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ACT ON THE PROTECTION OF FINANCIAL CONSUMERS
| ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.21065 | 20260102 |
| ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.20305 | 20240814 |
| ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.19532 | 20231012 |
| ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.17799 | 20211230 |
| ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.17292 | 20210325 |
| ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.17112 | 20210325 |
CHAPTER I GENERAL PROVISIONS
| Article 1 (Purpose) |
The purpose of this Act is to enhance the effectiveness of protection of financial consumers and to contribute to the development of the national economy by prescribing obligations that financial product distributors and financial product advisors shall observe in operating their businesses and matters concerning policies for financial consumers, procedures for the mediation of financial disputes, etc. for the protection of rights and interests of financial consumers in order to promote rights and interests of financial consumers and to establish sound market practices for financial product distribution businesses and financial product advisory businesses.
| Article 2 (Definitions) |
The terms used in this Act are defined as follows:
| 1. | The term “financial product” means: |
| (a) | A deposit or a loan under the Banking Act; |
| (b) | A financial investment instrument under the Financial Investment Services and Capital Markets Act; |
| (c) | An indemnity product under the Insurance Business Act; |
| (d) | A deposit or a loan under the Mutual Savings Banks Act; |
| (e) | Credit card, facility leasing, deferred payment sale, or installment financing under the Specialized Credit Finance Business Act; |
| (f) | Others specified by Presidential Decree among those similar to the products specified in items (a) through (e); |
| 2. | The term “financial product distribution business” means a business that engages in activities conducted continually or repeatedly for the purpose of earning income and that falls under any of the following: |
| (a) | Financial product direct sales business: A business that a person operates for the direct conclusion of contracts for financial products as the counterparty to such contracts or an investment brokerage business under Article 6 (3) of the Financial Investment Services and Capital Markets Act; |
| (b) | Financial product distribution agency or brokerage business: A business operated for agency or brokerage for the conclusion of contracts on financial products; |
| 3. | The term “financial product distributor” means a person who engages in a financial product distribution business authorized, permitted, or registered for business transactions of a financial product distribution business under any finance-related statute specified by Presidential Decree (hereinafter referred to as “finance-related statute”) (including persons who engage in business transactions that fall within the category of financial product distribution business without authorization, permission, or registration if the relevant finance-related statute provides that no authorization, permission, or registration is required for such business transactions) or a person who has a financial product distribution business registered under Article 12 (1), who shall be classified into: |
| (a) | Financial product direct seller: A person who engages in a financial product direct sales business, among financial product distributors; |
| (b) | Financial product distribution agent or broker: A person who engages in a financial product distribution agency or brokerage business, among financial product distributors; |
| 4. | The term “financial product advisory business” means a business of providing advice continually or repeatedly on decision-making with regard to the value, or the acquisition and disposal, of financial products (hereinafter referred to as “advisory service on financial products”) for the purpose of earning income: |
| (a) | Providing advice through periodicals, publications, communications, broadcasting, etc. issued or transmitted to many unspecified persons and made available for frequent purchase and receipt by many unspecified persons; |
| (b) | Other activities specified by Presidential Decree as those that need to be excluded from financial product advisory business in consideration of the nature of relevant activities and the necessity for protecting financial consumers where an attorney-at-law, a patent attorney or a certified public tax accountant provides advice pursuant to relevant statutes or in any similar cases; |
| 5. | The term “financial product advisor” means a person who engages in a financial product advisory business with authorization, permission, or registration under relevant statutes for services that fall under the category of financial product advisory business, where finance-related statutes require such authorization, permission, or registration, or a person who engages in a financial product advisory business registered under Article 12 (1); |
| 6. | The term “financial company” means a company falling under any of the following: |
| (a) | A bank under the Banking Act (including the Industrial Bank of Korea, the Korea Development Bank, the credit service sector of the National Federation of Credit Unions, the Nonghyup Bank, the Suhyup Bank, and the Korea Federation of Savings Banks, which are governed by the Banking Act respectively under Article 3 (3) of the Industrial Bank of Korea Act, Article 3 (1) of the Korea Development Bank Act, Article 6 (3) of the Credit Unions Act, Article 161-11 (8) of the Agricultural Cooperatives Act, Article 141-4 (2) of the Fisheries Cooperatives Act, and Article 36 (4) of the Mutual Savings Banks Act; hereinafter the same shall apply); |
| (b) | An investment trader, an investment broker, an investment advisory business entity, a discretionary investment business entity, or a trust business entity under Article 8 of the Financial Investment Services and Capital Markets Act or a merchant bank under Article 336 of that Act; |
| (c) | An insurance company under the Insurance Business Act (including the Nonghyup Life Insurance Co., Ltd. and the Nonghyup Property and Casualty Insurance Co., Ltd. under Article 161-12 (1) of the Agricultural Cooperatives Act; hereinafter the same shall apply); |
| (d) | A mutual savings bank under the Mutual Savings Banks Act; |
| (e) | A specialized credit financial business company under the Specialized Credit Finance Business Act; |
| (f) | Other persons specified by Presidential Decree as similar to the persons referred to in items (a) through (e) in consideration of the necessity for protecting financial consumers; |
| 7. | The term “financial company or other relevant person” means a person falling under any of the following: |
| (a) | A financial company; |
| (b) | An investment solicitor under Article 51 (9) of the Financial Investment Services and Capital Markets Act; |
| (c) | An insurance solicitor under subparagraph 9 of Article 2 of the Insurance Business Act; |
| (d) | An insurance agency under subparagraph 10 of Article 2 of the Insurance Business Act; |
| (e) | A certified insurance broker under subparagraph 11 of Article 2 of the Insurance Business Act; |
| (f) | A concurrent loan service provider under subparagraph 16 of Article 2 of the Specialized Credit Finance Business Act; |
| (g) | A solicitor under Article 14-2 (1) 2 of the Specialized Credit Finance Business Act; |
| (h) | Other persons specified by Presidential Decree as similar to those referred to in items (a) through (g) in consideration of the necessity for protecting financial consumers; |
| 8. | The term “financial consumer” means the counterparty to a transaction with a financial product distributor for the conclusion of a contract or the solicitation of conclusion of a contract for a financial product or the acceptance of an offer of a financial product (hereinafter referred to as “the conclusion of a contract for a financial product or other relevant transactions”) or a professional financial consumer or an ordinary financial consumer who is the counterparty to a financial product advisor for advisory service; |
| 9. | The term “professional financial consumer” means a financial consumer falling under any of the following, among financial consumers who are capable of taking risks on a contract for a financial product in light of expertise in financial products, the size of assets owned by them, etc.: |
| (a) | The State; |
| (b) | The Bank of Korea under the Bank of Korea Act; |
| (c) | A financial company specified by Presidential Decree; |
| (d) | A listed corporation under Article 9 (15) 3 of the Financial Investment Services and Capital Markets Act (applicable only where a person notifies a financial product distributor or advisor, in writing, of his or her willingness to be treated as a professional financial consumer for the purpose of concluding a contract for an investment product or conducting other relevant transactions); |
| (e) | Other persons specified by Presidential Decree for each type of financial products; |
| 10. | The term “ordinary financial consumer” means a financial consumer who is not a professional consumer. |
| Article 3 (Types of Financial Products) |
Financial products shall be classified into the following types: Provided , That if a particular product has attributes by which it can be classified into two or more of the following types of product, such product shall be deemed to be classifiable into each relevant type:
| 1. | Deposit products: The financial products specified by Presidential Decree, among the deposits under subparagraph 1 (a) and (d) of Article 2 and those similar to the aforementioned deposits; |
| 2. | Loan products: The financial products specified by Presidential Decree, among the loans under subparagraph 1 (a) and (d) of Article 2, credit card, facility leasing, deferred payment sale, installment financing under item (e) of that subparagraph, or similar financial products specified by Presidential Decree; |
| 3. | Investment products: Financial investment products under subparagraph 1 (b) of Article 2 and similar financial products specified by Presidential Decree; |
| 4. | Indemnity products: Indemnity products under subparagraph 1 (c) of Article 2 and similar financial products specified by Presidential Decree. |
| Article 4 (Classification of Financial Companies and Other Relevant Persons by Type of Business) |
Financial companies and other relevant persons shall be classified into financial product direct sellers, financial product distribution agents or brokers, or financial product advisors under this Act as follows: Provided , That if a financial company or other relevant person referred to in any of the following subparagraphs concurrently operates a financial product distribution business or a financial product advisory business not mentioned in the relevant subparagraph (referring to a financial product distribution business or a financial product advisory business; hereinafter the same shall apply) under any other statute, such financial company or other relevant person shall be deemed to be also a financial product distributor or advisor for the concurrently operated business:
| 1. | A bank under the Banking Act: A financial product direct seller or a financial product distribution agent or broker; |
| 2. | An investment trader under the Financial Investment Services and Capital Markets Act: A financial product direct seller or a financial product distribution agent or broker; |
| 3. | An investment broker under the Financial Investment Services and Capital Markets Act: A financial product direct seller or a financial product distribution agent or broker; |
| 4. | An investment advisory business entity under the Financial Investment Services and Capital Markets Act: A financial product advisor; |
| 5. | A discretionary investment business entity under the Financial Investment Services and Capital Markets Act: A financial product direct seller; |
| 6. | A trust business entity under the Financial Investment Services and Capital Markets Act: A financial product direct seller or a financial product distribution agent or broker; |
| 7. | A merchant bank under the Financial Investment Services and Capital Markets Act: A financial product direct seller or a financial product distribution agent or broker; |
| 8. | An investment solicitor under the Financial Investment Services and Capital Markets Act: A financial product distribution agent or broker; |
| 9. | An insurance company under the Financial Investment Services and Capital Markets Act: A financial product direct seller or a financial product distribution agent or broker; |
| 10. | An insurance solicitor under the Insurance Business Act: A financial product distribution agent or broker; |
| 11. | An insurance agency under the Insurance Business Act: A financial product distribution agent or broker; |
| 12. | A certified insurance broker under the Insurance Business Act: A financial product distribution agent or broker; |
| 13. | A mutual bank under the Mutual Savings Banks Act: A financial product direct seller or a financial product distribution agent or broker; |
| 14. | A specialized credit financial business company under the Specialized Credit Finance Business Act or a concurrent loan service provider under that Act: A financial product direct seller or a financial product distribution agent or broker; |
| 15. | A solicitor under the Specialized Credit Finance Business Act: A financial product distribution agent or broker; |
| 16. | A financial company or other relevant person under subparagraph 7 (h): A financial product distributor or advisor specified by Presidential Decree. |
| Article 5 (Scope of Application) |
This Act shall not apply to the cases falling under Article 6 (5) 1 of the Financial Investment Services and Capital Markets Act.
| Article 6 (Relationship to Other Statutes) |
Except as otherwise provided in other statutes, this Act shall apply to the protection of financial consumers.
CHAPTER II RIGHTS AND RESPONSIBILITIES OF FINANCIAL CONSUMERS AND RESPONSIBILITIES OF STATE AND FINANCIAL PRODUCT DISTRIBUTORS AND ADVISORS
| Article 7 (Fundamental Rights of Financial Consumers) |
Financial consumers shall have the following rights:
| 1. | The right to be protected from damage caused to property by illegal business activities of financial product distributors and advisors; |
| 2. | The right to be provided with necessary knowledge and information in the course of selecting and consuming financial products; |
| 3. | The right to reflect opinions in the policies of the State and local governments affecting financial consumption practices; |
| 4. | The right to be appropriately compensated for damage sustained in the course of consumption of financial products through prompt and fair proceedings; |
| 5. | The right to receive necessary education for reasonable financial consumption practices; |
| 6. | The right to form organizations and conduct activities through such organizations in order for financial consumers to enhance their rights and interests on their own. |
| Article 8 (Responsibilities of Financial Consumers) |
| (1) | Financial consumers shall recognize that they are main players of financial markets, together with financial product distributors and advisors, shall choose right financial products, and shall fairly exercise their fundamental rights under Article 7. |
| (2) | Financial consumers shall endeavor to learn knowledge and information necessary for enhancing their rights and interests on their own. |
| Article 9 (Responsibilities of the State) |
The State shall take responsibilities to take the following measures in order to ensure the realization of fundamental rights of financial consumers under Article 7:
| 1. | The establishment and implementation of policies necessary to enhance financial consumers’ rights and interests; |
| 2. | The enactment, amendment, and repeal of statutes and regulations concerning the protection of financial consumers; |
| 3. | The alignment of necessary administrative organizations and the improvement of operation of such organizations; |
| 4. | Support for, and the promotion of, robust and autonomous organizational activities of financial consumers. |
| Article 10 (Responsibilities of Financial Product Distributors and Advisors) |
Financial product distributors and advisors shall take the following responsibilities in order to promote the realization of fundamental rights of financial consumers under Article 7:
| 1. | Responsibility to proactively cooperate with the State in implementing national policies for enhancing rights and interests of financial consumers; |
| 2. | Responsibility to endeavor to create an environment for fair financial consumption practices in providing financial products; |
| 3. | Responsibility to take necessary measures to prevent financial products from causing damage to property of financial consumers; |
| 4. | Responsibility to avoid any term, condition, or method that is likely to infringe on reasonable choice or interests of financial consumers for a transaction of providing a financial product; |
| 5. | Responsibility to provide information about financial products earnestly and accurately to financial consumers; |
| 6. | Responsibility to handle personal information of financial consumers carefully to prevent personal information from being lost, stolen, released, falsified, altered, or damaged. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 10
CHAPTER III REGISTRATION OF FINANCIAL PRODUCT DISTRIBUTORS AND ADVISORS
| Article 11 (Prohibition of Business Activities of Persons Other than Financial Product Distributors and Advisors) |
No person, except financial product distributors and advisors under this Act, shall engage in a financial product distribution business or a financial product advisory business.
