ENFORCEMENT DECREE OF THE FINANCIAL INVESTMENT SERVICES AND CAPITAL MARKETS ACT
Amended by Presidential Decree No. 21291, Feb. 3, 2009
Presidential Decree No. 20947, Jul. 29, 2008
Amended by Presidential Decree No. 21291, Feb. 3, 2009
PART Ⅰ GENERAL PROVISIONS
법령보기 화면
| Article 1 (Purpose) |
|
The purpose of this Decree is to prescribe the matters delegated by the Financial Investment Services and Capital Markets Act and other matters necessary for the enforcement thereof.
법령보기 화면
| Article 2 (Definitions) |
|
The following terms as used in this Decree have the meanings indicated below:
| 1. | The term "overseas securities exchange" means an overseas market similar to the securities exchange; |
| 2. | The term "invitation to subscribe" means activities, conducted in order to invite a certain person to acquire securities, of notifying that securities will be issued or sold or providing information on the procedure for acquisition of such securities by placing an advertisement in a newspaper, a broadcasting medium, or a magazine; distributing printed matter, such as informative materials or leaflets; holding a presentation session for inducing investments; or using an electronic communication means, etc.: Provided, That the same shall not be applicable to cases where information or guidance is provided merely for all or part of the following matters by an advertisement or any similar means in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission without the name of an underwriter and the issue amount of securities included therein: |
| (a) | The name of the issuer; |
| (b) | The type and amount of securities subject to the intended issuance or sale; |
| (c) | General terms and conditions of the issuance or sale of securities; |
| (d) | Time table for the intended issuance or sale of securities; and |
| (e) | Such other matters prescribed and publicly notified by the Financial Services Commission as may be unlikely to undermine the protection of investors; and |
| 3. | The term "foreign asset" means an asset issued, created, or distributed in a foreign country or any other similar asset. |
법령보기 화면
| Article 3 (Scope of Financial Investment Instruments) |
|
| (1) | The term "sums specified by Presidential Decree, such as sales commissions" in the main body of Article 3 (1) of the Financial Investment Services and Capital Markets Act (hereinafter referred to as the "Act") means the sums under the following subparagraphs: |
| 1. | The fee under Article 58 (1) of the Act, the sales commission under Article 76 (4) of the Act (hereinafter referred to as the "sales commission"), and other fee or commission paid by investors and customers in consideration of any services provided; |
| 2. | The operating expenses and risk insurance premium under an insurance policy; and |
| 3. | Other sums specified and publicly notified by the Financial Services Commission. |
| (2) | The term "sums specified by Presidential Decree, such as termination fees" means the sums under the following subparagraphs: |
| 1. | The redemption fee under Article 236 (2) of the Act (hereinafter referred to as the "redemption fee") and other termination fees paid by investors and other customers for earlier termination (including fees similar thereto); |
| 3. | Sums that investors and other customers are unable to recover because the issuer or the other party to the transaction involved becomes unable to pay money, etc. as originally agreed due to the bankruptcy or adjustment of obligations of the issuer or the other party to the transaction involved, or any other similar cause or event; and |
| 4. | Other sums specified and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 4 (Requirements for Corporate Commercial Paper) |
|
The term "requirements prescribed by Presidential Decree" in Article 4 (3) of the Act means instruments that are tendered by a person who falls under any one of the following subparagraphs and who makes a payment on behalf of a corporation under a commissioning agreement with the corporation and that are produced in the form of a bill with the words "corporate commercial paper" printed thereon: | 1. | A bank under subparagraph 1 of Article 22 of the Act (hereinafter referred to as a "bank"); |
법령보기 화면
| Article 5 (Trading of Derivatives in Overseas Markets) |
|
The term "trading of derivatives in an overseas market prescribed by Presidential Decree" in Article 5 (2) of the Act means trading that falls under any one of the following subparagraphs: | 1. | Transactions of metals, made over the counter (referring to any market similar to the derivatives market and formed outside of an overseas market; hereafter the same shall apply in this Article) in accordance with the regulations of the London Metal Exchange; |
| 2. | Transactions of precious metals, made in accordance with the regulations of the London Bullion Market Association; |
| 3. | Transactions of foreign currencies, made over the counter in accordance with the regulations of the United States National Futures Association; |
| 4. | Transactions of foreign currencies, made over the counter in accordance with the Commodity Exchange Act of Japan; |
| 5. | Transactions of freight, made in accordance with the regulations of the Forward Freight Agreement Brokers’ Association; and |
| 6. | Other transactions specified and publicly notified by the Financial Services Commission as those made in accordance with internationally standardized terms and conditions or procedures. |
법령보기 화면
| Article 6 (Exclusion from Application of Acts Governing Collective Investments) |
|
| (1) | The term "Acts specified by Presidential Decree" in Article 6 (5) 1 of the Act means the following Acts: |
| 2. | The Ship Investment Company Act; |
| 3. | The Framework Act on the Promotion of Cultural Industries; |
| 8. | The Act on Special Measures for the Promotion of Specialized Enterprises, etc. for Component and Material. |
| (2) | The term "investors specified by Presidential Decree" in Article 6 (5) 1 of the Act means investors who do not fall under any of the following subparagraphs: |
| 1. | Persons who fall under any subparagraph of Article 10 (1); and |
| 2. | Persons specified and publicly notified by the Financial Services Commission as those who fall under Article 10 (3) 12 or 13. |
| (3) | The term "number of investors specified by Presidential Decree" in Article 6 (5) 1 of the Act means 49 persons. In such cases, the number of investors (referring to the investors under paragraph (2)) in another collective investment scheme shall be added to the aforesaid number for the purposes of calculating 49 persons, in cases where the other collective investment scheme acquires 10/100 or more of the total number of outstanding collective investment securities issued by the relevant collective investment scheme. |
| (4) | The term "cases prescribed by Presidential Decree" in Article 6 (5) 3 of the Act means any of the following cases: |
| 1. | Where a depository institution under Article 74 (3) of the Act (hereinafter referred to as the "depository institution") manages and distributes, in accordance with the said paragraph, the deposit placed by investors in a deposit or trust account under paragraph (1) of the said Article (hereinafter referred to as the "investors’ deposit"); |
| 2. | Where the case falls under any of the following items and trust business entities jointly manage the money deposited in trust in order to manage the trust property: |
| (a) | Where the trust is a trust with assets comprehensively entrusted under Article 103 (2) of the Act and the ratio of the money entrusted is not more than 40/100; and |
| (b) | Where it is inevitable for managing the yields earned from the management of the trust property or managing the residual trust property after termination or redemption of the trust; |
| 3. | Where a special purpose company under Article 271 of the Act (hereinafter referred to as the "special purpose company") carries on its business; |
| 4. | Where a merchant bank under Article 336 of the Act (hereinafter referred to as the "merchant bank") carries out its business affairs for bill management accounts under Article 329; |
| 5. | Where a corporation that meets the requirements under Article 51-2 (1) 6 of the Corporate Tax Act manages and distributes money, etc. received in accordance with the main body of Article 3 (1) of the Act (hereinafter referred to as "money, etc."); |
| 6. | Where a domestic company whose main business is to control the business of another company by holding ownership in its equity securities carries on its business; |
| 7. | Where the entity engages in a franchise business under subparagraph 1 of Article 2 of the Fair Transactions in Franchise Business Act; |
| 8. | Where the entity engages in a multi-level sales business under subparagraph 5 of Article 2 of the Door-to-Door Sales, etc. Act; |
| 9. | Where a person who runs a business such as manufacturing defined in the Korea Standard Industrial Classification Codes publicly notified by the Commissioner of the Korea National Statistical Office pursuant to the Statistics Act runs the business with human resources and physical facilities ordinarily required for such business, including executives, employees, and a place of business, and with money, etc. received from investors and distributes the yields from the business to the investors: Provided, That the same shall not be applicable to cases where the business operator specifies a certain business and distributes the yields from the specific business; |
| 10. | Where a traditional mutual aid scheme is organized and operated for any academic, religious or philanthropic activity, art, sociality, or non-profit business; |
| 11. | Where a clan or any group organized by members related by blood runs a non-profit business for itself or its members; |
| 12. | Where a non-profit corporation under the Civil Act, a public-service corporation under the Act on the Establishment and Operation of Public-Service Corporations, a social welfare foundation under the Social Welfare Services Act, an employee shareholders’ association under the Framework Act on Worker’s Welfare, or any other non-profit organization established with permission, authorization or registration pursuant to the relevant Act and subordinate statutes conducts activities appropriate for its purposes of business stipulated by the relevant articles of association or incorporation; |
| 13. | Where money, etc. collected from investors are managed and distributed in accordance with an agreement of all investors; |
| 14. | Where the Financial Services Commission deems otherwise, so that it does not amount to collective investment, comprehensively taking the following matters into consideration as to: |
| (a) | Whether there is a professional operator who is paid for operation and management; |
| (b) | Whether the investors’ motive for investment is based on the professional operator’s knowledge, experience, and competency, and whether there is a personal relationship between investors and the professional operator; |
| (c) | Whether the yields from operation and management are expected to be distributed pro rata to invested amounts within a reasonable period of time; |
| (d) | Whether it is necessary to separate the assets received from investors from the professional operator’s proprietary assets; and |
| (e) | Whether it is likely to become significantly difficult to protect investors if it is not deemed a collective investment. |
법령보기 화면
| Article 7 (Exclusion of Financial Investment Business from Application) |
|
| (1) | The term "securities specified by Presidential Decree" in Article 7 (1) of the Act means any of the following securities: |
| 1. | Derivative-combined securities, linked to changes in the price of equity securities (including securities depository receipts connected to equity securities) or an index based on the price; and |
| 2. | Derivative-combined securities, except those under subparagraph 1, in which case money, etc. paid by investors simultaneously at the time when they are issued as well as the yields therefrom, such as interest for money, etc., is linked to changes in the price, interest rate, indicators, or unit of underlying assets or an index based on such price, interest rate, indicator or unit. |
| (2) | The term "as prescribed by Presidential Decree" in Article 7 (4) of the Act means cases where an investment broker is authorized, without any additional consideration, to make judgment, in his/her full or partial discretion, on whether to invest in financial investment instruments (referring to the judgment on investment under Article 6 (6) of the Act; hereinafter the same shall apply) and which shall fall under any of the following subparagraphs: |
| 1. | Where an investor designates the trading date (only for one day) of financial investment instruments concerned and the total volume and total amount of the instruments traded during the specific trading date and where the investor authorizes to make discretional judgment on the quantity and price for the financial investment instruments, and the time for trading within the designated limit; |
| 2. | Where there is a compelling necessity due to a sudden fall in the price of financial investment instruments while an investor is temporarily unavailable due to travel or illness and the investor authorized in advance to exercise the power to sell the instrument at discretion in accordance with terms and conditions of the relevant agreement; |
| 3. | Where an investor does not perform an obligation to settle the payments for financial investment instruments traded or any other transaction; an obligation to deposit an additional amount of the guarantee money; obligation to maintain the collateral ratio in connection with credit extension under Article 72 of the Act; or an obligation to repay, and where the investor authorized in advance to exercise the power to sell the financial investment instruments (including the power to purchase derivatives already sold, if the instruments involved are derivatives) at discretion in accordance with terms and conditions of the relevant agreement; |
| 4. | Where an investor has made a prior agreement with an investment broker to buy or sell collective investment securities, etc. issued by a money market fund under subparagraph 5 of Article 229 of the Act (hereinafter referred to as the "money market fund") without necessarily communicating such intention explicitly, when the investor deposits money in the account opened by the investment broker or withdraws money from such account, or to buy or sell such securities on condition that the securities be redeemed, and where the investor authorized the power to buy or sell the relevant collective investment securities at discretion in accordance with the agreement or to buy or sell such securities on condition that the securities be redeemed; and |
| 5. | Where the Financial Services Commission determines and publicly notifies that the protection of investors or good order in trading is not likely to be undermined otherwise. |
| (3) | The term "as prescribed by Presidential Decree" in Article 7 (6) 3 of the Act means any of the following cases: |
| 1. | Where the State or a local government trades financial investment instruments for public interest pursuant to the relevant Acts and subordinate statutes; |
| 3. | Where sale with buy-back agreement under Article 81 (1) 1 or purchase with resale agreement under subparagraph 3 (b) of Article 85 (hereinafter referred to as "trading with buy-back agreement") is made between the persons falling under any of the following items: |
| (a) | A person under any subparagraph of Article 10 (2); |
| (b) | A person under any provision of Article 10 (3) 1 through 4 and 9 through 13 (including foreigners similar thereto); and |
| (c) | A person specified otherwise and publicly notified by the Financial Services Commission; |
| 4. | Where the Korea Financial Investment Association established pursuant to Article 283 of the Act (hereinafter referred to as the "Association") carries out its business affairs under Article 286 (1) 4 of the Act; |
| 5. | Where a Korean citizen makes a public offer, private placement or sale of securities abroad and where the foreign investment trader involved (referring to a person who runs a business equivalent to the investment trading business in the foreign country in accordance with laws and regulations of the foreign country; hereinafter the same shall apply) conducts any of the following activities: |
| (a) | Where the activity involved amounts to an underwriting agreement executed in Korea with a Korean citizen in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission and where it is approved as such agreement by the Financial Services Commission; and |
| (b) | Where the activity involved amounts to a negotiation for finalizing terms and conditions of an underwriting agreement in Korea with a Korean citizen in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission and where relevant data have been submitted in advance to the Financial Services Commission; |
| 6. | Where a foreign investment trader or a foreign investment broker (referring to a person who runs a business equivalent to the investment brokerage business in a foreign country in accordance with laws and regulations of the foreign country; hereinafter the same shall apply) conducts any of the following activities: |
| (a) | Activities of running an investment trading business or an investment brokerage business to make transactions with investment traders or investment brokers; and |
| (b) | Activities of running an investment trading business or an investment brokerage business to make transactions with residents in Korea (excluding investment traders and investment brokers; hereafter the same shall apply in this item) without inviting to make investments or making an advertisement for investment under Article 57 of the Act (hereinafter referred to as "advertisement for investment") but by receiving trading orders from residents in Korea; |
| 7. | Where a foreign investment advisory business entity under the proviso to the main body of Article 18 (2) 1 of the Act (hereinafter referred to as the "foreign investment advisory business entity") or a foreign discretionary investment business entity under the proviso to the main body of the said subparagraph (hereinafter referred to as the "foreign discretionary investment business entity") runs an investment advisory business or a discretionary investment business to make transactions abroad with any of the following persons without an invitation to invest or making an advertisement for investment: |
| (c) | A person under any provision of Article 10 (3) 4 and 12; and |
| (d) | A person specified otherwise and publicly notified by the Financial Services Commission; |
| 8. | Where advice is given, without any additional consideration, on the value of a financial investment instrument or the judgment on investment in a financial investment instrument in connection with other business; and |
| 9. | Where a fund assessment company under Article 258 of the Act (hereinafter referred to as the "fund assessment company"), a bond rating company under Article 263 of the Act (hereinafter referred to as the "bond rating company"), a certified public accountant, an appraiser, a person specializing in setting credit ratings, an attorney- at-law, a patent attorney, a tax accountant, or any similar person who provides an advisory service under the relevant Acts and subordinate statutes (including organizations to which any of them belong) provides information on an analysis pertaining to his/her service. |
| (4) | Pursuant to Article 7 (6) of the Act, a business that falls under any of the following subparagraphs shall not be deemed a financial investment business specified in the corresponding subparagraph: |
| 1. | If it falls under Article 7 (6) 1 of the Act: An investment brokerage business; |
| 2. | If it falls under Article 7 (6) 2 of the Act: An investment trading business; and |
| 3. | If it falls under Article 7 (6) 3 of the Act: Any of the following financial investment businesses: |
| (a) | If it falls under any provision of paragraph (3) 1 through 3 and 5: An investment trading business; |
| (b) | If it falls under paragraph (3) 4: An investment brokerage business; |
| (c) | If it falls under paragraph (3) 6: An investment trading business or an investment brokerage business; |
| (d) | If it falls under paragraph (3) 7: An investment advisory business or a discretionary investment business; and |
| (e) | If it falls under paragraph (3) 8 or 9: An investment advisory business. |
법령보기 화면
| Article 8 (Scope of Specially Related Persons) |
|
The term "specially related persons, as defined by Presidential Decree" in Article 9 (1) 1 of the Act means persons who fall under any of the following subparagraphs (hereinafter referred to as "specially related persons"): | 1. | Persons who fall under any of the following items, if the principal is a private individual: |
| (a) | His/her spouse (including a person in a de facto marital relationship; hereinafter the same shall apply); |
| (b) | A paternal relative in the sixth degree or closer and the wife of a paternal relative in the fourth degree or closer; |
| (c) | The husband of a paternal relative in the third degree or closer; |
| (d) | A maternal relative in the third degree or closer, his/her spouse, and his/her child; |
| (e) | A paternal relative of the spouse in the second degree or closer and his/her spouse; |
| (f) | A lineal ascendant or descendant in the natural family of an adopted child; |
| (g) | An adopted child, his/her spouse, and a lineal descendant in his/her adoptive family; |
| (h) | The natural mother of a person born out of wedlock; |
| (i) | A person who maintains a livelihood with the principal’s money or other property and a person who makes a living together with the principal; |
| (j) | A corporation, an organization, and any executives of such corporation or an organization (an executive shall be excluded herefrom, if it is certified by the principal’s written statement, etc. that the principal alone or jointly with a person in a relationship under any provision of items (a) through (i) with the principal does not exercise de facto control over the matters material to the corporation or organization through appointment and dismissal of executives or in any other way), if the investment made in the corporation or organization by the principal, alone or jointly with a person in a relationship under any provision of items (a) through (i) with the principal, reaches or exceeds 30/100 of its capital or the principal has, alone or jointly with such person, de facto control over the matters material to the corporation or organization, such as appointment and dismissal of executives; and |
| (k) | A corporation, an organization, and any executives of such corporation or organization (an executive shall be excluded herefrom, if it is certified by the principal’s written statement, etc. that the principal alone or jointly with a person in a relationship under any provision of items (a) through (j) with the principal does not exercise de facto control over the matters material to the corporation or organization through appointment and dismissal of executives or in any other way), if the investment made in the corporation or organization by the principal, alone or jointly with a person in a relationship under any provision of items (a) through (j) with the principal, reaches or exceeds 30/100 of its capital or the principal has, alone or jointly with such person, de facto control over the matters material to the corporation or organization, such as appointment and dismissal of executives; and |
| 2. | Persons who fall under any of the following items, if the principal is a corporation or an organization: |
| (c) | A private individual (including a person in a relationship under any item of subparagraph 1 with the individual), a corporation (excluding any of its affiliated companies; hereafter the same shall apply in this subparagraph), an organization, and any executives of the corporation or organization, if the investment made in the principal by the individual, corporation, or organization principal, alone or jointly with a person in a relationship under any item of subparagraph 1, reaches or exceeds 30/100 of its capital or the individual, corporation, or organization has, alone or jointly with such person, de facto control over the matters material to the principal, such as appointment and dismissal of executives; and |
| (d) | A corporation, an organization, and any executives of such corporation or organization (an executive shall be excluded herefrom, if it is certified by the principal’s written statement, etc. that the principal does not exercise de facto control over the matters material to the corporation or organization through appointment and dismissal of executives or in any other way), if the investment made in the corporation or organization by the principal, alone or jointly with a person in a relationship under any provision of items (a) through (c) with the principal, reaches or exceeds 30/100 of its capital or the principal has, alone or jointly with such person, de facto control over the matters material to the corporation or organization, such as appointment and dismissal of executives. |
법령보기 화면
| Article 9 (Scope of Significant Shareholders) |
|
The term "shareholder, as prescribed by Presidential Decree" in Article 9 (1) 2 (b) of the Act means any of the following persons: | 1. | A shareholder who has, solely or jointly with other shareholders under an accord or agreement, appointed the representative director or a majority of directors; and |
| 2. | A shareholder specified and publicly notified by the Financial Services Commission as the person deemed to exercise de facto control over the corporation in making decisions material to the corporation and execution of its business, including changes in its business strategy or organization. |
법령보기 화면
| Article 10 (Scope of Professional Investors) |
|
| (1) | The term "professional investor specified by Presidential Decree" in the proviso to the main body of Article 9 (5) of the Act means a professional investor not falling under any of the following subparagraphs: |
| 3. | A person who falls under any provision of paragraph (2) 1 through 17; |
| 4. | A person who falls under any provision of paragraph (3) 1 through 11; |
| 5. | A person who falls under any provision of paragraph (3) 18 (a) through (c); and |
| 6. | A foreigner similar to those under subparagraph 3 or 4. |
| (2) | The term "financial institutions specified by Presidential Decree" in Article 9 (5) 3 of the Act means any of the following financial institutions: |
| 2. | The Korea Development Bank under the Korea Development Bank Act; |
| 3. | The Industrial Bank of Korea under the Industrial Bank of Korea Act; |
| 5. | The National Agricultural Cooperative Federation under the Agricultural Cooperatives Act; |
| 6. | The National Federation of Fisheries Cooperatives under the Fisheries Cooperatives Act; |
| 8. | Financial investment business entities [excluding concurrently-run financial investment business entities under Article 22 of the Act (hereinafter referred to as "concurrently-run financial investment business entities")]; |
| 9. | Securities finance companies with authorization under Article 324 (1) of the Act (hereinafter referred to as "securities finance companies"); |
| 11. | Financial brokerage companies with authorization under Article 355 (1) of the Act (hereinafter referred to as "financial brokerage companies"); |
| 14. | Mutual savings banks under the Mutual Savings Banks Act and their Central Federation; |
| 15. | The Forestry Cooperatives Federation under the Forestry Cooperatives Act; |
| 16. | The Korean Federation of Community Credit Cooperatives under the Community Credit Cooperatives Act; |
| 17. | The National Credit Union Federation of Korea under the Credit Unions Act; and |
| 18. | Foreign financial institutions similar to the institutions under any provision of subparagraphs 1 through 17. |
| (3) | The term "persons specified by Presidential Decree" in Article 9 (5) 5 of the Act means any of the following persons: |
| 2. | The Korea Asset Management Corporation under the Act on the Efficient disposition of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation; |
| 3. | The Korea Housing Finance Corporation under the Korea Housing Finance Corporation Act; |
| 4. | The Korea Investment Corporation under the Korea Investment Corporation Act; |
| 6. | The Korea Securities Depository established pursuant to Article 294 of the Act (hereinafter referred to as the "Securities Depository"); |
| 7. | The Korea Exchange established pursuant to Article 373 of the Act (hereinafter referred to as the "Exchange"); |
| 8. | The Financial Supervisory Service under the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Financial Supervisory Service"); |
| 9. | Collective investment schemes (excluding those specified and publicly notified by the Financial Services Commission); |
| 12. | Funds established pursuant to a relevant Act (excluding those under subparagraphs 10 and 11) and the corporations that manage and operate any of such funds; |
| 13. | Corporations that manage any mutual aid business pursuant to a relevant Act; |
| 15. | Domestic corporations that have issued stocks listed in a foreign securities exchange; |
| 16. | Corporations or organizations that meet all of the following requirements (excluding foreign corporations or organizations): |
| (a) | Each of them shall submit to the Financial Services Commission relevant documents proving that the requirement under item (b) is met; |
| (b) | The balance of financial investment instruments as at the day immediately before the day on which the relevant documents were submitted shall not be less than ten billion won; and |
| (c) | No more than two years shall have passed since the relevant documents were submitted; |
| 17. | Private individuals who meet all of the following requirements (excluding foreign private individuals): |
| (a) | Each of them shall submit to the Financial Services Commission relevant documents proving that the requirement under items (b) and (c) are fully met; |
| (b) | The balance of financial investment instruments as at the day immediately before the day on which the relevant documents were submitted shall not be less than five billion won; |
| (c) | One year shall have passed since each of them opened an account with a financial investment business entity; and |
| (d) | No more two years shall have passed since the relevant documents were submitted; and |
| 18. | Foreigners falling under any of the following items: |
| (b) | International organizations established pursuant to a treaty; |
| (c) | Foreign central banks; and |
| (d) | Foreigners similar to those under any provision of subparagraphs 1 through 17. |
법령보기 화면
| Article 11 (Public Offering and Public Sale of Securities) |
|
| (1) | In calculating fifty persons in accordance with Article 9 (7) or (9) of the Act, the number of persons who have been invited to subscribe securities of the same class as the securities in the instant case in any manner other than by public offering or public sale within six months before the public invitation to subscribe shall be aggregated, but persons falling under any of the following subparagraphs shall be excluded therefrom: |
| 1. | Professionals falling under any of the following items: |
| (a) | Persons under any provision of Article 10 (1) 1 through 4; |
| (b) | Persons specified and publicly notified by the Financial Services Commission among those falling under Article 10 (3) 12 or 13; |
| (e) | Persons who provide accounting, consulting, and similar services to the issuer with an officially recognized qualification certificate for certified public accountant, appraiser, attorney-at-law, patent attorney, tax accountant, etc.; and |
| (f) | Other persons specified and publicly notified by the Financial Services Commission as professionals who are in a position to have good knowledge of financial status, business affairs, etc. of the issuer; and |
| 2. | Related persons falling under any of the following items: |
| (a) | The largest shareholder (referring to the largest shareholder under Article 9 (1) 1 of the Act; hereinafter the same shall apply) of the issuer and shareholders who hold 5/100 or more of the total number of outstanding stocks; |
| (b) | Executives (including those under subparagraphs of Article 401-2 (1) of the Commercial Act; hereafter the same shall apply in this subparagraph) of the issuer and members of the employee shareholders’ association under the Framework Act on Worker’s Welfare; |
| (c) | Affiliated companies of the issuer and their executives; |
| (d) | Shareholders of a stock-unlisted corporation (excluding a corporation that has a record of it as having publicly offered or sold its stocks), in cases where the issuer is the stock-unlisted corporation; |
| (e) | Executives and employees of a domestic affiliated company of the issuer, in cases where the issuer is a foreign enterprise established pursuant to laws and regulations of a foreign country, and sells stocks of the foreign enterprise to executives and employees of the domestic affiliated company in accordance with a stock option plan, etc. for improving welfare of employees; |
| (f) | Promoters of a company, if the company is being incorporated by the issuer; and |
| (g) | Other persons specified and publicly notified by the Financial Services Commission as related persons who are in a position to have good knowledge of financial status, business affairs, etc. of the issuer. |
| (2) | Even if the results of calculation under paragraph (1) shows that the number of persons who have been invited to subscribe is less than fifty persons and thus the invitation does not amount to a public offering of securities, it shall still be deemed as a public offering, in cases where it falls under the criteria prescribed and publicly notified by the Financial Services Commission for resale, taking into consideration the kind of securities, the characteristics of acquirers, etc. |
| (3) | In applying paragraph (1) to a public sale, the number of persons shall be calculated based on persons who are invited to subscribe outside of the securities market (excluding cases where a broker gets involved in trading listed stocks and securities depository receipts that are related to the stocks and that are listed on the securities exchange in accordance with Article 78 (1) of the Act). <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
법령보기 화면
| Article 12 (Securities Eligible for Trading in KOSDAQ Market) |
|
The term "securities designated by Presidential Decree" in Article 9 (13) 2 of the Act means securities unlisted in the securities market among the following securities: | 3. | Instruments representing preemptive rights; |
| 4. | Beneficiary certificates of an exchange-traded fund under Article 234 (1) of the Act (hereinafter referred to as the "exchange-traded fund"); |
| 5. | Derivative-combined securities under Article 7 (1) 1; and |
| 6. | Securities depository receipts connected to stocks issued by a foreign corporation, etc. (limited to those issued by the Securities Depository). |
법령보기 화면
| Article 13 (Scope of Foreign Corporations) |
|
| (1) | The term "international organizations specified by Presidential Decree" in Article 9 (16) 5 of the Act means international organizations established by treaty. |
| (2) | The term "other juristic person, as specified by Presidential Decree" in Article 9 (16) 6 of the Act means any of the following persons: |
| 1. | A fund or an association created and supervised or managed in accordance with laws and regulations of a foreign country; |
| 2. | A fund or an association created and supervised or managed by a foreign government, a foreign local government, or a foreign public organization; and |
| 3. | A fund or an association created and supervised or managed by an international organization established pursuant to a treaty. |
법령보기 화면
| Article 14 (Criteria for Privately Placed Funds) |
|
| (1) | The term "investors specified by Presidential Decree" in Article 9 (19) of the Act means investors not falling under any of the following subparagraphs: |
| 1. | Persons who fall under any subparagraph of Article 10 (1); and |
| 2. | Persons specified and publicly notified by the Financial Services Commission among those who fall under Article 10 (3) 12 or 13. |
| (2) | The term "number prescribed by Presidential Decree" in Article 9 (19) of the Act means 49 persons. In such cases, the number of investors (referring to the investors under paragraph (1)) in another collective investment scheme shall be added to the aforesaid sum for the purpose of calculating 49 persons, in cases where the other collective investment scheme acquires 10/100 or more of the total number of outstanding collective investment securities issued by a collective investment scheme. |
PART Ⅱ FINANCIAL INVESTMENT BUSINESSES
CHAPTER Ⅰ AUTHORIZATION AND REGISTRATION OF FINANCIAL INVESTMENT BUSINESSES
Section 1 Requirements and Procedure for Authorization
법령보기 화면
| Article 15 (Authorized Business Units) |
|
| (1) | The term "business units, as defined by Presidential Decree" in the main body of Article 12 (1) of the Act means units defined in the Appendix 1. |
| (2) | The term "instruments as specified by Presidential Decree" among the securities included in the scope of financial investment instruments in Article 12 (1) 2 of the Act means the following instruments: |
| 2. | Local government bonds; |
| 3. | Special bonds under Article 4 (3) of the Act (hereinafter referred to as "special bonds"); |
| 4. | Equity securities (excluding collective investment securities); |
| 5. | Listed stock certificates; |
| 6. | Collective investment securities; and |
| (3) | The term "instruments as specified by Presidential Decree" among the derivatives included in the scope of financial investment instruments in Article 12 (1) 2 of the Act means the following instruments: |
| 1. | Derivatives based on any underlying asset other than stocks; and |
| 2. | Derivatives based on the underlying asset of a certain currency or interest rate. |
법령보기 화면
| Article 16 (Requirements for Authorization) |
|
| (1) | The term "financial institutions specified by Presidential Decree" in Article 12 (2) 1 (a) of the Act means financial institutions falling under any of the following subparagraphs: |
| 4. | The National Agricultural Cooperative Federation under the Agricultural Cooperatives Act; |
| 5. | The National Federation of Fisheries Cooperatives under the Fisheries Cooperatives Act; |
| 6. | Domestic branches of a foreign financial institution under the Banking Act; |
| 8. | Other financial institutions designated and publicly notified by the Financial Services Commission. |
| (2) | Each foreign financial investment business entity under Article 12 (2) 1 (b) of the Act (hereinafter referred to as the "foreign financial investment business entity") shall meet the following requirements: |
| 1. | It shall meet the requirements under subparagraph 4 (b) through (e) of the Appendix 2; and |
| 2. | The supervision over the foreign financial investment business entity by the supervisory agency in its home country shall be conducted in accordance with internationally recognized guidelines for supervision. |
| (3) | The term "amount set by Presidential Decree" in Article 12 (2) 2 of the Act means the amount set in the Appendix 1. |
| (4) | Each business plan under Article 12 (2) 3 of the Act shall meet the following requirements: |
| 1. | Its revenue and expenditure outlook shall be reasonable and feasible; |
| 2. | It shall be capable of maintaining the guidelines for soundness in business management under Article 31 of the Act (referring to the guidelines prescribed by the relevant Acts and subordinate statutes for soundness in business management, if the entity is a concurrently- run financial investment business entity); |
| 3. | It shall have an internal control system appropriate for management of risks and prevention of financial accidents; |
| 4. | It shall have a work process appropriate for protection of investors; and |
| 5. | There shall be no likelihood of violating any Act or subordinate statute or undermining good order in the financial trading system. |
| (5) | The human resources, electronic computer system, and other physical facilities under Article 12 (2) 4 of the Act shall meet the following requirements: |
| 1. | It shall have professionals for major tasks, who shall have expertise and soundness in the intended financial investment business, (referring to the professional for major tasks under Article 286 (1) 3 of the Act; hereinafter the same shall apply) and adequate human resources required for carrying out its business, including operators of an electronic computer system; and |
| 2. | It shall have the following physical facilities, including an electronic computer system: |
| (a) | An electronic computer system and means of communication required for carrying out the intended financial investment business; |
| (b) | Adequate space for business and office equipment, including an office; |
| (c) | Security facilities for protecting the safety of physical facilities, including an electronic computer system; and |
| (d) | Supplementary facilities required for maintaining the continuity of business in preparation against accidents, such as power failure and fire. |
| (6) | Each major shareholder (referring to major shareholders under Article 12 (2) 6 (a) of the Act; hereafter the same shall apply in this Chapter) shall meet the requirements under the Appendix 2: Provided, That the Financial Services Commission may publicly notify relaxed requirements applicable to any of the following cases: |
| 1. | Where a person falling under any subparagraph of Article 22 of the Act desires to obtain a licence for a financial investment business; and |
| 2. | Where a financial investment business entity is merged with another company, split off or is merged after being split off. |
| (7) | The term "entity, as specified further by Presidential Decree" in Article 12 (2) 6 (a) of the Act means a person falling under any of the following subparagraphs: Provided, That persons falling under subparagraph 1 shall be excluded herefrom, in cases where the Financial Services Commission specifies and makes public notification of such persons, taking into consideration the nature of the corporation and other factors: |
| 1. | The largest shareholder of the corporation that is the largest shareholder itself (including persons who have de facto control, in cases where persons who have de facto control over the corporation that is the largest shareholder are clearly distinct from the largest shareholder of the corporation); and |
| 2. | The representative of the corporation that is the largest shareholder. |
| (8) | The system for preventing conflicts of interest under Article 12 (2) 7 of the Act (hereafter referred to as the "system for preventing conflicts of interest" in this Section) shall meet the following requirements: |
| 1. | It shall have appropriate internal control guidelines for detecting, assessing, and managing possible conflicts of interest in accordance with Article 44 of the Act; and |
| 2. | It shall have an appropriate system for preventing any activity under any subparagraph of Article 45 (1) and (2) of the Act. |
| (9) | In cases where a foreign financial investment business entity, a foreign financial institution under the Banking Act, or a foreign insurance company under the Insurance Business Act (hereafter referred to as the "foreign financial investment business entity, etc." in this paragraph) has branch offices or any other sales office (hereinafter referred to as "branch offices, etc." in this paragraph) installed in Korea in order to run a financial investment business, all such branch offices, etc. shall be deemed as a single financial investment business entity, pursuant to Article 12 (3) of the Act. In such cases, a foreign financial investment business entity, etc. shall, when it seeks to install an additional branch office, etc. in Korea in order to run a financial investment business, submit relevant documents to the Financial Services Commission in accordance with the process prescribed and publicly notified by the Financial Services Commission. |
| (10) | Further specific criteria necessary in connection with the requirements for authorization under paragraphs (2), (4) through (6), (8), and (9) shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 17 (Method and Procedure for Authorization) |
|
| (1) | An application filed with the Financial Services Commission for authorization in accordance with Article 13 (1) of the Act shall contain descriptions of the following matters: |
| 2. | Domiciles of the head office, branch offices, and other sales offices; |
| 3. | Matters concerning executives; |
| 4. | Matters concerning the intended business unit subject to the authorization (referring to authorized business units under Article 12 (1) of the Act; hereinafter the same shall apply); |
| 5. | Matters concerning financial status, including equity capital; |
| 6. | Matters concerning business plans; |
| 7. | Matters concerning human resources and physical facilities, including an electronic computer system; |
| 8. | Matters concerning major shareholders or a foreign financial investment business entity; |
| 9. | Matters concerning the system for preventing conflicts of interest; and |
| 10. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for examination of requirements for authorization. |
| (2) | Every application for authorization under paragraph (1) shall be accompanied by the following documents: |
| 1. | Articles of incorporation (including similar documents); |
| 2. | Documents proving the decision made on incorporation or application for authorization, such as minutes of the general meeting of promoters, the inaugural general meeting of shareholders, or a directors’ meeting; |
| 3. | Documents describing the locations and names of the head office, branch offices, and other sales offices; |
| 4. | Resumes and certificates of career experience of executives; |
| 5. | Documents stating the type and work process of the business unit subject to the authorization; |
| 6. | Financial statements and accompanying statements for the preceding three business years (a corporation still in the process of incorporation shall be exempted from providing these statements, while a corporation shall submit financial statements and accompanying statements for the business years since its incorporation date, if three business years have not yet passed since its incorporation date); |
| 7. | Business plans (including estimated financial statements) and a statement on estimated revenue and expenditure for three business years after the commencement of business; |
| 8. | A document showing the current status of human resources, physical facilities, etc.; |
| 9. | Documents stating the names or trade names of shareholders who hold 1/100 or more of the total number of outstanding stocks as at the authorization application date (or the end of the latest business year, if the application for authorization is filed to add another authorized business unit or for a concurrently-run financial investment business) and the number of stocks held by each of such shareholders; |
| 10. | Documents confirming that major shareholders or a foreign financial investment business entity meets requirements under items of Article 12 (2) 6 of the Act; |
| 11. | Documents confirming that the system for preventing conflicts of interest has been prepared; and |
| 12. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for examination of the requirements for authorization. |
| (3) | If a person has already filed an application for preliminary authorization under Article 14 of the Act and there is no change in the application or an accompanying document already filed, he/she may, when he/she files for authorization for a financial investment business, omit stating part of the descriptions of an application for authorization under paragraph (1), manifesting his/her intention to incorporate the former application into the later application by referring to the former application or omit submitting such a document among the accompanying documents under paragraph (2). |
| (4) | The Financial Services Commission shall, upon receiving an application for authorization under paragraph (1), verify a certified transcript of corporate register by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, but shall require the applicant to submit the certified transcript, if the applicant does not consent to verification in such manner. |
| (5) | The Financial Services Commission shall, upon receiving an application for authorization under paragraph (1), ascertain that the contents of the application for authorization for a financial investment business are true, and examine the contents of the application to ascertain as to whether the requirements for authorization under Article 12 (2) of the Act are met, taking into consideration the consensus of interested parties. |
| (6) | The Financial Services Commission shall, if necessary to examine the contents of an application filed for authorization for a financial investment business in accordance with paragraph (5), conduct a firsthand investigation by interviewing interested parties, promoters, or executives. |
| (7) | The Financial Services Commission shall issue public notice of the applicant, application date, contents of application, method and time period for presenting opinions through its Internet homepage or other means in order to collect opinions from interested parties, etc. in relation to the contents of the application filed for authorization for a financial investment business in accordance with paragraph (5). |
| (8) | The Financial Services Commission shall notify an applicant for authorization for a financial investment business of an opinion considered unfavorable to him/her, if any, among the opinions filed in accordance with paragraph (7), and may require the applicant to vindicate him/herself within a given period of time. |
| (9) | The Financial Services Commission may hold a public hearing, if the authorization for a financial investment business is likely to have a significant impact on the financial market or it is deemed necessary otherwise. |
| (10) | A person who obtains the authorization for a financial investment business under Article 13 (2) of the Act shall begin the business within six months from the date on which the authorization is granted: Provided, That if a different deadline is specially set by the Financial Services Commission or the aforesaid deadline is extended at the request of the person to whom the authorization for the financial investment business was granted, the person may begin the authorized business within such deadline specially set or extended. |
| (11) | The Financial Services Commission shall, if it attached a condition to the authorization for a financial investment business, make sure whether such condition has been fulfilled. |
| (12) | Necessary matters concerning application for and examinations of authorization for financial investment business, the form of the application for authorization, and the method of filling in such form shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (11). |
법령보기 화면
| Article 18 (Preliminary Authorization) |
|
| (1) | A person who intends to apply for a preliminary authorization under Article 14 (1) of the Act shall file an application for preliminary authorization, which shall contain the descriptions under subparagraphs of Article 17 (1), with the Financial Services Commission. |
| (2) | An application for preliminary authorization under paragraph (1) shall be accompanied by the following documents: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Articles of incorporation or proposed articles of incorporation (including similar documents); |
| 2. | Documents proving the decision made on incorporation or application for authorization, such as minutes of the general meeting of promoters, the inaugural general meeting of shareholders, or a directors’ meeting; |
| 3. | Resumes and certificates of career experience of executives (including persons elected as executives); |
| 4. | Documents stating the type and work process of the business unit to receive the authorization; |
| 5. | Financial statements and accompanying statements for the preceding three business years (a corporation still in the process of incorporation shall be exempted from providing these statements, while a corporation shall submit financial statements and accompanying statements for the business years since its incorporation date, if three years have not yet passed since its incorporation date); |
| 6. | Business plans (including estimated financial statements) and a statement on estimated revenue and expenditure for three business years after the commencement of business; |
| 7. | Documents confirming the current status of human resources, physical facilities, etc. (including human resources and physical facilities that will be employed or purchased); |
| 8. | Documents stating the names or trade names of shareholders who hold 1/100 or more of the total number of outstanding stocks as at the preliminary authorization application date (or the end of the latest business year, if the application for preliminary authorization to add permitted business units or the application for preliminary authorization of a concurrently-run financial investment business entity is filed) and the number of stocks held by each of such shareholders; |
| 9. | Documents confirming that major shareholders or a foreign financial investment business entity meets requirements under items of Article 12 (2) 6 of the Act; |
| 10. | Documents confirming that the system for preventing conflicts of interest has been or can been prepared; and |
| 11. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for examination of the requirements for preliminary authorization. |
| (3) | Article 17 (4) through 9 shall apply mutatis mutandis to the method and procedure for the examination of preliminary authorization applied in accordance with Article 14 (1) of the Act. In such cases, the term "authorization for a financial investment business" shall be construed as "preliminary authorization". |
| (4) | Each person who has a preliminary authorization under Article 14 (2) of the Act shall file an application for authorization for a financial investment business under Article 12 of the Act (hereafter referred to as "final authorization" in this paragraph) after the person fulfills the terms and conditions of the preliminary authorization within six months from the date on which the preliminary authorization was granted: Provided, That if a different deadline is specially set for application for final authorization by the Financial Services Commission or the aforesaid deadline for application for final authorization is extended at the request of the person to whom the preliminary authorization for the financial investment business was granted, the person may file an application for final authorization within such deadline specially set or extended. |
| (5) | Necessary matters concerning applications for and examinations of preliminary authorizations, the form of the application for preliminary authorization, and the method of filling in such form shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 19 (Mitigation of Requirements for Maintenance of Authorization) |
|
| (1) | The term "mitigated requirements prescribed by Presidential Decree" in Article 15 of the Act means the following requirements: |
| 1. | Where Article 12 (2) 2 of the Act is applicable: The authorized person shall maintain at least 70/100 of the minimum equity capital prescribed for each authorized business unit in the Appendix 1. In such cases, the requirements for maintaining the authorization shall be applicable as at the end of each fiscal year, while it shall be deemed that, even if a financial investment business entity fails to meet the requirements for maintaining the authorization as at the end of a specific fiscal year, it meets the requirements for maintaining the authorization by the end of the following fiscal year; and |
| 2. | Where Article 12 (2) 6 of the Act is applicable: The authorized person shall continue to satisfy the requirements specifically prescribed for each of the following categories: |
| (a) | If a major shareholder is a person falling under any provision of subparagraphs 1 through 3 of the Appendix 2, the authorized person shall continue to satisfy only the requirements under subparagraph 1 (d) and (e) (ⅰ) and (ⅲ) of the aforesaid Table. In such cases, the term "for the preceding five years" in subparagraph 1 (e) (ⅰ) of the aforesaid Table shall be construed as "for the preceding five years for the largest shareholder", and the term "fine" in the aforesaid sub-item as "fine of 500 million won"; |
| (b) | If a major shareholder is a person falling under subparagraph 4 or 5 (d) of the Appendix 2, the authorized person shall continue to satisfy only the requirements under subparagraphs 1 (e) (ⅰ) and (ⅲ) and 4 (d) of the aforesaid Table. In such cases, the term "for the preceding five years" in subparagraph 1 (e) (ⅰ) of the aforesaid Table shall be construed as "for the preceding five years for the largest shareholder", the term "fine" in the aforesaid sub-item as "fine of 500 million won", the term "for the preceding three years" in subparagraph 4 (d) in the aforesaid Table as "for the preceding three years for the largest shareholder", and the term "fact that it has at any time been subjected to an administrative disposition equivalent to or heavier than a corporate warning from the supervisory agency in its home country or a criminal punishment equivalent to or heavier than a sentence of fine" in the aforesaid item as "fact that it has at any time been subjected to the punishment by fine of 500 million won sentenced by the judiciary of its home country"; |
| (c) | If a major shareholder is a person falling under subparagraph 5 (excluding item (d)) of the Appendix 2, the authorized person shall continue to satisfy only the requirements under subparagraph 1 (e) (ⅰ) and (ⅲ) of the aforesaid Table. In such cases, the term "for the preceding five years" in subparagraph 1 (e) (ⅰ) of the aforesaid Table shall be construed as "for the preceding five years for the largest shareholder", and the term "fine" in the aforesaid sub-item as "fine of 500 million won"; and |
| (d) | If the authorized person is a foreign financial investment business entity under Article 12 (2) 6 (b) of the Act, it shall continue to satisfy only the requirements under item (b) of this subparagraph. In such cases, the term "largest shareholder" shall be construed as "foreign financial investment business entity". |
| (2) | In cases where any subparagraph of Article 16 (6) is applicable, the Financial Services Commission may relax the requirements under items of paragraph (1) 2 and publicly notify such relaxed requirements. |
Section 2 Prerequisites and Procedure for Registration
법령보기 화면
| Article 20 (Registered Business Units) |
|
The term "business units, as defined by Presidential Decree" in the main body of Article 18 (1) of the Act means the business units defined in the Appendix 3.
법령보기 화면
| Article 21 (Prerequisites for Registration) |
|
| (1) | The term "amount set by Presidential Decree" in Article 18 (2) 2 of the Act means the amount set in the Appendix 3. |
| (3) | The term "number prescribed by Presidential Decree" in Article 18 (2) 3 (b) of the Act means two full-time executives or employees. |
| (4) | The term "social credibility as prescribed by Presidential Decree" in Article 18 (2) 5 (a) of the Act means the following requirements: |
| 1. | If a major shareholder is a person falling under any provision of subparagraphs 1 through 3 and 5 (excluding item (d)) of the Appendix 2, the person shall meet the requirements under subparagraph 1 (e) of the aforesaid Table: Provided, That in cases where a person who has authorization for a financial investment business under Article 12 of the Act intends to register the financial investment business, the Financial Services Commission may prescribe and publicly notify special requirements different from the aforesaid requirements; and |
| 2. | If a major shareholder is a person falling under subparagraph 4 or 5 (e) of the Appendix 2, the person shall meet the requirements under subparagraph 4 (a), (d), and (e) of the aforesaid Table. In such cases, the term "authorization" in item (a) of the aforesaid subparagraph of the aforesaid Table shall be construed as "registration", and the term "who desires to obtain the authorization" in the aforesaid item as "who intends to register". |
| (5) | The term "social credibility as prescribed by Presidential Decree" in Article 18 (2) 5 (b) of the Act means the requirements under subparagraph 4 (a), (d), and (e) of the Appendix 2. In such cases, the term "authorization" in item (a) of the aforesaid subparagraph of the aforesaid Table shall be construed as "registration", the term "who desires to obtain the authorization" in the aforesaid item as "who intends to register", and the term "three years" in item (d) of the aforesaid subparagraph as "two years". |
| (6) | The system for preventing conflicts of interest under Article 18 (2) 6 of the Act (hereafter referred to as "system for preventing conflicts of interest" in this Section) shall meet the following requirements: |
| 1. | It shall have internal control guidelines appropriate for detecting, assessing, and managing possible conflicts of interest in accordance with Article 44 of the Act; and |
| 2. | It shall have a system appropriate for preventing the relevant entity from committing any act under subparagraphs of Article 45 (1) and (2) of the Act. |
| (7) | Specific guidelines required for the requirements for registration under paragraphs (4) through (6) shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 22 (Method and Procedure for Registration) |
|
| (1) | An application filed for registration with the Financial Services Commission in accordance with Article 19 (1) of the Act shall contain descriptions of the following matters: |
| 2. | The domicile of the head office; |
| 3. | Matters concerning executives; |
| 4. | Matters concerning the intended business unit subject to the registration (referring to the registered business unit under Article 18 (1) of the Act; hereinafter the same shall apply); |
| 5. | Matters concerning financial status including equity capital; |
| 6. | Matters concerning professional advisers for investment recommendation under Article 286 (1) 3 (a) of the Act (hereinafter referred to as "professional advisers for investment recommendation") or professional investment managers under Article 286 (1) 3 (c) of the Act (hereinafter referred to as "professional investment managers"); |
| 7. | Matters concerning major shareholders, a foreign investment advisory business entity, or a foreign discretionary investment business entity; |
| 8. | Matters concerning the system for preventing conflicts of interest; and |
| 9. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for examination of registration. |
| (2) | An application for registration under paragraph (1) shall be accompanied by the following documents: |
| 1. | Articles of incorporation (including similar documents); |
| 2. | Documents describing the location and name of the head office; |
| 3. | Resumes and certificates of career experience of executives; |
| 4. | Documents stating the type and work process of the registered business unit; |
| 5. | Financial statements and accompanying statements for the preceding three business years (a corporation still in the process of incorporation shall be exempted from providing these statements, while a corporation shall submit financial statements and accompanying statements for the business years since its incorporation date, if three business years have not yet passed since its incorporation date); |
| 6. | Documents showing the current status of professional advisers for investment recommendation or professional investment managers; |
| 7. | Documents stating the names or trade names of major shareholders as at the registration application date (or the end of the latest business year, if the application for registration is filed for adding another business unit subject to the registration or for a concurrently-run financial investment business) and the number of stocks held by each of such shareholders; |
| 8. | Documents confirming that major shareholders, a foreign investment advisory business entity, or a foreign discretionary investment business entity meets requirements under items of Article 18 (2) 5 of the Act; |
| 9. | Documents confirming that the system for preventing conflicts of interest has been prepared; and |
| 10. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for examinations of the requirements for registration. |
| (3) | The Financial Services Commission shall, upon receiving an application for registration under paragraph (1), verify a certified transcript of corporate register by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, but shall require the applicant to submit the certified transcript, if the applicant does not consent to verification in such manner. |
| (4) | The Financial Services Commission shall, upon receiving an application for registration under paragraph (1), ascertain that the contents of the application for registration of a financial investment business are true, and examine the contents of the application to find whether the requirements for registration under Article 18 (2) of the Act are met. |
| (5) | Necessary matters concerning applications for and examinations of registration of financial investment businesses, the form of the application for registration, and the method of filling on such form shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 23 (Mitigation of Prerequisites for Maintenance of Registration) |
|
The term "mitigated prerequisites pursuant to Presidential Decree" in Article 20 of the Act means the following prerequisites: | 1. | Where Article 18 (2) 2 of the Act is applicable: It shall maintain at least 70/100 of the minimum equity capital set for each registered business unit in the Appendix 3. In such cases, the prerequisites for registration shall be applicable as at the end of each fiscal year, while it shall be deemed that, even if a financial investment business entity fails to meet the prerequisites for maintaining the registration as at the end of a specific fiscal year, it meets the prerequisites by the end of the following fiscal year; and |
| 2. | Where Article 18 (2) 5 of the Act is applicable: The registrant shall continue to satisfy the prerequisites specifically prescribed for each of the following categories: |
| (a) | If a major shareholder falls under any provision of subparagraphs 1 through 3 and 5 (excluding item (d)) of the Appendix 2, the registrant shall continue to satisfy only the requirements under subparagraph 1 (e) (ⅰ) and (ⅲ) of the aforesaid Table. In such cases, the term "for the preceding five years" in subparagraph 1 (e) (ⅰ) of the aforesaid Table shall be construed as "for the preceding five years for the largest shareholder", and the term "fine" in the aforesaid sub-item as "fine of 500 million won"; |
| (b) | If a major shareholder falls under subparagraph 4 or 5 (d) of the Appendix 2, the registrant shall continue to satisfy only the requirements under subparagraph 1 (e) (ⅰ) and (ⅲ) and 4 (d) of the aforesaid Table. In such cases, the term "for the preceding five years" in subparagraph 1 (e) (ⅰ) of the aforesaid Table shall be construed as "for the preceding five years for the largest shareholder", the term "fine" in the aforesaid sub-item as "fine of 500 million won", the term "for the preceding three years" in subparagraph 4 (d) in the aforesaid Table as "for the preceding three years for the largest shareholder", and the term "fact that it has at any time been subjected to an administrative disposition equivalent to or heavier than a corporate warning from the supervisory agency in its home country or a criminal punishment equivalent to or heavier than a sentence of fine" in the aforesaid item as "fact that it has at any time been subjected to the punishment by fine of 500 million won sentenced by the judiciary of its home country"; and |
| (c) | If the registrant is a foreign investment advisory business entity or a foreign discretionary investment business entity under Article 18 (2) 5 (b) of the Act, it shall continue to satisfy only the requirements under item (b) of this subparagraph. In such cases, the term "three years" in subparagraph 4 (d) of the Appendix 2 shall be construed as "two years". In such cases, the term "largest shareholder" shall be construed as "foreign investment advisory business entity or foreign discretionary investment business entity", and the term "three years" in subparagraph 4 (d) of the Appendix 2 as "two years". |
CHAPTER Ⅱ GOVERNANCE OF FINANCIAL INVESTMENT BUSINESS ENTITY
법령보기 화면
| Article 24 (Scope of Application) |
|
The term "financial institutions or similar as specified by Presidential Decree" in subparagraph 3 of Article 22 of the Act means financial institutions, etc. falling under any of the following subparagraphs: | 4. | Securities finance companies; |
| 6. | Financial brokerage companies; |
| 8. | The Korea Housing Finance Corporation under the Korea Housing Finance Corporation Act; and |
| 9. | Other financial institutions designated and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 25 (Scope of Persons Exempt from Approval of Change) |
|
The term "persons specified by Presidential Decree" in Article 23 (1) of the Act means persons falling under any of the following subparagraphs: | 3. | Shareholders who are specially related to the largest shareholder (but who are not the largest shareholder) and each of whom holds less than 1/100 of the total number of outstanding voting stocks as a result of stock acquisition. |
법령보기 화면
| Article 26 (Requirements for Approval of Change of Major Shareholder) |
|
| (1) | The term "requirements prescribed by Presidential Decree" in Article 23 (1) of the Act means the requirements provided for in the Appendix 4. |
| (2) | Any person who desires to obtain approval under Article 23 (1) of the Act shall file with the Financial Services Commission an application for approval of change of major shareholder with descriptions of the following matters: |
| 1. | Matters concerning the applicant; |
| 2. | Current status of stocks issued by the financial investment business entity subject to the acquisition of stocks and owned by the person who intends to become a major shareholder; |
| 3. | Plan for acquisition of stocks by the person who intends to become a major shareholder among stocks that have been or will be issued by the financial investment business entity subject to the acquisition of stocks; and |
| 4. | Other matters prescribed and publicly notified by the Financial Services Commission, as necessary for examinations of requirements for approval. |
| (3) | An application for approval of change under paragraph (2) shall be accompanied by the following documents: |
| 1. | Articles of incorporation (including similar documents and applicable only to corporations); |
| 2. | Documents similar to a certified transcript of corporate register, if the person is a foreign enterprise; |
| 3. | Financial statements as at the end of the latest business year and half-yearly financial statements, if half a year has passed since the end of the latest business year (applicable only to corporations); |
| 5. | Financial state calculated in accordance with the standards for financial soundness applicable to the relevant financial institution and a review report on financial status by an accounting auditor, if the person who intends to become a major shareholder is a financial institution; and |
| 6. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for examinations of requirements for approval. |
| (4) | The Financial Services Commission shall, upon receiving an application for approval of change under paragraph (2), verify the following documents by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, but shall require the applicant to submit such documents (the document under subparagraph 2 may be substituted with the business registration certificate), if the applicant does not consent to verification in such manner: |
| 1. | A certified transcript of corporate register (applicable only to domestic corporations); |
| 2. | A certified transcript of citizen registration card; and |
| 3. | A certified transcript of corporate register for the financial investment business entity subject to the acquisition of stocks by the person who intends to become a major shareholder. |
| (5) | The Financial Services Commission shall, upon receiving an application for approval of change under paragraph (2), examine its contents, make a decision as to whether to approve it within sixty days, and shall notify the applicant of its decision and reasons therefor in writing forthwith. In such cases, the Commission may demand the applicant to correct defects, if any, in the application for approval of change. |
| (6) | In counting the time period for examination under paragraph (5), the time period prescribed and publicly notified by the Financial Services Commission, such as the time period for correcting defects in the application for approval of change, shall not be included in the time period for examination. |
| (7) | The Financial Services Commission shall, when it issues orders to dispose of stocks pursuant to Article 23 (2) of the Act, clearly state the number of stocks subject to such disposition, the deadline for such disposition, etc. in writing. |
| (8) | Necessary matters concerning the method and procedure for application for approval of change, the specific guidelines for the requirements under paragraph (1), etc. shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (7). |
법령보기 화면
| Article 27 (Disqualification of Executives) |
|
| (1) | The term "finance-related Acts and subordinate statutes, as specified by Presidential Decree" in subparagraph 3 of Article 24 of the Act means the following Acts and subordinate statutes (hereafter referred to as "finance-related Acts and subordinate statutes" in this Article): |
| 5. | The Korea Export-Import Bank Act; |
| 7. | The Mutual Savings Banks Act; |
| 10. | The Credit Unions Act; |
| 11. | The Community Credit Cooperatives Act; |
| 14. | The Act on the Establishment, etc. of Financial Services Commission; |
| 15. | The Asset-Backed Securitization Act; |
| 16. | The Act on the Efficient Disposition of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation; |
| 20. | The Korea Housing Finance Corporation Act; |
| 21. | The Public Notice of Values and Appraisal of Real Estate Act; |
| 24. | The Special Purpose Companies for Mortgage-Backed Bonds Act; |
| 27. | The Guarantee of Workers’ Retirement Benefits Act; |
| 28. | The Agricultural Cooperatives Act; |
| 29. | The Fisheries Cooperatives Act; |
| 30. | The Electronic Financial Transaction Act; |
| 31. | The Act on Reporting and Use of Certain Financial Transaction Information; |
| 33. | The Act on Registration of Credit Business and Protection of Finance Users; |
| 34. | The Registration of Bonds and Debentures Act; |
| 36. | The Act on the Regulation of Conducting Fund-raising Business without Permission; |
| 37. | The Act on Private Participation in Infrastructure; |
| 39. | The Ship Investment Company Act; |
| 40. | The Framework Act on the Promotion of Cultural Industries; |
| 45. | The Act on Special Measures for the Promotion of Specialized Enterprises, etc. for Component and Material; and |
| (2) | The term "person as specified by Presidential Decree" in subparagraph 5 of Article 24 of the Act means an executive or employee who was incumbent at the time when a ground or event that gave rise to the revocation of permission, authorization or registration of the relevant business occurred (or an executive or employee who was incumbent at the time when a ground or event that gave rise to a timely corrective measure under Article 10 of the Act on the Structural Improvement of the Financial Industry, in cases where the corporation had the permission, authorization or registration, etc. of its business revoked pursuant to Article 14 (2) of the aforesaid Act) and who falls under any of the following subparagraphs: |
| 1. | An auditor or a member of audit committee; |
| 2. | An executive against whom the Financial Services Commission [including the Governor of the Financial Supervisory Service (hereinafter referred to as the "Governor of the Financial Supervisory Service"); hereafter the same shall apply in this Article] demanded to take a measure, such as removal, suspension from performance of duties, warning of censure, warning for attention, caution or any similar measure, on account of his/her unlawful or wrongful conduct relevant to the occurrence of a ground or event that gave rise to the revocation of permission, authorization, registration, etc.; |
| 3. | An employee against whom the Financial Services Commission demanded to take a measure, such as dismissal or suspension from office, on account of his/her unlawful or wrongful conduct relevant to the occurrence of a ground or event that gave rise to the revocation of permission, authorization, registration, etc.; and |
| 4. | A person liable to be disciplined pursuant to subparagraph 2 or 3 but who had been retired or had resigned from his job before such disciplinary measure was taken. |
| (3) | The term "person as specified by Presidential Decree" in subparagraph 8 of Article 24 of the Act means a person falling under any of the following subparagraphs: |
| 1. | An executive whose term of office expired after the Financial Services Commission, a foreign financial supervisory agency, etc. had taken a measure to demand removal, suspension from his/her performance of duties, or a warning of censure against him/her pursuant to the Act, finance-related Acts and subordinate statutes, or finance-related laws and regulations of a foreign country (referring to finance-related laws and regulations of a foreign country under subparagraph 3 of Article 24 of the Act; hereafter the same shall apply in this Article) and in whose case any of the following periods of time has not yet passed: |
| (a) | Demand of removal: Five years from the date on which the removal was demanded; |
| (b) | Suspension from performance of duties: Four years from the date on which the suspension from performance of duties was lifted; and |
| (c) | Warning of censure: Three years from the date on which the warning of censure was issued; |
| 2. | An employee against whom the Financial Services Commission, a foreign financial supervisory agency, etc. took a measure to demand dismissal, suspension from office, or salary reduction pursuant to the Act, finance-related Acts and subordinate statutes, or finance-related laws and regulations of a foreign country, and in whose case any of the following periods of time has not yet passed: |
| (a) | Demand of dismissal: Five years from the date on which the dismissal was demanded; |
| (b) | Demand of suspension from office: Four years from the date on which the suspension from office was demanded; and |
| (c) | Demand of salary reduction: Three years from the date on which the salary reduction was demanded; |
| 3. | Either an executive whose term of office expired after the institution to which he/she belonged had taken a measure of suspension from performance of duties or warning of censure against him/her or an employee against whom the institution to which he/she belonged took a measure of suspension from office or salary reduction, pursuant to the Act, finance-related Acts and subordinate statutes, or finance- related laws and regulations of a foreign country, and in whose case any of the following periods of time has not yet passed: |
| (a) | Suspension from performance of duties or suspension from office: Four years from the date on which the suspension from performance of duties or the suspension from office was lifted; and |
| (b) | Warning of censure or salary reduction: Three years from the date on which the measure of warning of censure or salary reduction was taken; and |
| 4. | Any executives liable to the discipline by a measure under any provision of subparagraphs 1 through 3 (excluding the measures under subparagraphs 1 (a) and 2 (a)) pursuant to the Act, finance-related Acts and subordinate statutes, or finance-related laws and regulations of a foreign country, if he/she was incumbent or remained in office, but retired or resigned from his/her office and in whose case three years have not passed since his/her retirement or resignation date. |
법령보기 화면
| Article 28 (Appointment of Outside Directors) |
|
| (1) | The term "financial investment business entities specified by Presidential Decree" in Article 25 (1) of the Act means persons falling under any of the following subparagraphs: |
| 1. | A financial investment business entity whose total assets are less than two trillion won as at the end of the latest business year: Provided, That the same shall not apply to cases where the total amount of the collective investment property, discretionary investment property under subparagraph 5 of Article 85 of the Act (hereinafter referred to as "discretionary investment property"), and trust property managed by the relevant financial investment business entity as at the end of the latest business year is not less than six trillion won; |
| 2. | A domestic branch office or any other sales office of a foreign financial investment business entity; |
| 3. | A financial investment business entity disappearing as a consequence of a merger or otherwise within six months from the date of a general meeting of shareholders; |
| 4. | A financial investment business entity against whom proceedings for rehabilitation began or bankruptcy was declared pursuant to the Debtor Rehabilitation and Bankruptcy Act; and |
| 5. | A financial investment business entity that resolved dissolution. |
| (2) | The term "corporation which has a significant business relationship with the company, as specified further by Presidential Decree, or which is a competitor of the company in business, or which has a cooperative relationship with the company" in Article 25 (5) 6 of the Act means any of the following corporations: Provided, That the Bank of Korea, a person falling under any subparagraph of Article 10 (2), a person falling under any provision of Article 10 (3) 1 through 13, or any similar foreign corporation shall be excluded herefrom: |
| 1. | A corporation whose total amount of transactions made with the relevant financial investment business entity during the preceding three business years is not less than 10/100 of its total assets (referring to the total assets on the financial investment business entity’s balance sheet as at the end of the latest business year) or gross sales (referring to the gross sales on the financial investment business entity’s income statement as at the end of the latest business year; hereafter the same shall apply in this Article); |
| 2. | A corporation whose single contract made with the relevant financial investment business entity during the latest business year amounts to 10/100 or more of its gross sales; |
| 3. | A corporation to or from whom the total amount of money or securities that the relevant financial investment business entity lent or borrowed and the amount of guarantee the entity provided for performance of obligations, including collateral offered, reaches or exceeds 10/100 of its equity capital (referring to the financial investment business entity’s equity capital on the balance sheet as at the end of the latest business year); |
| 4. | A corporation in which the amount invested by the relevant financial business investment entity reaches or exceeds 5/100 of its capital (referring to the capital of the corporation in which the financial investment business entity invested); |
| 5. | A corporation that has a contractual technical alliance with the relevant financial investment business entity; |
| 6. | An accounting firm appointed as the accounting auditor of the relevant financial investment business entity; and |
| 7. | A corporation that has entered into a contract for advisory services, such as advice on legal affairs or business management, with the relevant financial investment business entity. |
| (3) | The term "person as specified further by Presidential Decree" in Article 25 (5) 8 of the Act means a person falling under any of the following subparagraphs: |
| 1. | A person who holds office as an outside director, a non-standing director, or a non-standing auditor of two or more other stock-listed corporations, in addition to the relevant financial investment business entity; |
| 2. | A certified public accountant, a tax accountant, an attorney-at-law, or any other similar person who audits accounting of the financial investment business entity concerned, acts as a tax agent for the relevant financial investment business entity, or who provides an advisory service under a contract made with the relevant financial investment business entity for advisory service on legal affairs, business management, or any other similar affairs; |
| 3. | A person who holds (referring to holding under the main sentence of Article 133 (3) of the Act) 1/100 or more of the total number of outstanding stocks issued by the relevant financial investment business entity; and |
| 4. | A person whose balance of transactions made with the relevant financial investment business entity (excluding routine transactions made with the relevant financial investment business entity in accordance with a standardized contract under Article 2 (1) of the Regulation of Standardized Contracts Act) reaches or exceeds 100 million won. |
법령보기 화면
| Article 29 (Audit Committee) |
|
| (1) | The term "financial investment business entities specified by Presidential Decree" in Article 26 (1) of the Act means financial investment business entities falling under any subparagraph of Article 28 (1). |
| (2) | The term "expert in accounting or finance as prescribed by Presidential Decree" in Article 26 (2) 2 of the Act means a person falling under any of the following subparagraphs: |
| 1. | A person who holds the qualification for certified public accountant and who has engaged in a business related to such qualification for five years or longer; |
| 2. | A person who holds a master’s degree or higher degree in accounting or finance and who has worked for a research institute, a university, or a college as a researcher, a full-time lecturer, or higher position for five years or longer in total; |
| 3. | A person who has worked for a stock-listed corporation as an executive in charge of accounting or finance-related affairs for five years or longer in total or who has worked for such corporation as an executive or an employee for ten years or longer in total; and |
| 4. | A person who has worked for any of the following institutions in charge of accounting or finance-related affairs, or supervision over the aforesaid affairs for five years or longer in total: |
| (c) | An institution falling under any subparagraph of Article 10 (2); |
| (d) | An institution falling under any provision of Article 10 (3) 1 through 14; |
| (e) | Any institution subject to the inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission, other than the institutions under items (c) and (d); |
| (f) | Any public agency under the Act on the Management of Public Agencies (excluding the agencies specified and publicly notified by the Financial Services Commission), other than the institutions under items (b) through (e); |
| (h) | Any foreign corporation similar to an institution or agency under items (a) through (g). |
| (3) | The term "person as specified further by Presidential Decree" in Article 26 (3) 3 of the Act means a person falling under any of the following subparagraphs: |
| 1. | The spouse or lineal ascendant or descendant of a significant shareholder; |
| 2. | The spouse or lineal ascendant or descendant of a standing executive; and |
| 3. | The standing executive or full-time employee of an affiliated company or the person who was a standing executive or full-time employee during the latest two years. |
법령보기 화면
| Article 30 (Standing Auditors) |
|
The term "financial investment business entities specified by Presidential Decree" in the main sentence of Article 27 (1) of the Act means those falling under any of the following subparagraphs: | 1. | A financial investment business entity whose total assets amount to less than 100 billion won as at the end of the latest business year: Provided, That cases where the total amount of collective investment property, discretionary investment property, or trust property managed by a financial investment business entity as at the end of the latest business year reaches or exceeds three trillion won shall be excluded herefrom; and |
| 2. | A person falling under any provision of Article 28 (1) 2 through 5. |
법령보기 화면
| Article 31 (Internal Control Guidelines) |
|
| (1) | Internal control guidelines under Article 28 (1) of the Act (hereinafter referred to as "internal control guidelines") shall provide for the following matters: |
| 1. | Matters concerning the division of duties and the organizational structure; |
| 2. | Matters concerning guidelines for the management of risks ensuing in the course of the management of proprietary property or investors’ property or the business operations; |
| 3. | Matters concerning the procedure with which executives and employees shall comply in performing their duties; |
| 4. | Matters concerning the establishment of a system through which information necessary for making decisions on business management can be communicated efficiently; |
| 5. | Matters concerning the procedure and method for ascertaining whether executives and employees comply with the internal control guidelines and the disposition of executives and employees who violate the internal control guidelines; |
| 6. | Matters concerning the procedure or guidelines for preventing unfair conduct as provided for in the Act, such as reporting by executives and employees on trading of financial investment instruments; |
| 7. | Matters concerning the procedure for establishing and amending the internal control guidelines; |
| 8. | Matters concerning the procedure for appointing and dismissing compliance officers under Article 28 (2) of the Act (hereinafter referred to as "compliance officer"); |
| 9. | Matters concerning the detection, assessment, and management of conflicts of interest; |
| 10. | Matters concerning whether laws, regulations, and internal guidelines relevant to the exercise of voting rights in stocks that belong to collective investment property or trust property are complied with; |
| 11. | Matters concerning the criteria for the selection of investment brokers with whom trading the assets that belong to collective investment property or trust property are commissioned; and |
| 12. | Such other matters prescribed and publicly notified by the Financial Services Commission as may be necessary for the internal control guidelines. |
| (2) | Every financial investment business entity (excluding branch offices and other sales offices of a foreign financial investment business entity) shall, when it seeks to establish or amend internal control guidelines, present them to its board of directors for resolution. |
| (3) | In order to prevent violation of any Act or subordinate statute from recurring, the Financial Services Commission may recommend a financial investment business entity to amend internal control guidelines, if a violation of any Act or subordinate statute is discovered from the financial investment business entity as a result of any inspection conducted by the Governor of the Financial Supervisory Service. |
| (4) | Further specific guidelines for internal control guidelines shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 32 (Compliance Officers) |
|
| (1) | The term "investment advisory business entity or a discretionary investment business entity as specified by Presidential Decree" in Article 28 (2) of the Act means a person who does not run any financial investment business other than a financial advisory business or a discretionary investment business and who manages discretionary investment property that does not reach 500 billion won in total as at the end of the latest business year. |
| (2) | The term "finance-related Acts and subordinate statutes specified by Presidential Decree" in Article 28 (4) 3 of the Act means the Acts and subordinate statutes under subparagraphs of Article 27 (1). |
| (3) | The term "institution specified by Presidential Decree" in Article 28 (4) 3 of the Act means any of the following institutions: |
| 1. | The institution to which the employee concerned belongs; and |
| 2. | A person who has the power to take action pursuant to fiance-related Acts and subordinate statutes under paragraph (2), including the Minister of Land, Transport and Maritime Affairs (excluding the Financial Services Commission and the Governor of the Financial Supervisory Service). |
