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| 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: |
| (a) | Derivatives and derivatives-linked securities under the Financial Investment Services and Capital Markets Act (excluding securities under each subparagraph of Article 7 (2) of the Enforcement Decree of the same Act); |
| (b) | Corporate bonds which can be converted into stocks or the obligation of which to repay principal and interest can be reduced if certain circumstances occur (excluding bonds under Article 469 (2), Article 513 or 516-2 of the Commercial Act) |
| (c) | Highly complex financial investment instruments, highly complex discretionary investment contracts, and highly complex money trust contracts under the Enforcement Decree of the Financial Investment Services and Capital Markets Act; |
| (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: |
| (a) | Loans collateralized on housing defined in subparagraph 1 of Article 2 of the Housing Act; |
| (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 |
| (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 |
| (7) | Article 11 (6) and (7) shall apply |