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 11
| Article 12 (Registration of Financial Product Distributors and Advisors) |
| (1) | A person who intends to operate a financial product distribution business or a financial product advisory business shall determine the scope of the financial products with which the person intends to deal, among deposit products, loan products, investment products, and indemnity products classified under Article 3, as a financial product direct seller, a financial product distribution agent or broker, or a financial product advisor, and shall register with the Financial Services Commission: |
| 1. | Where a finance-related statute requires to obtain authorization, permission, or registration for business lines falling within the category of a financial product distribution business or a financial product advisory business; |
| 2. | Where a finance-related statute requires to engage in business lines falling within the category of a financial product distribution business or a financial product advisory business without authorization, permission, or registration under the relevant statute. |
| (2) | A person who intends to register as a financial product direct seller or a financial product advisor under paragraph (1) shall meet all the following requirements: |
| 1. | Such person shall be equipped with the human resources, computer systems, and other physical facilities specified by Presidential Decree so as to be capable of protecting financial consumers and conducting business activities; |
| 2. | Such person shall have an equity capital not less than the amount specified by Presidential Decree for each type of business to register under paragraph (1); |
| 3. | Such person shall have good financial standing and social credibility prescribed by Presidential Decree; |
| 4. | Such person shall have no executive officer falling under any item of paragraph (4) 1; |
| 5. | Such person shall have a system for preventing conflicts of interest with financial consumers, which shall meet the requirements prescribed by Presidential Decree; |
| 6. | Such person shall have no interest in any financial product distributor and shall meet the following requirements: |
| (a) | Such person shall not concurrently operate a financial product distribution business (excluding the discretionary investment business under Article 6 (8) of the Financial Investment Services and Capital Markets Act) and any other financial business specified by Presidential Decree; |
| (b) | Such person shall not be an affiliate, as defined in subparagraph 3 of Article 2 of the Monopoly Regulation and Fair Trade Act, of a financial product distributor (excluding discretionary investment business entities under Article 8 (6) of the Financial Investment Services and Capital Markets Act; hereafter the same shall apply in this paragraph) or a company having a relationship specified by Presidential Decree with a financial product distributor (hereinafter referred to as “an affiliate or a related company”); |
| (c) | Such person shall have no executive officer or employee who concurrently holds a position as an executive officer or employee of any financial product distributor or who is seconded by any financial product distributor; |
| (d) | Other requirements prescribed by Presidential Decree to prevent conflicts of interest with financial consumers. |
| (3) | A person who intends to register as a financial product distribution agent or broker under paragraph (1) shall meet all the following requirements: |
| 1. | Such person shall have the qualifications specified by Presidential Decree, including the completion of educational programs; |
| 2. | Such person shall not fall under any item of paragraph (4) 2 (in cases of a corporation that intends to register as a financial product distribution agent or broker, any of its executive officers shall not fall under any item of paragraph (4) 2); |
| 3. | Such persons shall meet the requirements prescribed by Presidential Decree concerning the standards for the conduct of business activities of financial product distribution agents and brokers, the possession of necessary human resources, etc. as matters necessary for the protection of rights and interests of financial consumers and the sound trading practices. |
| (4) | A person falling under any item of the relevant subparagraph, among the following subparagraphs, shall not become a financial product direct seller, a financial product advisor, or an executive officer of a corporate financial product distribution agent and broker who is registered under paragraph (1): |
| 1. | In cases of a financial product direct seller or a financial product advisor: |
| (a) | A minor, a person under adult guardianship, or a person under limited guardianship; |
| (b) | A person declared bankrupt and not yet reinstated; |
| (c) | A person in whose case five years have not passed since his or her imprisonment without labor or greater punishment sentenced by a court was completely executed or he or she was discharged from such imprisonment (including cases where the execution of such sentence is deemed to have been completed); |
| (d) | A person who is under suspension of the execution of imprisonment without labor or greater punishment sentenced to him or her by a court; |
| (e) | A person in whose case five years have not passed since the complete execution of, or the discharge from, a sentence of a fine or greater punishment to him or her for a violation of this Act, a finance-related statute specified by Presidential Decree, or a finance-related statute of a foreign country (including cases where such sentence is deemed to have been completely executed); |
| (f) | A person in whose case the period specified by Presidential Decree within a maximum of five years for each type of sanction has not passed since a sanction was imposed upon him or her under this Act or a finance-related statute specified by Presidential Decree (in cases of a retired or resigned executive officer, including notification equivalent to such sanction); |
| (g) | A person specified by Presidential Decree as a person who is likely to undermine the protection of financial consumers and the sound trading practices; |
| 2. | In cases of a corporate financial product distribution agent or broker: |
| (a) | A person falling under subparagraph 1 (a), (b), or (d); |
| (b) | A person in whose case two years have not passed since his or her imprisonment without labor or greater punishment sentenced by a court was completely executed or he or she was discharged from such imprisonment (including cases where the execution of such sentence is deemed to have been completed); |
| (c) | A person in whose case two years have not passed since the complete execution of, or the discharge from, a sentence of a fine or greater punishment to him or her for a violation of this Act, a finance-related statute specified by Presidential Decree, or a finance-related statute of a foreign country (including cases where such sentence is deemed to have been completely executed). |
| (5) | A person who intends to register as a financial product distributor or advisor under paragraph (1) shall pay fess prescribed by Presidential Decree in consideration of necessary expenses for the examination and management of requirements for registration. |
| (6) | Except as provided in paragraphs (1) through (5), matters necessary for the registration of financial product distributors and advisors shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 12 (1), (2), (4), (5), and (6)
CHAPTER IV OBLIGATIONS OF FINANCIAL PRODUCT DISTRIBUTORS AND ADVISORS IN BUSINESS ACTIVITIES
Section 1 General Principles of Business Activities
| Article 13 (Guidelines for Interpretation of Obligations in Business Activities) |
Any person who intends to interpret and apply provisions of this Chapter concerning obligations in business activities shall consider rights and interests of financial consumers preferentially and shall ensure that such provisions be interpreted and applied equitably to each type of financial product or each type of business of financial product distributors and advisors according to the nature, etc. of each financial product or contractual relationship.
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 13
| Article 14 (Duty of Good Faith) |
| (1) | Financial product distributors and advisors shall observe the principle of good faith in executing a contract for a financial product or for advisory service on financial products, exercising rights, and conducting obligations. |
| (2) | Financial product distributors and advisors shall ensure fairness in the details of, and the procedure for, business activities in operating a financial product distribution business or a financial product advisory business and shall not gain benefits for themselves or for a third party to the detriment of financial consumers’ interests without good cause. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 14
| Article 15 (Non-Discrimination) |
In executing a contract for a financial product or for advisory service on financial products, neither a financial product distribution business nor a financial product advisory business shall unfairly discriminate against any financial consumer, without good cause, in regard to terms and conditions of contract on the grounds of gender, educational background, disability, social status, etc.
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 15
| Article 16 (Responsibility of Financial Product Distributors and Advisors for Management) |
| (1) | Financial product distributors and advisors shall manage their executive officers and employees and financial product distribution agents and brokers (excluding certified insurance brokers under subparagraph 11 of Article 2 of the Insurance Business Act; hereafter the same shall apply in this Article) in good faith so as to ensure that they observe statutes and regulations and do not undermine the robust trading system while conducting business activities. |
| (2) | The persons specified by Presidential Decree, among corporate financial product distributors and advisors, shall prepare standards and procedures that their executive officers and employees and financial product distribution agents and brokers shall observe in performing their duties (hereinafter referred to as “internal control standards”) in accordance with Presidential Decree in order to perform the management function under paragraph (1). |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 16 (1)
Section 2 Obligations in Business Activities by Types of Financial Products
| Article 17 (Principle of Suitability) |
| (1) | In executing a contract for a financial product, conducting other relevant transactions, or providing advisory service, financial product distributors and advisors shall ascertain whether a counterparty financial consumer is an ordinary financial consumer or a professional financial consumer. |
| (2) | When a financial product distributor or advisor solicits an ordinary financial consumer to conclude a contract for a financial product referred to in any of the following subparagraphs (including cases where a financial product advisor provides advisory service; hereafter the same shall apply in this Article), the financial product distributor or advisor shall obtain the information required under the relevant subparagraph through interviews, inquiries, etc. by requesting the ordinary financial consumer to affix his or her signature (including the digital signature defined in subparagraph 2 of Article 2 of the Digital Signature Act; hereinafter the same shall apply) or to print his or her name and affix his or her seal, by tape-recording oral statements of the ordinary financial consumer, or by obtaining confirmation from the ordinary financial consumer by other methods prescribed by Presidential Decree, shall maintain and manage such information appropriately, and shall provide the confirmed information to the ordinary financial consumer, without delay: |
| 1. | An indemnity product specified by Presidential Decree, including variable indemnity products under Article 108 (1) 3 of the Insurance Business Act: |
| (a) | The age of the ordinary financial consumer; |
| (b) | The status of property (referring to information about assets and income, including debts; hereinafter the same shall apply); |
| (c) | The purpose of conclusion of a contract for the indemnity product; |
| 2. | An investment product (excluding the investment products specified by Presidential Decree, such as securities subject to the crowdfunding brokerage under Article 9 (27) of the Financial Investment Services and Capital Markets Act; hereafter the same shall apply in this Article) or a deposit product specified by Presidential Decree as a financial product with a rate of return variable according to the performance of investment: |
| (a) | The purpose of acquisition or disposal of the relevant financial product by the ordinary financial consumer; |
| (b) | The status of property; |
| (c) | Experiences in acquisition or disposal; |
| 3. | A loan product: |
| (a) | The status of property of the ordinary financial consumer; |
| (b) | Credit and the repayment plan; |
| 4. | Other information specified by Presidential Decree as necessary for soliciting ordinary financial consumers to conclude a contract for financial products suitable to ordinary financial consumers. |
| (3) | No financial product distributor or advisor shall solicit an ordinary financial consumer to conclude a contract considered unsuitable to the ordinary financial consumer in light of the information referred to in the relevant subparagraph of paragraph (2). The criteria for the determination on suitability in such cases shall be prescribed by Presidential Decree in accordance with the relevant subparagraph of paragraph (2). |
| (4) | Further details of the information that financial product distributors and advisors shall obtain for each type of financial product under paragraph (2) shall be prescribed by Presidential Decree. |
| (5) | Paragraphs (1) through (3) shall not apply where a financial product distributor or advisor sells collective investment securities of a hedge fund under Article 249-2 of the Financial Investment Services and Capital Markets Act: |
| (6) | Financial product distributors and advisors under paragraph (5) shall inform the persons specified by Presidential Decree, in advance, in accordance with Presidential Decree, that they may separately request the application of paragraphs (1) through (3) under the proviso of paragraph (5). |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 17
| Article 18 (Principle of Appropriateness) |
| (1) | When a financial product distributor intends to conclude a contract for a financial product with an ordinary financial consumer without soliciting the ordinary financial consumer to conclude a contract for an indemnity product, an investment product, or a loan product specified respectively by Presidential Decree, such financial product distributor shall obtain the information required in the relevant subparagraph, among the following subparagraphs, through prior interviews, inquiries, etc.: |
| 1. | Indemnity products: Information referred to in Article 17 (2) 1; |
| 2. | Investment products: Information referred to in Article 17 (2) 2; |
| 3. | Loan products: Information referred to in Article 17 (2) 3; |
| 4. | Information specified by Presidential Decree as considered necessary for financial product distributors to determine whether a contract for the sale of a financial product is appropriate to an ordinary financial consumer. |
| (2) | If a financial product distributor determines that the financial product concerned is not appropriate for an ordinary financial consumer in light of the information identified in accordance with the relevant subparagraph of paragraph (1), the financial product distributor shall notify the ordinary financial consumer of the fact in accordance with Presidential Decree and shall obtain confirmation on the notification by requesting the ordinary financial consumer to affix his or her signature or print his or her name and affix his or her seal, by tape-recording oral statements of the ordinary financial consumer, or by obtaining confirmation from the ordinary financial consumer by other methods prescribed by Presidential Decree. The criteria for the determination on appropriateness shall be prescribed by Presidential Decree for the products referred to in each subparagraph of paragraph (1). |
| (3) | Further details of the information that financial product distributors shall obtain for each type of financial product under paragraph (1) shall be prescribed by Presidential Decree. |
| (4) | Paragraphs (1) and (2) shall not apply where a financial product distributor sells collective investment securities of a hedge fund under Article 249-2 of the Financial Investment Services and Capital Markets Act: |
| (5) | Financial product distributors under paragraph (4) shall inform the persons specified by Presidential Decree, in advance, in accordance with Presidential Decree, that they may separately request the application of paragraphs (1) and (2) under the proviso of paragraph (4). |
| Article 19 (Obligation to Explain) |
| (1) | When a financial product distributor or advisor solicits an ordinary financial consumer to conclude a contract (including cases where a financial product advisor provides advisory service) or when an ordinary financial consumer requests explanation, the financial product distributor or advisor shall explain important matters concerning financial products referred to in any of the following subparagraphs (limited to relevant matters if an ordinary financial consumer wants explanation about particular matters) to the ordinary financial consumer in a manner that the ordinary financial consumer can understand: |
| 1. | Matters concerning products referred to in each of the following items: |
| (a) | Indemnity Products: |
| (i) | Description of an indemnity product; |
| (ii) | Insurance premium (including mutual aid premium; hereinafter the same shall apply); |
| (iii) | Grounds for restriction on the payment of insurance claims (including mutual aid claims; hereinafter the same shall apply) and the procedure for payment; |
| (iv) | The scope of risk coverage; |
| (v) | Other matters specified by Presidential Decree as important for indemnity products, such as the term of risk coverage; |
| (b) | Investment products: |
| (i) | Description of an investment product; |
| (ii) | |
| (iii) | In cases of the investment products specified by Presidential Decree, the risk rating determined by a financial product direct seller in accordance with standards prescribed by Presidential Decree; |
| (iv) | Other matters specified by Presidential Decree as important for investment products, including fees to be paid by financial consumers; |
| (c) | Deposit products: |
| (i) | Description of a deposit product; |
| (ii) | Other matters specified by Presidential Decree as important for deposit products, such as interest rate, rate of return, etc.; |
| (d) | Loan products: |
| (i) | Description of a loan product, such as the interest rate, whether the interest rate is variable or not, whether an early repayment charge (referring to the fee imposed when a financial consumer fully or partially repays a loan before the maturity of the loan; hereinafter the same shall apply) is to be imposed or not, the term of the loan, and fee rates; |
| (ii) | The amount of repayment and the interest rate and timing for repayment, depending upon the method of repayment; |
| (iii) | Matters concerning the creation of mortgages and other security rights, the ground for execution of security rights, and matters concerning changes in rights, such as the forfeiture of the title to collateral by exercising a security right; |
| (iv) | The total amount, including the loan principle and fees, to be borne by financial consumers when concluding a loan agreement; |
| (v) | Other matters specified by Presidential Decree for loan products, including matters concerning the termination of loan agreements; |
| 2. | Where a financial product or service is linked or tied with a financial product under any item of subparagraph 1 (hereinafter referred to as “linked or tied product or service), the following matters: |
| (a) | Description of the linked or tied product or service; |
| (b) | Matters concerning responsibility for the performance of the linked or tied product or service; |
| (c) | Other matters specified by Presidential Decree as important for linked or tied products or services, such as the period of provision of a linked or tied product or service; |
| 3. | Matters concerning the deadline for the withdrawal of an offer under Article 46, the method and effect of exercise of such right; |
| 4. | Other matters specified by Presidential Decree for the protection of financial consumers. |
| (2) | A financial product distributor or advisor shall provide a written explanation necessary for the explanation under paragraph (1) to each ordinary financial consumer and shall obtain confirmation that the ordinary financial consumer understands the explanation by requesting the ordinary financial consumer to affix his or her signature or print his or her name and affix his or her seal, by tape-recording oral statements of the ordinary financial consumer, or by other methods prescribed by Presidential Decree: |
| (3) | In providing the explanation under paragraph (1), no financial product distributor or advisor shall falsify or misrepresent (referring to an act of providing conclusive judgment on any uncertain matter or providing misleading information) any matter specified by Presidential Decree as likely to seriously affect reasonable judgment of ordinary financial consumers or the value of a financial product or omit any important matter specified by Presidential Decree. |
| (4) | Further details about the contents of a written explanation under paragraph (2) and the methods and procedure for providing such written explanation shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 19
| Article 20 (Prohibition of Unfair Business Activities) |
| (1) | No financial product distributor or advisor shall commit any of the following acts (hereinafter referred to as “unfair business activities”), which violates rights and interests of financial consumers, taking advantage of his or her dominant position: |
| 1. | Forcing a financial consumer to conclude a contract for a financial product contrary to the financial consumer’s intention in the context of concluding a contract for a loan product or any other financial product specified by Presidential Decree; |
| 2. | Unfairly requiring a financial consumer to offer an asset as security or a guarantee in the context of concluding a contract for a loan product or any other financial product specified by Presidential Decree; |
| 3. | Demanding or receiving any benefit by a financial product distributor or advisor or any of its executive officers and employees in connection with its business activities; |
| 4. | In cases of a loan product, any of the following acts: |
| (a) | Forcing a financial consumer to choose a particular method for the repayment of a loan for its own benefit or for a third party’s benefit; |
| (b) | Except the cases referred to in (i) through (iii) below, imposing any fee, penalty, or early repayment charge, in whatsoever name; |
| (i) | Where a loan is repaid within three years from the date of execution of the loan agreement; |
| (ii) | Where imposing an early repayment charge is allowed under any other statute or regulation; |
| (iii) | Other acts specified by Presidential Decree as unlikely to undermine the protection of financial consumers and the robust trading system; |
| (c) | Demanding a third party’s joint surety in connection with a contract for a loan product specified by Presidential Decree, such as a loan to an individual; |
| 5. | If a linked or tied product or service is involved, an act specified by Presidential Decree as an act of unfairly reducing or changing such linked or tied product or service: |
| 6. | Any other act of violating a financial consumer’s rights and interests by a financial product distributor or advisor, taking advantage of its dominant position. |
| (2) | Specific types of, or the criteria for, unfair business activities shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 20
| Article 21 (Prohibition of Unfair Solicitation) |
No financial product distributor or advisor shall commit any of the following acts in soliciting the conclusion of a contract (including cases where a financial product advisor provides advisory service; hereafter the same shall apply in this Article): Provided , That the acts specified by Presidential Decree as unlikely to undermine the protection of financial consumers and the robust trading system shall be excluded:
| 1. | Providing conclusive judgment on any uncertain matter or giving any misleading information; |
