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| Article 74 (Separate Depositing of Investor's Deposit) |
| (1) | An investment trader or investment broker shall separate an investor's deposit (referring to money deposited by investors in connection with the trading of financial investment instruments and other transactions; hereinafter the same shall apply) from its proprietary property and shall place it in a deposit or trust account with a securities finance company. |
| (2) | Notwithstanding paragraph (1), any investment trader or investment broker prescribed by Presidential Decree, from among the concurrently-run financial investment entities, may place the investor's deposit in a trust with a trust business entity (excluding securities finance companies; hereafter in this Article the same shall apply) instead of placing it in a deposit or trust account under paragraph (1). In such cases, if the investment trader or investment broker runs a trust business, it may execute a self-contract, notwithstanding Article 3 (1) of the Trust Business Act. <Amended on Jul. 25, 2011> |
| (3) | In placing an investor's deposit in a deposit or trust account with a securities finance company or a trust business entity (hereafter in this Article referred to as "depository institution") in accordance with paragraph (1) or (2), every investment trader or investment broker shall indicate that the investor's deposit is the investor's property. |
| (4) | No one shall offset or seize (including provisional seizure) an investor's deposit placed in any deposit or trust account with a depository institution in accordance with paragraph (1) or (2), and neither the investment trader nor the investment broker who has placed the investor's deposit in a deposit or trust account (hereafter in this Article referred to as "depositing financial investment business entity") shall transfer or provide as collateral any investor's deposit placed in a deposit or trust account with a depository institution, except in circumstances prescribed by Presidential Decree. |
| (5) | A depository institution shall, if a depositing financial investment business entity falls under any of the following cases, preferentially pay the investor's deposit placed in a deposit or trust account to the investor in accordance with the method and procedure prescribed by Presidential Decree: <Amended on Jun. 8, 2021> |
| 1. | Where authorization is revoked; |
| 2. | Where a resolution for dissolution is passed; |
| 3. | Where bankruptcy is declared; |
| 4. | Where the transfer of all financial investment business under Article 6 (1) 1 and 2 is approved; |
| 5. | Where the complete discontinuance of all financial investment businesses under Article 6 (1) 1 and 2 is approved; |
| 6. | Where it is ordered to completely suspend the financial investment business under Article 6 (1) 1 or 2; |
| 7. | Where any cause or event similar to those under subparagraphs 1 through 6 occurs. |
| (6) | The Financial Services Commission shall, if a cause falling under any subparagraph of paragraph (5) occurs, immediately notify the relevant depositing financial investment business entity, the depository institution, and the Korea Deposit Insurance Corporation under the Depositor Protection Act (hereinafter referred to as the "Korea Deposit Insurance Corporation") of the fact. <Added on Jun. 8, 2021> |
| (7) | A depository institution in receipt of a notice under paragraph (6) shall provide the Korea Deposit Insurance Corporation with information related to separate deposit of investors' deposits, and shall publicly announce the time and place of payment of the investors' deposits and other matters related to the payment of the investors' deposits through at least two daily newspapers, its website, etc. within two months from the date of receipt of the notice: |
| (8) | Where a depository institution pays the investor's deposit under paragraph (5), if the investor is a person related to insolvency under Article 21-2 (1) of the Depositor Protection Act or is in a special relationship with the related person prescribed by Presidential Decree, it shall withhold the payment of the investor's deposit within six months from the date of public notice of the time of the payment of the investor's deposit under paragraph (7), as prescribed by Presidential Decree. <Added on Jun. 8, 2021> |
| (9) | If any cause falling under any subparagraph of paragraph (5) occurs, notwithstanding Article (1) of the Act on Real Name Financial Transactions and Confidentiality and Articles 32 and 33 of the Credit Information Use and Protection Act, a depositing financial investment business entity may provide information or data on the details of financial transactions under Article 4 of the Act on Real Name Financial Transactions and Confidentiality and personal credit information under Article 32 91) of the Credit Information Use and Protection Act for the purpose of having the depositing institution use it for payment of investor deposits in accordance with the methods and procedures prescribed by the Financial Services Commission with respect to the following matters: <Added on Jun. 8, 2021> |
| 1. | Scope of information that can be provided; |
| 2. | Processing method such as encryption of investor information; |
| 3. | Separate storage of investor information; |
| 4. | Period and purpose of use of investor information; |
| 5. | Deletion of investor information when the period of use has elapsed; |
| 6. | Other matters prescribed by Presidential Decree for strict management of investor information. |
| (10) | Where a depository institution directly pays an investor's deposits to an investor pursuant to paragraph (5), the depository institution's obligation to pay investors' deposits to the depository financial investment business entity and the depository financial investment business entity's obligation to pay the investor's deposits to the investor shall be deemed to have expired, respectively, within the scope thereof. <Added on Jun. 8, 2021> |
| (11) | Where any of the causes or events provided for in subparagraphs of paragraph (5) occurs in relation to a depository institution, the depository institution shall return the investor's deposit placed in a deposit or trust account by a depositing financial investment business entity, preferentially to the depositing financial investment business entity. |
| (12) | A depository institution shall manage the investor's deposit in any of the following manners: |
| 1. | Purchasing state bonds or local government bonds; |
| 2. | Purchasing debt securities with a guarantee of payment by the State, a local government, or any financial institution prescribed by Presidential Decree; |
| 3. | A method prescribed by Presidential Decree as unlikely to undermine the stable management of the investor's deposit. |
| (13) | The scope of the investor's deposit which an investment trader or investment broker shall place in a deposit or trust account with a depository institution in accordance with paragraph (1) or (2), the ratio of the deposit or trust, the withdrawal of the investor's deposit placed in a deposit or trust account, the management of the investor's deposit by a depository institution, and other matters pertaining to placing the investors' deposit in a deposit or trust, shall be prescribed by Presidential Decree. In such cases, the ratio of the deposit or trust applicable to each authorized investment trader or investment broker may differ depending upon the financial status of each investment trader or investment broker. |