obligation to Explain) |
| (1) | "Matters prescribed by Presidential Decree" in Article 19 (1) 1 (a)(v) of the Act means the following: |
| 1. | Period of risk coverage; |
| 2. | Termination and release of contract; |
| 3. | Request for reduction of insurance premiums; |
| 4. | Possibility of loss of insurance proceeds or amount refundable upon termination of contract; |
| 5. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 4. |
| (2) | "Investment products prescribed by Presidential Decree" in Article 19 (1) 1 (b) (iii) of the Act means investment products excluding the following financial instruments: |
| (3) | When a financial product distributor determines a risk rating pursuant to Article 19 (1) 1 (b) (iii) of the Act, the following matters shall be taken into consideration as determined and publicly notified by the Financial Services Commission. |
| 3. | Complexity of financial product structure; |
| 4. | The maximum possible loss of principal; |
| 5. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 4. |
| (4) | "Matters prescribed by Presidential Decree" in Article 19 (1) 1 (b) (iv) of the Act means the following matters (in cases of P2P investment, only subparagraph 4 shall apply): |
| 1. | Fees to be borne by financial consumers; |
| 2. | Termination and release of contract; |
| 3. | Redemption and purchase and sale of securities; |
| 5. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 4. |
| (1) | "Matters prescribed by Presidential Decree" in Article 19 (1) 1 (c) (ii) of the Act means the following: |
| 1. | Interest rate (including interest rate applied after maturity) and basis for calculation; |
| 2. | The rate of return and the basis for calculation; |
| 3. | Termination and release of contract; |
| 4. | Payment period of interest and profits and reasons for payment restrictions; |
| 5. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 4. |
| (6) | "Matters prescribed by Presidential Decree" in Article 19 (1) 1 (d)(v) of the Act means the following: |
| 1. | Termination and release of contract; |
| 3. | Overdue interest rates and other disadvantages due to overdue payment of principal and interest; |
| 4. | Matters concerning the contract period and its extension; |
| 5. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 4. |
| (7) | "Matters prescribed by Presidential Decree" in Article 19 (1) 2 (c) of the Act means the following: |
| 1. | Period of provision of linked or tied product or service, etc. (referring to financial products or services linked or tied to financial products; hereinafter the same shall apply); |
| 2. | Prior notice of change in, or termination of linked or tied product or service, etc.; |
| (8) | "Matters specified by Presidential Decree" in Article 19 (1) 4 of the Act means the following matters: |
| 1. | Procedures for processing civil petitions and mediating disputes; |
| 3. | Other matters prescribed and publicly notified by the Financial Services Commission as necessary for assisting ordinary financial consumers in decision-making or protecting their rights and interests. |
| (9) | "Methods prescribed by Presidential Decree" in the main clause of Article 19 (2) of the Act means methods defined in Article 11 (2): <Newly Inserted on Dec. 8, 2022> |
| (10) | "Matters prescribed by Presidential Decree" and "important matters prescribed by Presidential Decree" in Article 19 (3) of the Act means the matters classified in the subparagraphs of Article 19 (1) of the Act, respectively. <Amended on Dec. 8, 2022> |
| Article 14 (Written Explanation) |
| (1) | The written explanation shall include matters classified under the subparagraphs of Article 19 (1) of the Act, and the details thereof shall be prepared in a manner that ordinary financial consumers can easily understand. Provided, That where an investment prospectus under Article 123 (1) of the Financial Investment Services and Capital Markets Act, a short-form investment prospectus under Article 124 (2) 3 of that Act, or a summary prospectus under the former part of Article 249-4 (2) of that Act is provided to ordinary financial consumers, the relevant details may be excluded. <Amended on Aug. 1. 2023> |
| (2) | The written explanation includes the signature of the person who provided an explanation pursuant to Article 19 (1) of the Act regarding the fact that the contents explained to ordinary financial consumers are the same with the actual contents of the written explanations (including the electronic signature pursuant to subparagraph 2 of Article 2 of the Electronic Signature Act; hereinafter the same shall apply). Provided, That the written explanation of the following contracts shall be excluded. |
| 1. | Contracts on deposit products or loan products; |
| (3) | A financial product distributor or advisor shall provide an ordinary financial consumer with a written explanation before explaining under Article 19 (1) of the Act by any of the following methods: |
| 1. | Delivery of documents; |
| 3. | Mobile phone text message or equivalent electronic expression of intention. |
| (4) | "Cases prescribed by Presidential Decree" in the proviso of Article 19 (2) of the Act means the following cases: |
| 1. | When a financial product advisor provides documents containing the following items to an ordinary financial consumer: |
| (a) | Responses to advisory service requested by the relevant financial consumer and grounds therefor; |
| (b) | How to check the details of the financial product that is subject of advisory service; |
| (c) | Other matters determined and publicly notified by the Financial Services Commission as necessary for ordinary financial consumers' understanding. |
| 4. | Where a contract is renewed with the same contents as the existing contract; |
| 5. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 4. |
| (5) | Except as provided in paragraph (2) through (4), matters necessary for the methods of and procedures for writing and providing explanation shall be determined and publicly notified by the Financial Services Commission. |
| Article 15 (Prohibition of Unfair Business Activities) |
| (1) | "Cases prescribed by Presidential Decree" in Article 20 (1) 4 (b) (iii) of the Act means cases where a financial consumer terminates a contract for facility leasing, deferred payment sales, or installment financing under the Specialized Credit Finance Business Act and does not fall under any of the following items. |
| 1. | Where the goods under the contract are not delivered; |
| 2. | Where is impracticable to use the delivered goods due to their defects; |
| (2) | "Demanding a third party's joint surety in connection with a contract for a loan product prescribed by Presidential Decree, such as a loan to an individual" in Article 20 (1) 4 (c) of the Act means any of the following cases: <Amended on Dec. 8, 2022> |
| 1. | Demanding a joint a third party's joint surety for a contract for loan products concluded with a financial consumer as an individual; Provided, that a joint surety may be demanded from any of the following third parties: |
| (a) | Where a person whose status is stated as the representative in a business registration certificate concludes a contract for loan products, the other representative stated in the relevant business registration certificate; |
| (b) | Where a loan product contract is concluded to pay the price of buildings sold in units under the Act on Sale of Building Units, the sellers of buildings in units and the contractor of the relevant building under that Act; |
| 2. | Demanding a joint a third party's joint surety for a contract for loan products concluded with a financial consumer as a corporation; Provided, That a joint surety may be demanded from any of the following third parties: |
| (a) | The representative director or general partner of the relevant corporation; |
| (b) | A person who holds the largest share in the relevant corporation; |
| (c) | A person who holds more than 30/100 of the total number of voting stocks issued by the relevant corporation (adding the issued voting stocks held by the spouse, blood relatives and relatives within the fourth degree of relationship); |
| (d) | Other persons determined and publicly notified by the Financial Services Commission in consideration of the purpose, nature, and target of the loan product contract; |
| 3. | Demanding a joint a third party's joint surety for a contract for loan products concluded with a financial consumer as an association or organization; Provided, That a joint surety may be demanded from the representative of the relevant association or organization: |
| (3) | "An act prescribed by Presidential Decree" in the main clause of Article 20 (1) 5 of the Act means any of the following acts: |
| 1. | Reducing or changing linked or tied product services, etc. without prior notification as determined and publicly notified by the Financial Services Commission |
| 2. | Reducing or changing linked or tied product services, etc. unfavorably to financial consumers without good reasons; Provided, That this shall not apply where the profitability of the relevant financial product has significantly decreased due to the linked or tied product services, etc. after the linked or tied product services, etc. have been provided for at least three years; |
| (4) | Specific types of, or standards for unfair business activities under Article 20 (1) of the Act shall be classified as follows: <Amended on Dec. 8, 2022> |
| 1. | Article 20 (1) 1 of the Act: the following acts: |
| (a) | Compelling a financial consumer to conclude a contract for other financial products sold by himself or herself: |
| (b) | Compelling a financial consumer to conclude a contract for another financial product in the name of a third party; |
| (c) | Compelling a financial consumer to conclude a contract for another financial product through another financial product direct seller; |
| (d) | Compelling representative or related person (limited to persons determined and publicly notified by the Financial Services Commission) of a financial consumer who is a small or medium enterprise under the Framework Act on Small and Medium Enterprises to conclude a contract for another financial product; |
| (e) | Other acts as similar to those referred to in items (a) through (d), which compel a financial consumer to conclude a contract for another financial product against his or her will as determined and publicly notified by the Financial Services Commission. |
| 2. | Article 20 (1) 2 of the Act: the following acts: |
| (a) | Demanding collateral or surety even though it is not required; |
| (b) | Demanding collateral or surety in excess of the scope of general collateral or surety generally required for the conclusion of such contract; |
| 3. | Article 20 (1) 6 of the Act: the following acts: |
| (a) | Requesting money or imposing other disadvantages without good cause in response to a financial consumer's request for change or termination of a contract or change or termination of a contract; |
| (b) | Refusing a financial consumer's request for a reduction of interest rates or insurance premiums pursuant to a contract or statutes, or delaying the processing thereof without good cause; |