| 2. | Misrepresenting the description of a financial product; |
| 3. | Knowingly omitting to inform a financial consumer of any matter seriously affecting the value of a financial product; |
| 4. | Representing that the financial product concerned is better or more advantageous than other financial products with regard to part of the description of the financial product, without specifying compared products and criteria or with no objective ground; |
| 5. | In cases of an indemnity product, any of the following acts: |
| (a) | Hindering a financial consumer (including interested persons specified by Presidential Decree; hereafter the same shall apply in this subparagraph) from notifying a financial product direct seller of any important matter concerning a contract for an indemnity product or soliciting a financial consumer to refrain from information such important matter; |
| (b) | Soliciting a financial consumer to provide a financial product direct seller with inadequate information about any important matter concerning a contract for an indemnity product; |
| 6. | In cases of an investment product, any of the following acts: |
| (a) | Using a method for real-time conversation, such as a visit in person or telephone, without receiving any request from a financial consumer to solicit the conclusion of a contract; |
| (b) | Continuing to solicit the conclusion of a contract even after the financial consumer solicited to conclude such contract has already expressed his her refusal to the solicitation; |
| 7. | Other acts specified by Presidential Decree as likely to undermine the protection of financial consumers or the robust trading system. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 21
| Article 22 (Obligations Relating to Advertisements of Financial Products) |
| (1) | Neither a person who is not a financial product distributor or advisor nor a financial product distributor or advisor specified by Presidential Decree, such as a financial product distribution agent or broker dealing with investment products, shall make an advertisement of any business line of financial product distributors and advisors or of any financial product (hereinafter referred to as “advertisement of a financial product or other matter”): |
| 1. | The Korea Financial Investment Association established pursuant to Article 283 of the Financial Investment Services and Capital Markets Act; |
| 2. | The association composed of life insurance companies, among insurance associations established pursuant to Article 175 of the Insurance Business Act; |
| 3. | The association composed of non-life insurance companies, among insurance associations established pursuant to Article 175 of the Insurance Business Act; |
| 4. | The Korea Federation of Savings Banks established pursuant to Article 25 of the Mutual Savings Bank Act; |
| 5. | The Credit Finance Association established pursuant to Article 62 of the Specialized Credit Finance Business Act; |
| 6. | Other institutions specified by Presidential Decree as similar to those referred to in subparagraphs 1 through 5. |
| (2) | When a financial product distributor or advisor (including the persons falling under the proviso of paragraph (1); hereafter the same shall apply in this Article) makes an advertisement of a financial product or other matter, it shall communicate the description of the financial product clearly and fairly so as to avoid misleading information. |
| (3) | An advertisement of a financial product or other matter by a financial product distributor or advisor shall include the following contents: |
| 1. | A statement of recommending the reading of the written explanation and terms and conditions of the contract for the financial product concerned before concluding the contract for the financial product; |
| 2. | The name of the financial product distributor or advisor and the description of the financial product; |
| 3. | The following information: |
| (a) | In cases of an indemnity product: The statement that if a financial consumer terminates an existing contract and concludes another contract, the conclusion of the contract may be denied, the expenses payable by the financial consumer, such as insurance premium, (hereafter referred to as “insurance premium, etc.” in this Article) may be increased, or the coverage may be changed; |
| (b) | In cases of an investment product: |
| (i) | |
| (ii) | When making an advertisement including the past performance of operation, the statement that past investment performance is not indicative of future returns; |
| (c) | In cases of a deposit product: In illustrating the amount payable at maturity, etc. in an advertisement, the statement that the amount payable at maturity, etc. illustrated in the advertisement does not guarantee future profit (limited to financial products specified by Presidential Decree as deposit products for which the amount payable at maturity is variable); |
| (d) | In cases of a loan product: Terms and conditions of the loan; |
| 4. | Other information specified by Presidential Decree for the protection of financial consumers. |
| (4) | No financial product distributor or advisor shall commit any of the following acts in making an advertisement of a financial product or other matter: |
| 1. | In cases of an indemnity product: |
| (a) | Misleading financial consumers into believing that they are entitled to indemnity without limitations by omitting coverage limits, terms and conditions of restriction on indemnity, exclusions, or grounds for reducing payments or by notifying such information inadequately; |
| (b) | Misleading financial consumers into believing that coverage is greater by emphasizing a particular term or condition or by introducing a case for which a great amount of insurance proceeds is guaranteed; |
| (c) | Misleading financial consumers into believing that insurance premium, etc. are inexpensive by expressing insurance premium on a daily basis or by insufficiently explaining the standards for the calculation of insurance premium; |
| (d) | In cases of an indemnity product automatically renewed at maturity, failing to notify financial consumers sufficiently enough for them to recognize that insurance premium, etc. may be increased at the time of renewal; |
| (e) | In cases of an indemnity product for which the amount refundable at maturity is variable according to interest rate and the performance of investment, acts specified by Presidential Decree for the protection of financial consumers, such as misleading financial consumers to believe that a definite amount of the refund at maturity will be paid at the maturity of the indemnity product; |
| 2. | In cases of investment products: |
| (a) | Misleading financial consumers to believe that losses are compensated or profits are guaranteed: |
| (b) | Using in an advertisement any matter other than the matters specified by Presidential Decree in consideration of the nature of the investment product concerned with regard to the investment products specified by Presidential Decree; |
| (c) | Acts specified by Presidential Decree for the protection of financial consumers, such as an act of indicating the rate of return or the performance of operation only for a period in which the rate of return or the performance of operation was better, in indicating a rate of return or the performance of operation; |
| 3. | In cases of a deposit product: |
| (a) | Misleading financial consumers by failing to clearly indicate the range of interest rates, the method of calculation of interest rates, the timing for the payment and imposition of interest, and incidental benefits and expenses; |
| (b) | Acts specified by Presidential Decree for the protection of financial consumers, such as an act of indicating the rate of return or the performance of operation only for a period in which the rate of return or the performance of operation was better, in indicating a rate of return or the performance of operation; |
| 4. | A loan product: |
| (a) | Misleading financial consumers by failing to clearly indicate the range of interest rates for the loan, the method of calculation of interest rates, the timing for the payment and imposition of interest on the loan, and incidental benefits and expenses; |
| (b) | Misleading financial consumers to believe that the interest rate for the loan is lower by expressing the interest on the loan on a daily basis. |
| (5) | If an advertisement of a financial product or other matter includes any matter labeled or advertised under Article 4 (1) of the Act on Fair Labeling and Advertising, the same Act shall apply to such advertisement or matter. |
| (6) | A relevant association or institution may check whether a financial product distributor or advisor observes the standards for advertisement under paragraphs (1) through (4) in accordance with Presidential Decree with regard to advertisements of financial products and other matters of the financial product distributor or advisor and may notify the relevant financial product distributor or advisor of its opinion on findings from its checking. |
| (7) | Further details concerning paragraphs (2) through (4) and the method and procedure for advertising shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 22
| Article 23 (Obligation to Provide Contract Documents) |
| (1) | When a financial product distributor or advisor concludes a contract with a financial consumer for a financial product or for advisory service on financial products, it shall deliver contract documents specified by Presidential Decree for each type of financial product, to the financial consumer, without delay: |
| (2) | If a dispute with a financial consumer arises with respect to whether contract documents under paragraph (1) have been delivered, the financial product distributor or advisor shall prove it. |
| (3) | The method and procedure for the delivery of contract documents under paragraph (1) shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 23
Section 3 Obligations in Business Activities by Types of Business of Financial Product Distributors and Advisors
| Article 24 (Prohibition of Agency or Brokerage for Distribution of Financial Products through Unregistered Persons) |
No financial product distributor shall engage any person, other than financial product distributors and advisors, as an agent or a broker for the conclusion of a contract for a financial product or other relevant transactions.
| Article 25 (Prohibited Acts of Financial Product Agents and Brokers) |
| (1) | No financial product distribution agent or broker shall commit any of the following acts: |
| 1. | Receiving a benefit from a financial consumer in return for the performance of a contract, such as investment or insurance premium: |
| 2. | Engaging a third party as an agent or a broker by a financial product distribution agent or broker or paying a fee, remuneration or other reward for such engagement by a financial product distribution agent or broker: |
| 3. | Other acts specified by Presidential Decree as likely to undermine the protection of financial consumers or the robust trading system. |
| (2) | No financial product distribution agent or broker shall demand or accept money, goods, or any other economic benefit from a financial product distributor or advisor, in addition to the prescribed fees for serving as an agent or a broker for the distribution of financial products. |
| (3) | Further details about the limits on the fees under paragraph (2) and economic benefits shall be prescribed by Presidential Decree. |
| Article 26 (Obligation of Financial Product Distribution Agents and Brokers to Notify) |
| (1) | In serving as an agent or a broker for the distribution of financial products, a financial product distribution agent or broker shall notify financial consumers of all the following information: |
| 1. | The name of the financial product direct seller for whom the financial product distribution agent or broker serves as an agent or a broker and the details of its business lines; |
| 2. | Whether the financial product distribution agent or broker serves as an agent or a broker only for one financial product direct seller; |
| 3. | In cases of a financial product distribution agent or broker who has no power delegated by the financial product direct seller to conclude contracts for financial products, the fact that he or she has no power to conclude contracts for financial products; |
| 4. | Matters concerning liability for damages under Articles 44 and 45; |
| 5. | Other matters specified by Presidential Decree for the protection of financial consumers or the robust trading system. |
| (2) | In serving as an agent or a broker for the distribution of financial products, a financial product distribution agent or broker shall post the mark indicating that he or she is a financial product distribution agent or broker or shall present the relevant certificate to financial consumers. |
| (3) | Further details about the posting of a mark or the presentation of a certificate under paragraph (2) shall be prescribed by Presidential Decree. |
| Article 27 (Rules on Business Activities of Financial Product Advisors) |
| (1) | Financial product advisors shall exercise due care as a good manager in providing advisory service to financial consumers. |
| (2) | Financial product advisors shall perform advisory service earnestly in order to protect interests of financial consumers. |
| (3) | A financial product advisor shall inform financial consumers of the following matters in the course of performing advisory service and shall post a mark indicating that they are financial product advisors or present the relevant certificate to financial consumers: |
| 1. | Whether the financial product advisor is a person who meets the requirements under Article 12 (2) 6 (hereinafter referred to as “independent financial product advisor”); |
| 2. | If the financial product advisor receives economic benefits in relation to advisory service from financial product distributors, the kinds and size of such economic benefits: |
| 3. | If the financial product advisor concurrently operates a financial product distribution business, the name of the financial product distributor who has the relationship of entrustment of business transactions, including the conclusion of contracts for financial products and other relevant transactions, with the financial product advisor and the details of entrustment; |
| 4. | The scope of financial products on which advisory service is provided; |
| 5. | The procedure for the provision of advisory service; |
| 6. | Other matters specified by Presidential Decree for the protection of rights and interests of financial consumers or the robust trading system. |
| (4) | No person, except independent financial product advisors, may use the characters with the meaning “independent” or the foreign language characters specified by Presidential Decree as those having the same meaning (hereinafter referred to as “characters with the meaning of ‘independent’”) in names or advertisements. |
| (5) | No independent financial product advisor shall commit any of the following acts: |
| 1. | Receiving any economic benefit from a financial product distributor (including its executive officers and employees) in relation to a response to a financial consumer’s request for advisory service: |
| 2. | Other acts specified by Presidential Decree as those that can cause a conflict of interest with a financial consumer. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 27
| Article 28 (Keeping, Maintenance, and Management of Records) |
| (1) | Every financial product distributor or advisor shall keep records of the information specified by Presidential Decree about business activities of the financial product distribution business or the financial product advisory business and shall maintain and manage such records for the period specified by Presidential Decree for each type of information. |
| (2) | Every financial product distributor or advisor shall establish and implement measures appropriate for preventing the records that shall be kept, maintained, and managed under paragraph (1) from being destroyed, falsified, or altered. |
| (3) | A financial consumer may request a financial product distributor or advisor to allow him or her to inspect (including provision of copies, hearings; hereafter the same shall apply in this Article) the records that shall be kept, maintained, and managed by the financial product distributor or advisor under paragraph (1), for the purpose of seeking remedies for his or her rights, including mediation in a dispute or litigation under Article 36. |
| (4) | Upon the receipt of a financial consumer’s request for inspection under paragraph (3), a financial product distributor or advisor shall allow the financial consumer to inspect relevant records within the period specified by Presidential Decree for each type of information within a maximum of 10 days from the date the financial product distributor or advisor receives such request. If it is impracticable to allow inspection within such period due to good cause in such cases, the financial product distributor or advisor may notify the financial consumer of such cause and postpone inspection but shall allow the financial consumer to inspect the relevant records, without delay, when such cause ceases to exist. |
| (5) | In any of the following cases, a financial product distributor or advisor may restrict inspection or refuse to allow inspection by notifying the financial consumer concerned of the ground for such restriction or refusal: |
| 1. | Where a financial product distributor or advisor may restrict inspection or may refuse to allow inspection under a statute or regulation; |
| 2. | Where inspection is likely to be harmful to the life or body of any other person or is likely to unfairly violate property or an interest of any other person; |
| 3. | Other cases specified by Presidential Decree as those where it is inappropriate to allow inspection because inspection is likely to seriously infringe trade secret (referring to trade secret defined in subparagraph 2 of Article 2 of the Unfair Competition Prevention and Trade Secret Protection Act) of the financial company concerned. |
| (6) | When a financial consumer requests a financial product distributor or advisor to allow inspection, the financial product distributor or advisor may charge fees and postal charges (applicable only where mailing copies is requested) in accordance with Presidential Decree. |
| (7) | Necessary matters concerning the methods and procedures for the requesting of, the restriction on, and the notification of, inspection under paragraphs (3) through (5) shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Article 28
CHAPTER V PROTECTION OF FINANCIAL CONSUMERS
Section 1 Establishment of Policies for Financial Consumers and Financial Education
| Article 29 (Protection of Financial Consumers) |
| (1) | The Financial Services Commission shall establish policies for financial consumers in order to protect rights and interests of financial consumers and establish a robust market system for financial product distribution business and financial product advisory business. |
| (2) | The Financial Services Commission shall endeavor to promote rights and interests of financial consumers, support healthy financial lives, and improve financial consumers’ financial capabilities. |
| Article 30 (Financial Education) |
| (1) | The Financial Services Commission shall endeavor to help financial consumers make reasonable decisions and enjoy financial wellbeing in a long term, based on high comprehension about finance through financial education, and may provide subsidies necessary for such education, within the budget. |
| (2) | The Financial Services Commission shall develop educational programs for enhancing financial consumers’ financial capabilities in response to changes in the financial environment. |
| (3) | The Financial Services Commission shall establish and implement policies for raising the effect of financial education by connecting financial education with school education and lifelong education. |
| (4) | The Financial Services Commission shall conduct a survey on financial consumers’ financial capabilities once every three years and shall reflect findings from the survey in policies to be established for financial education. |
| (5) | The Financial Services Commission may entrust the work relating to financial education under paragraphs (2) through (4) to the head of the Financial Supervisory Service (referring to the Financial Supervisory Service under the Act on the Establishment of Financial Services Commission; hereinafter the same shall apply) (hereinafter referred to as the “Governor of the Financial Supervisory Service”) or an institution or organization in the field of financial education. |
| Article 31 (Financial Education Council) |
| (1) | The Financial Education Council (hereinafter referred to as the “Council”) shall be established within the Financial Services Commission in order to have the Council deliberate and resolve on policies for financial education. |
| (2) | The Council shall deliberate and resolve on the following matters: |
| 1. | Comprehensive implementation of financial education; |
| 2. | The evaluation of education of financial consumers, the improvement of the system for education of financial consumers, and interministerial cooperation; |
| 3. | Other matters tabled by the Chairperson for the enhancement of financial capabilities of financial consumers. |
| (3) | The Council shall be composed of not more than 25 members, including one Chairperson. |
| (4) | The Council shall be chaired by the Vice-Chairperson of the Financial Services Commission. |
| (5) | Members of the Council shall comprise the following persons: |
| 1. | Persons appointed by the head of the institution to which each person belongs, from among public officials of the related administrative agencies specified by Presidential Decree as those involved in financial education, such as the Financial Services Commission, the Fair Trade Commission, the Ministry of Economy and Finance, the Ministry of Education, the Ministry of the Interior and Safety, and the Ministry of Employment and Labor, who are members of the Senior Executive Service; |
| 2. | The senior deputy governor of the Financial Supervisory Service who is responsible for the protection of financial consumers. |
| (6) | If necessary for the deliberation and resolution under paragraph (2), the Council may request the institutions under each subparagraph of paragraph (5) to submit relevant information. |
| (7) | Except as provided in paragraphs (1) through (6), matters necessary for the composition and operation of the Council shall be prescribed by Presidential Decree. |
| Article 32 (Pubic Disclosure of Comparison of Financial Products) |
| (1) | The Financial Services Commission may make public disclosures of the comparison of main terms and conditions of financial products by the types of financial product under Article 3 to help financial consumers compare and easily understand main terms and conditions of financial products. |
| (2) | The Governor of the Financial Supervisory Service may evaluate the current situation of the protection of financial consumers by the financial product distributors and advisors specified by Presidential Decree and may publicly announce the result of such evaluation. |
| (3) | The financial product distributors and advisors specified by Presidential Decree shall establish basic procedures and standards that their executive officers and employees shall observe in performing their duties (hereinafter referred to as “standards for the protection of financial consumers”) to protect financial consumers through the prevention of grievances of financial consumers and prompt subsequent remedies therefor. |
| (4) | Necessary matters concerning the scope and details of financial products subject to the comparative public disclosure under paragraph (1), the procedure for such comparative public disclosure, the details of the current situation of the protection of financial consumers under paragraph (2) and the procedures for the evaluation and public announcement of such current situation, and the details of, and the procedure for, the standards for the protection of financial consumers under paragraph (3) shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Articles 32 (2), (3), and (4)
Section 2 Mediation of Financial Disputes
| Article 33 (Organization for Mediation of Financial Disputes) |
The Committee for the Mediation of Financial Disputes shall be established within the Financial Supervisory Service in order to have the committee deliberate and resolve on matters concerning the mediation of finance-related disputes arising among the institutions referred to in each subparagraph of Article 38 of the Act on the Establishment of Financial Services Commission (hereinafter referred to as “institutions subject to mediation”), financial consumers, and other interested persons.