법령보기 화면
| Article 33 (Exercise of Minority Shareholder Rights) |
|
| (1) | The term "financial investment business entities specified by Presidential Decree" in Article 29 (1) of the Act means those under Article 28 (1) 1 and 2. |
| (2) | The term "financial investment business entity specified by Presidential Decree" in Article 29 (2) through (6) of the Act means a financial investment business entity whose capital as at the end of the latest business year reaches or exceeds 100 billion won. |
CHAPTER Ⅲ MAINTENANCE OF SOUND BUSINESS MANAGEMENT
Section 1 Supervision over Soundness in Business Management
법령보기 화면
| Article 34 (Maintenance of Financial Soundness) |
|
| (1) | The term "financial investment business entities specified by Presidential Decree" in the main body of Article 30 (1) of the Act means financial investment business entities that run only a financial investment business falling under any of the following subparagraphs: |
| 1. | Investment advisory business; |
| 2. | Discretional investment business; and |
| 3. | Investment advisory business and discretionary investment business. |
| (2) | The term "period of time specified by Presidential Decree" in Article 30 (3) of the Act means one month. |
법령보기 화면
| Article 35 (Guidelines for Soundness in Business Management) |
|
The term "matters prescribed by Presidential Decree" in Article 31 (1) 4 of the Act means the following matters: | 1. | Matters concerning risk management; |
| 2. | Matters concerning soundness in foreign exchange; and |
| 3. | Such other matters prescribed and publicly notified by the Financial Services Commission as may be necessary for securing soundness in business management. |
법령보기 화면
| Article 36 (Deadline for Submission of Business Reports) |
|
| (1) | The term "period of time prescribed by Presidential Decree" in Article 33 (1) of the Act means 45 days. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (2) | The term "event as prescribed by Presidential Decree" in Article 33 (3) of the Act means the following events: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | If an investment trading business or an investment brokerage business is concerned: |
| (a) | Where a financial scandal or non-performing claim occurs; |
| (c) | Where the case falls under any subparagraph of Article 161 (1) of the Act (applicable only to financial investment business entities that are not required to submit the business report under Article 159 (1) of the Act); |
| (d) | Where the relevant corporation or any of its executives and employees has been subjected to criminal punishment in connection with the operation of the investment business or investment brokerage business; |
| (e) | Where it fails to settle payments with the securities exchange, derivative markets, etc.; and |
| (f) | Where there is any other cause or event specified and publicly notified by the Financial Services Commission; |
| 2. | If a collective investment business is concerned: |
| (a) | Where it falls under any provision of subparagraph 1 (a) through (c); |
| (b) | Where the relevant corporation or any of its executives and employees has been subjected to criminal punishment in connection with the operation of the collective investment business; and |
| (c) | Where there is any other cause or event specified and publicly notified by the Financial Services Commission; |
| 3. | If an investment advisory business or a discretionary investment business is concerned: |
| (a) | Where it falls under any provision of subparagraph 1 (a) through (c); |
| (b) | Where the relevant corporation or any of its executives and employees has been subjected to criminal punishment in connection with the operation of the investment advisory business or discretionary investment business; and |
| (c) | Where there is any other cause or event specified and publicly notified by the Financial Services Commission; and |
| 4. | If a trust business is concerned: |
| (a) | Where it falls under any provision of subparagraph 1 (a) through (c); |
| (b) | Where the relevant corporation or any of its executives and employees has been subjected to criminal punishment in connection with the operation of the trust business; |
| (c) | Where the contractor or the trustor defaults on a payment for any cheque or bill, or its banking transactions are suspended or banned; and |
| (d) | Where there is any other cause or event specified and publicly notified by the Financial Services Commission. |
| (3) | Each business report under Article 33 (1) of the Act (hereinafter referred to as the "quarterly business report") and reports indicating monthly business affairs under paragraph (4) of the same Article (hereinafter referred to as the "monthly business report") shall contain descriptions of the following matters: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | An overview of the financial investment business entity; |
| 2. | Matters concerning scope of the business run by the financial investment business entity; |
| 3. | Matters concerning financial status; |
| 4. | Matters concerning operations; |
| 5. | Matters concerning the largest shareholder (including his/her specially related persons) and significant shareholders; |
| 6. | Matters concerning transactions with specially related persons; |
| 7. | Matters concerning management of branch offices and other sales offices and human resources; |
| 8. | Matters concerning current status and protection of investors’ property; |
| 9. | Matters concerning details of trading of over-the-counter derivatives and other transactions and current status of transactions and valuation profit and loss (including valuation profit and loss from the transactions for evading risks of over-the-counter derivatives); |
| 10. | Details of measures taken by the Financial Services Commission, the Governor of the Financial Supervisory Service, or any other similar agency against the relevant financial investment business entity or any of its executives and employees during the latest five years, if any; and |
| 11. | Other matters specified and publicly notified by the Financial Services Commission as those relevant to the operation and management of financial investment business entities. |
| (4) | The document disclosed to the public in accordance with Article 33 (2) of the Act shall contain descriptions of the following matters: |
| 1. | Matters under paragraph (3) 1 through 7; and |
| 2. | Matters specified and publicly notified by the Financial Services Commission as those that shall be necessarily informed to investors. |
| (5) | If any event falling under any subparagraph of paragraph (2) occurs, the relevant financial investment business entity shall report it to the Financial Services Commission by no later than the day immediately after such event occurs, and shall disclose it to the public through its Internet homepage or any similar means. |
| (6) | If a financial investment business entity provides false information in disclosing material facts under Article 47 (3) of the Act (hereinafter referred to as "material facts") to the public among the facts that it is obligated to disclose to the public in accordance with Article 33 (2) or (3) of the Act, omits any of such material facts, or provides information in any other dishonest manner, the Financial Services Commission may demand the financial investment business entity to make a corrective public disclosure or reissue the public disclosure. |
| (7) | In regard to the quarterly business reports, monthly business reports, documents for public disclosure, and the public disclosure of business management status, further specific guidelines for the forms, the method of preparing such forms, mandatory descriptions, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (6). <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
Section 2 Restrictions on Trading with Major Shareholders
법령보기 화면
| Article 37 (Restrictions on Trading with Major Shareholders) |
|
| (1) | The term "as prescribed by Presidential Decree" in the proviso to Article 34 (1) of the Act means any of the following cases: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Where the case in question falls under any of the following items when Article 34 (1) 1 of the Act is applicable: |
| (a) | Where securities already owned become securities issued by a major shareholder as a consequence of the change of a major shareholder; |
| (b) | Where the securities in question are acquired in connection with underwriting; |
| (c) | Where a financial institution, etc. allowed to guarantee corporate bonds in accordance with relevant Acts and subordinate statutes acquires the corporate bonds for which it guarantees the payment of principal and interest; |
| (d) | Where special bonds are acquired; and |
| (e) | Where it is not likely to undermine a financial investment business entity’s soundness in business management and any other ground prescribed and publicly notified by the Financial Services Commission exists; and |
| 2. | Where the case in question falls under any of the following items when Article 34 (1) 2 of the Act is applicable: |
| (a) | Stocks, bonds, or promissory notes under Article 34 (1) 2 of the Act (hereafter referred to as "promissory notes" in this subparagraph) already owned become stocks, bonds, or promissory notes issued by a specially related person as a consequence of the change of a specially related person; |
| (b) | Where the case falls under any provision of subparagraph 1 (b) through (e); |
| (c) | Where stocks are acquired through such contribution to the capital as prescribed and publicly notified by the Financial Services Commission, such cases where equity shares are acquired with an intention to take part in control of the company; |
| (d) | Where stocks, bonds, or promissory notes are acquired with an intention to perform such transactions as prescribed and publicly notified by the Financial Services Commission, including transactions for marginal gains and transactions for hedging investment risks; |
| (e) | Where the price of stocks, bonds, or promissory notes exceed the ratio prescribed in paragraph (3) due to a change in the equity capital under paragraph (3) or price fluctuation of stocks, bonds, or promissory notes issued by a specially related person; and |
| (f) | Where it is not likely to undermine a financial investment business entity’s soundness in business management and any other ground prescribed and publicly notified by the Financial Services Commission exists. |
| (2) | The term "person as specified further by Presidential Decree" in the main sentence of Article 34 (1) 2 of the Act means an affiliated company. |
| (3) | The term "ratio prescribed by Presidential Decree" in the proviso to Article 34 (1) 2 of the Act means 8/100 of the equity capital defined and publicly notified by the Financial Services Commission. |
| (4) | The term "act as prescribed further by Presidential Decree" in Article 34 (1) 3 of the Act means any of the following acts: |
| 1. | Trading under a condition unfavorable to the relevant financial investment business entity when it trades with any of its major shareholders or specially related persons, compared to trading with any party other than such shareholder or person; and |
| 2. | An act committed with an intent to avoid the restriction under Article 34 (1) 1 or 2 of the Act or subparagraph 1 of this paragraph and falling under any of the following items: |
| (a) | An act of engaging in cross-trading with one another through a third party under an agreement or in collusion with a third party or in any other way; and |
| (b) | An act of using a transaction of over-the-counter derivatives, a trust deed, a linked transaction, etc. |
법령보기 화면
| Article 38 (Limits on Extension of Credit) |
|
| (1) | The term "transaction as specified further by Presidential Decree" in the main sentence of Article 34 (2) of the Act means the following transactions: |
| 1. | A transaction through which collateral is offered for a major shareholder (including his/her specially related persons; hereafter the same shall apply in this Article); |
| 3. | A transaction of promising to perform contribution to capital for a major shareholder; |
| 4. | A transaction of lending money, securities, or any other property with economic value to a major shareholder, guaranteeing performance of obligations for a major shareholder, or purchasing securities for supporting a major holder, or a transaction made with intent to avoid the restriction on transactions under any provision of subparagraphs 1 through 3, which falls under any of the following items: |
| (a) | A transaction made by cross-trading with one another through a third party under an agreement or in collusion with a third party or in any other way; and |
| (b) | A transaction made by using a transaction of over-the-counter derivatives, a trust deed, a linked transaction, etc.; and |
| 5. | Other transactions specified and publicly notified by the Financial Services Commission as those accompanying credit risks, such as assumption of an obligation. |
| (2) | The term "credit grant as prescribed further by Presidential Decree" in the proviso to Article 34 (2) of the Act means one falling under any of the following subparagraphs: |
| 1. | Credit extended to an executive within the limit of the smaller of either his/her annual salary (referring to the salary that has been paid by the financial investment business entity during his/her service period and that is subject to the income tax), or 100 million won; |
| 2. | Guarantee of obligations, provided for an overseas local corporation, as specified and publicly notified by the Financial Services Commission; and |
| 3. | Extension of credit under any of the following items, if such extension of credit constitutes one provided for in the main sentence of Article 34 (2) of the Act: |
| (a) | Where an act under any subparagraph of Article 34 (1) of the Act is done because it is necessary to exercise a security right or any other right; |
| (b) | Where an act under any subparagraph of Article 34 (1) of the Act is done to manipulate for stabilization under Article 176 (3) 1 of the Act or to create markets under subparagraph 2 of the aforesaid paragraph; |
| (c) | Where any subparagraph of Article 37 (1) is applicable; and |
| (d) | Where stocks, bonds, or promissory notes (referring to promissory notes under Article 34 (1) 2 of the Act; hereafter the same shall also apply in Article 39) owned do not exceed the limit of the ratio under Article 37 (3). |
법령보기 화면
| Article 39 (Transactions for which Resolution by Board of Directors is Not Required) |
|
| (1) | The term "act specified by Presidential Decree" in the former part of Article 34 (3) and Article 34 (4) of the Act means an act of owning or an act of granting credit limited to the amount of a single transaction, as prescribed and publicly notified by the Financial Services Commission, which does not exceed a smaller of either the amount equivalent to 10/10,000 of the equity capital (referring to the equity capital under Article 37 (3)), or one billion won: Provided, That the amount of a transaction made routinely by the relevant financial investment business entity in accordance with a standardized contract under Article 2 (1) of the Regulation of Standardized Contracts Act shall be excluded from the said amount of single transaction. |
| (2) | The term "matters specified by Presidential Decree" in Article 34 (5) of the Act means the following matters: |
| 1. | Where stocks, bonds, or promissory notes are owned in accordance with the proviso to Article 34 (1) 2 of the Act: |
| (a) | Amount of stocks, bonds, or promissory notes owned as at the end of each quarter year; |
| (b) | Details of increase and decrease in stocks, bonds, or promissory notes during each quarter year; |
| (c) | Acquisition price or disposition price; and |
| (d) | Other matters specified and publicly notified by the Financial Services Commission; and |
| 2. | Where credit is granted in accordance with the proviso to Article 34 (2) of the Act: |
| (a) | Amount of credit extended as at the end of each quarter year; |
| (b) | Amount of increase and decrease in credit extended during each quarter year; |
| (c) | Terms and conditions of credit extended; and |
| (d) | Other matters specified and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 40 (Grounds for Restriction on Transactions with Major Shareholders) |
|
The term "as specified further by Presidential Decree" in Article 34 (7) of the Act means any of the following cases: | 1. | Where the liabilities of a major shareholder (applicable only to companies, but including specially related companies; hereafter the same shall apply in this Article) exceed its assets; and |
| 2. | Where a major shareholder is assessed by two or more credit rating business entities to non-investment grade. |
법령보기 화면
| Article 41 (Scope of Exercise of Undue Influence) |
|
The term "act as specified further by Presidential Decree" in subparagraph 3 of Article 35 of the Act means any of the following acts: | 1. | Demanding a financial investment business entity to commit an illegal act; |
| 2. | Demanding a transaction to be made with a major shareholder him/herself or a third party under any term or condition different from ordinary terms and conditions related to interest rate, fee, collateral, etc.; and |
| 3. | Exercising influence in the course of preparing certain research and analysis data under subparagraph 2 of Article 71 of the Act (hereinafter referred to as "research and analysis data"). |
CHAPTER Ⅳ BUSINESS CONDUCT RULES
Section 1 Common Rules of Business Conduct
Sub-Section 1 Duty of Good Faith
법령보기 화면
| Article 42 (Restrictions on Trade Name) |
|
| (1) | The term "word as specified by Presidential Decree" in Article 38 (1) of the Act means "financial investment" (including its corresponding word in Korean language) or a word with any similar meaning in any other foreign language (including its corresponding word in Korea language). <Added by Presidential Decree No. 21291, Feb. 3, 2009> |
| (2) | The term "word as specified further by Presidential Decree" in the main sentence of and the proviso to Article 38 (2) of the Act means "securities" (including its corresponding word in Korean language) or a word with any similar meaning in any other foreign language (including its corresponding word in Korean language) respectively. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (3) | The term "word as specified further by Presidential Decree" in Article 38 (3) of the Act means "derivatives" or "futures" (including its corresponding word in Korean language) or a word with any similar meaning in any other foreign language (including the corresponding word in Korean language), respectively. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (4) | The term "word as specified further by Presidential Decree" in the main sentence of Article 38 (4) of the Act means "collective investment", "pooled investment", "investment trust", "unit trust", or "asset management" (including its corresponding word in Korean language) or a word with any similar meaning in any other foreign language (including the corresponding word in Korean language), and the term "word as specified further by Presidential Decree" in the proviso to the aforesaid paragraph means "investment trust" (including its corresponding word in Korean language)" or a word with any similar meaning in any other foreign language (including the corresponding word in Korean language), respectively. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (5) | The term "word as specified further by Presidential Decree" in the main sentence of and the proviso to Article 38 (5) of the Act means "investment advisory" (including its corresponding word in Korean language) or a word with any similar meaning in any other foreign language (including the corresponding word in Korean language), respectively. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (6) | The term "word as specified further by Presidential Decree" in Article 38 (6) of the Act means "discretionary investment" (including its corresponding word in Korean language) or a word with any similar meaning in any other foreign language (including the corresponding word in Korean language), respectively. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (7) | The term "word as specified further by Presidential Decree" in the main sentence of and the proviso to Article 38 (7) of the Act means "trust" (including its corresponding word in Korean language) or a word with any similar meaning in any other foreign language (including the corresponding word in Korean language), respectively. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
법령보기 화면
| Article 43 (Scope of Business of Financial Investment Business Entities) |
|
| (1) | The term "financial investment business entities specified by Presidential Decree" in the former part of the main body of Article 40 of the Act means those falling under any of the following subparagraphs: |
| 1. | A financial investment business entity that does not run an investment trading business or an investment brokerage business when subparagraph 3 or 4 of Article 40 of the Act is applicable; |
| 2. | A financial investment business entity that runs only a financial investment business falling under any of the following items when subparagraph 5 of Article 40 of the Act is applicable: |
| (a) | An investment advisory business; |
| (b) | A discretionary investment business; and |
| (c) | An investment advisory business and a discretionary investment business; and |
| 3. | Other financial investment business entities specified and publicly notified by the Financial Services Commission. |
| (2) | The term "finance-related Act and subordinate statute specified by Presidential Decree" in subparagraph 1 of Article 40 of the Act means the Acts and subordinate statutes under subparagraphs of Article 27 (1). |
| (3) | The term "financial business specified by Presidential Decree" in subparagraph 1 of Article 40 of the Act means a financial business falling under any of the following subparagraphs: |
| 1. | Business of a general administration company under Article 254 (8) of the Act (hereinafter referred to as the "general administration company"); |
| 3. | Electronic money transfer under the Electronic Financial Transaction Act (limited to the electronic money transfer for which the entity becomes a participating institution in the settlement relay system under subparagraph 6 of Article 6 of the aforesaid Act or the electronic money transfer made through the representative participating institution under Article 15 (2) 2 of the Enforcement Decree of the aforesaid Act); |
| 4. | Business of a retirement pension business operator under the Guarantee of Workers’ Retirement Benefits Act; |
| 5. | Trust business for secured debentures under the Secured Debentures Trust Act; |
| 10. | Other financial businesses specified and publicly notified by the Financial Services Commission as those unlikely to undermine the protection of investors and good order in trading. |
| (4) | The term "finance-related Act and subordinate statute specified by Presidential Decree" in subparagraph 2 of Article 40 of the Act means the Acts and subordinate statutes under subparagraphs of Article 27 (1). |
| (5) | The term "financial business specified by Presidential Decree" in subparagraph 5 of Article 40 of the Act means any of the following financial businesses: Provided, That the business under subparagraph 4 shall be applicable only to cases where an investment trading business is run for securities; the business under subparagraph 5 shall be applicable only to cases where an investment trading business or an investment brokerage business is run for the corresponding securities; the business under subparagraph 6 shall be applicable only to cases where an investment trading business is run for securities and over-the-counter derivatives; and the business under subparagraph 7 or 8 shall be applicable only to cases where an investment trading business or an investment brokerage business is run for debt securities: |
| 1. | Business of an asset manager and trustee’s business of a specialized securitization company under the Asset-Backed Securitization Act; |
| 2. | Management of third party’s security interests in securities, money, or similar in investors’ account; |
| 4. | Corporate financial affairs under subparagraph 3 of Article 71 of the Act and a business of lending loans related to other business specified and publicly notified by the Financial Services Commission; |
| 5. | Transactions of borrowing and lending securities and acting as a broker, an intermediary, or an agent for such transactions; |
| 7. | Trading of negotiable certificates of deposit in Korean won and acting as a broker, an intermediary, or an agent for such trading; |
| 8. | Trading of loan claims and other claims and acting as a broker, an intermediary, or an agent for such trading; |
| 9. | Acting as a broker, an intermediary, or an agent for loans; and |
| 10. | Other financial businesses specified and publicly notified by the Financial Services Commission as those unlikely to undermine the protection of investors and good order in trading. |
법령보기 화면
| Article 44 (Public Notice of Incidental Business) |
|
| (1) | Pursuant to Article 41 (4) of the Act, the Financial Services Commission shall, when a financial investment business entity reports the incidental business that it seeks to run, give public notice of the following matters through its Internet homepage or by other means within seven days from the date on which the report is filed: |
| 1. | Name of the financial investment business entity; |
| 2. | Date of report on the incidental business; |
| 3. | Date scheduled for commencement of the incidental business; |
| 4. | Details of the incidental business; and |
| 5. | Other matters prescribed and publicly notified by the Financial Services Commission. |
| (2) | The Financial Services Commission shall, when it issues an order of restriction or correction under Article 41 (2) of the Act, give public notice of the details of and grounds for such order through its Internet homepage or by other means. |
법령보기 화면
| Article 45 (Scope of Affairs of which Entrustment is Prohibited) |
|
The term "affairs specified by Presidential Decree" in the proviso to Article 42 (1) of the Act means the following affairs: | 1. | The affairs under the following items (applicable only to cases where even the power to make a decision on the relevant affairs is entrusted): |
| (a) | Affairs within the scope of works of a compliance officer, except the affairs specified and publicly notified by the Financial Services Commission; |
| (d) | Analysis and assessment of credit risks; and |
| 2. | The affairs under the following items, applicable depending upon the type of financial investment business: |
| (a) | Where an investment trading business is concerned, the affairs under Article 47 (1) 1 (a) (excluding simple tasks for opening accounts and verifying actual names), (b), and (d); |
| (b) | Where an investment brokerage business is concerned, the affairs under Article 47 (1) 2 (a) (excluding simple tasks for opening accounts and verifying actual names), and (c); |
| (c) | Where a collective investment business is concerned, the affairs under items of Article 47 (1) 3: Provided, That excluded therefrom are the management of, or instructions for management of, foreign currency assets among the collective investment property [including the exercise of voting rights for equity securities included in the collective investment property (including securities depository receipts related to equity securities); hereafter the same shall apply in this item]; the management of, or instructions for management of, assets in Korean won (referring to any assets other than assets in any foreign currency; hereafter the same shall apply in this subparagraph) included in the collective investment property within the limit of 20/100 of total value of such assets (applicable only to cases where such affairs are entrusted to a financial investment business entity); the research and analysis related to such management or instructions for management; the simple receipt of orders for trading securities, exchange-traded derivatives, or means of foreign payment under the Foreign Exchange Transactions Act included in the collective investment property; and assessment of the collective investment property, entrusted without delegating the power to make a decision; |
| (d) | Where an investment advisory business is concerned, the affairs under Article 47 (1) 4 (a) and (b): Provided, That excluded therefrom are the service of providing judgment on investment of foreign currency assets included in the property under an investment advisory contract and the service of providing judgment on investment of assets in Korean won included in the property under an investment advisory contract within the limit of 20/100 of total value of the property under an investment advisory contract (applicable only to cases where such affairs are entrusted to a financial investment business entity); |
| (e) | Where a discretionary investment business is concerned, the affairs under Article 47 (1) 5 (a) and (b): Provided, That excluded therefrom are the management of foreign currency assets among the discretionary investment property, the management of assets in Korean won among the discretionary investment property within the limit of 20/100 of total value of the property (applicable only to cases where such affairs are entrusted to a financial investment business entity), research and analysis related to such management, and the simple receipt of orders for trading securities, exchange traded derivatives, or means of foreign payment under the Foreign Exchange Transactions Act included in the discretionary investment property; and |
| (f) | Where a trust business is concerned, the affairs under Article 47 (1) 6 (a) through (d): Provided, That the safekeeping and management of securities, etc. subject to deposit under Article 308 of the Act, or foreign currency assets included in the collective investment property or the trust property (including the management of, and the performance of instructions for management of, foreign currency assets included in the collective investment property), the management of foreign currency assets included in the trust property [including the exercise of voting rights for equity securities (including securities depository receipts related to equity securities) included in the trust property; hereafter the same shall apply in this item], the management of assets in Korean won included in the trust property within the limit of 20/100 of total value of the trust property (applicable only to cases where such affairs are entrusted to a financial investment business entity), the research and analysis related to such management, and the simple receipt of orders for trading securities, exchange-traded derivatives, or means of foreign payment under the Foreign Exchange Transactions Act included in the discretionary investment property. |
법령보기 화면
| Article 46 (Reporting on Entrusted Affairs) |
|
| (1) | Each financial investment business entity shall submit a report on entrusted affairs, in accordance with Article 42 (1) of the Act, to the Financial Services Commission by no later than seven days before the person to whom such affairs are entrusted intends to carry out such affairs, along with the following documents attached thereto: |
| 1. | A copy of a contract on entrustment of business affairs; |
| 2. | Guidelines for the management of entrusted affairs under Article 42 (7) of the Act (hereafter referred to as "guidelines for the management of entrusted affairs" in this paragraph); |
| 3. | The compliance officer’s (referring to the auditor’s or any other similar person’s, if there is no compliance officer) review opinion that the contract on entrustment of business affairs does not fall under any subparagraph of Article 42 (3) of the Act and does not violate the guidelines for the management of entrusted affairs; |
| 4. | A document certifying that the relevant financial investment business entity is a person who meets the requirements under Article 47 (2), if the essential affairs (referring to the essential affairs under Article 42 (4) of the Act) has been entrusted to the financial investment business entity in accordance with the latter part of Article 42 (4) of the Act; and |
| 5. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for the protection of investors and good order in trading. |
| (2) | The term "matters specified by Presidential Decree" in Article 42 (2) 4 of the Act means matters falling under any of the following subparagraphs: |
| 1. | Matters concerning termination of contracts on entrustment of business affairs; |
| 2. | Matters concerning compensation and other conditions for entrustment; and |
| 3. | Matters prescribed and publicly notified by the Financial Services Commission, including systems for preventing conflicts of interest arising from entrustment of affairs. |
| (3) | The Financial Services Commission shall, when it issues an order of restriction or correction under Article 42 (3) of the Act, give public notice in writing, specifically stating the details of and grounds for such an order. |
법령보기 화면
| Article 47 (Scope of Essential Affairs) |
|
| (1) | The term "affairs specified by Presidential Decree" in the former part of Article 42 (4) of the Act means the following affairs, as enumerated for each type of financial investment business: |
| 1. | Where an investment trading business is concerned: |
| (a) | Execution and termination of contracts related to the investment trading business; |
| (b) | Presentation of quotations for trading financial investment instruments; |
| (c) | Receipt, delivery, execution, and confirmation of trading orders; |
| (d) | Underwriting of securities; |
| (e) | Analysis of the value of securities subject to proposed underwriting; and |
| (f) | Determination of the price of securities for underwriting, execution of affairs for subscription, and distribution of stocks; |
| 2. | Where an investment brokerage business is concerned: |
| (a) | Execution and termination of contracts related to the investment brokerage business; |
| (b) | Settlement of daily transactions; |
| (c) | Management of guarantee money and closing of transactions; and |
| (d) | Receipt, delivery, execution, and confirmation of trading orders; |
| 3. | Where a collective investment business is concerned: |
| (a) | Execution and termination of trust deeds for creation of an investment trust under Article 9 (18) 1 of the Act (hereinafter referred to as the "investment trust") and establishment of a limited-liability investment company under subparagraph 3 of the aforesaid paragraph (hereinafter referred to as the "limited-liability investment company"), a limited-partnership investment company under subparagraph 4 of the aforesaid paragraph (hereinafter referred to as the "limited-partnership investment company"), an investment association under subparagraph 5 of the aforesaid paragraph (hereinafter referred to as the "investment association"), or an undisclosed investment association under subparagraph 6 of the aforesaid paragraph (hereinafter referred to as the "undisclosed investment association"); |
| (b) | Management of, or instructions for management of, the collective investment property [including the exercise of voting rights for equity securities (including securities depository receipts related to equity securities) included in the collective investment property]; and |
| (c) | Assessment of the collective investment property; |
| 4. | Where an investment advisory business is concerned: |
| (a) | Execution and termination of contracts for advice on investment; and |
| (b) | Provision of determination on investment in response to a request for advice on investment; |
| 5. | Where a discretionary investment business is concerned: |
| (a) | Execution and termination of contracts on discretionary investment; and |
| (b) | Management of the discretionary investment property; and |
| 6. | Where a trust business is concerned: |
| (a) | Execution and termination of trust deeds (including trust deeds for creation of an investment trust) and contracts on safekeeping and management of the collective investment property (excluding investment trust property); |
| (b) | Safekeeping and management of the trust property (excluding investment trust property; hereafter the same shall apply in this subparagraph); |
| (c) | Safekeeping and management of the collective investment property (including the management and the performance of instructions for management); and |
| (d) | Management of the trust property [including the exercise of voting rights for equity securities (including securities depository receipts related to equity securities) included in the trust property]. |
| (2) | The term "requirements prescribed by Presidential Decree" in the latter part of Article 42 (4) of the Act means that a foreign financial investment business entity shall run a business, equivalent to the financial investment business which is intended to be entrusted to it or the financial business under subparagraph 1 of Article 40 of the Act, with permission, authorization, or registration with the financial supervisory agency of the foreign country in which the entity has domicile. |
법령보기 화면
| Article 48 (Scope of Re-entrustment) |
|
The term "ground specified by Presidential Decree" in the proviso to Article 42 (5) of the Act means the entrustment of any of the following affairs: | 1. | Affairs falling under any of the following items among part of the entrusted affairs: |
| (a) | Management and operation of an electronic computer system; |
| (b) | Dispatch of notices, etc.; |
| (c) | Safekeeping (excluding safekeeping that falls under a trust business); |
| (d) | Research and analysis; |
| (f) | Management of accounts; |
| (g) | Receipt of documents, etc.; |
| (h) | Collection of claims; and |
| (i) | Other simple affairs specified and publicly notified by the Financial Services Commission; |
| 2. | Management of, or instructions for management of, foreign currency assets included in the collective investment property among the affairs under Article 47 (1) 3 (b) [including the exercise of voting rights for equity securities (including securities depository receipts related to equity securities) included in the collective investment property] and the affairs under item (c) of the aforesaid subparagraph (applicable only to the assessment of foreign currency assets, entrusted without delegating the power to make a decision); and |
| 3. | Safekeeping and management of securities subject to the deposit under Article 308 of the Act or foreign currency assets (including management of, or performance of instructions for management of, the collective investment property) among the affairs under Article 47 (1) 6 (b) and (c), and management of foreign currency assets included in the trust property [including the exercise of voting rights for equity securities (including securities depository receipts related to equity securities) included in the trust property]. |
법령보기 화면
| Article 49 (Guidelines for Providing Information on Entrusted Affairs) |
|
| (1) | The term "guidelines prescribed by Presidential Decree" in Article 42 (6) of the Act means the following guidelines: |
| 1. | The information so provided shall be that relevant to the entrusted affairs; |
| 2. | The records of information provided shall be maintained; and |
| 3. | It shall be possible to control and supervise the trustee’s access to the information so provided. |
| (2) | Every financial investment business entity shall include the matters in the guidelines for management of entrusted affairs under Article 42 (7) of the Act: |
| 1. | Matters concerning the management and assessment of risks ensuing from entrustment of affairs; |
| 2. | Matters concerning the procedure for determination on and termination of entrustment of affairs; |
| 3. | Matters concerning the control and management of the trustee; |
| 4. | Matters concerning the protection of investors’ information; |
| 5. | Matters concerning countermeasures against incidents, such as the trustee’s default on payments for cheques and bills; |
| 6. | Matters concerning securing means for demanding informative documents in relation to entrusted affairs; and |
| 7. | Other matters prescribed and publicly notified by the Financial Services Commission. |
| (3) | Article 42 (2) and (3) of the Act shall apply mutatis mutandis to an amendment to a contract on entrustment of business affairs. |
| (4) | Articles 42 (2) through (4), (5) (main sentence), and (6) through (10), and 43 of the Act, and paragraphs (2), (3), and (5) of this Article shall apply mutatis mutandis respectively to re-entrustment of business affairs. In such cases, when Article 42 (2), (7), or (8) of the Act is applied mutatis mutandis, the person who is obligated to report the contents of a contract on re-entrustment of business affairs to the Financial Services Commission, the person who is obligated to establish the guidelines for management of re-entrusted affairs, and the person who shall state the details of entrusted affairs in contract documents and notify investors of the details shall be the financial investment business entity that entrusted such affairs initially. |
| (5) | Necessary matters concerning the forms of the report on entrustment of affairs and other documents and the method of filling out such forms, and accompanying documents shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
| (6) | The term "ground specified by Presidential Decree" in subparagraph 312 of the Appendix 1 of the Act pursuant to Article 43 (2) 4 of the Act means a ground falling under any subparagraph of the Appendix 5 of this Decree. |
법령보기 화면
| Article 50 (Cut-Off of Exchange of Information Inside of Financial Investment Business Entities) |
|
| (1) | The term "as prescribed by Presidential Decree" in the main body of Article 45 (1) of the Act means any of the following cases: Provided, That the same shall not apply to investment trading business (including underwriting business) and investment brokerage business with respect to state bonds: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Where such possibility lies between the management of the proprietary property (excluding cases where it is managed in accordance with the method prescribed and publicly notified by the Financial Services Commission, such as depositing it in a financial institution), the investment trading business, or the investment brokerage business, and the collective investment business or the trust business: Provided, That excluded therefrom are cases arising between the corporate financial affairs (referring to the corporate financial affairs under subparagraph 3 of Article 71 of the Act; hereafter the same shall apply in this Article) in the investment trading business or the investment brokerage business and the corporate financial affairs in the collective investment business; and |
| 2. | Where such possibility lies between the corporate financial affairs and the management of the proprietary property or the financial investment business (excluding the corporate financial affairs). |
| (2) | The term "information related to trading of financial investment instruments or other information specified by Presidential Decree" in Article 45 (1) 1 of the Act means any of the following information: Provided, That excluded herefrom is information less likely to cause conflicts of interest and furnished in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission: |
| 1. | Information concerning the trading of financial investment instruments; |
| 2. | Information concerning the current status of ownership of a financial investment instrument: Provided, That excluded herefrom is information concerning the total value of securities deposited by investors and total value of securities by type, and other information provided as prescribed and publicly notified by the Financial Services Commission; |
| 3. | Information concerning the details of composition of the collective investment property, the discretionary investment property, or the trust property, and the management of such property: Provided, That excluded herefrom is information released after two months in accordance with the method and procedure prescribed and publicly notified by the Financial Services Commission among the information concerning the details of composition of the collective investment property, the discretionary investment property, or the trust property, and the management of such property; and |
| 4. | Material nonpublic information under the main body of Article 174 (1) of the Act among the information obtained in the course of carrying out corporate financial affairs. |
| (3) | The term "manner specified by Presidential Decree" in Article 45 (1) 3 of the Act means any of the following manners: |
| 1. | The office space is not partitioned off with walls or partitions, or an entrance is used in common; and |
| 2. | The electronic data of the information under Article 45 (1) 1 of the Act is not stored, controlled, and inspected independently to prevent such data from being shared. |
| (4) | The term "acts specified by Presidential Decree" in Article 45 (1) 4 of the Act means the acts falling under any of the following subparagraphs: |
| 1. | Omission of separating departments in charge of the business affairs under subparagraphs of paragraph (1) as independent departments, or omission by a department in charge of carrying out its business affairs independently: Provided, That excluded therefrom are cases specified and publicly notified by the Financial Services Commission as those less likely to cause conflicts of interest; and |
| 2. | Omission of maintaining records of a meeting or communications when executives and employees who carry out the business affairs under subparagraphs of paragraph (1) have a meeting or communications concerning any of the business affairs, or omission of getting confirmation from the compliance officer (referring to the auditor or any similar person, if no compliance officer exists) on the recorded matters at least once a month. |
법령보기 화면
| Article 51 (Cut-off of Exchange of Information with Affiliated Companies) |
|
| (1) | The term "company as prescribed by Presidential Decree" in the main body of Article 45 (2) of the Act means any of the following companies: |
| 1. | An investment trading business entity or an investment brokerage business entity, which sells collective investment securities of a collective investment scheme managed by a financial investment business entity (hereafter referred to as "company selling collective investment securities" in this Article), if the financial investment business entity runs a collective investment business; and |
| 2. | A foreign financial investment business entity, if the relevant financial investment business entity is a branch office or any other sales office of the foreign financial investment business entity. |
| (2) | The term "as prescribed by Presidential Decree" in the main body of Article 45 (2) of the Act means cases that do not fall under any of the following subparagraphs: |
| 1. | Where any case falls under any of the following items when Article 45 (2) 1 of the Act is applicable: |
| (a) | Where relevant information is furnished to an affiliated company (including persons under paragraph (1) 2; hereafter the same shall apply in this subparagraph) with confirmation from the Financial Services Commission in order to perform the obligation to submit a report or make public disclosure on stocks, etc. in possession in accordance with any Acts and subordinate statutes, domestic or foreign; |
| (b) | Where monitoring of whether internal control guidelines are complied with is carried out by an affiliated company, in addition to the compliance officer (referring to the auditor or any similar person, if no compliance officer exists; hereafter the same shall apply in this Article) of the relevant financial investment business entity, and where information on trading of financial investment instruments, required for such monitoring, or any other information specified and publicly notified by the Financial Services Commission is furnished to such affiliated company in accordance with the method and procedure prescribed and publicly notified by the Financial Services Commission; |
| (c) | Where the relevant financial investment business entity runs an investment trading business or an investment brokerage business and where information on the total value of securities deposited by investors or total value of securities by type, or any other information specified and publicly notified by the Financial Services Commission is furnished to the relevant affiliated company; |
| (d) | Where simple orders for trading securities, exchange-traded derivatives, or means of foreign payment under the Foreign Exchange Transactions Act, which are included in the collective investment property, the discretionary investment property, or the trust property, are entrusted to an affiliated company and where information specified and publicly notified by the Financial Services Commission, such as the types, prices, quantity, etc., required for such orders for trading, is furnished to the relevant affiliated company in accordance with the method and procedure prescribed and publicly notified by the Financial Services Commission; |
| (e) | Where the relevant financial investment business entity runs a collective investment business and where information among the information on the details of composition of the collective investment property and the management of such property is furnished to a company selling collective investment securities after two months in accordance with the method and procedure prescribed and publicly notified by the Financial Services Commission; and |
| (f) | Where the relevant financial investment business entity entrusts an affiliated company with part of its business in accordance with Article 42 (1) of the Act and where information under paragraph (6) of the aforesaid Article is furnished to the relevant affiliated company; and |
| 2. | Where any case falls under any of the following items and confirmation from the Financial Services Commission has been obtained, when Article 45 (2) 2 of the Act is applicable: |
| (a) | Where a standing executive or a full-time employee of the relevant financial investment business entity (limited to executives and employees who perform the duties of the financial investment business, if the relevant entity is a concurrently-run financial investment business entity; hereafter the same shall apply in this subparagraph) holds office concurrently as a non-standing executive or employee of an affiliated company, which is also a financial investment business entity (including foreign financial investment business entities; hereafter the same shall apply in this subparagraph), or a person under paragraph (1) 2, or where a non-standing executive or employee of the relevant financial investment business entity holds office concurrently as an executive or employee of an affiliated company, which is also a financial investment business entity, or a person under paragraph (1) 2, and where such case falls under any of the cases specified and publicly notified by the Financial Services Commission; |
| (b) | Where a standing executive or a full-time employee of the relevant financial investment business entity holds office concurrently as a non-standing executive or employee of an affiliated company, which is a financial holding company (referring to the financial holding company under the Financial Holding Companies Act, and including similar companies established pursuant to laws and regulations of a foreign country; hereafter the same shall apply in this subparagraph), or where a non-standing executive or employee of the relevant financial investment business entity holds office concurrently as an executive or employee of an affiliated company, which is a financial holding company; |
| (c) | Where the relevant financial investment business entity dispatches any of its executives or employees to an affiliated company, which is a financial investment business entity, a financial holding company, or a person under paragraph (1) 2, to cause him/her to work there, or where the relevant financial investment business entity has any executives or employees dispatched from an affiliated company, which is a financial investment business entity or a person under paragraph (1) 2, to cause him/her to work for it, and where the case falls under any of the cases specified and publicly notified by the Financial Services Commission; |
| (d) | Where an executive or employee of the relevant financial investment business entity holds office concurrently as a non-standing executive or employee of a company (limited to a company conforming to a private equity fund’s purpose of investment) in which a private equity fund (referring to the private equity fund under Article 9 (18) 7 of the Act; hereinafter the same shall apply), the financial investment business entity of which is the executive partner, invests, or where the financial investment business entity dispatches any of its executives or employees to cause him/her to work for such company; |
| (e) | Where the relevant financial investment business entity creates or establishes a foreign collective investment scheme under Article 279 (1) of the Act (hereinafter referred to as "foreign collective investment scheme") in a foreign country in accordance with laws and regulations of the foreign country and where an executive or employee of the financial investment business entity holds office concurrently as a non-standing executive of the foreign collective investment scheme; and |
| (f) | Where a case is similar to any of the cases under items (a) through (e) and where the case falls under any of the cases specified and publicly notified by the Financial Services Commission. |
| (3) | The term "information related to trading of financial investment instruments or other information specified by Presidential Decree" in Article 45 (2) 1 of the Act means information falling under any of the following subparagraphs: Provided, That excluded herefrom is information less likely to cause conflicts of interest and furnished in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission: |
| 1. | Information on trading of financial investment instruments; |
| 2. | Information on the current status of ownership of financial investment instruments; |
| 3. | Information on the details of composition of the collective investment property, the discretionary investment property, or the trust property, and the management of such property; and |
| 4. | Material nonpublic information obtained in the course of carrying out corporate financial affairs and falling under the main body of Article 174 (1) of the Act. |
| (4) | The term "manner specified by Presidential Decree" in Article 45 (2) 3 of the Act means any of the means under subparagraphs of Article 50 (3). |
| (5) | The term "acts specified by Presidential Decree" in Article 45 (2) 4 of the Act means omission of an act, committed by executives and employees of a financial investment business entity, who carry out any affairs of the financial investment business, of maintaining the records of a meeting or communications, when they have a meeting or communications concerning the affair of the financial investment business with an affiliated company (including persons under paragraph (1) 2) or a dealer of collective investment securities, or omission of obtaining confirmation from the compliance officer on recorded matters at least once a month. |
Sub-Section 2 Investment Recommendations, etc.
법령보기 화면
| Article 52 (Confirmation of Purpose of Investment) |
|
The term "manner specified by Presidential Decree" in Article 46 (2) of the Act means any of the following means: | 1. | Electronic mail or any other similar electronic means of communication; |
| 3. | Automatic telephone answering system. |
법령보기 화면
| Article 53 (Duty to Provide Explanation) |
|
| (1) | The term "matters specified by Presidential Decree" in Article 47 (1) of the Act means the following matters: |
| 1. | Structure and nature of investment risks of financial investment instruments (referring to the investment risks of financial investment instruments under the main body of Article 3 (1) of the Act); |
| 2. | Matters concerning the fee under Article 58 (1) of the Act; |
| 3. | Matters concerning the terms and conditions of early repayment, if such terms and conditions exist; and |
| 4. | Matters concerning the cancellation and termination of contracts. |
| (2) | The term "manner prescribed by Presidential Decree" in Article 47 (2) of the Act means any means falling under any subparagraph of Article 52. |
법령보기 화면
| Article 54 (Exceptions to Prohibition on Uninvited Recommendations) |
|
| (1) | The term "acts specified by Presidential Decree" in the proviso to subparagraph 3 of Article 49 of the Act means acts of recommending investment in securities and exchange-traded derivatives. |
| (2) | The term "acts specified by Presidential Decree" in the proviso to subparagraph 4 of Article 49 of the Act means acts falling under any of the following subparagraphs: |
| 1. | Recommending investment in an investable insurance contract; |
| 2. | Recommending re-investment, after the lapse of the time period prescribed and publicly notified by the Financial Services Commission, to an investor who had once manifested his/her intent to reject a recommendation of investment; and |
| 3. | Recommending investment in another type of financial investment instrument. In such cases, specific details of different types shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 55 (Prohibition on Unfair Recommendations) |
|
The term "acts specified by Presidential Decree" in subparagraph 5 of Article 49 of the Act means recommending investment in an investor (excluding professional investors and ordinary investors who have an experience of investment with credit extended under Article 72 (1) of the Act) under the condition that a loan of money shall be granted, or the service of brokerage, intermediation, or agency for such loan shall be provided even without being asked for such service from the investor.
법령보기 화면
| Article 56 (Qualifications for Investment Solicitors) |
|
The term "qualifications prescribed by Presidential Decree" in Article 51 (1) 2 of the Act means a person who satisfies all of the following requirements: | 1. | Any person falling under any of the following items: |
| (a) | Any person who has successfully passed an examination administered by the Association pursuant to Article 286 (1) 3 (a) of the Act to test competency of professional advisers for investment recommendation; |
| (b) | Any person who has successfully passed an examination administered by the Association pursuant to Article 286 (1) 3 (c) of the Act to test competency of professional investment managers; and |
| (c) | Any private individual who meets the requirements for registration of insurance canvasser, insurance agency, or insurance broker under the Appendix 3 of the Enforcement Decree of the Insurance Business Act and who engages in the sale of insurance (applicable only to cases where such person acts as an investment solicitor for collective investment securities); and |
| 2. | The person shall complete the training course prescribed by the Association and recognized by the Financial Services Commission. |
법령보기 화면
| Article 57 (Entrustment of Affairs of Registration) |
|
The Financial Services Commission shall, when it entrusts the Association with the affairs of registration pursuant to the latter part of Article 51 (3) of the Act, execute a contract on entrustment of business affairs, including the following conditions, with the Association: | 1. | A condition that the Association comply with Article 51 (5) through (8) of the Act and Article 58 (3) and (4) of this Decree, if the Association performs the affairs of registration entrusted. In such cases, the term "Financial Services Commission" shall be construed as "Association"; and |
| 2. | A condition that the Association report the current status of registration to the Financial Services Commission on a quarterly basis. |
법령보기 화면
| Article 58 (Method and Procedure for Registration) |
|
| (1) | An application for registration under Article 51 (4) of the Act shall contain descriptions of the following matters: |
| 1. | Trade name of the relevant financial investment business entity; |
| 2. | Personal data of the person who intends to be registered as an investment solicitor under Article 51 (9) of the Act (hereinafter referred to as "investment solicitor"); |
| 3. | Scope of financial investment instruments, of which the investment recommendation will be entrusted, and contracts thereon; and |
| 4. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for the examination on registration. |
| (2) | An application for registration under paragraph (1) shall be accompanied by the following documents: |
| 1. | A copy of the citizen registration certificate (including those similar thereto) of the person who intends to be registered as an investment solicitor; |
| 3. | A document certifying the qualifications under Article 51 (1) 2 of the Act; and |
| 4. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for the examination on registration. |
| (3) | The Financial Services Commission shall ascertain whether the contents of an application filed for registration under Article 51 of the Act are true, and shall examine whether the contents of the application meet the requirements for registration under Article 51 (1) of the Act. |
| (4) | The Financial Services Commission shall, when it deems that an application received for registration meets the requirements for registration, issue to the applicant a registration certificate of investment solicitor with the descriptions specified and publicly notified by the Financial Services Commission. |
| (5) | Necessary matters concerning the application for and examination on registration, the form of the application for registration, the method of filling out the form, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 59 (Prohibited Acts of Investment Solicitors) |
|
| (1) | The term "acts specified by Presidential Decree" in Article 52 (2) 4 of the Act means acts falling under any of the following subparagraphs: |
| 1. | Executing a contract on behalf of an investor; |
| 2. | Accepting the power entrusted by an investor to trade financial investment instruments on behalf of the investor; |
| 3. | Acting as a broker, an intermediary, or an agent to induce a third party to lend money to an investor; |
| 4. | Misrepresenting that the discretionary investment property or the trust property is not managed separately for each investor or for each unit of the trust property but is collectively managed, and soliciting investment or making an advertisement on investment to solicit investors to sign a contract for such discretionary investment or trust; |
| 5. | Executing contracts on entrustment of investment recommendation with two or more financial investment business entities; |
| 6. | Executing a contract on entrustment of investment recommendation by an insurance canvasser under subparagraph 1 (c) of Article 56 with any insurance company other than the insurance company to which the canvasser belongs; and |
| 7. | Such other acts specified and publicly notified by the Financial Services Commission as may be likely to undermine the protection of investors or good order in trading. |
| (2) | The term "matters prescribed by Presidential Decree" in Article 52 (3) 4 of the Act means the following matters: |
| 1. | The fact that he/she is not allowed to execute any contract on behalf of an investor; |
| 2. | The fact that he/she is not allowed to accept the power entrusted by an investor to trade financial investment instruments on behalf of the investor; and |
| 3. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors or good order in trading. |
Sub-Section 3 Prohibition of Use of Job-related Information, etc.
법령보기 화면
| Article 60 (Advertisement Soliciting Investment) |
|
| (1) | The term "matters prescribed by Presidential Decree" in Article 57 (2) of the Act means the following matters: |
| 1. | The statement that a financial investment business entity under Article 57 (2) of the Act (hereafter referred to as the "financial investment business entity" in this Article) has a duty to provide a full explanation for financial investment instruments; |
| 2. | The statement of recommendation to make an investment after hearing an explanation under subparagraph 1 from the financial investment business entity; |
| 3. | Details of the fee under Article 58 (1) of the Act; and |
| 4. | Matters specified and publicly notified by the Financial Services Commission, taking into consideration the person who makes an advertisement soliciting investment, the contents of the advertisement soliciting investment, the medium, the size, time, and other matters of the advertisement soliciting investment. |
| (2) | The term "matters prescribed by Presidential Decree" in the main body of Article 57 (3) of the Act means the following matters: |
| 1. | Matters concerning the relevant entity, such as the trade names of the collective investment business entity, the trust business entity safekeeping and managing the collective investment property, and the investment trader or the investment broker who sells the collective investment securities (including the general administration company, if a general administration company is involved); |
| 2. | Matters concerning the compensation or fee that the persons under subparagraph 1 receive or charge; |
| 3. | Matters concerning professional investment managers of the relevant collective investment scheme; |
| 4. | Results of management, if any record of past performance of management exists; |
| 5. | Matters concerning the redemption of collective investment securities; and |
| 6. | Such other matters specified and publicly notified by the Financial Services Commission as may be unlikely to undermine the protection of investors, even if they are included in an advertisement soliciting investment. |
| (3) | Every financial investment business entity shall, whenever it makes an advertisement soliciting investment, comply with the following provisions: |
| 1. | Whenever it indicates the return of investment or results of management, it shall refrain from showing the return of investment or results of management only for the period of time during which it had good performance results; |
| 2. | Whenever it makes a comparative advertisement on financial investment instruments, it shall refrain from representing, without solid grounds, that a certain financial investment instrument is inferior or disadvantageous; and |
| 3. | It shall obtain confirmation from the compliance officer (referring to the auditor or any other similar person, if there is no compliance officer) in advance, and shall follow the method prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 61 (Delivery of Contract Documents and Cancellation of Contacts) |
|
| (1) | The term "as prescribed further by Presidential Decree" in the proviso to Article 59 (1) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where the relevant investor creates an account for trading, executes a basic contract for trading financial investment instruments, and continues trading repeatedly in accordance with the terms and conditions of the contract; |
| 2. | Where the relevant investor manifests his/her intent to refuse to receive contract documents in writing; |
| 3. | Where the relevant investor expresses his/her wish to receive contract documents by mail or electronic mail, and the contract documents are delivered by mail or electronic mail in response to the investor’s expression of willingness; and |
| 4. | Where the Financial Services Commission determines and publicly notifies that there is no foreseeable threat to the protection of investors. |
| (2) | The term "contracts specified by Presidential Decree" in Article 59 (2) of the Act means contracts for investment advice. |
| (3) | The term "amount prescribed by Presidential Decree" in Article 59 (4) and (5) (proviso) of the Act means any of the following amounts, respectively: |
| 1. | If the entity does not respond to a request for advice in accordance with a contract for investment advice: An amount equivalent to the expenses incurred in executing the contract for investment advice in light of social norms; |
| 2. | If the contract for investment advice provides that the fee shall be calculated according to the number of responses given upon request for advice: An amount equivalent to the fee calculated according to the number of responses given upon request for advice until the contract is cancelled (if the amount so calculated exceeds an amount deemed reasonable as the fee for providing advice in light of social norms, such excess amount shall be subtracted from the amount so calculated); and |
| 3. | Cases not falling under subparagraph 1 or 2: An amount calculated by dividing the fee for the entire contract period agreed in the contract for investment advice by the total number of days of the contract period and multiplying it by the number of days from the date on which the contract documents under Article 59 (1) of the Act were delivered until the date on which the contract is cancelled (if the amount so calculated exceeds an amount deemed reasonable as the fee for providing advice in light of social norms, such excess amount shall be subtracted from the amount so calculated). |
법령보기 화면
| Article 62 (Keeping and Maintaining Records) |
|
| (1) | Every financial investment business entity shall keep and maintain records of the following data for the period of time designated for each type of data in the following subparagraphs in accordance with Article 60 (1) of the Act: Provided, That the Financial Services Commission may shorten any of the following periods of time and publicly announce it if the protection of investors is not likely to be undermined: |
| (a) | Data related to investment recommendation: Ten years; |
| (b) | Data related to investors’ trading of financial investment instruments, including records and details of trading orders, and other data related to trading: Ten years; |
| (c) | Data related to management of investors’ property, such as the collective investment property, the discretionary investment property, and the trust property: Ten years; |
| (d) | Data related to contracts signed with investors, including creation of and agreement on accounts for trading: Ten years; |
| (e) | Data related to entrustment of business affairs: Five years; |
| (f) | Data related to incidental business affairs: Five years; and |
| (g) | Other data related to operations: Five years; |
| 2. | Data of finance: Ten years; |
| 3. | Data of business affairs: |
| (a) | Data related to resolutions adopted at general meetings of shareholders or by the board of directors: Ten years; |
| (b) | Data related to the matters that shall be stated in the report on material facts under Article 161 of the Act (hereinafter referred to as the "report on material facts"): Five years; |
| (c) | Data related to management of proprietary property: Three years; and |
| (d) | Data related to purchase and disposition of assets and other business affairs: Three years; |
| 4. | Data on internal controls: |
| (a) | Data related to monitoring of compliance, including internal control guidelines and risk management: Five years; |
| (b) | Data related to qualifications of executives, major shareholders, and professional human resources, and details of transactions with interested parties: Five years; and |
| (c) | Other data related to internal controls: Three years; and |
| 5. | Other account books and documents that must be prepared and kept in compliance with other Acts and subordinate statutes: The period of time prescribed in the relevant Act and subordinate statutes (if no period of time is prescribed by the relevant Act and subordinate statutes, the period of time shall be the one prescribed and publicly notified by the Financial Services Commission, taking into consideration the preservation period under subparagraphs 1 through 4). |
| (2) | Further specific guidelines for the types and classification of data under paragraph (1) shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 63 (Deposit of Acquired Securities) |
|
| (1) | The term "those specified by Presidential Decree" in the main sentence of Article 61 of the Act means the following instruments: |
| 1. | Certificate of deposit in Korean won; and |
| 2. | Other instruments specified and publicly notified by the Financial Services Commission. |
| (2) | The term "as specified by Presidential Decree" in the proviso to Article 61 of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where a financial investment business entity opens an account in the Korea Securities Depository in order to deposit the foreign currency securities under Article 3 (1) 8 of the Foreign Exchange Transactions Act (hereinafter referred to as "foreign currency securities") and concentrate its deposits in a foreign depository appointed by the Korea Securities Depository among the foreign depositaries designated and publicly notified by the Financial Services Commission; and |
| 2. | Where a financial investment business entity concentrates its deposits in a foreign depository designated and publicly notified by the Financial Services Commission, if the Korea Securities Depository is unable to appoint a foreign depository due to any laws, regulations or practices of a foreign country. |
| (3) | In cases where an investment trader or broker deposits any securities or instruments, other than securities subject to deposit under Article 308 of the Act, for safeguard deposit or for any other purpose, such securities or instruments shall be deemed to be deposited in accordance with Article 61 of the Act. |
법령보기 화면
| Article 64 (Trading by Executives and Employees of Financial Investment Instruments) |
|
| (1) | The term "financial investment business entity specified by Presidential Decree" in the main body of Article 63 (1) of the Act means a financial investment business entity falling under any of the following subparagraphs: |
| 1. | A person under subparagraph 1 or 2 of Article 22 of the Act; and |
| 2. | A person falling under any provision of subparagraphs 1 through 3 and 5 through 9 of Article 24. |
| (2) | The term "financial investment instruments specified by Presidential Decree" in the main body of Article 63 (1) of the Act means financial investment instruments falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Equity securities listed on the securities exchange [including stocks traded through over-the-counter transactions under Article 178, but excluding stocks issued by an investment company under Article 9 (18) 2 of the Act (hereinafter referred to as the "investment company") and equity securities issued by a limited-liability investment company, a limited-partnership investment company, an investment association, an undisclosed investment association]; |
| 2. | Securities depository receipts listed on the securities exchange (limited to securities depository receipts related to the equity securities under subparagraph 1; hereafter the same shall apply in this paragraph); |
| 3. | Stock-related corporate bonds under subparagraph 4 (b) of Article 71 of the Act, which are related to equity securities under subparagraph 1 or securities depository receipts under subparagraph 2; |
| 4. | Derivative-combined securities linked to changes in equity securities under subparagraph 1, securities depository receipts under subparagraph 2, or an index based on the aforesaid securities or receipts; |
| 5. | Exchange-traded derivatives; and |
| 6. | Over-the-counter derivatives linked to changes in equity securities under subparagraph 1, securities depository receipts under subparagraph 2, or an index based on the aforesaid securities or receipts. |
| (3) | The term "where it is allowed by Presidential Decree" in the proviso to Article 63 (1) 2 of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where it is allowed to trade through two or more companies: Cases falling under any of the following items: |
| (a) | Where the investment broker through whom an executive or employee of a financial investment business entity trades does not handle the financial investment instruments that the executive or employee of the financial investment business entity intends to trade; |
| (b) | Where securities issued or traded by public offering or sale are subscribed; and |
| (c) | Where the case falls under any of the cases specified and publicly notified by the Financial Services Commission; and |
| 2. | Where it is allowed to trade through two or more accounts: Cases falling under any of the following items: |
| (a) | Where two or more accounts are opened because the relevant investment trader required to create accounts separately for each type of financial investment instrument; |
| (c) | Where the case falls under any of the cases specified and publicly notified by the Financial Services Commission. |
| (4) | Each executive or employee of a financial investment business entity who trades financial investment instruments falling under any subparagraph of paragraph (2) on his/her own account, shall comply with the following method and procedure in accordance with Article 63 (1) 4 of the Act: |
| 1. | He/she shall, when he/she opens an account for trading financial investment instruments, report it to the compliance officer (referring to the auditor or any other similar person, if there is no compliance officer; hereafter the same shall apply in this paragraph) of the financial investment business entity to which he/she belongs; |
| 2. | He/she shall, when the compliance officer of the financial investment business entity to which he/she belongs demands an explanation of trading or any other transaction, respond properly to the compliance officer’s demand; |
| 3. | He/she shall observe the matters prescribed by the internal control guidelines of the financial investment business entity to which he/she belongs; and |
| 4. | He/she shall observe other methods and procedures prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 65 (Operating Funds of Foreign Financial Investment Business Entity) |
|
| (1) | The term "operating funds specified by Presidential Decree" in Article 65 (1) of the Act means funds falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Funds in Korea won, provided by a foreign financial investment business entity to its branch office or any other sales office in order to establish or operate such branch office or sales office; |
| 2. | Funds transferred from a reserve of a branch office or any other sales office of a foreign financial investment business entity (hereafter referred to as the "local branch office, etc." in this Article); and |
| 3. | Funds transferred by a foreign financial investment business entity from brought-over retained earnings of a branch office or any other sales office already installed in Korea in order to establish another additional branch office or any other sales office. |
| (2) | The assets of a local branch office, etc. which is located in Korea shall be managed by any of the following methods in accordance with Article 65 (2) of the Act: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Cash, or deposits, installment deposits, or installment savings in a domestic financial institution; |
| 2. | Securities held on deposit in trust within Korea; |
| 3. | Loans or other credit extended to persons within Korea; |
| 4. | Fixed assets within Korea; and |
| 5. | Other assets specified and publicly notified by the Financial Services Commission as those against which it is possible to enforce forced execution pursuant to an Act of Korea. |
| (3) | Each local branch office, etc. shall comply with the following provisions: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | It shall settle its accounts independently of its head office; and |
| 2. | In cases where the total amount of assets kept by a local branch office, etc. within Korea in the manner provided for in any subparagraph of paragraph (2) is less than the total amount of operating funds under Article 65 (1) of the Act and liabilities, it shall replenish the difference within 60 days from the date on which the settlement of accounts is finalized. |
법령보기 화면
| Article 66 Deleted.<by Presidential Decree No. 21291, Feb. 3, 2009> |
|
Section 2 Rules on Business Conduct by Financial Investment Business Entities
Sub-Section 1 Rules on Business Conduct by Investment Traders and Investment Brokers
법령보기 화면
| Article 67 (Time Period for Disposition of One’s Own Stocks) |
|
The term "time period prescribed by Presidential Decree" in the latter part of Article 69 of the Act means three months from the acquisition date.
법령보기 화면
| Article 68 (Prohibition on Unsound Business Conduct) |
|
| (1) | The term "as prescribed by Presidential Decree" in the proviso to the main body of Article 71 of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where cases fall under any of the following items, when subparagraph 1 of Article 71 of the Act is applicable: |
| (a) | Where it is proved that information about an investor’s trading order has not been used; and |
| (b) | Where the case is a transaction for marginal gains for benefiting from the price difference between the securities exchange and the derivatives market or any similar transaction, and where it is objectively evident that information about an investor has not been intentionally used; |
| 2. | Where cases falls under any of the following items, when subparagraph 2 of Article 71 of the Act is applicable: |
| (a) | Where the contents of research and analysis data have not induced, directly or indirectly, trading of a specific financial investment instrument; |
| (b) | Where it is not likely that a change of inducing trading or fluctuating has been used by disclosing research and analysis data; |
| (c) | It is proved that the contents of disclosed research and analysis data have not been used in trading; and |
| (d) | The research and analysis data in question do not contain any new content, compared with research and analysis data already disclosed to the public; and |
| 3. | Where subparagraph 3 of Article 71 of the Act is applicable and where the research and analysis data in question have not been disclosed or furnished to investors, but they have been prepared for the purpose of internal use of the financial investment business entity in carrying out its business affairs. |
| (2) | The term "corporate financial affairs specified by Presidential Decree" in subparagraph 3 of Article 71 of the Act means affairs falling under any of the following subparagraphs: |
| 1. | Affairs related to underwriting; |
| 2. | Affairs related to intermediation of public offerings, private placements, or sales; |
| 3. | Affairs related to brokerage, intermediation, or agency for corporate acquisition or merger; |
| 4. | Affairs related to advice on corporate acquisition or merger; and |
| 5. | Affairs related to management of property of a private equity fund. |
| (3) | The term "time specified by Presidential Decree" in the part other than each item of subparagraph 4 of Article 71 of the Act means 40 days. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (4) | The term "stock-related corporate bonds as specified by Presidential Decree" in subparagraph 4 (b) of Article 71 of the Act means convertible bonds, bonds with warrant, and exchangeable bonds (limited to exchangeable bonds entitled to claim the exchange with stocks, convertible bonds or bonds with warrant). <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (5) | The term "acts specified by Presidential Decree" in subparagraph 7 of Article 71 of the Act means acts falling under any of the following subparagraphs: |
| 1. | Disagreeing, without justifiable grounds, on a demand of a professional investor (excluding those under subparagraphs of Article 10 (1)) to treat him/her as equal to ordinary investors in accordance with the proviso to Article 95 (5) of the Act; |
| 2. | Soliciting ordinary investors to invest too often, without considering ordinary investors’ purpose of investment, status of property, experience in investment, etc.; |
| 3. | Providing a property interest, directly or indirectly, to an investor (including executives and employees of a corporation or any other organization, if the investor is a corporation or any other organization) or the opposite party to a transaction (including executives and employees of a corporation or any other organization, if the opposite party to a transaction is a corporation or any other organization), or receiving a property interest from such person, in connection with the business in violation of the guidelines prescribed and publicly notified by the Financial Services Commission; |
| 4. | Falling under any of the following items in connection with underwriting of securities or intermediation of public offering, private placement, or sale: |
| (a) | Failure to pay due attention for preventing an issuer from stating or indicating a false fact in relation to the material facts in the registration statement under Article 119 (3) of the Act (including the corrective registration statement and accompanying documents under Article 122 (1) of the Act) and the investment prospectus under Article 123 (1) of the Act (including the preliminary prospectus under Article 124 (2) 2 of the Act and the short-form investment prospectus under Article 124 (2) 3 of the Act), or omitting to state or indicate a material fact; |
| (b) | Demanding or promising an issuer, a seller, or a specially related person, in advance, to purchase securities after public offering, private placement, or sale in consideration of underwriting of the securities; |
| (c) | Receiving, directly or indirectly, a property interest, generated from investment on certain securities, from a person to whom the securities are distributed, or demanding such person to purchase such securities additionally, in consideration of distribution of the securities underwritten (including intermediation of public offerings, private placements, or sales; hereafter the same shall apply in this subparagraph); |
| (d) | Discriminating against subscribers of underwritten securities, without justifiable grounds, in distributing such securities; and |
| (e) | Such other acts specified and publicly notified by the Financial Services Commission as may be likely to undermine the protection of investors or good order in trading; |
| 5. | Selling or purchasing certain financial investment instruments by recommending investors to sell or purchase the financial investment instruments without informing investors of a known fact likely to have a significant impact on the value of the instruments; |
| 6. | Accepting entrustment by an investor of trading or any other transaction, knowing the fact that the investor intends to trade or makes such transaction in violation of Article 174, 176, or 178 of the Act; |
| 7. | Using any unfair method in order to conceal an illegal transaction of an investor in connection with trading or any other transaction of financial investment instruments; |
| 8. | Accepting entrustment of trading or any other transaction, without justifiable grounds, even where it is obviously foreseeable that the payment will not be performed in connection with trading or any other transaction of financial investment instruments; |
| 9. | Recommending an investment trader or broker to trade its own securities issued by itself; |
| 10. | Purchasing collective investment securities (excluding collective investment securities listed on the securities exchange) from an investor, or acting as a broker, an intermediary, or an agent for such purchase: Provided, That cases where such securities are purchased in accordance with the proviso to Article 235 (6) of the Act are excluded herefrom; |
| 11. | Using a transaction of over-the-counter derivatives, a trust deed, or a linked transaction in order to avoid the prohibition or restriction under Article 55 or 71 of the Act; |
| 12. | Receiving a blank note or check to secure collateral for a creditor’s rights; and |
| 13. | Such other acts specified and publicly notified by the Financial Services Commission as may be likely to undermine the protection of investors or good order in trading. |
법령보기 화면
| Article 69 (Credit Extension) |
|
| (1) | Every investment trader or broker may grant credit to investors in any of the following means in accordance with Article 72 (1) of the Act: |
| 1. | Lending a person who has an account for trading securities with the relevant investment trader or broker a loan for the purchase price for trading or lending such person securities that the investor intends to sell; and |
| 2. | Lending money to a person who deposits securities with the relevant investment trader or broker, taking the securities as collateral. |
| (2) | Further specific guidelines for the credit extension under paragraph (1), the ratio of security, the method of collection, etc. shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 70 (Notice of Details of Trading) |
|
| (1) | Every investment trader or broker shall issue a notice under Article 73 of the Act in accordance with the following subparagraphs: |
| 1. | It shall issue a notice of the types of trading, issues, items, volume, prices, all expenses including fees, and other details of transactions immediately after trading is closed, and shall issue a notice of the details of trading and the statement of profits and losses on a monthly basis and the current status of balance and unsettled agreements as at the end of each month; and |
| 2. | It shall issue a notice by the means agreed in advance between the relevant investment trader or broker with each investor among the means falling under any of the following subparagraphs (only item (a) shall be applicable to a transaction that is not managed by and recorded in the account register, etc.): Provided, That if an investor does not wish to receive such notice, such notice may be made available for inspection at the branch office or any other sales office or on its Internet homepage for occasional inquiry by accessing the Internet homepage: |
| (b) | Telephone, telegraph, or facsimile; |
| (c) | Electronic mail or any other similar electronic means of communication; and |
| (d) | Other means specified and publicly notified by the Financial Services Commission. |
| (2) | Further necessary details concerning the notices under paragraph (1) shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 71 (Exception to Deposits of Financial Securities Companies) |
|
The term "investment trader or broker specified by Presidential Decree" in the former part of Article 74 (2) of the Act means the following persons:
법령보기 화면
| Article 72 (Exceptional Transfer of Investor’s Deposit) |
|
The term "as prescribed by Presidential Decree" in Article 74 (4) of the Act means cases falling under any of the following subparagraphs: | 1. | Where a depositing financial investment business entity under Article 74 (4) of the Act (hereinafter referred to as the "depositing financial investment business entity") is merged into another company or a new company is established as a consequence of a merger of such depositing financial investment business entity and another company, and thus such depositing financial investment business entity transfers the investor’s deposit placed in a deposit or trust account with a depository institution to the company surviving the merger or the newly established company; |
| 2. | Where a depositing financial investment business entity transfers its financial investment business, entirely or partially, and thus transfers the investor’s deposit placed in a deposit or trust account with a depository institution to the transferee company in accordance with the terms and conditions of the transfer agreement; |
| 3. | Where a depositing financial investment business entity offers the investor’s deposit placed in a deposit or trust account with a deposit bank as security in connection with the money transfer under subparagraph 4 of Article 40 of the Act in accordance with the manner prescribed and publicly notified by the Financial Services Commission within the limit prescribed and publicly notified by the Financial Services Commission; and |
| 4. | Where the protection of investors is not likely to be undermined and there is a ground specified and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 73 (Time for Public Notice of Payment of Investor’s Deposit) |
|
The term "period of time prescribed by Presidential Decree" in the latter part of the main body of Article 74 (5) of the Act means two months from the date on which an event under any subparagraph of the aforesaid paragraph occurs: Provided, That the period of time may be extended by one month or less, subject to the prior confirmation of the Financial Services Commission, if it is not possible to issue a public notice and make public disclosure within the period of time because of the occurrence of an event beyond control.