| (c) | Failure to reflect into interest rates or loan limits financial consumer information confirmed pursuant to Article 17 (2) of the Act without good cause; |
| (d) | Other methods determined and publicly notified by the Financial Services Commission, as similar to those provided in items (a) through (c); |
| Article 16 (Prohibition of Unfair Solicitation) |
| (1) | "Acts prescribed by Presidential Decree" in the proviso, with the exception of the subparagraphs, of Article 21 of the Act means the following: <Amended on Dec. 8, 2022> |
| 1. | Acts referred to in subparagraph 6 (a) of Article 21 of the Act with respect to investment products classified as follows (applicable only to cases where financial consumers are informed in advance of matters determined and publicly notified by the Financial Services Commission, such as the type and content of the financial product to be solicited and the relevant financial consumer expresses his or her intention to be solicited to conclude a contract); |
| (a) | For professional financial consumers, investment products excluding over-the-counter derivatives and linked investments; |
| (b) | For ordinary financial consumers, investment products excluding the following financial products: |
| (i) | Over-the-counter derivatives and linked investment; |
| 2. | Acts under subparagraph 6 (b) of Article 21 of the Act regarding other financial products determined and publicly notified by the Financial Services Commission; |
| 3. | Where a period determined and publicly notified by the Financial Services Commission elapses after a financial consumer who has been solicited to conclude a contract for an investment product expresses his or her intention to reject such solicitation, an act under subparagraph 6 (b) of Article 21 of the Act with respect to the relevant product; |
| (2) | "Person prescribed by Presidential Decree" in subparagraph 5 (a) of Article 21 of the Act means a person entitled to indemnity pursuant to the contract for the relevant indemnity product. |
| (3) | "Acts prescribed by Presidential Decree" in subparagraph 7 of Article 21 of the Act means any of the following acts: |
| 1. | An act of having a person who has not received job performance training in accordance with internal control standards to perform work related to soliciting contract conclusion; |
| 2. | Soliciting by fabricating information on ordinary financial consumers under article 17 (2) of the act; |
| 3. | Providing guidance on loan products or information related thereto not requested by ordinary financial consumers, while soliciting the conclusion of a contract for investment products; |
| 4. | Other acts determined and publicly notified by the Financial Services Commission, as similar to those referred to in subparagraphs 1 through 3, which impede the rational judgment of financial consumers on financial products; |
| Article 16-2 (Matters to Be Observed in Relation to Door-to-Door Sales and Telemarketing) |
| (1) | Where a financial product distributor, etc. has notified an ordinary financial consumer of the matters referred to in the subparagraphs of Article 21-2 (1) of the Act orally pursuant to Article 21-2 (1) of the Act, such distributor shall notify such matters in writing, by e-mail, text message, or by any other method determined by the Financial Services Commission within one month from the date of notification; |
| (2) | An ordinary financial consumer may specify the object and content of a request to refrain from contacting a financial product distributor, etc. who contacts him or her for the purpose of introducing a financial product or soliciting the conclusion of a contract, and exercise his or her rights under Article 21-2 (1) 1 of the Act, using the method of paragraph 4. |
| (3) | Upon receipt of a request for prohibition of contact pursuant to paragraph (2), a financial product distributor shall complete the relevant measures within one month from the date of receipt of such request. |
| (4) | Pursuant to Article 21-2 (4) of the Act, a financial product distributor or advisor may help ordinary financial consumers exercise their rights under paragraph (1) 1 of that Article through the website, wired or wireless communication, e-mails, writing, or any other method determined and publicly notified by the Financial Services Commission. |
| (5) | A financial product distributor, etc. shall take measures such as toll-free phone calls or postal service chargeable to an addressee, to ensure that ordinary financial consumers do not bear monetary expenses incurred in exercising rights under Article 21-2 (1) 1 of the Act. |
[This Article Newly Inserted on Oct. 4, 2023]
| Article 17 (Subject of Advertisement) |
| (1) | "Financial product distributors or advisors prescribed by Presidential Decree, such as financial product distribution agents or brokers of investment instruments", in the main clause, with the exception of subparagraphs, of Article 22 (1) of the Act means persons classified as follows: |
| 1. | In cases of advertisements related to the business of financial product distributors, etc.: financial product distribution agents or brokers dealing with investment products; |
| 2. | In cases of advertisements on financial products, financial product distribution agents or brokers: Provided, That this shall not apply where a financial product distribution agent grants a license to a financial product distribution agent or broker as determined and publicly notified by the Financial Services Commission (excluding cases of dealing with investment products); |
| (2) | In the proviso, with the exception of subparagraphs, to Article 22 (1) of the Act, "a person prescribed by Presidential Decree, such as a financial holding company that has a financial product distributor or advisor as its subsidiary or second-tier subsidiary" means any of the following persons: |
| 1. | A financial holding company that has a financial product distributor or advisor as its subsidiary or second-tier subsidiary; |
| 5. | Collective investment business entities; |
| 6. | Other persons determined and publicly notified by the Financial Services Commission as similar to those under subparagraphs 1 through 5. |
| (3) | "Institution prescribed by Presidential Decree" in Article 22 (1) 6 of the Act means any of the following institutions: |
| 3. | The National Credit Union Federation of Korea under the National Credit Union Federation of Korea under the Credit Unions Act; |
| 4. | Other persons as similar to those under subparagraphs 1 through 3, as determined and publicly notified by the Financial Services Commission. |
| (1) | The details of financial products under Article 22 (3) 2 of the Act, the risks on investment under subparagraph 3 (b) (i) of that Article, and the details of terms and conditions of loans under item (d) of that subparagraph shall be subject to the following classifications: |
| 1. | Details of financial products: the following items: |
| (a) | Name of the financial product; |
| (d) | Other financial products determined and publicly notified by the Financial Services Commission as necessary for an ordinary financial consumer to under the relevant financial products, which are corresponding to those referred to in items (a) through (c). |
| 2. | Risks on investment: the following items: |
| (a) | Possibility of loss of principal; |
| (b) | Liability of consumers for loss of principal; |
| 3. | Terms and conditions of the loan: |
| (a) | Matters concerning the level of credit to be satisfied; |
| (b) | Methods of repaying principal and interest; |
| (2) | In Article 22 (3) 3 (c) of the Act, "financial products prescribed by Presidential Decree" means deposit products whose profits fluctuate depending on the value of the underlying assets. |
| (3) | "Matters prescribed by Presidential Decree" in Article 22 (3) 4 of the Act means the following: |
| 1. | Rights to be explained under Article 19 (1) of the Act; |
| 2. | Matters concerning the compliance with advertising-related procedures in accordance with statutes and internal control standards; |
| 4. | Matters referred to in Article 26 (1) 1 through 3 of the Act (limited to advertisements by financial product distribution agents or brokers); |
| 5. | Matters referred to in Article 27 (3) 1 through 4 of the Act (limited to advertisements by financial product advisors); |
| 6. | Other matters determined and publicly notified by the Financial Services Commission as significantly affecting financial consumers' contract conclusion or rights and obligations. |
| (4) | Notwithstanding paragraph (3), where the Financial Services Commission deems it impracticable to include all matters referred to in the subparagraphs of paragraph (3) in an advertisement of financial products, etc.(hereinafter referred to as "advertisements on financial products, etc.") under the main clause, with the exception of the subparagraphs, of Article 22 (1) of the Act, due to its purpose, characteristics of advertising media, and time limits of advertisements, part of such matters may be excluded, as determined and publicly notified by the Financial Services Commission. |
| Article 19 (Methods and Procedures for Advertisements) |
| (1) | Where a financial product distributor, etc. (including persons pursuant to the proviso to Article 22 (1) of the Act; hereinafter the same shall apply in this Article) advertises financial products, etc., he or she shall comply with the standards determined and publicly notified by the Financial Services Commission on the text of the advertisement and methods of conveying such as video and audio. |
| Article 20 (Prohibited Acts in Advertisement) |
| (1) | "Acts prescribed by Presidential Decree" in Article 22 (4) 1 (e) of the Act means the following: |
| 1. | In cases of an indemnity product for which the amount refundable at maturity is variable upon an interest rate and the performance of investment, misleading financial consumers to believe that a definite amount refundable at maturity will be paid at the maturity of the indemnity product; |
| 2. | Expressing financial products in a misleading way by making the economic burden on financial consumers appear small, such as displaying insurance premiums in daily units, or by making the benefits of signing a contract seem large; |
| 3. | Comparing financial products with others without clearly disclosing the competitors and criteria for comparison or without an objective ground; |
| 4. | Providing conclusive judgment on any uncertain matter or giving any misleading information; |
| 5. | Falsely informing or unclearly expressing matters that have a significant impact on whether or not to conclude a contract or the rights and obligations of financial consumers; |
| 6. | Other acts determined and publicly notified by the Financial Services Commission corresponding to the acts prescribed in subparagraphs 1 through 5, which are likely to hinder the rational decision-making of financial consumers or undermine sound market order; |