| Article 34 (Composition of Mediation Committee) |
| (1) | The Committee for the Mediation of Financial Disputes under Article 33 (hereinafter referred to as the “Mediation Committee”) shall be composed of not more than 35 members, including one Chairperson. |
| (2) | The Chairperson of the Mediation Committee shall be appointed by the Governor of the Financial Supervisory Service, from among senior deputy governors of the Financial Supervisory Service. |
| (3) | Members of the Financial Supervisory Service shall be appointed by the Governor of the Financial Supervisory Service, from among deputy governors of the Financial Supervisory Service, and commissioned by the Governor of the Financial Supervisory Service, from among persons falling under any of the following subparagraphs, taking gender equality into consideration: |
| 1. | A judge, a public prosecutor, or an licensed attorney-at-law; |
| 2. | A person who serves or served as an executive officer of the Korea Consumer Agency under the Framework Act on Consumers or a consumer organization registered under that Act or a person who has worked for not less than 15 years for such institution or organization; |
| 3. | A person who has worked for not less than 15 years for an institution subject to mediation or a finance-related institution or organization; |
| 4. | A person who has knowledge and experiences in the field of finance or consumers; |
| 5. | A medical doctor with a specialist license; |
| 6. | Other persons who the Governor of the Financial Supervisory Service considers necessary for the mediation of disputes. |
| (4) | The term of office of committee members under each subparagraph of paragraph (3) shall be two years. |
| (5) | If the Chairperson of the Mediation Committee is unable to perform his or her duties due to any unavoidable cause, the member of the Mediation Committee designated by the Governor of the Financial Supervisory Service shall act on behalf of the Chairperson. |
| (6) | For the purpose of applying Articles 129 through 132 of the Criminal Act, members who are not public officials, among members of the Mediation Committee, shall be deemed public officials. |
| Article 35 (Withdrawal of Appointment, and Cancellation of Commissioning, of Members of Mediation Committee) |
If any member of the Mediation Committee falls under any of the following subparagraphs, the Governor of the Financial Supervisory Service may withdraw the appointment of the member or cancel the commissioning of the member:
| 1. | If a member is unable to perform his or her duties due to a mental or psychological impairment; |
| 2. | If a member is found to have committed misconduct in connection with his or her duties; |
| 3. | If a member is found incompetent for the office due to neglect of duty or indecent conduct or on any other ground; |
| 4. | If a member does not voluntarily refrain from participating in proceedings, although he or she falls under any subparagraph of Article 38 (1); |
| 5. | If a member voluntarily discloses that he or she has difficulty in performing duties. |
| Article 36 (Mediation of Disputes) |
| (1) | When a dispute arises in connection with finance, an institution subject to mediation, a financial consumer, or other interested person may apply for the mediation of the dispute to the Governor of the Financial Supervisory Service. |
| (2) | Upon the receipt of an application for the mediation of a dispute under paragraph (1), the Governor of the Financial Supervisory Service may notify relevant parties of the issues of the application and may recommend settlement by agreement to them: |
| 1. | If the Governor of the Financial Supervisory Service finds that the issues of the application is not appropriate to settle by mediation; |
| 2. | If the issues of the application have no practical merit in proceeding with recommendation of settlement by agreement or mediation, in light of objective evidence, etc.; |
| 3. | Other cases specified by Presidential Decree as similar to those referred to in subparagraph 1 or 2. |
| (3) | When the Governor of the Financial Supervisory Service does not recommend settlement by agreement or refer a dispute to the Mediation Committee under the proviso, with the exception of the subparagraphs, of paragraph (2), he or she shall notify the involved parties of the fact in writing. |
| (4) | When a dispute is not settled by agreement under the main clause, with the exception of the subparagraphs, of paragraph (2) within 30 days from the filing date of an application for the mediation of a dispute, the Governor of the Financial Supervisory Service shall refer the dispute to the Mediation Committee, without delay. |
| (5) | When a dispute is referred to the Mediation Committee for mediation under paragraph (4), the Mediation Committee shall deliberate on the dispute and prepare a draft mediation agreement within 60 days. |
| (6) | When the Mediation Committee completes a draft mediation agreement, the Governor of the Financial Supervisory Service may propose the draft mediation agreement to the applicant and involved parties to recommend them to accept it. |
| (7) | If the applicant and involved parties do not accept a draft mediation agreement within 20 days from the date the draft mediation agreement is proposed to them under paragraph (6), the draft mediation agreement shall be deemed not accepted. |
| Article 37 (Meetings of Mediation Committee) |
| (1) | A meeting of the Mediation Committee shall be formed with 6 to 10 members of the Mediation Committee designated for each meeting by the Chairperson of the Mediation Committee, and each meeting shall be convened by the Chairperson of the Mediation Committee. |
| (2) | A majority of the members of the Mediation Committee shall constitute a quorum, and any resolution thereof shall require a concurring vote of at least a majority of those present. |
| Article 38 (Disqualification of, Challenge to, and Refrainment by, Members) |
| (1) | In any of the following cases, a member of the Mediation Committee shall be barred from deliberation and resolution on the relevant application for the mediation of a dispute (hereinafter referred to as “relevant case”): |
| 1. | If the committee member or the current or former spouse of the committee member becomes a party to the relevant case (if the party is a corporation, organization or other similar entity, including its executive officers; hereafter the same shall apply in this subparagraph and subparagraph 2) or is a joint right holder or joint obligor with a party to the relevant case; |
| 2. | If the committee member is a current or former relative of a party to the relevant case; |
| 3. | If the committee member belongs or belonged to a corporation or an organization (including affiliates and other related companies; hereafter the same shall apply in this paragraph) during the latest five years before the filing date of the mediation application; |
| 4. | If the committee member of the corporation, organization, or office to which the committee member belongs has testified, provided legal advice, appraised damage, or provided similar services with respect to the relevant case; |
| 5. | If the committee member or the corporation, organization, or office to which the committee member belongs is or was involved in the relevant case as the representative of a party. |
| (2) | If a party reasonably suspects that a committee member will be partial in the proceedings of deliberation and resolution, the party may file a challenge against the committee member to the Chairperson of the Mediation Committee; and the Chairperson of the Mediation Committee shall determine to accept the challenge if he or she finds that the challenge is reasonable. |
| (3) | If a committee member is to be disqualified under any subparagraph of paragraph (1), he or she shall voluntarily refrain from participating in the proceedings of deliberation and resolution on the relevant case. |
| Article 39 (Effect of Mediation) |
When both parties accept a draft mediation agreement under Article 36 (5), the draft mediation agreement shall be as effective as judicial compromise.
| Article 40 (Interruption of Prescription) |
| (1) | An application for the mediation of a dispute under Article 36 (1) shall have the effect of interrupting prescription: |
| (2) | When a judicial claim is filed or a party intervenes in bankruptcy proceedings against the other party or puts the other party’s property under attachment or provisional attachment or obtains provisional injunction against the other party within one month in cases of the proviso of paragraph (1), prescription shall be deemed to be interrupted by the initial application for the mediation of the dispute. |
| (3) | Prescription interrupted under the main clause of paragraph (1) shall begin to run again at the time falling under either of the following subparagraphs: |
| 1. | When both parties accept a draft mediation agreement; |
| 2. | When the proceedings of mediation end, although the dispute has not been settled by mediation. |
| Article 41 (Relationship to Litigation) |
| (1) | When a lawsuit filed before or after an application for mediation is filed for the same case is pending with a court, the court may stay litigation proceedings until mediation proceedings end. |
| (2) | If litigation proceedings are not stayed under paragraph (1), the Mediation Committee discontinue mediation proceedings of the relevant case. |
| (3) | If a lawsuit is pending with a court with respect to the same or a similar case where two or more persons are involved for the same cause as the cause of the case for which an application for mediation has been filed, the Mediation Committee may discontinue mediation proceedings by its decision. |
| Article 42 (Special Case concerning Small-Amount Dispute Cases) |
When a mediation proceeding has commenced with regard to a dispute that meets all the following requirements, the institution subject to mediation shall not file a lawsuit before a draft mediation agreement is proposed under Article 36 (6): Provided , That the same shall not apply where a written notice has been given under Article 36 (3) or no draft mediation agreement has been proposed within the period specified in Article 36 (5):
| 1. | The application for mediation has been filed by an ordinary financial consumer; |
| 2. | The value of the right or interest asserted through mediation is not greater than the amount specified by Presidential Decree within a maximum of 20 million won. |
| Article 43 (Operation of Mediation Committee) |
Necessary matters concerning the composition and operation of the Mediation Committee and the procedure for the mediation of disputes shall be prescribed by Presidential Decree.