법령보기 화면
| Article 74 (Management of Investor’s Deposit) |
|
| (1) | The term "financial institution specified by Presidential Decree" in Article 74 (7) 2 of the Act means any of the following institutions: |
| 5. | An investment trader or broker; |
| 6. | A securities finance company; |
| (2) | The term "method prescribed by Presidential Decree" in Article 74 (7) 3 of the Act means any of the following methods: |
| 1. | Lending a loan secured by securities or negotiable certificates of deposit in Korean won; |
| 2. | Depositing it in the Bank of Korea or a post office under the Postal Savings and Insurance Act; |
| 3. | Purchasing special bonds; and |
| 4. | Other methods prescribed and publicly notified by the Financial Services Commission as those deemed adoptable for safe management of the investor’s deposit. |
법령보기 화면
| Article 75 (Scope of Investor’s Deposit) |
|
| (1) | The extent of the investor’s deposit that an investment trader or broker shall place in a deposit or trust account with a depository institution in accordance with Article 74 (1) or (2) of the Act shall be the amount calculated by subtracting the sum under subparagraph 2 from the sum under subparagraph 1: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | The aggregate of the following amounts: |
| (a) | An amount deposited by the investor for trading of financial investment instruments or any other transaction; |
| (b) | An amount paid by the investment trader or the investment broker to the investor as the usage fee for the investor’s deposit and other fees; and |
| (c) | An amount of profit generated from daily settlement for exchange- traded derivatives owned by the investor; and |
| 2. | The aggregate of the following amounts: |
| (a) | An amount deposited by the investment trader or the investment broker in the Exchange (including the person specified and publicly notified by the Financial Services Commission) and another investment trader or broker for the investor’s trading and other transactions of financial investment instruments in the securities exchange and the derivatives market; |
| (b) | An amount deposited by the investment trader or the investment broker in a foreign securities exchange (including its settlement institution) or a foreign derivatives market (referring to a foreign derivatives market under Article 5 (2) of the Act and including its settlement institution) and a foreign investment trader or a foreign investment broker for the investor’s trading of financial investment instruments and other transactions abroad; |
| (c) | All expenses related to the investor’s trading of financial investment instruments and other transactions, including the entrustment commission; |
| (d) | Money under Articles 3 (3) 1, 3 (3) 2, 3 (3) 3 (excluding money paid to an investment trader or investment broker by an investor for acquiring collective investment securities pursuant to Article 76 (1) of the Act) and 3 (3) 4; and |
| (e) | All losses incurred as a result of daily settlement of exchange-traded derivatives owned by the investor. |
| (2) | Each investment trader or broker shall place at least 100/100 of the amount calculated in accordance with paragraph (1) in a deposit or trust account with a depository institution. |
| (3) | A depositing financial investment business entity may withdraw the investor’s deposit placed in a deposit or trust account with a depository institution in accordance with the following guidelines: |
| 1. | If the investor’s deposit already placed in a deposit or trust account exceeds the investor’s deposit that must be placed in the deposit or trust account: The difference between the investor’s deposit placed in the deposit or trust account and the investor’s deposit that must be placed in the deposit or trust account; |
| 2. | If an event occurs that requires the preferential payment under any subparagraph of Article 74 (5) of the Act: The investor’s deposit placed in the deposit or trust account; and |
| 3. | If it is deemed necessary by the Financial Services Commission to withdraw the investor’s deposit because investors make a mass simultaneous demand for the payment of the investor’s deposit or for any other reason: The amount deemed necessary. |
| (4) | Every depository institution shall separate the investor’s deposit placed in a deposit or trust account from its own property and shall manage it in good faith. |
| (5) | Further details necessary for the extent of the investor’s deposit under paragraph (1), the time, cycle, ratio, and method of placing it in a deposit or trust account, the withdrawal and management of the deposit, etc. shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 76 (Depositing of Securities Deposited by Investors) |
|
| (1) | The term "those specified by Presidential Decree" in the main sentence of Article 75 of the Act means the following instruments: |
| 1. | Negotiable certificates of deposit in Korean won; and |
| 2. | Other instruments designated and publicly notified by the Financial Services Commission. |
| (2) | The term "securities specified by Presidential Decree" in the proviso to Article 75 of the Act means securities deposited in accordance with any subparagraph of Article 63 (2). |
| (3) | In cases where an investment trader or broker deposits any securities or instruments other than securities, etc. subject to deposit under Article 308 of the Act for safeguard deposit or keeps them in the Securities Depository in any other way, such securities or instruments shall be deemed to be deposited in accordance with Article 75 of the Act. |
법령보기 화면
| Article 77 (Special Exception to Sale of Collective Investment Securities) |
|
| (1) | The term "as prescribed by Presidential Decree" in the proviso to Article 76 (1) of the Act means cases falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Where the investor pays money, etc. to the relevant investment trader or broker after the base point of time for determining the date for claiming purchase of collective investment securities as stipulated in the collective investment agreement; |
| 2. | Where the relevant investment trader or broker sells collective investment securities of a money market fund and where the case falls under any of the following items: |
| (a) | Where the investor has agreed in advance with the investment trader or broker that sells collective investment securities to purchase collective investment securities of a money market fund with the payment received for sale or buy-back of financial investment instruments or others on the date of settlement; and |
| (b) | Where the investor has agreed in advance with the investment trader or broker that sells collective investment securities to purchase collective investment securities with the money that he/she receives on a regular basis, such as wages, on the date of receipt; |
| 3. | Where collective investment securities of a money market fund are sold to a person falling under any of the following items: |
| (b) | The money market fund and collective securities investment scheme that manage consolidated surplus funds pursuant to Article 81 of the State Finance Act; and |
| 4. | Where the committee on assessment of collective investment property under Article 261 recognizes that it is likely to undermine the interests of investors of the relevant collective investment scheme when applying the base price under the main sentence of Article 76 (1) of the Act. |
| (2) | The term "base price prescribed by Presidential Decree" in the proviso to Article 76 (1) of the Act means the price under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Where paragraph (1) 1 is applicable: The base price publicly announced on the third business day counting from the day on which the money, etc. is paid; |
| 2. | Where paragraph (1) 2 or 3 is applicable: The base price publicly announced on the day on which the money, etc. is paid; and |
| 3. | Where paragraph (1) 4 is applicable: The base price publicly announced on or after the third business day counting from the day on which the money, etc. is paid. |
| (3) | The term "as prescribed by Presidential Decree" in the proviso to Article 76 (3) of the Act means cases where there is a plan to sell collective investment securities in a new form in accordance with an amendment to a relevant Act and subordinate statutes and thus the investors’ interest is not likely to be undermined even if the outlines of the collective investment scheme is advertised. In such cases, if the amendment of the relevant Act and subordinate statutes is not finalized, the advertisement shall contain a statement that the details may be revised according to a final amendment to the relevant Act and subordinate statutes. |
| (4) | Sales commission and the sales remuneration under Article 76 (4) of the Act (hereinafter referred to as "sales remuneration"), which an investment trader or broker may charge, shall not exceed the following limits: Provided, That the following limits shall not apply to privately placed funds: |
| 1. | Sales commission: 5/100 of the amount of payment or buy-back; and |
| 2. | Sales remuneration: 5/100 of the average annual value of the collective investment property. |
| (5) | Every investment trader or broker may charge the sales commission or the sales remuneration in any of the following methods in accordance with the terms and conditions of the relevant collective investment agreement: |
| 1. | Sales commission: Collecting from investors in lump sum at the time of sale or buy-back or collecting from investors in installments during the investment period; and |
| 2. | Sales remuneration: Collecting from the relevant collective investment scheme in proportion to the scale of the collective investment property on a daily basis. |
| (6) | The sales commission may be charged in tiered rates, based on the method of sales, the investment trader or broker involved, the amount of sales, the investment period, and other factors. |
| (7) | The base point of time under paragraph (1) 1, the guidelines for determining the specific limits on the sales commission and sales remuneration under paragraphs (4) and (5), and other necessary matters in detail shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 78 (Guidelines for Business of Electronic Securities Brokerage Company) |
|
The term "guidelines prescribed by Presidential Decree" in the main body of Article 78 (1) of the Act means the following guidelines: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> | 1. | Listed stocks (including securities depository receipts that are related to stocks and that are listed on the securities exchange; hereafter the same shall apply in this Article) subject to the brokerage of trading shall be the listed stocks that do not fall under any of the following items: |
| (a) | Listed stocks that the Exchange has designated to controlled issues or any other similar issues pursuant to the regulations on listing of securities under Article 390 of the Act; |
| (b) | Listed stocks with no voting rights; and |
| (c) | Listed stocks specified and publicly notified by the Financial Services Commission, considering the protection of investors, the maintenance of good order in trading, and other factors, such as listed stocks that have a poor trading record; |
| 2. | In cases where the Exchange suspends trading of certain listed stocks subject to the brokerage of trading or lifts such suspension, trading of such listed stocks shall be suspended or the suspension of trading shall be lifted accordingly; |
| 3. | The brokerage of trading shall be provided simultaneously to many persons, each of whom shall be treated as an independent party, and the guidelines for disclosure of the volume for intended purchase or sale and the principles and method for the brokerage of trading shall be established; |
| 4. | The Korea Securities Depository shall be designated as the settlement agency, and the method of guaranteeing the performance of payment, including the accumulation of a common fund in preparation for compensation for losses caused by breach of a trading contract, shall be established; |
| 5. | The minimum rate of entrustment guarantee money collected by an investment trader or broker, who participates in the brokerage of trading, shall be fixed; |
| 6. | The grounds for the rejection of entrustment shall be prescribed in accordance with the provisions of the securities market business regulations under Article 393 (1) of the Act; |
| 7. | The details of the business of the issuer of certain listed stocks (excluding those under items of subparagraph 1 shall be disclosed to the public as disclosed by the Exchange; |
| 8. | The daily price and volume of each issue traded shall be announced to the public and shall be reported to the Exchange within one day. In such cases, the report to the Exchange shall contain the details of trading by issue, handled by the investment trader or broker who participates in the brokerage of trading; |
| 9. | The brokerage of trading shall cease during trading hours of the securities exchange (including the quotation receipt hours); |
| 10. | The grounds for suspending the brokerage of trading and days of such suspension shall be established. In such cases, the brokerage of trading shall be suspended until before the securities exchange is re-opened after it suspends trading on any grounds other than official closure; |
| 11. | Business guidelines, including the matters provided for in subparagraphs 1 through 10, shall be established; and |
| 12. | When the business guidelines under subparagraph 11 is established or amended, the details shall be reported to the Financial Services Commission and the Exchange, and shall be disclosed to the public through its Internet homepage or by any other means. |
Sub-Section 2 Rules on Business Conduct by Collective Investment Business Entities
법령보기 화면
| Article 79 (Instruction of Asset Management) |
|
| (1) | The term "method prescribed by Presidential Decree" in the main sentence of Article 80 (1) of the Act and the former part of paragraph (5) of the same Article means the method by which the details of an instruction can be managed objectively and precisely with an electronic computer system. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (2) | The term "as prescribed by Presidential Decree" in the proviso to Article 80 (1) of the Act means cases where the assets for investment are managed by adopting any of the following methods: |
| 1. | Trading of securities listed on the securities exchange or a foreign securities exchange; |
| 2. | Trading of exchange-traded derivatives; |
| 3. | Short-term loans under Article 83 (4) of the Act; |
| 5. | Trading of bills or notes issued, discounted, traded, intermediated, underwritten, or guaranteed by any of the following financial institutions: |
| (d) | The Korea Export-Import Bank under the Korea Export-Import Bank Act; |
| (e) | An investment trader or broker; |
| (f) | A securities finance company; |
| (h) | A mutual savings bank under the Mutual Savings Banks Act; |
| 6. | Trading of negotiable certificates of deposit; |
| 8. | Trading of over-the-counter derivatives in order to avoid risks of investment or execution of contracts under Article 5 (1) 3 of the Act in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission; and |
| 9. | Such other cases specified and publicly notified by the Financial Services Commission as may be inevitable to efficiently manage the investment trust property. |
| (3) | A collective investment business entity of any collective investment scheme other than an investment trust shall follow the method under paragraph (1) when it issues the trust business entity of the collective investment scheme an instruction necessary for safekeeping and management of the assets acquired or disposed of. |
법령보기 화면
| Article 80 (Exceptions to Restriction on Limits of Asset Management) |
|
| (1) | The term "as prescribed by Presidential Decree" in the proviso to the main body of Article 81 (1) of the Act means cases where any of the following acts are performed: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Investing up to 100/100 of the total value of assets of each collective investment scheme [limited to either a real estate fund under subparagraph 2 of Article 229 of the Act (hereinafter referred to as the "real estate fund"), in cases where any provision of items (d) through (g) is applicable, or a special asset fund under subparagraph 3 of Article 229 of the Act (hereinafter referred to as the "special asset fund"), in cases where any provision of items (h) through (j) is applicable, and where the fund has stipulated the relevant matters in its collective investment agreement] in any of the following assets for investment, when Article 81 (1) 1 (a) of the Act is applicable: |
| (c) | Bonds, the principal and interest of which the State or a local government guarantees the payment; |
| (d) | Securities issued by a company established with a predetermined continuance period for the development of specific real estate (hereinafter referred to as the "real estate development company"); |
| (e) | Asset-backed securities issued in accordance with subparagraph 4 of Article 2 of the Asset-Backed Securitization Act (hereinafter referred to as "asset-backed securities") with real estate or other asset related to real estate, as specified and publicly notified by the Financial Services Commission, as their underlying asset, if the total value of the underlying asset is not less than 70/100 of the total value of the securitization assets under subparagraph 3 of Article 2 of the Asset-Backed Securitization Act (hereinafter referred to as "securitization assets"); |
| (f) | Residential mortgage-backed bonds or residential mortgage-backed securities under the Special Purpose Companies for MortgageBacked Bonds Act or the Korea Housing Finance Corporation Act, for which a special purpose company for mortgage-backed bonds under the Special Purpose Companies for Mortgage-Backed Bonds Act or a financial institution under any provision of Article 79 (2) 5 (a) through (g) guarantees the payment; |
| (g) | Equity securities issued by a company that meets the following requirements (hereinafter referred to as the "special purpose company for investment in real estate"): |
| (ⅰ) | It shall be established for the purpose of investing in real estate or investment securities issued by another special purpose company for investment in real estate; |
| (ⅱ) | The total value of real estate or of assets under Article 240 (4) 4 shall not be less than 90/100 of the assets owned by the special purpose company for investment in real estate and its subsidiary companies (referring to companies similar to subsidiary companies under the Act on External Audit of Stock Companies); |
| (h) | Stocks and bonds issued by a corporation with the objective of carrying out social infrastructure projects under the Act on Private Participation in Infrastructure; |
| (i) | Loans granted to a corporation with the objective of carrying out social infrastructure projects under the Act on Private Participation in Infrastructure; and |
| (j) | Equity securities issued by a corporation (excluding companies specializing in investment in and financing of social infrastructure under the Act on Private Participation in Infrastructure) with the objective of investing in a corporation established for the purpose of carrying out a single social infrastructure project in accordance with the aforesaid Act by acquiring stocks and bonds issued by the latter corporation or acquiring claims to loans granted to the latter corporation; |
| 2. | Investing up to 30/100 of the total value of the assets of each collective investment scheme in any of the following assets for investment, when Article 81 (1) 1 (a) of the Act is applicable: |
| (a) | Local government bonds; |
| (b) | Special bonds (excluding those under subparagraph 1 (b) and (c)) and bills or notes issued by a corporation established by direct operation of an Act [limited to the corporate commercial paper under Article 4 (3) of the Act (hereinafter referred to as "corporate commercial paper") and the bills or notes discounted, traded, intermediated, or underwritten by a financial institution under any item of Article 79 (2) 5]; |
| (c) | Derivative-combined securities; |
| (d) | Bills, notes, or negotiable certificates of deposit issued by a financial institution under any provision of Article 79 (2) 5 (a) through (g) and bonds issued by a financial institution under any provision of items (a) and (e) through (g) of the aforesaid subparagraph; |
| (e) | Bonds (limited only to bonds issued through public offering), bills, or notes for which a financial institution under any provision of Article 79 (2) 5 (a) through (g) guarantees the payment; |
| (f) | Bonds issued by a member state of the Organization for Economic Cooperation and Development; |
| (g) | Junior corporate bonds among corporate bonds under Article 31 of the Asset-Backed Securitization Act or junior beneficiary certificates among the beneficiary certificates under Article 32 of the aforesaid Act (limited to any collective investment scheme that has a covenant in its collective investment agreement to invest in junior corporate bonds or junior beneficiary certificates equivalent to or more than the ratio prescribed and publicly notified by the Financial Services Commission); and |
| (h) | Residential mortgage-backed bonds or residential mortgage-backed securities under the Special Purpose Companies for Mortgage- Backed Bonds Act or the Korea Housing Finance Corporation Act, for which a special purpose company for mortgage-backed bonds under the Special Purpose Companies for Mortgage-Backed Bonds Act or a financial institution under any provision of Article 79 (2) 5 (a) through (g) guarantees the payment; |
| 3. | Investing up to the weight of the total market price of equity securities issued by a single corporation (including the securities depository receipts related to equity securities issued by such corporation; hereafter the same shall apply in this paragraph), in cases where the weight of the total market value of such equity securities exceeds 10/100, when Article 81 (1) 1 (a) of the Act is applicable. In such cases, the weight of the total market value shall be calculated separately for the securities market, the KOSDAQ market, or a foreign securities exchange, and necessary matters concerning the calculation method, the base date of such calculation, the applicable period, and other matters shall be prescribed and publicly notified by the Financial Services Commission; |
| 4. | Investing the total assets of all real estate funds or total assets of a real estate fund, which is managed by a collective investment business entity, in the equity securities falling under any of the following items up to 100/100 of the total number of outstanding equity securities, when Article 81 (1) 1 (b) or (c) of the Act is applicable: |
| (a) | Equity securities issued by a real estate development company; and |
| (b) | Equity securities issued by a special purpose company for investment in real estate; |
| 5. | Investing the total assets of all special bond funds or total assets of a special bond fund, which is managed by a collective investment business entity, in the equity securities falling under any of the following items up to 100/100 of the total number of outstanding equity securities, when Article 81 (1) 1 (b) or (c) of the Act is applicable: |
| (a) | Stocks issued by a corporation with the objective of carrying out social infrastructure projects under the Act on Private Participation in Infrastructure; and |
| (b) | Equity securities issued by a corporation (excluding companies specializing in investment in and financing of social infrastructure under the Act on Private Participation in Infrastructure) with the objective of investing in a corporation established for the purpose of carrying out a single social infrastructure project in accordance with the aforesaid Act by acquiring stocks and bonds issued by the latter corporation or acquiring claims to loans granted to the latter corporation; |
| 6. | Investing up to 100/100 of the total assets of a collective investment scheme falling under any of the following items (limited to collective investment schemes that are able to invest more than 40/100 of the total assets) in any of the following collective investment securities, when Article 81 (1) 3 (a) or (b) of the Act is applicable: |
| (a) | Collective investment securities of a collective investment scheme (including foreign collective investment schemes under Article 279 (1) of the Act; hereafter the same shall apply in this paragraph) managed by a collective investment business entity (including foreign collective investment business entities under Article 279 (1) of the Act; hereafter the same shall apply in this paragraph), if it invests only in foreign currency assets; |
| (b) | Collective investment securities (including foreign collective investment business securities under Article 279 (1) of the Act; hereafter the same shall apply in this paragraph) of an exchange- traded fund specified and publicly notified by the Financial Services Commission (including foreign collective investment schemes similar to an exchange traded scheme; hereafter the same shall apply in this paragraph); and |
| (c) | Collective investment securities of a collective investment scheme whose collective investment property managed by a single collective investment business entity (including foreign collective investment schemes under Article 279 (1) of the Act; hereafter the same shall apply in this item) is entrusted to two or more different collective investment business entities (including foreign collective investment entities under Article 279 (1) of the Act) for management (limited to cases where not less than 90/100 of the total assets of the collective investment scheme managed by the identical collective investment business entity are invested in foreign currency assets); |
| 7. | Investing up to 30/100 of the total assets of a collective investment scheme in collective investment securities (excluding collective investment securities under subparagraph 6 (b)) of an exchange- traded fund, when Article 81 (1) 3 (b) of the Act is applicable; |
| 8. | Investing up to 100/100 of the total assets of an investment trust created by an insurance company in accordance with Article 251 (1) of the Act in a single collective investment scheme (including foreign collective investment schemes), when Article 81 (1) 3 (a) or (b) of the Act is applicable; |
| 9. | Investing the investment trust property created by an insurance company in accordance with Article 251 (1) of the Act in up to 100/100 of the total number of collective investment securities of a single collective investment scheme (including foreign collective investment schemes), when Article 81 (1) 3 (e) of the Act is applicable; |
| 10. | Investing the investment trust property created by an insurance company in accordance with Article 251 (1) of the Act in excess of the guidelines under Article 81 (1) 3 (f) of the Act, when Article 81 (1) 3 (f) of the Act is applicable; |
| 11. | Investing money in excess of the guidelines under Article 81 (1) 3 of the Act when the same subparagraph is applicable, where surplus funds pursuant to Article 81 of the State Finance Act are consolidated and managed; and |
| 12. | Such other acts specified and publicly notified by the Financial Services Commission as may be unlikely to undermine the protection of investors or the stable management of collective investment property. |
| (2) | The term "securities specified by Presidential Decree" in the main body of Article 81 (1) 1 of the Act means the foreign collective investment securities under Article 279 (1) of the Act. |
| (3) | The term "assets for investment as specified by Presidential Decree" in the main body of Article 81 (1) 1 of the Act means any of the following investable assets: |
| 1. | Negotiable certificates of deposit in Korean won; |
| 2. | Bills or notes except corporate commercial paper; and |
| 3. | Loan claims, deposits, and other claims specified and publicly notified by the Financial Services Commission, except those under subparagraphs 1 and 2. |
| (4) | The term "ratio prescribed by Presidential Decree" in the former part of Article 81 (1) 1 (a) of the Act means 10/100. |
| (5) | The term "qualification requirements prescribed by Presidential Decree" in Article 81 (1) 1 (d) of the Act means that the following requirements shall be fully met: |
| 1. | The person shall fall under any subparagraph of Article 10 (1); and |
| 2. | The person shall be the one rated as investment grade or higher by a credit rating agency (including persons who engage in a business equivalent to a credit rating agency in a foreign country in accordance with laws and regulations of the foreign country). |
| (6) | The term "guidelines prescribed by Presidential Decree" in Article 81 (1) 1 (e) of the Act means 100/100 of the value calculated by subtracting total liabilities from total assets of each collective investment scheme. |
| (7) | The term "period of time prescribed by Presidential Decree" in the main sentence of Article 81 (1) 2 (a) of the Act means any of the following periods of time: |
| 1. | For real estate within Korea: Three years; and |
| 2. | For real estate in a foreign country: The period of time stipulated by the relevant collective investment agreement. |
| (8) | The term "as prescribed further by Presidential Decree" in the proviso to Article 81 (1) 2 (a) of the Act means cases where a collective investment scheme is merged, terminated, or dissolved. |
| (9) | The term "as prescribed further by Presidential Decree" in the proviso to Article 81 (1) 2 (b) of the Act means cases where it is inevitable to dispose of real estate acquired for a real estate development project, because the feasibility of the project has significantly declined due to the enactment, amendment, or repeal of a relevant Act and subordinate statutes after the real estate was acquired and it is proved difficult objectively to implement the real estate development project. |
| (10) | The term "guidelines prescribed by Presidential Decree" in Article 81 (1) 3 (f) of the Act means limits prescribed in Article 77 (4). |
법령보기 화면
| Article 81 (Grounds for Exceeding Exceptional Limits of Restriction on Asset Management) |
|
| (1) | The term "act specified by Presidential Decree" in Article 81 (1) 4 of the Act means any of the following acts: |
| 1. | Making a sale with buy-back agreement (referring to selling securities under an agreement to buy-back after the lapse of a certain period of time; hereinafter the same shall apply) in excess of the ratio prescribed and publicly notified by the Financial Services Commission within the limit of the total value of the securities that belong to each collective investment scheme; |
| 2. | Lending securities in excess of the ratio prescribed and publicly notified by the Financial Services Commission within the limit of the securities that belong to each collective investment scheme; and |
| 3. | Borrowing securities in excess of the ratio prescribed and publicly notified by the Financial Services Commission within the limit of the total assets of each collective investment scheme. |
| (2) | The term "cause or event specified by Presidential Decree" in Article 81 (3) of the Act means any of the following causes and events: |
| 1. | Price fluctuation in any investment asset, which belongs to the collective investment property; |
| 2. | Partial termination of an investment trust or partial retirement of collective investment securities of an investment company, a limited- liability investment company, a limited-partnership investment company, an investment association, or an undisclosed investment association; |
| 3. | Exercise of a right, including the exercise of a security right; |
| 4. | Merger or merger after division of a corporation that has issued securities that belong to the collective investment property; and |
| 5. | Other cases where an investment exceeds any of the limits under Article 81 (1) of the Act without acquiring additional assets for investment. |
| (3) | The term "period prescribed by Presidential Decree" in Article 81 (3) of the Act means three months (or until the time when it is possible to dispose of an asset, in cases where it is impossible to dispose of the investment asset due to a default on payments for cheques and bills or any other event). |
| (4) | The term "period of time specified by Presidential Decree" in Article 81 (4) of the Act means one month. |
법령보기 화면
| Article 82 (Disposition of One’s Own Collective Investment Securities) |
|
Each collective investment business entity of an investment trust or an undisclosed investment association shall dispose of the collective investment securities acquired in accordance with the former part of subparagraph 1 of Article 82 of the Act within one month from the acquisition date in any of the following ways: | 2. | Sale through an investment trader or broker. |
법령보기 화면
| Article 83 (Restrictions on Borrowing Money) |
|
| (1) | A collective investment business entity may borrow money from any of the following institutions, in cases where it borrows money on account of a collective investment scheme in accordance with the proviso to Article 83 (1) of the Act: |
| 1. | A financial institution under any item of Article 79 (2) 5; |
| 2. | An insurance company; and |
| 3. | A foreign financial institution similar to the one under subparagraph 1 or 2. |
| (2) | In cases where a collective investment business entity borrows money in accordance with paragraph (1), it shall not purchase (excluding resale and buy-back of derivatives) additional assets for investment until it has fully repaid the money borrowed. |
| (3) | The term "financial institution specified by Presidential Decree" in Article 83 (4) of the Act means a financial institution falling under any subparagraph of Article 345 (1). |
법령보기 화면
| Article 84 (Scope of Interested Parties) |
|
The term "interested party as specified by Presidential Decree" in the main body of Article 84 (1) of the Act means any of the following persons: | 1. | An executive or employee of the relevant collective investment business entity and his/her spouse; |
| 2. | A major shareholder of the relevant collective investment business entity and his/her spouse; |
| 3. | An affiliated company of the relevant collective investment business entity, an executive or employee of such affiliated company, and his/her spouse; |
| 4. | An investment trader or broker who has sold directly, or sold on commission, 30/100 or more of collective investment securities (hereafter referred to as the "related investment trader or broker" in this Sub-Section) of all collective investment schemes managed by the relevant collective investment business entity; |
| 5. | A trust business entity that retains in custody and manages 30/100 or more of the collective investment property of all collective investment schemes managed by the relevant collective investment business entity; and |
| 6. | A supervisory director of an investment company in which the relevant collective investment business entity holds office as the corporate director. |
법령보기 화면
| Article 85 (Exceptions to Restriction on Trading with Interested Parties) |
|
The term "transactions specified by Presidential Decree" in Article 84 (1) 4 of the Act means transactions falling under any of the following subparagraphs: | 1. | Transactions of an investment asset, made with any person, other than an interested party, through brokerage, intermediation, or agency of the interested party in the manner prescribed and publicly notified by the Financial Services Commission; |
| 2. | Transactions of an investment asset falling under any of the following items, made with an interested party through trading brokerage (referring to the brokerage in the form of trading as prescribed and publicly notified by the Financial Services Commission) of the interested party: |
| (b) | Negotiable certificates of deposit in Korean won; and |
| (c) | Bills or notes (excluding corporate commercial paper); |
| 3. | Transactions through which the collective investment property is managed with an interested party (excluding a major shareholder or an affiliated company of the relevant collective investment business entity) within the limit of 10/100 of the total assets of each collective investment scheme in any of the following manners: |
| (a) | Granting a short-term loan under Article 83 (4) of the Act; and |
| (b) | Making a purchase and resale agreement (referring to cases where securities are purchased with an agreement to resell after the lapse of a certain period of time; hereinafter the same shall apply); |
| 4. | Depositing in a financial institution (limited to a financial institution under Article 83 (1) 1 and a similar foreign financial institution; hereafter the same shall apply in this subparagraph), which is an interested party. In such cases, the amount deposited in a financial institution, which is an interested party, out of the entire collective investment property managed by the relevant collective investment business entity shall not exceed 10/100 of the amount deposited in all financial institutions; |
| 6. | Such other transactions confirmed by the Financial Services Commission as may be unlikely to cause conflicts of interest with the relevant collective investment scheme, considering the form, conditions, method, and other aspects of transactions. |
법령보기 화면
| Article 86 (Restriction on Acquisition of Securities of Affiliated Companies) |
|
| (1) | The term "limit prescribed by Presidential Decree" in Article 84 (4) of the Act means any of the following limits: |
| 1. | In cases where a collective investment business entity has acquired equity securities (including securities depository receipts related to such equity securities; hereafter the same shall apply in this Article) issued by an affiliated company with the collective investment property of all collective investment schemes managed by the entity, the amount of equity securities acquired out of all outstanding equity securities issued by the affiliated company shall be 10/100 of the amount available for the investment in equity securities out of the total assets of all collective investment schemes managed by the collective investment business entity and 50/100 of the total assets of each collective investment scheme managed by the collective investment business entity: Provided, That any of the following cases shall be excluded therefrom: |
| (a) | Where the aggregate weight of total market value (referring to the weight of total market value calculated in accordance with the latter part of Article 80 (1) 3; hereafter the same shall apply in this subparagraph) of all outstanding equity securities issued by an affiliated company exceeds 10/100 of the amount available for the investment in the equity securities out of the total assets of all collective investment schemes managed by the collective investment business entity, and where the collective investment business entity acquires all outstanding equity securities issued by the affiliated company up to the weight of total market value of the equity securities; and |
| (b) | Where the collective investment business entity acquires all outstanding equity securities issued by an affiliated company with the collective investment property of a collective investment scheme operated with the purpose of managing assets in response to changes in the index specified and publicly notified by the Financial Services Commission among the indexes indicating the level of prices of a number of issues up to the weight of the relevant index; and |
| 2. | An amount equivalent to the ratio of the investment in the relevant collective investment business entity by all its affiliated companies, in cases where the collective investment business entity invests the collective investment property of all collective investment schemes managed by it in securities (referring to the securities under Article 84 (4) of the Act except equity securities) issued by an affiliated company (excluding a corporation established by direct operation of an Act; hereafter the same shall apply in this subparagraph). In such cases, the amount equivalent to the ratio of the investment in the collective investment business entity by all affiliated companies shall be equal to the amount calculated by dividing the number of voting stocks issued by the collective investment business entity and held by all affiliated companies by the total number of outstanding voting stocks issued by the collective investment business entity and multiplying the rate so obtained by the equity capital (or the capital, if the equity capital is not more than the capital) of the collective investment business entity. |
| (2) | The term "securities specified by Presidential Decree" in Article 84 (4) of the Act means any of the following securities: |
| 1. | Collective investment securities (excluding beneficiary certificates of an investment trust) and foreign collective investment securities under Article 279 (1) of the Act; |
| 2. | Derivative-combined securities; and |
| 3. | Beneficiary certificates under Article 110 of the Act. |
| (3) | The term "assets for investment as specified by Presidential Decree" in Article 84 (4) of the Act means investable assets falling under any of the following subparagraphs: |
| 1. | Negotiable certificates of deposit in Korean won; |
| 2. | Bills or notes other than corporate commercial paper; and |
| 3. | Loan claims, deposits, and other claims specified and publicly notified by the Financial Services Commission, except those under subparagraphs 1 and 2. |
| (4) | A collective investment business entity who acquires all stocks of an affiliated company in excess of 10/100 of the total assets of each collective investment scheme in accordance with any item of paragraph (1) 1 shall exercise voting rights, in accordance with the main sentence of Article 87 (1) of the Act, for the stocks of the affiliated company, held in excess of the weight of stocks of each affiliated company in the collective investment property, based on 10/100 of the total assets of a collective investment scheme. |
| (5) | If securities held by a collective investment business entity exceeds the limit under any subparagraph of paragraph (1) due to a cause or an event specified and publicly notified by the Financial Services Commission, although the collective investment business entity has not acquired additional securities under Article 84 (4) of the Act, the collective investment business entity shall manage such securities to conform to the limits under subparagraphs of paragraph (1) within three months from the date on which such cause or event occurred. |
법령보기 화면
| Article 87 (Prohibition of Unsound Business Conduct) |
|
| (1) | The term "as prescribed by Presidential Decree" in the proviso to the main body of Article 85 of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where the case falls under any of the following items, when subparagraph 1 of Article 85 of the Act is applicable: |
| (a) | Where it is proved that information relevant to the management of the collective investment property has not been used; and |
| (b) | Where it is objectively evident that the case in question is a transaction for marginal gains for benefiting from the price difference between the securities exchange and the derivatives market or any similar transaction and that information relevant to the management of the collective investment property has not been intentionally used; |
| 2. | Where the collective investment business entity purchases the underwritten securities after the lapse of three months from the underwriting date, when subparagraph 2 of Article 85 of the Act is applicable; and |
| 3. | Where an investment asset falling under any item of subparagraph 2 of Article 85, which belongs to specific collective investment property, is traded for the proprietary property of the relevant collective investment business entity in an effort through the trading brokerage under subparagraph 2 of Article 85, or where two collective investment schemes managed by the relevant collective investment business entity engage in a transaction falling under any of the following items, one selling an asset (including accounts payable under Article 224 (4)) and the other purchasing the asset at the same time, when subparagraph 5 of Article 85 of the Act is applicable. In such cases, the trading price in a transaction between such collective investment schemes, the procedure and method for such trading, and other necessary matters shall be prescribed and publicly notified by the Financial Services Commission: |
| (a) | Where it is inevitable in order to observe the limits of the investment under the collective investment agreement of the collective investment scheme initially created or established (limited to one month from the date of initial creation or establishment); |
| (b) | Where it is inevitable in order to accept a claim to buy-back collective investment securities; |
| (c) | Where it is inevitable in order to settle the termination money upon termination or dissolution of the relevant collective investment scheme; and |
| (d) | Where the Financial Services Commission deems it unlikely to undermine the protection of investors on any other ground. |
| (2) | The term "related underwriter as specified by Presidential Decree" in subparagraph 2 of Article 85 of the Act means an underwriter falling under any of the following subparagraphs: |
| 2. | An underwriter whose sales of collective investment securities of all collective investment schemes managed by the relevant collective investment business entity reach or exceed the ratio prescribed and publicly notified by the Financial Services Commission. |
| (3) | The term "underwriting as prescribed by Presidential Decree" in subparagraph 3 of Article 85 of the Act means receiving a request for underwriting of securities directly from an issuer or a seller and determining the terms and conditions of underwriting. |
| (4) | The term "acts specified by Presidential Decree" in subparagraph 8 of Article 85 of the Act means acts falling under any of the following subparagraphs: |
| 1. | Managing the collective investment property in violation of the collective investment agreement or the investment prospectus; |
| 2. | Trading the collective investment property for financial investment instruments too frequently, disregarding the collective investment scheme’s management policy or strategy; |
| 3. | Providing a property interest, directly or indirectly, in the course of business to an investment trader or broker (including its executives, employees, and investment solicitors), who sells collective investment securities of a collective investment scheme managed by the collective investment business entity, in violation of the guidelines prescribed and publicly notified by the Financial Services Commission; |
| 4. | Accepting a property interest, directly or indirectly, from an investment trader or broker (including its executives and employees) in the course of business in violation of the guidelines prescribed and publicly notified by the Financial Services Commission; |
| 5. | Managing the collective investment property according to an order, an instruction, or a request given routinely by an investor pursuant to a side agreement, etc. made with the investor; |
| 6. | Managing the collective investment property according to an order, an instruction, or a request given by an investment trader or broker, who sells collective investment securities of a collective investment scheme managed by the collective investment business entity, pursuant to a side agreement, etc. made with the investment trader or broker; |
| 7. | An act committed with intent to circumvent prohibition or restriction under Article 55, 81, 84, or 85 of the Act by using an over-the-counter transaction, a trust deed, a linked transaction, etc.; |
| 8. | Receiving a blank check or a blank note in order to secure the rights of a creditor; and |
| 9. | Such other acts specified and publicly notified by the Financial Services Commission as may be likely to undermine the protection of investors and good order in trading. |
법령보기 화면
| Article 88 (Restriction on Contingent Remuneration) |
|
| (1) | The term "as prescribed by Presidential Decree" in Article 86 (1) 2 of the Act means cases in which all of the following requirements are met. In such cases, necessary matters concerning the computation method of the contingent remuneration, the time for the payment, and other matters shall be prescribed and publicly notified by the Financial Services Commission: |
| 1. | The contingent remuneration shall be calculated on the basis of the reference index that meets the requirements prescribed and publicly notified by the Financial Services Commission (hereafter referred to as the "reference index" in this Article); |
| 2. | A remuneration system shall be established to pay remuneration for management smaller than the remuneration payable if the contingent remuneration system has not been adopted, in cases where the results of management of a collective investment scheme shows poorer performance than the reference index; |
| 3. | There shall be a provision that the contingent remuneration shall not be paid, if the results of management of a collective investment scheme exceed the performance of the reference index but show a negative return on investment or a certain aspect of the results fails to meet the guidelines prescribed and publicly notified by the Financial Services Commission; |
| 4. | It shall be comprised of only the investors whose investment reaches or exceeds the minimum investment amount prescribed and publicly notified by the Financial Services Commission; and |
| 5. | A closed-end fund under Article 230 of the Act (hereinafter referred to as the "closed-end fund") shall be created or established with its minimum continuance period stipulated for at least one year, but shall not issue additional collective investment securities. |
| (2) | The term "matters prescribed by Presidential Decree" in Article 86 (2) of the Act means the following matters: |
| 1. | The statement that contingent remuneration shall be paid and the limit of the remuneration; |
| 2. | The fact that it might be exposed to higher investment risks than any collective investment scheme that does not pay contingent remuneration; |
| 3. | Matters concerning all kinds of remuneration, including contingent remuneration; |
| 5. | The time for the payment of contingent remuneration; |
| 6. | Matters concerning cases in which contingent remuneration shall not be paid; and |
| 7. | Other matters prescribed and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
법령보기 화면
| Article 89 (Restriction on Exercise of Voting Rights) |
|
| (1) | The term "person who has an interest in the business entity as specified by Presidential Decree" in Article 87 (1) 1 (a) of the Act means a specially related person or joint holder under Article 141 (2). |
| (2) | The term "person as specified by Presidential Decree" in Article 87 (1) 1 (b) of the Act means any of the following persons: |
| 1. | A related investment trader, related investment broker, or its affiliated company; and |
| 2. | A major shareholder (including a shareholder who is a specially related person of the largest shareholder) of a collective investment business entity (referring to a collective investment business entity under Article 87 (1) of the Act). |
| (3) | The term "relationship as prescribed further by Presidential Decree" in Article 87 (1) 2 (b) of the Act means a relationship under which a person falls under any subparagraph of paragraph (2). |
법령보기 화면
| Article 90 (Maintenance of Records of Exercise of Voting Rights) |
|
| (1) | The term "ratio or amount prescribed by Presidential Decree" in Article 87 (7) of the Act means 5/100 of the total assets of each collective investment scheme or ten billion won. |
| (2) | The term "manner prescribed by Presidential Decree" in Article 87 (7) of the Act means keeping records as to whether and how the voting rights for a corporation subject to public disclosure of voting rights under Article 87 (7) of the Act have been exercised (or the reasons why voting rights have not been exercised, if such is the case) in the report on asset management under Article 88 of the Act (hereinafter referred to as the "asset management report") and the business report under Article 90 of the Act. |
법령보기 화면
| Article 91 (Public Disclosure of Exercise of Voting Rights) |
|
| (1) | The term "stocks prescribed by Presidential Decree" in the former part other than each subparagraph of Article 87 (8) of the Act means stocks issued by a stock-listed corporation under Article 9 (15) 3 (a) of the Act. <Added by Presidential Decree No. 21291, Feb. 3, 2009> |
| (2) | A collective investment business entity shall publicly disclose the exercise of voting rights through the securities exchange not later than five days before the date of the general meeting of shareholders pursuant to the latter part other than each subparagraph of Article 87 (8) of the Act. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (3) | If it is difficult to make the public disclosure provided for in paragraph (2) by no later than five days before the date of the general meeting of shareholders because specific details on the agenda of the general meeting of shareholders have not been finalized up to five days before the date of the general meeting of shareholders or due to any other reason, the collective investment business entity (referring to the collective investment business entity under Article 87 (1) of the Act; hereafter the same shall apply in this Article) shall disclose the fact to the public before the date of the general meeting of shareholders, and shall disclose the details of how it exercised the voting rights in the general meeting of shareholders in the manner provided for in paragraph (2) within five days from the date of the general meeting of shareholders. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (4) | The term "data specified by Presidential Decree" in Article 87 (9) of the Act means the following data: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | The collective investment business entity’s internal guidelines relevant to the exercise of voting rights; |
| 2. | The number of stocks and the number of securities depository receipts held by each collective investment scheme of the collective investment business entity in relation to the exercise of voting rights; and |
| 3. | Whether the relationship between the collective investment business entity and the corporation subject to the exercise of voting rights falls under the relationship provided for in Article 89 (1) or (2). |
법령보기 화면
| Article 92 (Asset Management Report) |
|
| (1) | The term "as prescribed further by Presidential Decree" in the proviso to Article 88 (1) of the Act means cases falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Where an investor expresses in writing his/her intent not to receive the asset management report; |
| 2. | Where the collective investment business entity creates or establishes and manages a money market fund and discloses the asset management report to the public at least once a month in the manner prescribed and publicly notified by the Financial Services Commission; |
| 3. | Where the collective investment business entity creates or establishes and manages a closed-end fund (limited to cases where the collective investment securities are listed in accordance with Article 230 (3) of the Act) and discloses the asset management report to the public at least once every three months in the manner prescribed and publicly notified by the Financial Services Commission; and |
| 4. | Where the collective investment agreement stipulates that the asset management report will not be delivered to an investor, if the assessed value of the collective investment securities held by the investor is 100,000 won or less. |
| (2) | The term "turnover rate as prescribed by Presidential Decree" in Article 88 (2) 4 of the Act means the ratio calculated by dividing the total value of stocks sold during the pertinent management period (referring to the pertinent management period under Article 88 (2) 2 of the Act) by the average value of stocks held during the pertinent management period. |
| (3) | The term "matters prescribed by Presidential Decree" in Article 88 (2) 5 of the Act means the following matters: |
| 1. | Details of investment assets that belong to the collective investment property as of the reference date (referring to the reference date under Article 88 (2) 1 of the Act; hereafter the same shall apply in this Article); |
| 2. | Matters concerning professional investment managers of the collective investment scheme; |
| 3. | The amounts of transactions with each investment broker in trading stocks, securities, and derivatives, on a monthly basis, the fees for such transactions, and the weight of transactions; |
| 4. | Matters concerning transactions with interested parties; |
| 5. | Whether and how the voting rights for a corporation subject to the public disclosure of voting rights under Article 87 (7) of the Act were exercised (including the reasons why the voting rights were not exercised, if such is the case); |
| 6. | Matters concerning details of transactions of securities issued by affiliated companies under Article 86 (1); and |
| 7. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (4) | Each collective investment business entity shall, when it delivers the asset management report to investors, deliver it to investors in person or by mail or by any other means within two months through the investment trader or broker who sold collective investment securities: Provided, That the asset management report may be delivered by electronic mail, in cases where an investor has expressed a wish to receive it by electronic mail. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (5) | The expenses required for preparing and delivering the asset management report shall be borne by the relevant collective investment business entity. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (6) | The form and method of preparation of the asset management report, and other necessary matters shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 93 (Means of Ad Hoc Public Disclosure) |
|
| (1) | Deleted. <by Presidential Decree No. 21291, Feb. 3, 2009> |
| (2) | The term "non-performing assets as specified by Presidential Decree" in Article 89 (1) 3 of the Act means assets specified and publicly notified as non-performing assets by the Financial Services Commission upon an issuer’s default on payments for checks and bills, an application for the commencement of the rehabilitation proceedings under the Debtor Rehabilitation and Bankruptcy Act. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (3) | The term "matters prescribed by Presidential Decree" in Article 89 (1) 5 of the Act means matters falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Revisions made to an investment prospectus: Provided, That any of the following cases shall be excluded therefrom: |
| (a) | Where an investment prospectus is revised in accordance with an amendment to the Act or this Decree or an order from the Financial Services Commission; |
| (b) | Where an investment prospectus is revised in accordance with an amendment to collective investment agreement; and |
| (c) | Where an insignificant matter is modified, including simple modification of words and phrases in an investment prospectus; |
| 2. | Merger, division, merger after division, or transfer of business of a collective investment business entity; |
| 3. | Details of a change in the base price (limited to cases of disclosing or posting it under the latter part of Article 262 (1) of the Act), in cases where the collective investment business entity or the general administration company changes the base price because it made an error in calculating the base price; and |
| 4. | Other matters specified and publicly notified by the Financial Services Commission as those likely to have a significant impact on investors’ judgment on investment. |
법령보기 화면
| Article 94 (Reporting and Public Notice Concerning Collective Investment Property) |
|
| (1) | Pursuant to Article 90 (1) of the Act, each collective investment business entity (referring to the collective investment business entity under Article 90 (1) of the Act; hereafter the same shall apply in this Article) shall prepare a business report on the collective investment property (limited to investment trust property and undisclosed investment association property; hereafter the same shall apply in this Article), which shall contain the following separate forms and documents, in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission: |
| 1. | The current status of the investment trust created or the current status of changes in the contributions of the undisclosed investment association; |
| 2. | The current status of management of the collective investment property and a table of the base prices of collective investment securities (limited to beneficiary certificates of the investment trust and equity securities of the undisclosed investment association); |
| 3. | A document stating whether and how the voting rights for a corporation subject to the public disclosure of voting rights under Article 87 (7) of the Act were exercised (including the reasons why the voting rights were not exercised, if such is the case); and |
| 4. | Turnover rate (referring to the turnover rate under Article 88 (2) 4 of the Act) of stocks among assets that belong to the collective investment property, the amount of transactions with each investment broker for commission sales of assets, the fees for such transactions, and the weighing of such transactions and fees. |
| (2) | The Association shall, when it discloses to the public comparative performances of management of collective investment property in accordance with Article 90 (4) of the Act, compare and disclose the following items separately in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission: |
| 1. | The collective investment business entity; |
| 2. | The investment trader or broker; |
| 3. | The type of collective investment scheme; |
| 4. | Major investment assets specified and publicly notified by the Financial Services Commission (hereinafter referred to as "major investment assets"); |
| 5. | Remuneration for management; |
| 6. | Sales commission and remuneration for sales; and |
| 7. | Other matters specified and publicly notified by the Financial Services Commission. |
| (3) | The Association may request a collective investment business entity of an investment trust or an undisclosed investment association or an investment company, etc. under Article 182 (1) of the Act (hereinafter referred to as the "investment company, etc.") to submit the collective investment agreement, investment prospectus, and data concerning the base prices and other items of each collective investment scheme within the extent necessary for the comparative disclosure of the performance of management of collective investment schemes. |
법령보기 화면
| Article 95 (Inspection and Public Disclosure of Account Books and Documents) |
|
| (1) | The term "justifiable ground as prescribed by Presidential Decree" in the latter part of Article 91 (1) of the Act means cases falling under any of the following subparagraphs. In such cases, the collective investment business entity (referring to the collective investment business entity under Article 91 (1) of the Act) shall deliver to investors a written statement that it is not permissible to be made available for inspection or deliver it, with the reasons therefor: |
| 1. | Where it is obvious that if an account book or a document containing details of trading orders of the collective investment property is furnished to a person, the person receiving such book or document will probably use any information therein for a transaction or business or furnish another person with such information; |
| 2. | Where it is obviously foreseeable that if an account book or a document containing details of trading orders of the collective investment property is furnished to a person, losses will be incurred by other investors; and |
| 3. | Where an account book or document relates to a collective investment scheme already terminated or dissolved, and thus, making it impossible to accept any request from an investor for inspection or delivery because the preservation period under Article 62 (1) has elapsed or due to any other reason. |
| (2) | The account books and documents that an investor is entitled to demanding to make them available for inspection or deliver a certified copy or an abstract thereof in accordance with Article 91 (1) of the Act shall be as follows: |
| 1. | A list of the collective investment property; |
| 2. | Ledger of the base prices of collective investment securities; |
| 3. | Financial statements and accompanying statements; and |
| 4. | A full statement of management of the collective investment property. |
법령보기 화면
| Article 96 (Special Exception to Management of Derivatives) |
|
| (1) | The term "guidelines prescribed by Presidential Decree" in the former part of Article 93 (1) of the Act means 10/100 of the total assets of a collective investment scheme. |
| (2) | The term "indexes related to risks, as prescribed by Presidential Decree" in the former part of Article 93 (1) of the Act means the following indexes: Provided, That subparagraph 2 shall not be applicable to cases where it is impossible to calculate the indexes because the data for calculating the risk-related indexes are insufficient or where the derivatives specified and publicly notified by the Financial Services Commission are involved: |
| 1. | The structure of profits and losses from trading derivatives at maturity; |
| 2. | Changes in the structure of profits and losses of the collective investment property according to changes in the market situation or the estimated amount of maximum losses that may be incurred from transactions of derivatives in cases where the market prices fluctuate unfavorably against the collective investment scheme; and |
| 3. | Other risk-related indexes specified and publicly notified by the Financial Services Commission as those that may serve as important references in investors’ judgment on investment. |
| (3) | The specific formula for calculating risk-related indexes under paragraph (2) and other necessary matters shall be prescribed and publicly notified by the Financial Services Commission. |
| (4) | The term "guidelines prescribed by Presidential Decree" in Article 93 (2) of the Act means 10/100 of the total assets of a collective investment scheme. |
법령보기 화면
| Article 97 (Special Exception to Management of Real Estate) |
|
| (1) | The term "manner prescribed by Presidential Decree" in Article 94 (1) of the Act means that a collective investment business entity borrows money by offering real estate as collateral to a financial institution, etc. falling under any of the following subparagraphs or in the manner prescribed and publicly notified by the Financial Services Commission: Provided, That if a general meeting of collective investors has made resolutions otherwise, money may be borrowed according to such resolutions: |
| 1. | A financial institution under any item of Article 79 (2) 5; |
| 3. | The fund under the State Finance Act; |
| 4. | Another real estate fund; and |
| 5. | A foreign financial institution similar to those under subparagraphs 1 through 4. |
| (3) | The term "manner prescribed by Presidential Decree" in Article 94 (2) of the Act means the manner that meets all of the following requirements: |
| 1. | The collective investment agreement shall stipulate matters concerning the lending of money; and |
| 2. | The collective investment business entity shall secure means appropriate for collecting loans, such as creation of a security right to real estate or securing a guarantee for payment by a contractor and others. |
| (4) | In cases where a collective investment business entity lends money in accordance with Article 94 (2) of the Act, the limit on such loans shall be 100/100 of the amount calculated by subtracting total liabilities from total assets of the relevant collective investment scheme. |
| (5) | The term "matters prescribed by Presidential Decree" in Article 94 (3) of the Act means the following matters: |
| 1. | Expenses for trading real estate; |
| 2. | Financial data related to real estate; |
| 3. | Elements affecting the earnings from real estate; and |
| 4. | Such other matters specified and publicly notified by the Financial Services Commission as may be necessary in determining whether to trade real estate. |
| (6) | The term "matters prescribed by Presidential Decree" in Article 94 (4) of the Act means the following matters: |
| 1. | Matters concerning the business plan, including the construction plan; |
| 2. | Matters concerning the procurement, investment, and collection of the funds; |
| 3. | Matters concerning estimated profits and losses; |
| 4. | Matters concerning risks in the project; |
| 5. | Matters concerning outsourcing services, including performance of construction works; and |
| 6. | Such other matters specified and publicly notified by the Financial Services Commission as may be necessary for protecting investors. |
| (7) | The limits on borrowings in cases where a collective investment business entity borrows money in accordance with Article 94 (1) of the Act shall be as follows: |
| 1. | Where money is borrowed on a real restate fund’s account: 200/100 of the amount calculated by subtracting total liabilities from total assets of the real estate fund: Provided, That the limit shall be that resolved at a general meeting of collective investors, if a different limit has been resolved by the general meeting of collective investors; and |
| 2. | Where money is borrowed on account of any collective investment scheme other than the real estate fund: The rate prescribed and publicly notified by the Financial Services Commission within the limit of 100/100 of the value of real estate that belongs to the collective investment scheme. In such cases, the value of the real estate shall be assessed by the assessment committee under Article 238 (2) of the Act (hereinafter referred to as the "committee on assessment of collective investment property") in accordance with the guidelines for the appraisal of collective investment property under paragraph (3) of the aforesaid Article. |
| (8) | No collective investment business entity shall manage money borrowed in accordance with Article 94 (1) of the Act in any manner other than by investing it in real estate: Provided, That such money may be managed in any manner other than by investing it in real estate, in cases where the Financial Services Commission prescribes and publicly notifies otherwise, considering the type of collective investment scheme and others. |
| (9) | The collective investment business entity of a real estate fund may carry out part of its business affairs under Article 240 (4) 1 through 3 and business affairs incidental thereto by entrusting them to a third party, notwithstanding subparagraph 2 (c) of Article 45. |
Sub-Section 3 Rules on Business Conduct by Investment Advisory Business Entities and Discretionary Investment Business Entities
법령보기 화면
| Article 98 (Execution of Contracts) |
|
The term "matters prescribed by Presidential Decree" in Article 97 (1) 8 of the Act means the following matters: | 1. | Matters concerning executives and major shareholders; |
| 2. | The form of discretionary investment property that investors will own at the beginning of the contract period and the form of discretionary investment property that investors will own at the end of the contract period, in cases where a discretionary investment contract is made; |
| 3. | Matters concerning the investment method applied to the management of the discretionary investment property; |
| 4. | The term applicable to the preparation of the discretionary investment report under Article 99 (1) of the Act (hereinafter referred to as the "discretionary investment report"); and |
| 5. | Such other matters specified and publicly notified by the Financial Services Commission as may serve as important guidelines for investors’ judgment in determining whether to execute a contract. |
법령보기 화면
| Article 99 (Prohibition on Unsound Business Conduct) |
|
| (1) | The term "as prescribed by Presidential Decree" in the proviso to the main body of Article 98 (1) of the Act means cases where an investment advisory business entity or a discretionary investment business entity runs another financial investment business or any other financial business concurrently and the Acts and subordinate statutes relevant to the concurrently-run business do not prohibit conduct under Article 98 (1) 1 and 2 of the Act, when Article 98 (1) 1 and 2 of the Act is applicable. |
| (2) | The term "as prescribed by Presidential Decree" in the proviso to the main body of Article 98 (2) of the Act means the following cases: |
| 1. | Where a case falls under any of the following items, when Article 98 (2) 1 of the Act is applicable: |
| (a) | Where it is proved that any information related to management of the discretionary investment property has not been used; and |
| (b) | Where it is objectively evident that any information related to management of the discretionary investment property, such as a transaction for marginal gains, has not been intentionally used; |
| 2. | Where underwritten securities are purchased after three months from the date of underwriting, when Article 98 (2) 2 of the Act is applicable; |
| 3. | Where a case falls under any of the following items, when Article 98 (2) 6 of the Act is applicable: |
| (a) | Where the case is a transaction under a contact executed six months earlier than the person becomes an interested party; |
| (b) | Where the case is a transaction through an open market in which a number of unspecified people participate, such as the securities exchange; |
| (c) | Where the case is a transaction favorable to the discretionary investment property in light of ordinary terms and conditions of transactions; |
| (d) | Trading with buy-back agreement; |
| (e) | Trading the discretionary investment property with any person other than a discretionary investment business entity or an interested party through brokerage, intermediation, or agency of the discretionary investment business entity or an interested party in accordance with the manner prescribed and publicly notified by the Financial Services Commission; |
| (f) | Where an interested party trades debt securities, negotiable certificates of deposit in Korean won, bills, or notes (excluding corporate commercial paper) with his/her interested party through trading brokerage (referring to brokerage in the form of trading as prescribed and publicly notified by the Financial Services Commission); |
| (g) | Where the case is a transaction of selling collective investment securities of an exchange-traded fund, which are borrowed for the discretionary investment property, in order to avoid risks ensuing from investment; and |
| (h) | Where the Financial Services Commission deems that investors’ interests are not likely to be undermined; |
| 4. | Where orders for trading investment assets are consolidated and disposed of simultaneously in order to manage individual discretionary investment property efficiently and the proceeds from such disposition are distributed fairly in accordance with an asset distribution list agreed upon in advance for each item of discretionary investment property, when Article 98 (2) 8 of the Act is applicable; and |
| 5. | Where a case falls under any of the following items, when Article 98 (2) 9 (c) of the Act is applicable: |
| (a) | Exercising appraisal rights; |
| (b) | Accepting a tender offer; |
| (c) | Subscribing for new stocks issued for capital increase for consideration; |
| (d) | Exercising the conversion right by a holder of convertible bonds; |
| (e) | Exercising the preemptive right to a new issue of stocks by a holder of bonds with warrant; |
| (f) | Claiming to exchange exchangeable corporate bonds; |
| (g) | Exercising rights by a holder of derivative-combined securities; and |
| (h) | Exercising the rights under Article 5 (1) 2 of the Act. |
| (3) | The term "underwriting affairs as prescribed by Presidential Decree" in Article 98 (2) 3 of the Act means receiving requests for underwriting of securities directly from an issuer or seller and determining terms and conditions of underwriting. |
| (4) | The term "act specified by Presidential Decree" in Article 98 (2) 10 of the Act means an act falling under any of the following subparagraphs: |
| 1. | Rejecting a demand from a professional investor (excluding a person under any subparagraph of Article 10 (1)) to treat him/her as equal to ordinary investors in accordance with the proviso to Article 9 (5) of the Act, without justifiable grounds; |
| 2. | Managing the discretionary investment property in violation of a discretionary investment contract; |
| 3. | Trading financial investment instruments with the discretionary investment property too frequently, disregarding the extent of the discretion in investment, the purpose of investment, and other factors; |
| 4. | Providing or accepting a property interest, directly or indirectly, in connection with the business to or from an investor (including its executives and employees, if the investor is a corporation or any other organization) or the opposite party to a transaction (including its executives and employees, if the opposite party to a transaction is a corporation or any other organization), in violation of the guidelines prescribed and publicly notified by the Financial Services Commission; |
| 5. | Using a transaction of over-the-counter derivatives, a trust deed, or a linked transaction with intent to circumvent the prohibition or restriction under Article 55 or 98 of the Act; |
| 6. | Receiving a blank check or a blank bill or note in order to secure its rights as a creditor; and |
| 7. | Other acts specified and publicly notified by the Financial Services Commission, as likely to undermine the protection of investors and good order in trading. |
법령보기 화면
| Article 100 (Delivery of Discretionary Investment Report) |
|
| (1) | Each discretionary investment report under Article 99 (1) of the Act shall contain descriptions of the following matters for the period to which the discretionary investment report pertains: |
| 1. | The summarized history of management and the current status of profits and losses; |
| 2. | The current status of management, including dates of trading the discretionary investment property, trading prices, entrustment fees, and taxes; |
| 3. | The current status of the balance, acquisition value, market value, and assessed profits and losses of the assets that belong to the discretionary investment property by type; |
| 4. | The time to charge the discretionary investment fee and the amount of such fee; and |
| 5. | Matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (2) | Each discretionary investment business entity shall, when it delivers a discretionary investment report to investors, deliver it in person or by mail or by any other means within two months after the end of the period to which the discretionary investment report pertains: Provided, That it may be delivered to an ordinary investor by electronic mail, if he/she has expressed a wish to receive the discretionary investment report by electronic mail. |
| (3) | The form, method of preparation and method of delivery of the discretionary investment report, and other necessary matters shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 101 (Special Exceptions to Offshore Investment Advisory Business Entities) |
|
| (1) | An offshore investment advisory business entity under Article 100 (1) of the Act (hereafter referred to as the "offshore investment advisory business entity" in this Article) or an offshore discretionary investment business entity under the aforesaid paragraph (hereafter referred to as the "offshore discretionary investment business entity" in this Article) shall prepare a business report for periods of three months, six months, nine months, and twelve months, respectively, from the beginning of each business year in compliance with paragraph (5) of the aforesaid Article in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission, and submit it to the Financial Services Commission within one month after the end of each term stated above. |
| (2) | The term "those specified by Presidential Decree" in Article 100 (6) of the Act means persons falling under any of the following subparagraphs: |
| 3. | A person falling under any provision of Article 10 (2) 1 through 17; and |
| 4. | A person falling under any provision of Article 10 (3) 1 through 14. |
| (3) | The term "foreign depository institution specified by Presidential Decree" in Article 100 (7) of the Act means a foreign depository institution under any subparagraph of Article 63 (2). |
| (4) | Every offshore discretionary investment business entity shall prepare a discretionary investment report at least once a month in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission and deliver it to investors in person or by mail or any other means: Provided, That it may be delivered to an investor by electronic mail, if the investor has expressed a wish to receive it by electronic mail. |
| (5) | Necessary matters concerning business methods and procedures for offshore investment advisory business entities or offshore discretionary investment business entities shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 102 (Reporting on Quasi-Investment Advisory Businesses) |
|
The term "as prescribed further by Presidential Decree" in Article 101 (1) of the Act means advice that any person, other than investment advisory business entities, provides on investment in consideration of the payment of a certain amount through a periodical, a publication, a communication medium, or a broadcasting medium, which is published or transmitted to a number of unspecified people and which a number of unspecified people can purchase or receive from time to time.
Sub-Section 4 Rules on Business Conduct by Trust Business Entities
법령보기 화면
| Article 103 (Classification of Trusts) |
|
Money trusts shall be classified into the following categories pursuant to Article 103 (3) of the Act: | 1. | Money trusts for which the trustor designates the management method of the trust property, which is money (hereinafter referred to as "specified money trusts"); and |
| 2. | Money trusts for which the trustor does not designate the management method of the trust property, which is money (hereinafter referred to as "unspecified money trusts"). |
법령보기 화면
| Article 104 (Methods of Trust Business) |
|
| (1) | No trust business entity shall guarantee to indemnify for any loss or assure profits for the entrusted property: Provided, That it may guarantee to indemnify for losses or assure profits for a trust for the payment of pension or retirement benefits, in cases where the Financial Services Commission prescribes and publicly notifies to do so. |
| (2) | In cases where the outcome of management of any trust property for which it guaranteed to indemnify for losses or assure profits in accordance with the proviso to paragraph (1) fails to meet those stipulated in the trust deed, the trust business entity shall appropriate it for the special reserve (referring to the sum reserved for indemnifying for losses or assuring profits for the trust to which a condition to indemnify for losses or assure profits is attached), the remuneration for trust, and the proprietary property in the order stated. |
| (3) | Except where there is a guarantee for indemnifying for losses or an assurance of profits in accordance with the proviso to paragraph (1), a trust business entity shall return the trust property according to the outcome of management of the trust property at the end of the trust deed term. |
| (4) | When a trustor terminates a trust deed before the expiration of the trust deed term, the trust business entity shall deduct the early termination fee as stipulated in the trust deed from the outcome of management of the trust property under paragraph (3) in returning the trust property: Provided, That such fee shall not be deducted in cases where a ground exists, prescribed and publicly notified by the Financial Services Commission. |
| (5) | Every trust business entity shall be entitled to remuneration for trust as stipulated in its trust deed. |
| (6) | The term "project cost prescribed by Presidential Decree" in Article 103 (4) of the Act means the expenses required for a real estate development project, including construction costs, advertisement expenses, and sales expenses, but excluding the acquisition price of the real estate itself, registration expenses, and other incidental expenses related to the acquisition of the real estate. |
법령보기 화면
| Article 105 (Acquisition of Trust Property with Proprietary Property) |
|
The term "as prescribed by Presidential Decree" in Article 104 (2) 2 of the Act means cases where the Financial Services Commission deems that all of the following requirements are met: | 1. | The trust deed term remaining until the expiration of the contract shall be three months or less; |
| 2. | It is difficult to dispose of the trust property, unless the trust property is acquired as proprietary property; and |
| 3. | The acquisition price shall be fair. |
법령보기 화면
| Article 106 (Management Method of Trust Property) |
|
| (1) | The term "securities specified by Presidential Decree" in Article 105 (1) 1 of the Act means securities falling under any of the following subparagraphs: |
| 3. | Beneficiary certificates; |
| 4. | Investment contract securities; |
| 5. | Derivative-combined securities; and |
| 6. | Securities depository receipts. |
| (2) | The term "financial institution as specified by Presidential Decree" in Article 105 (1) 3 of the Act means any of the following financial institutions: |
| 4. | A securities finance company; |
| 6. | A mutual savings bank under the Mutual Savings Banks Act; |
| 7. | An agricultural cooperative under the Agricultural Cooperatives Act; |
| 8. | A fisheries cooperatives under the Fisheries Cooperatives Act; |
| 9. | A credit union under the Credit Unions Act; |
| 10. | A post office under the Postal Savings and Insurance Act; and |
| 11. | A foreign financial institution similar to an institution under any provision of subparagraphs 1 through 10. |
| (3) | The term "methods specified by Presidential Decree" in Article 105 (1) 10 of the Act means methods falling under any of the following subparagraphs: |
| 1. | Purchasing negotiable certificates of deposit in Korean won; |
| 2. | Investing in surface rights, rights to lease on a deposit basis, rights to lease, rights to claim transfer of the ownership of real estate, or any other right related to real estate; |
| 3. | Making a purchase and resale agreement; |
| 4. | Lending or borrowing securities; |
| 5. | Investing in a right to claim to pay insurance money under an insurance contract under Article 16 (2) of the Guarantee of Workers’ Retirement Benefits Act, in cases where the trust property is invested in a reserve for retirement pension under the trust deed under the aforesaid provisions of the aforesaid Act; and |
| 6. | Other method prescribed and publicly notified by the Financial Services Commission, considering the stability, profitability, and other factors of the trust property. |
| (4) | The term "ground prescribed otherwise by Presidential Decree" in Article 105 (2) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where a trust deed is made for real estate development projects in accordance with Article 103 (4) of the Act and money is entrusted within the limit of 15/100 of the project cost (referring to the project cost under Article 104 (6)) for each real estate project under the trust deed; and |
| 2. | Where the Financial Services Commission deems that all of the following requirements are met: |
| (a) | It is difficult to dispose of the trust property by dividing it into parts, when there is a claim to terminate part of the trust deed; and |
| (b) | The interest rate for the loan is fair. |
| (5) | Each trust business entity shall, when it manages money that belongs to the trust property, comply with the following guidelines: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | In cases of a specified money trust (limited to acquisition and disposition of the stock-listed corporation’s own stocks issued by it pursuant to Article 165-2 (3) of the Act from the trust property): |
| (a) | The stocks shall be acquired through the methods under Article 165-2 (2) 1 or 165-2 (2) 2; |
| (b) | The stock-listed corporation’s own stocks acquired shall not be disposed of within one month after acquisition and the stock-listed corporation’s own stocks shall not be acquired within one month after disposition of such stocks; and |
| (c) | The surplus funds left over after acquiring the stock-listed corporation’s own stocks shall not be managed in any manner other than the manner prescribed and publicly notified by the Financial Services Commission; |
| 2. | In cases of an unspecified money trust: |
| (a) | In cases where trust property is invested in privately issued corporate bonds (excluding privately issued bonds, the payment of which is guaranteed by a person specified and publicly notified by the Financial Services Commission, and secured corporate bonds), such investment shall not exceed 3/100 of each item of trust property; |
| (b) | In cases where trust property is invested in equity securities (including securities depository receipts related to the equity securities) and exchange-traded derivatives, such investment shall not exceed 50/100 of each item of trust property. In such cases, if the trust property is invested in exchange-traded derivatives, such investment shall be calculated based on the amount of assessed risks ensuing from such trading (referring to the amount of assessed risks under Article 81 (2) of the Act; hereafter the same shall apply in this Article); |
| (c) | In cases where trust property is invested in over-the-counter derivatives, the amount of assessed risks ensuing from such trading shall not exceed 10/100 of each item of trust property; |
| (d) | In cases where trust property is invested in equity securities issued by a single corporation (including securities depository receipts related to such equity securities), such investment shall not exceed 15/100 of the total number of the outstanding equity securities; and |
| (e) | The trust property shall be managed in accordance with the management method of trust property additionally prescribed and publicly notified by the Financial Services Commission; and |
| 3. | The trust business entity of any trust other than those under subparagraphs 1 and 2 shall comply with the guidelines prescribed and publicly notified by the Financial Services Commission in order to protect beneficiaries or maintain good order in trading. |
법령보기 화면
| Article 107 (Management of Surplus Funds) |
|
| (1) | The term "financial institution specified by Presidential Decree" in subparagraphs 1 and 3 of Article 106 of the Act means a financial institution under any subparagraph of Article 106 (2) respectively. |
| (2) | The term "methods specified by Presidential Decree" in subparagraph 4 of Article 106 of the Act means methods falling under any of the following subparagraphs: |
| 1. | Short-term loans under Article 83 (4) of the Act; |
| 2. | Purchasing bonds issued by a financial institution under any subparagraph of Article 106 (2) (excluding special bonds); and |
| 3. | Other methods prescribed and publicly notified by the Financial Services Commission as those that do not undermine the stability and profitability of trust property. |
법령보기 화면
| Article 108 Deleted.<by Presidential Decree No. 21291, Feb. 3, 2009> |
|
법령보기 화면
| Article 109 (Prohibition on Unsound Business Conduct) |
|
| (1) | The term "as prescribed further by Presidential Decree" in the proviso to the main body of Article 108 of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where the case falls under any of the following items, when subparagraph 1 of Article 108 of the Act is applicable: |
| (a) | Where it is proved that information relevant to the management of the trust property has not been used; and |
| (b) | Where it is objectively evident that the case in question is a transaction for marginal gains for benefiting from the price difference between the securities exchange and the derivatives market or any similar transaction and that information relevant to the management of the trust property has not been used intentionally; |
| 2. | Where the trust business entity purchases underwritten securities after the lapse of three months from the underwriting date, when subparagraph 2 of Article 108 of the Act is applicable; |
| 3. | Where two items of trust property managed by a single collective investment business entity engage in a transaction falling under any of the following items, one selling an asset and the other purchasing the asset simultaneously, when subparagraph 5 of Article 108 of the Act is applicable. In such cases, the trading price, the procedure and method for such trading, and other necessary matters shall be prescribed and publicly notified by the Financial Services Commission: |
| (a) | Where it is inevitable in order to pay the termination fee upon termination (including partial termination) of a trust deed; and |
| (b) | Where the Financial Services Commission deems it unlikely to undermine the protection of investors on any other ground; |
| 4. | Where a case falls under any of the following items, when subparagraph 6 of Article 108 of the Act is applicable: |
| (a) | Where the case is a transaction under a contact executed six months earlier than the person becomes an interested party; |
| (b) | Where the case is a transaction through an open market in which a number of unspecified people participate, such as the securities exchange; |
| (c) | Where the case is a transaction favorable to the trust property in light of ordinary terms and conditions of transactions; |
| (d) | Trading with buy-back agreement; |
| (e) | Trading an investment asset with any person other than the trust business entity or an interested party through brokerage, intermediation, or agency of the trust business entity or an interested party in accordance with the manner prescribed and publicly notified by the Financial Services Commission; |
| (f) | Trading debt securities, negotiable certificates of deposit in Korean won, bills, or notes (excluding corporate commercial paper) with a trust business entity or an interested party through trading brokerage (referring to the brokerage in the form of trading as prescribed and publicly notified by the Financial Services Commission) of the trust business entity or the interested party; |
| (g) | Trading under Article 104 (2) or 105 (2) of the Act; |
| (h) | Deposits (limited to a specified money trust with an entrusted amount of 300 million won or more or a specified money trust under the Guarantee of Workers’ Retirement Benefits Act, only where assurance of principal and interest is required); |
| (i) | Lending a loan temporarily, because it is impossible to manage the funds in any other way due to the amount or a time constraint (limited to cases where it is lent to the trust business entity that manages the trust property); and |
| (j) | Other transaction deemed by the Financial Services Commission as unlikely to cause conflicts of interest with the trust property, considering the form, conditions, method, and other factors of the transaction; and |
| 5. | Where orders for trading investment assets are consolidated and disposed of simultaneously in order to manage individual trust property efficiently and the proceeds from such disposition are distributed fairly in accordance with an asset distribution list agreed upon in advance for each item of trust property, when paragraph (3) 5 is applicable. |
| (2) | The term "underwriting affairs as prescribed by Presidential Decree" in subparagraph 3 of Article 108 of the Act means receiving a request for underwriting of securities directly from an issuer or a seller and determining terms and conditions of underwriting. |
| (3) | The term "acts specified by Presidential Decree" in subparagraph 9 of Article 108 of the Act means acts falling under any of the following subparagraphs: |
| 1. | Rejecting a demand from a professional investor (excluding a person under any subparagraph of Article 10 (1)) to treat himself/herself as equal to ordinary investors in accordance with the proviso to Article 9 (5) of the Act, without justifiable grounds; |
| 2. | Managing the trust property in violation of a trust deed; |
| 3. | Trading financial investment instruments with the trust property too frequently, disregarding the extent of the policy or strategy on management under the trust deed; |
| 4. | Providing or accepting a property interest, directly or indirectly, in connection with the business to or from a beneficiary (including its executives and employees, if the beneficiary is a corporation or any other organization) or the opposite party to a transaction (including its executives and employees, if the opposite party to a transaction is a corporation or any other organization), in violation of the guidelines prescribed and publicly notified by the Financial Services Commission; |
| 5. | Commingling and managing items of trust property under several trust deeds altogether instead of managing each item of trust property separately in accordance with each such trust deed: Provided, That in cases falling under Article 6 (4) 2, such act may be performed; |
| 6. | Soliciting investment to execute a trust deed or making an advertisement soliciting investment by representing that several items of trust property are commingled in management; |
| 7. | Investing the trust property in a specific asset by cross-trading with one another through an agreement or collusion with a third party; |
| 8. | Using a transaction of over-the-counter derivatives, a trust deed, or a linked transaction with intent to circumvent the prohibition or restriction under Article 55, 105, 106, or 108 of the Act or Article 104 (1) of this Decree; |
| 9. | Receiving a blank check or a blank bill or note in order to secure its rights as a creditor; and |
| 10. | Other acts specified and publicly notified by the Financial Services Commission as those likely to undermine the protection of beneficiaries and good order in trading. |
법령보기 화면
| Article 110 (Trust Deeds) |
|
The term "matters prescribed by Presidential Decree" in subparagraph 10 of Article 109 of the Act means the following matters: | 1. | The extent of and qualifications for persons who are entitled to becoming a beneficiary, and other matters necessary for finally identifying beneficiaries, in cases where no beneficiary has been finally identified; |
| 2. | Details of a requirement, in cases where there is a requirement that a beneficiary shall express his/her own wish to acquire an interest in the trust; |
| 3. | Matters concerning the recordation or registration under Article 3 (1) of the Trust Act or the indications and descriptions of the trust property under paragraph (2) of the aforesaid Article; |
| 4. | The type of trust property that will be delivered to a beneficiary, the delivery method, and the timing for delivery thereof; |
| 5. | Matters concerning public charges, repairing cost, and other expenses required for the management of trust property; |
| 6. | Matters concerning final settlement upon termination of the trust deed; and |
| 7. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for maintaining good order in trading. |
법령보기 화면
| Article 111 (Reporting on Issuance of Beneficiary Certificates) |
|
| (1) | The term "documents specified by Presidential Decree" in Article 110 (2) of the Act means the following documents: |
| 1. | A plan for issuing beneficiary certificates; |
| 2. | A fund management plan; and |
| 3. | A standardized trust deed form or a trust deed. |
| (2) | The term "matters prescribed by Presidential Decree" in Article 110 (5) 9 of the Act means the following matters: |
| 1. | The issue date of beneficiary certificates; and |
| 2. | The identification codes and numbers of beneficiary certificates. |
법령보기 화면
| Article 112 (Purchase of Beneficiary Certificates) |
|
Every trust business entity shall, when it purchases beneficiary certificates with its proprietary property in accordance with Article 111 of the Act, purchase them at the price calculated in accordance with Article 104 (2) of the Act.
법령보기 화면
| Article 113 (Restriction on Exercise of Voting Rights) |
|
| (1) | The term "person who has a special relationship as specified by Presidential Decree" in Article 112 (2) 1 (a) of the Act means a specially related person or a joint holder under Article 141 (2). |
| (2) | The term "person as specified by Presidential Decree" in Article 112 (2) 1 (b) of the Act means a major shareholder of the trust business entity (including a shareholder specially related to the largest shareholder; hereafter the same shall apply in this Article). |
| (3) | The term "relationship as prescribed further by Presidential Decree" in Article 112 (2) 2 (b) of the Act means becoming a major shareholder of the trust business entity. |
법령보기 화면
| Article 114 (Public Disclosure of Exercise of Voting Rights) |
|
| (1) | The public disclosure of the exercise of voting rights under Article 112 (7) of the Act shall be made in any of the following methods: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | In cases where the corporation that issued the stock, the voting rights of which a trust business entity intends to exercise, is a stock-listed corporation, its intention to exercise such voting rights shall be disclosed to the public through the securities exchange by no later than five days before the date of the general meeting of shareholders; and |
| 2. | In cases where the corporation that issued the stock, the voting rights of which a trust business entity intends to exercise, is not a stock-listed corporation, its intention to exercise such voting rights shall be disclosed to the general public in the manner provided for in Article 89 (2) of the Act so that they can inspect it. |
| (2) | If it is difficult to make the public disclosure by no later than five days before the date of the general meeting of shareholders because specific details on the agenda of the general meeting of shareholders have not been finalized up to five days before the date of the general meeting of shareholders or due to any other reason, the trust business entity shall disclose the fact to the public before the date of the general meeting of shareholders, and shall disclose the details of how it exercised the voting rights in the general meeting of shareholders in the manner provided for in paragraph (1) within five days from the date of the general meeting of shareholders. |
법령보기 화면
| Article 115 (Inspection and Public Disclosure of Account Books and Documents) |
|
| (1) | The term "justifiable ground as prescribed by Presidential Decree" in the latter part of Article 113 (1) of the Act means cases falling under any of the following subparagraphs. In such cases, the trust business entity shall deliver to beneficiaries a written statement that it is not permissible to be made available for inspection or deliver it, with the reasons therefor: |
| 1. | Where it is obvious that if an account book or document containing details of management of the trust property is furnished to a person, the person receiving such book or document will probably use information therein for a transaction or business or furnish another person with the information; |
| 2. | Where it is clearly foreseeable that if an account book or document containing details of management of the trust property is furnished to a person, loss will be incurred by another beneficiary; and |
| 3. | Where an account book or document is related to a trust deed already terminated and thus it is impossible to accept a request from a beneficiary for inspection or delivery because the preservation period under Article 62 (1) has elapsed or due to any other reason. |
| (2) | The account books and documents that a beneficiary is entitled to demand to be made available for inspection or deliver a certified transcript or an abstract thereof in accordance with Article 113 (1) of the Act shall be as follows: |
| 1. | A list of the trust property; |
| 2. | Financial statements and accompanying statements; and |
| 3. | A full statement of management of the trust property. |
법령보기 화면
| Article 116 (Entrusted Establishment of Accounting Principles) |
|
법령보기 화면
| Article 117 (Exemption from Accounting Audit) |
|
The term "as prescribed by Presidential Decree" in the proviso to Article 114 (3) of the Act means cases falling under any of the following subparagraphs: | 1. | When the trust is a money trust falling under any of the following items: |
| (a) | A specified money trust; |
| (b) | A money trust that assures profit (excluding a money trust that compensates only for losses); and |
| (c) | A money trust with entrusted principal of less than 30 billion won as of the base date of accounting audit; and |
| 2. | When the trust is a trust of the property under any provision of Article 103 (1) 2 through 7 of the Act. |
법령보기 화면
| Article 118 (Appointment of Accounting Auditor) |
|
| (1) | Each trust business entity shall, whenever it seeks to appoint or replace an accounting auditor, obtain consent from the auditor (or a resolution of the audit committee, if an audit committee is already established). |
| (2) | The accounting audit principles for the trust property shall be prescribed and publicly notified by the Financial Services Commission, subject to deliberation by the Securities and Futures Commission. |
| (4) | Each accounting auditor shall, upon completion of the accounting audit of the trust property, prepare an accounting audit report describing the following matters and submit it to the trust business entity: |
| 1. | A balance sheet on the trust property; |
| 2. | An income statement on the trust property; |
| 3. | A statement of return on investment of the trust property; and |
| 4. | Details of transactions between the trust business entity and its specially related persons. |
| (5) | Each trust business entity shall, upon receiving an accounting audit report from an accounting auditor, submit it to the Financial Services Commission without delay. |
| (6) | Each trust business entity shall make an accounting audit report available to the relevant beneficiaries for inspection in accordance with the manner prescribed and publicly notified by the Financial Services Commission. |
| (7) | The expenses incurred in accounting audits shall be borne by the trust property subject to the accounting audit. |
PART Ⅲ ISSUANCE AND CIRCULATION OF SECURITIES
CHAPTER Ⅰ REGISTRATION STATEMENT
법령보기 화면
| Article 119 (Securities Exempt from Chapter Ⅰ of Part Ⅲ of Act) |
|
| (1) | The term "Act specified by Presidential Decree" in Article 118 of the Act means the following Acts: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 4. | The Korea Export-Import Bank Act; |
| 5. | The Agricultural Cooperatives Act (limited to the National Agricultural Cooperative Federation); |
| 6. | The Fisheries Cooperatives Act (limited to the National Federation of Fisheries Cooperatives); |
| 7. | The Deposit Protection Act; |
| 8. | The Act on the Efficient disposition of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation; |
| 9. | The Korea Land Corporation Act; |
| 10. | The Korea Highway Corporation Act; |
| 11. | The Korea Housing Finance Corporation Act; |
| 12. | The Korea National Housing Corporation Act; |
| 13. | The Korea Electric Power Corporation Act; |
| 14. | The Korea National Oil Corporation Act; |
| 15. | The Korea Gas Corporation Act; |
| 16. | The Korea Coal Corporation Act; |
| 17. | The Korea Water Resources Corporation Act; |
| 18. | The Korea Rural Community & Agricultural Corporation and Farmland Management Fund Act; |
| 19. | The Agricultural and Fishery Marketing Corporation Act; |
| 20. | The Korea Airports Corporation Act; |
| 21. | The Incheon International Airport Corporation Act; |
| 22. | The Port Authority Act; |
| 23. | The Korea Container Terminal Authority Act; |
| 24. | The Korea National Tourism Organization Act; |
| 25. | The Korea Railroad Corporation Act; |
| 26. | The Korea Rail Network Authority Act; |
| 27. | The Korea Environment and Resources Corporation Act; |
| 28. | The Environmental Management Corporation Act; |
| 29. | The Act on the Establishment and Management of Sudokwon Landfill Site Management Corporation; |
| 31. | The Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free International Cities. |
| (2) | The term "securities as specified by Presidential Decree" in Article 118 of the Act means the following securities: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Debt securities for which the State or a local government guarantees the payment of principal and interest; |
| 2. | Securities held by the State or a local government and disposed of through public sale following prior consultation with the Financial Services Commission; |
| 4. | Securities issued by an international financial institution under Article 2 (1) of the Act on the Measures for the Admission to International Financial Institutions with the approval of the Minister of Strategy and Finance following a prior consultation with the Financial Services Commission. |
법령보기 화면
| Article 120 (Registration Statement on Public Offering or Sale) |
|
| (1) | Pursuant to Article 119 (1) of the Act, a person who intends to offer or sell securities publicly shall file a registration statement in any of the following cases: |
| 1. | Where the aggregate value of securities [the value of securities sold by small investors (excluding the issuer and underwriter of such securities) through over-the-counter trading under Article 178 are excluded from the value of securities sold] that a person intends to publicly offer or sell and the value of securities of the same class already publicly offered or sold without filing a registration statement during the latest one year (referring to the period of time after a registration statement has been filed, if a registration statement on public offering or sale of the same issue of securities has been filed for the same period of time) before the date of the intended public offering or sale reaches or exceeds one billion won; and |
| 2. | Where it is required to add up the number of persons in accordance with Article 11 (1) and where the aggregate value of securities for which subscription has been solicited reaches or exceeds one billion won. |
| (2) | The term "small investor" in paragraph (1) 1 means a person who holds equity securities amounting to less than the smaller amount of the value for 1/100 of the total number of outstanding equity shares issued by the relevant corporation and 300 million won: Provided, That the largest shareholder of the corporation and his/her specially related persons shall not be deemed as small investors. |
법령보기 화면
| Article 121 (Universal Shelf Registration Statement) |
|
| (1) | The securities for which filing a universal shelf registration statement under Article 119 (2) of the Act (hereinafter referred to as the "universal shelf registration statement") is allowed shall be as follows: |
| 1. | Corporate bonds (excluding convertible bonds, bonds with warrant, participating bonds, and exchangeable bonds that it is allowed to claim to exchange with stocks); |
| 2. | Derivative-combined securities; and |
| 3. | Collective investment securities falling under any of the following items (hereafter referred to as "open-end collective investment securities" in this Chapter): |
| (a) | Collective investment securities issued by any collective investment scheme other than closed-end funds; and |
| (b) | Foreign collective investment securities under Article 279 (1) of the Act, similar to those under item (a). |
| (2) | The scheduled issue period in a universal shelf registration statement shall be the period of time of not less than two months but not more than one year from the effective date of the universal shelf registration statement: Provided, That such scheduled issue period for open-end collective investment securities shall be the continuance period set by the relevant collective investment agreement (or indefinite period, if the continuance period is not set by the collective investment agreement). |
| (3) | A person who has filed a universal shelf registration statement shall issue the securities at least three times during the scheduled issue period. |
| (4) | A person who desires to file a universal shelf registration statement shall meet all of the following requirements: Provided, That the same shall not apply to the issuance of open-end collective investment securities: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | The person shall fall under any of the following items and have a record of having publicly offered or sold securities of the same class, which fall under paragraph (1) 1 or 2, during the latest one year: |
| (a) | A person who submitted a business report and a half-yearly report under Article 160 of the Act (hereinafter referred to as the "half- yearly report") during the latest one year; and |
| (b) | A financial investment business entity that submitted quarterly business reports and monthly business reports during the latest one year; |
| 2. | An accounting auditor’s opinion on the audit of the financial statements for the latest business year shall be either unqualified or qualified; and |
| 3. | There shall be no record that the Financial Services Commission has taken a measure of restricting the issuance of securities against the person for the latest one year. |
| (5) | A corporation newly established by division or merger after division, or a corporation surviving division or merger after division may file a universal shelf registration statement, if it meets all of the following requirements, notwithstanding paragraph (4): |
| 1. | The corporation existing before the division or the merger after division shall meet the requirements under paragraph (4); and |
| 2. | An accounting auditor’s opinion on the audit of the financial statements of the corporation newly established by division or merger after division for the latest business year shall be either unqualified or qualified. |
법령보기 화면
| Article 122 (Supplements to Universal Shelf Registration Statement) |
|
| (1) | The term "securities specified by Presidential Decree" in the latter part of Article 119 (2) of the Act means open-end collective investment securities. |
| (2) | The supplements to the universal shelf registration statement under the latter part of Article 119 (2) of the Act (hereinafter referred to as "supplements to the universal shelf registration statement") shall contain descriptions of the following matters: |
| 1. | Signatures of the representative director and the director responsible for filing the registration under Article 119 (5) of the Act on the matters under subparagraphs of Article 124:Provided, That they may be omitted, in cases where the Financial Services Commission prescribes and publicly notifies that the protection of investors is not likely to be undermined; |
| 2. | Outlines of public offering or sale; |
| 3. | The scheduled issue period and intended amount of issue in the universal shelf registration statement; |
| 4. | Results of public offer or sale already completed during the scheduled issue period; |
| 5. | The underwriter’s opinion on the securities publicly offered or sold (limited to cases where an underwriter exists); and |
| 6. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (3) | No supplement to a universal shelf registration statement shall contain any description modifying or altering any description in the universal shelf registration statement (including the corrective registration statement under Article 122 (1) of the Act). |
| (4) | Necessary matters concerning the form of supplements to a universal shelf registration statement, the preparation method, accompanying documents, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (3). <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
법령보기 화면
| Article 123 (Scope of Forecast and Prospects) |
|
The term "matters prescribed by Presidential Decree" in Article 119 (3) 4 of the Act means the matters assessed by a person, upon request, with respect to the precision of forecast and prospects, in cases where the person makes such forecast and prospects upon receiving a request for assessment of forecast and prospects under Article 119 (3) 1 through 3 of the Act.