| (3) | "Investment products prescribed by Presidential Decree" in Article 22 (4) 2 (b) of the Act means collective investment securities, and "matters prescribed by Presidential Decree" means the following: |
| 1. | Name, location, and contact information of the person who has issued the collective investment securities; |
| 2. | Organization of a person who has issued collective investment securities and human resources for managing the collective investment property; |
| 3. | Past performance of operation of the collective investment property; |
| 4. | Redemption of collective investment securities; |
| 5. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 4 in consideration of the characteristics of collective investment securities; |
| (4) | "Acts prescribed by Presidential Decree" in Article 22 (4) 2 (c) and 3 (b) and 4 (b) of that paragraph of the Act means the following acts, respectively: |
| 1. | An act provided in paragraph (1) 2 through 5; |
| 2. | In cases of indicating a rate of return or the past performance of operation, acts prescribed by Presidential Decree for the protection of financial consumers, such as an act of indicating the rate of return or the past performance of operation only for a period in which the rate of return or the performance of operation was better; |
| 3. | Other acts determined and publicly notified by the Financial Services Commission corresponding to the acts prescribed in subparagraphs 1 and 2, which are likely to hinder the rational decision-making of financial consumers or undermine sound market order; |
| Article 21 (Confirmation by Relevant Association or Institution) |
| (1) | Where the relevant association or institution (hereinafter referred to as "relevant association or institution") under the proviso, with the exception of the subparagraphs, of Article 22 (1) confirms whether an advertisement is in compliance with the advertising-related standards for financial products, etc. pursuant to Article 22 (6) of the Act, it shall target an advertisement of a financial product distributor or advisor (including a financial product sales agent or broker who has concluded an entrustment contract with a financial product distributor) which is its member company. |
| (2) | Where necessary for the relevant association or institution to confirm whether a financial product distributor or advisor complies with advertising-related standards for financial products, etc. pursuant to Article 22 (6) of the Act, they may request submission of data or opinions from relevant institutions, organizations, experts, etc. |
| (3) | Where the relevant association or institution notifies a financial product distributor or advisor of its opinion pursuant to Article 22 (6) of the Act, it shall do so in writing. In such cases, if a financial product distributor or advisor has violated the Act, he or she may notify the Financial Services Commission of such fact. |
| (4) | Details of matters necessary for the procedure, methods, etc. for confirmation by the relevant association or institution, other than those provided in paragraphs (1) through (3), shall be determined and publicly notified by the Financial Services Commission. |
| Article 22 (Provision of Contract Documents) |
| (1) | "Contract documents prescribed by Presidential Decree" in the main clause of Article 23 (1) of the Act means the following documents (hereinafter referred to as "contract documents"): |
| 1. | Contracts of financial products; |
| 2. | Terms and conditions of financial products; |
| 3. | Financial product description (limited to financial product distributors); |
| 4. | Insurance policies under the Commercial Act (limited to insurances among indemnity products); |
| (2) | "Cases prescribed by Presidential Decree" in the proviso of Article 23 (1) of the Act means the following cases: |
| 1. | Where contract documents are provided pursuant to the following Acts: |
| 2. | Other cases determined and publicly notified by the Financial Services Commission where the protection of financial consumers is unlikely to be undermined even if contract documents are not provided in consideration of the details of the contract, the characteristics of financial products, etc. |
| (3) | When a financial product distributor or a financial product advisor provides contract documents pursuant to the main clause of Article 23 (1) of the Act, such contract documents shall be provided by the following methods: Provided, That where a financial consumer requests to provide information by any of the following methods, such method shall be used to provide such information: |
| 1. | Delivery of documents; |
| 3. | Mobile phone text message or equivalent electronic expression of intention. |
| (4) | When providing contract documents pursuant to the main clause of Article 23 (1) of the Act, financial product distributors and financial product advisors shall comply with the following matters. |
| 1. | The fact that the relevant contract documents are provided through the procedures under statutes and internal control standards shall be stated in the relevant contract documents; |
| 2. | Where contract documents are provided by e-mail or a method pursuant to paragraph (3) 3, technical measures shall be taken to prevent the relevant contract documents from being forged or altered; |
| (5) | Except as provided in paragraph (2) through (4), details of matters necessary for the methods of and procedures for providing contract documents shall be determined and publicly notified by the Financial Services Commission. |
| Article 23 (Prohibited Acts of Financial Product Agents and Brokers) |
| (1) | "Acts prescribed by Presidential Decree" in the proviso to Article 25 (1) 1 of the Act means receiving insurance premiums or mutual aid fees in connection with a contract for an indemnity product. |
| (2) | "An act prescribed by Presidential Decree" in the proviso to Article 25 (1) 2 of the Act means any of the following acts: |
| 1. | Having any of the following trustees perform the business of acting as an agent or broker for the conclusion of a contract for an indemnity product, or paying fees, remuneration or other considerations by a trustor for such an act, where any of the following entrustment contracts is concluded: |
| (a) | Where an insurance solicitor concludes an entrustment contract with another insurance solicitor belonging to the same insurance company, insurance agency, or certified insurance broker; |
| (b) | Where an insurance agency concludes an entrustment contract with an insurance solicitor belonging thereto or with another insurance agency of the same insurance company; Provided, That in cases of concluding an entrustment contract with another insurance agency of the same insurance company, prior consent on the terms of the contract shall be obtained from the financial product distributor. |
| (c) | Where a certified insurance broker concludes an entrustment contract with an insurance solicitor belonging thereto or another certified insurance broker; |
| 2. | Engaging an individual financial product distribution agent or broker as an agent or a broker of concluding a contract for deposit products or loan products or paying a fee, remuneration or other reward for such engagement by a corporate financial product distribution agent or broker: |
| (3) | "An act prescribed by Presidential Decree" in the proviso to Article 25 (1) 3 of the Act means any of the following acts: |
| 1. | Concluding a contract on behalf of a financial product distributor. Provided, That cases where the insurance agency has been authorized to manifest intent regarding the contract by the relevant financial product distributor pursuant to article 646-2 of the Commercial Act shall be excluded. |
| 2. | Concluding a contract on behalf of a financial consumer; |
| 3. | Using a business name in advertising or sales a trade name that may mislead a financial consumer into thinking that it is a financial product distributor or financial product advisor; |
| 4. | Compelling a financial product distributor to entrust the agency or brokerage business only to himself or herself or not to entrust it to any other financial product distribution agent or broker; |
| 5. | Using the name of another financial product distribution agent or broker, or allowing another financial product distribution agent or broker to use his or her name; |
| 6. | Other acts corresponding to those under subparagraphs 1 through 5, which are determined and publicly notified by the Financial Services Commission. |
| (4) | The details of property interests under Article 25 (2) of the Act shall be as follows: |
| 1. | Payment or lending of money, etc.; |
| 2. | Compensation for expenses or losses incurred in the course of conducting financial product distribution agency or brokerage business; |
| 3. | Preferential treatment when concluding a contract for financial products dealt with by a financial product distributor; |
| 4. | Other property interests determined and publicly notified by the Financial Services Commission as equivalent to those under subparagraphs 1 through 3. |
| Article 24 (Obligation of Financial Product Distribution Agents and Brokers to Notify) |
| (1) | "Matters prescribed by Presidential Decree" in Article 26 (1) 4 of the Act means the following: |
| 1. | Whether benefits can be received pursuant to the main clause of article 25 (1) 1 of the Act; |
| 2. | Where an entrustment contract referred to in the items of Article 23 (2) 1 is concluded, the name of the financial product distribution agent or broker who has entrusted the business and the details of the entrusted business; |
| 3. | The fact that credit information, personal information, etc. provided by a financial consumer is held and managed by a financial product distributor (excluding a certified insurance broker under the Insurance Business Act); |
| 4. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 3. |
| (2) | Posting a mark and presenting a certificate under Article 26 (2) of the Act shall be in compliance with the following standards: <Amended on Dec. 8, 2022> |
| 1. | Marks or certificates (in cases falling under Article 12 (1) 2 of the Act, marks or certificate issued by a financial product distributor for whom the financial product distribution agent or broker acts as a broker or agent shall be used) issued by an institution that grants authorization, permission, or registration for financial product distribution agency or brokerage business pursuant to finance-related statutes referred to in the provisions, with the exception of, the Act or subparagraph 3 of Article 2 of the Act; |
| 2. | The marks shall always be posted at the workplace and on the website (only applicable if there is a website); |
| Article 25 (Rules on Business Activities of Financial Product Advisors) |
| (1) | "Cases prescribed by Presidential Decree" in the proviso to Article 27 (3) 2 of the Act means cases where a person has been provided with property interests determined and publicly notified by the Financial Services Commission within the limit of 200,000 won. |
| (2) | "Matters determined by Presidential Decree" in Article 27 (3) 6 of the Act means the following: |