Section 3 Liability for Damages
| Article 44 (Liability of Financial Product Distributors and Advisors for Damages) |
| (1) | A financial product distributor or advisor shall be liable for damage that it intentionally or negligently inflicts on a financial consumer. |
| (2) | A financial product distributor or advisor shall be liable for damage that it inflicts on a financial consumer by its violation of Article 19: |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 44
| Article 45 (Liability of Financial Product Direct Sellers for Damages) |
| (1) | A financial product direct seller shall be liable for damage inflicted on a financial consumer while a financial product distribution agent or broker (including third parties serving as agents and brokers in accordance with the proviso of Article 25 (1) 2, but excluding certified insurance brokers under subparagraph 11 of Article 2 of the Insurance Business Act) concludes a contract for a financial product or conducts other relevant transactions as his or her agent or broker or while an executive officer or employee falling under Article 83 (1) 4 of the Insurance Business Act (hereafter referred to as “financial product distribution agent or broker or other relevant person” in this Article) serves as his or her agent or broker: |
| (2) | The liability of a financial product direct seller for damages under the main clause of paragraph (1) shall not obstruct the exercise of the right to demand a reimbursement by the financial product direct seller to the financial product distribution agent or broker or other relevant person. |
| Article 46 (Withdrawal of Offer) |
| (1) | An ordinary financial consumer who has offered a contract for an indemnity product, an investment product, or a loan product specified by Presidential Decree or for advisory service on financial products with a financial product distributor or advisor may withdraw such offer within the relevant period specified in the following subparagraphs (if the parties to a transaction have agreed on a period longer than the period specified in the relevant subparagraph, such longer period): |
| 1. | In cases of an indemnity product: 15 days from the date on which an insurance policy under Article 640 of the Commercial Act is delivered or 30 days from the date of the offer, whichever comes earlier; |
| 2. | In cases of an investment product or advisory service on financial products: Seven days from either of the following dates: |
| (a) | The date on which contract documents are delivered under the main clause of Article 23 (1); |
| (b) | In cases of the proviso of Article 23 (1), the date of conclusion of the contract; |
| 3. | In cases of a loan product: 14 days from any of the following dates (if money, goods (hereafter referred to as “money or goods” in this Article) or service under a contract are paid, delivered, or provided later than either of the following dates, the date of payment, delivery, or provision): |
| (a) | The date on which contract documents are delivered under the main clause of Article 23 (1); |
| (b) | In cases of the proviso of Article 23 (1), the date of conclusion of the contract; |
| (2) | The withdrawal of the offer under paragraph (1) shall become effective at the time specified in the following subparagraphs: |
| 1. | In cases of indemnity products, investment products, or advisory service on financial products: When an ordinary financial consumer dispatches a written notice to manifest his or her intention to withdraw the offer (including cases where such intention is communicated by the means specified by Presidential Decree; hereafter referred to as “written notice or other means”); |
| 2. | In cases of loan products: When an ordinary financial consumer dispatches a written notice or other means to manifest his or her intention to withdraw the offer and return money or goods specified in the following items (excluding service already provided, but including rights to use certain facilities or to receive service; hereafter the same shall apply in this paragraph): |
| (a) | Money or goods already received; |
| (b) | Interest specified by Presidential Decree in connection with money already received; |
| (c) | Expenses specified by Presidential Decree, such as fees that a financial product distributor or advisor has already paid to a third party. |
| (3) | When the offer is withdrawn under paragraph (1), the financial product distributor or advisor shall return money or goods already received from the ordinary financial consumer in any of the following manners: |
| 1. | In cases of an indemnity product: The financial product distributor or advisor shall return the money or goods already received, within three business days from the filing date of the withdrawal of the offer, and shall pay an additional amount calculated in accordance with Presidential Decree for the period during which the return of money or goods are delayed; |
| 2. | In cases of an investment product or advisory service on financial products: The financial product distributor or advisor shall return the money or goods already received, within three business days from the filing date of the withdrawal of the offer, and shall pay an additional amount calculated in accordance with Presidential Decree for the period during which the return of money or goods are delayed: |
| 3. | In cases of a loan product: The financial product distributor or advisor shall return the money or goods already received, including fees received from the ordinary financial consumer in connection with the relevant loan, to the ordinary financial consumer, in accordance with Presidential Decree within three business days from the date on which it received the money or goods and interest and fees returned by the ordinary financial consumer under paragraph (2) 2 and shall pay an additional amount calculated in accordance with Presidential Decree for the period during which the return of money or goods are delayed; |
| (4) | Where the offer is withdrawn under paragraph (1), no financial product distributor or advisor may claim compensation for damage caused by the withdrawal of the offer or the payment of money as penalty. |
| (5) | If an insurance event has already occurred before the offer of an indemnity product is withdrawn, the withdrawal of such offer shall not become effective: |
| (6) | Any special term or condition contrary to paragraphs (1) through (5) and unfavorable to ordinary financial consumers shall be void. |
| (7) | Necessary matters concerning the exercise of the right to withdraw an offer, the effect thereof, etc. under paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 46
| Article 47 (Termination of Illegal Contract) |
| (1) | Where a financial product distributor or advisor concludes a contract for any financial product specified by Presidential Decree with a financial consumer, in violation of Article 17 (3), 18 (2), 19 (1) or (3), 20 (1), or 21, the financial consumer may demand the termination of the contract by a written notice or other means, within the period specified by Presidential Decree within a maximum of five years: In such cases, the financial product distributor or advisor shall notify the financial consumer of whether to accept such demand within 10 days from the date on which it receives the demand for termination and shall also give the reason for refusal if it refuses to accept such demand. |
| (2) | If the financial product distributor or advisor does not comply with the demand under paragraph (1), without good cause, the ordinary financial consumer may terminate the relevant contract. |
| (3) | When a contract is terminated under paragraph (1) or (2), the financial product distributor or advisor shall not claim expenses relating to the termination of contract, including fees and penalty. |
| (4) | Necessary matters concerning the requirements for exercise of the right to demand the termination of a contract under paragraphs (1) through (3), the scope of exercise of such right, valid reasons therefor, etc. shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 47
CHAPTER VI SUPERVISION AND DISPOSITIONS
| Article 48 (Supervision over Financial Product Distributors and Advisors) |
| (1) | The Financial Services Commission shall supervise financial product distributors and advisors to ensure that they observe this Act or an order issued or a disposition made under this Act for the protection of rights and interests of financial consumers and the robust trading system. |
| (2) | A financial product advisor registered under Article 12 shall prepare business operation reports for 3 months, 6 months, 9 months, and 12 months respectively from the commencement date of each business year and shall submit the business operation reports to the Financial Services Commission within the period specified by Presidential Decree, which shall not exceed 45 days after the lapse of the respective periods. |
| (3) | If any matter specified by Presidential Decree, among requirements for the registration of financial product distributors and advisors, is changed with respect to any person specified by Presidential Decree, among financial product distributors and advisors registered in compliance with the requirements under Article 12, such person shall report the change to the Financial Services Commission within one month. |
| (4) | Mandatory contents of the business operation reports under paragraph (2), the method and procedure for reporting changes under paragraph (3), and other necessary matters shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 48
| Article 49 (Financial Services Commission’s Power to Issue Orders) |
| (1) | The Financial Services Commission may take necessary measures, such as corrective measures and the suspension of business operations, against a financial product distributor or advisor with regard to the following matters if it considers that such measures are necessary for the protection of rights and interests of financial consumers and the robust trading system: |
| 1. | Matters relating to the improvement of business management and operation of the financial product distributor or advisor; |
| 2. | Matters relating to the maintenance of order in business; |
| 3. | Matters relating to business methods; |
| 4. | Matters relating to the establishment of minimum or maximum limits on payments to be paid by a financial consumer for a financial product, such as investments; |
| 5. | Other matters specified by Presidential Decree as necessary for the protection of rights and interests of financial consumers and the robust trading system. |
| (2) | In cases specified by Presidential Decree as those where it is considered obvious that a financial product may cause serious economic damage to financial consumers, the Financial Services Commission may order the financial product distributor who sells the financial product to preclude the solicitation of conclusion of contracts for the financial product or restrict or preclude the conclusion of contracts for the financial product. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 49
| Article 50 (Inspections of Financial Product Distributors and Advisors) |
| (1) | Financial product distributors and advisors shall undergo inspections conducted by the Governor of the Financial Supervisory Service on their business operations and the current status of their property. |
| (2) | Where deemed necessary for inspections under paragraph (1), the Governor of the Financial Supervisory Service may request a financial product distributor or advisor to submit a report and data on its business operations or property or to have its officers make an appearance before him or her to express their opinions orally or may authorize employees of the Financial Supervisory Service to enter the office or place of business of the financial product distributor or advisor to inspect its business operations, books of accounts, documents, facilities, or other necessary articles. |
| (3) | The persons conducting the inspection under paragraph (2) shall carry a certificate of their authority and shall produce it to interested persons. |
| (4) | The Governor of the Financial Supervisory Service shall report the findings from the inspection conducted under paragraph (1) to the Financial Services Commission. If a violation of this Act or an order issued or a disposition made under this Act was found in such cases, the report shall be accompanied by a written opinion on the disposition on such violation. |
| (5) | The Governor of the Financial Supervisory Service may request the external auditor appointed by a financial product distributor or advisor under the Act on External Audit of Stock Companies, in writing, to submit the information obtained as a result of the audit of the financial product distributor or advisor and other materials relating to its business activities to the minimum extent necessary for his or her purpose of use. |
| (6) | The Financial Services Commission may determine and publicly notify necessary matters concerning the inspection, including the methods and procedure for the inspection. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 50
| Article 51 (Dispositions against Financial Product Distributors and Advisors) |
| (1) | If a financial product distributor or advisor registered under Articles 12, among financial product distributors and advisors, falls under any of the following subparagraphs, the Financial Services Commission may revoke the registration of its financial product distribution business or financial product advisory business under Article 12: |
| 1. | If a financial product distributor or advisor registers its business under Article 12 by fraud or other improper means; |
| 2. | If a financial product distributor or advisor ceases to maintain the requirements provided in Article 12 (2) or (3): |
| 3. | If a financial product distributor or advisor continues its business operations during a period of suspension of business operations; |
| 4. | If a financial product distributor or advisor does not take corrective measures or suspend its business operations within the period specified by the Financial Services Commission after it received an order from the Financial Services Commission to take corrective measures or suspend business operations; |
| 5. | Other cases specified by Presidential Decree as those where serious damage is likely to be caused financial consumers’ interests or where it is considered impracticable to engage in the relevant financial product distribution business or financial product advisory business. |
| (2) | In cases specified by Presidential Decree, such as cases where a financial product distributor or advisor falls under any of paragraph (1) 2 through 5 or where it is considered that a financial product distributor or advisor is unlikely to operate its financial product distribution business or financial product advisory business legitimately because of its violation of this Act or an order issued under this Act, the Financial Services Commission may take any of the following measures in accordance with Presidential Decree: |
| 1. | Complete or partial suspension of business operations for not more than six months; |
| 2. | An order to take measures to rectify the violation; |
| 3. | An order to stop the violation; |
| 4. | An order to publicly announce or post the fact that the financial product distributor or advisor has become subject to measures for the violation; |
| 5. | An institutional warning; |
| 6. | An institutional caution; |
| 7. | Other measures specified by Presidential Decree as those necessary for rectifying or preventing violations. |
| (3) | Notwithstanding paragraph (2), the following subparagraphs shall apply to financial product distributors falling under subparagraph 6 (a), (c), or (e) or subparagraph 7 (d), (e), or (f) of Article 2: |
| 1. | With respect to financial product distributors and advisors falling under subparagraph 6 (a) of Article 2, the Financial Services Commission may take the measure under any of paragraph (2) 2, 4, and 7 in response to the recommendation of the Governor of the Financial Supervisory Service or may authorize the Governor of the Financial Supervisory Service to take the measure under paragraph (2) 3, 5, or 6; |
| 2. | With respect to financial product distributors and advisors under subparagraph 6 (c) or (e) of Article 2 or subparagraph 7 (d), (e), or (f) of that Article, the Financial Services Commission may take the measure under any of paragraph (2) 2 through 7 according to the recommendation of the Governor of the Financial Supervisory Service or may authorize the Governor of the Financial Supervisory Service to take the measure under paragraph (2) 5 or 6. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 51
| Article 52 (Measures against Executive Officers and Employees of Financial Product Distributors and Advisors) |
| (1) | In cases specified by Presidential Decree, such as cases where it is considered that an executive officer of a financial product distributor or advisor is unlikely able to work for the financial product distribution business or financial product advisory business legitimately because of his or her violation of this Act or an order issued under this Act, the Financial Services Commission may request the financial product distributor or advisor to take any of the following measures: |
| 1. | Removal of such executive officer; |
| 2. | Suspension performance of such executive officer’s duties; |
| 3. | Warning of reprimand; |
| 4. | Cautionary warning; |
| 5. | Caution. |
| (2) | In cases specified by Presidential Decree, such as cases where it is considered that an employee of a financial product distributor or advisor is unlikely able to work for the financial product distribution business or financial product advisory business legitimately because of his or her violation of this Act or an order issued under this Act, the Financial Services Commission may request the financial product distributor or advisor to take any of the following measures: |
| 1. | Dismissal; |
| 2. | Suspension from office for not more than six months; |
| 3. | Salary reduction; |
| 4. | Reprimand; |
| 5. | Caution. |
| (3) | Notwithstanding paragraph (1), the following subparagraphs shall apply to executive officers of financial product distributors and advisors falling under subparagraph 6 (a), (c), or (e) of Article 2 or subparagraph 7 (d), (e), or (f) of that Article: |
| 1. | With respect to executive officers of a financial product distributor or advisor falling under subparagraph 6 (a) of Article 2, the Financial Services Commission may take the measure under paragraph (1) 1 or 2 in response to recommendation from the Governor of the Financial Supervisory Service and may authorize the Governor of the Financial Supervisory Service to take the measure under in any subparagraph of paragraph (1) 3 through 5; |
| 2. | With respect to executive officers of a financial product distributor or advisor falling under subparagraph 6 (c) or (e) of Article 2 or subparagraph 7 (d), (e), or (f) of that Article, the Financial Services Commission may take the measure under any subparagraph of paragraph (1) in response to recommendation from the Governor of the Financial Supervisory Service or may authorize the Governor of the Financial Supervisory Service to take the measure under any subparagraph of paragraph (1) 3 through 5. |
| (4) | Notwithstanding paragraph (2), the following subparagraphs shall apply to employees of the financial product distributors and advisors falling under subparagraph 6 (a), (c), or (e) of Article 2 or subparagraph 7 (d), (e), or (f) of that Article: |
| 1. | With respect to employees of a financial product distributor or advisor falling under subparagraph 6 (a) of Article 2, the Financial Services Commission may request the financial product distributor or advisor to take the measure under any subparagraph of paragraph (2); |
| 2. | With respect to employees of a financial product distributor or advisor falling under subparagraph 6 (c) or (e) of Article 2 or subparagraph 7 (d), (e), or (f) of that Article, the Financial Services Commission may request the financial product distributor or advisor to take the measure under any subparagraph of paragraph (2) in response to recommendation from the Governor of the Financial Supervisory Service or may authorize the Governor of the Financial Supervisory Service to request the financial product distributor or advisor to take such measure. |
| (5) | When the Financial Services Commission or the Governor of the Financial Supervisory Service takes a measure against an executive officer or employee of a financial product distributor or advisor or requests a financial product distributor or advisor to take such measure under paragraphs (1) through (4), the Financial Services Commission or the Governor of the Financial Supervisory Service may concurrently take measures against the executive officers or employees who are responsible for the supervision of such executive officer or employee or may concurrently request the financial product distributor or advisor to take such measures: |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 52
| Article 53 (Notification of Measures against Retired Executive Officers and Others) |
The Financial Services Commission (including the Governor of the Financial Supervisory Service who may take measures under Article 52 or who may request to take such measures) may notify the head of a financial product distributor or advisor of the details of the measure under Article 52 that it considers that an executive officer who retired from the financial product distributor or advisor or an employee resigned from the financial product distributor or advisor would deserve if the former executive officer or employee were still in service or in employment. Upon the receipt of a notice in such cases, the financial product distributor or advisor shall notify the details thereof to the executive officer or employee concerned.