법령보기 화면
| Article 124 (Verification and Examination of Registration Statement by Representative Director) |
|
The term "matters prescribed by Presidential Decree" in Article 119 (5) of the Act means the following matters: | 1. | The fact that no description or indication is false or has been omitted with respect to material facts in the descriptions of a registration statement under Article 119 (3) of the Act (hereinafter referred to as the "registration statement"); |
| 2. | The fact that no description or indication is seriously misleading any person who uses the descriptions or indications in the registration statement; |
| 3. | The fact that he/she has verified and examined the descriptions of the registration statement, him/herself, with due care; and |
법령보기 화면
| Article 125 (Descriptions and Accompanying Documents of Registration Statement) |
|
| (1) | Each registration statement under Article 119 (1) of the Act (excluding those for collective investment securities and asset-backed securities) shall contain descriptions of the following matters: |
| 1. | Signatures of the representative director and the director responsible for filing the registration under Article 119 (5) of the Act on the matters under subparagraphs of Article 124; |
| 2. | The following matters concerning public offering or sale: |
| (a) | General matters concerning public offering or sale; |
| (b) | Details of rights to securities publicly offered or sold; |
| (c) | Investment risks ensuing from acquisition of securities publicly offered or sold; |
| (d) | Matters concerning the underlying asset of securities publicly offered or sold (applicable only to derivative-combined securities); |
| (e) | The underwriter’s opinion on securities publicly offered or sold (applicable only to cases where an underwriter exists); |
| (f) | An assessment opinion issued by an analyst institution that meets the requirements prescribed and publicly notified by the Financial Services Commission (hereafter referred to as the "securities analysis institution" in this Article), in cases where a stock-unlisted corporation (including a corporation in the process of incorporation) files a registration statement with respect to public offering or sale of equity securities (including securities depository receipts related to equity securities) without an underwriter’s underwriting (hereinafter referred to as "direct public offering"): Provided, That such opinion may be omitted for cases specified and publicly notified by the Financial Services Commission; |
| (g) | Purpose of using the funds; and |
| (h) | Such other matters specified and publicly notified by the Financial Services Commission as may be necessary for protecting investors; and |
| 3. | The following matters concerning the issuer (limited to matters specified and publicly notified by the Financial Services Commission, if the corporation is still in the process of incorporation): |
| (a) | An overview of the company; |
| (c) | Matters concerning financial affairs; |
| (d) | An accounting auditor’s audit opinion; |
| (e) | Matters concerning organizations of the company, such as the board of directors, and its affiliated companies; |
| (f) | Matters concerning shareholders; |
| (g) | Matters concerning executives and employees; |
| (h) | Details of transactions with interested parties; and |
| (i) | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (2) | Each registration statement under paragraph (1) shall be accompanied by the following documents: Provided, That if it is possible to verify the information of the accompanying documents by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, the accompanying documents may be substituted by such verification: |
| 1. | The articles of incorporation or any other similar document that stipulates the operation of organizations and rights and obligations of investors; |
| 2. | A copy of minutes of the general meeting of shareholders (referring to the general meeting of promoters, if the corporation is still in the process of incorporation) or director’s meeting at which a resolution was passed for the issuance of securities (including specific purposes of issuing the securities for business management, the relationship between persons other than a certain shareholder and the issuer, and the reasons why persons other than the shareholder are chosen, in cases where the securities are issued in accordance with Article 418 (2) of the Commercial Act) or any other document proving the resolution on the issuance of securities; |
| 3. | A certified transcript of corporate register or any other similar document proving the incorporation; |
| 4. | A document proving that it holds permission, authorization, or approval, etc., in cases where it is required to obtain such permission, authorization, approval, or similar from an administrative agency with respect to the issuance of securities; |
| 5. | A copy of a contract on underwriting of securities, if such contract has been executed; |
| 6. | A document on the results of preliminary examination by the Exchange on listing, which confirms that the securities conform to the criteria for listing, in cases where the corporation seeks to have any of the following securities listed in the securities exchange: |
| (a) | Equity securities (excluding collective investment securities); |
| (b) | Securities depository receipts (limited to those related to equity securities); and |
| (c) | Derivative-combined securities (limited to those representing the right to perform trading of the securities under item (a) or (b) or close a transaction for giving and receiving money in a pre-determined manner by linking those to changes in the price of the securities under item (a) or (b) traded in the securities exchange or a foreign securities exchange or an index based on such price); |
| 7. | Preliminary investment prospectus, in cases where the corporation seeks to use the preliminary investment prospectus under Article 124 (2) 2 of the Act (hereinafter referred to as the "preliminary investment prospectus"); |
| 8. | Short-form investment prospectus, in cases where the corporation intends to use the short-form investment prospectus under Article 124 (2) 3 of the Act (hereinafter referred to as the "short-form investment prospectus"); |
| 9. | The following documents, in cases of direct public offering: |
| (a) | An assessment opinion issued by a security analysis institution; |
| (b) | A non-disclosure agreement signed by the representative that he/she shall ensure to prevent confidential information related to the assessment under item (a) from being divulged; and |
| (c) | A copy of a bankbook through which the subscription deposit money will be deposited in the investment trader or broker or the bank involved; and |
| 10. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (3) | Necessary matters concerning the form of the registration statement, the preparation method, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) and (2). |
법령보기 화면
| Article 126 (Descriptions and Accompanying Documents of Universal Shelf Registration Statement) |
|
| (1) | Each universal shelf registration statement (excluding collective investment securities) shall contain descriptions of the following matters: |
| 1. | Signatures of the representative director and the director responsible for filing the registration under Article 119 (5) of the Act on the matters under subparagraphs of Article 124; |
| 2. | The scheduled issue period; |
| 3. | The intended amount of issue; |
| 4. | Matters concerning the issuer under Article 125 (1) 3; and |
| 5. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (2) | Each universal shelf registration statement shall be accompanied by the following documents: Provided, That if it is possible to verify the information of the accompanying documents by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, the accompanying documents may be substituted by such verification: |
| 1. | The articles of incorporation or any other similar document that stipulates the operation of organizations and the rights and obligations of investors; |
| 2. | A copy of minutes of the director’s meeting at which a resolution was passed for filing a universal shelf registration statement or any other document proving such resolution; |
| 3. | A certified transcript of corporate register or any other similar document proving the incorporation; |
| 4. | An accounting auditor’s audit report; |
| 5. | An audit report prepared by an accounting auditor on consolidated financial statements, if the corporation is obligated to prepare consolidated financial statements under Article 1-2 (2) of the Act on External Audit of Stock Companies (hereinafter referred to as "consolidated financial statements"); and |
| 6. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (3) | Necessary matters concerning the form of universal shelf registration statement, the preparation method, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) and (2). |
법령보기 화면
| Article 127 (Descriptions of Registration Statement on Collective Investment Securities) |
|
| (1) | Pursuant to Article 119 (6) of the Act, each registration statement on collective investment securities shall contain descriptions of the following matters: |
| 1. | Signatures of the representative director and the director responsible for filing the registration under Article 119 (5) of the Act on the matters under subparagraphs of Article 124; |
| 2. | The following matters concerning public offering or sale: |
| (a) | General matters concerning public offering or sale; |
| (b) | Details of rights to collective investment securities publicly offered or sold; |
| (c) | Investment risks ensuing from acquisition of collective investment securities publicly offered or sold; |
| (d) | The underwriter’s opinion on collective investment securities publicly offered or sold (applicable only to cases where an underwriter exists); and |
| (e) | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors; and |
| 3. | The following matters concerning the collective investment scheme: |
| (a) | Name of the collective investment scheme; |
| (b) | Matters concerning the purposes of, policy on, and strategy of investment; |
| (c) | Matters concerning management remuneration, sales commission, sales remuneration, and other expenses; |
| (d) | Matters concerning contributions (excluding cases where an investment trust is involved); |
| (e) | Matters concerning financial affairs; |
| (f) | Matters concerning the collective investment business entity (including those concerning promoters and supervisory directors in cases of an investment company); |
| (g) | Matters concerning professional investment managers; |
| (h) | Matters concerning management of collective investment property; |
| (i) | Matters concerning sale and buy-back of collective investment securities; |
| (j) | Matters concerning assessment and public disclosure of collective investment property; |
| (k) | Matters concerning distribution of profits and losses and taxation; |
| (l) | Matters concerning the trust business entity and the general administration company (applicable only to cases where a general administration company exists); |
| (m) | Matters concerning entrustment of business affairs under Article 42 of the Act (applicable only to cases where business affairs are entrusted to a third party); and |
| (n) | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (2) | Each registration statement on collective investment securities under paragraph (1) shall be accompanied by the following documents: Provided, That if it is possible to verify the information of the accompanying documents by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, the accompanying documents may be substituted by such verification: |
| 1. | The collective investment agreement (including attached documents); |
| 2. | A certified transcript of corporate register or any other similar document proving the incorporation (excluding cases where an investment trust, an investment association, or an undisclosed investment association is involved); |
| 3. | A document proving the payment of contributions (excluding cases where an investment trust is involved); |
| 4. | A copy of a contract on entrustment of business affairs (including documents attached thereto) executed with the following persons: |
| (a) | The collective investment business entity (excluding cases where an investment trust or an undisclosed investment association is involved); |
| (b) | The trust business entity; |
| (c) | The general administration company (applicable only to cases where an entrust contract on business affairs was entered into with the general administration company); and |
| (d) | The trustee of business affairs under Article 42 of the Act (applicable only to cases where an entrust contract on business affairs was entered into with the trustee of business affairs); |
| 5. | A copy of a sales contact or a commission sales contract (including documents attached thereto), in cases where a sales contract or a commission sales contract was entered into with an investment trader or broker; |
| 6. | A copy of an underwriting contract, in cases where an underwriting contract was entered into made with respect to the collective investment securities; and |
| 7. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (3) | Necessary matters concerning the form of registration statement on collective investment securities, the preparation method, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) and (2). |
법령보기 화면
| Article 128 (Descriptions and Accompanying Documents of Registration Statement on Asset-Backed Securities) |
|
| (1) | Pursuant to Article 119 (6) of the Act, each registration statement on asset-backed securities shall contain descriptions of the following matters: |
| 1. | Signatures of the representative director and the director responsible for filing the registration under Article 119 (5) of the Act on matters under subparagraphs of Article 124; |
| 2. | The following matters concerning public offering or sale: |
| (a) | General matters concerning public offering or sale; |
| (b) | Details of rights to asset-backed securities publicly offered or sold; |
| (c) | Investment risks ensuing from acquisition of asset-backed securities publicly offered or sold; |
| (d) | The underwriter’s opinion on asset-backed securities publicly offered or sold (applicable only to cases where an underwriter exists); and |
| (e) | Purpose of using the funds; |
| 3. | The following matters concerning the issuer: |
| (a) | An overview of the company; |
| (b) | Matters concerning executives; and |
| (c) | Matters concerning entrustment of business affairs; |
| 4. | The following matters concerning the asset holder under subparagraph 2 of Article 2 of the Asset-Backed Securitization Act (hereinafter referred to as the "asset holder"): |
| (a) | An overview of the asset holder; |
| (c) | Matters concerning financial affairs; and |
| (d) | Matters concerning executives; |
| 5. | The following matters concerning securitized assets: |
| (a) | A detailed list of securitized assets by type; |
| (b) | Details of evaluation of securitized assets; and |
| (c) | Methods of transfer, etc. of securitized assets and a detailed plan for transfer; |
| 6. | The following mattes concerning the asset-backed securitization plan under Article 3 of the Asset-Backed Securitization Act (hereinafter referred to as the "asset-backed securitization plan"): |
| (a) | The detailed structure of the asset-backed securitization plan; |
| (b) | A plan for issuance and repayment of asset-backed securities; |
| (c) | The asset manager under Article 10 of the Asset-Backed Securitization Act (hereinafter referred to as "asset manager") and the method of management of assets; and |
| (d) | A plan for borrowing and management of funds; and |
| 7. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (2) | Each registration statement on asset-backed securities under paragraph (1) shall be accompanied by the following documents: Provided, That if it is possible to verify the information of the accompanying documents by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, the accompanying documents may be substituted by such verification: |
| 1. | Documents under Article 125 (2) 1 through 5; |
| 2. | A copy of a contract on entrustment of asset management; |
| 3. | A copy of a contract on entrustment of business affairs; and |
| 4. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (3) | Necessary matters concerning the form of the registration statement on asset-backed securities, the preparation method, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) and (2). |
법령보기 화면
| Article 129 (Special Rules Applicable to Descriptions and Accompanying Documents of Registration Statement) |
|
The Financial Services Commission may, if it is deemed necessary for protecting investors, prescribe and publicly notify different rules on the descriptions and accompanying documents of a registration statement, notwithstanding Articles 125 through 128, taking into consideration the characteristics of issuers, such as foreign enterprises, and the categories, types, and other factors of the securities under Article 4 (2) of the Act.
법령보기 화면
| Article 130 (Correction of Descriptions on Registration Statement) |
|
| (1) | The term "material fact, as specified by Presidential Decree" in the latter part of Article 122 (3) of the Act means any of the following matters: |
| 1. | Matters falling under any of the following items, in cases where any securities, other than collective investment securities, are involved: |
| (a) | Terms and conditions of issuance, including the price publicly offered or sold and the interest rate for issuance; |
| (b) | The distribution base date, subscription period, or deadline for payment; |
| (c) | Purposes of using the funds; |
| (d) | The underwriter, guaranteeing institution, or trustee company; and |
| (e) | Such other matters specified and publicly notified by the Financial Services Commission as may significantly affect investors’ reasonable judgment on investment or the value of the relevant securities; and |
| 2. | Matters falling under any of the following items, in cases where collective investment securities are involved: |
| (a) | Terms and conditions of issuance, including the price publicly offered or sold and the interest rate for issuance; |
| (b) | The underwriter (applicable only to cases where an underwriter exists); |
| (c) | A change in any matter registered in accordance with Article 182 (1) of the Act; and |
| (d) | Such other matters specified and publicly notified by the Financial Services Commission as may significantly affect investors’ reasonable judgment on investment or the value of the relevant securities. |
| (2) | The term "as prescribed by Presidential Decree" in the latter part of Article 122 (3) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where the descriptions or indications in the registration statement are so vague as to seriously mislead persons who rely on the registration statement; |
| 2. | Where any information unfavorable to the issuer (referring to an investment trust or an undisclosed investment association, in cases where the relevant securities are beneficiary certificates of the investment trust or equity securities of the undisclosed investment association) is omitted, only the information favorable to the issuer is emphasized, or any detail is exaggerated; |
| 3. | Where any of the following events occurs, in cases where any securities, other than collective investment securities, are involved: |
| (a) | When financial statements for the latest business year, a half- yearly report, or a quarterly report under Article 160 of the Act (hereinafter referred to as "quarterly report") is finalized; |
| (b) | When the issuer’s purpose of business is changed; |
| (c) | When a contract for transfer of business or merger is entered into; |
| (d) | When the issuer becomes a party to a lawsuit that may have significant impact on the management, property, or other matters of the issuer; |
| (e) | When the issuer defaults on any payment for check and bill or the issuer’s current account transactions with banks are suspended or banned; |
| (f) | When the issuer’s business activities are completely or partially suspended; |
| (g) | When an application for commencement of rehabilitation proceedings under the Debtor Rehabilitation and Bankruptcy Act is filed against the issuer; and |
| (h) | When a ground exists for dissolution under the Act, the Commercial Act, or any other Act; and |
| 4. | Where any of the following events occurs, in cases where collective investment securities are involved: |
| (a) | When financial statements for the latest fiscal term are finalized; |
| (b) | When a merger contract between collective investment schemes is entered into; and |
| (c) | When a lawsuit that may have significant impact on collective investment property or other matters is filed. |
| (3) | The term "collective investment securities as provided for in Presidential Decree" in the latter part of Article 122 (4) of the Act means open-end collective investment securities. |
| (4) | The term "limit prescribed by Presidential Decree" in the proviso to Article 122 (4) of the Act means 20/100 of the predetermined issue amount: Provided, That if it is recognized as necessary for the protection, etc. of investors, the Financial Services Commission may prescribe and publicly notify the limit not more than 20/100 of the predetermined issue amount. <Added by Presidential Decree No. 21291, Feb. 3, 2009> |
법령보기 화면
| Article 131 (Preparation and Public Disclosure of Investment Prospectus) |
|
| (1) | The investment prospectus under Article 123 (1) of the Act (hereinafter referred to as the "investment prospectus") shall be prepared in two separate sections title and main text. |
| (2) | The section of title of an investment prospectus shall contain descriptions of the following matters: |
| 1. | The effective date of the registration of securities under Article 119 (1) and (2) of the Act (hereinafter referred to as "securities registration"); |
| 2. | The price of securities publicly offered or sold; |
| 3. | The subscription period; |
| 5. | The place in which a copy of the relevant registration statement and the investment prospectus are available for inspection; |
| 6. | A statement as to the fact that manipulation for stabilization or market creation may be attempted in the securities exchange, when the manipulation for stabilization under Article 176 (3) 1 of the Act (hereinafter referred to as "manipulation for stabilization") or the marker creation under Article 176 (3) 2 of the Act (hereinafter referred to as "market creation") is intended; |
| 7. | A statement as to the fact that part of descriptions of the relevant registration statement may be changed until the day immediately before the subscription date (or even after the subscription date in cases of open-end collective investment securities); |
| 8. | A statement as to the fact that the Government does not confirm that the descriptions of the registration statement are true or correct, nor guarantee or approve the value of the relevant securities; and |
| 9. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (3) | The section of main text of an investment prospectus shall contain descriptions of the following matters: |
| 1. | Where a registration statement is filed in accordance with Article 125 (1): Matters under subparagraphs of Article 125 (1); |
| 2. | Where a supplement to a universal shelf registration statement is filed in accordance with the latter part of Article 119 (2) of the Act: Matters under subparagraphs of Article 122 (2) and Article 126 (1) 4; |
| 3. | Where a registration statement is filed in accordance with Article 127 (1): Matters under subparagraphs of Article 127 (1); |
| 4. | Where a registration statement is filed in accordance with Article 128 (1): Matters under subparagraphs of Article 128 (1); and |
| 5. | Where a registration statement is filed in accordance with Article 129: Matters specified and publicly notified by the Financial Services Commission. |
| (4) | In cases where a preliminary investment prospectus is filed in accordance with Article 125 (2) 7 and there is no change in descriptions of the registration statement until the relevant securities registration becomes effective, the preliminary investment prospectus may be used as an investment prospectus after the securities registration becomes effective. In such cases, the section of title in the preliminary investment prospectus shall be replaced with the section of title of the investment prospectus with the descriptions under subparagraphs of paragraph (2). |
| (5) | The term "description as prescribed further by Presidential Decree" in the proviso to Article 123 (2) of the Act means the description of the matters falling under any of the following subparagraphs: |
| 2. | Matters confirmed by the Financial Services Commission among those concerning the business affairs or operations of the issuer. |
| (6) | The term "collective investment securities specified by Presidential Decree" in the main body of Article 123 (4) of the Act means open-end collective investment securities. |
| (7) | Necessary matters concerning the form of the investment prospectus, the preparation method, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (6). |
법령보기 화면
| Article 132 (Persons Exempt from Issuing Investment Prospectus) |
|
The term "those specified by Presidential Decree" in the former part of the main body of Article 124 (1) of the Act means persons falling under any of the following subparagraphs: | 1. | Persons falling under any provision of Article 11 (1) 1 (c) through (f) and items of Article 11 (1) 2; and |
| 2. | Persons who expressed their intent to refuse to receive an investment prospectus in writing. |
법령보기 화면
| Article 133 (Method of Preparing Preliminary Investment Prospectus) |
|
| (1) | Pursuant to Article 124 (2) 2 of the Act, the section of title of a preliminary investment prospectus shall contain descriptions of the following matters: |
| 2. | Statements as to the fact that the relevant registration statement has been filed with the Financial Services Commission, but that the securities registration is not yet effective and that part of the descriptions thereof may be changed until the effective date; and |
| 3. | Matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (2) | Article 123 (2) of the Act and Article 131 (1) and (3) of this Decree shall apply mutatis mutandis to the preparation of a preliminary investment prospectus. In such cases, the term "investment prospectus" shall be construed as "preliminary investment prospectus." |
| (3) | Necessary matters concerning the form of the preliminary investment prospectus, the preparation method, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) and (2). |
법령보기 화면
| Article 134 (Method of Preparing Short-Form Investment Prospectus) |
|
| (1) | Pursuant to Article 124 (2) 3 of the Act, every short-form investment prospectus shall contain descriptions or indications of matters according to any of the following categories: |
| 1. | The following matters, if the relevant securities registration is not yet effective: |
| (b) | Statements as to the fact that the relevant registration statement has been filed with the Financial Services Commission, but that the securities registration is not yet effective and that part of the descriptions thereof may be changed until the effective date; |
| (c) | Results of the preliminary examination by the Exchange for listing, confirming that the securities conform to the criteria for listing, in cases where the securities under any item of Article 125 (2) 6 are intended to be listed on the securities exchange; |
| (d) | Matters that must be stated in the main sentence of an investment prospectus in accordance with Article 131 (3) and that the Financial Services Commission specifies and publicly notifies, as necessary for protecting investors; and |
| (e) | A recommendation to refer to the preliminary investment prospectus or the investment prospectus for further specific details concerning public offering or sale of the securities and the issuer (referring to an investment trust or an undisclosed investment association, if the securities are beneficiary certificates of the investment trust or equity securities of the undisclosed investment association); and |
| 2. | The following matters, if the relevant securities registration has already become effective: |
| (b) | Matters under subparagraph 1 (c) through (e). |
| (2) | When the matters under subparagraphs of paragraph (1) are described or indicated in a short-form investment prospectus, any information unfavorable to the issuer (referring to an investment trust or an undisclosed investment association, if the securities are beneficiary certificates of the investment trust or equity securities of the undisclosed investment association) shall not be omitted, nor shall only information favorable to the issuer be selectively described or indicated. |
| (3) | Necessary matters concerning the form of the short-form investment prospectus, the method of preparation, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) and (2). |
법령보기 화면
| Article 135 (Persons Liable for Losses Caused by False Statement) |
|
| (1) | The term "as specified further by Presidential Decree" in Article 125 (1) 3 of the Act means a person who holds an officially recognized qualification (including an organization to which he/she belongs), including a certified public accountant, an appraiser, a person specializing in credit rating, an attorney-at-law, a patent attorney, and a tax accountant. |
| (2) | The term "person specified by Presidential Decree" in Article 125 (1) 5 of the Act means the underwriter who determines the terms and conditions of underwriting upon direct request for underwriting of securities from an issuer or a seller. |
법령보기 화면
| Article 136 (Matters Excluded from Public Disclosure) |
|
The term "descriptions specified by Presidential Decree" in the latter part of the main body of Article 129 of the Act means descriptions of the matters falling under any of the following subparagraphs: | 2. | Matters confirmed by the Financial Services Commission among those concerning the business affairs or operations of the issuer. |
법령보기 화면
| Article 137 (Public Offering or Sale without Filing Registration Statement) |
|
| (1) | The term "measures prescribed by Presidential Decree" in Article 130 of the Act means the following measures: |
| 1. | An issuer shall submit, to the Financial Services Commission, documents describing the financial status and business performance of the issuer before public offering or sale of securities (referring to an investment trust or an undisclosed investment association, if the securities are beneficiary certificates of the investment trust or equity securities of the undisclosed investment association). In such cases, such documents (collective investment securities are exempted) shall be those that have undergone an accounting audit by an accounting auditor, or those that have been confirmed by a certified public accountant and to which the certified public accountant’s opinion is attached, as prescribed and publicly notified by the Financial Services Commission; |
| 2. | Recommendation for subscription shall be issued in wiring or other means describing or indicating the following matters. In such cases, any description or indication of the financial status and business performance therein shall not differ from the contents of the documents submitted in accordance with subparagraph 1, nor shall any false statement on fact be described or indicated therein: |
| (a) | Matters under Article 125 (1) 2 and 3 (referring to matters under Article 127 (1) 2 and 3 in cases of collective investment securities, and matters under Article 128 (1) 2 through 7 in cases of asset- backed securities); and |
| (b) | Matters under Article 131 (2) 2 through 4; |
| 3. | Once an issuer begins public offering or sale of securities, it shall submit to the Financial Services Commission, details of the method of soliciting subscriptions and the contents of the printed matter or any other means under subparagraph 2 without delay. The same shall also apply to cases where the method of soliciting subscriptions and any description or indication contained in the printed matter or any other means is changed after public offering or sale of securities has begun; and |
| 4. | An issuer shall, upon completion of public offering or sale of securities, report the results of the public offering or sale to the Financial Services Commission without delay. |
| (2) | In cases where an issuer (referring to an investment trust or an undisclosed investment association, if the securities are beneficiary certificates of the investment trust or equity securities of the undisclosed investment association; hereafter the same shall apply in this paragraph) is obligated to submit documents concerning the financial status and business performance of the issuer to the Financial Services Commission in accordance with paragraph (1) 1, documents has been submitted before pertinent public offering or sale of securities in relation to the pertinent public offering or sale of securities, but no change has been made in the contents of the documents submitted, submitting the documents concerning the financial status and business performance of the issuer may be substituted by submitting a written statement referring to the documents. |
| (3) | If public sale of securities fully satisfies the following requirements, it shall be deemed that the issuer of the securities has fully performed the measures under paragraph (1): |
| 1. | The public sale of securities have been carried out by an over-the- counter transaction under Article 178; |
| 2. | The public sale of securities are initiated by a small investor under Article 120 (2) (excluding the issuer and underwriter of the securities); and |
| 3. | The issuer of the securities disclosed the following matters in the manner prescribed and publicly notified by the Financial Services Commission: |
| (a) | Matters concerning the issuer; and |
| (b) | Documents describing the financial status and business performance of the issuer. |
| (4) | The Financial Services Commission may prescribe and publicly notify detailed guidelines with respect to the measures under paragraph (1). |
법령보기 화면
| Article 138 (Measures of Financial Services Commission) |
|
The term "measures prescribed by Presidential Decree" in the former part in the main body of Article 132 of the Act means measures falling under any of the following subparagraphs: | 1. | Imposing restrictions on issuance of securities within the limit of one year; |
| 2. | Recommending the dismissal of executives; |
| 3. | Filing criminal complaints or informing a competent investigative agency of violations of the Act, if any; |
| 4. | Informing a related agency or an investigative agency of violations of any other Act, if any; and |
| 5. | Issuing warnings or cautions. |
CHAPTER Ⅱ SYSTEMS RELATED TO CORPORATE ACQUISITIONS AND MERGERS
Section 1 Public Tender Offer
법령보기 화면
| Article 139 (Securities Eligible for Public Tender Offer) |
|
The term "voting stocks or any other securities specified by Presidential Decree" in Article 133 (1) of the Act means any of the following securities related to voting stocks (hereinafter referred to as "stocks, etc."): | 1. | Securities issued by a stock-listed corporation and falling under any of the following items: |
| (b) | Instruments representing preemptive rights to a new issue of stocks; |
| (e) | Exchangeable bonds with a right to claim to exchange them with stocks under any provision of items (a) through (d); and |
| (f) | Derivative-combined securities based on, as the underlying asset, the securities under any provision of items (a) through (e) (limited to those with rights to acquire the underlying asset by exercising such rights); and |
| 2. | Securities issued by any person other than a stock-listed corporation under subparagraph 1 and falling under any of the following items: |
| (a) | Securities depository receipts related to securities under subparagraph 1; |
| (b) | Exchangeable bonds with a right to claim to exchange them with securities under subparagraph 1 or securities under item (a); and |
| (c) | Derivative-combined securities based on, as the underlying asset, securities under subparagraph 1 or securities under item (a) or (b) (limited to those with rights to acquire the underlying asset by exercising such rights). |
법령보기 화면
| Article 140 (Guidelines for Calculating Number of Opposite Parties to Public Tender Offer) |
|
| (1) | The term "period of time prescribed by Presidential Decree" in the main sentence of Article 133 (3) of the Act means a duration of six months before the date of purchasing, etc. the relevant stocks, etc. (referring to the purchase, etc. under Article 133 (2) of the Act; hereafter the same shall apply in this Section). |
| (2) | The term "number of persons, equivalent to or more than the number of those prescribed by Presidential Decree" in the main sentence of Article 133 (3) of the Act means the number of persons reaching or exceeding ten persons when adding the number of opposite parties who engage in the purchase, etc. of the stocks, etc. in the instant case to the number of opposite parties who have already engaged in the purchase, etc. of the same issue of the stocks, etc. during the period of time under paragraph (1). |
법령보기 화면
| Article 141 (Scope of Specially Related Persons) |
|
| (1) | The term "those who have a special relationship as determined by Presidential Decree" in the main sentence of Article 133 (3) of the Act means specially related persons and joint holders. |
| (2) | The term "joint holders" in paragraph (1) means those who have agreed to perform any of the following acts in accordance with an arrangement or an agreement with the principal: |
| 1. | Jointly acquiring or disposing of stocks, etc.; |
| 2. | Trading stocks, etc. among each other after jointly or solely acquiring such stocks, etc.; and |
| 3. | Jointly exercising voting rights (including the power to instruct to exercise voting rights). |
| (3) | In cases where it is proved in the context under paragraph (1) that the number of stocks, etc. owned by a specially related person is less than 1,000 shares or that the person does not fall under paragraph (2), the person shall not be deemed a specially related person for the purposes of this Section and Section 2 of Chapter Ⅱ of Part Ⅲ. |
법령보기 화면
| Article 142 (Possession Similar to Ownership) |
|
The term "those owned and similarly possessed, as prescribed further by Presidential Decree" in the main sentence of Article 133 (3) of the Act means cases falling under any of the following subparagraphs: | 1. | Where stocks, etc. are owned on a person’s own account, regardless of in whose name they are held; |
| 2. | Where a person holds rights to claim delivery of stocks, etc. in accordance with a provision of an Act, as a result of a transaction, or under any other contract; |
| 3. | Where a person holds voting rights (including the power to instruct to exercise voting rights) of stocks, etc. in accordance with a provision of an Act or under a money trust deed, security agreement, or any other contract; |
| 4. | Where a person holds rights to acquire or dispose of the relevant stocks, etc. under a provision of an Act or under a money trust deed, a security contract, a discretionary investment contract, or any other contract; |
| 5. | Where a person holds rights to complete a trade by unilateral reservation for trading stocks, etc. and acquires the status of purchaser by exercising such rights; |
| 6. | Where a person holds contractual rights under Article 5 (1) 2 of the Act to a contract for an underlying asset of stocks, etc. and acquires the status of purchaser by exercising such rights; and |
| 7. | Where a person holds stock option and acquires the status of purchaser by exercising such option. |
법령보기 화면
| Article 143 (Purchase, etc. for which Public Tender Offer Not Required) |
|
The term "purchasing, etc. prescribed by Presidential Decree" in the proviso to Article 133 (3) of the Act means cases falling under any of the following subparagraphs: | 1. | Purchase, etc. of stocks, etc. for the purpose of retirement; |
| 2. | Purchase of stocks in response to the exercise of appraisal rights; |
| 3. | Purchase, etc. of stocks, etc. by exercising rights to instruments representing preemptive rights to a new issue of stocks, convertible bonds, bonds with warrant, or exchangeable bonds; |
| 4. | Purchase, etc. of stocks, etc. by exercising rights to derivative-combined securities; |
| 5. | Purchase, etc. of stocks, etc. from a specially related person; |
| 6. | Purchase of stocks by intermediating a trade of securities in accordance with Article 78 (1) of the Act; and |
| 7. | Purchase, etc. of stocks, etc. specified and publicly notified otherwise by the Financial Services Commission as cases unlikely to undermine other investors’ interests. |
법령보기 화면
| Article 144 (Purchase Not Deemed Purchase in Securities Exchange) |
|
The term "purchasing as prescribed by Presidential Decree" in Article 133 (4) of the Act means purchasing of stocks, etc. by stipulating the issue, price, volume, and other matters by contract or any other arrangement between a seller and a purchaser and closing the trade and settling the payment through the securities exchange.
법령보기 화면
| Article 145 (Public Notice of Tender Offer) |
|
| (1) | A person who intends to give public notice of tender offer under Article 134 (1) of the Act (hereinafter referred to as "public notice of tender offer") shall issue such public notice through two or more newspapers circulated nationwide among ordinary daily newspapers or daily newspapers specializing in economy under the Act on the Freedom of Newspapers, etc. and Guarantee of Their Functions in the manner prescribed and publicly notified by the Financial Services Commission. |
| (2) | The term "stocks, etc. specified by Presidential Decree" in Article 134 (1) 2 of the Act means exchangeable bonds and derivative-combined securities. |
| (3) | The term "person specified by Presidential Decree" in Article 134 (1) 2 of the Act means any of the following persons: |
| 1. | The issuer of stocks, etc., which are the underlying securities, in cases of securities depository receipts; |
| 2. | The issuer of stocks, etc. subject to the exchange, in cases of exchangeable bonds; and |
| 3. | The issuer of stocks, etc., which are the underlying asset, in cases of derivative-combined securities. |
| (4) | The term "matters prescribed by Presidential Decree" in Article 134 (1) 6 of the Act means the following matters: |
| 1. | The current status of the tender offeror under Article 134 (2) of the Act (hereinafter referred to as the "tender offeror") and his/her specially related persons (referring to the specially related persons under Article 133 (3) of the Act; hereinafter the same shall apply); |
| 2. | Matters concerning the tender offer agent under Article 133 (2) of the Act (hereinafter referred to as the "tender offer agent"); |
| 3. | The method of tender offer; |
| 4. | The fact as to whether there was an advance agreement with executives or the largest shareholder of the issuer (referring to the issuer of stocks, etc. subject to the tender offer under Article 134 (1) 2 of the Act; hereinafter referred to as the "company subject to the tender offer") of stocks, etc. subject to the tender offer, and details of the agreement, if any; |
| 5. | A plan for the future of the company subject to the tender offer after closing the tender offer; |
| 6. | The fact as to whether there are contracts executed on purchase, etc. of the relevant stocks, etc. before giving public notice of tender offer, and details of the contracts, if any; and |
| 7. | The place in which the public tender statement under Article 134 (2) of the Act (hereinafter referred to as the "public tender statement") and the prospectus for tender offer under Article 137 (1) of the Act (hereinafter referred to as the "prospectus for tender offer") are available for inspection. |
법령보기 화면
| Article 146 (Public Tender Statement) |
|
| (1) | No public tender statement shall contain any description that differs from the contents of the relevant public notice of tender offer, nor shall it omit any content of such public notice. |
| (2) | The term "matters prescribed by Presidential Decree" in Article 134 (2) 7 of the Act means the following matters: |
| 1. | Matters concerning the tender offer agent; |
| 2. | The current status of the company subject to the tender offer; |
| 3. | The method of tender offer; |
| 4. | Details of procurement of the funds or securities for the exchange, required for the tender offer (including the lender, if they are borrowed from a third party); |
| 5. | The current status of stocks, etc. of the company subject to the tender offer, held by the tender offeror and his/her specially related persons, and details of transactions of such stocks, etc. by such persons during the latest one year; |
| 6. | The fact as to whether there was an advance agreement with executives or the largest shareholder of the company subject to the tender offer, and details of the agreement, if any; |
| 7. | A plan for the future of the company subject to the tender offer after closing the tender offer; |
| 8. | Details of a broker or intermediary for the tender offer, if any; and |
| 9. | The place in which the public tender statement and prospectus for tender offer are available for inspection. |
| (3) | The term "period set by Presidential Decree" in Article 134 (3) of the Act means a period of time of not less than 20 days but not more than 60 days. |
| (4) | Every public tender statement shall be accompanied by the following documents: Provided, That if it is possible to verify the information of the accompanying documents by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, the accompanying documents may be substituted by such verification: |
| 1. | A certified transcript of citizen registration card, if the tender offeror is a private individual (or any similar document, if he/she is a foreigner); |
| 2. | A certified transcript of corporate register or any other similar document, if the tender offeror is a corporation or any other organization; |
| 3. | A copy of a contract on the administrative affairs related to the tender offer; |
| 4. | A document proving the balance of deposits in financial institutions or any funds secured, equivalent to or more than the amount required for the public tender; |
| 5. | A document proving the securities that the tender offeror has secured to deliver as the price for exchange, in cases where the tender offer is made for the exchange with other securities: Provided, That in cases where the tender offer is made in order to induce investment in kind with intent to circumvent the guidelines under Article 8-2 (2) 2 of the Monopoly Regulation and Fair Trade Act, a document proving the issuance of new stocks is required; |
| 6. | A document with the same contents as those to be stated in a statement under Article 119 (1) or (2) of the Act, in cases where it is required to file such statement with respect to the tender offer for exchange with other securities; |
| 7. | A document proving that there was permission, authorization, or approval, if permission, authorization or approval by an administrative agency is required for the purchase, etc. of stocks, etc.; |
| 8. | Details of the public notice of tender offer; |
| 9. | A copy of a contract, if there is a contract executed for purchase, etc. of stocks, etc. before the public notice of tender offer; and |
| 10. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for confirming the descriptions of the public tender statement. |
| (5) | Necessary matters for the form of the public tender statement, the method of preparation, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 147 (Prohibition on Change of Terms and Conditions of Tender Offer) |
|
The term "terms and conditions specified by Presidential Decree" in the proviso to Article 136 (3) of the Act means those falling under any of the following subparagraphs: | 1. | Shortening the tender offer period; |
| 2. | Changing the type of consideration that shall be provided to subscribing shareholders under Article 139 (4) of the Act (hereafter referred to as "subscribing shareholders" in this subparagraph): Provided, That an addition to the types of consideration among which subscribing shareholders may choose one shall be excluded herefrom; and |
| 3. | Changing terms and conditions of tender offer to the extent leading to the extension of the payment period for tender offer: Provided, That cases falling under any of the following items shall be excluded herefrom: |
| (a) | Increasing the purchase price, in cases where the arithmetic mean price of prices (based on closing prices) formed in the securities exchange for the relevant stocks, etc. during the period of three days before the date on which a corrective statement under Article 136 (1) of the Act was filed is not less than 90/100 of the tender offer price or where there is a counter tender offer under Article 139 (1) of the Act (hereinafter referred to as the "counter tender offer"); |
| (b) | Increasing the number of stocks, etc., subject to the intended purchase, in cases where there is a change in the total number of the stocks, etc. after the public notice of tender offer or where there is a counter tender offer; and |
| (c) | Extending the tender offer period (limited to the closing date of the counter tender offer period), in cases where there is a counter tender offer. |
법령보기 화면
| Article 148 (Preparation of Prospectus for Tender Offer) |
|
Pursuant to Article 137 (1) of the Act, each prospectus for tender offer shall contain descriptions of the matters under subparagraphs of Article 134 (2) of the Act: Provided, That descriptions of the matters specified and publicly notified by the Financial Services Commission may be omitted, if the tender offer is a stock-listed corporation.
법령보기 화면
| Article 149 (Expression of Opinions on Tender Offer) |
|
| (1) | The issuer of the stocks, etc. against which a public tender statement is filed shall, when it seeks to express its opinion thereon in accordance with Article 138 (1) of the Act, communicate its opinion by advertisement, letter (including electronic mail), or any other document. |
| (2) | The opinion expressed in accordance with paragraph (1) shall include the issuer’s position on whether it assents to, opposes, or remains neutral in the tender offer and the reasons for its position, and shall notify a significant change in its opinion without delay in the manner provided for in paragraph (1), if it makes a significant change in its position after expressing its opinion. |
법령보기 화면
| Article 150 (Exceptional Revocation of Tender Offer) |
|
The term "as prescribed further by Presidential Decree" in the proviso to Article 139 (1) of the Act means cases falling under any of the following subparagraphs: | 1. | Where the tender offeror defaults on payments for cheques and bills or where its current account transactions with banks are suspended or banned; and |
| 2. | Where the tender offer publicly notified included a condition that the tender offer may be revoked, if any of the following events occurs in relation to the company subject to the tender offer and the condition was also included in the public tender statement, and where any of such events actually occurs: |
| (a) | Merger, division, merger after division, all-embracing transfer of stocks, or all-embracing exchange; |
| (b) | Transfer of an essential business or asset falling under any subparagraph of Article 171 (1); |
| (e) | Dishonoring a bill, a note, a check issued; |
| (f) | Suspension of or ban on check account transactions with banks; |
| (g) | Delisting of stocks, etc; and |
| (h) | Where the loss incurred during the latest business year due to a natural disaster, war, upheaval, or any other calamity reaches or exceeds 10/100 of total assets. |
법령보기 화면
| Article 151 (Acquisition of Stocks in Any Manner other than Tender Offer) |
|
The term "as prescribed by Presidential Decree" in the proviso to Article 140 of the Act means cases falling under any of the following subparagraphs: | 1. | Where a contract on purchase, etc. of the relevant stocks, etc. was executed before the tender offer is publicly notified, but it did not fall under the subject matter of the tender offer under Article 133 (1) of the Act at the time when the contract was executed, and the public notice of the tender offer and the public tender statement mention the facts and terms of the contract; and |
| 2. | Where the tender offer agent involved accepts entrustment of purchasing, etc. the relevant stocks, etc. from any person other than the tender offeror and his/her specially related persons. |
법령보기 화면
| Article 152 (Measures of Financial Services Commission) |
|
The term "measures prescribed by Presidential Decree" in the former part of the main body of Article 146 (2) of the Act means measures falling under any of the following subparagraphs: | 1. | Imposing restrictions on public tender offer within the limit of one year (applicable only to the tender offeror and his/her specially related persons); |
| 2. | Imposing restrictions on a business handling administrative affairs of public tender offer within the limit of one year (applicable only to the tender offer agent); |
| 3. | Recommending the dismissal of executives; |
| 4. | Filing criminal complaints of violations of the Act or informing an investigative agency of such violations, if any; |
| 5. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 6. | Issuing warnings or cautions. |
Section 2 Report on Stocks, etc. Held in Bulk
법령보기 화면
| Article 153 (Reporting on Stocks, etc. Held in Bulk) |
|
| (1) | The term "days specified by Presidential Decree" in the former part of Article 147 (1) of the Act means the following days: |
| 2. | The workers’ day under the Designation of Workers’ Day Act; and |
| (2) | The term "matters prescribed by Presidential Decree" in the former part of Article 147 (1) of the Act means the following matters: |
| 1. | Matters concerning the person (hereinafter referred to as the "large stockholder") who comes to hold stocks, etc. in bulk (referring to the holding in bulk under Article 147 (1) of the Act) and his/her specially related persons; |
| 2. | Matters concerning the issuer (referring to the issuer under Article 148 of the Act) of the stocks, etc. held in bulk; |
| 3. | Reasons for such change; |
| 4. | The date, price, and method of acquisition or disposition; |
| 6. | Details of procurement of the funds necessary for such acquisition or the goods subject to the exchange (including the lenders, if the funds or the goods were borrowed); and |
| 7. | Detailed matters specified and publicly notified by the Financial Services Commission as those relevant to the matters under subparagraphs 1 through 6. |
| (3) | In cases where a large holder of stocks, etc. is obligated to report the current status of stocks, etc. held in hand or details of a change, the reference date for such reporting shall be the date falling under any of the following subparagraphs: |
| 1. | The date of listing, in cases where stocks issued by a stock-unlisted corporation are listed in the securities exchange; |
| 2. | The date of merger in cases of merger by absorption, and the date of listing in cases of merger by creation of new incorporation; |
| 3. | The contract execution date, in cases where stocks, etc. are traded in the securities exchange; |
| 4. | The contract execution date, in cases where stocks, etc. are acquired outside the securities exchange; |
| 5. | The earlier date of the payment date and the date of delivery of stocks, etc. in cases where stocks, etc. are disposed of outside the securities exchange; |
| 6. | The date immediately following the date set for payment of stock price, in cases where new stocks allocated for capital increase for consideration are acquired; |
| 7. | The contract execution date for borrowing stocks in cases where stocks, etc. are borrowed, and the date of delivery of stocks, etc., in cases where such stocks, etc. are returned; |
| 8. | The effective date under the Civil Act, in cases where a person receives stocks, etc. as gift, and the date of delivery of stocks, etc., in cases where a person conveys such stocks, etc. as a gift; |
| 9. | The date on which inheritance is finalized by absolute acceptance or by qualified acceptance, in cases where there is one inheritor, and the date on which the division of property related to such stocks, etc. are completed, in cases where there are two or more inheritors, if stocks, etc. are acquired by inheritance; and |
| 10. | The date on which a relevant legal act, etc. becomes effective by operation of a relevant Act, such as the Civil Act and the Commercial Act, in cases where reporting is required on any ground other than those under subparagraphs 1 through 9. |
| (4) | In cases where a report under Article 147 (1) of the Act is submitted by the principal jointly with his/her specially related persons, such report jointly signed by them may be submitted by the person who holds the greatest number of stocks, etc. as their representative. |
| (5) | The term "case prescribed by Presidential Decree" in the former part of Article 147 (1) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where new stocks are issued in the manner of allocating them in proportion to the number of stocks held by each shareholder and thus each shareholder acquires only the stocks as allocated; |
| 2. | Where only acquiring a certificate of preemptive right to new stocks issued on the basis of the preemptive right to have new stocks allocated in proportion to the number of stocks held by a shareholder increases the number of stocks, etc. held; |
| 3. | Where the ratio of stocks, etc. held by a shareholder is changed by acquisition or disposal of treasury stocks; |
| 4. | Where the ratio of stocks, etc. held by a shareholder is changed by capital reduction; and |
| 5. | Where only an adjustment of the issue price or exchange price of stocks, etc. issued or exchanged in response to the exercise of rights granted to an instrument representing the preemptive right to new stocks (excluding certificates of preemptive right to new stocks), bonds with warrant, convertible bonds, or exchangeable bonds increases the number of stocks held by a shareholder. |
| (6) | Necessary matters concerning the form of the report under Article 147 (1) and (4) of the Act, the method of preparation, and other matters shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 154 (Special Exceptions to Reporting on Stocks Held in Bulk) |
|
| (1) | The term "as prescribed further by Presidential Decree" in the latter part of Article 147 (1) of the Act means exercising de facto influence on the company or its executives with respect to an event falling under any of the following subparagraphs (including exercising the right under Article 363-2 or 366 of the Commercial Act or assigning a third party to exercise such right in accordance with the Commercial Act or any other Act): |
| 1. | Appointment, dismissal, or suspension of performance of duties of executives; |
| 2. | Amendment to the articles of incorporation with respect to organization of the company, such as the board of directors; |
| 3. | Changes in the company’s capital; |
| 4. | Determining dividends of the company; |
| 5. | Merger, division, and merger after division of the company; |
| 6. | All-embracing exchange or transfer of stocks; |
| 7. | Transfer of business in whole or transfer of an essential part as specified and publicly notified by the Financial Services Commission; |
| 8. | Disposal of all assets or disposal of an essential part of assets as specified and publicly notified by the Financial Services Commission; |
| 9. | Execution of, amendment to, or termination of contracts for leasing a business in whole or delegating business management, or sharing the profits and losses with another person entirely, or any similar contract; and |
| 10. | Dissolution of the company. |
| (2) | The term "professional investor specified by Presidential Decree" in the latter part of Article 147 (1) of the Act means any of the following persons: |
| 3. | The Bank of Korea; and |
| 4. | Other person specified and publicly notified by the Financial Services Commission as one in whose case it is required to apply different rules with respect to details of the report, the time to report, and other matters. |
| (3) | Pursuant to the latter part of Article 147 (1) of the Act, a report on the current status of stocks held by a shareholder or details of changes under Article 147 (1) of the Act or a report under paragraph (4) of the aforesaid Article may be substituted by a report containing descriptions of the following matters, if the purpose of holding stocks is not for exercising influence on the issuer’s (referring to the issuer under Article 148 of the Act) control of business or if the reporting person is a professional investor under paragraph (2): |
| 1. | The current status of stocks held by the shareholder; |
| 3. | Confirmation that the shareholder will not engage in any conduct to exercise influence over the control of business under paragraph (1) while the shareholder holds such stocks, etc. (excluding cases where a person falling under any subparagraph of paragraph (2) submits a report). |
| (4) | A person who is obligated to submit a report under paragraph (3) may submit it by the tenth day of the month immediately following the month in which he/she acquires stocks or there is a change in stocks held by him/her in accordance with the latter part of Article 147 (1) of the Act. |
법령보기 화면
| Article 155 (Reporting on Changes in Material Facts) |
|
The term "material fact, as specified by Presidential Decree, such as a change in an essential term or condition of the contract" in Article 147 (4) of the Act means any of the following matters: | 1. | Purposes of holding stocks; |
| 2. | Terms and conditions of a trust deed, security agreement, or any other important contract on the stocks, etc. held by the shareholder; and |
| 3. | The form of possession (applicable only to cases where there is a change between ownership and possession without ownership). |
법령보기 화면
| Article 156 (Dispatching Report on Holding Stocks in Bulk to Issuer) |
|
The term "person specified by Presidential Decree, in cases of stocks, etc. specified by Presidential Decree" in Article 148 of the Act means any of the following persons: | 1. | The issuer of stocks, etc. subject to exchange in cases of exchangeable bonds; |
| 2. | The issuer of stocks, etc. which are the underlying asset of derivative- combined securities, in cases of derivative-combined securities; and |
| 3. | The issuer of stocks, etc. which are the underlying securities, in cases of securities depository receipts. |
법령보기 화면
| Article 157 (Scope of Material Facts) |
|
The term "material fact specified by Presidential Decree" in Article 150 (1) of the Act means a fact falling under any of the following subparagraphs: | 1. | Matters concerning a large stockholder and his/her specially related persons; |
| 2. | Objectives for holding stocks, etc.; |
| 3. | The class and number of stocks, etc. held or changed; |
| 4. | Date of acquisition or disposition; and |
| 5. | Terms and conditions of a trust deed, security agreement, or any other important contract on stocks, etc. held by the shareholder. |
법령보기 화면
| Article 158 (Period of Restriction for Exercise of Voting Rights) |
|
The term "time period prescribed by Presidential Decree" in Article 150 (1) of the Act means any of the following periods of time: | 1. | In cases where the report under Article 147 (1), (3), or (4) of the Act is neglected intentionally or by gross negligence, or where a false statement is made or a statement is omitted with respect to a matter under any subparagraph of Article 157, the period of time shall begin on the day on which the relevant stocks, etc. were purchased and end on the day on which six months elapses after submitting such report (including a corrective report thereon; hereafter the same shall apply in this paragraph); and |
| 2. | In cases where the current status of stocks, etc. held in bulk or details of changes in or alteration to such stocks, etc. have already been reported to the Financial Services Commission and the Exchange in accordance with the Act, this Decree, or any other Acts and subordinate statutes, or where the report under Article 147 (1), (3), or (4) of the Act was submitted late because of the occurrence of an error due to the fact that the stocks, etc. were acquired or disposed of in accordance with the approval, guidance, recommendation, etc. of the Government, the period of time shall begin on the day on which the relevant stocks, etc. were purchased and end on the day on which the report was submitted. |
법령보기 화면
| Article 159 (Measures of Financial Services Commission) |
|
The term "measures prescribed by Presidential Decree" in Article 151 (2) of the Act means measures falling under any of the following subparagraphs: | 1. | Recommending the dismissal of executives; |
| 2. | Filing criminal complaints against violations of the Act or informing an investigative agency of such violations, if any; |
| 3. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 4. | Issuing warnings or cautions. |
Section 3 Restriction on Solicitation to Exercise Voting Rights by Proxy
법령보기 화면
| Article 160 (Method of Delivering Proxy Forms) |
|
A proxy solicitor under Article 152 (1) of the Act (hereinafter referred to as the "proxy solicitor") shall deliver to a solicited voting right holder under the aforesaid paragraph (hereinafter referred to as the "solicited voting right holder") the proxy form and reference documents in any of the following methods before or simultaneously at the time when he/she solicits to exercise voting rights by proxy: | 1. | Delivery of them by the proxy solicitor to the solicited voting right holder in person; |
| 2. | Sending them by mail or facsimile; |
| 3. | Sending them by electronic mail (limited to cases where the solicited voting right holder has expressed a wish to receive the proxy form and reference documents by electronic mail); and |
| 4. | Dispatching them together with a notice of convening the general meeting of shareholders [limited to cases where the proxy solicitor is the issuer of the relevant listed stocks (including securities depository receipts related to such listed stocks; hereafter the same shall apply in this Section)]. |
법령보기 화면
| Article 161 (Cases Not Deemed Solicitation to Exercise Voting Rights by Proxy) |
|
The term "case prescribed by Presidential Decree" in the proviso to the main body of Article 152 (2) of the Act means cases falling under any of the following subparagraphs: | 1. | Where any person, other than the issuer (including its specially related persons) of the relevant listed stocks and its executives (including their specially related persons), solicits less than ten solicited voting rights holders to exercise their voting rights for the stocks by proxy; |
| 2. | Where a person who owns stocks in another person’s name under a trust or any other legal relationship solicits such another person to exercise the voting rights for the stocks by proxy; and |
| 3. | Where a person performs an act falling under any subparagraph of Article 152 (2) of the Act by advertising to a number of unspecified people through a newspaper, broadcasting medium, magazine, etc., but indicates only the name of the issuer of the relevant listed stocks, the reasons for the advertisement, and the place in which the agenda of the general meeting of shareholders, the proxy form, and reference documents are available. |
법령보기 화면
| Article 162 (Scope of Public-Purpose Corporation) |
|
The term "public-purpose corporation" in Article 152 (3) of the Act (hereinafter referred to as the "public-purpose corporation") means a corporation designated by the Financial Services Commission, subject to consultation with Ministers of related ministries and agencies and reporting to the State Council, as one fully satisfying the following requirements: | 1. | It shall be a corporation with solidly established business foundations and with potential for sustainable growth; |
| 2. | It shall be a corporation with a healthy financial structure and expected to yield high profits; and |
| 3. | It shall be a corporation with capital sufficient enough to enable to distribute its stocks broadly so that a large number of nationals can hold some of its stocks. |
법령보기 화면
| Article 163 (Descriptions of Proxy Form and Reference Documents) |
|
| (1) | Pursuant to Article 152 (6) of the Act, each proxy form shall be made to enable each solicited voting right holder to describe the following matters clearly: |
| 1. | The fact that voting rights are delegated to be exercised by proxy; |
| 2. | The person to whom voting rights are delegated, including the proxy solicitor; |
| 3. | The number of voting stocks held by the solicited voting rights holder; |
| 4. | The number of stocks subject to proxy; |
| 5. | Each item of the agenda of the general meeting of shareholders and whether to agree or disagree on each item of the agenda; |
| 6. | Whether to delegate the power to exercise voting rights for an item newly brought up or modified during the general meeting of shareholders and the details of the power so delegated; |
| 7. | The date and time of proxy appointment; and |
| 8. | The name and citizen registration number (referring to the trade name and business registration number in cases of a corporation) of the delegator. |
| (2) | The reference documents under Article 152 (1) of the Act shall contain descriptions of the following matters: |
| 1. | The following matters concerning solicitation to exercise voting rights by proxy: |
| (a) | The name or trade name of the proxy solicitor, the class and number of stocks held by the proxy solicitor, and the class and number of stocks held by his/her specially related persons; |
| (b) | The name of an agent of the proxy solicitor, and the class and number of stocks held by the agent (applicable only to cases where an agent is involved); and |
| (c) | The relationship between the proxy solicitor and his/her agent and the relevant stock-listed corporation; |
| 2. | The agenda of the general meeting of shareholders; and |
| 3. | The reasons for soliciting to exercise voting rights by proxy. |
| (3) | Necessary matters concerning specific descriptions, forms, and the method of preparation of the proxy form under paragraph (1) and the reference documents under paragraph (2) and other matters shall be prescribed by the Financial Services Commission. |
법령보기 화면
| Article 164 (Submission Date of Proxy Form and Reference Documents) |
|
The term "days specified by Presidential Decree" in Article 153 of the Act means the days under subparagraphs of Article 153 (1).