| 1. | Remuneration for advisory services and the criteria for determining such remuneration; |
| 2. | The fact that money, etc. is not requested in addition to the remuneration under subparagraph 1; |
| 3. | The fact that a financial consumer shall not be liable for any loss incurred in his or her acquisition or disposition of financial products; |
| (3) | "Characters prescribed by Presidential Decree" in Article 27 (4) of the Act means characters written in English, French, Spanish, Japanese, Chinese, or a foreign language determined and publicly notified by the Financial Services Commission. |
| (4) | "Cases prescribed by Presidential Decree, such as cases where a financial product distributor receives consideration for advice from a financial product distributor" in the proviso to Article 27 (5) 1 of the Act means cases where a financial product distributor receives consideration for a financial product distributor's advice. |
| (5) | "Acts prescribed by Presidential Decree" in Article 27 (5) 2 of the Act means the following acts: |
| 1. | Providing advice on financial products of only a specific financial product distributor; |
| 2. | Using personal information, credit information, etc. of a financial consumer for the benefit of his or her own or of a third party; |
| 3. | Advertising a specific financial product distributor or specific financial product; |
| 4. | Entrusting a third party with advisory services without consent of the financial consumer after concluding a contract for advisory services; |
| 5. | Other acts corresponding to those under subparagraphs 1 through 4, which are determined and publicly notified by the Financial Services Commission. |
| Article 26 (Keeping, Maintenance, and Management of Records) |
| (1) | "Records prescribed by Presidential Decree" in the main clause of Article 28 (1) of the Act means the following data: |
| 1. | Records on the conclusion of contracts; |
| 2. | Records on the performance of the contract; |
| 3. | Records on advertising financial products, etc.; |
| 4. | The following records on the exercise of rights by financial consumers: |
| (a) | Records on the postponement, restriction, and refusal of access to records of financial consumers pursuant to the latter part of Article 28 (4) and Article 28 (5) of the Act; |
| (b) | Records on the withdrawal of an offer under Article 46 of the Act; |
| (c) | Records on the termination of illegal contracts under Article 47 of the Act; |
| 5. | Records on the establishment, operation, etc. of internal control standards; |
| 6. | Matters regarding the entrustment of business affairs; |
| 7. | Other persons determined and publicly notified by the Financial Services Commission as similar to those under subparagraphs 1 through 6. |
| (2) | "Period prescribed by Presidential Decree" in Article 28 (1) of the Act means ten years. Provided, That the following records shall be the period specified in the relevant subparagraph: <Amended on Dec. 8, 2022> |
| 1. | Records in paragraph (1) 1 and 2: Periods as classified as follows: |
| (a) | In cases of an indemnity product, the indemnity period of which exceeds ten years: The indemnity period of the relevant indemnity product; |
| (b) | In cases of a financial instrument, the contract period of which exceeds ten years: The contract period of the relevant financial instrument; |
| 2. | Records referred to in paragraph (1) 5: The period determined and publicly notified by the Financial Services Commission within the limit of five years; |
| 3. | Records referred to in paragraph (1) 7: The period determined and publicly notified by the Financial Services Commission within the limit of ten years; |
| (3) | Where a financial consumer intends to request inspection of records pursuant to Article 28 (3) of the Act, he or she shall submit a written request for inspection determined and publicly notified by the Financial Services Commission to a financial product distributor or advisor. In such cases, the relevant written request shall include matters concerning the purpose, scope, method, etc. of such inspection. |
| (4) | Upon the receipt of a financial consumer's request for inspection of data pursuant to paragraph (3), a financial product distributor or advisor shall make the relevant records available to the financial consumer within six business days from the date of receipt of the request. <Amended on Aug. 1, 2023> |
| (5) | Where a financial product distributor or advisor gives notice of inspection, postponement of inspection, and restriction or refusal of inspection under Article 28 (4) through (6) of the Act, he or she shall make such notification in writing, as determined and publicly notified by the Financial Services Commission. Provided, That where the inspection is notified pursuant to the former part of Article 28 (4) of the Act, such notification may be made by means of telephone, facsimile, e-mail, or mobile phone text message, etc. |
| (6) | "Cases prescribed by Presidential Decree" in Article 28 (5) 3 of the Act means any of the following: |
| 2. | Where there is a risk of unreasonable infringement on privacy or freedom due to disclosure of personal information; |
| 3. | Where it is obvious that records to be inspected are irrelevant to the purpose of inspection; |
| (7) | Where a financial product distributor or advisor requests a financial consumer to charge fees or postal charges pursuant to Article 28 (6) of the Act, he or she shall charge an amount based on actual expenses. In such cases, if necessary for the efficient operation of the affairs of inspection, fees or postal charges may be claimed in advance. |
| (8) | Except as provided in paragraphs (1) through (7), details of matters necessary for the scope of records to be kept and the methods and procedures for inspection of records shall be determined and publicly notified by the Financial Services Commission. |
| Article 27 (Entrustment of Affairs concerning Financial Education) |
| (1) | Pursuant to Article 30 (5) of the Act, the Financial Services Commission may entrust the head of the Financial Supervisory Service under the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Governor of the Financial Supervisory Service") or financial education-related institutions and organizations equipped with expertise determined and publicly notified by the Financial Services Commission with the following affairs may be ed to an institution or organization: |
| 1. | Development of educational programs under Article 30 (2) of the Act; |
| 2. | Implementation of policies under Article 30 (3) of the Act; |
| 3. | Survey of financial capacities under article 30 (4) of the Act; |
| (2) | Where the Financial Services Commission entrusts affairs concerning financial education pursuant to Article 30 (5) of the Act, it shall post matters concerning the trustee, details of entrustment, etc. on the website of the Financial Services Commission. |
| (3) | A person entrusted with business activities concerning financial education pursuant to Article 30 (5) of the Act shall report to the Financial Services Commission a plan for performing business activities, the outcome of performance of business activities, etc., as determined and publicly notified by the Financial Services Commission. |
| Article 28 (Financial Education Council) |
| (1) | "Related administrative agencies prescribed by Presidential Decree" in Article 31 (5) 1 of the Act means the following institutions: |
| 1. | The Financial Services Commission; |
| 2. | The Fair Trade Commission; |
| 3. | The Ministry of Economy and Finance; |
| 4. | The Ministry of Education; |
| 5. | The Ministry of the Interior and Safety; |
| 6. | The Ministry of Health and Welfare; |
| 7. | The Ministry of Employment and Labor; |
| 8. | The Ministry of Gender Equality and Family; |
| (2) | Meetings of the Financial Education Council (hereinafter referred to as the "Council") under Article 31 (1) of the Act shall be held in accordance with the following classifications: |
| 1. | Regular meetings: Twice a year; |
| 2. | Extraordinary meetings: Where the chairperson of the council deems it necessary; |
| (3) | A majority of the members of the Council shall constitute a quorum, and any resolution decision thereof shall require the concurring vote of a majority of those present. Provided, That a resolution may be passed in writing if there are unavoidable circumstances that make it impossible to convene a meeting. |
| (4) | Where deemed necessary for the efficient deliberation of agenda items, the Council may require related institutions, organizations, experts, etc. to attend a meeting to hear their opinions or to submit data. |
| (5) | Except as provided in paragraphs (1) through (4), details of matters necessary for the operation of the Council shall be determined by the chairperson of the Council following a resolution by the Council. |
| Article 29 (Pubic Disclosure of Comparison of Financial Products) |
| (1) | The scope of financial products that the Financial Services Commission may make public disclosures of the comparison pursuant to Article 32 (1) of the Act (hereinafter referred to as "public disclosures of the comparison") shall be as follows: |
| 1. | Deposit among deposit products; |
| 2. | Loans from among loan products; |
| 3. | Collective investment securities among investment instruments; |
| 4. | Insurance among indemnity products; |
| 5. | Other financial products determined and publicly notified by the Financial Services Commission among financial products that ordinary financial consumers may acquire or dispose of; |
| (2) | The public disclosure of comparison of financial products shall include the following matters: |
| 4. | Other information determined and publicly notified by the Financial Services Commission as information necessary for financial consumers to determine whether to conclude a contract for financial products; |
| (3) | Where the Financial Services Commission deems it necessary for the efficient operation of public disclosure of comparison, it may hear the opinions of the related central administrative agencies, local governments, finance-related institutions or organizations, or experts or request them to submit data. |
| (4) | When the Financial Services Commission makes a public disclosure of the comparison, it shall post the details thereof on the website of the Financial Services Commission or in the manner prescribed and publicly notified by the Financial Services Commission. |
| (5) | Except as provided in paragraphs (1) through (4), details of necessary matters for the procedure and methods for public disclosure of comparison shall be determined and publicly notified by the Financial Services Commission. |
| Article 30 (Current Status of Financial Consumer Protection) |
| (1) | "Financial product distributors or advisors prescribed by Presidential Decree" in Article 32 (2) of the Act means financial product distributors or advisors designated every year by the Governor of the Financial Supervisory Service in consideration of the following matters, as determined and publicly notified by the Financial Services Commission: |