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 53
| Article 54 (Hearings) |
The Financial Services Commission shall hold hearings when it intends to make a disposition or take a measure under either of the following subparagraphs:
| 1. | Revoking the registration of a financial product distributor or advisor under Article 51 (1); |
| 2. | Requesting the removal of an executive officer or the dismissal of an employee, as a measure under any of Article 52 (1) through (5). |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 54
| Article 55 (Petition for Objection) |
| (1) | A person who protests against a disposition made or a measure taken under Article 51 or 52 (excluding the revocation of registration or the requesting for removal or dismissal) may file a petition for objection, with the reason for protest stated therein, within 30 days from the date on which he or she is notified of such disposition or measure. |
| (2) | The Financial Services Commission shall render a decision on the petition for application under paragraph (1) within 60 days: |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 55
| Article 56 (Recording of Dispositions and Measures) |
| (1) | The Financial Services Commission and the Governor of the Financial Supervisory Service shall keep, maintain, and manage records of the details of each disposition made or each measure taken under Article 49, 51, or 52. |
| (2) | When a financial product distributor or advisor takes measures against executive officers and employees concerning according to a request of the Financial Services Commission or the Governor of the Financial Supervisory Service under Article 52 or is notified of the details of measures against retired executive officers, etc. under Article 53, it shall record the details thereof and shall maintain and manage such records. |
| (3) | A financial product distributor or advisor or an executive officer or employee of a financial product distributor or advisor may request the Financial Services Commission, the Financial Supervisory Service, or the financial product distributor or advisor to reply to his or her inquiry about whether a disposition was made or a measure was taken against him or her under Article 49 or Articles 51 through 53 or the details of such disposition or measure. |
| (4) | Upon the receipt of an inquiry under paragraph (3), the Financial Services Commission, the Financial Supervisory Service, or a financial product distributor or advisor shall notify the inquirer of whether a disposition was made or a measure was taken and the details of such disposition or measure, unless a compelling reason exists not to do so. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 56
| Article 57 (Penalty Surcharges) |
| (1) | If a financial product distributor or advisor falls under any of the following subparagraphs, the Financial Services Commission may impose a penalty surcharge within a maximum of 50/100 of the revenue that it gained from contracts relating to such violation or an amount equivalent to such earnings (hereafter referred to as “revenue” in this Article): |
| 1. | Where a financial product distributor or advisor omits to explain any important matter, in violation of Article 19 (1), or omits to provide a written explanation or obtains confirmation, in violation of paragraph (2) of that Article; |
| 2. | Where a financial product distributor or advisor commits an act falling under any subparagraph of Article 20 (1); |
| 3. | Where a financial product distributor or advisor commits an act falling under any subparagraph of Article 21; |
| 4. | Where a financial product distributor or advisor makes an advertisement of a financial product or other matter, in violation of Article 22 (3) or (4). |
| (2) | If a financial product distribution agent or broker whom a financial product direct seller authorized to act as his or her agent or broker for the conclusion of a contract for a financial product or the conduct of other relevant transaction (limited to financial product distribution agents and brokers acting as agents only for one financial product direct seller under this Act or any other finance-related statute or regulation) or an executive officer or employee of a financial product direct seller commits an act falling under any subparagraph of paragraph (1), the Financial Services Commission may impose a penalty surcharge on the financial product direct seller within a maximum of 50/100 of the revenue that he or she gained from contracts relating to such violation: |
| (3) | Where the Financial Services Commission may order a financial product distributor or advisor to suspend its business operation under Article 51 (2) 1 but suspending business operations is likely to seriously affect interested persons or undermine public interest, the Financial Services Commission may impose a penalty surcharge within a maximum of the profit that the financial product distributor or advisor is expected to gain during the period of suspension of business operations, in lieu of the suspension of business operation, in accordance with Presidential Decree. |
| (4) | Matters concerning the determination of the revenue gained from contracts relating to a violation under paragraph (1) shall be prescribed by Presidential Decree in consideration of the causes of change according to environmental changes, characteristics of each type of financial product, the size of business of financial product distributors and advisors, etc. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 57 (1), (3), and (4)
| Article 58 (Imposition of Penalty Surcharges) |
| (1) | In imposing a penalty surcharge under Article 57, the Financial Services Commission shall consider the following matters according to the guidelines prescribed by Presidential Decree: |
| 1. | The substance and degree of the violation; |
| 2. | The duration of the violation and the number of violations; |
| 3. | The amount of profit obtained from the violation; |
| 4. | The period of suspension of business operations (limited to cases where a penalty surcharge is imposed under Article 57 (3)). |
| (2) | If a corporation that violated this Act is merged with another corporation, the Financial Services Commission may impose a penalty on the corporation surviving the merger or newly established by the merger and collect it from such corporation, deeming that the violation committed by the former corporation was committed by the latter corporation. |
| (3) | Except as provided in paragraphs (1) and (2), matters necessary for the imposition of penalty surcharges shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 58
| Article 59 (Petition for Objection) |
| (1) | A person who protests against the imposition of a penalty surcharge under Article 57 or 58 (2) may file a petition for objection, with the reason for protest stated therein, within 30 days from the date on which he or she is notified of such disposition. |
| (2) | The Financial Services Commission shall render a decision on the petition for application under paragraph (1) within 60 days: |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 59
| Article 60 (Extension of Period for Payment of Penalty Surcharges and Payment in Installments) |
| (1) | If the Financial Services Commission determines that a person upon whom a penalty surcharge was imposed under Article 57 or 58 (2) (hereinafter referred to as “person obligated to pay a penalty surcharge”) is unable to pay it in a lump sum due to any of the following causes or events, it may extend the period of payment or permit payment in installments. In such cases, the Financial Services Commission may require such person to provide collateral if it considers necessary to do so: |
| 1. | If the person obligated to pay a penalty surcharge sustained a serious economic loss due to a disaster, theft, or other similar event; |
| 2. | If the business of the person obligated to pay a penalty surcharge is in a critical crisis due to the deterioration of business conditions; |
| 3. | If it is expected that the person obligated to pay a penalty surcharge will suffer severe difficulty in financing as a consequence of the payment of the penalty surcharge in a lump sum; |
| 4. | If any other cause or event equivalent to the causes and events under subparagraphs 1 through 3 has occurred. |
| (2) | If a person obligated to pay a penalty surcharge wishes to obtain permission for the extension of the period for the payment of the penalty surcharge or the payment in installments under paragraph (1) shall file an application therefor with the Financial Services Commission no later than 10 days before the deadline for payment. |
| (3) | If a person obligated to pay a penalty surcharge who has the period of payment extended or is permitted to pay in installments under paragraph (1) falls under any of the following subparagraphs, the Financial Services Commission may revoke the decision to extend the period of payment or to permit the payment in installments and may collect the penalty surcharge in a lump sum: |
| 1. | If the person obligated to pay a penalty surcharge fails to pay the penalty surcharge payable in installments within the period of payment; |
| 2. | If the person obligated to pay a penalty surcharge fails to comply with an order issued by the Financial Services Commission as necessary for the change or supplementation of collateral; |
| 3. | If it is found that it is impossible to collect the whole amount or balance of a penalty surcharge due to forced execution, the commencement of an auction, the declaration of bankruptcy, the dissolution of the corporation concerned, or the disposition on the delinquency of a national or local tax; |
| 4. | If any other cause or event equivalent to the causes and events under subparagraphs 1 through 3 has occurred. |
| (4) | Necessary matters concerning the extension of the period of payment of a penalty surcharge, payment in installments, collateral, etc. provided in paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 60
| Article 61 (Collection of Penalty Surcharges and Disposition on Delinquency) |
| (1) | If a person obligated to pay a penalty surcharge fails to pay the penalty surcharge by the deadline for payment, the Financial Services Commission may collect the additional charge prescribed by Presidential Decree for the period starting on the day immediately after the deadline for payment and ending on the day immediately before the date of actual payment. The period for which an additional charge may be collected in such cases shall not exceed 60 months. |
| (2) | If a person obligated to pay a penalty surcharge fails to pay the penalty surcharge by the deadline for payment, the Financial Services Commission shall urge for payment within the period designated by it and may collect the penalty surcharge and the additional charge under paragraph (1) in the same manner as provided for the disposition on the delinquency of national taxes if such person fails to pay them within the designated period. |
| (3) | The Financial Services Commission may entrust the Commissioner of the National Tax Service with affairs relating to the collection of penalty surcharges and additional charges and the disposition on the delinquency of them under paragraphs (1) and (2). |
| (4) | Except as provided in paragraphs (1) through (3), matters necessary for the collection of penalty surcharges and additional charges shall be prescribed by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 61
| Article 62 (Refund of Overpayment or Erroneous Payment) |
| (1) | If a person obligated to pay a penalty surcharge claims the refund of an overpaid or erroneously paid penalty surcharge on the ground of a decision on a petition for objection, a court judgment, or any other equivalent adjudication, the Financial Services Commission shall refund such payment, without delay, and shall refund any payment identified by the Financial Services Commission as overpaid or erroneously paid even where the person obligated to pay a penalty surcharge does not claim the refund of such payment. |
| (2) | Where the Financial Services Commission shall refund an overpayment or erroneous payment, the Financial Services Commission may appropriate the refundable amount for any other penalty surcharge that the person entitled to such refund shall pay otherwise to the Financial Services Commission. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 62
| Article 63 (Additional Payment on Refund) |
When the Financial Services Commission shall refund a penalty surcharge under Article 62 (1), it shall pay an additional payment on refund to the person entitled to the refund by applying the interest rate specified by Presidential Decree for such additional payment to the period starting on the date of actual payment of the penalty surcharge and ending on the date of refund.
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 63
| Article 64 (Disposal of Deficiency) |
If any of the following events occurs to a person obligated to pay a penalty surcharge, the Financial Services Commission may dispose of the deficiency as a loss:
| 1. | If the amount allocated for the payment of the delinquent amount after the disposition on delinquency is less than the delinquent amount; |
| 2. | If extinctive prescription for the claim for collecting a penalty surcharge and additional charges is completed; |
| 3. | If the whereabouts of the delinquent payer is uncertain or if it is found that the delinquent payer has no asset; |
| 4. | If it is found that there will be no leftover after satisfying expenses for the disposition on delinquency from the estimated value of total assets subject to the disposition on delinquency; |
| 5. | If it is found that there will be no leftover after satisfying national taxes, local taxes, and claims, etc. secured by rights to lease on a deposit basis, pledge rights, mortgages, security interests under the Act on Security over Movable Property and Claims, which are senior to the penalty surcharge and additional charges, from total assets subject to the disposition on delinquency; |
| 6. | Other cases where it is impossible to collect a penalty surcharge and additional charges due to any cause or event specified by Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 64
CHAPTER VII SUPPLEMENTARY PROVISIONS
| Article 65 (Entrustment of Business Affairs) |
| (1) | The Financial Services Commission may entrust part of the business affairs assigned to it under this Act to the Governor of the Financial Supervisory Service, the relevant association or institution in accordance with Presidential Decree. |
| (2) | The Governor of the Financial Supervisory Service may delegate part of the business affairs assigned to him or her under this Act to the relevant association or institution in accordance with Presidential Decree. |
| (3) | For the purpose of applying Articles 129 through 132, the executive officers and employees of the relevant association or institution performing part of the business affairs entrusted by the Financial Services Commission or the Governor of the Financial Supervisory Service under paragraphs (1) and (2) shall be deemed public officials. |
| Article 66 (Guidance for and Supervision over Governor of Financial Supervisory Service) |
| (1) | If necessary to exercise the powers under this Act, the Financial Services Commission may guide and supervise the Governor of the Financial Supervisory Service and may order the Governor of the Financial Supervisory Service to take other measures necessary for supervision. |
| (2) | The Financial Supervisory Service shall perform the business affairs assigned to it under this Act and the business affairs entrusted by the Financial Services Commission, under the guidance and supervision of the Financial Services Commission under this Act. |
CHAPTER VIII PENALTY PROVISIONS
| Article 67 (Penalty Provisions) |
Any of the following persons shall be punished by imprisonment with labor for not less than five years or by a fine not exceeding 200 million won:
| 1. | A person who engages in a financial product distribution business or a financial product advisory business without registering the financial product distribution business or financial product advisory business, in violation of Article 12; |
| 2. | A person who registers under Article 12 by fraud or other improper means; |
| 3. | A person who engages any person, other than financial product distribution agents and brokers, as an agent or a broker for the conclusion of a contract for a financial product or other relevant transactions, in violation of Article 24. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in subparagraphs 1 and 2 of Article 67
| Article 68 (Joint Penalty Provisions) |
If the representative of a corporation or an agent or employee of, or any other person employed by, the corporation or an individual commits any violation described in Article 67 in performing any business affair of the corporation or individual, the corporation or individual shall, in addition to punishing the violator accordingly, be punished by a fine prescribed in the relevant Article: Provided , That the same shall not apply where the corporation or individual has not neglected exercising due care and supervising the violator to prevent such violation.
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 68
| Article 69 (Administrative Fines) |
| (1) | Any of the following persons shall be subject to an administrative fine not exceeding 100 million won: |
| 1. | A person who fails to prepare internal control standards, in violation of Article 16 (2); |
| 2. | A person who fails to explain an important matter, in violation of Article 19 (1), or who fails to deliver a written explanation or obtain confirmation, in violation of paragraph (2) of that Article; |
| 3. | A person who commits an act falling under any subparagraph of Article 20 (1); |
| 4. | A person who commits an act falling under any subparagraph of Article 21; |
| 5. | A person who makes an advertisement of a financial product or other matter, in violation of Article 22 (1), (3), or (4); |
| 6. | Where a financial product distribution agent or broker who is engaged by another financial product distribution agent or broker as an agent or a broker for the conclusion of a contract for a financial product or other relevant transactions commits any of the following acts, the latter financial product distribution agent or broker who engages the former financial product distribution agent or broker as an agent or broker for such transactions: |
| (a) | Where a financial product distribution agent or broker fails to explain an important matter, in violation of Article 19 (1), or fails to deliver a written explanation or obtain confirmation, in violation of paragraph (2) of that Article; |
| (b) | Where a financial product distribution agent or broker commits an act falling under any subparagraph of Article 20 (1); |
| (c) | Where a financial product distribution agent or broker commits an act falling under any subparagraph of Article 21; |
| (d) | Where a financial product distribution agent or broker makes an advertisement of a financial product or other matter, in violation of Article 22 (3) or (4); |
| 7. | A person who fails to deliver contract documents to a financial consumer, in violation of Article 23 (1); |
| 8. | Where a financial product distribution agent or broker who is engaged by a financial product direct seller as an agent or a broker for the conclusion of a contract for a financial product or other relevant transactions commits an act falling under Article 25 (1) 2, the financial product direct seller who engages the financial product distribution agent or broker as an agent or broker for such transactions: |
| 9. | A person who fails to inform financial consumers of the matters referred to in any subparagraph of Article 27 (3) or who fails to post a mark or present the relevant certificate to financial consumers, in violation of that paragraph; |
| 10. | A person who uses characters with the meaning of ‘independent’ in a name or an advertisement, in violation of Article 27 (4); |
| 11. | A person who commits an act falling under any subparagraph of Article 27 (5); |
| 12. | A person who fails to record data or maintain and manage data by types, in violation of Article 28 (1); |
| 13. | A person who refuses, obstructs, or evades an inspection conducted under Article 50 (1), without good cause. |
| (2) | Any of the following persons shall be subject to an administrative fine not exceeding 30 million won: |
| 1. | A person who fails to identify information, to obtain confirmation, to maintain and manage information, or to provide the confirmed information without delay, in violation of Article 17 (2); |
| 2. | A person who solicits the conclusion of a contract, in violation of Article 17 (3); |
| 3. | A person who fails to identify information, in violation of Article 18 (1); |
| 4. | A person who fails to give notice of the fact that the financial product concerned is not appropriate or to obtain confirmation, in violation of Article 18 (2); |
| 5. | A person who commits an act falling under any subparagraph of Article 25 (1); |
| 6. | A person who demands or accepts money, goods, or any other economic benefit, in violation of Article 25 (2); |
| 7. | A person who fails to notify a financial consumer of the information falling under any subparagraph of Article 26 (1), in violation of that paragraph, or a person who fails to post a mark or present a certificate, in violation of paragraph (2) of that Article. |
| (3) | Any person who fails to report a change in the requirements for registration, in violation of Article 48 (3), shall be subject to an administrative fine not exceeding 10 million won. |
| (4) | The administrative fines under paragraphs (1) through (3) shall be imposed and collected by the Financial Services Commission in accordance with Presidential Decree. |
[Enforcement Date: Sep. 25, 2021] Provisions relevant to financial product advisors in Article 69 (1) 1, 2, 3, 4, 5, 7, 9, 10, 11, 12, and 13 and Article 69 (2) 1 and 2, and (3)
ADDENDA <Act No. 17112, Mar. 24, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation: Provided , That the provisions enumerated in subparagraph 1 concerning financial product advisors and the provisions enumerated in subparagraph 2 shall enter into force one year and six months after the date of its promulgation:
| 1. | Article 10, Article 11, Article 12 (1), (2), and (4) through (6), Articles 13 through 15, Article 16 (1), Article 17, Articles 19 through 21, Article 22, Article 23, Article 27, Article 32 (2) through (4), Article 44, Articles 46 through 56, Article 57 (1), (3), and (4), Articles 58 through 64, subparagraphs 1 and 2 of Article 67, Article 69 (1) 1 through 5, 7, and 9 through 13, Article 69 (2) 1 and 2, and Article 69 (3); |
| 2. | Articles 16 (2) and 28. |
Article 2 (Applicability to Keeping, Maintenance, and Management of Records of Data)
Article 28 shall begin to apply to cases where a contract for a financial product or for advisory service for financial products is solicited (including cases where a financial product advisor provides advisory service) or concluded after this Act enters into force.