법령보기 화면
| Article 165 (Demand for Correction) |
|
| (1) | The term "days specified by Presidential Decree" in the former part of Article 156 (3) of the Act means days under subparagraphs of Article 153 (1). |
| (2) | The term "material fact specified by Presidential Decree" in the latter part of Article 156 (3) of the Act means facts falling under any of the following subparagraphs: |
| 2. | Facts under Article 163 (2) 1 (excluding the name or trade name of the proxy solicitor under item (a)) or 2. |
| (3) | The term "as prescribed further by Presidential Decree" in the latter part of Article 156 (3) of the Act means cases where the descriptions under Article 163 (2) 3 fall under any of the following subparagraphs: |
| 1. | Where the descriptions or indications are so vague as to seriously mislead solicited voting rights holders; and |
| 2. | Where any information unfavorable to the proxy solicitor is omitted, only information favorable to the proxy solicitor is emphasized, or there is any exaggeration in expression. |
법령보기 화면
| Article 166 (Measures of Financial Services Commission) |
|
The term "measures prescribed by Presidential Decree" in the former part of the main body of Article 158 (2) of the Act means measures falling under any of the following subparagraphs: | 1. | Imposing restrictions on solicitation to exercise voting rights by proxy within the limit of one year; |
| 2. | Recommending the dismissal of executives; |
| 3. | Filing criminal complaints or informing a competent investigative agency of violations of the Act, if any; |
| 4. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 5. | Issuing warnings or cautions. |
CHAPTER Ⅲ LISTED CORPORATION’S BUSINESS REPORT
법령보기 화면
| Article 167 (Corporations Obligated to Submit Business Reports) |
|
| (1) | The term "corporations specified by Presidential Decree" in the main sentence of Article 159 (1) of the Act means corporations falling under any of the following subparagraphs: |
| 1. | Issuers who have listed any of the following securities on the securities exchange: |
| (a) | Equity securities other than stocks [excluding collective investment securities and investment equities issued by a specialized securitization company, etc. under an asset-backed securitization plan (referring to the specialized securitization company, etc. under Article 3 of the Asset-Backed Securitization Act)]; |
| (b) | Unsecured corporate bonds (referring to corporate bonds other than secured corporate bonds or guaranteed corporate bonds under Article 362 (8)); |
| (c) | Convertible bonds, bonds with warrant, participating bonds, or exchangeable bonds; |
| (d) | Instruments representing preemptive rights to new stocks; |
| (e) | Securities depository receipts (limited to securities depository receipts related to stocks or the securities under any provision of items (a) through (d)); and |
| (f) | Derivative-combined securities; |
| 2. | Issuers who do not fall under subparagraph 1 but publicly offered or sold (excluding public offerings or sales under Article 130 of the Act) any of the following securities (including issuers who once were stock-listed corporations or issuers under subparagraph 1 but whose stocks have been delisted): |
| (b) | Securities falling under any item of subparagraph 1; and |
| 3. | Issuers who are corporations subject to external audit under Article 2 of the Act on External Audit of Stock Companies, if the number of persons (referring to the number of persons counted by the method prescribed and publicly notified by the Financial Services Commission; hereafter the same shall apply in this Article) who hold securities issued by any of the issuers and falling under any item of subparagraph 2 are 500 persons or more (including issuers whose securities were once owned by 500 persons or more but are now owned by less than 500 persons and who do not fall under paragraph (2) 5). |
| (2) | The term "reason prescribed by Presidential Decree" in the proviso to Article 159 (1) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where it is factually impossible to submit a business report due to bankruptcy; |
| 2. | Where it is factually impossible to submit a business report for the latest business year because an event triggering dissolution under Article 517 of the Commercial Act or any other Act occurred to the corporation; |
| 3. | Where an issuer is a stock-listed corporation or one under paragraph (1) 1 and falls under the requirements for delisting, and where the Financial Services Commission confirms that it is impossible to submit a business report due to a cause or event for which the corporation is not liable; |
| 4. | Where an issuer falling under paragraph (1) 2 issued securities falling under any item of the aforesaid subparagraph, but the Financial Services Commission recognizes that the number of holders of the securities is less than 25 persons in total: Provided, That the issuer shall submit a business report for the business year in which the number of holders has reduced to less than 25 persons; and |
| 5. | Where an issuer falling under paragraph (1) 3 issued securities falling under any item of paragraph (1) 2, but the number of holders of the securities is less than 300 persons in total: Provided, That the issuer shall submit a business report for the business year in which the number of holders has reduced to less than 300 persons. |
법령보기 화면
| Article 168 (Descriptions and Accompanying Documents of Business Report) |
|
| (1) | The term "those specified by Presidential Decree" in Article 159 (2) of the Act means the total amount of remuneration paid to all executives during the pertinent business year. |
| (2) | The term "matters prescribed by Presidential Decree" in Article 159 (2) of the Act means the following matters: |
| 1. | Signatures of the representative director and the director responsible for submitting the report under Article 159 (7) of the Act on the matters under subparagraphs of Article 169; |
| 2. | An overview of the company; |
| 3. | Matters concerning the organization of the company, including the board of directors, and its affiliated companies; |
| 4. | Matters concerning shareholders; |
| 5. | Mattes concerning executives and employees; |
| 6. | Details of transactions with major shareholders (including their specially related persons), executives, or employees of the company; |
| 7. | Matters concerning financial affairs and annexed statements; |
| 8. | The accounting auditor’s audit opinion; and |
| 9. | Other matters specified and publicly notified by the Financial Services Commission as those of which it is necessary for investors to be informed. |
| (3) | Deleted. <by Presidential Decree No. 21291, Feb. 3, 2009> |
| (4) | If a corporation obligated to submit a business report is a corporation having a subsidiary company under Article 1-3 (1) of the Enforcement Decree of the Act on External Audit of Stock Companies, the matters concerning financial affairs and the statements annexed thereto under paragraph (2) 7, and other matters specified and publicly notified by the Financial Services Commission shall be described in the report on the basis of consolidated financial statements and the financial statements of the corporation shall be included in such report, while the accounting auditor’s opinion under paragraph (2) 8 shall describe the audit opinion on both the consolidated financial statements and the financial statements of the corporation. |
| (5) | Notwithstanding paragraph (4), a corporation whose total assets are less than two trillion won as at the end of the latest business year and who does not apply the accounting principles established by the Korea Accounting Institute pursuant to Article 17-2 (1) of the Enforcement Decree of the Act on External Audit of Stock Companies and adopted in accordance with international accounting principles (hereinafter referred to as "international accounting principles adopted by the Republic of Korea") may describe the matters concerning financial affairs, the statements annexed thereto, and other matters specified and publicly notified by the Financial Services Commission in such report on the basis of the financial statements of the corporation, and may submit the business report with the accounting auditor’s audit opinion on the financial statements of the corporation by the deadline for submission under Article 159 (1) of the Act. In such cases, a supplementary report containing the matters concerning financial affairs and the statements annexed thereto on the basis of the consolidated financial statements, other matters specified and publicly notified by the Financial Services Commission, and the accounting auditor’s audit opinion on the consolidated financial statements shall be submitted within 30 days after 90 days of the end of the business year. |
| (6) | Pursuant to Article 159 (2) of the Act, each business report shall be accompanied by the following documents: Provided, That the audit report on the consolidated financial statements under subparagraph 1 may be submitted within the deadline set forth in paragraph (5) (applicable only to corporations who shall submit a business report in accordance with paragraph (5)), while the documents under subparagraph 4 may be submitted within the deadline set forth in Article 159 (5) of the Act: |
| 1. | The accounting auditor’s audit reports (referring to audit reports on the financial statements of the corporation and consolidated financial statements); |
| 2. | The auditor’s audit report (referring to audit reports under Article 447-4 of the Commercial Act); |
| 3. | The auditor’s opinion letter of assessment on the current status of operation of the internal monitoring system of the corporation [referring to the board of directors’ power to supervise directors’ performance of duties, the power of the auditor (referring to the audit committee, if there is an audit committee installed; hereafter the same shall apply in this subparagraph), and other internal monitoring system of the corporation]; |
| 4. | The conglomerate’s combined financial statements under Article 159 (5) of the Act (hereinafter referred to as "conglomerate’s combined financial statements"); and |
| 5. | Other documents prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 169 (Verification and Examination of Representative Director and Another Director on Business Report) |
|
The term "matters prescribed by Presidential Decree" in Article 159 (7) of the Act means the following matters: | 1. | The fact that no description or indication is false or has been omitted with respect to material facts in the descriptions of the business report; |
| 2. | The fact that no description or indication is seriously misleading any person who relies on the descriptions or indications of the business report; |
| 3. | The fact that he/she himself/herself has verified and examined the descriptions of the business report with due care; and |
법령보기 화면
| Article 170 (Descriptions and Accompanying Documents of Half-yearly and Quarterly Reports) |
|
| (1) | Article 168 (1) through (4) shall apply mutatis mutandis to the matters that shall be described in half-yearly and quarterly reports (paragraph (4) shall apply only to corporations obligated to prepare consolidated financial statements to which the international accounting principles adopted by the Republic of Korea are applicable). In such cases, the statements annexed thereto under Article 168 (2) 7 may be omitted, and the accounting auditor’s audit opinion under subparagraph 8 of the aforesaid paragraph shall be prepared in compliance with the following guidelines: |
| 1. | In cases of a half-yearly report, it may be substituted by the accounting auditors’ confirmation and comment in any of the following manners: |
| (a) | In cases where the corporation is obligated to prepare consolidated financial statements to which the international accounting principles adopted by the Republic of Korea are applicable: The accounting auditor’s confirmation and comment on the financial statements of the corporation and also his/her confirmation and comment on the consolidated financial statements; and |
| (b) | In cases where the corporation does not fall under item (a): The accounting auditor’s confirmation and comment on the financial statements of the corporation; and |
| 2. | In cases of a quarterly report, the accounting auditor’s audit opinion may be omitted: Provided, That each quarterly report of a financial institution (referring to institutions subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission) or a stock-listed corporation whose total assets reach or exceed 500 billion won as at the end of the latest business year shall comply with the provisions of subparagraph 1. |
| (2) | Each half-yearly and quarterly report shall be accompanied by the following documents: |
| 1. | A half-yearly audit or review report prepared by the accounting auditor in cases of a half-yearly report: Provided, That half-yearly audit or review reports prepared by the accounting auditor on consolidated financial statements shall be submitted together with the report in cases of a corporation obligated to prepare consolidated financial statements to which the international accounting principles adopted by the Republic of Korea are applicable; and |
| 2. | A quarterly audit or review report prepared by the accounting auditor in cases of a quarterly report (applicable only to corporations under the proviso to paragraph (1) 2): Provided, That quarterly audit or review reports prepared by the accounting auditor on consolidated financial statements shall be submitted together with the report in cases of a corporation obligated to prepare consolidated financial statements to which the international accounting principles adopted by the Republic of Korea are applicable. |
법령보기 화면
| Article 171 (Events Requiring Submission of Reports on Material Facts) |
|
| (1) | The term "when a resolution to transfer an essential business or asset, as specified by Presidential Decree, or to have such business or asset transferred, is adopted" in Article 161 (1) 7 of the Act means when a resolution on a matter falling under any of the following subparagraphs is adopted: |
| 1. | Transferring and taking over a business division, if the assets of the business division subject to the intended transfer and take-over reach or exceed 10/100 of the total assets as at the end of the latest business year; |
| 2. | Transferring and taking over a business division, if the sales of the business division subject to the intended transfer and take-over reach or exceed 10/100 of the sales as at the end of the latest business year; |
| 3. | Taking over a business, if the liabilities that shall be assumed by the intended take-over of the business reach or exceed the total liabilities as at the end of the latest business year; |
| 4. | Taking over an entire business; and |
| 5. | Transferring and taking over assets, if the assets subject to the intended transfer and take-over reach or exceed 10/100 of the total assets as at the end of the latest business year: Provided, That acts of trading commodities, products, raw materials in the course of routine business activities and the transfer and take-over of other assets as specified and publicly notified by the Financial Services Commission shall be excluded herefrom. |
| (2) | The term "when any other cause or event occurs, as specified further by Presidential Decree" in Article 161 (1) 9 of the Act means an event falling under any of the following subparagraphs: |
| 2. | When a lawsuit likely to have a significant impact on the securities falling under any item of Article 167 (1) 2 is filed; |
| 3. | When it is decided to list or delist the stocks on a foreign securities exchange, or when the stocks become subject to a measure of delisting or suspension of trading, or any other measure taken by a foreign financial investment supervisory agency under Article 437 (1) of the Act (hereinafter referred to as the "foreign financial investment supervisory agency"), a foreign exchange under Article 406 (1) 2 of the Act (hereinafter referred to as the "foreign exchange"), etc.; and |
| 4. | When any other event specified and publicly notified by the Financial Services Commission occurs as an event having a significant impact on the management, property, or other matters of the corporation. |
| (3) | The term "documents thereto as specified by Presidential Decree" in Article 161 (2) of the Act means the following documents or copies of such documents: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | A document proving relevant facts, such as a bank’s certificate of default on payments for cheques and bills, in cases where a default on payments for cheques and bills occurs as provided for in Article 161 (1) 1 of the Act; |
| 2. | A document proving relevant facts, such as a bank’s certificate of suspension of check account transactions, in cases where check account transactions with banks are suspended or banned as provided for in Article 161 (1) 1 of the Act; |
| 3. | A document proving that the business has been suspended, such as minutes of the directors’ meeting and a written order issued by an administrative agency to suspend the business, in cases under subparagraph 2 of Article 161 of the Act; |
| 4. | A document proving relevant facts, such as an application for commencement of rehabilitation proceedings filed with a court, in cases under subparagraph 3 of Article 161 of the Act; |
| 5. | A document proving an occurrence of an event, such as minutes of the directors’ meeting and a written decision on bankruptcy, in cases under subparagraph 4 of Article 161 of the Act; |
| 6. | A document proving relevant facts, such as minutes of the directors’ meeting, in cases under any provision of subparagraphs 5 through 8 of Article 161 of the Act; |
| 7. | A document proving relevant facts, such as a written notice and complaint, in cases under subparagraph 9 of Article 161 of the Act; and |
| 8. | Other documents necessary for the protection of investors as prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 172 (Institutions Requested to Furnish Information) |
|
The Financial Services Commission may request the following institutions to furnish it with information by sending them a document (including an electronic document) or facsimile message describing the grounds for such request:
| 3. | Main creditor banks with respect to matters under Article 171 (2) 1; and |
| 4. | Other administrative agencies and related institutions that possess relevant information with respect to other matters. |
법령보기 화면
| Article 173 (Scope of Securities Subject to Liability for Losses) |
|
| (1) | The term "securities specified by Presidential Decree" in the main sentence of the main body of Article 162 (1) of the Act means the following securities: |
| 1. | Exchangeable bonds with a right to claim to exchange with the relevant securities (including securities depository receipts related to the securities; hereafter the same shall apply in this paragraph); and |
| 2. | Derivative-combined securities based on the underlying asset composed only of the relevant securities and the exchangeable bonds under subparagraph 1. |
| (2) | The term "persons specified further by Presidential Decree" in Article 162 (1) 3 of the Act means persons who hold an officially recognized qualification (including the organization to which they belong), including certified public accountants, appraisers, persons specializing in credit rating, attorneys-at-law, patent attorneys, and tax accountants. |
법령보기 화면
| Article 174 (Matters Excluded from Public Disclosure of Business Reports) |
|
The term "matters specified by Presidential Decree" in the latter part of Article 163 of the Act means matters falling under any of the following subparagraphs: | 2. | Matters confirmed by the Financial Services Commission among matters concerning the business affairs or operation of the corporations obligated to submit business reports under Article 159 (1) of the Act (hereinafter referred to as "corporations obligated to submit business reports"). |
법령보기 화면
| Article 175 (Measures of Financial Services Commission) |
|
The term "measures prescribed by Presidential Decree" in the former part of the main body of Article 164 (2) of the Act means measures falling under any of the following subparagraphs: | 1. | Imposing restrictions on issuance of securities within the limit of one year; |
| 2. | Recommending the dismissal of executives; |
| 3. | Filing criminal complaints or informing a competent investigative agency of violations of the Act, if any; |
| 4. | Informing a related agency or an investigative agency of violations of any other Act, if any; and |
| 5. | Issuing warnings or cautions. |
법령보기 화면
| Article 176 (Special Exceptions for Foreign Corporations and Others) |
|
| (1) | Articles 159 through 161 of the Act shall not apply to foreign corporations, etc. falling under any of the following subparagraphs: |
| 2. | A foreign local government; |
| 3. | A foreign public institution that is established to engage in business activities for the public interest and whose equities are owned by a foreign government or a foreign local government; and |
| 4. | An international financial organization falling under any subparagraph of Article 2 (1) of the Act on the Measures for the Admission to International Financial Institutions. |
| (2) | Foreign corporations, etc. (excluding foreign corporations, etc. falling under any subparagraph of paragraph (1); hereafter the same shall apply in this Article) may submit a business report within 30 days after the lapse of the time period set forth in the main sentence of Article 159 (1) of the Act, and may also submit a half-yearly or quarterly report within 15 days after the lapse of the time period set forth in the former part of Article 160 of the Act. |
| (3) | Notwithstanding paragraph (2), a foreign corporation, etc. may, if it has submitted any document equivalent to a business report under Article 162 (1) of the Act (hereinafter referred to as the "business report") to its home country, submit the business report, or submit the document equivalent to the business report, as submitted to its home country, along with a Korean translation summarized in the manner prescribed and publicly notified by the Financial Services Commission, within ten days (or five days in cases of a report on material facts) from the day on which it submitted such document. |
| (4) | Notwithstanding Articles 168 and 170, a foreign corporation, etc. may, when it submits a business report, a half-yearly report, or a quarterly report in accordance with paragraph (2) or (3), omit financial statements of the corporation, etc., if it falls under any of the cases specified and publicly notified by the Financial Services Commission and has already submitted a document equivalent to consolidated financial statements. In such cases, foreign corporations, etc. may omit descriptions of the following matters from business reports, half-yearly reports, or quarterly reports: |
| 1. | The following matters in cases of business reports: |
| (a) | Matters concerning financial affairs and statements annexed thereto on the basis of financial statements of the foreign corporation, etc.; and |
| (b) | The accounting auditor’s audit opinion on financial statements of the foreign corporation, etc.; and |
| 2. | The following matters in cases of a half-yearly or quarterly reports: |
| (a) | Matters concerning financial affairs and statements annexed thereto on the basis of financial statements of the foreign corporation, etc.; and |
| (b) | The accounting auditor’s audit opinion or confirmation and comment on financial statements of the foreign corporation, etc. |
| (5) | A foreign corporation, etc. whose equity securities are listed on the securities exchange shall submit a report on material facts to the Financial Services Commission by the day prescribed and publicly notified by the Financial Services Commission, whenever it falls under any of the following subparagraphs [or whenever a subsidiary company (referring to a company subject to the consolidation in accordance with the accounting principles adopted by the foreign holding company) of a foreign holding company (referring to a company established pursuant to laws and regulations of a foreign country, whose main business is to exercise control over another company’s business through ownership of equity securities; hereinafter the same shall apply) falls under any of the following subparagraphs], in addition to cases where it falls under any subparagraph of Article 161 (1) of the Act: |
| 1. | When there occurs a restriction on transfer of equity securities, nationalization of the foreign corporation, etc., or an amendment to laws and regulations of a foreign country that has a significant impact on the foreign corporation, etc. or its investors; |
| 2. | When there is a public tender offer, manipulation for stabilization, or market creation in a foreign country with respect to stocks, etc. of the foreign corporation, etc.; |
| 3. | When it becomes subject to a measure taken by a foreign financial investment supervisory agency or a foreign exchange on account of a violation of a relevant law or regulation; and |
| 4. | When it becomes subject to a measure taken by a foreign exchange, such as suspension or termination of trading, or delisting. |
| (6) | The Financial Services Commission shall prescribe and publicly notify different rules on specific descriptions, accompanying documents, forms, and other matters of the business report and other reports of foreign corporations, etc., taking into consideration the types and nature of foreign corporations, etc, foreign laws and regulations, and other factors. |
CHAPTER Ⅲ-2 SPECIAL CASES CONCERNING STOCK-LISTED CORPORATIONS
법령보기 화면
| Article 176-2 (Guidelines for Acquisition and Disposal of One’s Own Stocks) |
|
| (1) | Where a stock-listed corporation acquires or disposes of its own stocks or concludes or terminates trust contracts pursuant to Article 165-2, the board of directors shall resolve on the matters falling under each of the following subparagraphs: Provided, That the same shall not apply to cases where the corporation distributes its own stocks as a result of the exercise of appraisal rights of shareholders and where the term of trust contracts expires: |
| 1. | When the corporation seeks to acquire or dispose of its own stocks pursuant to Articles 165-2 (1), (2) and (4) of the Act, the object, amount and methods of such acquisition or disposal, the number and type of stocks and other matters prescribed and publicly notified by the Financial Services Commission; and |
| 2. | When the corporation seeks to conclude or terminate trust contracts under Article 165-2 (3) of the Act, the object and amount of conclusion or termination, the terms of contracts, and other matters prescribed and publicly notified by the Financial Services Commission. |
| (2) | A stock-listed corporation shall neither acquire or dispose of its own stocks under Article 165-2 of the Act, nor conclude or terminate trust contracts during the period falling under any of the following subparagraphs: |
| 1. | Period for one month before the date when the resolution of the board of directors is made with respect to the merger with another corporation; |
| 2. | Period from one month before the reference date (in cases of a general public offering, the subscription date) of the allocation of new stocks in connection to paid-in capital increase to the subscription date; |
| 3. | Period from the date on which the resolution of the board of directors is made with respect to the capitalization of reserves to the reference date for the allocation of new stocks; |
| 5. | When material nonpublic information under Article 174 (1) of the Act exists, period to the date on which such information is disclosed; and |
| 6. | Period for three months after disposal (including the termination of trust contacts) or for six months after acquisition (including the conclusion of trust contracts): Provided, That the same shall not apply to cases falling under any of the following subparagraphs: |
| (a) | Where the corporation distributes its own stocks to employees and executives as bonus; |
| (b) | Where the corporation distributes its own stocks as a result of the exercise of appraisal rights of shareholders; |
| (c) | Where the corporation disposes of its own stocks in excess of the limit under the latter part other than each subparagraph of Article 165-2 (2) of the Act; |
| (d) | Where the corporation pays (including such cases as contributing to intra-company labor welfare funds under the Intra-company Labor Welfare Fund Act) its own stocks to employees and executives as retirement grants, rewards or bounty; |
| (e) | Where the corporation disposes of its own stocks to an employee stock ownership association under subparagraph 4 of Article 2 of the Framework Act on Workers’ Welfare; |
| (f) | Where the corporation disposes of its own stocks inevitably due to the compliance with Acts and subordinate statutes, performance of obligations, etc.; |
| (g) | Where a company subject to the application of the Act on the Improvement of Managerial Structure and Privatization of Public Enterprises issues exchangeable bonds entitled to claim the exchange with the stocks of the company for its privatization; |
| (h) | Where a company which has acquired its own stocks from the State or the Korea Deposit Insurance Corporation under the Depositor Protection Act issues exchangeable bonds entitled to claim the exchange with its stocks (excluding item (i)). It shall be limited to exchangeable bonds entitled to claim the exchange six months after the date on which its own stocks subject to the exchange are acquired; |
| (i) | Where a company under item (h) issues exchangeable bonds overseas and those are issued for claiming the exchange with securities depository receipts which are issued in lieu of its own stocks; |
| (j) | Where the corporation disposes of its own stocks in order to issue securities depository receipts based on its own stocks overseas after the period prescribed and publicly notified by the Financial Services Commission expires; and |
| (k) | Where the corporation acquires its own stocks by terminating trust contracts pursuant to Article 165-2 (2) 3 of the Act. |
| (3) | A stock-listed corporation shall, when it acquires its own stocks pursuant to Article 165-2 (1) and (2) of the Act, acquire its own stocks on the securities exchange under the conditions prescribed and publicly notified by the Financial Services Commission within three months from the date on which three days have elapsed since a report on material facts was submitted. |
| (4) | In applying this Article, when a stock-listed corporation has issued exchangeable bonds entitled to exchange with its own stocks from among listed securities owned pursuant to Article 176-13 (1), the corporation shall be deemed to have disposed of its own stocks when the bonds were issued. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-3 (Period for Disposal of Excessive Portion) |
|
The term "Period prescribed by Presidential Decree" in Article 165-2 (5) of the Act means three years. [This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-4 (Period, Methods, etc. for Acquisition of Stocks for Retirement) |
|
| (1) | The term "guidelines prescribed by Presidential Decree" in the latter part of Article 165-3 (3) 1 of the Act means those falling under each of the following subparagraphs: |
| 1. | The period for acquiring stocks shall not be more than three months from the date on which three days have elapsed after the date when the resolution of the board of directors was made for the purpose of retiring stocks, but the period shall not overlap with any of the following items: |
| (b) | For three months after the disposal (including the termination of trust contracts and the issuance of exchangeable bonds entitled to exchange with its own stocks, but excluding cases falling under any of the items under Article 176-2 (2) 6) of its own stocks; or |
| (c) | Period for acquisition or disposal of its own stocks under Article 165-2 of the Act; and |
| 2. | The conditions prescribed and publicly notified by the Financial Services Commission shall be complied with when acquiring stocks on the securities exchange. |
| (2) | The term "amount prescribed by Presidential Decree" in Article 165-3 (3) 2 of the Act means the amount calculated by subtracting the aggregate of the amounts falling under each following subparagraph from the limit for paying dividends under Article 462 (1) of the Commercial Act: |
| 1. | Revaluation reserves under Article 28 of the Asset Revaluation Act; and |
| 2. | Others prescribed and publicly notified by the Financial Services Commission as reserves, etc. accumulated by the Act, this Decree and other Acts and subordinate statutes. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-5 (Requirements, Methods, etc. for Merger) |
|
| (1) | A stock-listed corporation shall, when it seeks to merge with another corporation, follow the merger value calculated in accordance with the methods falling under each of the following subparagraphs. In such cases, when a stock-listed corporation is unable to calculate the price under subparagraph 1 or the main sentence of subparagraph 2 (a), the price under subparagraph 2 (b) shall apply: |
| 1. | In cases of a merger between stock-listed corporations, as of the day preceding the earlier of the date when the resolution of the board of directors is made for the merger and the date when the merger contract is concluded, the lower value of the average of the closing prices under each of the following items and the closing price under item (c). In such cases, the average closing price under items (a) and (b) shall be calculated by the volume weighted average of the closing prices: |
| (a) | Average closing price for the latest one month: Provided, That when any ex-dividend or ex-right exists during the period for calculation and the record day comes after not less than seven days from the date when such ex-dividend or ex-right occurs, the average closing price during the period; |
| (b) | Average closing price for the latest one week; and |
| (c) | Closing price on the latest date; and |
| 2. | In cases of merger between a stock-listed corporation and a stock- unlisted corporation, the price following the standards under each item: |
| (a) | In cases of a stock-listed corporation, the price under subparagraph 1: Provided, That when the price under subparagraph 1 falls short of the value of assets, the price may be the value of assets; and |
| (b) | In cases of a stock-unlisted corporation, the average of the weighted average of the asset value and earnings value and their relative value: Provided, That when the relative value is unable to be calculated, it may be replaced with the weighted average of the asset value and earings value. |
| (2) | The methods of calculating asset value, earnings value and their weighted average under each item of paragraph (1) 2 and the methods of calculating relative value shall be prescribed and publicly notified by the Financial Services Commission. |
| (3) | A stock-listed corporation shall, when it becomes a stock-listed corporation as a result of merger with a stock-unlisted corporation, meet all the requirements under the following subparagraphs: |
| 1. | The appropriateness of the merger value shall be appraised by an outside appraisal organization under paragraph (6); and |
| 2. | The stock-unlisted corporation shall meet all the requirements under the following items when it has larger amounts in not less than two values, among total amount of assets, capital reserve and amount of sales, than the stock-listed corporation, based on the financial statements of the business year preceding the business year which includes the date when a stock-listed corporation which becomes the party of the merger submitted a report on material facts pursuant to Article 161 (1) of the Act: |
| (a) | Requirements for finance, etc. specified in Listing Regulations of securities under Article 390 of the Act (hereinafter referred to as the "Listing Regulations" in this subparagraph); and |
| (b) | Requirements specified in Listing Regulations for auditor’s opinion, pending litigations, and others necessary for a fair merger. |
| (4) | Paragraph (3) (excluding paragraph (3) 1, if the merger value is calculated pursuant to paragraph (1) 1) shall apply mutatis mutandis to cases where a corporation whose stocks are listed on the securities market becomes a corporation listed on the securities market or a corporation listed on the KOSDAQ market as a result of a merger with a corporation whose stocks are listed on the KOSDAQ market. In such cases, a "stock- listed corporation" shall be deemed a "corporation listed on the same securities exchange despite the merger", and a "stock-unlisted corporation" shall be deemed a "corporation to be listed on another securities exchange after the merger". |
| (5) | A stock-listed corporation shall be appraised by an outside appraisal organization under paragraph (6) when it becomes a stock-unlisted corporation after the merger with anther corporation: Provided, That the same shall not apply to cases where the corporations which become the parties of the merger calculate the merger value pursuant to paragraph (1) 1. |
| (6) | An outside appraisal organization shall be a person falling under any of the following subparagraphs: |
| 1. | Any person who obtained authorization on the business under Articles 68 (2) 1 and 68 (2) 2; |
| (7) | Any outside appraisal organization under paragraph (6) (hereinafter referred to as the "outside appraisal organization") shall not, when it falls under any of the following subparagraphs, perform its appraisal business during the relevant period: Provided, That in the case of subparagraph 4, the organization shall not perform the appraisal business for the specific company only: |
| 1. | When a person under paragraph (6) 1 is given any measure to be restricted from the participation in underwriting business of stocks by the Financial Services Commission, such restriction period; |
| 2. | When a person under paragraph (6) 2 is given any measure to be suspended from credit rating business with respect to his/her credit rating business by the Financial Services Commission, such suspension period; |
| (8) | When an outside appraisal organization has a special relationship prescribed and publicly notified by the Financial Services Commission with a company subject to the appraisal by the outside appraisal organization, the organization shall not conduct an appraisal on the merger. |
| (9) | When the appraisal by an outside appraisal organization is quite insufficient or an employee or executive of the outside appraisal organization divulges any secret that has come to his/her knowledge in connection with the appraisal or uses it for any purpose other than business affairs, the Financial Services Commission may impose restriction on the outside appraisal organization’s appraisal business under this Decree by fixing a certain period, or exclude it from outside appraisal organizations. |
| (10) | With respect to the merger under the provisions of Acts, paragraphs (1) through (9) shall not apply: Provided, That when a corporation which becomes a party of the merger is an affiliated company and the merger value is not calculated pursuant to paragraph (1) 1, the appropriateness of the merger value shall be appraised by an outside appraisal organization. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-6 (Requirements, Methods, etc. for Business Acquisition or Transfer, etc.) |
|
| (1) | The term "acquisition or transfer of material business or asset prescribed by Presidential Decree" in subparagraph 2 of Article 165-4 of the Act means those falling under any of the subparagraphs of Article 171 (1). |
| (2) | Article 176-5 (1) shall apply mutatis mutandis to all-inclusive swap or transfer of stocks under subparagraph 3 of Article 165-4 of the Act and split and merger under subparagraph 4 of the same Article: Provided, That the same shall not apply to cases where the stock-listed corporation becomes a complete subsidiary on its own as a result of the all-inclusive transfer of stocks. |
| (3) | In cases of the acquisition or transfer of material business or asset under subparagraph 2 of Article 165-4 of the Act, the all-inclusive exchange or transfer (limited to cases where a stock-listed corporation is included in corporations to become a complete subsidiary under Articles 360-2 and 360-15 of the Commercial Act and where a complete parent company becomes a stock-unlisted corporation) of stocks under subparagraph 3 of the same Article, the split and merger under subparagraph 4 of Article 165-4 of the Act, the appropriateness of the value of the acquisition or transfer of business or asset, the ratio of the all-inclusive exchange of stocks, the ratio of all-inclusive transfer of stocks, or the ratio of split and merger shall be appraised by an outside appraisal organization, respectively: Provided, That the same shall not apply to acquisition or transfer of assets which have little necessity of appraisal by an outsider appraisal agency, such as sale and purchase of securities through the securities exchange, auction of assets, etc., as prescribed and publicly notified by the Financial Services Commission. |
| (4) | Article 176-5 (10) shall apply mutatis mutandis to the acquisition or transfer of material business or assets under subparagraph 2 of Article 165-4 of the Act, the all-inclusive exchange or transfer of stocks under subparagraph 3 of the same Article, and split-off or split and merger under subparagraph 4 of the same Article. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-7 (Appraisal Rights of Shareholders) |
|
| (1) | The term "cases prescribed by Presidential Decree" in Article 165- 5 (1) of the Act means cases where the acquisition contract of the relevant stocks has been concluded by the next day of the date when the resolution of the board of directors was disclosed to the public. |
| (2) | The term "amount calculated in a manner prescribed by Presidential Decree" in the proviso to Article 165-5 (3) of the Act means the amount falling under each of the following subparagraphs: |
| 1. | In cases of stocks whose transactions are made on the securities exchange, average of the prices calculated in a manner falling under each of the following items: |
| (a) | Average of final quotations of the stocks traded on the securities exchange and disclosed on a daily basis for two months (if any adjustment to trading reference price occurs due to ex-dividends or ex-rights during the same period and the day immediately preceding the date of the resolution of the board of directors comes after not less than seven days from the date when the ex-dividends or ex-rights occur, such period) before the day immediately preceding the date when the resolution of the board of directors is made, weighted by trading volume by real transactions; |
| (b) | Average of final quotations of the stocks traded on the securities exchange and disclosed on a daily basis for one month (if any adjustment to trading reference price occurs due to ex-dividends or ex-rights during the same period and the day immediately preceding the date of the resolution of the board of directors comes after not less than seven days from the date when the ex-dividends or ex-rights occur, such period) before the day immediately preceding the date when the resolution of the board of directors is made, weighted by trading volume by real transactions; and |
| (c) | Average of final quotations of the stocks traded on the securities exchange and disclosed on a daily basis for one week before the day immediately preceding the date when the resolution of the board of directors is made, weighted by trading volume by real transactions; and |
| 2. | In cases of stocks whose transactions are not made on the securities exchange, the price under Article 176-5 (1) 2 (b). |
| (3) | The term "period prescribed by Presidential Decree" in the main sentence of Article 165-5 (4) of the Act means three years from the date when the relevant stocks are purchased. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-8 (Capital Increase by Public Offering) |
|
| (1) | The term "public offering prescribed by Presidential Decree" in Article 165-6 (1) of the Act means the public offering of new stocks to many and unspecified people (including shareholders of the relevant corporation), excluding preemptive rights of shareholders. |
| (2) | The term "price calculated by the methods prescribed by Presidential Decree" in Article 165-6 (2) of the Act means 70/100 of the highest of the prices calculated by the methods falling under each of the following subparagraphs: |
| 1. | Average of final quotations of the stocks traded on the securities exchange and disclosed on a daily basis for one month before the fifth trading day prior to the subscription date; |
| 2. | Average of final quotations of the stocks traded on the securities exchange and disclosed on a daily basis for one week before the fifth trading day prior to the subscription date; and |
| 3. | Final quotations of the stocks traded on the securities exchange on the fifth trading day before the subscription date |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-9 (Exceptions, etc. to Preferential Allocation to Members of Employee Stock Ownership Association) |
|
| (1) | The term "cases prescribed by Presidential Decree" in Article 165- 7 (1) 2 of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where a stock-listed corporation (excluding corporation whose stocks are listed on the KOSDAQ market) makes a public offering of new or outstanding stocks and the aggregate of the subscription price of a member of the employee stock ownership association (referring to the member of an employee stock ownership association under the Framework Act of Workers’ Welfare; hereafter the same shall apply in this Article) and the acquisition value (if the acquisition value falls short of its par value, referring to the par value; hereafter the same shall apply in this Article) of stocks of the relevant corporation acquired for 12 months before the subscription pursuant to the main sentence of Article 165-7 (1) of the Act other than each subparagraph exceeds the total amount of wages (referring to wages subject to income taxes) paid for 12 months immediately before the subscription from the corporation; or |
| 2. | Where the aggregate of the subscription price of a member of the employee stock ownership association and the accumulated amount of acquisition value of stocks acquired pursuant to the main sentence of Article 165-7 (1) of the Act other than each subparagraph prior to the subscription exceeds the lesser of 1/100 of the total amount of issued and outstanding stocks or the total amount of contributions and three hundred million won. |
| (2) | In applying paragraph (1) 2, the accumulated amount of acquisition value of stocks acquired pursuant to the main sentence of Article 165-7 (1) of the Act other than each subparagraph shall be calculated by adding the acquisition value of stocks acquired pursuant to the main sentence of Article 165-7 (1) of the Act other than each subparagraph as an employee of another corporation which carries on the same type of business prescribed and publicly notified by the Financial Services Commission. |
| (3) | The number of stocks owned by a member of an employee stock ownership association under Article 165-7 (2) of the Act shall be calculated in accordance with the stocks of which entry has been changed in the name of the representative of the employee stock ownership association on the roster of shareholders on the day immediately preceding the date when a registration statement of public offering or sale of securities is filed with the Financial Services Commission pursuant to Article 119 (1) of the Act (if the registration statement is not filed because a universal shelf registration statement under the former part of Article 119 (2) of the Act has been filed, the date when the resolution of the general meeting of shareholders or the board of directors is made): Provided, That in cases of stocks deposited to the Securities Depository by a trust company under Article 37 (1) of the Framework Act on Workers’ Welfare, the number shall be calculated in accordance with the investors’ account book under Article 310 (1) of the Act. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-10 (Minimum Issue Price of Stocks to be Issued Less Than Par Value) |
|
The term "price calculated by the methods prescribed by Presidential Decree" in the latter part of Article 165-8 (2) of the Act means 70/100 of the highest price of the prices calculated by the methods falling under each of the following subparagraphs: | 1. | Average of final quotations of the stocks traded on the securities exchange and disclosed on a daily basis for one month before the day immediately preceding the date on which the resolution of the board of directors (hereafter referred to as the "board of directors for the convocation of a general meeting of shareholders" in this Article) is made to decide on the convocation of a general meeting of shareholders in order to issue stocks at a price less than par value; |
| 2. | Average of final quotations of the stocks traded on the securities exchange and disclosed on a daily basis for one week before the day immediately preceding the date when the resolution of the board of directors for the convocation of a general meeting of shareholders is made; and |
| 3. | Final quotations of the stocks traded on the securities exchange on the day immediately preceding the date when the resolution of the board of directors for the convocation of a general meeting of shareholders is made. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-11 (Methods of Evaluation of Price of Stocks Invested in Kind) |
|
The term "where a stock-listed corporation evaluates the price of such invested stocks under the conditions prescribed by Presidential Decree" in the former part of Article 165-9 of the Act means cases where the price is evaluated following the method under Article 176-5 (1) 1: Provided, That when it is unable to evaluate the price following the method under Article 176-5 (1) 1, the term means cases where the price is evaluated following the method under subparagraph 2 (b) of the same paragraph. [This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-12 (Issuance of Participating Bonds) |
|
| (1) | A stock-listed corporation may issue bonds entitled for bondholders to participate in the distribution of dividends (hereafter referred to as "participating bonds" in this Article) in addition to receiving interests on bonds pursuant to Article 165-11 of the Act . |
| (2) | In the case of paragraph (1), the board of directors shall determine the matters falling under each of the following subparagraphs, which are not prescribed in the articles of incorporation: Provided, That the same shall not apply to cases where the articles of incorporation prescribes that a general meeting of shareholders shall determine such matters: |
| 1. | Total amount of participating bonds; |
| 2. | Conditions and terms of participating in dividends; and |
| 3. | The effect that a right to acquire participating bonds is granted to a shareholder and the value of the participating bonds which are the object of the acquisition right. |
| (3) | Where participating bonds are issued to a person who is not a shareholder, the value of participating bonds that may be issued and terms of participating in dividends shall be prescribed by the special resolution of the general meeting of shareholders under Article 434 of the Commercial Act unless the articles of incorporation specifies such matters. |
| (4) | In the resolution under paragraph (3), summary of the proposal on the issuance of participating bonds shall be indicated in the public notice and notification under Article 363 of the Commercial Act. |
| (6) | Articles 424 and 424-2 shall apply mutatis mutandis to the issuance of participating bonds. |
| (7) | The matters falling under each of the following subparagraph shall be indicated in the subscription form for bonds, bonds, and bond register: |
| 1. | The effect that it is possible to participate in dividends; and |
| 2. | Conditions and terms of participating in dividends. |
| (8) | A stock-listed corporation shall, when it issues participating bodns, register the matters falling under each of the following subparagraphs in the location of the head office within two weeks from the date when the payment under Article 476 of the Commercial Act is completed: |
| 1. | Total amount of participating bonds; |
| 2. | Price of each participating bond; |
| 3. | Paid amount of each participating bond; and |
| 4. | Matters specified under each subparagraph of paragraph (7). |
| (9) | Article 514-2 (3) and (4) shall apply mutatis mutandis to the registration under paragraph (8). |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-13 (Issuance of Exchangeable Bonds) |
|
| (1) | A stock-listed corporation may issue bonds entitled to claim the exchange with listed securities (including its own stocks acquired pursuant to Article 165-2 or 165-5 of the Act; hereafter the same shall apply in this Article) owned by the corporation (hereafter referred to as "exchangeable bonds" in this Article) in accordance with the resolution of the board of directors pursuant to Article 165-11 of the Act. |
| (2) | The matters falling under each of the following subparagraphs shall be indicated in the subscription form for bonds, bonds, and bond register: |
| 1. | The effect that a right to claim the exchange with listed securities is granted; |
| 2. | Terms of listed securities subject to exchange; |
| 3. | Conditions of exchange; and |
| 4. | Period to claim the exchange. |
| (3) | A stock-listed corporation issuing exchangeable bonds shall deposit listed securities needed for the exchange to the Securities Depository until a bondholder requests the exchange of the bonds or until the period for claiming the exchange expires. In such cases, the Securities Depository may manage such securities by stating that they are part of the trust property. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-14 (Methods of Calculating Market Prices) |
|
Where stock dividends are made pursuant to Article 165-13 of the Act, the market price of the stocks shall be the lesser of the average of the final quotations of the stocks traded on the securities exchange and disclosed on a daily basis for the period retroactively calculated from the day immediately preceding the date of the general meeting of shareholders which resolves on the stock dividends to the commencement date of the business year which includes the date of the general meeting of shareholders and the final quotations of the stocks traded in the securities exchange on the day immediately preceding the date of the general meeting of shareholders. [This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-15 (Special Cases concerning Dividends of Public Purpose Corporations, etc.) |
|
| (1) | A public purpose corporation shall, when it needs to distribute profits or interests under Article 165-14 (1) of the Act, distribute them in accordance with the number of stocks which are directly acquired from the Government (if the Bank of Korea, the Korea Development Bank or the other public agencies under the Act on the Management of Public Agencies sold stocks issued by a public purpose corporation owned by it, including such organization; hereafter the same shall apply in this Article) and continuously held by a person falling under any subparagraph of the same paragraph. |
| (2) | The term "person who meets standards prescribed by Presidential Decree" in Article 165-14 (1) 2 of the Act means a person falling under any of the following subparagraphs: |
| 1. | Workers under Article 2 (1) of the Enforcement Decree of the Korea Housing Finance Corporation Act; |
| 2. | Farmers and fishermen under Article 2 (1) of the Act on Savings for Large Payment Expenditures of Farming and Fishing Households; or |
| 3. | A person whose annual income is not more than 7.2 million won. |
| (3) | A public purpose corporation shall, when it needs to issue stocks under Article 165-14 (2) of the Act, distribute them in accordance with the number of stocks continuously held by a person falling under any subparagraph of paragraph (1) of the same Article after purchasing directly from the Government. |
| (4) | A person who acquires stocks pursuant to Article 165-14 (2) of the Act shall deposit them for five years from the date when the stocks are acquired as prescribed and publicly notified by the Financial Services Commission. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-16 (Corporations Issuing Non-Voting Stocks) |
|
| (1) | The term "conditions prescribed by Presidential Decree" in Article 165-15 (1) 1 of the Act means that a stock-listed corporation and a corporation which publicly offers or sells stocks for the purpose of listing them initially issue overseas securities as non-voting stocks as prescribed and publicly notified by the Financial Services Commission. |
| (2) | The term "corporation meeting standards prescribed by Presidential Decree" in Article 165-15 (1) 2 of the Act means a corporation falling under any of the following subparagraphs: |
| 1. | Any corporation 15/100 of whose stocks or equity is held by the Government (including the Bank of Korea, the Korea Development Bank, and public agencies under the Act on the Management of Public Agencies); or |
| 2. | Any corporation which carries on the business in which stock acquisition or equity participation is restricted in accordance with other Acts. |
| (3) | Methods of issuing non-voting stocks pursuant to Article 165-13 (3) of the Act shall be as follows: |
| 1. | Exercise of rights, such as preemptive rights, conversion rights, etc. by a shareholder or bondholder; |
| 2. | Capitalization of reserves; |
| 4. | Exercise of appraisal rights of shareholders. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-17 (Standards for Financial Management of Stock-listed Corporations, etc.) |
|
| (1) | The term "overseas securities prescribed by Presidential Decree" in Article 165-16 (1) 3 of the Act means stocks, convertible bonds, bonds with warrant, participating bonds, exchangeable bonds, securities depository receipts issued overseas by a stock-listed corporation, and other securities similar thereto. |
| (2) | The term "matters prescribed by Presidential Decree" in Article 165- 16 (1) 4 of the Act means matters falling under each of the following subparagraphs: |
| 1. | Matters concerning the issuance of convertible bonds, bonds with warrant, participating bonds, or exchangeable bonds (including matters on requirements for and limit to the issuance thereof). In such cases, conversion rights or preemptive rights of convertible bonds and bonds with warrant shall be exercised one year after the date of the issuance of such bonds, except as otherwise prescribed and publicly notified by the Financial Services Commission; |
| 2. | Matters concerning deficit; and |
| 3. | Matters concerning the methods of reporting and disclosing accounting statements and matters on finance. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 176-18 (Report, etc. on Granting Stock Options) |
|
| (1) | When a stock-listed corporation makes a resolution on granting stock options at a general meeting of shareholders or the board of directors pursuant to Article 340-2 (1) of the Commercial Act, the corporation shall report the fact to the Financial Services Commission and the Korea Exchange without delay pursuant to Article 165-17 (1) of the Act. In such cases, the stock-listed corporation shall attach minutes of the general meeting of shareholders or the board of directors thereto. |
| (2) | The term "measures prescribed by Presidential Decree" in the former part other than each subparagraph of Article 165-18 of the Act means the measures under subparagraphs 3 through 5 of Article 138. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
CHAPTER Ⅳ OVER-THE-COUNTER TRADING
법령보기 화면
| Article 177 (Method of Over-The-Counter Trading) |
|
Except for trading under Articles 178 (1) and 179, securities exchange or over-the-counter derivatives outside the securities market or the derivatives market shall be traded between a single seller and a single buyer in accordance with Article 166 of the Act.
법령보기 화면
| Article 178 (Over-The-Counter Trading through Association) |
|
| (1) | The Association shall, when it carries out the business affairs related to over-the-counter trading of stocks not listed on the securities exchange pursuant to Article 286 (1) 4 of the Act, observe the following guidelines: |
| 1. | It shall announce to the public the issue of stocks that the parties offer to trade between a number of parties simultaneously, the price bid for purchasing (hereinafter referred to as the "bidding price") or the price asked for selling (hereinafter referred to as the "asking price"), and the volume of the stocks; |
| 2. | In cases where a single price determined and publicly notified for each issue of stocks by the Financial Services Commission or an asking price coincides with a bidding price, it shall close the trade at such price; |
| 3. | It shall prepare business guidelines concerning the criteria for designation of stocks for trading and cancellation of such designation, the trading method, the settlement method, and other matters, report them to the Financial Services Commission, and publish them to inform the general public; and |
| 4. | It shall disclose the current status of the issuer, including its financial status, business performance, and a change in its capital, as prescribed and publicly notified by the Financial Services Commission. |
| (2) | No person except the Association may engage in intermediating trades of stocks outside the securities exchange in the manner provided for in paragraph (1). |
법령보기 화면
| Article 179 (Over-The-Counter Trading through Inter-Dealer Broker) |
|
Every investment broker who holds authorization under 2i-11-2i of the Appendix 1 (hereinafter referred to as "inter-dealer broker") among the authorized business units under the aforesaid Table pursuant to Article 166 of the Act shall observe the following guidelines, whenever it acts as a broker for a trade of debt securities outside the securities exchange: | 1. | The brokerage of a trade of debt securities shall be one for trading debt securities between the persons falling under any of the following items with respect to the debt securities subject to the brokerage of trading: |
| (a) | A person under any provision of Article 10 (2) 1 through 17 and a person under any provision of paragraph (3) 1 through 13 of the aforesaid Article; |
| (b) | A post office under the Postal Savings and Insurance Act; and |
| (c) | Other person specified and publicly notified by the Financial Services Commission; |
| 2. | It shall announce the issue of debt securities that the parties offer to trade between a number of parties simultaneously, the bidding price or asking price, and the volume of the stocks to the public; |
| 3. | It shall close a trade at the price at which the asking price and bidding price of parties for each issue of debt securities coincide with each other; and |
| 4. | The operation method and other matters shall satisfy the guidelines prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 180 (Over-The-Counter Trading through Specialized Bond Dealer) |
|
| (1) | A person who is designated by the Financial Services Commission pursuant to Article 166 of the Act as one who performs a role of facilitating trades of the bonds held by the persons who engage in an investment trading business for bonds by offering an asking price and a bidding price for such bonds simultaneously (hereafter referred to as the "specialized bond dealer" in this Article) shall, when there is an order from an investor for trading the bonds falling under any of the following subparagraphs, accept such order within the limit set for each investor by the specialized bond dealer: |
| 1. | Bonds for which an asking price and a bidding price are offered simultaneously; and |
| 2. | Bonds sold by the specialized bond dealer to the investor. |
| (2) | The guidelines for designation of specialized bond dealer and revocation of such designation, the obligations of specialized bond dealers, the support to specialized bond dealers, and other necessary matters concerning specialized bond dealers shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 181 (Trading with Buy-back Agreement) |
|
| (1) | Pursuant to Article 166 of the Act, an investment trading business entity shall, when it engages in a trade with buy-back agreement with a person who does not fall under any item of Article 7 (3) 3 (hereafter referred to as the "ordinary investor" in this Article), observe the guidelines provided for below: |
| 1. | The securities traded shall be state bonds, local government bonds, special bonds, or any other securities specified and publicly notified by the Financial Services Commission; |
| 2. | The securities shall be traded at the trading price determined and publicly notified by the Financial Services Commission; |
| 3. | The date of buy-back or resale shall be fixed. In such cases, if it is intended to sell securities purchased with resale agreement under a condition to buy-back, the date of buy-back of such securities sold with buy-back agrement shall be earlier than the date set for resale of such securities purchased with resale agreement; and |
| 4. | The entity shall observe the guidelines prescribed and publicly notified by the Financial Services Commission with respect to safekeeping, replacement, and other matters of the securities sold with buy-back agreement. |
| (2) | No concurrently-run financial investment business entity (excluding the person specified and publicly notified by the Financial Services Commission) with authorization for the business under 11r-1r-1 of the Appendix 1 among the authorized business units provided for in the aforesaid Table may engage in purchasing with resale agreement with ordinary investors. |
| (3) | The persons falling under any item of Article 7 (3) 3 shall, when they engage in trading among each other via buy-back agreement through an investment broker, tender the securities and the price therefor simultaneously for settlement in the manner prescribed and publicly notified by the Financial Services Commission: Provided, That in cases where the Financial Services Commission prescribes and publicly notifies otherwise, it is not required to tender the securities and the price therefor simultaneously for settlement. |
법령보기 화면
| Article 182 (Transactions of Borrowing and Lending Securities) |
|
| (1) | Pursuant to Article 166 of the Act, every investment trader or broker shall, when it engages in a transaction of borrowing and lending securities or brokerage, intermediation, or agency for such transaction, observe the following guidelines: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | It shall require the borrower to offer security in the manner prescribed and publicly notified by the Financial Services Commission: Provided, That the same shall not apply to the brokerage of transactions of borrowing and lending securities deemed necessary by an investment trader or investment broker as transactions of borrowing and lending securities with separate conditions under the agreement between the borrower and the lender; |
| 2. | Delivery of the relevant securities and offering of the security shall be performed simultaneously in the manner prescribed and publicly notified by the Financial Services Commission: Provided, That the same shall not apply to transactions of borrowing and lending between foreigners; and |
| 3. | It shall disclose the details of transactions of borrowing and lending securities to the public on the same day through the Association. |
| (2) | Every investment trader or broker may intermediate transactions of borrowing and lending by brokerage in the form of borrowing and lending (referring to the brokerage in the form of transactions of borrowing and lending as prescribed and publicly notified by the Financial Services Commission). |
| (3) | Necessary matters concerning the ratio and management of the security, the public disclosure method of transactions of borrowing and lending, and other matters shall be prescribed and publicly notified by the Financial Services Commission. |
| (4) | Paragraphs (1) through (3) shall apply mutatis mutandis to cases where a person who is not an investment trader or broker, but who was established or authorized pursuant to the Act engages in a transaction of borrowing and lending securities, or brokerage, intermediation, or agency for such transaction. |
법령보기 화면
| Article 183 (Over-The-Counter Transactions of Corporate Commercial Paper) |
|
| (1) | Pursuant to Article 166 of the Act, every investment trader or broker shall, when it trades corporate commercial paper or engages in brokerage, intermediation, or agency for such trading, observe the following guidelines: |
| 1. | The corporate commercial paper shall be those that have passed credit rating conducted by two or more credit rating business entities; and |
| 2. | It shall not guarantee, directly or indirectly, payment for the corporate commercial paper. |
| (2) | Necessary matters concerning the method of trading corporate commercial paper, the credit rating method, and other matters shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 184 (Transactions in Overseas Markets) |
|
| (1) | Pursuant to Article 166 of the Act, every ordinary investor (including professional investors specified and publicly notified by the Financial Services Commission) shall, when he/she intends to trade foreign currency securities or exchange-traded derivatives in an overseas securities exchange or an overseas derivatives market under Article 5 (2) of the Act (hereinafter referred to as "overseas derivatives market"), trade them through an investment broker. |
| (2) | Every investment broker shall, when it is entrusted by an ordinary investor under paragraph (1) to make a transaction in an overseas securities exchange or derivatives market, open a separate account with a foreign investment broker, etc. for such trading in addition to its account for trading on its own account. |
| (3) | The acceptance of entrustment of orders for trading in overseas securities exchange and derivatives market, the settlement of such trading, the notices of results of execution, exercise of rights, and other matters, and necessary matters concerning domestic transactions by investment traders or brokers of foreign currency securities and exchange-traded derivatives shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 185 (Other Over-The-Counter Transactions of Securities) |
|
| (1) | Pursuant to Article 166 of the Act, no person, other than investment traders, may sell bonds, which he/she does not own, outside the securities exchange. |
| (2) | Every investment trader shall, when it receives an order from an investor to trade listed stocks of less than the trading unit of the securities exchange, accept such order: Provided, That an investment trader may refuse to accept an order, in cases where it receives an order to purchase certain listed stocks that it does not own. |
| (3) | The methods of trading securities, etc. outside the securities exchange and settlement of such trading, and other necessary matters shall be prescribed and publicly notified by the Financial Services Commission, taking into consideration the types of securities, the forms of trading and other transactions, and other factors, in addition to the matters provided for in paragraphs (1) and (2). |
법령보기 화면
| Article 186 Deleted.<by Presidential Decree No. 21291, Feb. 3, 2009> |
|
법령보기 화면
| Article 186-2 (Transactions for Risk Avoidance) |
|
The term "transactions for the purpose of avoiding risk prescribed by Presidential Decree" in the former part of Article 166-2 (1) 1 of the Act means transactions for the purpose of reducing all or part of economic loss which is likely to be incurred to the assets, liabilities, contracts, etc. (hereinafter referred to as "objects of avoiding risk") owned or to be owned by a person who intends to avoid risk, which meet all the requirements falling under each of the following subparagraphs at the time of execution of such contracts: | 1. | The objects of avoiding risk shall be owned or to be owned by the person; and |
| 2. | Any profit and loss which are likely to be generated in trading over- the-counter derivatives during the contract term for such over- the-counter derivatives transactions shall not exceed the range of the profit and loss which are likely to be generated in the objects of avoiding risk. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 187 (Limits on Acquisition by Foreigners of Securities or Exchange- Traded Derivatives) |
|
| (1) | Except as prescribed and publicly notified by the Financial Services Commission, a foreigner under Article 168 (1) of the Act (hereafter referred to as the "foreigner" in this Chapter), a foreign corporation, etc. may not acquire equity securities issued by a public-purpose corporation on his/her own account in excess of the following limits on acquisition, regardless of in whose name they are held. In such cases, necessary matters concerning the disposition of the amounts in excess of the limits, the guidelines for calculating such limits on acquisition and the management of such limits, and other matters shall be prescribed and publicly notified by the Financial Services Commission: |
| 1. | The limit on acquisition by a foreigner, a foreign corporation, etc. per issue per person: The limit stipulated in the articles of incorporation of the relevant public-purpose corporation; and |
| 2. | The overall limit on acquisition by foreigners, foreign corporations, etc. per issue: 40/100 of the total number of equity securities of the relevant issue. |
| (2) | If it is deemed necessary for stabilizing the securities exchange or the derivatives market or protecting investors, the Financial Services Commission may prescribe and publicly notify the limits on acquisition of securities or exchange-traded derivatives (limited to those traded in the derivatives market) by type of business, by type or issue, and by item of securities and exchange-traded derivatives, in addition to the limits on acquisition under paragraph (1). |
| (3) | A foreign depository and settlement institution under subparagraph 5 of Article 296 of the Act (hereinafter referred to as the "foreign depository and settlement institution") shall, when it seeks to acquire equity securities issued by a domestic corporation for the purpose of issuing securities depository receipts overseas, obtain consent in advance from the domestic corporation that issued the equity securities: Provided, That the same shall not apply to cases where such equity securities are newly issued or to cases where the Financial Services Commission prescribes and publicly notifies otherwise. |
법령보기 화면
| Article 188 (Registration of Foreigner’s Investment) |
|
| (1) | A foreigner, a foreign corporation, etc. shall, when he/she/it intends to acquire or dispose of securities listed on the securities exchange (hereinafter referred to as "listed securities") or securities that will be listed, such as securities publicly offered or sold in order to be listed on the securities exchange, register his/her personal data and other information (hereinafter referred to as "investor registration") in advance with the Financial Services Commission. In such cases, necessary matters concerning the requirements, methods, and procedure for the investor registration, the revocation of such registration, and other matters shall be prescribed and publicly notified by the Financial Services Commission. |
| (2) | A foreigner, a foreign corporation, etc. shall, when he/she/it intends to trade listed securities or exchange-traded derivatives (limited to those traded in the derivatives market; hereafter the same shall apply in this paragraph), observe the following guidelines: |
| 1. | When trading listed securities: |
| (a) | Except as prescribed and publicly notified by the Financial Services Commission, he/she/it shall trade them through the securities exchange; and |
| (b) | He/she/it shall satisfy the guidelines prescribed and publicly notified by the Financial Services Commission concerning opening of trading accounts, safekeeping of purchased securities, appointment of a domestic agent, reporting on details of trading, and other matters; and |
| 2. | When trading exchange-traded derivatives, he/she/it shall satisfy the guidelines prescribed and publicly notified by the Financial Services Commission concerning opening of trading accounts, reporting on details of trading, and other matters. |
법령보기 화면
| Article 189 (Accounting Auditor’s Audit Certificate) |
|
| (1) | The term "person specified by Presidential Decree" in the main sentence of Article 169 (1) of the Act means a person falling under any of the following subparagraphs: |
| 1. | A corporation obligated to submit a business report; and |
| 2. | A corporation that publicly offered or sold securities falling under any item of Article 167 (1) 2 without filing a registration statement under Article 130 of the Act. |
| (2) | The term "matters specified by Presidential Decree" in the proviso to Article 169 (1) of the Act means the following matters: |
| 1. | A section of documents related to financial affairs, which describe the matters falling under any subparagraph of Article 131 (5); and |
| 2. | Documents related to financial affairs in half-yearly and quarterly reports: Provided, That in cases of half-yearly reports and quarterly reports submitted by a corporation falling under the proviso to Article 170 (1) 2, the same shall apply only to those with confirmation and comment of an accounting auditor. |
법령보기 화면
| Article 190 (Special Exception to Accounting Audit of Foreign Corporations) |
|
Pursuant to the former part of Article 169 (3) of the Act, a foreign corporation, etc. shall be deemed to have received an accounting audit under the main sentence of paragraph (1) of the aforesaid Article, if it falls under any of the following subparagraphs: | 1. | Where a foreign corporation, etc. falling under any subparagraph of Article 176 (1), has undergone an audit in accordance with laws and regulations of a foreign country or a treaty, articles of incorporation, regulations, etc. under which it is incorporated; and |
| 2. | Where a foreign corporation, established pursuant to laws and regulations of a foreign country, has received an external audit in accordance with laws and regulations of the foreign country: Provided, That if the accounting principles adopted by the foreign corporation differ from the accounting principles under the Act on External Audit of Stock Companies, it shall submit documents describing the matters specified and publicly notified by the Financial Services Commission along with the relevant audit report. |
법령보기 화면
| Article 191 (Extent of Securities Subject to Liability for Losses) |
|
The term "securities specified by Presidential Decree" in the main body of Article 170 (2) of the Act means the following securities: | 1. | Exchangeable bonds with rights to claim exchange with securities (including securities depository receipts related to such securities; hereafter the same shall apply in this Article) issued by a corporation obligated to receive an accounting audit by an accounting auditor; and |
| 2. | Derivative-combined securities issued with its underlying asset composed of securities issued by a corporation obligated to undergo an accounting audit by an accounting auditor and exchangeable bonds under subparagraph 1. |
법령보기 화면
| Article 192 (Alternative Payment for Guarantee Money) |
|
| (1) | The term "guarantee money or deposit money specified by Presidential Decree" in Article 171 (1) of the Act means guarantee money or deposit money falling under any of the following subparagraphs: |
| 2. | Performance guarantee money; |
| 4. | Statutory deposit money. |
| (2) | The listed stocks for which certain guarantee money or deposit money may be paid alternatively in accordance with Article 171 (1) of the Act shall be as follows: |
| 1. | Debt securities (excluding corporate commercial paper); and |
| (3) | The value of listed stocks used as an alternative means of payment of guarantee money or deposit money shall be appraised according to the substitute price determined by the Exchange. |
법령보기 화면
| Article 193 (Deposit Certificate) |
|
| (1) | When the Korea Securities Depository issues a deposit certificate under Article 171 (4) of the Act (hereafter referred to as the "deposit certificate" in this Article), it shall issue such deposit certificate for the portion owned by a depositor under Article 171 (5) of the Act (hereinafter referred to as the "depositor") in accordance with the depositors’ account book, while it shall issue such deposit certificate for the portion deposited for an investor in accordance with the investors’ account book of which the relevant depositor has notified the Korea Securities Depository. |
| (2) | The deposit certificate under paragraph (1) shall contain descriptions of the following matters: |
| 1. | The name or trade name and address of the actual owner on the depositors’ account book or investors’ account book; |
| 2. | The type and number of depository receipts, etc. under Article 309 (3) 2 of the Act (hereinafter referred to as "depository receipts, etc."); |
| 3. | The purpose of using the deposit certificate; |
| 4. | A statement that the deposit certificate may not be used for any purpose other than alternative payment for guarantee money or deposit money under Article 192 (1); |
| 5. | A statement that a person who receives the deposit certificate as alternative payment for guarantee money or deposit money under Article 192 (1) may file an application to transferring the relevant depository receipts, etc. to its own account on the investors’ account book or the depositors’ account book; |
| 6. | A statement that if a person under subparagraph 5 files an application for the transfer under the aforesaid subparagraph, it shall return the relevant deposit certificate to the Korea Securities Depository or the depositor and that, in such cases, the Korea Securities Depository or the depositor will delete the restrictions on disposition under Article 171 (5) of the Act; and |
| 7. | A statement that the depositor who has a deposit certificate returned in accordance with subparagraph 6 shall return it to the Korea Securities Depository without delay. |
PART Ⅳ REGULATION OF UNFAIR TRADING
법령보기 화면
| Article 194 (Scope of Employees Obligated to Return Short-Swing Profit) |
|
The term "person as specified by Presidential Decree" in the former part of the main body of Article 172 (1) of the Act means a person falling under any of the following subparagraphs and deemed by the Securities and Futures Commission as one who has knowledge of the material, nonpublic information under Article 174 (1) of the Act (hereinafter referred to as "material, nonpublic information"): | 1. | An employee who is in charge of the establishment of, revision to, promotion of, or public disclosure of a matter falling under any subparagraph of Article 161 (1) of the Act, or any other business affair related to such matter in the relevant corporation; and |
| 2. | An employee who is in charge of a business affair related to financial affairs, accounting, planning, or research and development of the relevant corporation. |
법령보기 화면
| Article 195 (Method of Calculation of Short-Swing Profit) |
|
| (1) | The profit under Article 172 (1) of the Act shall be calculated in the following formulas: |
| 1. | In cases where specific securities, etc. have been sold or purchased within six months (including the first day; hereafter the same shall apply in this Article) after the purchase [including sale of specific securities, etc. (referring to specific securities, etc. under the former part of Article 172 (1) of the Act; hereinafter the same shall apply) in which the person in question becomes the opposite party to the exercise of rights and holds the status of purchaser; hereafter the same shall apply from this Article through Article 199] or sale in question (including purchase of specific securities, etc. in which the person in question can exercise his/her rights and holds the status of seller; hereafter the same shall apply from this Article through Article 199) was made, the profit therefrom shall be calculated by multiplying the difference between the unit selling price and the unit buying price by the smaller volume between the volume purchased and the volume sold (hereafter referred to as "matching volume" in this Article) and subtracting trading commission, securities transaction tax, and special tax for rural areas for the matching volume. In such cases, if the amount so calculated is below the decimal point, it shall be deemed that there is no profit; and |
| 2. | In cases where specific securities, etc. have been sold or purchased twice or more within six months after the purchase or sale in question, the profit therefrom shall be calculated by applying the formula under subparagraph 1 to the portion purchased at the earliest time and the portion sold at the earliest time and applying the same formula to portions purchased and sold thereafter consecutively until the portions purchased or sold, to which the formula is applicable, are completely exhausted. In such cases, the volume exceeding the matching volume out of the portions purchased or sold, to which the formula was applied, shall be deemed to be the purchase or sale not related to the purchase or sale in question in applying the formula. |
| (2) | In cases where profit is calculated in accordance with paragraph (1) 1 or 2, the buying price and selling price shall be the prices determined in accordance with the following subparagraphs, depending upon the class and issue of specific securities, etc.: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | In cases where specific securities, etc. purchased and specific securities, etc. sold are the same in class but different in issue: If there is profit from the sale after the purchase, the closing price of the specific securities, etc. on the date of sale shall be the selling price of the specific securities, etc. sold, while if there is profit from the purchase after the sale, the closing price of the specific securities, etc. on the date of purchase shall be the buying price of the specific securities, etc. purchased; and |
| 2. | In cases where specific securities, etc. purchased and specific securities, etc. sold are different in class: The price of specific securities, etc., other than equity securities, shall be that calculated by converting them into equity securities by the formula prescribed and publicly notified by the Securities and Futures Commission. |
| (3) | In cases where specific securities, etc. purchased and specific securities, etc. sold are different in class, the volume shall be calculated by the formula prescribed and publicly notified by the Securities and Futures Commission. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (4) | In cases where profit is calculated in accordance with any provision of paragraphs (1) through (3), specific securities, etc. go ex-rights, exdividend, or ex-interest or any similar event occurs after purchase or sale, and a ground is specified and publicly notified by the Securities and Futures Commission, profit shall be calculated based on the price and volume converted considering such event. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (5) | Deleted. <by Presidential Decree No. 21291, Feb. 3, 2009> |
| (6) | Necessary matters concerning specific guidelines and formula for calculating short-swing profits under the former part of Article 172 (1) of the Act (hereinafter referred to as "short-swing profit") and similar matters shall be prescribed and publicly notified by the Securities and Futures Commission, in addition to those provided for in paragraphs (1) through (4). <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
법령보기 화면
| Article 196 (Securities Exempt from Return of Short-Swing Profit) |
|
The term "securities specified by Presidential Decree" in Article 172 (1) 1 of the Act means the following securities: | 1. | Debt securities: Provided, That securities falling under any of the following items shall be excluded herefrom: |
| (c) | Participating bonds; and |
| (d) | Exchangeable bonds with a right to claim their exchange with equity securities (including securities depository receipts related to such securities) or securities under any provision of items (a) through (c) (including securities depository receipts related to such securities) issued by the same corporation; |
| 2. | Beneficiary certificates; and |
| 3. | Derivative-combined securities (excluding derivative-combined securities under Article 172 (1) 4 of the Act). |
법령보기 화면
| Article 197 (Public Disclosure of Short-Swing Profit) |
|
The term "manner prescribed by Presidential Decree" in the latter part of Article 172 (3) of the Act means ensuring that the following matters are disclosed to the public without delay: | 1. | The position of the person who is obligated to return short-swing profits [referring to an executive (including a person under any subparagraph of Article 401-2 (1) of the Commercial Act), an employee, or a major shareholder; hereafter the same shall apply in this Article]; |
| 2. | The amount (referring to the sum aggregated for each executive, employee, or shareholder) of the short-swing profit; |
| 3. | The date on which it was notified by the Securities and Futures Commission that the short-swing profit was realized; |
| 4. | The corporation’s plan for claiming to return the short-swing profit; and |
| 5. | A statement that any shareholder of the corporation (including any person who holds equity securities or securities depository receipts, other than stocks; hereafter the same shall apply in this subparagraph) may demand the corporation to claim the person who realized short-swing profit to return the profit, and the shareholder may, if the corporation does not file such claim within two months from the date on which it is demanded to do, file a claim on behalf of the corporation. |
법령보기 화면
| Article 198 (Exception to Return of Short-Swing Profits) |
|
The term "cases prescribed by Presidential Decree" in Article 172 (6) of the Act means cases falling under any of the following subparagraphs: | 1. | Where the purchase or sale is inevitable under a relevant Act and subordinate statutes; |
| 2. | Where the purchase or sale is made in accordance with permission, authorization, approval, etc., or the written guidance or recommendation, of the Government; |
| 3. | Where the purchase and sale or the sale and purchase are made for manipulation for stabilization or market creation; |
| 4. | Where specific securities, etc. publicly offered, privately placed, or publicly sold are acquired as a result of underwriting, or where such underwritten specific securities, etc. are disposed of; |
| 5. | Where stocks are acquired by exercising a stock option; |
| 6. | Where stocks are acquired by exercising rights of equity securities, an instrument representing preemptive right to new stocks, convertible bonds, or bonds with warrant already owned; |
| 7. | Where securities under Article 172 (1) 1 of the Act are acquired as a result of termination of a deposit contract for securities depository receipts under Article 172 (1) 2 of the Act; |
| 8. | Where securities are acquired by exercising rights of convertible bonds under subparagraph 1 (d) of Article 196 among the securities under Article 172 (1) 1 of the Act or convertible bonds under Article 172 (1) 3 of the Act; |
| 9. | Where specific securities, etc. are acquired as a result of subscription for specific securities, etc. publicly offered or sold; |
| 10. | Where stocks are acquired as a result of subscription for stocks preferentially allocated to members of an employee stockholders association in accordance with Article 32 of the Framework Act on Worker’s Welfare; |
| 11. | Where stocks are disposed of by exercising appraisal rights; |
| 12. | Where stocks, etc. are disposed of by accepting a tender offer; and |
| 13. | Where the Securities and Futures Commission deems that there is no likelihood that any material, nonpublic information will be used. |
법령보기 화면
| Article 199 (Duration Applicable Mutatis Mutandis to Investment Traders) |
|
The provisions applicable mutatis mutandis to investment traders with respect to insiders’ short-swing profits as provided for in Article 172 (7) of the Act shall apply mutatis mutandis to cases where an investment trader makes a purchase or sale within three months from the date on which an underwriting contract is executed and makes a sale or purchase within six months from the date of such sale or purchase (excluding cases under subparagraph 4 of Article 198):Provided, That in cases where an investment trader makes a trade for manipulation for stabilization or market creation, the provisions shall apply mutatis mutandis to cases where it makes a purchase or sale during the relevant period of time for manipulation for stabilization or market creation and makes a sale or purchase within six months from the date of the purchase or sale (excluding cases under subparagraph 3 of Article 198).
법령보기 화면
| Article 200 (Reporting by Executives on Current Status of Specific Securities Owned) |
|
| (1) | The term "days specified by Presidential Decree" in Article 173 (1) of the Act means the days under subparagraphs of Article 153 (1). |
| (2) | Every executive (including persons under any subparagraph of Article 401-2 (1) of the Commercial Act) or major shareholder of a stock-listed corporation shall, when he/she prepares a report on the current status of specified securities, etc. owned and changes therein in accordance with Article 173 (1) of the Act, describe the following matters: |
| 2. | The relevant stock-listed corporation; and |
| 3. | Matters concerning the current status of specific securities, etc. owned by type and changes therein. |
| (3) | The reference date for the reporting period applicable to the cases where an executive (including any person under subparagraphs of Article 401-2 (1) of the Commercial Act) or a major shareholder of a stock-listed corporation is obligated to report the current status of specific securities, etc. owned shall be as follows: |
| 1. | Where any person who was not an executive of the stock-listed corporation is appointed as an executive at the pertinent general meeting of shareholders: The date of appointment; |
| 3. | Where a person becomes a major shareholder of a stock-listed corporation by acquiring stocks issued by the corporation: The date on which he/she acquires the stocks; |
| 4. | Where stocks issued by a stock-unlisted corporation are listed on the securities exchange: The date of listing; and |
| 5. | Where an executive (including a person falling under any subparagraph of Article 401-2 (1) of the Commercial Act; hereafter the same shall apply in this Article) or a major shareholder of a stock-unlisted corporation becomes an executive or a major shareholder of a stock-listed corporation by merger, merger after division, or all-encompassing exchange or transfer of stocks: The date on which the stocks issued by merger, merger after division, or all-embracing exchange or transfer of stocks are listed. |
| (4) | The date of change applicable to the cases where an executive or a major shareholder of a stock-listed corporation is obligated to report a change in the current status of specific securities, etc. owned shall be as follows: |
| 1. | The date of settlement, in cases where the specific securities, etc. are traded in the securities exchange or the derivatives market; |
| 2. | The earlier date of the date on which the price is paid and the date on which the specific securities, etc. are delivered, in cases where the specific securities, etc. are purchased outside the securities exchange or the derivatives market; |
| 3. | The earlier date of the date on which the price is received and the date on which the specific securities, etc. are delivered, in cases where the specific securities, etc. are sold outside the securities exchange or the derivatives market; |
| 4. | The date immediately after the date on which the stock price is paid, in cases where new stocks allocated for capital increase for consideration are acquired; |
| 5. | The date on which the specific securities, etc. are received, in cases where such securities, etc. are borrowed, and the date on which the specific securities, etc. are delivered, in cases where such securities, etc. are returned; |
| 6. | The date on which the specific securities, etc. are received, in cases where such securities, etc. are received as a gift, and the date on which the specific securities, etc. are delivered, in cases where such securities, etc. are transferred as a gift; |
| 7. | The date on which inheritance is finalized by absolute acceptance or qualified acceptance, in cases where specific securities, etc. are acquired by inheritance and there is only one inheritor, and the date on which division of property related to the specific securities, etc. is completed, in cases where there are two or more inheritors; and |
| 8. | The date on which relevant legal conduct, etc. becomes effective pursuant to a relevant Act, such as the Civil Act and the Commercial Act, in any case other than cases under subparagraphs 1 through 7. |
| (5) | Necessary matters concerning the form and preparation method of the report under paragraph (2) and other matters shall be prescribed by the Securities and Futures Commission, in addition to the matters provided for in paragraphs (2) through (4). <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
법령보기 화면
| Article 200-2 (Report on Exchange-traded Derivatives Held in Bulk) |
|
| (1) | The term "days specified by Presidential Decree" in Article 173-2 (1) of the Act means days under each subparagraph of Article 153 (1). |
| (2) | The term "matters prescribed by Presidential Decree" in Article 173- 2 (1) of the Act means matters falling under each of the following subparagraphs: |
| 1. | Matters concerning a person who holds exchange-traded derivatives in bulk and a financial investment business entity which is entrusted with holding such derivatives by the person; |
| 2. | Type and issue of transactions of the relevant exchange-traded derivatives; |
| 3. | Time point of holding the relevant exchange-traded derivatives, the price and quantity thereof; and |
| 4. | Matters prescribed and publicly notified by the Financial Services Commission as related to the matters under subparagraphs 1 through 3. |
| (3) | Where a person who is obligated to report to the Financial Services Commission and the Korea Exchange pursuant to Article 173-2 (1) of the Act is a trustor, he/she may have a financial investment business entity make a report on behalf of him/her, and if any reason to report new changes occurs by the day immediately preceding the date when the current status of exchange-traded derivatives held in bulk and the changes thereof are to be reported, the new changes shall be reported together with the current status of exchange-traded derivatives held in bulk and the changes thereof, which have originally been scheduled to be reported. |
| (4) | In addition to the matters under paragraphs (1) through (3), matters necessary for the methods, procedures, etc. of a report shall be prescribed and publicly notified by the Financial Services Commission. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 201 (Disclosure of Information) |
|
| (1) | The term "manner prescribed by Presidential Decree" in the main body of Article 174 (1) of the Act means that the period of time prescribed in any of the following subparagraphs has elapsed since the relevant corporation (including a person to whom the power to make disclosure was delegated by the relevant corporation) or a subsidiary company of the corporation (referring to a subsidiary company under Article 342- 2 (1) of the Commercial Act, and including a person to whom the power to make disclosure was delegated by the subsidiary company) disclosed information in the manner provided for in the relevant subparagraph: |
| 1. | Information reported to the Financial Services Commission or the Exchange or described in a document reported in accordance with an Act and subordinate statutes: One day after the document containing such information is made available for inspection as prescribed by the Financial Services Commission or the Exchange; |
| 2. | Information disclosed through an electronic communication medium established and run by the Financial Services Commission or the Exchange: 24 hours after disclosure; |
| 3. | Information published through two or more newspapers circulated nationwide among ordinary daily newspapers and daily newspapers specializing in the economy under the Act on the Freedom of Newspapers, etc. and Guarantee of Their Functions: One day after publishing; and |
| 4. | Information broadcasted through a terrestrial broadcasting station with nationwide coverage among the broadcasting stations under the Broadcasting Act: 12 hours after broadcasting. |
| (2) | The term "manner prescribed by Presidential Decree" in the main body of Article 174 (2) of the Act means that the period or time prescribed in any subparagraph of paragraph (1) has elapsed since a tender offeror (including a person to whom the power to make disclosure was delegated by the tender offeror) disclosed information in the manner provided for in the relevant subparagraph. |
| (3) | The term "acquisition or disposition as prescribed by Presidential Decree" in the main body of Article 174 (3) of the Act means the acquisition or disposition fully satisfying the following requirements: |
| 1. | It shall be done for the purposes under Article 154 (1) (applicable only to acquisition); |
| 2. | It shall be a bulk acquisition or disposition, which reaches or exceeds the ratio prescribed and publicly notified by the Financial Services Commission; and |
| 3. | The acquisition or disposition shall be one subject to the report under Article 147 (1) of the Act. |
| (4) | The term "manner prescribed by Presidential Decree" in the main body of Article 174 (3) of the Act means that the period or time prescribed in any subparagraph of paragraph (1) has elapsed since the person who intends to acquire or dispose of stocks, etc. in bulk (including a person to whom the power to make disclosure was delegated by the person) disclosed information in the manner provided for in the relevant subparagraph. |
법령보기 화면
| Article 202 (Market Price Subject to Market Price Manipulation) |
|
The term "market price prescribed by Presidential Decree" in Article 176 (2) 1 of the Act means the first formed market price in the securities exchange for newly listed securities (including the listing prescribed and publicly notified by the Financial Services Commission).
법령보기 화면
| Article 203 (Persons Authorized to Conduct Manipulation for Stabilization and Market Creation) |
|
The term "person specified by Presidential Decree" in Article 176 (3) 1 of the Act means a person falling under any of the following subparagraphs: | 1. | An investment trader authorized by the registration statement as a person who can conduct manipulation for stabilization or market creation, in cases where such registration statement under Article 119 (1) of the Act is filed; and |
| 2. | An investment trader authorized by the underwriting contract as a person who can conduct manipulation for stabilization or market creation, in cases where a registration statement under Article 119 (1) of the Act is not filed. |
법령보기 화면
| Article 204 (Methods of Manipulation for Stabilization) |
|
| (1) | An investment trader under Article 203 may conduct manipulation for stabilization, only in cases where the following matters are fully described in the investment prospectus for the relevant securities in accordance with Article 176 (3) 1 of the Act: Provided, That such matters shall be described in the contents of the relevant underwriting contract in cases under subparagraph 2 of Article 203: |
| 1. | A statement that manipulation for stabilization is allowed; and |
| 2. | The name of the securities exchange in which manipulation for stabilization is allowed. |
| (2) | An investment trader under Article 203 shall not conduct manipulation for stabilization outside the securities exchange mentioned in the investment prospectus or terms and conditions of the underwriting contract. |
| (3) | An investment trader under Article 203 shall, when it conducted the first manipulation for stabilization during the period of time in which manipulation for stabilization is allowed (hereinafter referred to as the "manipulation period for stabilization"), file a registration statement on manipulation for stabilization describing the following matters (hereinafter referred to as the "registration statement on manipulation for stabilization") with the Financial Services Commission and the Exchange without delay: |
| 1. | The trade name of the investment trader who conducted manipulation for stabilization; |
| 2. | The trade name of another investment trader, if manipulation for stabilization was conducted jointly with another investment trader; |
| 3. | The issue and trading price of the stocks subjected to such manipulation for stabilization; |
| 4. | The date and time when the manipulation for stabilization began; |
| 5. | The manipulation period for stabilization; |
| 6. | The publicly offered or selling price of securities of which manipulation for stabilization is intended to promote public offering or sale and the total value of securities publicly offered or sold; and |
| 7. | The name of the securities exchange in which the manipulation for stabilization was conducted. |
| (4) | An investment trader under Article 203 shall not purchase securities subject to manipulation for stabilization (hereinafter referred to as "securities subject to manipulation for stabilization") in excess of the price prescribed in the following subparagraphs: |
| 1. | On the date manipulation for stabilization begins: |
| (a) | If manipulation for stabilization is conducted for the first time: The lower price of the trading price of the securities traded in the securities exchange immediately before the date manipulation for stabilization begins and the average trading price in the securities market during 20 days before the date manipulation for stabilization begins. In such cases, the method of calculating the average trading price shall be prescribed and publicly notified by the Financial Services Commission; and |
| (b) | If manipulation for stabilization is conducted again after the first manipulation for stabilization: The investment trader’s beginning price in the manipulation for stabilization; and |
| 2. | On a day after the date manipulation for stabilization begins: The lower price of the beginning price in the manipulation for stabilization (or the lowest price of the beginning prices in investment traders’ manipulation for stabilization, if two or more investment traders are involved in the manipulation for stabilization on the same day) and the price of the securities traded in the securities exchange immediately before the day on which the manipulation for stabilization was conducted. |
| (5) | An investment trader under Article 203 shall prepare a report on manipulation for stabilization describing the following matters (hereinafter referred to as the "report on manipulation stabilization") with respect to the trades of securities subject to manipulation for stabilization during the period of time from the date the manipulation for stabilization begins until the end date, for each securities exchange in which manipulation for stabilization was conducted, and submit it to the Financial Services Commission and the Exchange: |
| 1. | The issue of securities subject to manipulation for stabilization; |
| 2. | The details of trades; and |
| 3. | The trade name of the investment trader who conducted the manipulation for stabilization. |
| (6) | The Financial Services Commission and the Exchange shall make the registration statement and report on manipulation for stabilization available for inspection for three years from any of the following dates, and shall disclose them through their Internet homepages or by other means: |
| 1. | The registration statement on manipulation for stabilization: The filing date; and |
| 2. | The report on manipulation for stabilization: The day immediately after the date manipulation for stabilization ends. |
| (7) | The term "day specified by Presidential Decree" in Article 176 (3) 1 of the Act means the twentieth day before the date on which the subscription period of securities publicly offered or sold ends: Provided, That in cases where the public offering price or selling price is finally fixed during the period of time between the aforesaid twentieth day and the subscription date, it means the day immediately following the day such price is fixed. |
| (8) | Necessary matters concerning the form and preparation method of the registration statement and report on manipulation for stabilization, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (7). |
법령보기 화면
| Article 205 (Market Creation Method) |
|
| (1) | Every investment trader under Article 203 shall, when it seeks to make efforts for market creation in accordance with Article 176 (3) 2 of the Act, file a registration statement on market creation describing the following matters with the Financial Services Commission and the Exchange in advance: |
| 1. | The trade name of the investment trader who will make efforts for market creation; |
| 2. | The trade name of another investment trader, if another investment trader will make joint efforts for market creation; |
| 3. | The issue of the securities targeted for market creation; |
| 4. | The beginning date and time for market creation; |
| 5. | The period for market creation; and |
| 6. | Names of securities exchanges targeted for market creation. |
| (2) | No investment trader under Article 203 may, when it makes efforts for market creation, purchase securities in excess of the public offering or selling price of the securities targeted for market creation, nor may it sell such securities at a price lower than the public offering or selling price: Provided, That in cases where such securities go ex-rights, ex-dividend, or ex-interest, the price shall be calculated and determined by considering such event. |
| (3) | Article 204 (1), (2), (5), and (6) shall apply mutatis mutandis to market creation. In such cases, the term "manipulation for stabilization" shall be construed as "market creation". |
| (4) | The term "period of time prescribed by Presidential Decree" in Article 176 (3) 2 of the Act means the period of time beginning on the date on which the securities publicly offered or sold are listed and ending on the date stipulated in the relevant underwriting contract, which shall not be less than one month, but shall not exceed six months. |
| (5) | Necessary matters concerning the forms and preparation method of the registration statement and report on market creation, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 206 (Persons Eligible for Entrustment of Manipulation for Stabilization) |
|
The term "person specified by Presidential Decree, such as an executive of the issuer" in Article 176 (3) 3 of the Act means any of the following persons: | 1. | A director of the issuer of the securities publicly offered or sold; |
| 2. | The owner of the securities publicly sold: Provided, That in cases where securities were transferred under an underwriting contract, the transferor of such securities shall be deemed to be the owner; |
| 3. | A company that has a relationship falling under any of the following subparagraphs with the issuer of the securities publicly offered or sold or a director of such company, if either the owner or such company has such ownership of equity securities issued by the other party as provided for in the corresponding item: |
| (a) | A relationship based on the ownership of equity securities in excess of 30/100 of the total number of equity securities; and |
| (b) | A relationship based on the ownership of equity securities in excess of 10/100 of the total number of equity securities and falling under any subparagraph of Article 9; and |
| 4. | A person designated and notified to the Financial Services Commission and the Exchange in advance by the issuer or owner of securities publicly offered or sold as a person to whom manipulation for stabilization may be entrusted. |
법령보기 화면
| Article 207 (Scope of Linked Securities) |
|
The term "securities as specified by Presidential Decree" in Article 176 (4) 3 of the Act means the following securities: | 1. | Securities linked to convertible bonds or bonds with warrant and falling under any of the following items, in cases where the purpose is to earn unjust profits or to enable a third party to earn unjust profits from trading convertible bonds or bonds with warrant: |
| (a) | Exchangeable bonds with rights to claim exchange with such convertible bonds or bonds with warrant; |
| (c) | Derivative-combined securities based on an underlying asset of such convertible bonds or bonds with warrant; and |
| (d) | Securities depository receipts related to such convertible bonds or bonds with warrant; |
| 2. | Securities subject to exchange with exchangeable bonds and falling under any of the following items, in cases where the purpose is to earn unjust profits or to enable a third party to earn unjust profits from trading exchangeable bonds: |
| (a) | Convertible bonds or bonds with warrant; |
| (c) | Derivative-combined securities; and |
| (d) | Securities depository receipts; |
| 3. | Securities linked to equity securities and falling under any of the following items, in cases where the purpose is to earn unjust profits or to enable a third party to earn unjust profits from trading equity securities: |
| (a) | Convertible bonds or bonds with warrant; |
| (b) | Exchangeable bonds with rights to claim exchange with such equity securities; |
| (c) | Derivative-combined securities based on an underlying asset of such equity securities; and |
| (d) | Securities depository receipts related to such equity securities; |
| 4. | Securities based on an underlying asset of derivative-combined securities falling under any of the following items, in cases where the purpose is to earn unjust profits or to enable a third party to earn unjust profits from trading derivative-combined securities: |
| (a) | Convertible bonds or bonds with warrant; |
| (b) | Exchangeable bonds (limited to those with rights to claim exchange with those under item (a), (c), or (d)); |
| (c) | Equity securities; and |
| (d) | Securities depository receipts; and |
| 5. | Securities that are underlying securities of securities depository receipts and that fall under any of the following items, in cases where the purpose is to earn unjust profits or to enable a third party to earn unjust profits from trading securities depository receipts: |
| (a) | Convertible bonds or bonds with warrant; |
| (b) | Exchangeable bonds (limited to those with rights to claim exchange with those under item (a), (c), or (d)); |
| (c) | Equity securities; and |
| (d) | Derivative-combined securities. |
법령보기 화면
| Article 208 (Restriction on Short Sale) |
|
| (1) | The term "securities specified by Presidential Decree" in the main sentence of the main body of Article 180 (1) of the Act means securities falling under any of the following subparagraphs: |
| 1. | Convertible bonds, bonds with warrant, participating bonds, or exchangeable bonds; |
| 3. | Beneficiary certificates; |
| 4. | Derivative-combined securities; and |
| 5. | Securities depository receipts (limited to securities depository receipts related to securities under any provision of subparagraphs 1 through 4). |
| (2) | The term "manner prescribed by Presidential Decree" in the proviso to the main body of Article 180 (1) of the Act means that the sale is made in any of the following ways at the price prescribed by the business regulations of the securities exchange under Article 393 (1) of the Act (hereinafter referred to as "business regulations of the securities market") with respect to short sale (limited to the short sale under Article 180 (1) 2 of the Act, excluding such short sale which is feared to undermine the stability and formation of fair market prices on the securities market and which is restricted by the approval of the Financial Services Commission after the Korea Exchange’s specifying the scope of listed securities, type and deadline of trading, etc. under the main sentence of the same Article other than each subparagraph; hereafter the same shall apply in this Article); <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | In cases where an investor (including an investment trader or broker, who is not a member of the Exchange; hereafter the same shall apply in this subparagraph) commissions an investment broker, who is a member of the Exchange, to place a selling order: |
| (a) | The investor who commissions the sale of securities shall inform the investment broker whether the sale is a short sale. In such cases, if the investor is an executive or employee of the relevant listed corporation, he/she shall also inform the investment broker that he/she is an executive or employee of the listed corporation; |
| (b) | An investment broker shall, when he/she is commissioned by an investor to sell securities, ascertain whether the sale is a short sale as specified in the business regulations of the securities market and whether it is possible to settle the payment for the short sale; |
| (c) | If it is anticipated that the payment for a short sale will not be performed, the investment broker shall not accept commissioning of a short sale nor place an order for such short sale on the securities exchange; and |
| (d) | An investment broker shall, when he/she is commissioned by an investor to make a short sale, inform the Exchange that the sale is a short sale; and |
| 2. | In cases where an investment trader or broker, who is a member of the Exchange, places a selling order, he/she shall inform the Exchange that the sale is a short sale, if such is the case. |
| (3) | The term "as prescribed by Presidential Decree" in Article 180 (2) 3 of the Act means a sale falling under any of the following subparagraphs, for which it is possible to settle the payment by the payment date: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | A sale of listed securities, only if it is confirmed that the securities are placed in the custody of any safekeeping institution other than an investment broker commissioned to place a selling order or they are owned in any other way; |
| 2. | A sale of collective investment securities expected to receive as the result of an additional issue of listed collective investment securities; |
| 3. | A sale of listed securities expected to receive by claiming redemption of collective investment securities of an exchange-traded fund under Article 234 of the Act; |
| 4. | A sale of listed securities expected to acquire upon termination of a deposit contract for securities depository receipts; |
| 5. | A sale of listed securities that have been lent to someone else, but the return of which is finally confirmed; |
| 6. | A sale of listed securities expected to be delivered by trading outside the securities exchange; |
| 7. | A sale of securities depository receipts expected to acquire in return of deposit of the securities under any provision of paragraph (1) 1 through 4; and |
| 8. | Others specified in the business regulations of the securities market as a sale of listed securities to be delivered according to the contracts, agreements, or exercise of rights. |
PART Ⅴ COLLECTIVE INVESTMENT SCHEME
CHAPTER Ⅰ GENERAL PROVISIONS
법령보기 화면
| Article 209 (Prerequisites for Registration of Collective Investment Scheme) |
|
The term "requirements prescribed by Presidential Decree" in Article 182 (2) 4 of the Act means the following requirements: | 1. | For an investment company: The following requirements: |
| (a) | A supervisory director shall not fall under any subparagraph of Article 24 of the Act; and |
| (b) | Its capital at the time the application for registration is filed shall not be less than 100 million won and the amount prescribed and publicly notified by the Financial Services Commission; and |
| 2. | For a limited-liability investment company, a limited-partnership investment company, an investment association, or an undisclosed investment association: Its capital or contribution at the time the application for registration is filed shall not be less than 100 million won and the amount prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 210 (Exemption from Revised Registration) |
|
The term "as provided for otherwise by Presidential Decree" in the former part of Article 182 (8) of the Act means cases falling under any of the following subparagraphs: | 1. | Where any registered matter is revised in accordance with an amendment to the Act or this Decree or an order issued by the Financial Services Commission; and |
| 2. | Where such minor matter as specified and publicly notified by the Financial Services Commission, including simple modification of words of a registered matter, is revised. |
법령보기 화면
| Article 211 (Method and Procedure for Registration) |
|
| (1) | Each registration application under Article 182 (3) of the Act shall contain descriptions of the following matters: |
| 1. | The name of the collective investment scheme; |
| 2. | Matters concerning objectives, policy, and strategy of investment; |
| 3. | Matters concerning details of rights and investment risk; |
| 4. | Matters concerning management remuneration, sales commission, sales remuneration, and other expenses; |
| 5. | Matters concerning contributions (excluding cases where an investment trust is involved); |
| 6. | Matters concerning financial affairs; |
| 7. | Matters concerning the collective investment business entity (including promoters and supervisory directors, if an investment company is involved); |
| 8. | Matters concerning professional investment managers; |
| 9. | Matters concerning management of the collective investment property; |
| 10. | Matters concerning sale and redemption of collective investment securities; |
| 11. | Matters concerning assessment, public disclosure, etc. of the collective investment property; |
| 12. | Matters concerning distribution of profits and losses and taxation; |
| 13. | Matters concerning the trust business entity and the general administration company (applicable only to cases where there is a general administration company involved); |
| 14. | Matters concerning entrustment of business affairs under Article 42 of the Act (applicable only to cases where the business affairs are entrusted to someone); and |
| 15. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (2) | Each registration application under paragraph (1) shall be accompanied by the following documents: Provided, That if it is possible to verify the information of the accompanying documents by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, the accompanying documents may be substituted by such verification: |
| 1. | The collective investment agreement (including attached documents); |
| 2. | A certified transcript of corporate register or any other similar document proving its incorporation (excluding the cases where an investment trust, an investment association, or an undisclosed investment association is involved); |
| 3. | A document proving the payment of contributions (excluding cases where an investment trust is involved); |
| 4. | A copy of contracts executed with the following persons on entrustment of business affairs (including attached documents): |
| (a) | A collective investment business entity (excluding cases where an investment trust or an undisclosed investment association is involved); |
| (b) | A trust business entity; |
| (c) | A general administration company (applicable only to cases where a contract has been executed with the general administration company on entrustment of business affairs); and |
| (d) | A trustee of business affairs under Article 42 of the Act (applicable only to cases where a contract has been executed with the trustee on entrust of business affairs); |
| 5. | A copy of a sales contract or a commission sales contract (including attached documents), in cases where such contract has been executed with an investment trader of broker; and |
| 6. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for the protection of investors. |
| (3) | An application for revised registration under Article 182 (8) of the Act shall describe the reasons for revision and revised contents in the manner prescribed and publicly notified by the Financial Services Commission, and shall be accompanied by the documents proving the revised contents, such as a copy of minutes of the general meeting of collective investors or the directors’ meeting at which a resolution for such revision was adopted, a collective investment agreement, a certified transcript of register, and a copy of an essential contract. |
| (4) | The Financial Services Commission shall ascertain whether the facts relevant to the contents of an application for the registration under Article 182 (1) of the Act or the revised registration under paragraph (8) of the aforesaid Article, and shall examine whether the contents of the application satisfy the requirements for the registration under paragraph (2) (including cases to which the aforesaid paragraph shall apply mutatis mutandis pursuant to paragraph (8) of the aforesaid Article) or the revised registration. |
| (5) | In cases where a collective investment business entity of an investment trust or an undisclosed investment association, or an investment company, etc. files a registration application under Article 182 (3) of the Act together with a registration statement, it shall be deemed that the relevant collective investment scheme is duly registered at the time when the registration statement becomes effective. |
| (6) | In cases where a collective investment business entity of an investment trust or an undisclosed investment association, or an investment company, etc. files a corrective statement under Article 122 (1) of the Act, it shall be deemed that an application for revised registration under Article 182 (8) of the Act has been filed. In such cases, it shall be deemed that the registration of the relevant collective investment scheme is revised at the time when the corrective statement becomes effective. |
| (7) | The Financial Services Commission may prescribe and publicly notify different rules on the descriptions under paragraph (1) or (3) with respect to the registration of privately placed funds. |
| (8) | Necessary matters concerning the application for and examination of registration, the form and preparation method of the application, and other similar matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (7). |
법령보기 화면
| Article 212 (Business Affairs of General Administration Company) |
|
The term "matters prescribed by Presidential Decree" in Article 184 (6) 5 of the Act means the following business affairs: | 1. | Business affairs entrusted in accordance with Article 238 (8) of the Act; and |
| 2. | Business affairs related to management of an investment company. |
법령보기 화면
| Article 213 (Investment Company’s Disposition of Its Own Collective Investment Securities) |
|
Pursuant to the former part of Article 186 (1) 1 of the Act, every investment company, etc. shall dispose of collective investment securities issued by itself and acquired later within one month from the acquisition date in any of the following manners: | 2. | Sale through an investment trader of broker. |
법령보기 화면
| Article 214 (Keeping and Maintaining Records of Data of Investment Company, etc.) |
|
| (1) | Pursuant to Article 187 (1) of the Act, every investment company, etc. shall keep and maintain the following data for the period of time prescribed below: Provided, That the Financial Services Commission may publicly shorten the periods of time and publicly notify them as shortened: |
| 1. | A list of collective investment property: Ten years; |
| 2. | The ledger of base price of collective investment securities: Ten years; |
| 3. | A full statement of management of collective investment property: Ten years; |
| 4. | Minutes of the general meeting of collective investors and the directors’ meeting: Ten years; and |
| 5. | Other account books and documents that any other Act and subordinate statutes require to keep and maintain: The period of time prescribed in the relevant Act and subordinate statutes (if no period of time is prescribed in the relevant Act and subordinate statutes, the period of time shall be prescribed and publicly notified by the Financial Services Commission, taking into account the preservation periods under subparagraphs 1 through 4). |
| (2) | Further specific guidelines for the types and classifications of data under paragraph (1) and other similar matters shall be prescribed and publicly notified by the Financial Services Commission. |
CHAPTER Ⅱ ORGANIZATION OF COLLECTIVE INVESTMENT SCHEMES
Section 1 Investment Trust
법령보기 화면
| Article 215 (Descriptions of Trust Deed) |
|
The term "matters prescribed by Presidential Decree" in Article 188 (1) 8 of the Act means the following matters: | 1. | The type of investment trust (referring to the type according to the classification under Article 229 of the Act); |
| 2. | The name of the investment trust; |
| 3. | Assets for investment (main assets for investment shall be described separately); |
| 4. | Matters concerning the businesses of the collective investment business entity and the trust business entity; |
| 5. | Matters concerning additional issuance and retirement of beneficiary certificates; |
| 6. | The trust deed term, if a trust deed term has been agreed; |
| 7. | Matters concerning assessment of the investment trust property and calculation of the base price; |
| 8. | Matters concerning distribution of assets, etc., other than profits; |
| 9. | Matters concerning replacement of the collective investment business entity and the trust business entity; |
| 10. | Matters concerning amendment and termination of the trust deed; |
| 11. | The fiscal term of the investment trust; and |
| 12. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting beneficiaries. |
법령보기 화면
| Article 216 (Reasons for being Excused from General Meeting of Beneficiaries) |
|
The term "reason as specified by Presidential Decree" in Article 188 (2) 2 of the Act means a ground falling under any of the following subparagraphs: | 1. | Where the trust deed is entirely transferred by transfer of business, etc.; |
| 2. | Where part of the trust deed is inevitably transferred in order to comply with Article 184 (4) or 246 (1) of the Act or any other relevant Act and subordinate statutes; |
| 3. | Where the trust business entity is replaced with another by a measure taken by the Financial Services Commission pursuant to Article 420 (3) 1 or 2 of the Act; and |
법령보기 화면
| Article 217 (Matters Subject to Resolution of General Meeting of Beneficiaries) |
|
The term "matters prescribed by Presidential Decree" in Article 188 (2) 4 of the Act means the following matters: | 1. | Change of the type of investment trust (referring to the type according to the classification under Article 229 of the Act): Provided, That excluded therefrom are cases where it was planned to convert it to any other type of investment trust at the time when the investment trust was created, and the trust deed states such plan; |
| 2. | Change of main assets for investment; |
| 3. | Replacement of the collective investment business entity: Provided, That excluded therefrom are cases falling under any of the following items: |
| (a) | Mergers, divisions, or mergers after division; |
| (b) | Where the collective investment business entity is replaced with another by a measure taken by the Financial Services Commission pursuant to Article 420 (3) 1 or 2 of the Act; and |
| 4. | Change from an investment trust, which was not a closed-end investment trust (referring to an investment trust with a prescribed continuance period during which claims for redemption of beneficiary certificates are not allowed; hereinafter the same shall apply), to a closed-end investment trust; |
| 5. | Extension of the payment date for redemption money; and |
| 6. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting beneficiaries. |
법령보기 화면
| Article 218 (Descriptions of Beneficiary Certificates) |
|
The term "matters prescribed by Presidential Decree" in Article 189 (5) 5 of the Act means the following matters: | 1. | The name of the investment trust; |
| 3. | The time for distribution of profits and others; |
| 4. | Terms of conditions of redemption of equity securities (a statement as to the fact that it is not allowed to claim redemption, in cases of beneficiary certificates of a closed-end investment trust); |
| 5. | The trust deed term, if a trust deed term has been agreed; and |
| 6. | The name of the investment trader or broker who sold the beneficiary certificates. |
법령보기 화면
| Article 219 (Exceptions to Prohibition on Furnishing Information) |
|
법령보기 화면
| Article 220 (Convening General Meeting of Beneficiaries) |
|
| (1) | Every collective investment business entity (including a trust business entity or a beneficiary holding 5/100 or more of the total number of units of outstanding beneficiary certificates, who calls a general meeting of beneficiaries in accordance with the latter part of Article 190 (3) of the Act; hereafter the same shall apply in this Article) shall entrust the Korea Securities Depository to send a notice to convene a general meeting of beneficiaries. |
| (2) | The Korea Securities Depository shall, when it sends a notice to convene a general meeting of beneficiaries pursuant to paragraph (1) or if a request is made from a beneficiary, dispatch a form for exercising voting rights under Article 190 (6) of the Act. |
| (3) | The Korea Securities Depository shall, when it dispatches a form for exercising voting rights pursuant to paragraph (2), ensure that each beneficiary can express his/her intent clearly by manifesting whether he/she agrees or disagrees, require the collective investment business entity to submit materials for reference in exercising voting rights as prescribed by Ordinance of the Prime Minister, and send them to beneficiaries. |
| (4) | A collective investment business entity shall, when it seeks to convene a general meeting of beneficiaries that was adjourned in accordance with the latter part of Article 190 (7) of the Act (hereafter referred to as the "adjourned general meeting of beneficiaries" in this paragraph), dispatch a notice to convene the adjourned general meeting of beneficiary in accordance with paragraph (1) by one week before the scheduled opening date of the adjourned general meeting of beneficiaries, clearly stating the matters under Article 190 (8) of the Act. |
법령보기 화면
| Article 221 (Exercise of Voting Rights in Writing) |
|
| (1) | A beneficiary who wishes to exercise voting rights in writing in accordance with Article 190 (6) of the Act shall state his/her intent in exercising the voting rights in the form under Article 220 (2) and submit it to the collective investment business entity (including the trust business entity or a beneficiary holding 5/100 or more of the total number of units of outstanding beneficiary certificates, who calls the general meeting of beneficiaries in accordance with the latter part of Article 190 (3) of the Act) by the day immediately before the scheduled opening date of the general meeting of beneficiaries. |
| (2) | The number of voting rights exercised in writing in accordance with 190 (6) of the Act shall be added to the number of voting rights exercised by beneficiaries present at the general meeting of beneficiaries. |
| (3) | Every collective investment business entity shall retain the forms submitted by beneficiaries for exercising voting rights in accordance with paragraph (1) and the reference materials for exercising voting rights at its head office for six months from the date of the general meeting of beneficiaries. |
| (4) | Every beneficiary may ask the collective investment business entity to allow him/her to inspect the forms and materials under paragraph (3) or to provide him/her with a copy thereof at any time during the business hours of the collective investment business entity. |
| (5) | The chairperson of a general meeting of beneficiaries shall be elected from among and by beneficiaries at the general meeting. |
법령보기 화면
| Article 222 (Buy-Out of Beneficiary Certificates from Dissenting Beneficiaries) |
|
A collective investment business entity shall, when it buys out beneficiary certificates with the investment trust property in accordance with the main sentence of Article 191 (3) of the Act, deem that a claim for redemption is filed at the end of the period of time set for filing claims for buy-out, and buy out such beneficiary certificates in accordance with terms and conditions of the trust deed.