| 1. | Size of operation and market share; |
| 2. | Types and nature of financial products dealt with; |
| 4. | Current status of civil petitions or disputes on the relevant financial product; |
| 5. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 4. |
| (2) | The details of the actual state of protection of financial consumers under Article 32 (2) of the Act (hereinafter referred to as "actual condition of protection of financial consumers") shall be as follows: |
| 1. | Matters on the operation of internal control standards; |
| 2. | Matters on the operation of financial consumer protection standards under Article 32 (3) of the Act (hereinafter referred to as "financial consumer protection standards"); |
| (3) | The Governor of the Financial Supervisory Service shall evaluate and publicly announce the current situation of the protection of financial consumers every year. Provided, That where deemed necessary for the protection of financial consumers and sound trading practices, the evaluation and public announcement may be made at any time; |
| (4) | Where the Governor of the Financial Supervisory Service evaluates the current situation of the protection of financial consumers, he or she shall comply with the following matters: |
| 1. | It shall use evaluation indices with credibility and validity; |
| 2. | It shall reflect the characteristics of each type of financial product; |
| 3. | It shall secure objective grounds for evaluation results; |
| 4. | It shall ascertain the opinions of persons being evaluated; |
| (5) | Where the Governor of the Financial Supervisory Service evaluates the current situation of the protection of financial consumers, he or she shall notify in advance in writing the relevant financial product distributor or advisor of matters concerning the period, method, and details of the evaluation, the evaluators, etc. |
| (6) | Where the Governor of the Financial Supervisory Service deems it necessary to evaluate and publicly announce the current situation of the protection of financial consumers, he or she may hear opinions from financial-related institutions, organizations, or experts or request submission of data. |
| (7) | Where the Governor of the Financial Supervisory Service publicly announces the results of evaluation of the current situation of the protection of financial consumers, he or she shall post them on the website of the Financial Supervisory Service and the relevant association, etc. without delay. |
| (8) | Except as provided in paragraphs (1) through (7), details of matters necessary for the procedure and methods for the evaluation of the current situation of the protection of financial consumers and public announcement of the result thereof shall be determined and publicly notified by the Financial Services Commission. |
| Article 31 (Standards for Protection of Financial ConsumerS) |
| (1) | "Financial product distributors or advisors prescribed by Presidential Decree" in Article 32 (3) of the Act means financial product distributors or advisors who are required to prepare internal control standards pursuant to Article 16 (2) of the Act. |
| (2) | The standards for the protection of financial consumers shall include the following matters: |
| 1. | Rights of financial consumers; |
| 2. | Procedures for handling procedures for any civil petitions and disputes; |
| 3. | Organization and human resources for the operation of the standards for the protection of financial consumers; |
| 4. | Inspection, taking measures, and evaluation of compliance with the standards for the protection of financial consumers; |
| 5. | Education and training related to response to civil petitions and disputes; |
| 6. | Procedure for formulating or revising the standards for the protection of financial consumers; |
| 7. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 6. |
| (3) | Article 10 (3) and (4) shall apply mutatis mutandis to the procedures for formulating and revising the standards for the protection of financial consumers. |
| (4) | Except as provided in paragraphs (1) through (3), details of matters necessary for the standards for the protection of financial consumers shall be determined and publicly notified by the Financial Services Commission. |
| Article 32 (Composition of Committee for the Mediation of Financial Disputes) |
| (1) | When the Governor of the Financial Supervisory Service intends to appoint members (excluding members under Article 34 (3) 6 of the Act) of the Committee for the Mediation of Financial Disputes (hereinafter referred to as the "Mediation Committee") under Article 33 of the Act, he or she shall obtain recommendations of at least twice the number of persons to be appointed from the heads of the following institutions or organizations: <Amended on Aug. 1, 2023> |
| 1. | Persons falling under Article 34 (3) 1 of the Act: the following institutions and organizations: |
| (a) | The Minister of Justice; |
| (b) | The National Court Administration; |
| (c) | The Korea Legal Aid Corporation established under the Legal Aid Act; |
| 2. | Persons falling under Article 34 (3) 2 of the Act: the following institutions and organizations: |
| 3. | A person falling under Article 34 (3) 3 of the Act: A relevant association or institution: |
| 4. | A person falling under Article 34 (3) 4 of the Act: the following institutions and organizations: |
| (b) | A relevant association or institution; |
| 5. | A person falling under Article 34 (3) 5 of the Act: the following institutions and organizations: |
| (2) | Except as provided in paragraph (1), details of matters necessary for the composition, operation, etc. of the Committee for Mediation shall be prescribed by the Governor of the Financial Services Commission. <Newly Inserted on Aug. 1, 2023> |
| Article 33 (Procedure for Mediation of Disputes) |
| (1) | Where many persons jointly apply for the mediation of a dispute pursuant to Article 36 (1), not more than three representatives may be selected from among them. |
| (2) | When deciding whether to recommend a settlement by agreement under the main clause, with the exception of the subparagraphs, of Article 36 (2) of the Act, the Governor of the Financial Supervisory Service shall consider whether proceeding with the mediation procedure through the settlement recommendation procedure is necessary for the prompt and smooth resolution of the dispute. <Newly Inserted on Aug. 1, 2023> |
| (3) | Where the Governor of the Financial Supervisory Service deems it necessary to recommend an agreement under the main clause, with the exception of the subparagraphs, of Article 36 (2) of the Act, he or she may request the parties (including agents) to state their opinions or submit data. <Amended on Aug. 1, 2023> |
| (4) | "Cases prescribed by Presidential Decree" in Article 36 (2) 3 of the Act means the following: <Amended on Aug. 1, 2023> |
| 1. | Where a lawsuit is filed before it is referred to the Mediation Committee; |
| 2. | Where he or she has failed to comply with a request for supplementation of the contents of the application on at least two occasions; |
| 3. | Where the details of the application have no direct stake in the applicant; |
| (5) | Where the Governor of the Financial Supervisory Service gives notice pursuant to Article 36 (3) of the Act, he or she shall also notify the reason why he or she does not recommend a settlement or refer the case to the Mediation Committee. <Amended on Aug. 1. 2023> |
| (6) | Where the Governor of the Financial Supervisory Service who has received an application for dispute mediation under Article 36 (1) of the Act refers to the Mediation Committee without recommending an agreement under the main clause, with the exception of the subparagraphs, of paragraph (2) of that Article, the deadline for preparing a mediation proposal by the Mediation Committee shall be prescribed in Article 36 (5). <Newly Inserted on Aug. 1. 2023> |
| (7) | Where a party accepts an agreement under Article 36 (6) of the Act, the Mediation Committee shall prepare a mediation protocol in which the members who have participated in the mediation and the disputing parties have their names and seals affixed or signed. <Amended on Aug. 1. 2023> |
| (8) | Except as provided in paragraph (1) through (7), details of matters necessary for the composition, operation, etc. of the Mediation Committee shall be prescribed by the Governor of the Financial Services Commission. <Newly Inserted on Aug. 1, 2023> |
| Article 34 (Meetings of Mediation Committee) |
| (1) | When composing a meeting of the Mediation Committee pursuant to Article 37 (1) of the Act, the Chairperson of the Mediation Committee (hereinafter referred to as "Chairperson") shall comply with the following standards. <Amended on Aug. 1, 2023> |
| 1. | The commissioned members referred to in Article 34 (3) 2 and Article 34 (3) 3 of the Act shall be appointed in the same number of at least one person, respectively; |
| 2. | To ensure the independence of the Mediation Committee and the fairness of meetings thereof, commissioned members under each subparagraph of article 34 (3) of the Act shall be appointed; |
| 3. | The Chairperson shall appoint a member in the field of financial products related to the contents of the application for dispute mediation; |
| (2) | The Mediation Committee shall notify the members designated pursuant to Article 37 (1) of the Act of the date, venue, and agenda of the meeting by no later than one week before the date of the meeting. Provided, That where the Chairperson deems it urgent, he or she may notify the meeting by the day before the meeting is held. |
| (3) | The Mediation Committee shall allow parties to attend meetings and make statements unless there is a compelling reason not to do so. |
| (4) | Except as provided in paragraph (1) through (3), details of matters necessary for the composition, operation, etc. of the Mediation Committee shall be prescribed by the Governor of the Financial Services Commission. <Newly Inserted on Aug. 1, 2023> |
| Article 35 (Notice of Proceedings) |
| (1) | If a lawsuit is filed before being referred to the Mediation Committee pursuant to Article 33 (4) 1, the parties shall notify the Governor of the Financial Supervisory Service of the fact without delay. <Amended on Aug. 1, 2023> |
| (2) | Where the court of a lawsuit suspends litigation proceedings pursuant to Article 41 (1) of the Act, the parties shall notify the Governor of the Financial Supervisory Service of such fact without delay. |
| (3) | Where the Mediation Committee suspends mediation proceedings pursuant to Article 41 (2) and (3) of the Act, the Governor of the Financial Supervisory Service shall notify the parties thereof without delay. |
| (4) | Except as provided in paragraph (1) through (3), details of matters necessary for the composition, operation, etc. of the Mediation Committee shall be determined by the Governor of the Financial Services Commission. <Newly Inserted on Aug. 1, 2023> |
| Article 36 (Standards for Small-Amount Dispute Case) |
"Amount determined by Presidential Decree" in subparagraph 2 of Article 42 of the Act means 20 million won.