Article 3 (Applicability to Survey on Financial Consumers’ Financial Capabilities)
The first survey on financial consumers’ financial capabilities under Article 30 (4) shall be conducted within three years after the enforcement date of this Act.
Article 4 (Applicability to Effect of Interruption of Prescription by Application for Mediation)
Articles 40 through 42 shall begin to apply to the applications filed for mediation of a dispute after this Act enters into force.
Article 5 (Applicability to Liability of Financial Product Distributors and Advisors for Damages)
Article 44 (2) shall begin to apply to cases where a financial product distributor or advisor causes damage to a financial consumer after this Act enters into force, in violation of Article 19.
Article 6 (Applicability to Liability of Financial Product Direct Sellers for Damages)
Article 45 shall begin to apply where a financial product distribution agent or broker acts as an agent or a broker after this Act enters into force.
Article 7 (Applicability to Withdrawal of Offer)
Article 46 shall begin to apply to offers of contracts after this Act enters into force.
Article 8 (Applicability to Termination of Illegal Contracts)
Article 47 shall begin to apply to the contracts concluded after this Act enters into force.
Article 9 (Applicability to Submission of Business Operation Reports)
Article 48 (2) shall begin to apply to the business years beginning after this Act enters into force.
Article 10 (Transitional Measures concerning Establishment of Committee for Mediation of Financial Disputes)
| (1) | The Committee for the Mediation of Financial Disputes, established within the Financial Services Commission under Article 51 of the Act on the Establishment of Financial Services Commission (referring to the Act before amended under Article 13 (1) of the Addenda; hereinafter the same shall apply) before this Act enters into force, shall be deemed the Mediation Committee under Article 38 of this Act. |
| (2) | The members of the Committee for the Mediation of Financial Disputes, appointed or commissioned under Article 52 (2) of the previous Act on the Establishment of Financial Services Commission before this Act enters into force, shall be deemed the members of the Mediation Committee, appointed or commissioned under Article 34 of this Act, and their term of office shall be counted from the date they were commissioned under Article 52 (2) of the previous Act on the Establishment of Financial Services Commission. |
| (3) | The cases for which a mediation application was filed under Article 53 of the Act on the Establishment of Financial Services Commission before this Act enters into force shall be deemed the cases for which a mediation application was filed under Article 36 of this Act: |
| (4) | The acts done by the Committee for the Mediation of Financial Disputes or the Governor of the Financial Supervisory Service under the previous Act on the Establishment of Financial Services Commission in connection of mediation of finance-related disputes before this Act enters into force shall be deemed the acts done by the Mediation Committee or the Governor of the Financial Supervisory Service under this Act. |
Article 11 (Transitional Measure concerning Penalty Surcharges and Additional Payments)
When an administrative disposition, such as an order under Article 49, a disposition against a financial product distributor or advisor under Article 51, a measure against executive officers and employees under Article 52, or the imposition of a penalty surcharge under Article 57, is made for a violation of the Act before amended under Article 13 of the Addenda (hereinafter referred to as the “previous Act”), committed before this Act enters into force but terminated before this Act enters into force or persisting even after this Act enters into force, the provisions relevant to such violation in the previous Act shall apply.
Article 12 (Transitional Measure concerning Penalty Provisions and Administrative Fines)
In applying penalty provisions or imposing an administrative fine with regard to a violation committed before this Act enters into force, the provisions relevant to such violation in the previous Act shall apply.
Article 13 Omitted.
ADDENDA <Act No. 17292, May 19, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 and 3 Omitted.
ENFORCEMENT DECREE OF THE ACT ON THE PROTECTION OF FINANCIAL CONSUMERS
| ENFORCEMENT DECREE OF THE ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.36287 | 20260428 |
| ENFORCEMENT DECREE OF THE ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.35947 | 20260102 |
| ENFORCEMENT DECREE OF THE ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.35811 | 20251001 |
| ENFORCEMENT DECREE OF THE ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.35799 | 20251231 |
| ENFORCEMENT DECREE OF THE ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.34888 | 20240915 |
| ENFORCEMENT DECREE OF THE ACT ON THE PROTECTION OF FINANCIAL CONSUMERS | No.33913 | 20231212 |
| Article 1 (Purpose) |
The purpose of this Decree is to prescribe matters delegated by the Act on the Protection of Financial Consumers and those necessary for the enforcement thereof.
| Article 2 (Definitions) |
| (1) | "Others prescribed by Presidential Decree" in subparagraph 1f of Article 2 of the Act on the Protection of Financial Consumers (hereafter referred to as "the Act") means the following financial products: <Amended on Sep. 10, 2024> |
| 1. | A credit service under subparagraph 1 of Article 2 of the Act on Registration of Credit Business, etc. and Protection of Finance Users; |
| 2. | Deposits, loans, and credit under the Credit Unions Act; |
| 3. | P2P investment (hereafter referred to as "P2P investment") and P2P loans defined under subparagraph 1 of Article 2 of the Act on Online Investment-Linked Financial Business and Protection of Users; |
| 4. | Trust contract (hereinafter referred to as "trust contract") and discretionary investment contract (hereinafter referred to as "discretionary investment contract") pursuant to Article 9(4) of the Financial Investment Services and Capital Markets Act. |
| 4-2. | Deferred payments in small amounts under Article 35-2 of the Electronic Financial Transactions Act; |
| 5. | Deposits and loans under the Industrial Bank of Korea Act; |
| 6. | Deposits and loans under the Industrial Bank of Korea Act; |
| 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: |
| 1. | The Secured Bond Trust Act; |
| 2. | Businesses under Article 7(6)1, 2, or 4 of the Financial Investment Services and Capital Markets Act; |
| 3. | Copyright trust management business under the Copyright Act; |
| 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: <Amended on Sep. 10, 2024> |
| 1. | The Act on the Guarantee of Workers' Retirement Benefits; |
| 2. | The Agricultural Cooperatives Act; |
| 3. | The Act on Registration of Credit Business, etc. and Protection of Finance Users; |
| 4. | The Insurance Business Act; |
| 5. | The Mutual Savings Banks Act; |
| 6. | The Fisheries Cooperatives Act; |
| 7. | The Credit Unions Act; |
| 8. | The Specialized Credit Financial Business Act; |
| 9. | The Act on Online Investment-Linked Financial Business and Protection of Users; |
| 10. | The Banking Act; |
| 11. | The Act on Special Cases concerning Establishment and Operation of Internet-Only Banks; |
| 12. | The Financial Investment Services and Capital Markets Act; |
| 12-2. | The Electronic Financial Transactions Act; |
| 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 4b of Article 2 of the Act means the following: |
| 1. | Financial product advice under the main clause, with the exception of the items, of subparagraph 4 of Article 2 (hereinafter referred to as "financial product advice") provided by a lawyer, patent attorney, or tax accountant pursuant to of the Attorney-at-Law Act, the Patent Attorney Act, the Tax Accountant Act, etc.; |
| 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 6f of Article 2 of the Act means the following: <Amended on Sep. 10, 2024> |
| 1. | Financial product direct sellers and financial product advisors registered pursuant to under Article 12(1) of the Act; |
| 2. | Currently-run financial investment entities prescribed in Article 8(9) of the Financial Investment Services and Capital Markets Act; |
| 3. | Among prepayment business operators under Article 25-2(1), with the exception of its subparagraphs, of the Electronic Financial Transactions Act, a person who concurrently engages in the business of deferred payment in small amounts under Article 35-2(1) of that Act. |
| (6) | "Persons prescribed by Presidential Decree" in subparagraph 7h 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; |
| 2. | Any of the following persons under the Act on Registration of Credit Business, etc. and Protection of Finance Users: |
| a. | Credit service providers (hereafter referred to as "credit service provider") who register pursuant to Article 3(2) of the Act on Registration of Credit Business and Protection of Finance Users; |
| 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); |
| 4. | An online investment-linked financial business entity under the Act on Online Investment-Linked Financial Business and Protection of Users (hereinafter referred to as "online investment-linked financial business entity"); |
| 5. | A collective investment business entity under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "collective investment business entity"), a securities finance company, a short-term finance company, and a fund brokerage company; |
| 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 9d of Article 2 of the Act; |
| b. | A public institution that manages and operates the fund established pursuant to the Acts under Appendix 2 of the "National Finance Act" (excluding the Technology Finance Corporation under the Korea Technology Finance Corporation Act and the Korea Credit Guarantee Fund under the Korea Credit Guarantee Fund Act; |
| c. | A corporation, cooperative, organization that manages a mutual aid business pursuant to relevant Acts; |
| d. | A corporation and organization who falls under Article 10(3)16 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; |
| e. | An individual who falls under Article 10(3)17 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; |
| f. | A listed corporation on a foreign securities market; |
| g. | Local governments; |
| 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 2a,b,f or g; |
| b. | Any of the following foreign corporations: |
1) A financial company;
2) A person provided in paragraph (6)3 through 6;
3) A financial holding company established under the Financial Holding Companies Act;
| c. | A person falling under Article 6-2(3)18 of the Enforcement Decree of the Insurance Business Act; |
| (8) | "A financial company prescribed by Presidential Decree" in subparagraph 9c 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 9d 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 9e 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: |
| a. | A public institution under the Act on the Management of Public Institutions whose competent agency is the Financial Services Commission; |
| b. | A financial holding company under the Financial Holding Companies Act; |
| c. | The Export-Import Bank under the Export-Import Bank of Korea Act; |
| d. | The Korea Investment Corporation under the Korea Investment Corporation Act; |
| e. | A person falling under any of paragraph (6)3 through 6; |
| f. | A person who falls under paragraph (7)2b or c; |
| g. | A person who does not fall under any of the following: |
1) A person who does not reach majority under Article 4 of the Civil Act;
2) A person under adult guardianship and limited guardianship;
3) 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: |
| a. | A concurrent loan service provider under Article 3(3)2 of the Specialized Credit Finance Business Act; |
| 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 1a through f; |
| f. | Other persons as similar to those provided in items a through f, determined and publicly notified by the Financial Services Commission; |
| 3. | In cases of an investment product, any of the following persons: |
| a. | An electronic registry under the Act on Electronic Registration of Stocks and Bonds; |
| b. | A corporation and organization who falls under Article 10(3)16 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; |
| c. | An individual who falls under Article 10(3)17 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; |
| d. | A financial product agent and broker dealing with investment products; |
| e. | A person falling under subparagraph 1a through f; |
| f. | Other persons as similar to those provided in items a through f, determined and publicly notified by the Financial Services Commission; |
| 4. | In cases of an indemnity product, any of the following persons: |
| a. | A premium rate calculation agency under the Insurance Business Act; |
| b. | An insurance-related organization referred to in the Insurance Business Act; |
| c. | A person falling under Article 6-2(3)18 of the Enforcement Decree of the Insurance Business Act; |
| d. | A financial product agent and broker dealing with indemnity products; |
| e. | A person falling under subparagraph 1a through f; |
| f. | Other persons as similar to those provided in items a through f, 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. <Added on Dec. 8, 2022> |
| 1. | A person who falls under paragraph (10)3b or c; |
| 2. | A person who falls under paragraph (10)3e and under subparagraph 1f of the same paragraph; |
| 3. | A person determined and publicly notified by the Financial Services Commission, from among those referred to in subparagraph 3f 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: |
| 1. | Deposits referred to in Article 2(1)2; |
| 2. | Deposits under Article 2(1)5 or 6; |
| 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: <Amended on Sep. 10, 2024> |
| 1. | Loan under Article 2(1)1; |
| 2. | P2P loans pursuant to Article 2(1)3; |
| 2-2. | Small deferred payment in small amounts under Article 2(1)4-2; |
| 3. | Loans under Article 2(1)5 or 6; |
| 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: |
| 1. | P2P investment; |
| 2. | Trust contract; |
| 3. | Discretionary investment contract; |
| 4. | Financial products under Article 2(1)7 and similar products under Article 3(1) of the Financial Investment Services and Capital Markets Act, determined and publicly notified by the Financial Services Commission; |
| (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 7h 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)2a: financial product direct sellers; |
| 3. | Persons falling under Article 2(6)2b: 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, 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 Appendix 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; |
| 2. | Social credibility: It shall have social credibility under article 16(8)2 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; in such cases, the "Monopoly Regulation and Fair Trade Act" in item a of the same subparagraph means "Article 5, 40, 45, 47, or 48 of the Monopoly Regulation and Fair Trade Act"; |
| (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)6a of the Act means any of the following financial business: |
| 1. | A financial investment business under the Financial Investment Services and Capital Markets Act; |
| 2. | Credit business or mutual aid business under the Agricultural Cooperatives Act, Forestry Cooperatives Act, Community Credit Cooperatives Act, or Fisheries Cooperatives Act; |
| (6) | "A company having a relationship prescribed by Presidential Decree" in Article 12(2)6b of the Act means a company specified in any subparagraph of Article 26(1) of the Enforcement Decree of the Act on External Audit of Stock Companies. |
| (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 possession of necessary human resources" in Article 12(3)3 of the Act means the following requirements; provided, 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.; |
| 4. | To have social credibility under Article 16(8)2 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act: in such cases, the "Monopoly Regulation and Fair Trade Act" in item a of the same subparagraph means "Article 5, 40, 45, 47, or 48 of the Monopoly Regulation and Fair Trade Act"; |
| 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; |
| 6. | To install software that includes standards for preventing conflicts of interest in an electronic device under the Electronic Financial Transactions Act; |
| (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) |
| (1) | "Finance-related statutes prescribed by Presidential Decree" in Article 12(4)1e and f and 2c of the Act means the statutes under each subparagraph of Article 5 of the Enforcement Decree of the Act on Corporate Governance of Financial Companies. |
| (2) | "Period prescribed by Presidential Decree" in Article 12(4)1f of the Act means the period specified in the subparagraphs of Article 7(2) of the Enforcement Decree of the Act on Corporate Governance of Financial Companies. |
| 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, 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) | Detailed matters necessary for 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 provided 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: |
| 1. | The Korea Federation of Mutual Savings Banks under the Mutual Savings Banks Act; |
| 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, 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 engaging in door-to-door sales and telemarketing under Article 16-2(1) of the Act belongs to the financial product distributor, etc. |
[This Article Added 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: |
| a. | Variable insurance under the Insurance Business Act; |
| b. | Insurance or mutual aid that allows a portion of the insurance premium or mutual aid premium to be used for the acquisition or disposition of financial investment products or other methods pursuant to the Financial Investment Services and Capital Markets Act; |
| 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: |
| a. | Securities subject to crowdfunding brokerage (referring to securities under Article 4(1) of the Financial Investment Services and Capital Markets Act; hereinafter the same shall apply); |
| b. | P2P investment; |
| 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.; |
| 3. | A loan product: |
| (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. <Added 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; |
| b. | 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, 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; |
| (5) | Pursuant to Article 17(4) of the Act, the contents of credit under Article 17(2)3b shall be credit information under the Credit Information Use and Protection Act or credit rating under the Financial Investment Services and Capital Markets Act. <Amended on Dec. 8, 2022> |
| (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; |
| 2. | Mail or e-mail; |
| 3. | Telephone or fax; |
| 4. | Mobile phone text messages or electronic messages equivalent thereto. |
| (7) | Details necessary for 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 shall identify information of general financial consumers under Article 18(1) of the Act shall be as follows: <Amended on Aug. 1, 2023> |
| 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 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; Sep. 30, 2025> |
| 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, as prescribed by the Financial Services Commission; |
| 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): <Added 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)1a5) 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)1b3) of the Act means investment products excluding the following financial instruments: |
| 1. | P2P investment; |
| 2. | Trust contract under Article 103(1)2 through 7 of the Financial Investment Services and Capital Markets Act; |
| (3) | When a financial product distributor determines a risk rating pursuant to Article 19(1)1b3) of the Act, the following matters shall be taken into consideration as determined and publicly notified by the Financial Services Commission. |
| 1. | Volatility of underlying assets under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "underlying assets"); |
| 2. | Credit rating under the Financial Investment Services and Capital Markets Act; |
| 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)1b4) 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; |
| 4. | Information under each subparagraph of Article 22(1) of the Act on Online Investment-Linked Financial Business and Protection of Users; |