법령보기 화면
| Article 223 (Grounds for Termination Allowed without Approval) |
|
The term "as prescribed by Presidential Decree" in the proviso to Article 192 (1) of the Act means cases falling under any of the following subparagraphs. In such cases, such termination shall satisfy the guidelines prescribed and publicly notified by the Financial Services Commission: | 1. | Where all beneficiaries consent to termination; |
| 2. | Where it is intended to terminate the trust deed with claims for redemption of all beneficiary certificates of the investment trust; and |
| 3. | Where the amount of principal of the investment trust has fallen short, for one month continuously, of the amount prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 224 (Method and Procedure for Approval on Termination) |
|
| (1) | A person who intends to file an application for approval on termination of an investment trust in accordance with Article 192 (1) of the Act shall file an application for approval on termination with descriptions of the following matters with the Financial Services Commission: |
| 1. | Matters concerning the investment trust subject to termination; |
| 2. | Reasons for termination of the investment trust; |
| 3. | Matters concerning the collective investment business entity, the trust business entity, the investment trader or broker involved in the investment trust subject to termination; |
| 4. | Matters concerning beneficiaries; and |
| 5. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting beneficiaries. |
| (2) | An application under paragraph (1) shall be accompanied by the following documents: |
| 1. | A document proving the collective investment business entity’s decision on termination; |
| 2. | A full statement of the collective investment property as of the day immediately before the application for approval; and |
| 3. | Other documents specified and publicly notified by the Financial Services Commission, as necessary for examination on approval on termination. |
| (3) | A collective investment business entity shall, if accounts receivable remain when terminating an investment trust in accordance with Article 192 (1) or (2) of the Act, take over the accounts receivable at a fair value prescribed and publicly notified by the Financial Services Commission as of the day on which the investment trust terminates: Provided, That such accounts receivable may be transferred through a transaction under Article 87 (1) 3, in cases to which the aforesaid provisions are applicable. |
| (4) | A collective investment business entity shall, if accounts payable remain when terminating an investment trust in accordance with Article 192 (1) or (2) of the Act, take over the accounts payable at a fair value prescribed and publicly notified by the Financial Services Commission as of the day on which the investment trust terminates: Provided, That such accounts payable may be transferred through a transaction under Article 87 (1) 3, in cases where the accounts payable are finally fixed and the aforesaid provisions are applicable. |
| (5) | Necessary matters concerning termination of an investment trust, including the form and preparation method of the application for approval on termination of an investment trust, shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 225 (Reasons for Partial Termination) |
|
The term "case as prescribed by Presidential Decree" in Article 192 (5) of the Act means cases falling under any of the following subparagraphs: | 1. | Where beneficiary certificates issued remain unsold; |
| 2. | Where a beneficiary files a claim for redemption of beneficiary certificates; and |
| 3. | Where a beneficiary files a claim for buy-out of beneficiary certificates in accordance with Article 191 (1) of the Act. |
법령보기 화면
| Article 226 (Merger of Investment Trusts) |
|
| (1) | The term "matters prescribed by Presidential Decree" in Article 193 (2) 7 of the Act means the following matters: |
| 1. | The maximum amount of dividends, in cases where profits are distributed due to a merger of investment trusts; |
| 2. | Details of a change in the deed term or the fiscal term of an investment trust, in cases where the deed term or the fiscal term is changed due to a merger of investment trusts; |
| 3. | Details of a change in remuneration, redemption fee, etc., in cases where such remuneration, redemption fee, etc. is changed; |
| 4. | Matters concerning appraisal of the investment trust property for computing the merged value of beneficiary certificates; and |
| 5. | Matters concerning treatment of a fraction, which is less than one unit, in cases where beneficiary certificates are issued due to a merger. |
| (2) | In cases where investment trusts are merged, the merged value of beneficiary certificates under Article 193 (8) of the Act shall be calculated by subtracting total liabilities from total assets stated in the balance sheet as of the day immediately before the merger date of the investment trusts. |
| (3) | A notice for convening a general meeting of beneficiaries shall describe important matters of the merger plan. |
| (4) | A collective investment business entity shall, when it obtains approval of the general meeting of beneficiaries on matters under Article 193 (2) 1 through 6 of the Act and those under subparagraphs of paragraph (1) of this Article, notify beneficiaries of the details thereof without delay. |
| (5) | A collective investment business entity shall, when it issues notice to beneficiaries in accordance with paragraph (4), entrust the affairs related to such notice to the Korea Securities Depository. |
| (6) | Necessary matters concerning merger of investment trusts, including the form and preparation method of a plan for merger of investment trusts, shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (5). |
Section 2 Collective Investment Scheme in Form of Company
법령보기 화면
| Article 227 (Descriptions of Articles of Incorporation) |
|
| (1) | The term "matters prescribed by Presidential Decree" in Article 194 (2) 11 of the Act means the following matters: |
| 1. | The type of investment company (referring to the type according to the classification under Article 229 of the Act); |
| 2. | Assets for investment (main assets for investment shall be described separately); |
| 3. | Matters concerning additional issuance and retirement of stocks; |
| 4. | Details of the continuance period or grounds for dissolution, if such continuance period or grounds for dissolution are prescribed; |
| 5. | Matters concerning assessment of the investment company’s property and calculation of the base price; |
| 6. | Matters concerning distribution of assets, etc., other than profits; |
| 7. | Outline of contracts on entrustment of business affairs, which will be executed with a collective investment business entity, a trust business entity, and a general administration company (including matters concerning the method of calculating remuneration and other fees, the payment method and the time for payment); |
| 8. | Matters concerning replacement of the collective investment business entity and the trust business entity; |
| 9. | Matters concerning amendment to the articles of incorporation; |
| 10. | Matters concerning remuneration for supervisory directors; |
| 11. | The fiscal term of the investment company; |
| 12. | The preparation date of the articles of incorporation; and |
| 13. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting shareholders. |
| (2) | The term "amount prescribed by Presidential Decree" in Article 194 (5) of the Act means one billion won. |
법령보기 화면
| Article 228 (Accompanying Documents for Registration of Incorporation) |
|
The term "accompanying documents prescribed by Presidential Decree" in the main body of Article 194 (10) of the Act means the following documents: | 1. | The articles of incorporation; |
| 3. | Directors’ inspection reports; |
| 4. | Directors’ written statements proving their acceptance of appointment as directors; |
| 5. | A written statement proving entrustment of administrative affairs related to stock transfer; and |
| 6. | Other certificates issued by banks responsible for receiving payments of consideration for stocks and other financial institutions concerning receipt and safekeeping of payments of consideration for stocks. |
법령보기 화면
| Article 229 (Amendment to Articles of Incorporation) |
|
| (1) | The term "matters prescribed by Presidential Decree" in Article 195 (1) 4 of the Act means the following matters: |
| 1. | Change in the type of the investment company (referring to the type according to the classification under Article 229 of the Act): Provided, That excluded therefrom are cases where it was planned to convert it to any other type of invest company at the time when the investment company was created, and the articles of incorporation states such plan; |
| 2. | Change of main assets for investment; |
| 3. | Change from an open-end investment company under Article 196 (4) of the Act (hereinafter referred to as the "open-end investment company") to a closed-end investment company (referring to an investment company with a prescribed continuance period, in which claims for redemption of stocks are not allowed; hereinafter the same shall apply); |
| 4. | Extension of the payment date for redemption money; and |
| 5. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting shareholders. |
| (2) | The term "event prescribed by Presidential Decree" in Article 195 (2) of the Act means an event falling under any of the following subparagraphs: |
| 1. | In cases where the relevant collective investment business entity falls under any of the following items: |
| (a) | Where the collective investment business entity is replaced with another by a measure taken by the Financial Services Commission pursuant to Article 420 (3) 1 or 2 of the Act; and |
| 2. | In cases where the relevant trust business entity falls under any of the following items: |
| (a) | Where the contract on safekeeping and management of the investment company’s property is entirely transferred due to transfer of business, etc.; |
| (b) | Where part of the contract on safekeeping and management of the investment company’s property is inevitably transferred in order to comply with Article 184 (4) or 246 (1) of the Act or any other relevant Act and subordinate statutes; |
| (c) | Where the trust business entity is replaced with another by a measure taken by the Financial Services Commission pursuant to Article 420 (3) 1 or 2 of the Act; and |
법령보기 화면
| Article 230 (Condition of Issuance of New Stocks) |
|
The term "manner prescribed by Presidential Decree" in the latter part of Article 196 (5) of the Act means the formula for calculating the base price under Article 238 (6) of the Act (hereinafter referred to as the "base price"): Provided, That a closed-end investment company may determine the issue value of new stocks, considering the amount calculated according to the formula for calculating the base price and the trading price in the securities exchange.
법령보기 화면
| Article 231 (Disqualification of Supervisory Director) |
|
The term "persons specified by Presidential Decree" in Article 199 (4) 7 of the Act means persons falling under any of the following subparagraphs: | 1. | An executive or employee of the general administration company of the relevant investment company; |
| 2. | An executive or employee of the fund assessment company responsible for assessment of the relevant investment company; |
| 3. | An executive or employee of the bond rating company responsible for assessment of the value of the investment company’s property; |
| 4. | An employee of the investment trader or broker responsible for sale of stocks of the relevant investment company; and |
| 5. | The accounting auditor of the relevant investment company (referring to certified public accountants who belong to an accounting firm, if the accounting auditor is an accounting firm). |
법령보기 화면
| Article 232 (Registration of Liquidator) |
|
| (1) | The term "documents specified by Presidential Decree" in the main body of Article 202 (2) of the Act means the following documents: |
| 1. | Where the corporate director acts as liquidator: The articles of incorporation; |
| 2. | Where a person specified by the articles of incorporation acts as liquidator: The articles of incorporation; |
| 3. | Where a liquidator is appointed at the general meeting of shareholders: A copy of minutes of the general meeting of shareholders and a written statement proving acceptance of the appointment; and |
| 4. | Where a liquidator is appointed by the Financial Services Commission: A written statement proving the appointment. |
| (2) | The term "documents specified by Presidential Decree" in Article 202 (3) of the Act means the following documents: |
| 1. | Where a supervisory director acts as liquidation overseer: The articles of incorporation; |
| 2. | Where a person specified by the articles of incorporation acts as liquidation overseer: The articles of incorporation; |
| 3. | Where the liquidation overseer is appointed at the general meeting of shareholders: A copy of minutes of the general meeting of shareholders and a written statement proving acceptance of the appointment; and |
| 4. | Where the liquidation overseer is appointed by the Financial Services Commission: A written statement proving the appointment. |
법령보기 화면
| Article 233 (Omission of Procedure for Peremptory Notice to Creditors) |
|
| (1) | An investment company shall, when it seeks to omit the procedure for peremptory notice to creditors in accordance with the main sentence of Article 203 (4) of the Act, publish the matters related to obligations, including its intent to omit it, the details of obligations, the method of performance of obligations, at least twice through a daily newspaper circulated nationwide, and shall report it to the Financial Services Commission without delay. |
| (2) | The term "case prescribed by Presidential Decree" in the proviso to Article 203 (4) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where the investment company is liable for performance of a contract in relation to a trade of exchange-traded derivatives or over-the- counter derivatives; |
| 2. | Where a lawsuit that may affect substantially the investment company’s property is pending; and |
| 3. | Where any obligations remain due to borrowing of money, etc. under the proviso to Article 83 (1) of the Act. |
법령보기 화면
| Article 234 (Descriptions of Articles of Incorporation) |
|
| (1) | The term "matters prescribed by Presidential Decree" in Article 207 (1) 8 of the Act means the following matters: |
| 1. | The type of limited-liability investment company (referring to the type according to the classification under Article 229 of the Act); |
| 2. | Assets for investment (main assets for investment shall be described separately); |
| 3. | Matters concerning additional issuance and retirement of equity securities; |
| 4. | Details of the continuance period or grounds for dissolution, if such continuance period or grounds for dissolution are prescribed; |
| 5. | Matters concerning assessment of the limited-liability investment company’s property and calculation of the base price; |
| 6. | Matters concerning distribution of assets, etc., other than profits; |
| 7. | Outline of contracts on entrustment of business affairs, which will be executed with a collective investment business entity, a trust business entity, and a general administration company (including matters concerning the method of calculating remuneration and other fees, the payment method and the time for payment); |
| 8. | Matters concerning replacement of the collective investment business entity and the trust business entity; |
| 9. | Matters concerning amendment to the articles of incorporation; |
| 10. | The fiscal term of the limited-liability investment company; |
| 11. | The preparation date of the articles of incorporation; and |
| 12. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting partners. |
| (2) | The term "documents specified by Presidential Decree" in the main body of Article 207 (3) of the Act means the following documents: |
| 1. | The articles of incorporation; and |
| 2. | Certificates issued by banks responsible for receipt of contributions and other financial institutions in relation to receipt and safekeeping of contributions. |
법령보기 화면
| Article 235 (Descriptions of Equity Securities) |
|
The term "matters prescribed by Presidential Decree" in Article 208 (2) 5 of the Act means the following matters: | 2. | The time for distribution of profits and other items; |
| 3. | Terms and conditions of redemption of equity securities (a statement as to the fact that it is not allowed to claim redemption, in cases where the equity securities do not allow a claim for redemption); |
| 4. | The continuance period, if any; and |
| 5. | The name of the investment trader or broker who sold the equity securities. |
법령보기 화면
| Article 236 (Descriptions of Articles of Incorporation) |
|
| (1) | The term "matters prescribed by Presidential Decree" in Article 213 (1) 8 of the Act means the following matters: |
| 1. | The type of limited-partnership investment company (referring to the type according to the classification under Article 229 of the Act); |
| 2. | Assets for investment (main assets for investment shall be described separately); |
| 3. | Matters concerning additional issuance and retirement of equity securities; |
| 4. | Details of the continuance period or grounds for dissolution, if such continuance period or grounds for dissolution are prescribed; |
| 5. | Matters concerning assessment of the limited-partnership investment company’s property and calculation of the base price; |
| 6. | Matters concerning distribution of assets, etc., other than profits; |
| 7. | Outline of contracts on entrustment of business affairs, which will be executed with a collective investment business entity, a trust business entity, and a general administration company (including matters concerning the method of calculating remuneration and other fees, the payment method and the time for payment); |
| 8. | Matters concerning replacement of the collective investment business entity and the trust business entity; |
| 9. | Matters concerning amendment to the articles of incorporation; |
| 10. | The fiscal term of the limited-partnership investment company; |
| 11. | The preparation date of the articles of incorporation; and |
| 12. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting partners. |
| (2) | The term "documents specified by Presidential Decree" in the main body of Article 213 (3) of the Act means the following documents: |
| 1. | The articles of incorporation; and |
| 2. | Certificates issued by banks responsible for receipt of contributions and other financial institutions in relation to receipt and safekeeping of contributions. |
Section 3 Collective Investment Scheme in Form of Association
법령보기 화면
| Article 237 (Descriptions of Association Agreement) |
|
The term "matters prescribed by Presidential Decree" in Article 218 (1) 9 of the Act means the following matters: | 1. | The type of investment association (referring to the type according to the classification under Article 229 of the Act); |
| 2. | Assets for investment (main assets for investment shall be described separately); |
| 3. | Matters concerning additional issuance and retirement of equity securities; |
| 4. | Matters concerning assessment of the investment association’s property and calculation of the base price; |
| 5. | Matters concerning distribution of assets, etc., other than profits; |
| 6. | Outline of contracts on entrustment of business affairs, which will be executed with a collective investment business entity, a trust business entity, and a general administration company (including matters concerning the method of calculating remuneration and other fees, the payment method and the time for payment); |
| 7. | Matters concerning replacement of the collective investment business entity and the trust business entity; |
| 8. | Matters concerning amendment to the association agreement; |
| 9. | The fiscal term of the investment association; |
| 10. | The preparation date of the association agreement; and |
| 11. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting members of the association. |
법령보기 화면
| Article 238 (Reporting on Dissolution) |
|
Pursuant to the latter part of Article 221 (1) of the Act, the liquidator shall report the following matters to the Financial Services Commission within 30 days of the dissolution date: | 1. | Reasons for and the date of dissolution; and |
| 2. | The name and citizen registration number of the liquidator (or the trade name and business registration number, if the liquidator is a corporation). |
법령보기 화면
| Article 239 (Descriptions of Undisclosed Association Agreement) |
|
The term "matters prescribed by Presidential Decree" in Article 224 (1) 9 of the Act means the following matters: | 1. | The type of undisclosed investment association (referring to the type according to the classification under Article 229 of the Act); |
| 2. | Assets for investment (main assets for investment shall be described separately); |
| 3. | Matters concerning additional issuance and retirement of equity securities; |
| 4. | Matters concerning assessment of the undisclosed investment association’s property and calculation of the base price; |
| 5. | Matters concerning distribution of assets, etc., other than profits; |
| 6. | Outline of contracts on entrustment of business affairs, which will be executed with a collective investment business entity, a trust business entity, and a general administration company (including matters concerning the method of calculating remuneration and other fees, the payment method and the time for payment); |
| 7. | Matters concerning replacement of the collective investment business entity and the trust business entity; |
| 8. | Matters concerning amendment to the undisclosed association agreement; |
| 9. | The fiscal term of the undisclosed investment association; |
| 10. | The preparation date of the undisclosed association agreement; and |
| 11. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting members of the undisclosed association. |
CHAPTER Ⅲ TYPES OF COLLECTIVE INVESTMENT SCHEMES
Section 1 Types of Collective Investment Schemes
법령보기 화면
| Article 240 (Minimum Investment Ratio by Type of Collective Investment Scheme) |
|
| (1) | The term "ratio prescribed by Presidential Decree" in subparagraph 1 of Article 229 of the Act means 50/100. |
| (2) | The term "securities specified by Presidential Decree" in subparagraph 1 of Article 229 of the Act means securities falling under any of the following subparagraphs: |
| 1. | Beneficiary certificates, collective investment securities, or asset- backed securities of trust property, collective investment property, or securitized assets, in cases where any of the following assets amounts to 50/100 or more of the trust property, collective investment property, or securitized assets: |
| (b) | An interest in real property, such as surface rights, easement, rights to lease on a deposit basis, rights to lease, rights to parcel sale; |
| (d) | A special asset under subparagraph 3 of Article 229 of the Act (hereinafter referred to as the "special asset"); |
| 3. | Stocks issued by a ship investment company under the Ship Investment Company Act; |
| 4. | Stocks and bonds issued by a corporation with the objective of carrying out social infrastructure projects under the Act on Private Participation in Infrastructure; |
| 5. | Equity securities issued by a corporation (excluding the companies specializing in investment in and financing of social infrastructure under the Act on Private Participation in Infrastructure) with the objective of investing in a corporation established for the purpose of carrying out a single social infrastructure project in accordance with the aforesaid Act by acquiring stocks and bonds issued by the latter corporation or acquiring claims to loans granted to the latter corporation; and |
| 6. | Securities under Article 80 (1) 1 (d) through (g); |
| (3) | The term "ratio prescribed by Presidential Decree" in subparagraph 2 of Article 229 of the Act means 50/100. |
| (4) | The term "manner prescribed by Presidential Decree" in subparagraph 2 of Article 229 of the Act means any of the following means: |
| 1. | Development of real estate; |
| 2. | Management and amelioration of real estate; |
| 3. | Leasing of real estate; |
| 4. | Acquisition of an interest in real estate, such as surface rights, easement, rights to lease on a deposit basis, rights to lease, rights to parcel sale; and |
| (5) | The term "securities related to real estate as prescribed by Presidential Decree" in subparagraph 2 of Article 229 of the Act means securities falling under any of the following subparagraphs: |
| 1. | Securities under paragraph (2) 1 (excluding those under item (d)); |
| 2. | Stocks under paragraph (2) 2; and |
| 3. | Securities under paragraph (2) 6. |
| (6) | The term "ratio prescribed by Presidential Decree" in subparagraph 3 of Article 229 of the Act means 50/100. |
법령보기 화면
| Article 241 (Money Market Funds) |
|
| (1) | The term "short-term financial instruments, as specified by Presidential Decree" in subparagraph 5 of Article 229 of the Act means assets denominated in Korean won falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Negotiable certificates of deposits with a remaining maturity of six months or less; |
| 2. | State bonds, local government bonds, special bonds, corporate bonds (excluding stock-related corporate bonds under subparagraph 4 (b) of Article 71 of the Act and corporate bonds issued through private placement), or corporate commercial paper with a maturity of one year or less: Provided, That purchasing with resale agreement shall not be subject to the restriction on remaining maturity; |
| 3. | Bills or notes under Article 79 (2) 5 with a remaining maturity of one year or less (excluding corporate commercial paper); |
| 4. | A short-term loan under Article 83 (4) of the Act; |
| 5. | A deposit in a financial institution falling under any item of Article 79 (2) 5 with a remaining maturity of six months or less; and |
| 6. | Collective investment securities of another money market fund. |
| (2) | The term "manner prescribed by Presidential Decree" in subparagraph 5 of Article 229 of the Act means any of the following means: |
| 1. | Securities shall not be managed by lending or borrowing them; |
| 2. | Purchasing with resale agreement shall not exceed the limit prescribed and publicly notified by the Financial Services Commission; |
| 3. | The weighted average period of remaining maturities for collective investment property of each money market fund shall not exceed the limit prescribed and publicly notified by the Financial Services Commission; |
| 4. | In cases where the collective investment property of a money market fund (excluding a money market fund whose sale is restricted pursuant to Article 76 (2) of the Act or in which case redemption has deferred pursuant to Article 237 of the Act) fails to meet the following criteria, no money market fund shall be created or established additionally, nor shall it accept entrustment of management of another money market fund: Provided, That the following criteria shall not be applicable to cases where a money market fund for consolidating and managing surplus funds pursuant to Article 81 of the State Finance Act or a money market fund in which the aforesaid money market fund invests is created or established, or where the management of such money market fund is entrusted: |
| (a) | In cases where all investors in the money market fund are private individuals: 300 billion won or more; and |
| (b) | In cases where all investors in the money market fund are corporations: 500 billion won or more; and |
| 5. | It shall observe the rules prescribed and publicly notified by the Financial Services Commission with respect to credit rating of assets for investment, limitations on investment by credit grade, the method of calculating the weighted average of remaining maturity, and other matters for maintaining stability in asset management. |
Section 2 Collective Investment Schemes in Extraordinary Form
법령보기 화면
| Article 242 (Closed-End Fund) |
|
| (1) | The term "as prescribed by Presidential Decree" in Article 230 (2) of the Act means the time falling under any of the following subparagraphs, when issuing securities at a price determined, considering the base price and the trading price in the securities exchange: |
| 1. | In cases where collective investment securities of a closed-end fund are additionally issued within the limit of dividends of profits received for the closed-end fund; |
| 2. | In cases where the relevant trust business entity confirms that there is no possibility to undermine existing investors’ interests; and |
| 3. | In cases where all existing investors consent. |
| (2) | The term "cases prescribed by Presidential Decree" in Article 230 (5) of the Act means cases falling under any of the following subparagraphs: Provided, That in the cases of subparagraphs 1 through 3, the creation or establishment of a collective investment scheme which does not invest in assets without marketability prescribed and publicly notified by the Financial Services Commission shall be excluded: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Where a real estate fund is created or established; |
| 2. | Where a special asset fund is created or established; |
| 3. | Where a mixed asset fund under subparagraph 4 of Article 229 of the Act is created or established; and |
| 4. | Where a collective investment scheme that may invest in any non-marketable asset specified and publicly notified by the Financial Services Commission in excess of the ratio prescribed and publicly notified by the Financial Services Commission within the limit of 20/100 of the total assets of each collective investment scheme is created or established. |
법령보기 화면
| Article 243 (Multiple-Class Funds) |
|
| (1) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, when it creates or establishes a multiple-class fund under Article 231 of the Act (hereinafter referred to as the "multiple-class fund"), include the following matters in the registration application under Article 211 (1): |
| 1. | Matters concerning sales commission and sales remuneration for each class of collective investment securities; |
| 2. | Matters concerning conversion, if an investor has a right to convert a class of collective investment securities into various classes; |
| 3. | Matters concerning expenses borne by each class of the collective investment property; and |
| 4. | Other matters specified and publicly notified by the Financial Services Commission, as necessary for protecting investors. |
| (2) | The conversion price applicable at the time when securities are converted in accordance with paragraph (1) 2 shall be the base price of each class of collective investment securities. In such cases, the collective investment business entity of an investment trust or an undisclosed investment association, or the trust company, etc. shall not charge buy-back fees against investors who claim to convert securities. |
| (3) | Each investment trader or broker shall, when it sells collective investment securities of a multiple-class fund, provide an explanation as to the fact that there are multiple classes of collective investment securities for which sales commission or sales remuneration are different and as to the difference between various classes of collective investment securities. |
| (4) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, when it seeks to change a collective investment scheme to a multiple-class fund, file for revised registration, including the matters under subparagraphs of paragraph (1) in accordance with Article 211 (3). |
| (5) | Necessary matters concerning the protection of investors in a multiple-class fund shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 244 (Umbrella Funds) |
|
| (1) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, when it creates or establishes an umbrella fund under Article 232 (1) of the Act (hereinafter referred to as the "umbrella fund"), describe matters concerning the convertible collective investment scheme in the registration application under Article 211 (1). |
| (2) | The conversion price applicable at the time when collective investment securities of an umbrella fund are converted into collective investment securities of another collective investment scheme in accordance with Article 232 (1) of the Act shall be the base price of collective investment securities of each collective investment scheme. In such cases, the collective investment business entity of an investment trust or an undisclosed investment association, or the trust company, etc. shall not charge buy-back fees against investors who claim to convert securities. |
| (3) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, when it seeks to change a collective investment scheme to an umbrella fund, file for revised registration, describing the matters concerning the convertible collective investment scheme under paragraph (1) in accordance with Article 211 (3). |
| (4) | Necessary matters concerning the protection of investors in an umbrella fund shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (3). |
법령보기 화면
| Article 245 (Master-Feeder Funds) |
|
| (1) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, when it creates or establishes a master-feeder fund under Article 233 (3) of the Act (hereinafter referred to as the "master-feeder fund"), include matters concerning collective investment securities of a master fund under Article 233 (1) of the Act (hereinafter referred to as the "master fund"), acquired by a feeder fund under Article 233 (1) of the Act (hereinafter referred to as "feeder fund"), in the registration application under Article 211 (1). |
| (2) | No investment trader or broker may sell investors collective investment securities of a master fund. |
| (3) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, when it seeks to change a collective investment scheme to a master-feeder fund, file for revised registration, including matters concerning the collective investment securities of the master fund, acquired by the feeder fund, in accordance with Article 211 (3). |
| (4) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, when it seeks to make a change under paragraph (3), transfer all assets of the collective investment scheme to the master fund newly created or established, and shall deliver collective investment securities of the master fund, equivalent to the value of the transferred assets, to the changed feeder fund. In such cases, it shall not consolidate assets of two or more collective investment schemes to transfer them to a single master fund, nor shall it separate assets of a single collective investment scheme to transfer them to two or more master funds. |
| (5) | Necessary matters concerning the protection of investors in a master-feeder fund shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 246 (Requirements for Exchange-Traded Funds) |
|
The term "requirements prescribed by Presidential Decree" in the latter part of Article 234 (1) 1 of the Act means the following requirements that shall be fully met: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> | 1. | The index shall be one that collectively indicates the prices of issues or the level of prices of a multiple number of issues traded on the Exchange, a foreign exchange, or a market specified and publicly notified by the Financial Services Commission; |
| 2. | The prices or index under subparagraph 1 shall be publicly announced to investors through the market under the aforesaid subparagraph; and |
| 3. | The fund shall satisfy the requirements prescribed and publicly notified by the Financial Services Commission with respect to the requirements for prices of underlying assets, the issues comprising the index, the weight of each issue comprising the index, the management method necessary for the linkage to changes in the price and index, and other matters. |
법령보기 화면
| Article 247 (Designated Participating Company) |
|
The term "person specified by Presidential Decree" in Article 234 (2) of the Act means a person who engages in both an investment trading business (excluding underwriting business) and an investment brokerage business (limited to commissioned sale business) for securities and whom a collective investment business entity designates to carry out the following business affairs (hereinafter referred to as the "designated participating company"): <Amended by Presidential Decree No. 21291, Feb. 3, 2009> | 1. | Business affairs requested of a collective investment business entity for creation, additional creation, or establishment of an exchange-traded fund or issuance of new stocks for such exchange-traded fund; |
| 2. | Business affairs requested of a collective investment business entity for termination, partial termination, or dissolution of an exchange- traded fund or partial retirement of stocks; |
| 3. | Business affairs related to trading or commissioned trading of securities for changing money or securities paid by investors (hereafter referred to as "payments" in this Section) to an asset amounting to a certain unit prescribed and publicly notified by the Financial Services Commission (hereinafter referred to as the "creation unit"); and |
| 4. | Business affairs for facilitating trades of collective investment securities of an exchange-traded fund in the securities exchange and helping the price of such collective investment securities to be converged into net asset value of the collective investment securities per unit or per share (applicable only to designated participating companies specified and publicly notified by the Financial Services Commission). |
법령보기 화면
| Article 248 (Creation or Establishment) |
|
| (1) | Upon receiving a request from a designated participating company to create, additionally create, or establish an exchange-traded fund or issue new stocks for such exchange-traded fund, a collective investment business entity may create, additionally create, or establish an exchange- traded fund or issue new stocks for such exchange-traded fund in accordance with the provisions of the trust deed or the articles of incorporation of the investment company. |
| (2) | A designated participating company shall, when it seeks to make a request for creation, additional creation, or establishment of an exchange- traded fund or issuance of new stocks for such exchange-traded fund in accordance with subparagraph 1 of Article 247, convert the payments paid by investors directly or through an investment trader or broker to an asset amounting to the creation unit; provided, the same shall not apply to cases specified and publicly notified by the Financial as cases where it is difficult to convert them to an asset. |
| (3) | Necessary matters concerning the payment method of the payments, creation, additional creation, or establishment of an exchange-traded fund or issuance of new stocks for such exchange-traded fund, and other similar matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) and (2). |
법령보기 화면
| Article 249 (Redemption of Collective Investment Securities of Exchange- Traded Fund) |
|
| (1) | An investor in an exchange-traded fund may claim the investment trader or broker who sells the collective investment securities (excluding the designated participating company; hereafter the same shall apply in this Article) or the designated participating company for the collective investment securities (limited to cases where the designated participating company is the investment trader or broker who sold the collective investment securities) to redeem the collective investment securities by creation unit: Provided, That if the investment trader or broker who sells the collective investment securities is unable to accept the claim for redemption due to dissolution, revocation of authorization, suspension of business, or any other event specified and publicly notified by the Financial Services Commission (hereafter referred to as "dissolution, etc." in this Chapter), such claim for redemption may be filed with the designated participating company. |
| (2) | The investment trader or broker who has received a claim for redemption of collective investment securities of an exchange-traded fund in accordance with the main sentence of paragraph (1) shall demand the designated participating company to redeem them: Provided, That if the designated participating company to whom it is intended to claim to redeem collective investment securities of an exchange-traded fund is unable to carry on business affairs related to the redemption of the collective investment securities due to dissolution, etc., the investment trader or broker may demand the collective investment business entity directly to redeem the collective investment securities. |
| (3) | An investor in an exchange-traded fund may, if the designated participating company to whom he/she intends to claim to redeem collective investment securities of the exchange-traded fund in accordance with the proviso to paragraph (1), is unable to carry on business affairs related to redemption of the collective investment securities due to dissolution, etc., claim the collective investment business entity directly to redeem the collective investment securities. |
| (4) | A designated participating company shall, upon receiving a claim or demand for redemption of collective investment securities of an exchange- traded fund in accordance with the main sentence of paragraph (1) or (2), demand the collective investment business entity of the exchange traded investment trust or the exchange-traded investment company to redeem them without delay. |
| (5) | An investor in collective investment securities of an exchange-traded fund, the investment trader or broker or the designated participating company may, if he/she claims or demands the collective investment business entity to redeem the securities in accordance with the proviso to paragraph (2) or paragraph (3) or (4) (applicable only to cases where redemption is demanded to the collective investment business entity of an exchange-traded investment trust), but if the collective investment business entity that shall accept such claim or demands for redemption is unable to redeem them due to dissolution, etc., file the claim directly with the relevant trust business entity. |
| (6) | The collective investment business entity of an exchange-traded investment trust and the trust business entity shall, upon receiving a demand for redemption in accordance with the proviso to paragraph (2) or any provision of paragraphs (3) through (5), accept the claim for redemption without delay, and the collective investment business entity of the exchange-traded investment company and the trust business entity shall demand the exchange-traded investment company to accept the claim for redemption without delay. |
| (7) | A collective investment business entity, a trust business entity, or an exchange-traded investment company that is obligated to accept a claim for redemption in accordance with the proviso to paragraph (2) or any provision of paragraphs (3) through (6) shall redeem the relevant securities with the asset amounting to the creation unit by terminating part of the exchange-traded investment trust or retiring part of stocks of the exchange-traded investment company (excluding cases specified and publicly notified by the Financial Services Commission), based on the collective investment property of the exchange-traded fund after management of the collective investment property is closed on the day on which such claim for redemption is filed. |
| (8) | If an investment trader or broker, a designated participating company, a collective investment business entity, or a trust business entity is, upon receiving a claim or demand for redemption in accordance with any provision of paragraphs (1) through (6), unable to redeem collective investment securities by the day stipulated in the collective investment agreement due to dissolution, etc., it shall postpone the redemption in accordance with Article 237 of the Act and notify the investor of the fact without delay. |
법령보기 화면
| Article 250 (Listing and Delisting of Exchange-Traded Funds) |
|
| (1) | Collective investment securities of an exchange-traded fund shall be listed in accordance with the regulations on listing of securities under Article 390 (1) of the Act. |
| (2) | If an event specified and publicly notified by the Financial Services Commission occurs in relation to collective investment securities of an exchange-traded fund, the Exchange may delist such collective investment securities. |
| (3) | A collective investment business entity of an exchange-traded in vestment trust and an exchange-traded investment company shall, when collective investment securities of the exchange-traded fund are delisted pursuant to paragraph (2), terminate or dissolve the exchange-traded fund within the period prescribed by Ordinance of the Prime Minister from the delisting date. In such cases, Article 192 (1) of the Act shall not apply to an exchange-traded investment trust. |
| (4) | A collective investment business entity shall, when an exchange-traded fund is terminated or dissolved pursuant to paragraph (3), report it to the Financial Services Commission within seven days of the termination date or dissolution date. |
법령보기 화면
| Article 251 (Public Notice of Property Owned) |
|
| (1) | A collective investment business entity of an exchange-traded investment trust or an exchange traded investment company shall issue public notice of the details of composition of assets paid in the exchange- traded fund (including the details of composition of assets in the creation unit for new creation, additional creation, new establishment, or issuance of new stocks) as at the day immediately before the public notice date each day through the securities exchange. |
| (2) | The Exchange shall issue public notice of net asset value and tracking error (referring to the difference between the floating rate of net asset value per unit or per share of collective investment securities of an exchange- traded fund and the floating rate of a certain multiple rate (including a negative multiple rate) of changes in index at which the exchange-traded fund aims] of an exchange-traded fund at least once daily. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
법령보기 화면
| Article 252 (Special Exceptions to Management) |
|
| (1) | Notwithstanding Articles 80 (4) and 86 (1), each collective investment business entity may manage the collective investment property of an exchange-traded fund in any of the following means in accordance with the proviso to Article 81 (1) of the Act and Article 234 (4) of the Act: |
| 1. | Investing 30/100 or less of the total assets of each exchange-traded fund in an identical issue of securities. In such cases, equity securities (including securities depository receipts related to equity securities issued by a corporation, etc.; hereafter the same shall apply in this paragraph) and securities except the equity securities among securities issued by an identical corporation, etc. shall be deemed an identical issue respectively; and |
| 2. | Investing the total assets of each exchange-traded fund in 20/100 or less of the total number of equity securities issued by an identical corporation, etc. |
| (2) | Notwithstanding the main sentence of Article 84 (1) of the Act, every collective investment business entity may trade securities with an interested party (referring to an interested party under Article 84 (1) of the Act) or engage in any other transaction with an interested party for the purpose of creating, additionally creating, or establishing an exchange-traded fund or issuing new stocks for such exchange-traded fund. |
CHAPTER Ⅳ REDEMPTION OF COLLECTIVE INVESTMENT SECURITIES
법령보기 화면
| Article 253 (Events Excusing Performance in Response to Claims for Redemption) |
|
The term "reason specified by Presidential Decree" in the proviso to Article 235 (2) of the Act means an interruption of an electronic computer system due to natural disaster or any other similar event due to which the Financial Services Commission deems it difficult for an investment trader or broker who sold collective investment securities to carry on his/her own business under normal circumstances.
법령보기 화면
| Article 254 (Exceptions to Redemption Method) |
|
| (1) | The term "as otherwise provided for by Presidential Decree" in Article 235 (4) of the Act means cases that fall under any of the following subparagraphs and where the collective investment agreement stipulates the redemption date in excess of 15 days from the date on which a claim for redemption is filed: |
| 1. | Where the collective investment property of a collective investment scheme is invested in any non-marketable asset specified and publicly notified by the Financial Services Commission in excess of the ratio prescribed and publicly notified by the Financial Services Commission within the limit of 10/100 of the total assets of the collective investment scheme; and |
| 2. | Where the collective investment property of a collective investment scheme is invested in a foreign currency asset in excess of 50/100 of the total assets of the collective investment scheme. |
| (2) | The term "as prescribed by Presidential Decree" in the proviso to Article 235 (6) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where an investment trader or broker who has sold collective investment securities of a money market fund purchases the collective investment securities at the base price publicly notified by a private individual investor on a day on which the private individual investor files a claim for redemption within the limit of the greater amount of an amount equivalent to 5/100 of the sales volume of collective investment securities of the money market fund, and an amount prescribed and publicly notified by the Financial Services Commission; and |
| 2. | Where an investment trader or broker who has sold collective investment securities of a collective investment scheme (excluding collective investment securities of a money market fund) inevitably purchases part of the collective investment securities on the redemption date stipulated in the collective investment agreement of the collective investment scheme at the redemption price stipulated in the collective investment agreement in response to a claim filed by an investor for redemption on the basis of an amount. |
법령보기 화면
| Article 255 (Redemption Price and Fees) |
|
| (1) | The term "as prescribed by Presidential Decree" in the proviso to Article 236 (1) of the Act means cases that fall under any of the following subparagraphs and where the collective investment agreements stipulates that securities shall be redeemed on a day on which redemption is claimed at the base price publicly notified on the date of redemption claim: |
| 1. | Where an investment trader or broker sold collective investment securities of a money market fund and where the case falls under any of the following items: |
| (a) | Where an investor has agreed in advance with the investment trader or broker to have collective investment securities of the money market fund redeemed in order to pay the consideration for purchase of financial investment instruments, etc.; and |
| (b) | Where an investor has agreed in advance with the investment trader or broker to have collective investment securities of the money market fund redeemed in order to perform obligations arising on a regular basis, such as payment of public charges; and |
| 2. | Where an investment trader or broker sold collective investment securities of a money market fund to a person falling under any of the following items and where the collective investment securities are redeemed: |
| (b) | A money market fund managed with surplus funds consolidated pursuant to Article 81 of the State Finance Act. |
| (2) | The redemption fee shall be charged when collective investment securities are redeemed with the period of time stipulated in the collective investment agreement in accordance with Article 236 (2) of the Act. In such cases, the redemption fee may be charged on the basis of the redemption amount, profits, etc. |
| (3) | The base price calculated after the date of redemption claim under the main sentence of Article 236 (1) of the Act shall be the base price publicly notified after the second business day (referring to the third business day, in cases where an investor claims redemption after the reference time set for determining the date of redemption claim for collective investment securities as stipulated in the collective investment agreement) commencing from the date of redemption claim and stipulated in the collective investment agreement of the collective investment scheme. |
| (4) | Matters necessary for protecting investors in relation to paragraphs (2) and (3) shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 256 (Causes for Postponement of Redemption) |
|
The term "cause prescribed by Presidential Decree" in the former part of Article 237 (1) of the Act means a cause falling under any of the following subparagraphs: | 1. | Where it is factually impossible to redeem securities due to impossibility of disposition of collective investment property, and where the case falls under any of the following items: |
| (a) | Where it is impossible to dispose of collective investment property due to a significant slump in transactions; |
| (b) | Where it is impossible to dispose of collective investment property due to permanent closure, temporary closure, or business suspension of the securities exchange or a foreign securities exchange or any other similar event; and |
| (c) | Where natural disaster or any other similar event occurs; |
| 2. | Where it is anticipated that equality in dealing with investors will probably be undermined and where the case falls under any of the following items: |
| (a) | Where it is anticipated that other investors’ interests will probably be undermined, if collective investment property is disposed of in order to accept a claim for redemption because such disposition is likely to lead to default on payments for checks and bills, etc.; |
| (b) | Where it is anticipated that other investors’ interests will probably be undermined, if a claim for redemption is accepted, because assets that belong to collective investment property has no market value; and |
| (c) | Where it is anticipated that accepting a claim for redemption in a large volume will probably undermine equality in dealing with investors; |
| 3. | Where it is impossible to redeem collective investment securities because of dissolution, etc. of the investment trader or broker, the collective investment business entity, the trust business entity, the investment company, etc., to whom redemption is claimed or demanded; and |
| 4. | Where any other cause similar to those under subparagraphs 1 through 3 exists and where the Financial Services Commission deems it necessary to postpone redemption. |
법령보기 화면
| Article 257 (Matters Subject to Resolution of General Meeting for Postponement of Redemption) |
|
| (1) | The term "matters as prescribed by Presidential Decree" in the latter part of Article 237 (1) of the Act means the following matters: |
| 1. | The time and method for payment of redemption money, in cases where it is intended to resume redemption; |
| 2. | The period of time for postponement of redemption and the time and method for payment of redemption money when redemption is resumed, in cases where it is intended to continue postponement of redemption; and |
| 3. | The method for disposition of assets causing postponement of redemption, in cases where partial redemption is intended in accordance with Article 237 (5) of the Act. |
| (2) | The term "matters prescribed by Presidential Decree" in Article 237 (3) 1 (b) of the Act means the following matters: |
| 1. | The redemption price; and |
| 2. | The purport and scale of partial redemption, in cases where partial redemption is intended. |
| (3) | The term "matters prescribed by Presidential Decree" in Article 237 (3) 2 (d) of the Act means the following matters: |
| 1. | The redemption price and the time for payment of the redemption money, in cases where redemption is resumed; and |
| 2. | The purport and scale of partial redemption, in cases where partial redemption is intended. |
법령보기 화면
| Article 258 (Redemption Method When Redemption is Resumed) |
|
Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, when the cause for postponement of redemption is entirely or partially resolved after the general meeting of collective investors held for postponing redemption, redeem securities in accordance with the resolution adopted at the general meeting of collective investors in compliance with Article 237 (4) of the Act: Provided, That any collective investment business entity of an investment trust or an undisclosed investment association, or any investment company, etc. may redeem securities without holding a general meeting of collective investors, in cases where the cause for postponement of redemption is resolved before holding the general meeting of collective investors for postponement of redemption.
법령보기 화면
| Article 259 (Partial Redemption) |
|
| (1) | In cases where it is resolved at the general meeting of collective investors for partial redemption or postponement of redemption to accept partial redemption, each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall separate the assets causing postponement of redemption from remaining assets (hereinafter referred to as "normal assets") in accordance with Article 237 (7) of the Act as of the day immediately before the date on which partial redemption is resolved. |
| (2) | With respect to normal assets, each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall pay redemption money in proportion to the share of collective investment securities held by each investor by calculating the base price for the normal assets in a formula stipulated in the collective investment agreement. |
| (3) | Any collective investment business entity of an investment trust or an undisclosed investment association, or any investment company, etc. may, when it has created or established a separate collective investment scheme in accordance with Article 237 (6) of the Act, continue issuing, selling, and redeeming the collective investment securities of the collective investment scheme comprised of normal assets. |
| (4) | Necessary matters concerning the method and procedure for partial redemption, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (3). |
CHAPTER Ⅴ ASSESSMENT AND ACCOUNTING
법령보기 화면
| Article 260 (Assessment Method for Collective Investment Property) |
|
| (1) | The term "method prescribed by Presidential Decree" in the main sentence of Article 238 (1) of the Act means the closing market price at which the property was traded in the securities exchange (including an overseas securities exchange) or publicly announced by the derivatives market (including an overseas derivatives market) in which exchange- traded derivatives are traded: Provided, That if a case falls under any of the following subparagraphs, securities may be assessed at a price prescribed in the corresponding subparagraph: |
| 1. | The acquisition price of equity securities, in cases where a private equity fund invests in such equity securities in accordance with Article 270 (1) 1 or 2 of the Act; |
| 2. | The price based on price information furnished by two or more bond rating companies on the basis of the closing market price at which debt securities were traded in the securities market on the assessment reference date, in cases of debt securities for which the market price has been formed in the securities exchange for ten days or more each month continuously during three months immediately before the month on which the assessment reference date falls; and |
| 3. | The price based on price information furnished by two or more bond rating companies, in cases of debt securities for which the market price has been formed in an overseas securities exchange. |
| (2) | The term "fair market value prescribed by Presidential Decree" in the main sentence of Article 238 (1) of the Act means the price assessed for each type of asset that belongs to collective investment property by the committee on assessment of collective investment property (referring to the executive partner in cases of a private equity fund; hereafter the same shall apply in this paragraph), considering the following matters, exercising a duty of good faith under Article 79 (2) of the Act, and maintaining consistency in assessment. In such cases, the committee on assessment of collective investment property shall assess non-performing assets that belong to the collective investment property, including defaulted bonds, in compliance with the guidelines prescribed and publicly notified by the Financial Services Commission: |
| 1. | Acquisition prices of assets for investment; |
| 2. | Trading prices of assets for investment; |
| 3. | Prices informed by the following persons with respect to assets for investment: |
| (a) | A bond rating company; |
| (c) | A credit rating business entity; |
| (d) | An appraisal business entity under the Public Notice of Values and Appraisal of Real Estate Act; |
| (e) | An investment trader who runs an underwriting business; |
| (f) | A person similar to a person in any provision of items (a) through (e), who holds permission, authorization, registration, etc. in accordance with a relevant Act and subordinate statutes; and |
| (g) | A foreigner similar to a person in any provision of items (a) through (f); |
| 5. | Base prices of collective investment securities. |
| (3) | The term "as prescribed by Presidential Decree" in the proviso to Article 238 (1) of the Act means cases of collective investment property of a money market fund, while the term "value prescribed by Presidential Decree" in the aforesaid provisions means a book price prescribed and publicly notified by the Financial Services Commission (hereafter referred to as the "book price" in this paragraph). In such cases, the collective investment business entity shall monitor the difference between the base price assessed according to the book price and the base price assessed in accordance with paragraphs (1) and (2), and shall take a necessary measure as stipulated in the collective investment agreement, if the difference exceeds or is likely to exceed the rate prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 261 (Committee on Assessment of Collective Investment Property) |
|
| (1) | Every collective investment business entity shall organize the committee on assessment of collective investment property with the following persons: |
| 1. | The executive responsible for assessment of collective investment property; |
| 2. | The executive responsible for management of collective investment property; |
| 3. | The compliance officer; and |
| 4. | Other persons deemed by the Financial Services Commission as those necessary for fair assessment of collective investment property. |
| (2) | The committee on assessment of collective investment property shall report on the matters concerning assessment of collective investment property, including whether the guidelines for assessment of collective investment property under Article 238 (3) of the Act (hereinafter referred to as "guidelines for assessment of collective investment property") have been complied with, to the collective investment business entity’s board of directors (referring to the committee on management of collective investment property under Article 250 (2) of the Act, in cases of a bank concurrently running a collective investment business under Article 250 (1) of the Act) once every half year. |
| (3) | The term "matters prescribed by Presidential Decree" in Article 238 (3) 4 of the Act means the following matters: |
| 1. | Matters concerning detailed guidelines applicable to classification and assessment of non-performing assets specified and publicly notified by the Financial Services Commission, including defaulted bonds; |
| 2. | Matters concerning correction of errors in assessment of collective investment property; |
| 3. | Matters concerning the guidelines for assessment of assets included in collective investment property by type; and |
| 4. | Matters concerning the assessment method of accounts receivable, accounts payable, etc. under Article 192 (4) of the Act. |
법령보기 화면
| Article 262 (Calculation and Public Notice of Base Price) |
|
| (1) | The term "formula prescribed by Presidential Decree" in Article 238 (6) of the Act means the formula for calculating by subtracting total liabilities from total assets (referring to the value calculated by the assessment method under Article 238 (1) of the Act) stated on the balance sheet as at the day immediately before the publicly notified and posted date of the base price under Article 238 (7) of the Act and dividing the subtracted amount by the total number of collective investment securities as at the day immediately before the publicly notified and posted date. In such cases, each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, if an error in calculation of the base price publicly notified and posted is discovered, revise the base price without delay by correction of assessment under Article 261 (3) 2 and publicly notify and post the correct price again (excluding cases where the difference between the base price publicly notified and posted initially and the revised base price does not exceed 1/1000 of the base price publicly notified and posted initially). |
| (2) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, when it seeks to revise the base price in accordance with the latter part of paragraph (1), obtain confirmation of the compliance officer on the collective investment business entity and the trust business entity. |
| (3) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, when it revises the base price in accordance with the latter part of paragraph (1), report the fact to the Financial Services Commission as prescribed and publicly notified by the Financial Services Commission. |
| (4) | Further details necessary for the procedure for revision to the base price, reporting on revisions, and other similar matters shall be prescribed and publicly notified by the Financial Services Commission. |
| (5) | The term "as specified further by Presidential Decree" in the proviso to Article 238 (7) of the Act means cases where collective investment property is invested in a foreign currency asset and where it is difficult to publicly notify and post the base price on a daily basis. |
법령보기 화면
| Article 263 (Entrustment of Establishment of Accounting Principles) |
|
The term "corporation or organization specified by Presidential Decree" in the former part of Article 240 (2) of the Act means the Korea Accounting Institute.