| Article 37 (Withdrawal of Offer) |
| (1) | "Indemnity products, investment products, and loan products prescribed by Presidential Decree" in, with the exception of the subparagraphs, Article 46 (1) of the Act, means financial products classified as follows: |
| 1. | Indemnity products: financial products other than the following: |
| (a) | A guarantee insurance under the Insurance Business Act, which requires a third party's consent to withdrawal of offer; |
| (b) | Liability insurance under the Motor Vehicle Accident Compensation Guarantee Act: Provided, That this shall not apply where an ordinary financial consumer has purchased another liability insurance of the same kind. |
| (c) | A financial product the indemnity period of which is the period determined and publicly notified by the Financial Services Commission within the limit of one year; |
| (d) | Other indemnity products determined and publicly notified by the Financial Services Commission, the offer withdrawal of which is highly likely to undermine sound market practices. |
| 2. | Investment products: the following financial products: Provided, That this shall not apply where an ordinary financial consumer agrees to manage the deposited money, etc. within the period for withdrawal of offer under article 46 (1) 2 of the Act;. |
| 3. | Indemnity products: financial products other than the following: |
| (a) | Facility leasing, installment financing, and deferred payment sales under the Specialized Credit Finance Business Act (applicable only to cases where goods under the relevant contract are provided within the period of offer withdrawal under Article 46 (1) 3 of the Act) |
| (c) | Provision of credit pursuant to Article 72 (1) of the Capital Market and Financial Investment Services Act (applicable only to cases where securities provided as collateral are disposed of within the period of offer withdrawal pursuant to Article 46 (1) 3 of the Act); |
| (d) | Other loan products determined and publicly notified by the Financial Services Commission, the offer withdrawal of which is highly likely to undermine sound market practices. |
| (2) | When calculating the offer withdrawal period under Article 46 (1) of the Act for financial products under paragraph (1) 2 (b) or (d), for financial products for which a consideration period is granted pursuant to Article 99 (4) 1-2 (b) or Article 109 (3) 1-2 (b) of the Enforcement Decree of the Capital Markets and Financial Investment Services Act , the relevant consideration period shall be excluded from the calculation. <Newly Inserted December 8, 2022> |
| (3) | "Method prescribed by Presidential Decree" in Article 46 (2) 1 of the Act means the following methods: <Amended on Dec. 8, 2022> |
| 2. | Mobile phone text message or equivalent electronic expression of intention; |
| 3. | Other information determined and publicly notified by the Financial Services Commission as similar to those under subparagraphs 1and 2. |
| (4) | When an ordinary financial consumer dispatches a written notice or other means (referring to a written notice or other means under subparagraph 1 of that paragraph) pursuant to subparagraph 1 or 2 of Article 46 (2) of the Act, he or she shall notify the financial product distributor of the fact without delay. <Amended on Dec. 8, 2022> |
| (5) | "Interest prescribed by Presidential Decree" in Article 46 (2) 2 (b) of the Act means interest calculated by applying the interest rate specified in the contract for the relevant financial product for the period from the date when an ordinary financial consumer receives money from a financial product distributor or advisor to the date when he or she the returns money. <Amended on Dec. 8, 2022> |
| (6) | "Expenses prescribed by Presidential Decree, such as fees" in Article 46 (2) 2 (c) of the Act, means the following costs already paid by a financial product distributor or advisor to a third party for the relevant financial product contract: <Amended on Dec. 8, 2022> |
| 1. | Other taxes and public charges, such as stamp tax, etc.; |
| 2. | Expenses incurred in relation to the establishment of a mortgage, etc.; |
| 3. | Other expenses determined and publicly notified by the Financial Services Commission as similar to those under subparagraphs 1and 2. |
| (7) | Where a financial product distributor or advisor returns money (including interest and fees) to an ordinary financial consumer pursuant to Article 46 (3) of the Act, it shall deposit it into an account designated by the relevant ordinary financial consumer. <Amended on Dec. 8, 2022> |
| (8) | Where a financial product distributor or advisor returns money, goods or services to an ordinary financial consumer pursuant to Article 46 (3) of the Act, the amount calculated by multiplying the price of money, goods, or services by an overdue interest rate specified in the contract for the relevant financial product shall be paid on a daily basis. <RAmended on Dec. 8, 2022> |
| (9) | Except as provided in paragraphs (1) through (8), details of matters necessary for the procedure, methods, etc. for exercising the right to withdraw an offer shall be determined and publicly notified by the Financial Services Commission. <Newly Inserted on Jun. 28, 2016> |
| Article 38 (Termination of Illegal Contract) |
| (1) | "Financial products prescribed by Presidential Decree" in the former part of Article 47 (1) of the Act means financial products determined and publicly notified by the Financial Services Commission from among financial products in which continuous transactions occur between financial consumers and financial product direct distributors or financial product advisors. |
| (2) | In the former part of Article 47 (1) of the Act, "period prescribed by Presidential Decree" refers to a period within one year from the date the financial consumer becomes aware of the violation of contract conclusion. In such cases, the relevant period shall be within five years from the date of contract conclusion. |
| (3) | Where a financial consumer intends to demand the termination of a contract pursuant to the former part of Article 47 (1) of the Act, he or she shall submit a written demand for termination determined and publicly notified by the Financial Services Commission to the financial product distributor or advisor, along with documents proving the violation. In such cases, when a request for termination of liability insurance under the Guarantee of Motor Vehicle Accident Compensation Act is made, the person shall be insured with another liability insurance of the same kind. |
| (4) | The scope of good causes under Article 47 (2) of the Act shall be as follows: |
| 1. | Where he or she fails to present grounds for violations or presents false grounds; |
| 2. | Where no violation has been committed at the time of the conclusion of the contract, but the financial consumer alleges the violation due to changes in circumstances after the conclusion of the contract; |
| 3. | Where he or she corrects any violation with the consent of the financial consumer; |
| 4. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 3. |
| (5) | Except as provided in paragraph (1) through (4), details of matters necessary for the methods and procedure for the exercise of the right to demand the termination of a contract shall be determined and publicly notified by the Financial Services Commission. |
| Article 39 (Submission of Business Report) |
| (1) | "Period prescribed by Presidential Decree" in Article 48 (2) of the Act means 45 days. |
| (2) | The business report pursuant to Article 48 (2) of the Act shall include the following matters: |
| 2. | Human resources and financial status; |
| 3. | Scope of financial products for advisory; |
| 4. | Procedure for the provision of advisory service; |
| 5. | Internal control standards and standards for financial consumer protection; |
| 6. | Criteria for remuneration and determination thereof; |
| 7. | Matters concerning whether a relevant person falls under any item of Article 12 (4) 1 of the Act; |
| 8. | Other matters determined and publicly notified by the Financial Services Commission as similar to those under subparagraphs 1 through 7. |
| (3) | "Persons prescribed by Presidential Decree" in Article 48 (3) of the Act means financial product distributors or advisors and "matters prescribed by Presidential Decree" means matters concerning registration requirements under Article 12 (2) through (4) of the Act. |
| (4) | A financial product distributor or advisor who reports changes pursuant to Article 48 (3) of the Act shall submit to the Financial Services Commission a report determined and publicly notified by the Financial Services Commission, along with documents proving the changes. |