| 5. | Other matters determined and publicly notified by the Financial Services Commission, which are corresponding to subparagraphs 1 through 4. |
| (5) | "Matters prescribed by Presidential Decree" in Article 19(1)1c2) 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)1d5) of the Act means the following: |
| 1. | Termination and release of contract; |
| 2. | Impact on credit; |
| 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)2c 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 prescribed by Presidential Decree" in Article 19(1)4 of the Act means the following matters: |
| 1. | Procedures for processing civil petitions and mediating disputes; |
| 2. | Whether to provide protection under other acts such as the Depositor Protection Act (excluding loan products); |
| 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): <Added 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, 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, the written explanation of the following contracts shall be excluded. |
| 1. | Contracts on deposit products or loan products; |
| 2. | A contract for which services are provided only through an automated method using an electronic apparatus under the Electronic Financial Transactions Act; |
| (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; |
| 2. | Mail or e-mail; |
| 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. |
| 2. | Where an online investment-linked financial business entity provides an ordinary financial consumer with all the information referred to in Article 22(1) of the Act on Online Investment-Linked Financial Business and Protection of Users and its users or has fully explained the matters referred to in the subparagraphs of Article 24(1) of that Act; |
| 3. | Where a credit service provider or loan broker has fully explained the matters specified in the subparagraphs of Article 6(1) of the Act on Registration of Credit Business and Protection of Finance Users to an ordinary financial consumer; |
| 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)4b3) 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)4c 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, 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, 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, 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, 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 6a 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: |
1) Over-the-counter derivatives and linked investment;
2) Over-the-counter derivatives under the Financial Investment Services and Capital Markets Act;
3) Collective investment securities of a general private equity fund under the Financial Investment Services and Capital Markets Act;
4) 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;
| 2. | Acts under subparagraph 6b 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 6b of Article 21 of the Act with respect to the relevant product; |
| (2) | "Person prescribed by Presidential Decree" in subparagraph 5a 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 Added 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, 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; |
| 2. | Issuer or seller of securities under the Financial Investment Services and Capital Markets Act (limited to cases where advertisements are made regarding the relevant securities); |
| 3. | The Korea Housing and Urban Guarantee Corporation established under the Housing and Urban Fund Act; |
| 4. | The Korea Housing Finance Corporation under the Korea Housing Finance Corporation Act; |
| 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: |
| 1. | The Credit Business and Loan Brokerage Business Association established pursuant to Article 18-2 of the Act on Registration of Credit Business and Protection of Finance Users; |
| 2. | The Korea Federation of Banks established pursuant to Article 32 of the Civil Act; |
| 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. |
| Article 18 (Advertising) |
| (1) | The details of financial products under Article 22(3)2 of the Act, the risks on investment under subparagraph 3b1) 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; |
| b. | Interest rates (including the loan interest rate and overdue interest rate under Article 9(1) of the Act on Registration of Credit Business, etc. and Protection of Finance Users); |
| c. | Fees; |
| 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)3c 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; |
| 3. | Details of protection under other Acts such as the Depositor Protection Act (excluding loan products); |
| 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. |
| (2) | Where a financial product distributor, etc. advertises financial products, etc., it shall undergo deliberation by a compliance officer (referring to an auditor, if no compliance officer exists) under Article 25(1) of the Act on Corporate Governance of Financial Companies. |
| Article 20 (Prohibited acts in advertisement) |
| (1) | "Acts prescribed by Presidential Decree" in Article 22(4)1e 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. | Engaging in an act of providing information in a manner that is contrary to the facts or expressed in an unclear way regarding matters that materially affect the conclusion of a contract or the rights and obligations of a financial consumer; |
| 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; |
| (2) | "Cases specified by Presidential Decree" in Article 22(4)2a of the Act means the cases where losses are compensated or profits are guaranteed under the proviso to Article 104(1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act. |
| (3) | "Investment products prescribed by Presidential Decree" in Article 22(4)2b 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)2c and 3b and 4b 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: |
| a. | The Act on Registration of Credit Business, etc. and Protection of Finance Users; |
| b. | The Financial Investment Services and Capital Markets Act (limited to crowdfunding brokers); |
| c. | The Act on Online Investment-Linked Financial Business and Protection of Users; |
| 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, 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; |
| 2. | Mail or e-mail; |
| 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, 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, 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, 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, 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: |
| 1. | Where trade secrets defined in subparagraph 2 of Article 2 of the Unfair Competition Prevention and Trade Secret Protection Act are likely to be substantially infringed; |
| 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 business affairs may be entrusted 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) | "Relevant administrative agencies prescribed by Presidential Decree" in Article 31(5)1 of the Act means the following administrative agencies: <Amended on Oct. 1, 2025; Dec. 30, 2025; Apr. 28, 2026> |
| 1. | The Financial Services Commission; |
| 2. | The Fair Trade Commission; |
| 3. | The Vice Minister of Finance and Economy; |
| 4. | The Ministry of Education; |
| 4-2. | The Ministry of National Defense; |
| 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, 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: |
| 1. | Interest rate; |
| 2. | Insurance premiums; |
| 3. | Fees; |
| 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; |
| 3. | Results of supervision under Article 48 of the Act and inspection under Article 50 of the Act; |
| 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, 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; |
| d. | The Korean Bar Association established under the Attorney-at-Law Act; |
| 2. | Persons falling under Article 34(3)2 of the Act: the following institutions and organizations: |
| a. | The Korea Inclusive Finance Agency and the Credit Counseling and Recovery Service established pursuant to Article 3 of the Microfinance Support Act; |
| b. | The Korea Consumer Agency established under the Framework Act on Consumers; |
| c. | A nationwide consumer organization registered with the Fair Trade Commission under the Framework Act on Consumers; |
| 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: |
| a. | The Korea Consumer Agency established under the Framework Act on Consumers; |
| b. | A relevant association or institution; |
| 5. | A person falling under Article 34(3)5 of the Act: the following institutions and organizations: |
| a. | The medical doctor' association established under Article 28 of the Medical Service Act; |
| b. | The National Academy of Medicine of Korea under Article 52-2 of the Medical Service Act; |
| (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. <Added 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. <Added 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). <Added 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. <Added 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, 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. <Added on Aug. 1, 2023> |
| Article 35 (Notice of proceedings) |
| (1) | Any party who files a lawsuit before or after the referral to the Mediation Committee pursuant to Article 36(4) of the Act concerning a case in which dispute mediation has been applied for under Article 36(1) of the Act (hereinafter referred to as a "dispute mediation application case") shall immediately notify the Governor of the Financial Supervisory Service of such fact. <Amended on Sep. 30, 2025> |
| (2) | The Financial Supervisory Service Commissioner who receives the notification pursuant to paragraph (1) shall, with the consent of the parties, inform the competent court of the following matters; provided, this shall not apply in cases where a lawsuit is filed before referral to the Mediation Committee pursuant to Article 36(4) of the Act, and the case is not referred to the Mediation Committee pursuant to the proviso of Article 36(2) of that Act: <Added on Sep. 30, 2025> |
| 1. | Names and addresses of the parties (in the case of a corporation, its name, the location of its principal office, and the name and address of its representative; this shall apply in this Article); |
| 2. | The fact that an application for dispute mediation has been filed with the Governor of the Financial Supervisory Service. |
| (3) | 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. <Amended on Sep. 30, 2025> |
| (4) | The Governor of the Financial Supervisory Service shall, after referring the matter to the Mediation Committee under Article 36(4) of the Act, and upon the conclusion of the mediation procedure for a dispute mediation application case in which the litigation procedure has been suspended under Article 41(1) of the Act, notify the competent court of the following matters with the consent of the parties. <Added on Sep. 30, 2025> |
| 1. | Names and addresses of the parties; |
| 2. | The date of the request for a mediation; |
| 3. | Grounds for termination of dispute mediation proceedings; |
| 4. | Results of mediation (limited to cases where both the applicant and the related parties accept the recommendation to accept the mediation proposal under Article 36(6) of the Act); |
| 5. | Case number of the lawsuit. |
| (5) | 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. <Amended on Sep. 30, 2025> |
| (6) | Except as provided in paragraphs (1) through (5), detailed matters necessary for the notification of the filing of a lawsuit shall be determined by the Governor of the Financial Supervisory Service. <Added on Aug. 1, 2023; Sept. 30, 2025> |
| 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, 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, 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; |
| a. | Highly complex financial investment products under the Enforcement Decree of the Financial Investment Services and Capital Markets Act (applicable only to products which solicits financial consumers only for a certain period of time, and after the end of that period, conducts collective investment with the money paid by financial consumers, etc. pursuant to the Financial Investment Services and Capital Markets Act); |
| b. | Highly complex financial investment instruments under the Enforcement Decree of Financial Investment Services and Capital Markets Act; |
| c. | A money trust contract (excluding a specified money trust under the Enforcement Decree of the Financial Investment Services and Capital Markets Act); |
| d. | Highly complex money trust contract under the Enforcement Decree of Financial Investment Services and Capital Markets 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) |
| b. | P2P loans under the Act on Online Investment-Linked Financial Business and Protection of Users; |
| 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)2b or d, for financial products for which a consideration period is granted pursuant to Article 99(4)1-2 b or Article 109(3)1-2b of the Enforcement Decree of the Capital Markets and Financial Investment Services Act, the relevant consideration period shall be excluded from the calculation. <Added 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> |
| 1. | E-mail; |
| 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)2b 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)2c 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. <Amended on Dec. 8, 2022> |
| (9) | Except as provided in paragraphs (1) through (8), details 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. <Added on Dec. 8, 2022> |
| 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: |
| 1. | Name and location; |
| 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 Appendix 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 Appendix 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, etc. under the main clause, with the exception of the subparagraphs, of Article 57(1) of the Act (hereinafter referred to as "revenue, etc."), all forms of money, etc. obtained through the conclusion and performance of a contract shall be included, regardless of its name; provided, the expenses under Article 37(6) shall be excluded. <Amended on Dec. 8, 2022; Apr. 28, 2026> |
| (2) | Money, etc. under the main clause of paragraph (1) shall be classified as follows: <Added on Apr. 28, 2026> |
| 1. | Where the financial product related to the violation is a deposit-type product: The amount of deposits or money, etc. equivalent thereto; |
| 2. | Where the financial product related to the violation is a loan-type product: The amount of loans or money, etc. equivalent thereto; |
| 3. | Where the financial product related to the violation is an investment-type product: The amount of investments or money, etc. equivalent thereto; |
| 4. | Where the financial product related to the violation is an investment-type product: The amount of investments or money, etc. equivalent thereto; |
| 5. | Where it is difficult to apply the classifications under subparagraphs 1 through 4: Money, etc. determined and publicly notified by the Financial Services Commission in consideration of the type and details of the violation. |
| (3) | "Cases prescribed by Presidential Decree" in the proviso, with the exception of the subparagraphs, of Article 57(1) of the Act means any of the following cases: <Amended on Apr. 28, 2026> |
| 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; |
| (4) | The criteria for imposing penalty surcharges under Article 57(3) of the Act shall be as specified in Appendix 2. <Amended on Apr. 28, 2026> |
| 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. <Amended on Dec. 12, 2023> |
| (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 Appendix 3; |
| 2. | Penalty surcharges under Article 57(3) of the Act: Criteria for imposing penalty surcharges under Appendix 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:
| 1. | Where the person has been immune pursuant to Article 251 of the Debtor Rehabilitation and Bankruptcy Act; |
| 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, 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 a 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 6b 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; |
| d. | A mutual savings bank under the Mutual Savings Banks 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 6d through g. |
| 9. | Measures under Article 52(1)4 and 5 of the Act against a financial product distributor, etc. falling under the items of subparagraph 6; |
| 10. | Request for a measure under Article 52(2)1 of the Act against persons falling under subparagraph 6e 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); |
| 2. | A loan broker; |
| 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. |
| (5) | Articles 11(2) and (3), 12(1) and (3), and 13 through 16 of the Regulations on Devolution and Entrustment of Administrative Competence shall apply mutatis mutandis to the entrustment of business affairs under paragraph (3). |
| 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; |
| 6. | Inspection under Article 50 of the Act; |
| 7. | Dispositions and measures under Article 51 of the Act; |
| 8. | Measures under Article 52 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; |
| (2) | Where unavoidable to conduct the following affairs, financial product distributors or advisors may handle data containing resident registration numbers, passport numbers, driver's license numbers, or alien registration numbers under Article 19 of the Enforcement Decree of the Personal Information Protection 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 Appendix 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, the provisions of the following subparagraphs shall enter into force from the date as classified in each subparagraph.
| 1. | Articles 5, 7 through 9, Articles 11, 13 through 22, Articles 25, 30, 31, 37 through 48, Articles Article 51 and parts in Appendices 1 through 4 regarding financial product advisors and Articles 10 and 26: September 25, 2021; |
| 2. | Article 12(1)2c and Article 37(1)2a,b, and d: May 10, 2021. |
Article 2 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 12 Omitted.
Article 13 Omitted.
Article 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)1c 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)1b 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. 1, 2023>
Article 1 (Enforcement date)
This Decree shall enter into force three months after the date of its promulgation; provided, the amended provisions of Article 2(10)1g3), 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)3b 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.
ADDENDUM <Presidential Decree No. 34888, Sep. 10, 2024>
This Decree shall enter into force on September 15, 2024.
ADDENDUM <Presidential Decree No. 35799, Sep. 30, 2025>
Article 1 (Enforcement date)
This Decree shall enter into force from the date three months elapse after the promulgation of this Decree.
Article 2 (Special cases on notification of facts of filing lawsuits)
The Governor of the Financial Supervisory Service may, if deemed necessary to notify matters under the amended provisions of each subparagraph of Article 35(2) with respect to dispute mediation applications filed before this Decree enters into force, request the parties to the dispute mediation application cases in which mediation procedures are ongoing at the time of enforcement of this Decree to inform whether a lawsuit has been filed. In such cases, the consent of the parties shall be obtained when notifying the court where the lawsuit was filed.
ADDENDUM <Presidential Decree No. 35811, Oct. 1, 2025>
This Decree shall enter into force on the date of its promulgation; provided, among Presidential Decrees amended pursuant to this Decree, the amended provisions of Presidential Decrees which were promulgated before this Decree enters into force but the enforcement dates of which have not arrived shall enter into force on the enforcement dates of the relevant Presidential Decrees, respectively.
ADDENDA <Presidential Decree No. 35947, Dec. 30, 2025>
Article 1 (Enforcement date)
This Decree shall enter into force on January 2, 2026; provided, the amended provisions of Presidential Decree which have been promulgated before this Decree enters into force, but the enforcement date of which has not arrived, among amended provisions of Presidential Decree under Article 6 of the Addenda, shall enter into force on the date the relevant Presidential Decree enters into force, respectively.
Articles 2 through 5 Omitted.
Article 6 Omitted.
ADDENDUM <Presidential Decree No. 36287, Apr. 28, 2026>
This Decree shall enter into force on the date of its promulgation.