법령보기 화면
| Article 264 (Exemption from Accounting Audits) |
|
The term "as specified further by Presidential Decree" in the proviso to the main body of Article 240 (3) of the Act means cases falling under any of the following subparagraphs as of the end of a fiscal term and the day falling under any subparagraph of the aforesaid paragraph: | 1. | Where the total assets of a collective investment scheme do not exceed five billion won; and |
| 2. | Where the total assets of a collective investment scheme are more than five billion won but not more than ten billion won, and where collective investment securities are not additionally issued for six months from the end of a fiscal term until the day falling under any subparagraph of Article 240 (3) of the Act. |
법령보기 화면
| Article 265 (Appointment of Accounting Auditor) |
|
| (1) | Pursuant to Article 240 (4) of the Act, each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. (excluding investment companies) shall, when it seeks to appoint or replace the accounting auditor of a collective investment scheme, obtain consent (referring to a resolution of the audit committee, if an audit committee is installed) of the auditor of the collective investment business entity that manages the collective investment property of the collective investment scheme, while an investment company shall, when it seeks to appoint or replace the accounting auditor, obtain consent of supervisory directors. |
| (2) | The guidelines for accounting audit of collective investment property shall be prescribed and publicly notified by the Financial Services Commission, subject to prior deliberation by the Securities and Futures Commission. |
| (4) | The accounting auditor shall, upon completion of accounting audit of collective investment property, prepare an accounting audit report describing the following matters, and shall submit it to each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. without delay: |
| 1. | A balance sheet of collective investment property; |
| 2. | An income statement of collective investment property; |
| 3. | A calculation sheet of the base prices of collective investment property; and |
| 4. | Details of transactions between the collective investment business entity and its interested parties (referring to interested parties under Article 84 (1) of the Act). |
| (5) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall, upon receiving an accounting audit report from the accounting auditor, submit it to the Financial Services Commission, the Association, the investment trader or broker who sells the collective investment securities, and the trust business entity responsible for safekeeping and management of collective investment property. |
| (6) | Each collective investment business entity of an investment trust or an undisclosed investment association, or each investment company, etc. shall make the accounting audit report available to the relevant investors for inspection in a manner prescribed and publicly notified by the Financial Services Commission. |
| (7) | Expenses for accounting audits shall be borne by the collective investment scheme subject to the accounting audit. |
법령보기 화면
| Article 266 (Distribution of Profits) |
|
| (1) | The term "collective investment schemes specified by Presidential Decree" in the proviso to Article 242 (1) of the Act means collective investment schemes (excluding money market funds under Article 241).<Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (2) | The method and time for distribution of profits under Article 242 (1) of the Act shall be stipulated by collective investment agreement. |
| (3) | An investment company shall, when it seeks to distribute profits only by stocks newly issued, bring the matter to the board of directors for resolution on the number of stocks to be issued, the time to issue them, and other matters necessary for issuance of stocks. |
| (4) | The collective investment business entity of an investment trust or an undisclosed investment association, investment company, etc. shall, when it seeks to distribute dividends in cash in excess of profits, state such intent in the collective investment agreement and shall determine the method and time for distribution of profits and other necessary matters in advance. |
법령보기 화면
| Article 267 (Method of Reporting Deficiency of Net Assets) |
|
| (1) | Pursuant to Article 243 (1) of the Act, an investment company shall, when its net assets do not meet the minimum net asset requirement under Article 194 (2) 7 of the Act, submit a report on such fact to the Financial Services Commission, along with a document proving the cause, etc. |
| (2) | Necessary matters concerning the form and method of preparation of the report under paragraph (1) shall be prescribed and publicly notified by the Financial Services Commission. |
CHAPTER Ⅵ SAFEKEEPING AND MANAGEMENT OF COLLECTIVE INVESTMENT PROPERTY
법령보기 화면
| Article 268 (Deposit of Securities) |
|
| (1) | The term "instruments specified by Presidential Decree" in Article 246 (3) of the Act means the following instruments: |
| 1. | Negotiable certificates of deposit in Korean won; and |
| 2. | Other instruments specified and publicly notified by the Financial Services Commission. |
| (2) | A trust business entity shall, when it receives instructions from a collective investment business entity on acquisition, disposition, etc. of securities (including those under subparagraphs of paragraph (1); hereafter the same shall apply in this paragraph) or instructions on safekeeping, management, etc. of securities, carry out the matters as instructed by settling delivery of securities and payment of the proceeds thereof simultaneously in accordance with Article 246 (4) of the Act. |
| (3) | The term "cases prescribed by Presidential Decree" in the proviso to Article 246 (5) of the Act means cases falling under any of the following subparagraphs: Provided, That in cases of subparagraphs 2 and 3, the relevant amount shall not exceed 10/100 of the total amount deposited to financial institutions or the total amount of short-term loan from among collective investment property: <Added by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Where a trust business entity trades the cash left after the collective investment business entity invests collective investment property in assets for investment with its own property as specified in collective investment agreement; |
| 2. | Deposit in financial institutions; |
| 4. | Where foreign currencies are purchased or sold in accordance with the Foreign Exchange Transactions Act (including forward exchange transactions for the purpose of avoiding exchange risk). |
법령보기 화면
| Article 269 (Trust Business Entity’s Duty to Monitor) |
|
| (1) | Pursuant to Article 247 (1) and (2) of the Act, every trust business entity shall ascertain whether any details of an instruction, including the following matters, violate the guidelines prescribed and publicly notified by the Financial Services Commission, after it carries out acquisition, disposition, etc. of an asset or safekeeping, management, etc. of an asset according to the instruction: |
| 1. | Matters provided for in Articles 80 through 85 of the Act: Provided, That excluded therefrom are the matters in which it is impossible to ascertain, only with information on the collective investment property that a specific trust business entity retains in its custody and manages, whether there is any violation, because there are two or more trust business entities that retain in their custody and manage the collective investment property of all collective investment schemes managed by a collective investment business entity; |
| 2. | Limits on investment of each investment asset stipulated in the collective investment agreement; and |
| 3. | Other matters specified and publicly notified by the Financial Services Commission as necessary for monitoring management of assets. |
| (2) | Pursuant to the main sentence of Article 247 (3) of the Act, supervisory directors of a trust business entity or an investment company that retains in its custody and manage collective investment property (excluding property of an investment company) shall post descriptions of the following matters at the head office, a branch office, and other sales office of the investment trader of broker who sells the collective investment securities, or disclose them to the public through its Internet homepage or other means: |
| 1. | Details of instructions of the collective investment business entity; |
| 2. | Violations of an Act, a subordinate statute, the collective investment agreement, the investment prospectus, etc. in details of instructions of the collective investment business entity; and |
| 3. | Details of an objection filed by the collective investment business entity and a decision made thereon by the Financial Services Commission, in cases where the collective investment business entity filed an objection with the Financial Services Commission in accordance with Article 247 (4) of the Act. |
| (3) | The term "guidelines prescribed by Presidential Decree" in the latter part of Article 247 (4) of the Act means the following guidelines: |
| 1. | A decision shall be made, within 30 days from the day on which a collective investment business entity files an objection with the Financial Services Commission, on whether details of instructions violated an Act, a subordinate statute, the collective investment agreement, the investment prospectus, etc.: Provided, That such decision shall be made within 60 days from the day on which such objection is filed, if it is impossible due to unavoidable circumstances to make a decision within the aforesaid period of time; and |
| 2. | The method and time for correction of a violation and similar matters shall be decided and notified to the relevant collective investment business entity. |
| (4) | The term "matters prescribed by Presidential Decree" in Article 247 (5) 7 of the Act means as to whether there is any possibility of undermining existing investors’ interests at the time of issuing collective investment securities additionally under Article 242 (1) 2. |
법령보기 화면
| Article 270 (Report on Safekeeping and Management of Assets) |
|
| (1) | The term "as prescribed further by Presidential Decree" in the proviso to the main body of Article 248 (1) of the Act means cases falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Where an investor has manifested his/her intent, in writing, to refuse to receive a report on safekeeping and management of assets; |
| 2. | Where a trust business entity has disclosed a report on safekeeping and management of assets of a collective investment scheme falling under any of the following items in a manner prescribed and publicly notified by the Financial Services Commission: |
| (b) | A closed-end fund (limited to one whose collective investment securities are listed in accordance with Article 230 (3) of the Act); and |
| (c) | An exchange-traded fund; and |
| 3. | Where the assessed value of collective investment securities owned by an investor is not more than 100,000 won and where the collective investment agreement provides that a report on safekeeping and management of assets shall not be delivered to such investor. |
| (2) | The term "matters prescribed by Presidential Decree" in Article 248 (1) 5 of the Act means the following matters: |
| 1. | Details of a review, in cases where a review was conducted to ensure that transactions made with interested parties under Article 84 (1) of the Act are proper; |
| 2. | Matters concerning appointment, replacement, and dismissal of accounting auditors; and |
| 3. | Other matters specified and publicly notified by the Financial Services Commission as necessary for protecting investors. |
| (3) | A trust business entity shall, when it furnishes investors with a report on safekeeping and management of assets, deliver the report to them directly or by mail or by any other means through the investment trader or broker who sold the collective investment securities: Provided, That if an investor has manifested his/her intent to receive the report on safekeeping and management of assets by electronic mail, it may deliver the report to such investor by electronic mail. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (4) | Expenses incurred in preparing and delivering a report on safekeeping and management of assets shall be borne by the relevant trust business entity. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (5) | The form and preparation method of the report on safekeeping and management of assets, and other necessary matters shall be prescribed and publicly notified by the Financial Services Commission. |
CHAPTER Ⅶ SPECIAL PROVISONS FOR PRIVATELY PLACED FUNDS
법령보기 화면
| Article 271 (Special Cases Concerning Privately Placed Funds) |
|
| (1) | The term "cases prescribed by Presidential Decree" in Article 249 (1) of the Act means cases under the proviso to Article 81 (1) of the Act (excluding Article 80 (1) 6), and Article 81 (1) 1 (excluding items (d) and (e)), 3 (excluding items (a) and (b)), and 4 of the Act. |
| (2) | The term "manner prescribed by Presidential Decree" in Article 249 (3) of the Act means a manner that satisfies all of the following requirements: |
| 1. | It is required to obtain consent of all other investors: Provided, That the same shall not apply to investment trusts created for the purpose of executing blind trust deeds on stocks pursuant to the Public Service Ethics Act; and |
| 2. | It is required to pay the price determined by the committee on assessment of collective investment property based on the price provided for in Article 238 (1) of the Act. |
| (3) | In applying Article 80 (6) to any privately placed fund, the term "100/100" shall be construed as "400/100", while the term "20/100" in Article 81 (1) 3 (b) of the Act shall be construed as "50/100" in applying the aforesaid provisions to any privately placed fund. |
| (4) | Article 97 (3) 2 shall not apply to any privately placed fund. |
법령보기 화면
| Article 272 (Special Rules Governing Banks) |
|
| (1) | The committee on management of collective investment property under the former part of Article 250 (2) of the Act shall carry out the following business affairs: Provided, That the matters concerning management or similar of the committee on management of collective investment property shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters under subparagraphs 1 through 3: |
| 1. | Establishment of a business plan and budget for a collective investment business; |
| 2. | Establishment of a strategy for management of collective investment property; and |
| 3. | Deliberation on the following matters: |
| (a) | Decision-making on postponement of redemption; |
| (b) | Convening (excluding cases under Article 190 (3) of the Act) and adjournment of the general meeting of beneficiaries; |
| (c) | Decision-making on purchase of beneficiary certificates in response to the exercise of appraisal rights of beneficiary certificates; |
| (d) | Appointment and dismissal of members of the committee on assessment of collective investment property; |
| (e) | Establishment and amendment of the guidelines for assessment of collective investment property; and |
| (f) | Merger of investment trusts. |
| (3) | Each bank shall have a system for preventing conflicts of interest, including the following matters, in accordance with the main sentence of Article 250 (7) of the Act: |
| 1. | Each department shall be separated independently to ensure that business affairs and reports are carried out independently; |
| 2. | Whenever executives and employees in charge of the business affairs under Article 250 (7) of the Act hold meetings or communicate with each other, they shall keep records of such meetings or communications and shall obtain confirmation on the affairs from the compliance officer (referring to the compliance officer under the Banking Act) at least once a month; |
| 3. | Employees in charge of business affairs under any subparagraph of Article 250 (7) of the Act shall not be dispatched from one department to another department, nor shall an employee in charge of business affairs under any provision of Article 250 (7) 2 through 4 of the Act be assigned to any other business affairs within the period prescribed and publicly notified by the Financial Services Commission; |
| 4. | An employee in charge of sales of collective investment securities shall not concurrently hold office for the business affairs falling under any provision of Article 250 (7) 2 through 4 of the Act; |
| 5. | The office space shall be separated by installing a separate entrance or in any other way sufficient to prevent sharing of information; |
| 6. | Electronic data of the business affairs under subparagraphs of Article 250 (7) of the Act shall be stored, managed, and inspected sufficiently independently to prevent sharing of such data; and |
| 7. | Such other matters specified and publicly notified by the Financial Services Commission as may be necessary for preventing conflicts of interest. |
| (4) | The term "business affairs as prescribed further by Presidential Decree" in the proviso to the main body of Article 250 (7) of the Act means business affairs falling under any of the following subparagraphs: |
법령보기 화면
| Article 273 (Special Rules Governing Insurance Companies) |
|
| (1) | The term "manner prescribed by Presidential Decree" in the main sentence of the main body of Article 251 (3) of the Act means any of the following ways in which an insurance company shall manage investment trust property: |
| 1. | Entrusting all business affairs related to management and management instruction to another collective investment business entity; |
| 2. | Managing the whole investment trust property by discretionary investment; and |
| 3. | Investing the whole investment trust property in other collective investment securities. |
| (3) | Every insurance company shall have a system for preventing conflicts of interest, including the following matters, in accordance with the main sentence of Article 251 (3) of the Act: |
| 1. | Each department shall be separated independently to ensure that business affairs and reports are carried out independently; |
| 2. | Whenever executives and employees in charge of the business affairs under Article 251 (3) of the Act hold meetings or communicate with each other, they shall keep records of such meetings or communications and shall obtain confirmation on the affairs from the compliance officer (referring to the compliance officer under the Insurance Business Act) at least once a month; |
| 3. | Employees in charge of business affairs under any subparagraph of Article 251 (3) of the Act shall not be exchanged from one department to another department, nor shall an employee in charge of business affairs under any provision of Article 251 (3) 2 through 4 of the Act be assigned to any other business affairs within the period prescribed and publicly notified by the Financial Services Commission; |
| 4. | An employee in charge of sales of collective investment securities shall not concurrently hold office for the business affairs falling under any provision of Article 251 (3) 2 through 4 of the Act; |
| 5. | The office space shall be separated by installing a separate entrance or in any other way sufficient to prevent sharing of information; |
| 6. | Electronic data of the business affairs under subparagraphs of Article 251 (3) of the Act shall be stored, managed, and inspected sufficiently independently to prevent sharing of such data; and |
| 7. | Such other matters specified and publicly notified by the Financial Services Commission as may be necessary for preventing conflicts of interest. |
| (4) | The term "business affairs as prescribed further by Presidential Decree" in the proviso to the main body of Article 251 (3) of the Act means business affairs falling under any of the following subparagraphs: |
| 2. | Business affairs, other than business affairs under subparagraph 1, which are not related directly to the business affairs under Article 251 (3) 2 through 4 of the Act. |
| (5) | The term "manner prescribed by Presidential Decree" in Article 251 (5) of the Act means a manner falling under any subparagraph of para graph (1). |
CHAPTER Ⅷ SUPERVISION AND INSPECTION
법령보기 화면
| Article 274 (Supervision over Investment Companies, etc.) |
|
The term "matters prescribed by Presidential Decree" in Article 252 (1) 3 of the Act means the following matters: | 1. | Matters concerning redemption of collective investment securities; |
| 2. | Matters concerning assessment and accounting of collective investment property; |
| 3. | Matters concerning dissolution and merger of collective investment schemes; and |
| 4. | Matters concerning business affairs under subparagraphs of Article 184 (6) of the Act. |
법령보기 화면
| Article 275 (Measures against Investment Companies, etc.) |
|
| (1) | The term "as prescribed further by Presidential Decree" in Article 253 (1) 7 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a collective investment scheme falls under subparagraph 2 of the Appendix 2 of the Act because it has violated Article 81 (1) or 84 (1) of the Act in managing the collective investment property; |
| 2. | If a collective investment scheme falls under subparagraph 4 of the Appendix 4 of the Act because it has committed an act falling under any subparagraph of Article 85 of the Act in violation of the aforesaid Article (excluding subparagraph 8); |
| 3. | If a collective investment scheme falls under subparagraph 6 of the Appendix 2 of the Act because it has violated any provision of Article 87 (1) through (5) of the Act (including cases to which any of the aforesaid provisions shall apply mutatis mutandis pursuant to Article 186 (2) of the Act) in exercising voting rights; |
| 4. | If a collective investment scheme falls under subparagraph 3 of the Appendix 6 hereof because it has breached the duty to refrain from using any material, nonpublic information under Article 174 of the Act; |
| 5. | If a collective investment scheme falls under subparagraph 4 of the Appendix 6 hereof because it has breached the duty to refrain from committing any act of manipulating a market price or any similar act under Article 176 of the Act; and |
| 6. | If a collective investment scheme falls under subparagraph 5 of the Appendix 6 hereof because it has breached the duty to refrain from engaging in an unfair trade or any similar act under Article 178 of the Act. |
| (2) | The term "finance-related Acts and subordinate statute, etc. specified by Presidential Decree" in Article 253 (1) 8 of the Act means the Acts and subordinate statutes under subparagraphs of Article 373 (2). |
| (3) | The term "as prescribed further by Presidential Decree" in Article 253 (1) 8 of the Act means cases falling under any subparagraph of Article 373 (3). |
| (4) | The term "as prescribed further by Presidential Decree" in Article 253 (1) 9 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a collective investment scheme has failed to commence management of the collective investment property within six months from the registration date; |
| 2. | If a collective investment scheme has received money, etc. from a third person in connection with its business in any wrongful manner or has acquired money, etc. to deliver it to a third person; |
| 3. | If a collective investment scheme has failed to correct a relevant condition within one month from the day on which a measure of business suspension under Article 253 (2) 1 of the Act was taken (or within a period of time prescribed for correction, in cases where a period of time exceeding one month was prescribed for correction when a measure of business suspension was taken) or if it has continued its business during the business suspension period; and |
| 4. | If a collective investment scheme has committed identical or similar violations continuously or repeatedly. |
| (5) | The term "measures specified by Presidential Decree" in Article 253 (2) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Demanding or recommending improvement of methods of business management or operation; |
| 2. | Demanding compensation for losses; |
| 3. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 4. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 5. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (6) | The term "measure as prescribed by Presidential Decree" in the main sentence of the main body of Article 253 (3) of the Act means a measure under any provision of paragraph (5) 3 through 5. |
| (7) | The term "as prescribed further by Presidential Decree" in Article 253 (3) 5 of the Act means cases falling under any subparagraph of the Appendix 6 hereto. |
| (8) | The term "as prescribed in Presidential Decree" in subparagraph 89 of the Appendix 2 of the Act means cases falling under any subparagraph of the Appendix 6 of this Decree. |
CHAPTER Ⅸ COMPANIES RELATED TO COLLECTIVE INVESTMENT SCHEMES
법령보기 화면
| Article 276 (Prerequisites for Registration of General Administration Company) |
|
| (1) | The term "financial institution specified by Presidential Decree" in Article 254 (2) 1 (c) of the Act means a financial institution falling under any provision of Article 16 (1) 1 through 5. |
| (2) | The term "amount prescribed by Presidential Decree" in Article 254 (2) 2 of the Act means two billion won. |
| (3) | The term "professionals that meet the criteria prescribed by Presidential Decree" in Article 254 (2) 3 of the Act means two or more professionals specializing in computation of collective investment property, who have worked for any of the following institutions in charge of computation of value of assets, including securities, or safekeeping and management of collective investment property for two years or longer: |
| 1. | An institution subject to the inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission; |
| 2. | A foreign financial investment business entity; |
| 3. | A department installed by a fund management entity under Article 8 (1) of the State Finance Act and exclusively dedicated to asset management pursuant to Article 77 (1) of the aforesaid Act or a pension management corporation, etc. to which management and investment of a fund is entrusted pursuant to an Act that authorizes establishment of such fund pursuant to the Appendix 2 of the aforesaid Act; and |
| 4. | A general administration company. |
| (4) | The term "physical facilities specified by Presidential Decree" in Article 254 (2) 4 of the Act means the following: |
| 1. | An electronic computer system, office space, and office equipment required for operation of a general administration company; and |
| 2. | Supplementary facilities required for maintaining continuity of business in preparation for occurrence of accidents, such as power failure and fire. |
| (5) | The term "system for preventing conflicts of interest as prescribed by Presidential Decree" in Article 254 (2) 6 of the Act means a system for ensuring compliance with the following subparagraphs: |
| 1. | The department responsible for business affairs of a general administration company shall be separated from departments for other business affairs to ensure that business affairs and reports are carried out independently; |
| 2. | It shall be prohibited from assigning employees in charge of business affairs of a general administration company to concurrently hold office for other business affairs or to dispatch such employees to take charge of other business affairs; |
| 3. | The office space for business affairs of a general administration company shall be sufficiently separated from the office space for other business affairs to prevent sharing of information; and |
| 4. | Electronic data concerning business affairs of a general administration company shall be separated from those concerning other business affairs and shall be stored, managed, and inspected sufficiently independently to prevent sharing of such data. |
| (6) | The term "financial business specified by Presidential Decree" in Article 254 (2) 6 of the Act means a financial business falling under any of the following subparagraphs: |
| 3. | A financial investment business; and |
| 4. | A merchant bank business. |
| (7) | The term "prerequisites alleviated as prescribed by Presidential Decree" in Article 254 (8) of the Act means 70/100 or more of the minimum equity capital. In such cases, the prerequisites for maintaining the registration shall be applicable as at the end of each fiscal year, and it shall be deemed that a general administration company that fails to meet the prerequisites for maintaining the registration as at the end of a specific fiscal year conforms to the prerequisites for maintaining the registration until the end of the following fiscal year. |
법령보기 화면
| Article 277 (Method and Procedure for Registration) |
|
| (1) | A registration application under Article 254 (3) of the Act shall contain descriptions of the following matters: |
| 2. | The domicile of the head office; |
| 3. | Matters concerning financial affairs, including equity capital; |
| 4. | Matters concerning executives; |
| 5. | Matters concerning professionals under Article 276 (3); |
| 6. | Matters concerning physical facilities under Article 276 (4); |
| 7. | Matters concerning a system for preventing conflicts of interest under Article 276 (5); and |
| 8. | Other matters specified and publicly notified by the Financial Services Commission as necessary for protecting investors. |
| (2) | A registration application under paragraph (1) shall be accompanied by the following documents: |
| 1. | Articles of incorporation; |
| 2. | A document describing names or trade names of shareholders and number of stocks held by each of them; |
| 3. | Financial statements and accompanying statements for the latest three business years (excluding a corporation in the process of incorporation, but referring to financial statements and accompanying statements for the business years since the incorporation date in cases of a corporation for which three business years have not yet passed since its incorporation date); |
| 4. | Resumes and certificates of career experience of executives; |
| 5. | A document showing the current status of professionals, physical facilities, etc.; |
| 6. | A document indicating whether there is a system for preventing conflicts of interest under Article 276 (5); and |
| 7. | Other documents specified and publicly notified by the Financial Services Commission as necessary for examination on registration. |
| (3) | The Financial Services Commission shall, upon receiving an application under paragraph (1), verify a certified transcript of corporate register by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, but shall require the applicant to submit a certified transcript, if the applicant does not consent to verification in such manner. |
| (4) | The Financial Services Commission shall, upon receiving an application under paragraph (1), ascertain that the contents of the application under Article 254 (1) of the Act are true, and examine the contents of the application to determine whether the prerequisites for registration under paragraph (2) of the aforesaid Article have been met. |
| (5) | Necessary matters concerning the application for and examination on registration of a general administration company, the form and method of preparation of the application, and similar matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 278 (Supervision over General Administration Companies) |
|
The term "matters prescribed by Presidential Decree" in Article 256 (1) 4 of the Act means the following matters: | 1. | Matters concerning prevention of conflicts of interest; |
| 2. | Matters concerning acceptance of entrustment of business affairs; and |
| 3. | Matters concerning the rule that requires a general administration company, if it is not a member of the Association, to establish internal guidelines similar to self-regulation that the Association implements for maintaining good business order and protecting investors. |
법령보기 화면
| Article 279 (Measures against General Administration Companies) |
|
| (1) | The term "measures specified by Presidential Decree" in Article 257 (2) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Closure of branch offices or other sales offices or suspending their business completely or partially; |
| 2. | Demanding or recommending improvement of methods of business management or operation; |
| 3. | Demanding compensation for losses; |
| 4. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 5. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 6. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (2) | The term "measures prescribed by Presidential Decree" in Article 257 (3) 6 and (4) 7 of the Act means measures under paragraph (1) 4 through 6 respectively. |
| (3) | The term "as prescribed in Presidential Decree" in subparagraph 19 of the Appendix 3 of the Act means cases falling under any subparagraph of the Appendix 7 of this Decree. |
법령보기 화면
| Article 280 (Prerequisites for Registration of Fund Assessment Company) |
|
| (1) | The term "amount prescribed by Presidential Decree" in Article 258 (2) 3 of the Act means 500 million won. |
| (2) | The term "professionals that meet the criteria prescribed by Presidential Decree" in Article 258 (2) 4 of the Act means three or more professionals specializing in assessment of collective investment schemes, who have worked for an institution under any provision of Article 276 (3) 1 through 3 or a fund assessment company in charge of assessment and analysis of securities, collective investment schemes, etc. or corporate financial affairs (referring to corporate financial affairs under subparagraph 3 of Article 71 of the Act) for two years or longer. |
| (3) | The term "physical facilities specified by Presidential Decree" in Article 258 (2) 5 of the Act means the following: |
| 1. | An electronic computer system, office space, and office equipment required for operation of a fund assessment company; and |
| 2. | Supplementary facilities required for maintaining continuity of business in preparation for occurrence of accidents, such as power failure and fire. |
| (4) | The term "system for assessment of collective investment schemes as prescribed by Presidential Decree" in Article 258 (2) 7 of the Act means a system for assessment of collective investment schemes that covers the following matters: |
| 1. | Matters concerning collective investment schemes subject to assessment; |
| 2. | Matters concerning guidelines for classification by type of collective investment scheme and the reference index for each type; |
| 3. | Matters concerning calculation of return on investment and risk indices; |
| 4. | Mattes concerning determination of the grade of a collective investment scheme; and |
| 5. | Matters concerning provision, public disclosure, etc. of data. |
| (5) | The term "system for preventing conflicts of interest as prescribed by Presidential Decree" in Article 258 (1) 8 of the Act means a system for ensuring compliance with the following subparagraphs: |
| 1. | The department responsible for business affairs of a fund assessment company shall be separated from departments for other business affairs to ensure that business affairs and reports are carried out independently; |
| 2. | It shall be prohibited from assigning employees in charge of business affairs of a fund assessment company to concurrently hold office for other business affairs or to dispatch such employees to take charge of other business affairs; |
| 3. | The office space for business affairs of a fund assessment company shall be separated from the office space for other business affairs sufficient to prevent sharing of information; and |
| 4. | Electronic data concerning business affairs of a fund assessment company shall be separated from those concerning other business affairs and shall be stored, managed, and inspected sufficiently independently to prevent sharing of such data. |
| (6) | The term "financial business specified by Presidential Decree" in Article 258 (2) 8 of the Act means a financial business falling under any of the following subparagraphs: |
| 3. | A financial investment business; and |
| 4. | A merchant bank business. |
| (7) | The term "prerequisites alleviated as prescribed by Presidential Decree" in Article 258 (8) of the Act means 70/100 or more of the minimum equity capital. In such cases, the prerequisites for maintaining the registration shall be applicable as at the end of each fiscal year, and it shall be deemed that a fund assessment company that fails to meet the prerequisites for maintaining the registration as at the end of a specific fiscal year conforms to the prerequisites for maintaining the registration until the end of the following fiscal year. |
법령보기 화면
| Article 281 (Method and Procedure for Registration) |
|
| (1) | A registration application under Article 258 (3) of the Act shall contain descriptions of the following matters: |
| 2. | The domicile of the head office; |
| 3. | Matters concerning financial affairs, including equity capital; |
| 4. | Matters concerning executives; |
| 5. | Matters concerning professionals under Article 280 (2); |
| 6. | Matters concerning physical facilities under Article 280 (3); |
| 7. | Matters concerning a system for preventing conflicts of interest under Article 280 (5); |
| 8. | Matters concerning a system for assessment of collective investment schemes; and |
| 9. | Such other matters specified and publicly notified by the Financial Services Commission as may be necessary for protecting investors. |
| (2) | A registration application under paragraph (1) shall be accompanied by the following documents: |
| 1. | Articles of incorporation; |
| 2. | A document describing names or trade names of shareholders and number of stocks held by each of them; |
| 3. | Financial statements and accompanying statements for the latest three business years (excluding a corporation in the process of incorporation, but referring to financial statements and accompanying statements for the business years since the incorporation date in cases of a corporation for which three business years have not yet passed since its incorporation date); |
| 4. | Resumes and certificates of career experience of executives; |
| 5. | A document showing the current status of professionals, physical facilities, etc.; |
| 6. | A document indicating whether there is a system for preventing conflicts of interest under Article 280 (5); |
| 7. | A document indicating matters concerning a system for assessment of collective investment schemes; and |
| 8. | Other documents specified and publicly notified by the Financial Services Commission as necessary for examination on registration. |
| (3) | The Financial Services Commission shall, upon receiving an application under paragraph (1), verify the certified transcript of corporate register by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, but shall require the applicant to submit the certified transcript, if the applicant does not consent to verification in such manner. |
| (4) | The Financial Services Commission shall, upon receiving an application under paragraph (1), ascertain that the contents of the application under Article 258 (1) of the Act are true, and examine the contents of the application to ascertain whether the prerequisites for registration under paragraph (2) of the aforesaid Article have been met. |
| (5) | Necessary matters concerning the application for and examination on registration of a fund assessment company, the form and method of preparation of the application, and similar matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 282 (Working Rules on Business Conduct) |
|
| (1) | The term "matters prescribed by Presidential Decree" in Article 259 (1) of the Act means the following matters: |
| 1. | Matters for maintaining the consistency in assessment of collective investment schemes in accordance with universally reasonable and fair standards; |
| 2. | Matters for prohibiting the use of any nonpublic information; and |
| 3. | Matters for preventing the use of any information acquired for assessment of a collective investment scheme for any other business. |
| (2) | Pursuant to Article 259 (2) of the Act, every collective investment business entity may furnish a fund assessment company with details of collective investment property directly or through the Association to the extent necessary for assessment of a collective investment scheme. |
| (3) | Every fund assessment company shall disclose the standards for assessment of collective investment schemes to the public through Internet homepages operated by the Association and the company. |
| (4) | Every fund assessment company shall, when it discloses to the public or provides comparative performance of management of collective investment schemes, collective investment business entities, and investment traders and brokers who sell collective investment securities, disclose or provide it together with the standards applied to such comparison. |
| (5) | Every fund assessment company shall, when it modifies any content disclosed or provided in accordance with paragraph (3) or (4), disclose or provide such modified content to the public without delay. |
법령보기 화면
| Article 283 (Supervision over Fund Assessment Companies) |
|
The term "matters prescribed by Presidential Decree" in Article 261 (1) 4 of the Act means the following matters: | 1. | Matters concerning prevention of conflicts of interest; and |
| 2. | Matters concerning the rule that requires a fund assessment company, if it is not a member of the Association, to establish internal guidelines similar to self-regulation that the Association implements for maintaining good business order and protecting investors. |
법령보기 화면
| Article 284 (Measures against Fund Assessment Companies) |
|
| (1) | The term "measures specified by Presidential Decree" in Article 262 (2) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Closure of branch offices or other sales offices or suspending their business completely or partially; |
| 2. | Demanding or recommending improvement of methods of business management or operation; |
| 3. | Demanding compensation for losses; |
| 4. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 5. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 6. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (2) | The term "measures prescribed by Presidential Decree" in Article 262 (3) 6 and (4) 7 of the Act means measures under paragraph (1) 4 through 6 respectively. |
| (3) | The term "as prescribed by Presidential Decree" in subparagraph 18 of the Appendix 4 of the Act means cases falling under any subparagraph of the Appendix 8 of this Decree. |
법령보기 화면
| Article 285 (Prerequisites for Registration of Bond Rating Companies) |
|
| (1) | The term "amount prescribed by Presidential Decree" in Article 263 (2) 2 of the Act means three billion won. |
| (2) | The term "financial institution specified by Presidential Decree" in Article 263 (2) 3 of the Act means any of the following financial institutions: |
| 7. | A financial investment business entity; and |
| (3) | The term "professionals that meet the criteria prescribed by Presidential Decree" in Article 263 (2) 4 of the Act means ten or more professionals specializing in assessment of collective investment property, including three or more professionals specializing in analysis of securities, who fall under any of the following subparagraphs and who work as full- time employees in charge of assessment and analysis of securities: |
| 1. | A person who has successfully passed an examination conducted by the Association in order to test competency of professionals specializing in analysis of securities; and |
| 2. | A person who has worked for an institution falling under any provision of Article 276 (3) 1 through 3 or a bond rating company in charge of assessment and analysis of securities for three years or longer. |
| (4) | The term "physical facilities specified by Presidential Decree" in Article 263 (2) 5 of the Act means the following: |
| 1. | An electronic computer system, office space, and office equipment required for operation of a bond rating company; and |
| 2. | Supplementary facilities required for maintaining continuity of business in preparation for occurrence of accidents, such as power failure and fire. |
| (5) | The term "system for assessment of bonds, etc. as prescribed by Presidential Decree" in Article 263 (2) 5 of the Act means a price assessment system covering the following matters: |
| 1. | Matters concerning bonds, etc. subject to assessment; |
| 2. | Matters concerning standards for classification of bonds, etc.; |
| 3. | The method of calculating returns on investment; and |
| 4. | Matters concerning provision, public disclosure, etc. of data. |
| (6) | The term "system for preventing conflicts of interest as prescribed by Presidential Decree" in Article 263 (2) 8 of the Act means a system for ensuring compliance with the following subparagraphs: |
| 1. | The department responsible for business affairs of a bond rating company shall be separated from departments for other business affairs to ensure that business affairs and reports are carried out independently; |
| 2. | It shall be prohibited from assigning employees in charge of business affairs of a bond rating company to concurrently hold office for other business affairs or to dispatch such employees to take charge of other business affairs; |
| 3. | The office space for business affairs of a bond rating company shall be sufficiently separated from the office for other business affairs to prevent sharing of information; and |
| 4. | Electronic data concerning business affairs of a bond rating company shall be separated from those concerning other business affairs and shall be stored, managed, and inspected sufficiently independently to prevent sharing of such data. |
| (7) | The term "financial business specified by Presidential Decree" in Article 263 (2) 8 of the Act means a financial business falling under any of the following subparagraphs: |
| 3. | A financial investment business; and |
| 4. | A merchant bank business. |
| (8) | The term "prerequisites alleviated as prescribed by Presidential Decree" in Article 263 (8) of the Act means 70/100 or more of the minimum equity capital. In such cases, the prerequisites for maintaining the |
registration shall be applicable as at the end of each fiscal year, and it shall be deemed that a bond rating company that fails to meet the prerequisites for maintaining the registration as at the end of a specific fiscal year conforms to the prerequisites for maintaining the registration until the end of the following fiscal year.
법령보기 화면
| Article 286 (Method and Procedure for Registration) |
|
| (1) | A registration application under Article 263 (3) of the Act shall contain descriptions of the following matters: |
| 2. | The domicile of the head office; |
| 3. | Matters concerning financial affairs, including equity capital; |
| 4. | Matters concerning executives; |
| 5. | Matters concerning professionals under Article 285 (3); |
| 6. | Matters concerning physical facilities under Article 285 (4); |
| 7. | Matters concerning a system for preventing conflicts of interest under Article 285 (6); |
| 8. | Matters concerning a system for price assessment of bonds, etc.; and |
| 9. | Such other matters specified and publicly notified by the Financial Services Commission as may be necessary for protecting investors. |
| (2) | A registration application under paragraph (1) shall be accompanied by the following documents: |
| 1. | Articles of incorporation; |
| 2. | A document describing names or trade names of shareholders and number of stocks held by each of them; |
| 3. | Financial statements and accompanying statements for the latest three business years (excluding a corporation in the process of incorporation, but referring to financial statements and accompanying statements for the business years since the incorporation date in cases of a corporation for which three business years have not yet passed since its incorporation date); |
| 4. | Resumes and certificates of career experience of executives; |
| 5. | A document showing the current status of professionals, physical facilities, etc.; |
| 6. | A document indicating whether there is a system for preventing conflicts of interest under Article 285 (6); |
| 7. | A document indicating a system for price assessment of bonds, etc.; and |
| 8. | Other documents specified and publicly notified by the Financial Services Commission as necessary for examination on registration. |
| (3) | The Financial Services Commission shall, upon receiving an application under paragraph (1), verify the certified transcript of corporate register by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, but shall require the applicant to submit the certified transcript, if the applicant does not consent to verification in such manner. |
| (4) | The Financial Services Commission shall, upon receiving an application under paragraph (1), ascertain that the contents of the application under Article 263 (1) of the Act are true, and examine the contents of the application to ascertain whether the prerequisites for registration under paragraph (2) of the aforesaid Article have been met. |
| (5) | Necessary matters concerning the application for and examination on registration, the form and method of preparation of the application, and similar matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 287 (Working Rules on Business Conduct) |
|
| (1) | The term "matters prescribed by Presidential Decree" in Article 264 (1) of the Act means the following matters: |
| 1. | Matters for maintaining consistency in the rating of assets, including bonds, in accordance with universally reasonable and fair standards; |
| 2. | Matters for prohibiting the use of any nonpublic information; and |
| 3. | Matters for preventing the use of any information acquired for price assessment of assets, such as bonds, for any other business. |
| (2) | Pursuant to Article 264 (2) of the Act, every bond rating company shall disclose the standards for assessment to the public through Internet homepages operated by the Association and the company. |
| (3) | Every bond rating company shall, when it modifies any content disclosed in accordance with paragraph (2), disclose such modified content to the public without delay. |
| (4) | Every collective investment business entity may furnish a bond rating company with details of collective investment property directly or through the Association to the extent necessary for rating of collective investment property. |
법령보기 화면
| Article 288 (Supervision over Bond Rating Companies) |
|
The term "matters prescribed by Presidential Decree" in Article 266 (1) 4 of the Act means the following matters: | 1. | Matters concerning prevention of conflicts of interest; and |
| 2. | Matters concerning the rule that requires a bond rating company, if not a member of the Association, to establish internal guidelines similar to self-regulation that the Association implements for maintaining good business order and protecting investors. |
법령보기 화면
| Article 289 (Measures against Bond Rating Companies) |
|
| (1) | The term "measures specified by Presidential Decree" in Article 267 (2) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Closure of branch offices or other sales offices or suspending their business completely or partially; |
| 2. | Demanding or recommending improvement of methods of business management or operation; |
| 3. | Demanding compensation for losses; |
| 4. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 5. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 6. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (2) | The term "measures prescribed by Presidential Decree" in Article 267 (3) 6 and (4) 7 of the Act means the measures under paragraph (1) 4 through 6. |
| (3) | The term "as prescribed by Presidential Decree" in subparagraph 19 of the Appendix 5 of the Act means cases falling under any subparagraph of the Appendix 9 of this Decree. |
CHAPTER Ⅹ SPECIAL CASES CONCERNING PRIVATE EQUITY FUNDS
법령보기 화면
| Article 290 (Registration of Private Equity Fund) |
|
| (1) | A registration application under Article 268 (5) of the Act shall contain descriptions of the following matters: |
| 1. | Matters required to be registered pursuant to Article 268 (2) of the Act; |
| 2. | Matters concerning the executive partner; |
| 3. | Matters concerning management of property of the private equity fund; and |
| 4. | Other matters specified and publicly notified by the Financial Services Commission as necessary for protecting investors. |
| (2) | A registration application under paragraph (1) shall be accompanied by the following documents: |
| 1. | Articles of incorporation (excluding matters under Article 268 (1) 4, 7, and 8 of the Act); |
| 2. | A written statement describing the trade name of a company, the largest shareholder (including shareholders who are specially related persons of the largest shareholder; hereafter the same shall apply in this paragraph) of which is the executive partner or its specially related person, and details of contributions paid by such company; |
| 3. | The following documents, if the executive partner is a corporation: |
| (a) | Financial statements for the latest three business years; and |
| (b) | Data of the largest shareholder, including the name and citizen registration number of the largest shareholder (or the trade name and business registration number, if the largest shareholder is a corporation) and the number of stocks held thereby; |
| 4. | A contract executed with a third party on entrustment of business affairs, if business affairs of the private equity fund has been entrusted to a third party; and |
| 5. | Such other documents specified and publicly notified by the Financial Services Commission as may be necessary for protecting partners of a private equity fund. |
| (3) | The Financial Services Commission shall, upon receiving an application under paragraph (1), verify the certified transcript of corporate register by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, but shall require the applicant to submit the certified transcript, if the applicant does not consent to verification in such manner. |
| (4) | The Financial Services Commission shall, upon receiving an application under paragraph (1), ascertain that the contents of the application under Article 268 (3) of the Act are true, and examine the contents of the application to ascertain whether the prerequisites for registration under paragraph (4) of the aforesaid Article have been met. |
| (5) | Necessary matters concerning the application for and examination of registration of a private equity fund, the form and method of preparation of the application, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 291 (Partners and Contributions) |
|
| (1) | The term "persons specified by Presidential Decree" in Article 269 (3) of the Act means persons falling under any of the following subparagraphs: |
| 1. | Persons falling under any subparagraph of Article 10 (1); and |
| 2. | Persons specified and publicly notified by the Financial Services Commission among those falling under Article 10 (3) 12 or 13. |
| (2) | The term "amount prescribed by Presidential Decree" in Article 269 (6) of the Act means two billion won, if a partner is a corporation or any other organization (including funds under an Act specified in the Appendix 2 of the State Finance Act and a collective investment scheme), or one billion won, if a partner is a private individual. |
| (3) | In cases where a financial institution that belongs to a certain conglomerate subject to restrictions on mutual investment (referring to a conglomerate subject to restrictions on mutual investment under Article 9 (1) of the Monopoly Regulation and Fair Trade Act) invests in a private equity fund that belongs to the same conglomerate, it shall not make an investment in excess of 30/100 of the total equity shares of the private equity fund. |
| (4) | A limited partner may, when the executive partner demands him/her to perform contributions, pay his/her contributions in a manner agreed for contribution. |
| (5) | Necessary matters concerning the method and procedure for partners’ contribution shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (4). |
법령보기 화면
| Article 292 (Management Method of Property of Private Equity Fund) |
|
| (1) | The term "manner prescribed by Presidential Decree" in the main body of Article 270 (1) of the Act means an agreement between a private equity fund and another private equity fund to perform any of the following acts: |
| 1. | Jointly acquiring or disposing of equity securities, instruments representing preemptive rights to new stocks (including any other rights to subscribe to equity securities newly issued), convertible bonds, bonds with warrant, or exchangeable bonds (hereafter referred to as "equity securities, etc." in this paragraph); |
| 2. | Jointly or solely acquiring equity securities, etc. and then transferring or taking over securities, the acquired equity securities, etc. of one another; and |
| 3. | Jointly exercising voting rights (including power to instruct to exercise voting rights). |
| (2) | The term "company specified by Presidential Decree" in Article 270 (1) 1 of the Act means a company falling under any of the following subparagraphs: |
| 1. | A specialized securitization company under the Asset-Backed Securitization Act; |
| 3. | A ship investment company under the Ship Investment Company Act; |
| 4. | A company specializing in a cultural industry under the Framework Act on the Promotion of Cultural Industries; |
| 5. | A foreign company, if the total value of the following assets is not less than 5/100 of the total value of assets owned by the foreign company and its subsidiary companies (referring to foreign companies equivalent to a subsidiary company under the Act on External Audit of Stock Companies): |
| (a) | Securities issued by a corporation incorporated in Korea; |
| (b) | Pecuniary claims against a corporation incorporated in Korea; |
| (c) | Real estate or a special asset under subparagraph 3 of Article 229 of the Act, which is located in Korea; and |
| (d) | Derivative-combined securities or derivatives based on an asset under any provision of items (a) through (c) or an index based on such asset (applicable only to cases where it is possible to acquire the underlying asset by exercising rights or otherwise); and |
| 6. | Other company similar to a company under any provision of subparagraphs 1 through 5 and specified and publicly notified by the Financial Services Commission. |
| (3) | The term "exchange-traded derivatives or over-the-counter derivatives as prescribed further by Presidential Decree" in Article 270 (1) 4 of the Act means exchange-traded derivatives or over-the-counter derivatives on the basis of an underlying asset of securities issued by an enterprise in which an investment is made in accordance with the aforesaid subparagraph (hereinafter referred to as the "enterprise for investment") or the price of such securities or an index based on such price. |
| (4) | The term "investment as prescribed further by Presidential Decree" in Article 270 (1) 7 of the Act means an investment falling under any of the following subparagraphs: |
| 1. | An investment in pecuniary claims against an enterprise for investment (limited to cases where it is for the purpose of investment under Article 270 (1) 1 or 2 of the Act); and |
| 2. | An investment in real estate (including rights related to real estate, such as surface rights, easement, rights to lease on a deposit basis, rights to lease, and rights to parcel sale), pecuniary claims, etc. disposed in the course of improving business structure, governance, etc. of an enterprise for investment. |
법령보기 화면
| Article 293 (Management Method of Surplus Fund) |
|
| (1) | The term "short-term loans prescribed by Presidential Decree" in Article 270 (2) 1 of the Act means short-term loans under Article 83 (4) of the Act. |
| (2) | The term "financial institutions specified by Presidential Decree" in Article 270 (2) 2 of the Act means financial institutions falling under any item of Article 79 (2) 5 and foreign financial institutions similar thereto. |
| (3) | The term "ratio prescribed by Presidential Decree" in Article 270 (2) 3 of the Act means 5/100. |
| (4) | The term "method as prescribed further by Presidential Decree" in Article 270 (2) 4 of the Act means a method of management falling under any of the following subparagraphs: |
| 1. | Negotiable certificates of deposit in Korean won; and |
| 2. | Bills or notes under Article 79 (2) 5 (excluding corporate commercial paper). |
법령보기 화면
| Article 294 (Restrictions on Management of Property of Private Equity Funds) |
|
| (1) | The term "time period prescribed by Presidential Decree" in the main sentence of Article 270 (3) of the Act means two years, and the term "ratio prescribed by Presidential Decree" in the same sentence means 50/100. |
| (2) | The term "cases prescribed by Presidential Decree" in the proviso to Article 270 (3) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where the property of a private equity fund is insufficient to acquire equity securities of an enterprise for investment in accordance with Article 270 (1) 1 or 2 of the Act; and |
| 2. | Where there is an inevitable cause or event specified and publicly notified by the Financial Services Commission. |
| (3) | The term "case prescribed by Presidential Decree" in the proviso to Article 270 (4) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where the business of an enterprise for investment is suspended; |
| 2. | Where the operation of an enterprise for investment has been discontinued for three months or longer; and |
| 3. | Where there is any inevitable cause or event specified and publicly notified by the Financial Services Commission. |
| (4) | The term "case prescribed by Presidential Decree" in the proviso to Article 270 (5) of the Act means cases falling under any subparagraph of paragraph (3). |
| (5) | The term "period of time prescribed by Presidential Decree" in the main sentence of Article 270 (6) of the Act means one month. |
| (6) | The term "case prescribed by Presidential Decree" in the proviso to Article 270 (6) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where trading of equity securities of an enterprise for investment in the securities exchange or a foreign securities exchange is suspended or discontinued; and |
| 2. | Where there is an inevitable cause or event specified and publicly notified by the Financial Services Commission. |
| (7) | The term "period of time prescribed by Presidential Decree" in the proviso to Article 270 (6) of the Act means a period of time until the Financial Services Commission confirms that it is possible to dispose of equity securities of an enterprise for investment. |
법령보기 화면
| Article 295 (Calculation Formula of Investment Ratio) |
|
| (1) | The investment ratios under Article 270 (1) 1 and (2) 3 of the Act shall be calculated as at the day on which an investment is made respectively. |
| (2) | The investment ratios under Article 270 (2) 3 and (3) (main sentence) of the Act may be calculated in any of the following formulas respectively, in cases where a fund under an Act specified in the Appendix 2 of the State Finance Act becomes a partner of a private equity fund and pays its contribution in any manner other than agreeing to pay its contribution at the time when performance of contribution is demanded in accordance with Article 291 (4): |
| 1. | When calculating the ratio under Article 270 (2) 3 of the Act: The amount of contribution and the amount of acquired securities shall be excluded in calculating the ratio, in cases where securities are acquired within the limit of the contribution by the fund; and |
| 2. | When calculating the ratio under the main sentence of Article 270 (3) of the Act: The amount of contribution by the fund shall be excluded from the property of the private equity fund in calculating the ratio. |
| (3) | The executive partner of a private equity fund may not entrust any of the following business affairs to a third party: |
| 1. | Selection of an enterprise for investment or establishment or selection of a special purpose company; |
| 2. | Determination of the price of equity securities of an enterprise for investment or a special purpose company, the time and method for trading such securities, and similar matters, in cases of trading equity securities of an enterprise for investment or a special purpose company; |
| 3. | Exercise of voting rights for equity securities that belong to the property of a private equity fund or a special purpose company; and |
| 4. | Other affairs similar to those under subparagraphs 1 through 3 and specified and publicly notified by the Financial Services Commission as necessary for protecting interests of partners. |
| (4) | Necessary matters concerning approval under the provisos to Article 270 (3), (4), (5), and (6) of the Act shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 296 (Special Purpose Companies) |
|
| (1) | The term "ratio prescribed by Presidential Decree" in the main body of Article 271 (1) 3 of the Act means 50/100. |
| (2) | The term "person as specified by Presidential Decree" in Article 271 (1) 3 (c) of the Act means a financial institution (referring to an institution subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission) that had extended credit (referring to credit granted under Article 34 (2) of the Act) to a special purpose company and who converted it into an investment, etc. |
| (3) | The term "limit set by Presidential Decree" in the latter part of Article 271 (3) of the Act means 200/100 of the equity capital calculated as at the day on which a special purpose company borrows a loan or guarantees the performance of an obligation. |
| (4) | The investment ratio of the property of a special purpose company shall be calculated following the same methods as those for calculating the investment ratio of the property of a privately placed fund under Article 295 (1) and (2). <Added by Presidential Decree No. 21291, Feb. 3, 2009> |
| (5) | A special purpose company shall entrust the management of the property of the company to the executive partner of a private equity fund, which is a shareholder or a partner of the company. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (6) | A special purpose company may manage the residual property of the special purpose company, left over after investing for purposes under Article 271 (1) 2 of the Act, in a manner falling under any subparagraph of Article 270 (2) of the Act. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (7) | A special purpose company may, when it invests in equity securities in accordance with Article 270 (1) 1 or 2 of the Act, assess the equity securities by the same assessment method as that for the property of a private equity fund under Article 260 (1) 1. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (8) | Matters necessary for the approval of the Financial Services Commission under the proviso to Article 270 (4) of the Act and the proviso to paragraph (6) of the same Article as applicable mutatis mutandis in Article 271 (5) of the Act shall be prescribed and publicly notified by the Financial Services Commission. <Added by Presidential Decree No. 21291, Feb. 3, 2009> |
법령보기 화면
| Article 297 (Executive Partners) |
|
| (1) | The term "finance-related Acts and subordinate statutes specified by Presidential Decree" in the former part of Article 272 (2) of the Act means the Act, this Decree, or an Act and its subordinate statutes falling under any of the following subparagraphs: |
| 4. | The Korea Export-Import Bank Act; |
| 6. | The Mutual Savings Banks Act; |
| 10. | The Credit Unions Act; |
| 11. | The Community Credit Cooperatives Act; |
| 13. | The Act on the Efficient Disposition of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation; |
| 14. | The Korea Housing Finance Corporation Act; |
| 16. | The Ship Investment Company Act; |
| (2) | The term "act as prescribed further by Presidential Decree" in Article 272 (6) 4 of the Act means an act falling under any of the following subparagraphs: |
| 1. | Managing the property of a private equity fund in violation of its articles of incorporation; |
| 2. | Trading on unfair conditions that deviate from ordinary terms and conditions without justifiable grounds in managing the property of a private equity fund; |
| 3. | Using information about the property of a private equity fund in managing the proprietary property of the executive partner; |
| 4. | Undermining interest of a specific private equity fund or a special purpose company to pursue its own interests or third party’s interests; and |
| 5. | Using a transaction of over-the-counter derivatives, a trust deed, a linked transaction, etc. with intent to circumvent the prohibition or restriction under any provision of Articles 269 through 274 of the Act. |
| (3) | The term "interval prescribed by Presidential Decree" in Article 272 (8) of the Act means six months. |
법령보기 화면
| Article 298 (Reporting Method upon Acquisition of Stocks of Banks, etc.) |
|
The term "manner prescribed by Presidential Decree" in the main bodies of Article 275 (3), (4), and (5) of the Act means attaching all relevant evidential materials in a form prescribed and publicly notified by the Financial Services Commission respectively.
법령보기 화면
| Article 299 (Special Cases concerning Regulation of Holding Companies) |
|
| (1) | The term "manner prescribed by Presidential Decree" in Article 276 (2) of the Act means attaching all relevant evidential materials in a form prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 300 (Measures against Private Equity Funds) |
|
| (1) | The term "as prescribed further by Presidential Decree" in Article 278 (1) 6 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a private equity fund falls under subparagraph 3 of the Appendix 10 hereof because it has breached the duty to refrain from using any material, nonpublic information under Article 174 of the Act; |
| 2. | If a private equity fund falls under subparagraph 4 of the Appendix 10 hereof because it has breached the duty to refrain from manipulating a market price or any similar act under Article 176 of the Act; and |
| 3. | If a private equity fund falls under subparagraph 5 of the Appendix 10 hereof because it has breached the duty to refrain from engaging in an unfair trade or any similar act under Article 178 of the Act. |
| (2) | The term "finance-related Acts and subordinate statute, etc. specified by Presidential Decree" in Article 278 (1) 7 of the Act means any Acts and subordinate statutes under any subparagraph of Article 373 (2). |
| (3) | The term "as prescribed further by Presidential Decree" in Article 278 (1) 7 of the Act means cases falling under any subparagraph of Article 373 (3). |
| (4) | The term "as prescribed further by Presidential Decree" in Article 278 (1) 8 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a private equity fund has failed to commence management of the property of the private equity fund within six months from the registration date; |
| 2. | If a private equity fund has received money, etc. from a third person in connection with its business in any wrongful manner or has acquired money, etc. to deliver it to a third person; |
| 3. | If a private equity fund has not corrected a relevant condition within one month from the date on which a measure of business suspension under Article 278 (3) 1 of the Act was taken (or within a period of time prescribed for correction, in cases where a period of time exceeding one month was prescribed for correction when a measure of business suspension was taken) or if it has continued its business during the business suspension period; and |
| 4. | If a private equity fund has committed identical or similar violations continuously or repeatedly. |
| (5) | The term "measures specified by Presidential Decree" in Article 278 (3) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Demanding or recommending improvement of methods of business management or operation; |
| 2. | Demanding compensation for losses; |
| 3. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 4. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 5. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (6) | The term "measures prescribed by Presidential Decree" in Article 278 (4) 1 (e) of the Act means measures under any subparagraph of paragraph (5). |
| (7) | The term "measures prescribed by Presidential Decree" in Article 278 (4) 2 (e) of the Act means measures falling under any of the following subparagraphs: |
| 2. | Measures under paragraph (5) 3 through 5. |
| (8) | The term "measures prescribed by Presidential Decree" in Article 278 (4) 3 (f) of the Act means measures falling under any of the following subparagraphs: |
| 2. | Measures under paragraphs (5) 3 through 5. |
| (9) | The term "measures prescribed by Presidential Decree" in Article 278 (5) 5 of the Act means measures falling under any subparagraph of paragraph (7). |
| (10) | The term "as prescribed by Presidential Decree" in subparagraph 27 of the Appendix 6 of the Act means cases falling under any subparagraph of the Appendix 10 of this Decree. |
CHAPTER ? SPECIAL CASES CONCERNING FOREIGN COLLECTIVE INVESTMENT SECURITIES
법령보기 화면
| Article 301 (Prerequisites of Qualification for Foreign Collective Investment Business Entities) |
|
| (1) | The term "prerequisites of qualification for a foreign collective investment business entity and the prerequisites of qualification for sale of foreign collective investment securities as prescribed by Presidential Decree" in the former part of Article 279 (2) of the Act means the following prerequisites: |
| 1. | Prerequisites of qualification for a foreign collective investment business entity: |
| (a) | The size of its assets under management (referring to those calculated in a formula prescribed and publicly notified by the Financial Services Commission) as at the end of the latest business year shall not be less than one trillion won. In such cases, if a foreign collective investment business entity has entrusted the entire business affairs of its assets under management to another foreign collective investment business entity, the size of assets under management of the entrusted foreign collective investment business entity shall not be less than one trillion won: |
| (b) | Its equity capital shall not be less than the minimum equity capital prescribed for each authorized business unit of collective investment business under the Appendix 1 hereof according to the type (referring to the type under Article 229 of the Act) of the foreign collective investment scheme that it seeks to sell in Korea; |
| (c) | It shall have no record of having been subjected to an administrative disposition equivalent to or heavier than business suspension by the supervisory agency either in its home country or in Korea, or sentenced to a criminal punishment equivalent to or heavier than a fine, in connection with its business equivalent to a financial business during the latest three years; and |
| (d) | It shall have a liaison officer in Korea, who shall satisfy the requirements prescribed and publicly notified by the Financial Services Commission for protecting investors; and |
| 2. | Prerequisites of qualification for sale of foreign collective investment securities: |
| (a) | Such securities shall be issued or scheduled to be issued by a member state (excluding its dependency) of the Organization for Economic Cooperation and Development, or under laws of Hong Kong or Singapore; |
| (b) | Matters concerning expenses borne by investors, such as commission and fees, shall be clearly stated, and price thereof shall not be set excessively high in light of international practice; |
| (c) | It shall be possible to recover the amount invested, in a manner of direct or indirect redemption or similar, on a demand by investors; and |
| (d) | Other requirements specified and publicly notified by the Financial Services Commission, as necessary for protecting investors, shall be met. |
| (2) | The term "persons specifically enumerated by Presidential Decree" in the latter part of Article 279 (2) of the Act means professional investors falling under any of the following subparagraphs: |
| 3. | Persons falling under any provision of Article 10 (2) 1 through 17; and |
| 4. | Persons falling under any provision of Article 10 (3) 1 through 14. |
| (3) | In cases where it is intended to sell foreign collective investment securities only to persons under paragraph (2), the prerequisites of qualification for a foreign collective investment business entity and the prerequisites of qualification for sale of foreign collective investment securities shall be limited to paragraph (1) 1 (c) and 2 (c) pursuant to the latter part of Article 279 (2) of the Act. |
법령보기 화면
| Article 302 (Inspection of Account Books and Documents) |
|
| (1) | The term "account books and documents, as specified further by Presidential Decree" in Article 280 (3) of the Act means the following account books and documents: |
| 1. | A document equivalent to a list of collective investment property; |
| 2. | A document equivalent to a ledger of base price of collective investment securities; |
| 3. | Financial statements and accompanying statements; and |
| 4. | A document equivalent to a full statement of management of collective investment property. |
| (2) | The term "justifiable reason prescribed by Presidential Decree" in Article 280 (3) of the Act means cases falling under any of the following subparagraphs. In such cases, a foreign investment trust under Article 279 (1) of the Act (hereinafter referred to as the "foreign investment trust"), the foreign collective investment business entity of a foreign undisclosed investment association under Article 279 (1) of the Act (hereinafter referred to as "foreign undisclosed investment association"), a foreign investment company, etc. under Article 279 (1) of the Act (hereinafter referred to as "foreign investment company, etc."), or an investment trader or broker who has sold foreign collective investment securities shall deliver, to investors, a written statement that inspection or delivery is impossible, describing the reasons therefor: |
| 1. | Where it is obvious that if an account book or a document containing details of trading orders of the collective investment property of a foreign collective investment scheme is furnished to a person, the person receiving such book or document will probably use information therein for a transaction or business or furnish another person with such information; |
| 2. | Where it is obviously foreseeable that if an account book or a document containing details of trading orders of the collective investment property of a foreign collective investment scheme is furnished to a person, losses will be inflicted on other investors; and |
| 3. | Where an account book or a document is related to a foreign collective investment scheme already terminated or dissolved and thus it is impossible to accept a request from an investor for inspection or delivery because the preservation period under Article 239 (4) of the Act has elapsed or due to any other reason. |
| (3) | The term "as prescribed further by Presidential Decree" in the proviso to Article 280 (4) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where an investment is made in a foreign currency asset and it is difficult to publicly notify or post the base price every day; |
| 2. | Where the relevant collective investment scheme is a foreign closed-end fund equivalent to a closed-end fund; and |
| 3. | Where it is not required to publicly notify and post the base price every day pursuant to laws and regulations of the country in which a foreign collective investment scheme was created or established. |
법령보기 화면
| Article 303 (Sales Method of Foreign Collective Investment Securities) |
|
| (1) | Any collective investment business entity of a foreign investment trust or a foreign undisclosed investment association, any foreign investment company, etc., or any investment trader or broker who sells foreign collective investment securities may not sell certain foreign collective investment securities in Korea or make an advertisement for sale before the relevant foreign collective investment scheme is registered in accordance with Article 279 (1) of the Act. |
| (2) | Article 57 (2) of the Act shall not apply to an advertisement for investment in foreign collective investment securities. |
| (3) | Article 57 (3) of the Act and Article 87 (4) 3 and 4 of this Decree shall apply to foreign collective investment securities and foreign collective investment business entities. In such cases, the term "collective investment business entity" under Article 87 (4) 3 shall be construed as "foreign collective investment business entity", the term "collective investment scheme" in the aforesaid provisions as "foreign collective investment scheme", the term "collective investment securities" in the aforesaid provisions as "foreign collective investment securities", the term "financial investment business entity" in Article 57 (3) of the Act as "financial investment business entity or a foreign collective investment business entity", the term "collective investment securities" in the aforesaid provisions as "foreign collective investment securities", and the term "collective investment scheme" in the aforesaid provisions as "foreign collective investment scheme". |
| (4) | Notwithstanding Article 88 of the Act, a foreign collective investment business entity may, when it prepares and furnishes an asset management report in accordance with Article 280 (2) of the Act, prepare and furnish the asset management report as stipulated in the relevant foreign collective investment agreement (referring to one equivalent to a collective investment agreement; hereinafter the same shall apply). |
| (5) | An investment trader or broker shall observe the following subparagraphs in selling foreign collective investment securities: |
| 1. | He/she shall publicly notify and post the base price of foreign collective investment securities sold by him/her at the head office, a branch office, and other sales office of the investment trader or broker as stipulated in the foreign collective investment agreement of the foreign collective investment securities; |
| 2. | He/she shall keep all documents deemed necessary for investors’ judgment on investment, including an asset management report, at the head office, a branch office, and other sales office of the investment trader or broker; and |
| 3. | He/she shall prepare all the documents under subparagraph 2 in Korean language to furnish investors therewith: Provided, That in cases of a foreign exchange-traded fund that is similar to an exchange-traded fund and whose foreign collective investment securities are listed on the securities exchange, furnishing an asset management report by a foreign collective investment business entity may be substituted by publicly notifying details of composition of its paid-in assets and other matters each day through the securities exchange. |
| (6) | Matters concerning recommendations of investment in foreign collective investment securities, matters concerning reporting on the current status of domestic sales of foreign collective investment securities, and other matters necessary for protecting investors shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 304 (Revocation of Registration of Foreign Collective Investment Schemes) |
|
The term "as prescribed further by Presidential Decree" in Article 282 (1) 7 of the Act means cases falling under any of the following subparagraphs: | 1. | Where a foreign collective investment scheme is terminated or dissolved; and |
| 2. | Where a foreign collective investment scheme rejects, interferes with, or evades an inspection under Article 419 (1) of the Act, which shall apply mutatis mutandis pursuant to Article 281 (2) of the Act. |
PART Ⅵ INSTITUTIONS RELATED TO FINANCIAL INVESTMENT BUSINESS
CHAPTER Ⅰ KOREA FINANCIAL INVESTMENT ASSOCIATION
법령보기 화면
| Article 305 (Registration of Incorporation) |
|
| (1) | Pursuant to Article 283 (3) of the Act, the register of incorporation of the Association shall contain descriptions of the following matters: |
| 3. | Domiciles of the central association and branch associations; |
| 4. | Names and addresses of executives; and |
| 5. | Method of public notification. |
| (2) | An application for registration of incorporation under paragraph (1) shall be accompanied by the following documents: |
| 1. | Articles of incorporation; |
| 2. | A copy of a letter of approval on the articles of incorporation under Article 3 of the Addenda of the Act; |
| 3. | A copy of a letter of approval on merger under Article 3 of the Addenda of the Act; |
| 4. | A merger agreement under Article 3 of the Addenda of the Act; |
| 5. | Minutes of the general meeting of members at which the merger of the associations subject to merger pursuant to Article 3 of the Addenda of the Act (referring to the associations subject to merger under Article 3 (1) of the Addenda of the Act; hereafter the same shall apply in this paragraph) was approved before the merger; |
| 6. | A written statement certifying a fact that the public notice and peremptory notice under Article 3 (6) of the Addenda of the Act were issued, a fact that obligations to creditors who have filed objections, if such creditors exist, have been fully performed, an asset has been offered as security for such obligations, or an asset has been placed in trust for such obligations, or a fact that such creditor will not possibly suffer any loss due to the merger; |
| 7. | A written statement certifying the value of net assets existing before the merger in the associations subject to the merger; and |
| 8. | A written statement that executives of the Association have accepted appointment as executives. |
법령보기 화면
| Article 306 (Members) |
|
The term "person specified by Presidential Decree" in Article 285 (1) of the Act means a person falling under any of the following subparagraphs: | 1. | A general administration company; |
| 2. | A fund assessment company; |
| 3. | A bond rating company; and |
| 4. | Other persons specified as members by the Association’s articles of incorporation. |
법령보기 화면
| Article 307 (Business Affairs) |
|
| (1) | The term "persons performing an important duty specified by Presidential Decree" in Article 286 (1) 3 (d) of the Act means persons falling under any of the following subparagraphs: |
| 1. | Human resources for management of professional advisers for investment recommendation (referring to the persons who carry out business affairs related to management of professional advisers for investment recommendation); |
| 2. | Human resources specializing in calculation of collective investment property under Article 276 (3); |
| 3. | Human resources specializing in assessment of collective investment schemes under Article 280 (2); |
| 4. | Human resources specializing in analysis of securities and human resources specializing in assessment of collective investment property under Article 285 (3); and |
| 5. | Other persons specified and publicly notified by the Financial Services Commission as required to be registered and managed for protection of investors or good order in trading. |
| (2) | The term "business affairs specified by Presidential Decree" in Article 286 (1) 9 of the Act means the following business affairs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | Business affairs concerning maintenance and management of records of disciplinary measures taken against executives and employees of each financial investment business entity; |
| 2. | Business affairs concerning comparative public disclosure of net operating capital under Article 30 (1) of the Act (hereinafter referred to as "net operating capital") and total risks under the same paragraph of each financial investment business entity; |
| 3. | Business affairs concerning management and public disclosure of information about trading of debt securities (limited to trades outside the securities market); |
| 4. | Business affairs concerning education of executives and employees of each financial investment business entity on their duties and ethics; |
| 5. | Business affairs concerning autonomous deliberation on advertisements on investment; and |
| 6. | Other business affairs stipulated by its articles of incorporation. |
법령보기 화면
| Article 308 (Organization and Articles of Incorporation) |
|
| (1) | Pursuant to the latter part of Article 287 (1) 3 of the Act, organizations of the Association shall be separately operated in accordance with the following guidelines: |
| 1. | The organizations shall conform to the classification under the following items according to the specific type of financial investment business: |
| (a) | Investment trading or brokerage business; and |
| (b) | Collective investment business, investment advisory business, discretionary investment business, or trust business; and |
| 2. | In cases of the investment trading or brokerage business under subparagraph 1 (a), the organizations shall conform to the classification under the following items according to the scope of financial investment instruments: |
| (a) | Securities (excluding collective investment securities); |
| (b) | Collective investment securities; and |
| (2) | The term "matters specified by Presidential Decree" in Article 287 (1) 10 of the Act means the following matters: |
| 1. | Matters concerning assets; |
| 2. | Matters concerning executives; |
| 3. | Matters concerning the general meeting and the board of directors; |
| 4. | Matters concerning accounting; and |
| 5. | Matters concerning entrustment of business affairs (including entrustment of business affairs related to a trust business entity that accepts only entrustment of the assets under Article 103 (1) 4 through 6 of the Act). |
| (3) | The term "matters specified by Presidential Decree" in Article 287 (2) of the Act means the matters under Article 287 (1) 1, 2, and 5 through 8, and (2) 2, 3, and 5 of the Act: Provided, That an amendment made pursuant to an amendment to an Act or its subordinate statute or a modification of any minor matter, such as simple alteration of words, is excluded herefrom. |
법령보기 화면
| Article 309 (Measures against Association) |
|
| (1) | The term "measures prescribed by Presidential Decree" in Article 293 (1) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Demanding or recommending improvement of methods of business management or operation; |
| 2. | Demanding compensation for losses; |
| 3. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 4. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 5. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (2) | The term "measures prescribed by Presidential Decree" in Article 293 (2) 6 and (3) 7 of the Act means measures falling under any provision of paragraph (1) 3 through 5 respectively. |
| (3) | The term "as prescribed in Presidential Decree" in subparagraph 22 of the Appendix 7 of the Act means cases falling under any subparagraph of the Appendix 11 of this Decree. |
CHAPTER Ⅱ KOREA SECURITIES DEPOSITORY
법령보기 화면
| Article 310 (Securities Subject to Deposit) |
|
The term "instruments specified by Presidential Decree" in Article 294 (1) of the Act means those falling under any of the following subparagraphs: | 1. | Negotiable certificate of deposit in Korean won; and |
| 2. | Other instruments specified and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 311 (Registration of Incorporation) |
|
| (1) | Pursuant to Article 294 (3) of the Act, the register of incorporation of the Korea Securities Depository shall contain descriptions of the following matters: |
| 3. | Domiciles of the principal place of business and branches; |
| 5. | Names and addresses of executives; and |
| 6. | Method of public notification. |
| (2) | An application for registration of incorporation under paragraph (1) shall be accompanied by the following documents: |
| 1. | Articles of incorporation; and |
| 2. | A copy of a letter of approval on the articles of incorporation. |
법령보기 화면
| Article 312 (Special Interests) |
|
The term "special interest specified by Presidential Decree" in Article 301 (5) of the Act means interests falling under any of the following subparagraphs: | 1. | Guarantee of performance of an obligation; |
| 2. | Offering assets as security; and |
| 3. | Interests that cannot be regarded as necessary activity in the course of carrying out normal trading activities (referring to activities related to the business of the opposite party to a transaction or activities incidental in accomplishing a purpose of business, which can be regarded as ordinary trading activities in light of social norms and terms and conditions of the transaction). |
법령보기 화면
| Article 313 (Measures against Korea Securities Depository) |
|
| (1) | The term "measures prescribed by Presidential Decree" in Article 307 (1) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Demanding or recommending improvement of methods of business management or operation; |
| 2. | Demanding compensation for losses; |
| 3. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 4. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 5. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (2) | The term "measures prescribed by Presidential Decree" in Article 307 (2) 6 and (3) 7 of the Act means measures falling under any provision of paragraph (1) 3 through 5 respectively. |
| (3) | The term "as prescribed in Presidential Decree" in subparagraph 29 of the Appendix 8 of the Act means cases falling under any subparagraph of the Appendix 12 of this Decree. |
법령보기 화면
| Article 314 (Restriction on Return of Securities Deposited by Investors) |
|
The term "reason specified by Presidential Decree" in Article 312 (3) of the Act means any of the following reasons: | 1. | Revocation of licence, permit, registration, etc. or suspension of business against a depositor; and |
| 2. | Bankruptcy or dissolution of a depositor and cases similar to subparagraph 1. |
법령보기 화면
| Article 315 (Replenishment of Shortfall in Deposited Securities, etc.) |
|
| (1) | Deleted. <by Presidential Decree No. 21291, Feb. 3, 2009> |
| (2) | The Securities Depository and the relevant depositor shall jointly replenish shortage of deposited securities, etc. pursuant to Article 313 (10) of the Act. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
법령보기 화면
| Article 316 (Matters Notified by Issuer) |
|
The matters of which an issuer is obligated to notify the Korea Securities Depository in accordance with Article 314 (6) of the Act shall be as follows: | 1. | The type and issue time of securities, etc. under Article 294 (1) of the Act (hereafter referred to as "securities, etc." in this Article); |
| 2. | The type of rights to securities, etc., the ground under which such rights arise, details of the rights, and the time schedule for exercising such rights; |
| 3. | Details of a change in terms and conditions of issuance of securities, etc., if such change has occurred; |
| 4. | Details of allocated rights, including preemptive rights to new stocks, in cases where the number of stocks are summed up in accordance with Article 316 (3) of the Act; and |
| 5. | Other matters deemed necessary and requested by the Korea Securities Depository in relation to a change in a date for payment of principle and interest or the exercise of rights to securities, etc. |
법령보기 화면
| Article 317 (Exercise of Voting Rights by Korea Securities Depository) |
|
| (1) | The Korea Securities Depository shall, when it exercises voting rights in stocks registered in the name of the Korea Securities Depository, exercise the voting rights in proportion to assenting stocks and dissenting stocks (including abstentions from voting and invalid votes; hereafter the same shall apply in this paragraph) so that its voting does not affect the result of voting by the number of stocks (including the number of stocks voting in writing) excluding the number of stocks for which the Korea Securities Depository can exercise voting rights. In such cases, a fractional share less than one share (hereafter referred to as the "fractional share" in this paragraph) shall be rounded off in counting assenting votes, while a fractional share shall be rounded up in counting dissenting votes. |
| (2) | When the Korea Securities Depository exercises voting rights pursuant to paragraph (1), the number of stocks for which it can exercise voting rights shall be the number of stocks required for resolution at the general meeting of shareholders out of the number of stocks deposited by domestic real shareholders (referring to the real shareholders, excluding foreign shareholders, under Article 315 (1) of the Act; hereafter the same shall apply in this Article) and requested by the relevant issuer to the Korea Securities Depository: Provided, That if the number of stocks requested by the relevant issuer exceeds the number of stocks calculated by subtracting, from the number of stocks deposited by domestic real shareholders, the number of stocks for which domestic real shareholders manifested intent to exercise voting rights in person, to exercise voting rights by proxy, or to abstain from voting (hereafter referred to as "manifestation of intent in voting" in this Article) by no later than five days before the date of the general meeting of shareholders, the number of stocks for which it can exercise voting rights shall be the number of stocks calculated by subtracting, from the number of deposited stocks, the number of stocks for which intent in voting was manifested. |
| (3) | The Korea Securities Depository may exercise voting rights directly or by proxy. |
| (4) | A proxy who has exercised voting rights in accordance with paragraph (3) shall notify the Korea Securities Depository of the result of his/her exercise of voting rights without delay after the relevant general meeting of shareholders is closed. |
| (5) | An issuer shall, when it issues a notice or public notice of convening the general meeting of shareholders under Article 314 (4) of the Act, also issue a notice or public notice of the following matters to domestic real shareholders: |
| 1. | Matters under paragraph (1); and |
| 2. | The method of manifesting the intent of a domestic real shareholder. |
| (6) | The deadline by which and the method as to how an issuer can request the Korea Securities Depository to exercise voting rights, the method as to how a domestic real shareholder can manifest his/her intent, and other necessary matters in relation to the exercise of voting rights for stocks deposited in the name of the Korea Securities Depository shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 318 (Persons Included in Issuers of Stocks, etc.) |
|
| (1) | The term "stocks, etc. specified by Presidential Decree" in the main body of Article 315 (5) of the Act means exchangeable bonds and derivative-combined securities. |
| (2) | The term "persons specified by Presidential Decree" in the main body of Article 315 (5) of the Act means the following persons: |
| 1. | The issuer of stocks, etc., which are underlying securities, in cases of securities depository receipts; |
| 2. | The issuer of stocks, etc. subject to exchange, in cases of exchangeable bonds; and |
| 3. | The issuer of stocks, etc., which are the underlying asset, in cases of derivative-combined securities. |
CHAPTER Ⅲ SECURITIES FINANCE COMPANIES
법령보기 화면
| Article 319 (Authorization) |
|
| (1) | The term "amount prescribed by Presidential Decree" in Article 324 (2) 2 of the Act means 50 billion won. |
| (2) | The term "alleviated requirements as prescribed by Presidential Decree" in Article 324 (9) of the Act means the following requirements: |
| 1. | In applying the requirements under Article 324 (2) 2 of the Act, a securities finance company shall maintain its equity capital equivalent to or more than 70/100 of the minimum equity capital under paragraph (1). In such cases, the requirements for maintaining the authorization shall be applicable as at the end of each fiscal year, while it shall be deemed that, even if a securities finance company fails to meet the requirements for maintaining its authorization as at the end of a specific fiscal year, it meets the requirements for maintaining the authorization until the end of the following fiscal year; and |
| 2. | In applying the requirements under Article 324 (2) 6 of the Act, a securities finance company shall continue to satisfy the requirements under Article 19 (1) 2 (a) through (c). |
| (3) | Articles 16 (4), (5), (6) (excluding subparagraph 1), (8) 1, and (10), and 17 (excluding paragraphs (1) 4, (2) 5, and (3)) shall apply mutatis mutandis to the authorization requirements for a securities finance company. |
법령보기 화면
| Article 320 (Business Affairs) |
|
The term "business affairs specified by Presidential Decree" in Article 326 (2) 1 of the Act means the following business affairs: | 1. | Trading with buy-back agreement; |
| 2. | Brokerage, intermediation, or agency for trading with buy-back agreement; and |
| 3. | An investment trading or brokerage business for collective investment securities. |
법령보기 화면
| Article 321 (Special Interests) |
|
The term "special interest specified by Presidential Decree" in Article 327 (3) of the Act means interests falling under any of the following subparagraphs: | 1. | Guarantee for performance of obligations; |
| 2. | Offering assets as security; and |
| 3. | Interests that cannot be regarded as necessary activity in the course of carrying out normal trading activities (referring to activities related to the business of the opposite party to a transaction or activities incidental in accomplishing a purpose of business, which can be regarded as ordinary trading activities in light of social norms and terms and conditions of the transaction). |
법령보기 화면
| Article 322 (Issuance of Bonds) |
|
| (1) | In cases where a securities finance company states, in a bond subscription form or a registration statement, its intent to issue bonds even in cases where the total amount of subscribed bonds does not reach the total amount of bonds described in the bond subscription form or the registration statement, the total amount of subscribed bonds shall be deemed to be the total amount of bonds issued. |
| (2) | Any securities finance company may issue bonds through public sale during a predetermined period of time, and in such cases, it may omit preparing a bond subscription form. |
| (3) | Each securities finance company shall describe the following matters in the bonds issued through public sale: |
| 1. | Trade name of the company; |
| 2. | Par value of the bonds; |
| 3. | Coupon rate of the bonds; |
| 4. | Method and deadline for payment of interest; |
| 5. | Method and deadline for repayment of bonds; and |
| 6. | Serial number of bonds. |
| (4) | Any securities finance company may issue bonds at a discount. |
| (5) | In cases where a securities finance company issues bonds at a discount with a maturity of five years or longer, it may exclude the difference in the discounted issue price in applying the issue value of bonds under Article 329 of the Act. |
법령보기 화면
| Article 323 (Approval on Discontinuance of Business) |
|
Article 370 (2) through (6) shall apply mutatis mutandis to the approval of the Financial Services Commission on discontinuance of business or dissolution of a securities finance company under Article 332 (1) of the Act.
법령보기 화면
| Article 324 (Measures against Securities Finance Companies) |
|
| (1) | The term "as prescribed by Presidential Decree" in Article 335 (1) 6 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a securities finance company falls under subparagraph 3 of the Appendix 13 hereof because it has breached the duty to refrain from using any material, nonpublic information under Article 174 of the Act; |
| 2. | If a securities finance company falls under subparagraph 4 of the Appendix 13 hereof because it has breached the duty to refrain from manipulating a market price or any similar act under Article 176 of the Act; and |
| 3. | If a securities finance company falls under subparagraph 5 of the Appendix 13 hereof because it has breached the duty to refrain from engaging in an unfair trade or any similar act under Article 178 of the Act. |
| (2) | The term "finance-related Acts and subordinate statute, etc. specified by Presidential Decree" in Article 335 (1) 7 of the Act means Acts and subordinate statutes under subparagraphs of Article 373 (2). |
| (3) | The term "as prescribed further by Presidential Decree" in Article 335 (1) 7 of the Act means cases falling under any subparagraph of Article 373 (3). |
| (4) | The term "as prescribed further by Presidential Decree" in Article 335 (1) 8 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a securities finance company has failed to commence its business within six months from the authorization date or has failed to continue the authorized business without justifiable grounds for six months after commencement of the business; |
| 2. | If a securities finance company has received money, etc. from a third person in connection with its business in any wrongful manner or has acquired money, etc. to deliver it to a third person; |
| 3. | If a securities finance company has failed to correct a relevant condition within one month from the day on which a measure of business suspension under Article 335 (2) 1 of the Act was taken (or a period of time prescribed for correction, in cases where a period of time exceeding one month was prescribed for correction when a measure of business suspension was taken); and |
| 4. | If a securities finance company has committed identical or similar violations continuously or repeatedly. |
| (5) | The term "measures specified by Presidential Decree" in Article 335 (2) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Closure of branch offices or other sales offices or suspending their business completely or partially; |
| 2. | Demanding or recommending improvement of methods of business management or operation; |
| 3. | Demanding compensation for losses; |
| 4. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 5. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 6. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (6) | The term "measures as prescribed by Presidential Decree" in Article 335 (3) 6 and (4) 7 of the Act means measures under any provision of paragraph (5) 4 through 6 respectively. |
| (7) | The term "as prescribed in Presidential Decree" in subparagraph 26 of the Appendix 9 of the Act means cases falling under any subparagraph of the Appendix 13 of this Decree. |
법령보기 화면
| Article 325 (Business of Merchant Banks) |
|
| (1) | The term "period of time prescribed by Presidential Decree" in Article 336 (1) 1 of the Act means one year. |
| (2) | The term "business affairs specified by Presidential Decree" in Article 336 (1) 8 of the Act means the following business affairs: |
| 1. | Business affairs of bill management accounts (referring to accounts opened by a merchant bank for the purpose of consolidating funds deposited by customers, managing them by investing in bills, etc. under Article 336 (1) 1 of the Act, and distributing profits earned from such investment to customers; hereafter the same shall apply in this Chapter); |
| 2. | Factoring business affairs (referring to purchase and collection of claims for sales proceeds of enterprises and business affairs incidental to such business affairs); |
| 3. | Investment trading or brokerage business for trading exchange-traded derivatives based on an underlying asset of a stock price index among exchange-traded derivatives traded in the derivatives market; |
| 4. | Trading negotiable certificates of deposit and brokerage, intermediation, or agency for such trading; |
| 5. | Trading securities eligible for manipulation in open markets pursuant to Article 68 of the Bank of Korea Act (hereafter referred to as "securities eligible for manipulation in open markets" in this Chapter) and brokerage, intermediation, or agency for such trading; |
| 6. | Granting loans secured by bills issued by the relevant merchant bank or loans secured by bonds deposited by a private individual in a bill management account of the relevant merchant bank and granted to such private individual; |
| 7. | Business affairs of pre-shipment trade bills (referring to business affairs of discounting, trading, brokerage, acceptance, and guarantee of trade bills prior to shipment and purchase of bills of exchange for exportation and collection request for such bills of exchange); and |
| 8. | Business affairs of leasing business-use real estate under Article 347 (4) of the Act. |
| (3) | The term "business affairs specified by Presidential Decree" in Article 336 (2) 6 of the Act means the following business affairs: |
| 1. | Investment trading or brokerage business for exchange-traded derivatives (excluding those falling under paragraph (2) 3); |
| 3. | Business affairs of management of securitized assets under the Asset- Backed Securitization Act; |
| 4. | Business affairs of securitization of mortgage-backed bonds under the Special Purpose Companies for Mortgage-Backed Bonds Act; |
| 5. | Investment advisory business; and |
| 6. | Business affairs related to electronic money transfer under the Electronic Financial Transaction Act (excluding the business affairs related to electronic money transfer through which it becomes a participant institution of the settlement relay system under subparagraph 6 of Article 2 of the aforesaid Act or related to electronic money transfer through the representative participant institution under Article 15 (2) 2 of the Enforcement Decree of the aforesaid Act). |
법령보기 화면
| Article 326 (Issuance of Cover Notes) |
|
| (1) | Pursuant to Article 336 (3) of the Act, any merchant bank may issue new bills (hereafter referred to as "cover bills" in this Chapter) by integrating or dividing factoring bills or claims purchased at discount and owned (referring to bills or claims related to factoring business; hereafter the same shall apply in this Chapter) or trade bills (hereafter referred to as "real bills, etc." in this Chapter). |
| (2) | Every merchant bank shall, when it issues cover bills under paragraph (1), issue them within the limits of the balance of real bills, etc., owned and their final maturities, and shall not sell such real bills, etc., based on which cover bills were issued, offer such real bills, etc. as security, or include such real bills, etc. in a bill management account. |
법령보기 화면
| Article 327 (Selection of Eligible Business Entities) |
|
| (1) | Every merchant bank shall select business entities eligible for discount or trade of bills, brokerage or intermediation of a transaction of bills, or acceptance or guarantee of bills: Provided, That in cases where it discounts or trades a bill, intermediates a transaction of a bill, or accepts or guarantees a bill guaranteed by other financial institution (referring to institutions engaging in business of bills and subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission) may omit selection of an eligible business entity. |
| (2) | The method of selecting eligible business entities under paragraph (1), the discount ceiling of bills for each eligible business entities, and other necessary matters concerning eligible business entities shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 328 (Dealing with Unsecured Bills) |
|
| (1) | No merchant bank may, when it sells an unsecured bill, guarantee or cause another person to guarantee, directly or indirectly, the payment thereof: Provided, That it may guarantee the payment of such bill in cases where it sells a bill issued by a small or medium enterprise under Article 2 of the Framework Act on Small and Medium Enterprises with guarantee of the payment by any bank, the Korea Credit Guarantee Fund under the Credit Guarantee Fund Act, the Korea Technology Credit Guarantee Fund under the Technology Credit Guarantee Fund Act, or another merchant bank. |
| (2) | In cases where a merchant bank sells an unsecured bill, such unsecured bill shall satisfy all of the following requirements: |
| 1. | It shall be one that has been subjected to credit assessment by two or more credit rating business entities: Provided, That in cases where all immediately former credit grades reached the credit grade prescribed and publicly notified by the Financial Services Commission, the bill shall be one that has been subjected to credit assessment by one or more credit rating business entities; and |
| 2. | The lowest credit grade among credit grades assessed by credit rating business entities shall reach or exceed the credit grade prescribed and publicly notified by the Financial Services Commission: Provided, That in cases where a bill is one under the proviso to paragraph (1) or one issued by an enterprise specified and publicly notified by the Financial Services Commission, it may be exempt from application of the requirements for credit grade. |
| (3) | Any merchant bank may act as a broker, an intermediary, or an agent for trading unsecured bills, only in cases where the lowest credit grade to which it is rated among credit grades rated by credit rating business entities reaches or exceeds the credit grade prescribed and publicly notified by the Financial Services Commission: Provided, That in cases where a bill is one issued by an enterprise specified and publicly notified by the Financial Services Commission, it may by exempt from application of the requirements for credit grade. |
| (4) | The standards for credit assessment by credit rating business entities, the valid term of credit grades, the public disclosure of credit grades, and other necessary matters concerning credit rating of unsecured bills shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 329 (Bill Management Account) |
|
| (1) | Every merchant bank shall set the deposit term of a bill management account within the limit of one year. |
| (2) | Any merchant bank may invest the money deposited in a bill management account, except the asset reserved for payment under Article 346 of the Act, only in any of the following assets: |
| 1. | Discount of bills issued by an enterprise that is a customer of the merchant bank; |
| 2. | Pre-shipment trade bills; |
| 3. | Factoring bills or claims; |
| 4. | Cover bills issued by a financial institution (referring to an institution engaging in a business of bills and subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission); |
| 5. | State bonds, local government bonds, or special bonds; |
| 6. | Bonds for which the State guarantees the payment of principle and interest; |
| 7. | Bonds issued by a financial institution (referring to an institution subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission); |
| 8. | Bonds listed on the securities exchange; and |
| 9. | Negotiable certificates of deposit. |
| (3) | Each merchant bank shall invest 50/100 or more of the total manageable assets out of the money deposited in a bill management account in the assets under paragraph (2) 1 through 3 in managing such deposited money: Provided, That in cases where it fails to meet the guidelines for management of the money deposited in a bill management account due to an unavoidable cause or event, such as deposit of a large amount of funds at once, it shall be deemed that the merchant bank meets the guidelines until the following day. |
| (4) | Each merchant bank shall separate manageable asset of the money deposited in a bill management account from its proprietary assets in managing such deposited money. |
| (5) | The transaction method of a bill management account, the management method of deposited money, and other necessary matters concerning a bill management account shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 330 (Working Rules on Business Conduct) |
|
| (1) | A merchant bank shall not grant a loan to anyone in order to enable him/her to acquire stocks issued by the merchant bank directly or indirectly. |
| (2) | A merchant bank shall not provide funds to a lender of hybrid capital instruments, such as subordinated bonds and subordinated borrowings, in relation to such a transaction by granting a loan, directly or indirectly, issuing a payment guarantee letter or in any other way. |
| (3) | A merchant bank shall not commit any of the following acts in relation to credit affairs: |
| 1. | Placing any restrictions on a borrower’s use of a loan or coercing a customer unfairly to open a deposit account, increasing the borrower’s burden of financing costs in violation of the criteria prescribed and publicly notified by the Financial Services Commission; |
| 2. | Shifting credit risk, etc. borne by the merchant bank unfairly on to a customer directly or indirectly; and |
| 3. | Deriving benefits otherwise or bringing about a result undermining a customer’s interests, taking advantage of the merchant bank’s dominant position. |
| (4) | A merchant bank shall allocate, for small and medium enterprises, at least 25/100 of the total sum of bills in hand, factoring finance, payment guarantee for bills, and mediumand long-term loans to enterprises (excluding the public agencies under the Act on the Management of Public Agencies and non-profit organizations). |
| (5) | The Financial Services Commission may prescribe and publicly notify other matters necessary for protecting customers and good order in trading. |
법령보기 화면
| Article 331 (Authorization for Branches) |
|
| (1) | The Financial Services Commission shall, when it seeks to authorize establishment of a branch office, etc. (referring to branch offices, etc. under Article 337 of the Act; hereafter the same shall apply in this Article) pursuant to Article 337 of the Act, examine the following requirements that: |
| 1. | The relevant merchant bank meets the guidelines for soundness in business management under Article 31 of the Act, which shall apply mutatis mutandis pursuant to Article 350 of the Act; |
| 2. | The relevant merchant bank has realized net income during at least one business year out of the latest two business years; and |
| 3. | The relevant merchant bank has never been subject to any measure, equivalent to or heavier than a warning to the institution as a whole, taken by the Financial Services Commission during the latest two years preceding the date on which an application for authorization for establishment of a branch office, etc. is filed. |
| (2) | Paragraph (1) 2 and 3 shall not apply to merchant banks that seek to obtain authorization for establishment of a branch office, etc. in a Metropolitan City/Do in which the merchant bank has neither head office nor a branch office. |
| (3) | Further specific matters concerning the application for and examination on authorization for a branch office, etc., the form and method of preparation of the application, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) and (2). |
법령보기 화면
| Article 332 (Issuance of Bonds) |
|
| (1) | In cases where a merchant bank states, in a bond subscription form or a registration statement, its intent to issue bonds even in cases where the total amount of subscribed bonds does not reach the total amount of bonds described in the bond subscription form or the registration statement, the total amount of subscribed bonds shall be deemed the total amount of bonds issued. |
| (2) | A merchant bank shall, if it has issued bonds in excess of the limit in accordance with Article 340 (2) of the Act, meet the limit under paragraph (1) of the aforesaid Article within one month after issuing such bonds. |
| (3) | Any merchant bank company may issue bonds through public sale during a predetermined period of time, and in such cases, it may omit preparing a bond subscription form. |
| (4) | Every merchant bank shall describe the following matters in the bonds issued through public sale: |
| 1. | Trade name of the company; |
| 2. | Par value of the bonds; |
| 3. | Coupon rate of the bonds; |
| 4. | Method and deadline for payment of interest; |
| 5. | Method and deadline for repayment of bonds; and |
| 6. | Serial number of bonds. |
| (5) | Any merchant bank may issue bonds at a discount. |
| (6) | In cases where a merchant bank issues bonds at a discount with a maturity of five years or longer, it may exclude the difference in the discounted issue price in applying the issue value of bonds under Article 340 of the Act. |
법령보기 화면
| Article 333 (Special Cases concerning Collective Investment Business Entities) |
|
| (2) | Every merchant bank shall have a system for preventing conflicts of interest, including the following matters, in accordance with the main sentence of Article 341 (2) of the Act: |
| 1. | Each department shall be separated independently to ensure that business affairs and reports are carried out independently; |
| 2. | Whenever executives and employees in charge of the business affairs under subparagraphs of Article 341 (2) of the Act hold meetings or communicate with each other, they shall keep records of such meetings or communications and shall obtain confirmation on the affairs from the compliance officer at least once a month; |
| 3. | Employees in charge of business affairs under any subparagraph of Article 341 (2) of the Act shall not be dispatched from one department to another department, nor shall employees in charge of business affairs under Article 341 (2) 2 of the Act be assigned to any other business affairs; |
| 4. | Employees in charge of sales of collective investment securities shall not concurrently hold office for the business affairs falling under Article 341 (2) 2 of the Act; |
| 5. | The office space shall be separated by installing a separate entrance or in any other way sufficient to prevent sharing of information; |
| 6. | Electronic data of the business affairs under subparagraphs of Article 341 (2) of the Act shall be stored, managed, and inspected sufficiently independently to prevent sharing of such data; and |
| 7. | Other matters specified and publicly notified by the Financial Services Commission as necessary for preventing conflicts of interest. |
| (3) | The term "business affairs prescribed by Presidential Decree" in the proviso to the main body of Article 341 (2) of the Act means business affairs falling under any of the following subparagraphs: |
| 1. | Business affairs specified and publicly notified by the Financial Services Commission as those not related directly to the business affairs under Article 341 (2) 2 of the Act among the business affairs under Article 336 (1) 8 of the Act; |
| 2. | Business affairs under Article 336 (2) 1 of the Act; |
| 3. | Business affairs under Article 336 (2) 5 of the Act; and |
| 4. | Business affairs specified and publicly notified by the Financial Services Commission as those not related directly to the business affairs under Article 341 (2) 2 of the Act among the business affairs under Article 336 (2) 6 of the Act. |
법령보기 화면
| Article 334 (Limit on Credit Extension to Single Borrower) |
|
| (1) | The term "limit prescribed by Presidential Decree" in Article 342 (2) of the Act means 15/100 of equity capital of a merchant bank. |
| (2) | The term "as prescribed by Presidential Decree" in the main body of Article 342 (5) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where a case falls under Article 342 (5) 1 of the Act and any of the following items: |
| (a) | Where credit extension under Article 342 (1) of the Act (hereafter referred to as "credit extension" in this Chapter) is to the State, a local government, or a corporation, etc. established by direct operation of an Act and specified and publicly notified by the Financial Services Commission; |
| (b) | Where a merchant bank grants a loan to another financial institution with its surplus operating fund for a fixed period of time, not exceeding three business days, through a financial brokerage company; |
| (c) | Where a merchant bank makes additional credit extension to a company for which rehabilitation proceedings under the Debtor Rehabilitation and Bankruptcy Act are pending or proceedings for joint management of creditor financial institutions or creditor banks under the Corporate Restructuring Promotion Act are pending; and |
| (d) | Where a merchant bank makes additional credit extension to a person who took over a company falling under item (c) in accordance with terms and conditions of the relevant transfer agreement; and |
| 2. | Where a case falls under Article 342 (5) 2 of the Act and any of the following items: |
| (a) | Where the equity capital of the relevant merchant bank has been reduced; |
| (b) | Where there is a change in composition of a single borrower due to a merger or transfer of business between enterprises to which credit was extended, or other event; |
| (c) | Where the amount converted into Korean won has been increased due to fluctuation in exchange rates; and |
| (d) | Where the Financial Services Commission recognizes that the relevant merchant bank is not liable for the excess of the limit on credit extension but the excess was caused by other unavoidable events, such as a rapid change in economic conditions. |
| (3) | A merchant bank shall, when it seeks to extend credit in excess of the limits under Article 342 (1) through (4) of the Act on a ground under paragraph (2) 1, obtain confirmation of the Financial Services Commission that the case falls under any ground under paragraph (2) 1. In such cases, the merchant bank shall file an application for confirmation with the Financial Services Commission by not later than seven days before the day on which it plans to extend credit. |
| (4) | A merchant bank shall, when it has exceeded the limit on credit extension due to an event under paragraph (2) 2, submit a plan required for correction of the excess to the Financial Services Commission within one month from the day on which such event occurred. |
| (5) | The term "unavoidable cause specified by Presidential Decree" in the proviso to Article 342 (6) of the Act means a cause that falls under any of the following subparagraphs and due to which ceasing to exceed the limit will undermine the soundness of assets of the relevant merchant bank: |
| 1. | Where it is difficult to recover credit extended because the maturity date of credit already extended has not yet arrived; and |
| 2. | Where it is anticipated that recovery of credit extended will cause serious harm to the stability of business of the person to whom credit was extended. |
| (6) | Necessary matters concerning the application for confirmation of excess of the limit on credit extension and confirmation thereon, the form and method of preparation of the application, and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (5). |
법령보기 화면
| Article 335 (Scope of Equity Capital) |
|
The equity capital under Article 342 (1) of the Act shall be divided into core (Tier 1) capital and supplementary (Tier 2) capital, and shall be prescribed and publicly notified by the Financial Services Commission in accordance with the following guidelines: | 1. | The core capital consists of real net assets of a merchant bank, such as capital and reserves, which can be characterized as permanent; |
| 2. | The supplementary capital consists of subordinated bonds and others, which can be characterized as similar to those under subparagraph 1 and with which it is possible to set off losses incurred in the course of business activities of the relevant merchant bank; and |
| 3. | Treasury stocks owned by the relevant merchant bank and others that do not actually contribute to capital adequacy shall not be included in core capital or supplementary capital. |
법령보기 화면
| Article 336 (Scope of Credit Extension) |
|
The credit extension under Article 342 (1) of the Act shall consist of the following, but further specific scope shall be prescribed and publicly notified by the Financial Services Commission: | 4. | Purchase of securities that can be characterized as financial support; |
| 6. | Subrogated payment following payment guarantee; |
| 8. | Other transaction that may incur a loss to a merchant bank if the other party to the transaction becomes insolvent; and |
| 9. | A transaction that falls under any of the provisions of subparagraphs 1 through 7 and that may actually bring about a result pertaining to such provisions, although the relevant merchant bank was not involved directly in the transaction. |
법령보기 화면
| Article 337 (Extent of Single Borrower and Related Persons) |
|
| (1) | The specific extent of a single borrower under Article 342 (1) of the Act shall be the same private individual or corporation and persons who are in a relationship under any of the following subparagraphs: |
| 1. | A person who is in a relationship falling under any subparagraph of Article 3 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act; and |
| 2. | Another private individual or corporation that is anticipated as highly likely to become insolvent, unless there are any extraordinary circumstances, if a private individual or corporation becomes insolvent. |
| (2) | The specific extent of related persons under Article 342 (2) of the Act means the following persons: |
| 1. | Executives of the relevant merchant bank; |
| 2. | Subsidiary companies (referring to subsidiary companies at least 15/100 of whose outstanding voting stocks are held by the relevant merchant bank; hereafter the same shall apply in this Chapter) of the relevant merchant bank; |
| 3. | Specially related persons of executives of the merchant banks concerned; and |
| 4. | Persons who are in a relationship under any subparagraph of paragraph (1) with a subsidiary company of the relevant merchant bank. |
법령보기 화면
| Article 338 (Restriction on Transactions with Major Shareholders) |
|
| (1) | The term "limit prescribed by Presidential Decree" in Article 343 (1) of the Act means the smaller of an amount equivalent to 15/100 of equity capital, and an amount calculated by dividing the number of voting stocks of the relevant merchant bank held by the relevant major shareholder (including his/her specially related persons; hereafter the same shall apply in this Article) by the total number of outstanding voting stocks of the merchant bank and multiplying the equity capital of the merchant bank by the ratio obtained by the division. |
| (2) | The term "amount prescribed by Presidential Decree" in Article 343 (2) (former part) and (3) of the Act means the smaller of an amount of a single transaction which is defined and publicly notified by the Financial Services Commission, equivalent to 10/10000 of equity capital, or one billion won: Provided, That excluded from the amount of a single transaction is the amount of an ordinary transaction made by the relevant merchant bank in accordance with a standardized contract under Article 2 of the Regulation of Standardized Contracts Act. |
| (3) | The term "transaction specified by Presidential Decree" in the former part of Article 343 (2) of the Act means a transaction for acquiring corporate bonds issued by a major shareholder through public offering or sale. |
| (4) | The term "matters specified by Presidential Decree" in Article 343 (4) of the Act means matters classified in the following subparagraphs: |
| 1. | Matters under the following items in cases of credit extension under Article 343 (3) of the Act: |
| (a) | Size of credit extension as at the end of each quarter; |
| (b) | Amount of credit extension increased or decreased during each quarter; |
| (c) | Terms and conditions of credit extension; and |
| (d) | Other matters specified and publicly notified by the Financial Services Commission; and |
| 2. | Matters under the following items in cases of acquisition of stocks issued by a major shareholder under Article 343 (3) of the Act: |
| (a) | Size of acquisition as at the end of each quarter; |
| (b) | Details of increase and decrease during each quarter; |
| (c) | Acquisition price or disposition price; and |
| (d) | Other matters specified and publicly notified by the Financial Services Commission. |
| (5) | The term "period of time prescribed by Presidential Decree" in Article 343 (5) of the Act means one year. |
| (6) | The term "as prescribed by Presidential Decree" in the main body of Article 343 (9) of the Act means cases where a major shareholder falls under any of the following subparagraphs: |
| 1. | Where liabilities of the major shareholder (limited to a company, but including specially related persons that are companies; hereafter the same shall apply in this Article) exceed its assets; and |
| 2. | Where the major shareholder is rated non-investment grade by two or more credit rating business entities. |
| (7) | The term "measures prescribed by Presidential Decree" in Article 343 (9) 3 of the Act means prohibition on new acquisition of financial investment instruments falling under any of the following subparagraphs: |
| 1. | Securities depository receipts related to securities issued by a major shareholder; |
| 2. | Exchangeable bonds issued by any person other than a major shareholder with a right to claim exchange with securities issued by a major shareholder or securities under subparagraph 1; and |
| 3. | Financial investment instruments (limited to cases where an underlying asset can be acquired by exercising rights) based on an underlying asset composed only of securities issued by a major shareholder or securities under subparagraph 1 or 2. |
법령보기 화면
| Article 339 (Limit on Investment in Securities) |
|
| (1) | The term "as prescribed by Presidential Decree" in the former part of Article 344 (1) of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where a merchant bank holds securities because it engages in business affairs under Article 336 (1) 1 or 3 or (2) 2 or 3 of the Act and an investment trading or brokerage business for collective investment securities; |
| 2. | Where a merchant bank holds bonds for which the State guarantees the payment of principal and interest; |
| 3. | Where a merchant bank holds securities by exercising shareholders’ rights, security rights, etc. (excluding those held for more than one year); |
| 4. | Where a merchant bank holds corporate bonds with a remaining maturity period of three years or less; |
| 5. | Where a merchant bank holds stocks (including convertible bonds) acquired by converting an existing credit extension into investment as prescribed and publicly notified by the Financial Services Commission; |
| 6. | Where a merchant bank holds asset-backed securities issued on the basis of assets owned by the relevant merchant bank under the Asset- Backed Securitization Act; and |
| 7. | Where a merchant bank holds collective investment securities specified and publicly notified by the Financial Services Commission. |
| (2) | The term "manner prescribed by Presidential Decree" in Article 344 (2) of the Act means a manner in which different limits on investment is prescribed separately for the following securities: |
| 1. | Stocks issued by each company (including securities depository securities related to such stocks); |
| 2. | Stocks (including securities depository securities related to such stocks) issued by a major shareholder of a merchant bank and its specially related persons; |
| 3. | Unlisted securities (including securities depository securities related to such stocks) sold by a major shareholder of a merchant bank and its specially related persons; and |
| 4. | Derivative-combined securities and other securities specified and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 340 (Acts Prohibited in Relation to Providing Financial Support) |
|
The term "act specified by Presidential Decree" in Article 345 (1) 3 of the Act means using a transaction of over-the-counter derivatives, a trust deed, a linked transaction, etc. with intent to circumvent the limits under Article 342 through 344 of the Act.