| Article 40 (Financial Services Commission's Power to Issue Orders) |
| (1) | "Matters prescribed by Presidential Decree" in Article 49 (1) 5 of the Act means the following: |
| 1. | Internal control standards and standards for financial consumer protection; |
| 2. | Fees and remuneration; |
| (2) | "Cases prescribed by Presidential Decree" in Article 49 (2) of the Act means cases where it is clearly recognized that substantial damage to the property of financial consumers is likely to occur due to the conclusion and execution of a contract for investment products, indemnity products or loan products: |
| Article 41 (Dispositions against Financial Product Distributors or Advisors) |
| (1) | "Cases prescribed by Presidential Decree" in the proviso of Article 51 (1) 2 of the Act means the following cases: |
| 1. | Where a financial product distributor or advisor fails to meet requirements for human resources under Article 12 (2) 1 or Article 12 (3) 3 of the Act due to the retirement of an executive officer or an employee and comes to meet such requirements again within 60 days from the date the requirements are not met; |
| 2. | Where an executive fails to meet the requirements provided in Article 12 (2) 4 or (3) 2 of the Act and the relevant executive is replaced with another within six months from the date he or she fails to meet such requirements; |
| 3. | Where a financial product distributor or advisor fails to meet any of the requirements prescribed in Article 12 (2) 1 (excluding the requirements for human resources) or Article 12 (2) 2 of the Act without any cause attributable to him or her and the relevant requirements are met again within the period determined and publicly notified by the Financial Services Commission, which shall not exceed six months; |
| (2) | "Cases prescribed by Presidential Decree" in the proviso of Article 51 (1) 5 of the Act means the following cases: |
| 1. | Where a financial product distributor or advisor fails to comply with an order under Article 49 (2) of the Act; |
| 2. | Where a financial product distributor or advisor fails to continue to conduct business for at least one year without good cause; |
| 3. | Where he or she receives money, etc. from a third party in connection with his or her business by unlawful means or receives money, etc. payable to a financial consumer; |
| 4. | Where he or she has repeatedly committed the same offense not less than the number of times determined and publicly notified by the Financial Services Commission within the period determined and publicly notified by the Financial Services Commission within three years from the date he or she is subject to a measure under the subparagraphs of Article 51 (2) of the Act; |
| (3) | "Cases prescribed by Presidential Decree" in the main clause, with the exception of the subparagraphs, of Article 51 (2) of the Act means cases falling under each subparagraph of attached Table 1. |
| (4) | "Measures prescribed by Presidential Decree" in Article 51 (2) 7 of the Act means the following measures: |
| 1. | Suspending all or part of business office; |
| 2. | Notification to an investigative agency; |
| 3. | Request to another administrative agency for administrative dispositions; |
| 4. | Request for improvement of management or business affairs; |
| (5) | Where the Financial Services Commission or the Governor of the Financial Supervisory Service revokes the registration of a financial product distributor or advisor takes other measures pursuant to Article 51 of the Act, he or she shall notify the financial product distributor or advisor of the fact and the grounds therefor in writing. |
| Article 42 (Measures against Executive Officers and Employees of Financial Product Distributors and Advisors) |
| (1) | "Cases prescribed by Presidential Decree" in the provisions, with the exception of the subparagraphs, of Article 52 (1) and (2) of the Act means the cases specified in each subparagraph of Attached Table 1. |
| (2) | Where the Financial Services Commission or the Governor of the Financial Supervisory Service takes measures against an executive officer or employee of a financial product distributor or employee or requests a financial product distributor or advisor to take measures pursuant to Article 52 of the Act, he or she shall notify such fact and the grounds therefor in writing. |
| Article 43 (Standards for Calculation of Revenue) |
| (1) | When calculating revenue under the main clause, with the exception of the subparagraphs, of Article 57 (1) of the Act (hereinafter referred to as "revenue"), all forms of money, etc. obtained from financial consumers through the conclusion and performance of contracts, regardless of their names shall be calculated; Provided, That expenses under Article 37 (6) shall be excluded herefrom. <Amended on Dec. 8, 2022> |
| (2) | "Cases prescribed by Presidential Decree" in the proviso, with the exception of the subparagraphs, of Article 57 (1) of the Act means the following cases: |
| 1. | Where there is no revenue generated from the contract related to the violation due to reasons such as no business performance; |
| 2. | Where it is impracticable to calculate revenue due to reasons such as disappearance or destruction of data necessary for calculating revenue due to a disaster; |
| (3) | The criteria for imposing penalty surcharges under Article 57 (3) of the Act shall be as specified in attached Table 2. |
| Article 44 (Imposition of Penalty Surcharges) |
| (1) | Where the Financial Services Commission imposes a penalty surcharge pursuant to Article 58 of the Act, it shall give a written notice on the type of violation, the amount of the penalty surcharge, and the method of raising an objection. |
| (2) | A person who receives a notice under paragraph (1) shall pay penalty surcharges to a receiving agency determined and publicly notified by the Financial Services Commission within 60 days from the date of receiving such notice. |
| (3) | Upon receipt of a penalty surcharge under paragraph (2), the receiving agency shall issue a receipt to the payer and notify the Financial Services Commission of the fact that it has received the penalty surcharge without delay. |
| (4) | "Standards prescribed by Presidential Decree" in Article 58 (1) of the Act means the following criteria for imposing penalty surcharges: |
| 1. | Penalty surcharges under article 57 (1) of the act: Criteria for imposing penalty surcharges under attached Table 3; |
| 2. | Penalty surcharges under Article 57 (3) of the Act: Criteria for imposing penalty surcharges under attached Table 2; |
| (5) | Except as provided in paragraphs (1) through (4), details of matters necessary for the imposition of penalty surcharges shall be determined and publicly notified by the Financial Services Commission. |
| Article 45 (Extensions of Payment Deadline for Penalty Surcharges and Payment by Installment) |
Where the Financial Services Commission extends the payment deadline of a penalty surcharge or allows a person obligated to pay a penalty surcharge to pay penalty surcharges in installments under Article 60 (1) of the Act pursuant to the proviso to Article 29 the Framework Act on Public Administration, the extension of the payment deadline shall not exceed one year from the day following the payment deadline. The interval between each installment payment period shall not exceed four months, and the number of installment payments shall not exceed three times. [This Article Wholly Amended on Dec. 12, 2023]
| Article 46 (Collection of Penalty Surcharges and Disposition on Delinquency) |
| (1) | "Additional charge prescribed by Presidential Decree" in the main clause of Article 61 (1) of the Act means the amount calculated by applying an interest rate of 6/100 per annum to the amount in arrears. |
| (2) | Where the Commissioner of the National Tax Service is entrusted with the work related to the collection of penalty surcharges and additional charges or disposition on the delinquency by the Financial Services Commission pursuant to Article 61 (3) of the Act, he or she shall inform the Financial Services Commission of the results or progress of handling the work. |
| Article 47 (Additional Charges on Refund) |
"Interest rate on the additional charges prescribed by Presidential Decree" in Article 63 of the Act means the interest rate determined and publicly notified by the Financial Services Commission, in consideration of average interest rates on time deposits with one-year maturity sold by banks.
| Article 48 (Disposition of Deficiency) |
"Cases prescribed by Presidential Decree" in subparagraph 6 of Article 64 of the Act means any of the following: | 2. | Where it is determined and publicly notified by the Financial Services Commission as recognized that it is impossible to collect penalty surcharges due to inevitable reasons. |
| Article 49 (Entrustment of Business Affairs) |
| (1) | The Financial Services Commission entrusts the following business affairs to the Governor of the Financial Supervisory Service pursuant to Article 65 (1) of the Act. Provided, That matters related to the Korea Development Bank under the Korea Development Bank Act and the Industrial Bank of Korea under the Industrial Bank of Korea Act from among the business affairs in subparagraph 7, are excluded. |
| 1. | Registration of financial product sales agents or brokers pursuant to Article 12 (1) of the Act (only applicable to financial product distribution agents or brokers who are corporations with 100 or more individual financial product distribution agents or brokers who deal with loan products, and a financial product distribution agent or broker which is a corporation that engages in financial product sales agency or brokerage business only in an automated manner using electronic apparatus pursuant to the Electronic Financial Transactions Act) |
| 2. | Review of registration requirements for financial product advisory businesses pursuant to Article 12 (2) of the Act (including requests for a fact-finding survey or data pursuant to Article 8 (3) and (4) of this Decree) |
| 3. | Comparative disclosure of financial products pursuant to Article 32 (1) of the Act; |
| 4. | Receipt of business reports under article 48 (2) of the Act; |
| 5. | Receipt and review of reports on changes under Article 48 (3) of the Act by the following persons: |
| (a) | A financial product advisor registered pursuant to Article 12 (1) of the Act; |
| (b) | A financial product distribution agent or broker who is a corporation with 100 or more individual financial product distribution agents or brokers who deal with loan products; |
| (c) | A financial product distribution agent or broker who is an corporation engaging in financial product distribution agency or brokerage business only in an automated manner using an electronic apparatus under the Electronic Financial Transactions Act; |
| 6. | Measures under Article 51 (2) 5 and 6 of the Act against the following financial product distributors or advisors: |
| (a) | A person who falls under subparagraph 6 (b) of Article 2 of the Act; |
| (b) | A financial product distributor or advisor registered pursuant to Article 12 (1) of the Act; |
| (c) | A person who falls under Article 2 (6) 5 of the Act; |
| (e) | Credit unions and the National Credit Union Federation under the Credit Unions Act; |
| (f) | Credit service providers and loan brokers; |
| (g) | Online investment-linked financial business entities. |
| 7. | Measures under Article 51 (2) 7 of the Act (applicable only to measures under Article 41 (4) 4 of this Decree) |
| 8. | Measures under Article 52 (1) 3 of the Act against financial product distributors or advisors under the provisions of subparagraphs 6 (d) through (g). |
| 9. | Measures under Article 52 (1) 4 and 5 of the Act against the following financial product distributors or advisors: |
| 10. | Request for a measure under Article 52 (2) 1 of the Act against persons falling under subparagraph 6 (e) and (f); |
| 11. | Request for measures under Article 52 (2) 2 through 5 of the Act on financial product distributors or advisors in each item of subparagraph 6; |
| 12. | Notification pursuant to the former part of Article 53 of the Act (applicable only to notification regarding business affairs entrusted pursuant to subparagraphs 8 to 11); |
| 13. | Receipt of objection pursuant to Article 55 (1) of the Act; |
| (2) | The Financial Services Commission entrusts the following tasks to the relevant association or institution pursuant to Article 65 (1) of the Act. |
| 1. | Registration of financial product agents or brokers regarding loan products and mutual aid under Article 12 (1) of the Act (excluding registration of financial product sales agents or brokers under paragraph (1) 1); |
| 2. | Receipt of report on changes pursuant to Article 48 (3) by a financial product sales agent or broker under subparagraph 1. |
| (3) | Pursuant to Article 65 (2) of the Act, the Governor of the Financial Supervisory Service may entrust a part of inspections under Article 50 (1) of the Act (only applicable to inspections of financial product sales agents and brokers regarding loan products and of financial product sales agents and brokers regarding deductions excluding the persons in the following subparagraphs) to a relevant association or institution that meets the human and physical standards to perform such business affairs. In such cases, when the relevant affairs are entrusted, information regarding the trustee and details of the entrustment, etc. shall be posted on the website of the Financial Supervisory Service's Internet. |
| 1. | A financial product sales distributor or broker under paragraph 1 (1); |
| 3. | An online investment-linked financial business entity. |
| (4) | The Governor of Financial Supervisory Service and the relevant association or institution shall report the results of conducting business affairs entrusted pursuant to paragraphs (1) and (2) to the Financial Services Commission, as determined and publicly notified by the Financial Services Commission. |
| Article 50 (Handling Sensitive Information and Personally Identifiable Information) |
| (1) | Where it is unavoidable for the Financial Services Commission (including those entrusted with affairs pursuant to Article 49 (1) and (2)) or the Governor of the Financial Supervisory Service (including those entrusted with affairs pursuant to Article 49 (3)) to perform the following affairs, the Commission or Governor may handle health-related information pursuant to Article 23 of the Personal Information Protection Act (applicable only to the affairs of subparagraph 3), genetic information pursuant to Article 18 of the Enforcement Decree of that Act (applicable only to the affairs of subparagraph 3), or criminal record data (applicable only to the affairs of subparagraphs 1 through 3), data containing resident registration number, passport number, driver's license number, or alien registration number pursuant to Article 19 of that Decree. |
| 1. | Registration of financial product distributors or advisors pursuant to Article 12 of the Act; |
| 2. | Composition of the Mediation Committee pursuant to Article 34 of the Act; |
| 3. | Mediation of disputes under Article 36 of the Act; |
| 4. | Supervision, submission of business reports, and confirmation of changes in registration requirements pursuant to Article 48 of the Act; |
| 5. | An order to take measures or to restrict or prohibit under Article 49 of the Act; |
| 7. | Dispositions and measures under Article 51 of the Act; |
| 9. | Notification of measures taken against retired executives or retired employees pursuant to Article 53 of the Act; |
| 10. | The following affairs related to the imposition and collection of penalty surcharges: |
| (a) | Imposition of penalty surcharges under Article 57 of the Act; |
| (b) | Processing of objections pursuant to Article 59 of the Act; |
| (c) | Collection of penalty surcharges under Article 61 of the Act; |
| 1. | Business affairs concerning liability for damages under Articles 44 and 45; |
| 2. | Business affairs concerning the withdrawal of an offer under Article 46 of the Act; |
| 3. | Business affairs concerning the termination of illegal contracts under Article 47 of the Act; |
| Article 51 (Criteria for Imposition of Administrative Fines) |
The criteria for imposing administrative fines under Article 69 (1) through (4) of the Act shall be as prescribed in attached Table 4. <Amended on Oct. 4, 2023> [Title Amended on Oct. 4, 2023]
ADDENDA <Presidential Decree No. 31553, Mar. 23, 2021>
Article 1 (Enforcement Date)
This decree will enter into force on March 25, 2021. Provided, That the provisions of the following subparagraphs shall enter into force from the date as classified in each subparagraph.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 32274, Dec. 28, 2021>
Article 1 (Enforcement Date)
This Decree shall enter into force on Dec. 30, 2021.
Articles 2 through 14 Omitted.
ADDENDA <Presidential Decree No. 33037, Dec. 8, 2022>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to Application of Principles of Suitability and Appropriateness to Foreign Currency Insurance)
The amended provisions of Article 11 (1) 1 (c) shall begin to apply to cases where a conclusion of an insurance product contract is solicited (including cases where a financial product advisor provides advisory service) or where a sales contract is concluded after this Act enters into force. Article 3 (Applicability to Prohibition of Unfair Business Practices in Concluding Financial Product Contracts)
The amended provisions of Article 15 (2) and paragraph 4 (1) (a) of that Article shall begin to apply to cases where a financial product contract is concluded after the enforcement of this Decree. Article 4 (Applicability to Prohibition of Unfair Solicitation in Soliciting Conclusion of Financial Product Contracts)
The amended provisions of Article 16 (1) 1 shall begin to apply to cases where a conclusion of an insurance product contract is solicited after the enforcement of this Decree. Article 5 (Applicability to Maintenance and Management Period of Financial Product Contract-related Data)
The amended provisions of Article 26 (2) 1 (b) shall also apply to financial products whose contract period has not expired as at the time this Decree enters into force. Article 6 (Transitional Measures concerning Persons Classified as Ordinary Financial Consumers in Cases of Over-the-Counter Derivatives Contracts)
Notwithstanding the amended provisions of Article 2 (11), a financial consumer who has concluded a contract for over-the-counter derivatives or made an offer to a contract for over-the-counter derivatives pursuant to the previous provisions of Article 2 (10) 3 before this Decree enters into force and fails to notify a financial product distributor or advisor of his or her intension to be treated the same as a professional financial consumer shall be deemed an ordinary financial consumer until the contract period of the relevant over-the-counter derivative expires.
ADDENDA <Presidential Decree No. 33656, Aug. 31, 2023>
Article 1 (Enforcement Date)
This Decree shall enter into force three months after the date of its promulgation. Provided, That the amended provisions of Article 2 (10) 1 (g) (iii), the proviso to Article 14 (1), and Article 26 (4) shall enter into force on the date of its promulgation. Article 2 (Applicability to Principle of Appropriateness)
The amended provisions of Article 12 (1) 3 (b) shall begin to apply to a conclusion of contracts for loan products secured by securities after this Decree enters into force. Article 3 (Transitional Measures concerning Period for Inspection of Data)
Notwithstanding the amended provisions of Article 26 (4), the previous provisions shall apply to the period of inspecting data where a request therefor is received pursuant to Article 26 (3) before the enforcement date under the proviso to Article 1 of the Addenda.
ADDENDUM <Presidential Decree No. 33784, Oct. 4, 2023>
This Decree shall enter into force on October 12, 2023.
ADDENDUM <Presidential Decree No. 33913, Dec. 12, 2023>
This Decree shall enter into force on the date of its promulgation.