법령보기 화면
| Article 341 (Holding Reserve Assets) |
|
| (1) | Pursuant to Article 346 of the Act, every merchant bank shall hold reserve assets equivalent to or more than 5/100 of the aggregate of the following amounts: |
| 1. | Amount of outstanding bills (referring to outstanding bills issued by the relevant merchant bank at investors’ requests, representing the merchant bank as the issuer and payer) and outstanding debt securities; |
| 2. | Amount of deposits in bill management accounts; and |
| 3. | Par value of corporate bills sold, undertaking the surety’s liability. |
| (2) | The reserve assets under paragraph (1) shall consist of the following assets, which have not been offered to any other person as security: |
| 2. | State bonds, local government bonds, or special bonds; and |
| 3. | Bonds for which the State guarantees the payment of principal and interest. |
| (3) | Matters concerning the method of calculation for reserve assets shall be prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 342 (Restrictions on Acquisition of Real Property) |
|
| (1) | A merchant bank shall dispose of any real property, other than business-use real property, in accordance with Article 347 (3) of the Act and the real property acquired in accordance with the proviso to Article 347 (1) of the Act within one year from the date on which it acquired such real property, or shall request the Korea Asset Management Corporation established pursuant to the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation to sell such real property: Provided, That it is not required to dispose of or request to sell such real property, if it is unable to dispose of or request to sell it due to unavoidable circumstances, as specified and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 343 (Corporation Subject to Prohibition on Concurrent Offices) |
|
The term "other profit-making corporations specified by Presidential Decree" in Article 348 of the Act means the following profit-making corporations: | 2. | A subsidiary company of the relevant merchant bank, for which the merchant bank is obligated to prepare consolidated financial statements under subparagraph 2 of Article 1-2 of the Act on External Audit of Stock Companies: Provided, That cases falling under any of the following items are excluded herefrom: |
| (a) | Where an executive concurrently holds office as an executive of a financial institution that is a subsidiary company in a foreign country or is dispatched to such financial institution; and |
| (b) | Where an executive concurrently holds office as an executive of a subsidiary company or is dispatched to such subsidiary company to promote business rationalization or restructuring of the subsidiary company efficiently; |
| 3. | An accounting firm under the Certified Public Account Act; |
| 4. | A major shareholder of the relevant merchant bank and a corporation in a relationship under any subparagraph of Article 337 (1) with the major shareholder; |
| 5. | A corporation to which the relevant merchant bank has made credit extension amounting to 10/100 or more of the equity capital of the merchant bank; and |
| 6. | A profit-making corporation not falling under any provision of subparagraphs 1 through 5, but specified and publicly notified by the Financial Services Commission as a corporation in which a conflict of interest is likely to arise, if a standing executive of the merchant bank takes charge of a full-time job in another profit-making corporation. |
법령보기 화면
| Article 344 (Measures against Merchant Banks) |
|
| (1) | The term "as prescribed by Presidential Decree" in Article 354 (1) 4 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a merchant bank falls under subparagraph 10 of the Appendix 10 of the Act because it has extended credit to a major shareholder in violation of Article 343 (1) of the Act; |
| 2. | If a merchant bank falls under subparagraph 21 of the Appendix 10 of the Act because it has committed an act falling under any subparagraph of Article 35 of the Act, in violation of the aforesaid Article, which shall apply mutatis mutandis pursuant to Article 350 of the Act; |
| 3. | If a merchant bank falls under subparagraph 3 of the Appendix 14 hereof because it has breached the duty to refrain from using any material, nonpublic information under Article 174 of the Act; |
| 4. | If a merchant bank falls under subparagraph 4 of the Appendix 14 hereof because it has breached the duty to refrain from manipulating a market price or any similar act under Article 176 of the Act; and |
| 5. | If a merchant bank falls under subparagraph 5 of the Appendix 14 hereof because it has breached the duty to refrain from unfair trade or any similar act under Article 178 of the Act. |
| (2) | The term "finance-related Acts and subordinate statutes, etc. specified by Presidential Decree" in Article 354 (1) 5 of the Act means Acts and subordinate statutes under subparagraphs of Article 373 (2). |
| (3) | The term "as prescribed by Presidential Decree" in Article 354 (1) 5 of the Act means cases falling under any subparagraph of Article 373 (3). |
| (4) | The term "as prescribed by Presidential Decree" in Article 354 (1) 6 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a merchant bank has failed to continue the authorized business for six months or longer without justifiable reasons; |
| 2. | If a merchant bank has received money, etc. from a third person in connection with its business in any wrongful manner or has acquired money, etc. to deliver it to a third person; |
| 3. | If a merchant bank has failed to correct a relevant condition within one month from the day on which a measure of business suspension under Article 354 (2) 1 of the Act was taken (or within a period of time prescribed for correction, in cases where a period of time exceeding one month was prescribed for correction when a measure of business suspension was taken); and |
| 4. | If a merchant bank has committed identical or similar violations continuously or repeatedly. |
| (5) | The term "measures specified by Presidential Decree" in Article 354 (2) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Closure of branch offices or other sales offices or suspending their business completely or partially; |
| 2. | Demanding or recommending improvement of methods of business management or operation; |
| 3. | Demanding compensation for losses; |
| 4. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 5. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 6. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (6) | The term "measures as prescribed by Presidential Decree" in Article 354 (3) 6 and (4) 7 of the Act means measures under any provision of paragraph (5) 4 through 6 respectively. |
| (7) | The term "as prescribed in Presidential Decree" in subparagraph 32 of the Appendix 10 of the Act means cases falling under any subparagraph of the Appendix 14 of this Decree. |
CHAPTER Ⅴ FINANCIAL BROKERAGE COMPANY
법령보기 화면
| Article 345 (Authorization for Financial Brokerage Company) |
|
| (1) | The term "financial institutions, etc. specified by Presidential Decree" in Article 355 (1) of the Act means the following persons: |
| 1. | Persons under Article 10 (2) 1 through 7, 9 through 11, 13, 14, 16, and 17; |
| 3. | Persons similar to those under subparagraph 1 or 2 and specified and publicly by the Financial Services Commission. |
| (2) | The term "amount prescribed by Presidential Decree" in Article 355 (2) 2 of the Act means two billion won. |
| (3) | The term "alleviated requirements as prescribed by Presidential Decree" in Article 355 (9) of the Act means the following requirements: |
| 1. | In applying the requirements under Article 355 (2) 2 of the Act, a financial brokerage company shall maintain its equity capital at an equivalent to or more than 70/100 of the minimum equity capital under paragraph (2). In such cases, the requirements for maintaining the authorization shall be applicable as at the end of each fiscal year, while it shall be deemed that, even if a financial brokerage company fails to meet the requirements for maintaining such authorization as at the end of a specific fiscal year, it meets the requirements for maintaining the authorization until the end of the following fiscal year; and |
| 2. | In applying the requirements under Article 355 (2) 6 of the Act, a financial brokerage company shall continue to satisfy the requirements under Article 19 (1) 2 (a) through (c). |
| (4) | Articles 16 (4), (5), (6) (excluding subparagraph 1), and (10), and 17 (excluding paragraphs (1) 4 and 9, (2) 5 and 11, and (3)) shall apply mutatis mutandis to the authorization requirements for a financial brokerage company. |
법령보기 화면
| Article 346 (Restrictions on Activities of Financial Brokerage Company) |
|
| (1) | The term "financial investment business specified by Presidential Decree" in Article 357 (1) of the Act means a business falling under any of the following subparagraphs: |
| 1. | Brokerage, intermediation, or agency for negotiable certificates of deposit in Korean won; |
| 2. | Brokerage, intermediation, or agency for trading with buy-back agreement; |
| 3. | Brokerage, intermediation, or agency for corporate commercial paper; |
| 4. | Brokerage, intermediation, or agency for over-the-counter derivatives, the underlying asset of which is foreign currency or interest rate; and |
| 5. | Investment brokerage business under 2i-11-2i among the authorized business units in the Appendix 1 hereof. |
| (2) | No financial brokerage company may act as a broker, intermediary, or agent for a transaction where a financial investment, etc. specified and publicly notified by the Financial Services Commission borrows a loan through call transaction (referring to short-term transactions between financial institutions, etc. for a period not exceeding 90 days; hereafter the same shall apply in this Chapter). |
| (3) | A financial brokerage company that acts as a broker for a loan shall carry on simple brokerage of transactions (referring to only interconnecting a lender and a borrower for a transaction and charging certain fees): Provided, That it may, when it becomes involved in call transactions as a broker, engage in trading brokerage (referring to brokerage in the form of trading as prescribed and publicly notified by the Financial Services Commission for efficient trading) within the minimum extent prescribed and publicly notified by the Financial Services Commission. |
| (4) | Every financial brokerage company shall report the details of its brokerage business activities each month to the Financial Services Commission in a manner prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 347 (Measures against Financial Brokerage Companies) |
|
| (1) | The term "as prescribed by Presidential Decree" in Article 359 (1) 6 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a financial brokerage company falls under subparagraph 1 of the Appendix 11 of the Act because it has engaged in a financial investment business in violation of Article 357 (1) of the Act; |
| 2. | If a financial brokerage company falls under subparagraph 3 of the Appendix 15 hereof because it has breached the duty to refrain from using any material, nonpublic information under Article 174 of the Act; |
| 3. | If a financial brokerage company falls under subparagraph 4 of the Appendix 15 hereof because it has breached the duty to refrain from manipulating a market price or any similar act under Article 176 of the Act; and |
| 4. | If a financial brokerage company falls under subparagraph 5 of the Appendix 15 hereof because it has breached the duty to refrain from unfair trade or any similar act under Article 178 of the Act. |
| (2) | The term "finance-related Acts and subordinate statutes, etc. specified by Presidential Decree" in Article 359 (1) 7 of the Act means any Acts and subordinate statutes under any subparagraph of Article 373 (2). |
| (3) | The term "as prescribed by Presidential Decree" in Article 359 (1) 7 of the Act means cases falling under any subparagraph of Article 373 (3). |
| (4) | The term "as prescribed by Presidential Decree" in Article 359 (1) 8 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a financial brokerage company has failed to commence its business within six months from the authorization date or has failed to continue the authorized business without justifiable reasons for six months or longer after commencement of such business; |
| 2. | If a financial brokerage company has received money, etc. from a third person in connection with its business in any wrongful manner or has acquired money, etc. to deliver it to a third person; |
| 3. | If a financial brokerage company has failed to correct a relevant condition within one month from the day on which a measure of business suspension under Article 359 (2) 1 of the Act was taken (or within a period of time prescribed for correction, in cases where a period of time exceeding one month was prescribed for correction when a measure of business suspension was taken); and |
| 4. | If a financial brokerage company has committed identical or similar violations continuously or repeatedly. |
| (5) | The term "measures specified by Presidential Decree" in Article 359 (2) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Closure of branch offices or other sales offices or suspending their business completely or partially; |
| 2. | Demanding or recommending improvement of methods of business management or operation; |
| 3. | Demanding compensation for losses; |
| 4. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 5. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 6. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (6) | The term "measures prescribed by Presidential Decree" in Article 359 (3) 6 and (4) 7 of the Act means measures under paragraph (5) 4 through 6 respectively. |
| (7) | The term "as prescribed in Presidential Decree" in subparagraph 22 of the Appendix 11 of the Act means cases falling under any subparagraph of the Appendix 15 of this Decree. |
CHAPTER Ⅵ SHORT-TERM FINANCIAL COMPANY
법령보기 화면
| Article 348 (Business of Short-Term Financial Companies) |
|
| (1) | The term "period of time prescribed by Presidential Decree" in Article 360 (1) of the Act means one year. |
| (2) | The term "business affairs specified by Presidential Decree" in Article 360 (1) of the Act means business affairs of loans secured by bill. |
| (3) | The term "financial institution, etc. specified by Presidential Decree" in Article 360 (2) 1 of the Act means any of the following financial institutions: |
| (4) | The term "amount prescribed by Presidential Decree" in Article 360 (2) 2 of the Act means 30 billion won. |
| (5) | The term "alleviated requirements as prescribed by Presidential Decree" in Article 360 (9) of the Act means the following requirements: |
| 1. | In applying the requirements under Article 360 (2) 2 of the Act, a short-term financial company shall maintain its equity capital at an equivalent to or more than 70/100 of the minimum equity capital under paragraph (4). In such cases, the requirements for maintaining the authorization shall be applicable as at the end of each fiscal year, while it shall be deemed that, even if a short-term financial company fails to meet the requirements for maintaining the authorization as at the end of a specific fiscal year, it meets the requirements for maintaining the authorization until the end of the following fiscal year; and |
| 2. | In applying the requirements under Article 360 (2) 5 of the Act, a short-term financial company shall continue to satisfy the requirements under Article 19 (1) 2 (a) through (c). In such cases, Article 19 (2) shall apply mutatis mutandis. |
| (6) | Articles 16 (4) (excluding subparagraph 2), (5), (6), and (10), and 17 (excluding paragraphs (1) 4 and 9, (2) 5 and 11, and (3)) shall apply mutatis mutandis to the authorization requirements for a short-term financial company. |
법령보기 화면
| Article 349 (Measures against Short-Term Financial Companies) |
|
| (1) | The term "as prescribed by Presidential Decree" in Article 364 (1) 6 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a short-term financial company falls under subparagraph 3 of the Appendix 16 hereof because it has breached the duty to refrain from using any material, nonpublic information under Article 174 of the Act; |
| 2. | If a short-term financial company falls under subparagraph 4 of the Appendix 16 hereof because it has breached the duty to refrain from manipulating a market price or any similar act under Article 176 of the Act; and |
| 3. | If a short-term financial company falls under subparagraph 5 of the Appendix 16 hereof because it has breached the duty to refrain from unfair trade or any similar act under Article 178 of the Act. |
| (2) | The term "finance-related Acts and subordinate statutes, etc. specified by Presidential Decree" in Article 364 (1) 7 of the Act means Acts and subordinate statutes under subparagraphs of Article 373 (2). |
| (3) | The term "as prescribed by Presidential Decree" in Article 364 (1) 7 of the Act means cases falling under any subparagraph of Article 373 (3). |
| (4) | The term "as prescribed by Presidential Decree" in Article 364 (1) 8 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a short-term financial company has failed to commence its business within six months from the authorization date or has failed to continue the authorized business without justifiable grounds for six months or longer after commencement of the business; |
| 2. | If a short-term financial company has received money, etc. from a third person in connection with its business in any wrongful manner or has acquired money, etc. to deliver it to a third person; |
| 3. | If a short-term financial company has failed to correct a relevant condition within one month from the day on which a measure of business suspension under Article 364 (2) 1 of the Act was taken (or within a period prescribed for correction, in cases where a period exceeding one month was prescribed for correction when a measure of business suspension was taken); and |
| 4. | If a short-term financial company has committed identical or similar violations continuously or repeatedly. |
| (5) | The term "measures specified by Presidential Decree" in Article 364 (2) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Closure of branch offices or other sales offices or suspending their business completely or partially; |
| 2. | Demanding or recommending improvement of methods of business management or operation; |
| 3. | Demanding compensation for losses; |
| 4. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 5. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 6. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (6) | The term "measures prescribed by Presidential Decree" in Article 364 (3) 6 and (4) 7 of the Act means measures under paragraph (5) 4 through 6 respectively. |
| (7) | The term "as prescribed in Presidential Decree" in subparagraph 19 of the Appendix 12 of the Act means cases falling under any subparagraph of the Appendix 16 of this Decree. |
CHAPTER Ⅶ TRANSFER AGENCY COMPANY
법령보기 화면
| Article 350 (Prerequisites for Registration) |
|
| (1) | The term "physical facilities specified by Presidential Decree" in Article 365 (2) 2 of the Act means the following: |
| 1. | An electronic computer system, office space, and office equipment required for operation of a transfer agency for securities; and |
| 2. | Supplementary facilities required for maintaining continuity of business in preparation for occurrence of accidents, such as power failure and fire. |
| (2) | The term "system for preventing conflicts of interest as prescribed by Presidential Decree" in Article 365 (2) 3 of the Act means a system for ensuring compliance with the following subparagraphs: |
| 1. | The department responsible for business affairs of a transfer agency for securities shall be separated from departments for other business affairs to ensure that business affairs and reports are carried out independently; |
| 2. | The office space for business affairs of a transfer agency for securities shall be sufficiently separated from office space for other business affairs to prevent sharing of information; and |
| 3. | Electronic data concerning business affairs of a transfer agency for securities shall be separated from those concerning other business affairs and shall be stored, managed, and inspected sufficiently independently to prevent sharing of such data. |
법령보기 화면
| Article 351 (Procedure for Registration) |
|
| (1) | Each registration application under Article 365 (3) of the Act shall contain descriptions of the following matters: |
| 1. | Name and domicile of the company; |
| 2. | Matters concerning capital; |
| 3. | Matters concerning executives; |
| 4. | Method of carrying out business affairs; |
| 5. | Matters concerning physical facilities under Article 350 (1); |
| 6. | Matters concerning the system for preventing conflicts of interest under Article 350 (2); and |
| 7. | Such other matters specified and publicly notified by the Financial Services Commission as may be necessary for examination on registration. |
| (2) | Each registration application under paragraph (1) shall be accompanied by the following documents. In such cases, the Financial Services Commission shall, upon receiving an application under paragraph (1), verify the certified transcript of corporate register by administrative data matching pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, but shall require the applicant to submit the certified transcript, if the applicant does not consent to verification in such manner: |
| 1. | Articles of incorporation; |
| 2. | A document describing names or trade names of shareholders and the number of stocks held by each of them; |
| 3. | Financial statements and accompanying statements for the latest three business years (excluding corporations in the process of incorporation, but referring to financial statements and accompanying statements for the business years since the incorporation date in cases of corporations for which three business years have not yet passed since its incorporation date); |
| 4. | A document indicating the current status of physical facilities; |
| 5. | A document indicating as to whether there is a system for preventing conflicts of interest under Article 350 (2); and |
| 6. | Other documents specified and publicly notified by the Financial Services Commission as necessary for examination on registration. |
| (3) | The Financial Services Commission shall, upon receiving an application under paragraph (1), ascertain that the contents of the application under Article 365 (3) of the Act are true, and examine the contents of the application to ascertain whether the prerequisites for registration under Article 365 (2) of the Act have been met. |
| (4) | Necessary matters concerning the application for and examination of registration of a transfer agency company, the form and method of preparation of the application, and similar matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (3). |
법령보기 화면
| Article 352 (Measures against Transfer Agency Companies) |
|
| (1) | The term "as prescribed by Presidential Decree" in Article 369 (1) 5 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a transfer agency company falls under subparagraph 3 of the Appendix 17 hereof because it has breached the duty to refrain from using any material, nonpublic information under Article 174 of the Act; |
| 2. | If a transfer agency company falls under subparagraph 4 of the Appendix 17 hereof because it has breached the duty to refrain from manipulating a market price or any similar act under Article 176 of the Act; and |
| 3. | If a transfer agency company falls under subparagraph 5 of the Appendix 17 hereof because it has breached the duty to refrain from unfair trade or any similar act under Article 178 of the Act. |
| (2) | The term "finance-related Acts and subordinate statutes, etc. specified by Presidential Decree" in Article 369 (1) 6 of the Act means the Acts and subordinate statutes under subparagraphs of Article 373 (2). |
| (3) | The term "as prescribed by Presidential Decree" in Article 369 (1) 6 of the Act means cases falling under any subparagraph of Article 373 (3). |
| (4) | The term "as prescribed by Presidential Decree" in Article 369 (1) 7 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a transfer agency company has failed to commence its business within six months from the registration date or has failed to continue the registered business without justifiable grounds for six months after commencement of the business; |
| 2. | If a transfer agency company has received money, etc. from a third person in connection with its business in any wrongful manner or has acquired money, etc. to deliver it to a third person; |
| 3. | If a transfer agency company has failed to correct a relevant condition within one month from the day on which a measure of business suspension under Article 369 (2) 1 of the Act was taken (or within a period prescribed for correction, in cases where a period exceeding one month was prescribed for correction when a measure of business suspension was taken); and |
| 4. | If a transfer agency company has committed identical or similar violations continuously or repeatedly. |
| (5) | The term "measures specified by Presidential Decree" in Article 369 (2) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Closure of branch offices or other sales offices or suspending their business completely or partially; |
| 2. | Demanding or recommending improvement of methods of business management or operation; |
| 3. | Demanding compensation for losses; |
| 4. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 5. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 6. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (6) | The term "measures as prescribed by Presidential Decree" in Article 369 (3) 6 and (4) 7 of the Act means measures under any provision of paragraph (5) 4 through 6 respectively. |
| (7) | The term "as prescribed in Presidential Decree" in subparagraph 18 of the Appendix 13 of the Act means cases falling under any subparagraph of the Appendix 17 of this Decree. |
CHAPTER Ⅷ ORGANIZATIONS RELATED TO FINANCIAL INVESTMENT
법령보기 화면
| Article 353 (Establishment of Organizations Related to Financial Investment) |
|
| (1) | The term "person specified by Presidential Decree" in Article 370 (1) of the Act means persons falling under any of the following subparagraphs: |
| 1. | An investment solicitor; and |
| 2. | A professional for a major job. |
| (2) | A person who desires to obtain a permit for establishment of an organization related to financial investment under Article 370 (3) of the Act shall file an application describing the following matters with the Financial Services Commission: |
| 2. | Purposes of establishment; |
| 3. | Domicile of place of business; |
| 4. | Matters concerning the status of property and estimates on revenue and expenditure; and |
| 5. | Matters concerning promoters and executives. |
| (3) | An application under paragraph (2) shall be accompanied by the following documents. In such cases, the Financial Services Commission shall verify certified transcripts of resident registration cards of promoters, etc. by administrative data matching pursuant to Article 21 (1) or 22- 2 (1) of the Electronic Government Act, but shall require the applicant to submit the certified transcript, if the applicant does not consent to verification in such manner: |
| 1. | Articles of association or agreement; |
| 2. | Business plan and statement of estimated revenue and expenditure for two years; |
| 3. | Resumes and certificates of personal identification of promoters; and |
| 4. | A document describing the type and method of business. |
법령보기 화면
| Article 354 (Measures against Organizations Related to Financial Investment) |
|
The term "as prescribed by Presidential Decree" in Article 372 (1) 4 of the Act means cases falling under any of the following subparagraphs: | 1. | If an organization has breached the duty to refrain from using any material, nonpublic information under Article 174 of the Act; |
| 2. | If an organization has breached the duty to refrain from manipulating a market price or any similar act under Article 176 of the Act; |
| 3. | If an organization has breached the duty to refrain from unfair trade or any similar act under Article 178 of the Act; |
| 4. | If an organization has refused, interfered with, or evaded an inspection under Article 419 (1) of the Act, which shall apply mutatis mutandis pursuant to Article 371 of the Act; and |
| 5. | If an organization has failed to comply with a demand to submit a report, etc. under Article 419 (5) of the Act, which shall apply mutatis mutandis pursuant to Article 371 of the Act. |
법령보기 화면
| Article 355 (Abnormal Transactions) |
|
The term "abnormal transactions specified by Presidential Decree" in subparagraph 8 of Article 377 of the Act means transactions or activity that is anticipated as likely to violate Article 174, 176, 178, or 180 of the Act in the securities exchange (including cases where a trade of listed stocks and securities depository receipts related to stocks and that are listed on the securities exchange is intermediated in accordance with Article 78 of the Act; hereafter the same shall apply in this Article) or the derivatives market and that falls under any of the following subparagraphs. In such cases, transactions or activity discovered in the course of examination or supervision of abnormal transactions under Article 404 of the Act as transactions or activity that is anticipated as likely to violate Article 147, 172, 173, or 173-2 (2) of the Act shall be presumed to be abnormal transactions: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> | 1. | If there is a remarkable change in prices or volume of traded securities or exchange-traded derivatives; |
| 2. | If there is a public disclosure, rumor, news report, etc. that may affect prices or volume of traded securities or exchange-traded derivatives; and |
| 3. | If it is anticipated that the fair trading order in the securities exchange or the derivatives market is likely to be undermined otherwise. |
법령보기 화면
| Article 356 (Qualifications for Executives) |
|
| (1) | The term "person who has good experience and knowledge about finance as specified by Presidential Decree and who is not doubted to undermine good management and fair trading order of the Exchange" in Article 380 (3) of the Act means a person who meets any of the following requirements: |
| 1. | A person who has worked for the Bank of Korea or institutions subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission (including foreign financial institutions equivalent to such institutions) for 15 years or longer in total; |
| 2. | A person who has been a member of the Senior Civil Service, or who has served as a Grade Ⅱ or higher public official, in a field related to finance or the economy; |
| 3. | A person who has served in a domestic or foreign university, college, or research institute as an adjunct professor or higher faculty member, or in a position equivalent to such position in a field related to finance or the economy for 15 years or longer in total; and |
| 4. | A person recognized as one who has good experience and knowledge similar to those under subparagraphs 1 through 3. |
| (2) | The term "as prescribed in Presidential Decree" in the former part of Article 380 (4) of the Act means cases where a person is determined incompetent to perform his/her duty as a result of examination of qualification, considering the ability to perform the duty, expertise, experience, etc. |
| (3) | The term "person specified by Presidential Decree" in the latter part of Article 380 (5) of the Act means a person falling under any of the following subparagraphs: |
| 1. | A person who holds stocks on account of the largest shareholder or his/her specially related person (limited to stocks held on account of the largest shareholder or any of his/her specially related persons): |
| 2. | A person who has delegated voting rights (including the power to give instructions to exercise voting rights) to the largest shareholder or his/her specially related person (applicable only to the portion so delegated). |
법령보기 화면
| Article 357 (Special Interests) |
|
The term "special interests specified by Presidential Decree" in Article 383 (2) of the Act means interests falling under any of the following subparagraphs: | 1. | Guarantee for performance of obligations; |
| 2. | Offering assets as security; and |
| 3. | Interests that cannot be regarded as necessary activity in the course of carrying out normal trading activities (referring to activities related to the business of the opposite party to a transaction or activities incidental in accomplishing purposes of business, which can be regarded as ordinary trading activities in light of social norms and terms and conditions of the transaction). |
법령보기 화면
| Article 358 (Members of Director-Nominee Recommendation Committee) |
|
| (1) | The term "corporation whose stocks are listed on the securities market as prescribed by Presidential Decree" in Article 385 (2) 3 of the Act means a corporation recommended by an organization established by and consisting of stock-listed corporations. |
| (2) | The term "corporation whose stocks are listed on the KOSDAQ market as prescribed by Presidential Decree" in Article 385 (2) 4 of the Act means a corporation recommended by an organization established by and consisting of KOSDAQ-listed corporations. |
법령보기 화면
| Article 359 (Categories of Members) |
|
The term "member specified by Presidential Decree" in Article 387 (2) 3 of the Act means a member falling under any one of the following subparagraphs: | 3. | A member who participates in settlement or trading limitedly in a certain market sector of the securities exchange or for certain items; |
| 4. | A member who participates in settlement or trading limitedly in a certain market sector of the derivatives market or for certain items; and |
| 5. | Other member stipulated in the membership management regulations under Article 387 (1) of the Act (hereinafter referred to as "membership management regulations"). |
법령보기 화면
| Article 360 (Securities Subject to Public Disclosure Regulations) |
|
The term "other securities specified by Presidential Decree" in the former part of Article 391 (1) of the Act means securities falling under any of the following subparagraphs: | 2. | Derivative-combined securities; |
| 3. | Securities depository receipts; and |
| 4. | Other securities specified by the public disclosure regulations under Article 391 (1) of the Act. |
법령보기 화면
| Article 361 (Requests for Furnishing Information) |
|
The Exchange may, pursuant to Article 392 (2) of the Act, request administrative agencies and other related institutions to furnish it with necessary information by sending a document (including an electronic document) or facsimile message in accordance with the following guidelines. In such cases, the written request shall describe the reasons such information is requested: | 2. | A competent court with respect to application for or decision on rehabilitation proceedings under the Debtor Rehabilitation and Bankruptcy Act, filing lawsuits that may substantially affect certain listed stocks, or an occurrence of a cause for dissolution; |
| 3. | A creditor bank with respect to commencement of administration of the relevant corporation by the creditor bank; and |
| 4. | An administrative agency or any other related institution that has any other relevant information with respect to matters required to be reported or demanded to confirm pursuant to Article 391 (2) 1 or 3 of the Act. |
법령보기 화면
| Article 362 (Accumulation and Management of Joint Fund for Compensation for Losses) |
|
| (1) | The size of aggregate amount of the joint fund for compensation for losses under Article 394 (1) of the Act (hereinafter referred to as the "joint fund") and the reserve rate and reserve method applicable to each member shall be stipulated by the membership management regulation, considering payment risk in the securities exchange and the derivatives market respectively, payment risk for each member, and other circumstances. |
| (2) | The Exchange shall, when it appropriates the joint fund to compensate for losses pursuant to Article 399 (2) of the Act, use the joint fund accumulated by the breaching member first, and shall use the joint fund accumulated by other members for shortage in proportion to the amount accumulated. |
| (3) | The Exchange shall earmark the joint fund for each member who has contributed to it so that it can be separately managed, and shall keep it separate from other property for separate accounting. |
| (4) | The Exchange shall refund from the joint fund to an opting-out member as stipulated in the membership management regulations. |
| (5) | The Exchange shall manage the joint fund in any of the following ways: |
| 2. | Purchasing guaranteed corporate bonds; |
| 3. | Lending to or depositing in a securities finance company or purchasing bonds issued by a securities finance company; and |
| (6) | The Exchange shall add yields generated by managing the joint fund in accordance with paragraph (5) into the principal of the joint fund as stipulated in the membership management regulations. |
| (7) | Necessary matters concerning accumulation, management, investment, etc. of the joint fund shall be stipulated by the membership management regulations, in addition to the matters provided for in paragraphs (1) through (6). |
| (8) | The term "guaranteed corporate bonds" in paragraph (5) 2 means corporate bonds for which any of the following financial institutions, etc. guarantees the payment of principal and interest: |
| 5. | An investment trading business entity; |
| 6. | A securities finance company; |
| 8. | The Korea Credit Guarantee Fund under the Credit Guarantee Fund Act (guaranteed corporate bonds for which the Korea Credit Guarantee Fund guarantees payment, include those guaranteed on account of the industrial infrastructure credit guarantee fund pursuant to Act on Private Participation in Infrastructure); and |
법령보기 화면
| Article 363 (Exercise of Rights to Claim Reimbursement of Indemnity) |
|
| (1) | The Exchange shall, when it compensates someone for losses pursuant to Article 339 (1) of the Act, report it to the Financial Services Commission, and shall exercise the rights to reimbursement of indemnity against a breaching member in a way that replenishes the joint fund promptly. |
| (2) | The Exchange shall, when it has any indemnity reimbursed by a breaching member, replenish the portion spent out of the joint fund accumulated by other members first with it in proportion to the amount spent, and shall then replenish the portion spent out of the joint fund accumulated by the breaching member with the remainder, if any. |
법령보기 화면
| Article 364 (Public Announcement of Market Prices) |
|
| (1) | The term "manner prescribed by Presidential Decree" in the main body of Article 401 of the Act means a manner of announcing through an electronic computer system or publishing through a periodical that mainly carries information of the securities market and the derivatives market, including market prices of securities and exchange-traded derivatives. |
| (2) | The Exchange may prescribe matters in detail as may be necessary for public announcement of market prices under Article 401 of the Act and efficient management of such information. |
| (3) | The term "market price specified by Presidential Decree" in subparagraph 3 of Article 401 of the Act means the substitute price under Article 192 (3). |
법령보기 화면
| Article 365 (Qualifications for Chairperson of Market Monitoring Committee) |
|
| (1) | The term "person who has good experience and knowledge about finance as specified by Presidential Decree and who is not doubted to undermine good management and fair trading order of the Exchange" in Article 402 (4) of the Act means a person who meets any of the following requirements: |
| 1. | A person who has worked for the Bank of Korea or institutions subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission (including foreign financial institutions equivalent to such institutions) for 15 years or longer in total; |
| 2. | A person who has been a member of the Senior Civil Service, or who has served as a Grade Ⅱ or higher public official, in a field related to finance or the economy; |
| 3. | A person who has served in a domestic or foreign university, college, or research institute as an adjunct professor or higher faculty member, or in a position equivalent to such position in a field related to finance or the economy for 15 years or longer in total; and |
| 4. | A person recognized as one who has good experience and knowledge similar to those under subparagraphs 1 through 3. |
| (2) | The term "as prescribed in Presidential Decree" in the former part of Article 402 (5) of the Act means cases where a person is determined incompetent to perform his/her duty as a result of examination of qualifications, considering the ability to perform the duty, expertise, experience, etc. |
| (3) | The term "as specified by Presidential Decree" in Article 402 (8) 2 of the Act means cases falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | If a committee member falls under subparagraph 23 of the Appendix 14 of the Act because he/she has violated an order to submit a report or data under Article 426 (1) of the Act or has refused, interfered with, or evaded an investigation; |
| 2. | If a committee member falls under subparagraph 24 of the Appendix 14 of the Act because he/she has failed to comply with a demand under Article 426 (2) of the Act; |
| 3. | If a committee member falls under subparagraph 25 of the Appendix 14 of the Act because he/she has failed to follow a measure under Article 426 (3) of the Act; |
| 4. | If a committee member falls under subparagraph 26 of the Appendix 14 of the Act because he/she has failed to comply with a demand to submit data under Article 426 (4) of the Act; |
| 5. | If a committee member falls under subparagraph 28 of the Appendix 14 of the Act because he/she has failed to comply with an interrogation, seizure, or search under Article 427 (1) of the Act; |
| 6. | If a committee member falls under subparagraph 5 of the Appendix 18 hereof because he/she has held stocks in violation of Article 167 (1) of the Act; |
| 7. | If a committee member falls under subparagraph 6 of the Appendix 18 hereof because he/she has exercised voting rights in violation of Article 167 (3) of the Act or has violated an order to make a correction under the aforesaid paragraph; |
| 8. | If a committee member falls under subparagraph 8 of the Appendix 18 hereof because it has breached the duty to refrain from using any material, nonpublic information under Article 174 of the Act; |
| 9. | If a committee member falls under subparagraph 9 of the Appendix 18 hereof because it has breached the duty to refrain from manipulating a market price or any similar act under Article 176 of the Act; |
| 10. | If a committee member falls under subparagraph 10 of the Appendix 18 hereof because it has breached the duty to refrain from unfair trade or any similar act under Article 178 of the Act; |
| 11. | If a committee member falls under subparagraph 11 of the Appendix 18 hereof because he/she has made a short sale or entrusted a short sale to someone or has accepted entrustment of a short sale from someone in violation of Article 180 of the Act; |
| 12. | If a committee member falls under subparagraph 13 of the Appendix 18 hereof because he/she has held stocks of the Exchange in violation of Article 406 (1) of the Act; |
| 13. | If a committee member falls under subparagraph 14 of the Appendix 18 hereof because he/she has exercised voting rights in violation of Article 406 (3) of the Act; |
| 14. | If a committee member falls under subparagraph 15 of the Appendix 18 hereof because he/she has violated an order to dispose under Article 406 (4) of the Act; |
| 15. | If a committee member falls under subparagraph 17 of the Appendix 18 hereof because he/she has violated the membership management regulations, the securities market business regulations, the derivatives market business regulations, the listing regulations, the public disclosure regulations, the market monitoring regulations, the dispute mediation regulations, or any other business regulations under Article 412 (1) of the Act; |
| 16. | If a committee member falls under subparagraph 23 of the Appendix 18 hereof because he/she has failed to comply with a demand under the main sentence of Article 384 (7); |
| 17. | If a committee member falls under subparagraph 24 of the Appendix 18 hereof because he/she has received money, etc. from a third person in a wrongful manner, or has acquired money, etc. to give it to a third person, in connection with the business; and |
| 18. | If a committee member falls under subparagraph 25 of the Appendix 18 hereof and any of subparagraphs 1 through 3 of the Appendix 21 hereof. |
법령보기 화면
| Article 366 (Restriction on Holding of Stocks) |
|
| (1) | The term "person having a special relationship as specified by Presidential Decree" in Article 406 (2) 2 of the Act means a specially related person or joint holder under Article 141 (2). In such cases, Article 141 (3) shall apply mutatis mutandis in determining whether a person is a specially related person. |
| (2) | The term "as specified by Presidential Decree" in Article 406 (2) 3 of the Act means cases falling under any subparagraph (excluding subparagraph 3) of Article 142. |
법령보기 화면
| Article 367 (Measures against Exchange) |
|
| (1) | The term "measures specified by Presidential Decree" in Article 411 (1) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Demanding or recommending improvement of methods of business management or operation; |
| 2. | Demanding compensation for losses; |
| 3. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 4. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 5. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (2) | The term "measures prescribed by Presidential Decree" in Article 411 (2) 6 and (3) 7 of the Act means measures under paragraph (1) 3 through 5 respectively. |
| (3) | The term "as prescribed in Presidential Decree" in subparagraph 30 of the Appendix 14 of the Act means cases falling under any subparagraph of the Appendix 18 of this Decree. |
법령보기 화면
| Article 368 (Market Efficiency Promotion Committee) |
|
| (1) | The term "institution specified by Presidential Decree" in Article 414 (2) of the Act means a corporation in which the Exchange invested to entrust it with the development, operation, etc. of an electronic computer system for operating the securities exchange or the derivatives market. |
| (2) | The term "case where it is intended to invest an amount equivalent to or more than the amount prescribed by Presidential Decree in an electronic computer system" in Article 414 (2) of the Act means cases where it is intended to invest ten billion won or more in the cost and expenses required for an electronic computer system and its ancillary facilities, including software and hardware, in order to improve the operation or infrastructure of a market. |
| (3) | The market efficiency promotion committee under Article 414 (1) of the Act (hereafter referred to as the "committee" in this Article) shall be comprised of seven or less members commissioned by the chairperson of the Financial Services Commission among non-governmental experts specializing in finance, law, accounting, and electronic computation. |
| (4) | The chairperson of the committee shall be elected by and among committee members. |
| (5) | Necessary matters concerning management, deliberation, etc. of the committee shall be determined by the chairperson of the committee, subject to deliberation of the committee, in addition to the matters provided for in paragraphs (3) and (4). |
PART Ⅷ SUPERVISION AND DISPOSITIONS
CHAPTER Ⅰ ORDERS, APPROVAL, ETC.
법령보기 화면
| Article 369 (Orders to Financial Investment Business Entities to Take Measures) |
|
| (1) | The term "matters specified by Presidential Decree" in subparagraph 8 of Article 416 of the Act means the following matters: |
| 1. | Matters concerning the system for preventing conflicts of interest under Articles 16 (8) and 21 (6); |
| 2. | Matters concerning registration, reporting, etc. necessary for supervision in cases where a financial investment business entity runs a business equivalent to a financial investment business in a foreign country; |
| 3. | Matters concerning registration, reporting, etc. necessary for supervision in cases where a foreign financial investment business entity runs a financial investment business in Korea in accordance with Article 12 (2) 1 (b) or 18 (2) 1 (b) or (c) of the Act; |
| 4. | Matters concerning financial business affairs under subparagraphs of Article 40 of the Act; |
| 5. | Matters concerning trading or brokerage of corporate commercial paper; |
| 6. | Matters concerning management of instruments handled by a financial investment business entity; |
| 7. | Matters concerning business, financial affairs, and risk of a financial investment business entity; |
| 8. | Matters concerning reporting on business affairs of a financial investment business entity; |
| 9. | Matters concerning the rule that requires a financial investment business entity, if it is not a member of the Association, to establish internal guidelines similar to self-regulation that the Association implements for maintaining good business order and protecting investors; |
| 10. | Matters concerning submission by a financial investment business entity handling derivatives of information about persons who have traded derivatives amounting to a certain level or persons who hold an open interest; and |
| 11. | Deposit of the property related to liquidation of a collective investment scheme (excluding an investment trust) in a depository office and other necessary matters. |
| (2) | The Financial Services Commission shall prescribe and publicly notify detailed guidelines necessary for issuing orders pursuant to Article 416 of the Act to a financial investment business entity to take measures. |
법령보기 화면
| Article 370 (Matters Subject to Approval) |
|
| (1) | The term "act specified by Presidential Decree" in Article 417 (1) 8 of the Act means capital reduction. |
| (2) | The Financial Services Commission shall, when it seeks to grant approval under Article 417 (1) of the Act, ascertain whether the following guidelines have been met: |
| 1. | A financial investment business entity shall meet the guidelines for financial soundness under Article 30 of the Act and soundness in business management under Article 31 of the Act (excluding cases under Article 417 (1) 3, 6, and 7 of the Act); |
| 2. | A financial investment business entity shall not bring about any obstacle to protection of investors; |
| 3. | A financial investment business entity shall not undermine the stability of financial market; |
| 4. | A financial investment business entity shall not undermine good financial trading order; |
| 6. | Each act under subparagraphs of Article 417 (1) of the Act shall meet the guidelines prescribed and publicly notified by the Financial Services Commission for protecting investors. |
| (3) | A financial investment business entity shall, when it seeks to obtain approval under Article 417 (1) of the Act, file an application for approval describing the following matters with the Financial Services Commission: |
| 2. | Domicile of head office; |
| 3. | Matters concerning executives; |
| 4. | Matters concerning reasons, substance, time, etc. for which the approval is applied; and |
| 5. | Other matters specified and publicly notified by the Financial Services Commission as necessary for examination for approval. |
| (4) | An application for approval under paragraph (3) shall be accompanied by the following subparagraphs: |
| 1. | Articles of incorporation; |
| 2. | Minutes of director’s meeting or general meeting of shareholders, if a resolution has been adopted by the board of directors or general meeting of shareholders concerning the grounds for applying the approval; |
| 3. | A copy of a contract related to the reasons for applying the approval, if such contract exists; and |
| 4. | Such other documents specified and publicly notified by the Financial Services Commission as may be necessary for examination for approval. |
| (5) | The Financial Services Commission shall, upon receiving an application for approval and accompanying documents under paragraphs (3) and (4), examine the contents, make a decision as to whether to grant approval within two months, and notify the applicant of the results and grounds thereof in writing without delay. In such cases, the Commission may demand the applicant to correct a defect in the application for approval, if there is any defect. |
| (6) | The period prescribed and publicly notified by the Financial Services Commission, such as a period for correction of defects in an application for approval, shall not be included in the period for examination in counting the period for examination under paragraph (5). |
| (7) | The Financial Services Commission may, when it grants approval under paragraph (5), attach conditions as may be necessary for securing soundness in business management and protecting investors. |
| (8) | Necessary matters concerning application and examination for approval, the form and method of preparation of the application, and similar matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters provided for in paragraphs (1) through (7). |
법령보기 화면
| Article 371 (Matters Subject to Reporting) |
|
| (1) | A financial investment business entity shall, when it falls under any subparagraph of Article 418 of the Act, report the fact to the Financial Services Commission without delay: Provided, That the Financial Services Commission may prescribe and publicly notify different deadlines for reporting depending upon importance of relevant facts. |
| (2) | The term "important matters specified by Presidential Decree" in subparagraph 2 of Article 418 of the Act means matters falling under any of the following subparagraphs: |
| 1. | Matters concerning business purposes; |
| 2. | Matters concerning general meeting of shareholders and board of directors, and other matters concerning governance of the company; |
| 3. | Matters concerning stocks issued by the company; and |
| 4. | Other matters specified and publicly notified by the Financial Services Commission as those related to protection of investors. |
| (3) | The term "as prescribed by Presidential Decree" in subparagraph 13 of Article 418 of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where capital is increased; |
| 2. | Where a financial investment business entity has been subjected to a punishment under Part Ⅹ (Articles 443 through 449) of the Act; |
| 3. | Where a financial investment business entity becomes a party to a lawsuit that may significantly affect the business of the financial investment business entity; |
| 4. | Where an application for bankruptcy has been filed against the relevant financial investment business entity or where a cause of dissolution occurs; |
| 5. | Where an application for commencement of rehabilitation proceedings under the Debtor Rehabilitation and Bankruptcy Act is filed, a decision on commencement of rehabilitation proceedings is made, or a decision on commencement of rehabilitation proceedings becomes ineffective; |
| 6. | Where a financial investment business entity has been subject to a disposition against default on tax payment or to a punishment on account of violation of a taxation-related Act and subordinate statutes; |
| 7. | Where a financial investment business entity has made a direct overseas investment under the Foreign Exchange Transactions Act or installed an overseas sales office or any other overseas office; |
| 8. | Where a financial investment business entity has established or closed down a domestic office (applicable only to a domestic office of a foreign financial investment business entity); |
| 9. | Where a financial investment business entity defaults on payment for cheques or bills issued by it or current account transaction with banks are suspended or banned; |
| 10. | Where a cause or event specified and publicly notified by the Financial Services Commission occurred in relation to an overseas local corporation, an overseas branch, an overseas office, etc. of a financial investment business entity; |
| 11. | Where a cause or event specified and publicly notified by the Financial Services Commission occurred in relation to the head office of a foreign financial investment business entity (applicable only to a foreign financial investment business entity that has installed a domestic branch or any other domestic sales office); and |
| 12. | Where there occurred any other cause or event specified and publicly notified by the Financial Services Commission as one that may significantly affect business management, property, etc. of a financial investment business entity. |
CHAPTER Ⅱ INSPECTION AND MEASURES
법령보기 화면
| Article 372 (Entrustment of Inspection) |
|
| (1) | The inspection that the Governor of the Financial Supervisory Service may entrust to the Association pursuant to Article 419 (8) of the Act shall be limited to an inspection for the following matters: |
| 1. | Matters concerning business activities of professionals for major jobs and investment solicitors; |
| 2. | Matters concerning underwriting of securities (limited to the matters related to the business affairs under Article 286 (1) 1 of the Act); and |
| 3. | Matters concerning whether terms and conditions of standardized contracts are complied with. |
| (2) | The Association shall, when it carries out the inspection entrusted pursuant to paragraph (1), observe the guidelines prescribed by the Governor of the Financial Supervisory Service for the method, procedure, etc. for the inspection, and shall report the results thereof to the Governor of the Financial Supervisory Service without delay upon completion of the inspection. |
| (3) | Articles 10 through 15 of the Regulations on Devolution and Entrustment of Administrative Competence shall apply mutatis mutandis to the entrustment of inspection by the Governor of the Financial Supervisory Service to the Association. |
법령보기 화면
| Article 373 (Measures against Financial Investment Business Entities) |
|
| (1) | The term "as prescribed by Presidential Decree" in Article 420 (1) 6 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a financial investment business entity falls under subparagraph 1 of the Appendix 1 of the Act because it has run a financial investment business (excluding an investment advisory business and a discretionary investment business) without authorization for the financial investment business (including a revised authorization) in violation of Article 11 of the Act; |
| 2. | If a financial investment business entity falls under subparagraph 21 of the Appendix 1 of the Act because it has failed to perform duties related to restriction on trading, etc. with a major shareholder in violation of Article 34 (1) (excluding subparagraph 3) or (2) of the Act; |
| 3. | If a financial investment business entity falls under subparagraph 23 of the Appendix 1 of the Act because it has committed an act falling under any subparagraph of Article 35 of the Act in violation of the aforesaid Article; |
| 4. | If a financial investment business entity falls under subparagraph 78 of the Appendix 1 of the Act because it has traded financial investment instruments with property deposited by investors in violation of Article 70 of the Act; |
| 5. | If a financial investment business entity falls under subparagraph 79 of the Appendix 1 of the Act because it has committed an act falling under any subparagraph of Article 71 of the Act (excluding subparagraph 7) in violation of the aforesaid Article; |
| 6. | If a financial investment business entity falls under subparagraph 90 of the Appendix 1 of the Act because it has managed collective investment property in violation of Article 81 (1) or 84 (1) of the Act; |
| 7. | If a financial investment business entity falls under subparagraph 92 of the Appendix 1 of the Act because it has committed an act falling under any subparagraph of Article 85 of the Act (excluding subparagraph 8) in violation of the aforesaid Article; |
| 8. | If a financial investment business entity falls under subparagraph 94 of the Appendix 1 of the Act because it has exercised voting rights in violation of any provision of Article 87 (1) through (5) of the Act; |
| 9. | If a financial investment business entity falls under subparagraph 113 of the Appendix 1 of the Act because it has committed an act falling under any subparagraph of Article 98 (1) of the Act (including cases to which the aforesaid paragraph shall apply mutatis mutandis pursuant to Article 101 (4) of the Act) in violation of the aforesaid paragraph; |
| 10. | If a financial investment business entity falls under subparagraph 114 of the Appendix 1 of the Act because it has committed an act falling under any subparagraph of Article 98 (2) of the Act (excluding subparagraph 10) in violation of the aforesaid paragraph; |
| 11. | If a financial investment business entity falls under subparagraph 125 of the Appendix 1 of the Act because it has committed an act falling under any subparagraph of Article 108 of the Act (excluding subparagraph 9) in violation of the aforesaid Article; |
| 12. | If a financial investment business entity falls under subparagraph 130 of the Appendix 1 of the Act because it has exercised voting rights in violation of any provision of Article 112 (2) through (5) of the Act; |
| 13. | If a financial investment business entity falls under subparagraph 139 of the Appendix 1 of the Act because a description or indication of a material fact is false or has been omitted in a public notice or document falling under any item of the aforesaid subparagraph (excluding items (d) and (h)); |
| 14. | If a financial investment business entity falls under subparagraph 140 of the Appendix 1 of the Act because it has failed to submit a document falling under any item of the aforesaid subparagraph (applicable only to items (a), (b), and (e)); |
| 15. | If a financial investment business entity falls under subparagraph 141 of the Appendix 1 of the Act because it has made a public offering or sale of securities in violation of Article 119 (3), (4), or (6) of the Act; |
| 16. | If a financial investment business entity falls under subparagraph 153 of the Appendix 1 of the Act because it has failed to issue public notice in violation of Article 134 (1) or 136 (5) of the Act; |
| 17. | If a financial investment business entity falls under subparagraph 163 of the Appendix 1 of the Act because there is a false or omitted description or indication of a fact falling under any subparagraph of Article 157 (hereafter referred to as the "material fact" in this subparagraph) in a document for reporting under Article 147 of the Act or a corrective report under Article 151 (2) of the Act; |
| 18. | If a financial investment business entity falls under subparagraph 166 of the Appendix 1 of the Act because there is a false or omitted description or indication of a fact that may significantly affect solicited voting rights holders’ judgment as to whether to delegate voting rights (hereafter referred to as the "material fact related to delegation of voting rights" in this subparagraph) in a proxy form and reference documents under Article 154 of the Act or corrective documents under Article 156 of the Act; |
| 19. | If a financial investment business entity falls under subparagraph 174 of the Appendix 1 of the Act because it has breached the duty to refrain from using any material, nonpublic information under Article 174 of the Act; |
| 20. | If a financial investment business entity falls under subparagraph 175 of the Appendix 1 of the Act because it has breached the duty to refrain from manipulating a market price or any similar act under Article 176 of the Act; |
| 21. | If a financial investment business entity falls under subparagraph 176 of the Appendix 1 of the Act because it has breached the duty to refrain from unfair trade or any similar act under Article 178 of the Act; |
| 22. | If a financial investment business entity falls under subparagraph 261 of the Appendix 1 of the Act because it has run a collective investment business in violation of Article 250 (1) or 251 (1) of the Act; |
| 23. | If a financial investment business entity falls under subparagraph 273 of the Appendix 1 of the Act because it has sold foreign collective investment securities in Korea without involving an investment trader or broker in violation of Article 280 (1) of the Act; |
| 24. | If a financial investment business entity falls under subparagraph 293 of the Appendix 1 of the Act because it has engaged in a business without authorization in violation of Article 324 (1), 355 (1), or 360 (1) of the Act; and |
| 25. | If a financial investment business entity falls under subparagraph 294 of the Appendix 1 of the Act because it has opened a market under Article 386 (1) of the Act or any similar facility in violation of Article 386 (2) of the Act or traded securities or exchange-traded derivatives through any similar facility. |
| (2) | The term "finance-related Acts, subordinate statutes, etc. specified by Presidential Decree" in Article 420 (1) 7 of the Act means the following Acts and subordinate statutes: |
| (3) | The term "as specified by Presidential Decree" in Article 420 (1) 7 of the Act means cases falling under any of the following subparagraphs: |
| 3. | If a financial investment business entity falls under subparagraph 1 (d) of the Appendix 21 because it has provided or divulged to another person information, etc. on trading known to it, used such information, etc. for any purpose other than a contemplated purpose, or demanded such information, etc. in violation of the main sentence of Article 4 (4) of the Act on Real Name Financial Transactions and Guarantee of Secrecy; |
| 6. | If a financial investment business entity falls under subparagraph 2 (b) of the Appendix 21 because it has violated Article 223 of the Criminal Act (applicable only to violations of provisions of Articles 214 through 217 of the aforesaid Act); |
| 8. | If a financial investment business entity falls under subparagraph 2 (f) of the Appendix 21 because it has violated Article 359 of the Criminal Act (applicable only to violations of Article 355, 356, or 357 (1) of the aforesaid Act); |
| (4) | The term "as specified by Presidential Decree" in Article 420 (1) 8 of the Act means cases falling under any of the following subparagraphs: |
| 1. | If a financial investment business entity has failed to commence its business within six months from the date of authorization or registration or has failed to continue the authorized or registered business without justifiable grounds for six months after commencement of the business; |
| 2. | If a financial investment business entity has received money, etc. from a third person in connection with its business in any wrongful manner or has acquired money, etc. to deliver it to a third person; |
| 3. | If a financial investment business entity has failed to correct a relevant condition within one month from the day on which a measure of business suspension under Article 420 (3) 1 of the Act was taken (or within a period prescribed for correction, in cases where a period exceeding one month was prescribed for correction when a measure of business suspension was taken); |
| 4. | If a financial investment business entity has breached a contract on trading or any other transaction in the securities exchange or the derivatives market or has failed to perform payment in such market (applicable only to investment traders or brokers who are members of the Exchange); and |
| 5. | If a financial investment business entity has committed identical or similar violations continuously or repeatedly. |
| (5) | The term "measures specified by Presidential Decree" in Article 420 (3) 7 of the Act means measures falling under any of the following subparagraphs: |
| 1. | Closure of branch offices or other sales offices or suspending their business completely or partially; |
| 2. | Demanding or recommending improvement of methods of business management or operation; |
| 3. | Demanding compensation for losses; |
| 4. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 5. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 6. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (6) | The term "as prescribed in Presidential Decree" in subparagraph 312 of the Appendix 1 of the Act means cases falling under any subparagraph of the Appendix 5 of this Decree. |
법령보기 화면
| Article 374 (Measures against Executives and Employees) |
|
| (1) | The term "as prescribed by Presidential Decree" in subparagraph 312 of the Appendix 1 of the Act pursuant to Article 422 (1) and (2) of the Act means cases falling under any subparagraph of the Appendix 5 of this Decree. |
| (2) | The term "measures specified by Presidential Decree" in Article 422 (1) 6 and (2) 7 of the Act means measures falling under any of the following subparagraphs respectively: |
| 1. | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| 2. | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| 3. | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
CHAPTER Ⅲ INVESTIGATIONS, ETC.
법령보기 화면
| Article 375 (Demands to Financial Investment Business Entities to Submit Data) |
|
The Financial Services Commission (referring to the Securities and Futures Commission, in cases of a violation of any of the provisions of Articles 172 through 174, 176, 178, and 180 of the Act; hereafter the same shall apply in Articles 376 and 377) shall, when it demands a financial investment business entity, an institution related to financial investment business, or the Exchange to submit data, make such demand in writing pursuant to Article 426 (4) of the Act, stating the purpose of using such data, the type, issue, and item of financial investment instruments, the trading form, the trading period, etc.
법령보기 화면
| Article 376 (Measures Following Results of Investigation) |
|
| (1) | The term "measures prescribed by Presidential Decree" in Article 426 (5) of the Act means the following measures: |
| 1. | Against a financial investment business entity: Measures under Article 420 (1) or (3) or 422 (1) or (2) of the Act; |
| 2. | Against the Exchange: Measures under Article 411 (1) through (3) of the Act; |
| 3. | Against the Association: Measures under Article 293 (1) through (3) of the Act; |
| 4. | Against the Korea Securities Depository: Measures under Article 307 (1) through (3) of the Act; |
| 5. | Against a securities finance company: Measures under Article 335 (1) through (4) of the Act; |
| 6. | Against a merchant bank: Measures under Article 354 (1) through (4) of the Act; |
| 7. | Against a financial brokerage company: Measures under Article 359 (1) through (4) of the Act; |
| 8. | Against a short-term financial company: Measures under Article 364 (1) through (4) of the Act; |
| 9. | Against a transfer agency company (referring to a person who completed the registration under Article 365 (1) of the Act): Measures under Article 369 (1) through (4) of the Act; |
| 10. | Against an organization related to financial investment: Measures under Article 372 (1) of the Act; and |
| 11. | Against a person to whom any provision of subparagraphs 1 through 10 is not applicable: A measure falling under any of the following items: |
| (c) | Filing criminal complaints or informing an investigative agency of violations of the Act, if any; |
| (d) | Informing a related agency or an investigative agency of violations of other Acts, if any; and |
| (e) | Other measures that the Financial Services Commission may take pursuant to the Act, this Decree, or any other related Acts and subordinate statutes. |
| (2) | The term "as prescribed by Presidential Decree" in subparagraph 13 of the Appendix 15 of the Act pursuant to Article 426 (5) of the Act means cases falling under any subparagraph of the Appendix 19 of this Decree. |
법령보기 화면
| Article 377 (Public Announcements of Results of Investigations and Dispositions) |
|
Pursuant to Article 426 (8) of the Act, the Financial Services Commission may announce to the public the following information and data as may be necessary for preventing offenses through a newspaper, broadcasting medium, Internet homepage, or any other means: Provided, That public announcements may be omitted completely or partially, in cases where a criminal complaint is filed against a person concerned, an offense is informed to an investigative agency, or any other reason specified and publicly notified by the Financial Services Commission exists: | 1. | The entity to which the person concerned belongs and personal data of the person concerned; |
| 2. | Details of an offense and measures taken; and |
| 3. | Such other matters specified and publicly notified by the Financial Services Commission as may be necessary for preventing offenses by persons concerned. |
법령보기 화면
| Article 378 (Investigative Officers) |
|
The term "person specified by Presidential Decree" in Article 427 (1) of the Act means a person recommended by the Chairperson of the Securities and Futures Commission among public officials of the Financial Services Commission and appointed by the Prosecutor General.
CHAPTER Ⅳ PENALTY SURCHARGES
법령보기 화면
| Article 379 (Guidelines for Imposition of Penalty Surcharges) |
|
| (1) | The Financial Services Commission shall observe the following guidelines in imposing penalty surcharges pursuant to Article 428 or 429 of the Act: |
| 1. | In cases where provisions relevant to public disclosure, such as false description or indication, are violated, the Commission shall categorize the substance of offenses into measurable offenses and non-measurable offenses, and shall judge the degree of the offense, considering comprehensively how the offense has affected net income for the pertinent term, equity capital and other matters, and whether the offense falls under any item of subparagraph 2; |
| 2. | In cases where an offense falls under any of the following items, the Commission shall impose penalty surcharges of not less than 50/100 of the statutory maximum amount: Provided, That a penalty surcharge may be abated, if a case falls under any item of subparagraph 3: |
| (a) | If an offense has continued for one year or longer or if it has been committed repeatedly, on three or more occasions; |
| (b) | If the size of profit acquired by an offense amounts to 100 million won or more; and |
| (c) | If an offense is related to unfair trade under Part Ⅳ of the Act (hereinafter referred to as "unfair trade"), such as inside trading and manipulation of market prices; and |
| 3. | If an offense falls under any of the following items, the penalty surcharge shall be abated or exempted: |
| (a) | If facts of an offense are deemed insignificant; |
| (b) | If there is any other publicly disclosed document submitted by an offender and it is possible for investors to verify the facts with such publicly disclosed document; |
| (c) | If an offense was corrected without delay; and |
| (d) | If investors has been compensated for losses sustained due to an offense. |
| (2) | In cases where a registration statement under Article 119 or 134 of the Act has not been filed, the statutory maximum amount under paragraph (1) 2 shall be calculated and determined on the basis of the value of public offering or sale actually made or total value of tender offer. |
| (3) | Detailed matters necessary for imposing penalty surcharges and other matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters prescribed by this Decree. |
법령보기 화면
| Article 380 (Procedure for Imposition of Penalty Surcharges) |
|
| (1) | The Financial Services Commission shall, when it imposes penalty surcharges, issue a notice in writing, clearly stating the category of the offense and the amount of penalty surcharge and demanding payment of the penalty surcharge, in the manner prescribed and publicly notified by the Financial Services Commission. |
| (2) | A person who receives a notice under paragraph (1) shall pay penalty surcharges within 60 days from the date on which the notice is delivered to a receiving institution designated and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 381 (Extension of Deadline for Payment and Payment in Installments) |
|
| (1) | The deadline extended pursuant to Article 433 (1) through (3) of the Act shall not exceed one year from the day immediately following the original deadline. |
| (2) | In cases where payment in installments is permitted pursuant to Article 433 (1) through (3) of the Act, the interval between deadlines for each installment shall not exceed six months, and such installments shall not exceed three occasions. |
| (3) | An application for extension of deadline or for payment by installments under paragraph (1) or (2) shall be filed in a manner prescribed and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 382 (Additional Charges) |
|
The term "additional charges prescribed by Presidential Decree" in Article 434 (1) of the Act means an amount calculated by multiplying the amount of penalty surcharges in default by the rate of 6/100 per annum.
법령보기 화면
| Article 383 (Entrustment of Disposition against Default on Payment) |
|
| (1) | The Financial Services Commission shall, when it entrusts business affairs related to disposition against default on payment pursuant to Article 434 (3) of the Act to the Commissioner of the National Tax Service, make such entrustment in writing along with the following documents attached thereto: |
| 1. | A letter of resolution of the Financial Services Commission; |
| 2. | A written decision on collection of revenue and a written notice thereof; and |
| 3. | A reminder of demand for payment. |
| (2) | The Commissioner of the National Tax Service shall, when he/she is entrusted with business affairs related to disposition against default on payment pursuant to paragraph (1), notify the Financial Services Commission of matters falling under any of the following subparagraphs within 30 days from the date on which an event under any of the following subparagraphs occurs: |
| 1. | When business affairs related to disposition against default on payment are completed: The date and time when the business affairs are completed, and other necessary matters: and |
| 2. | When there is a request from the Financial Services Commission to inform of the progress: Details of the progress. |
법령보기 화면
| Article 383-2 (Interest Rate for Additional Payment on Refund) |
|
The term "interest rate for additional payment prescribed by Presidential Decree" in Article 434-3 of the Act means the interest rate determined by the Financial Services Commission and provided by public notice, taking into consideration the interest rate for time deposits of financial institutions. [This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
법령보기 화면
| Article 383-3 (Disposition on Deficits) |
|
The term "reasons prescribed by Presidential Decree" in subparagraph 6 of Article 434-4 of the Act means cases falling under any of the following subparagraphs: | 2. | Where it is prescribed and publicly notified by the Financial Services Commission as recognized that it is impossible to collect penalty surcharges due to inevitable reasons. |
[This Article Added by Presidential Decree No. 21291, Feb. 3, 2009]
PART Ⅸ SUPPLEMENTARY PROVISONS
법령보기 화면
| Article 384 (Reporting of Offenses) |
|
| (1) | A person shall observe the following guidelines, when he/she intends to report or inform the Financial Services Commission (referring to the Securities and Futures Commission in cases of violations of any provisions of Articles 172 through 174, 176, 178, and 180 of the Act; hereafter the same shall apply in this Article) of violations of the Act, including unfair trade, or facts that commission of an offense was coerced or proposed (hereafter referred to as "unfair trade or any similar act" in this Article) in accordance with Article 435 (1) of the Act: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| 1. | The facts reported or informed shall be relevant to a specific person’s unfair trade or any similar act; |
| 2. | Specific facts of an offense, such as unfair trade or any similar act, including the offender, the date, time, and place of offense, shall be clearly pointed out and presented along with evidence; and |
| 3. | The reporter or informant (hereafter referred to as the "informant" in this Article) shall show his/her identification. |
| (2) | With respect to a report or information received, the Financial Services Commission may examine the informant on his/her personal data, reasons for and purport of the report or information, and other matters necessary for specifying details of the report or information. |
| (3) | The Financial Services Commission may demand the informant to submit relevant materials within the extent necessary for ensuring whether the report or information received is true. |
| (4) | The Financial Services Commission shall process a report or information received within 60 days from the date of receipt. In such cases, it may extend the period by 30 days or less, if it is deemed necessary to have materials submitted, hear opinions, or otherwise. |
| (5) | The Financial Services Commission shall notify an informant, etc. of the results of the disposition related to his/her report or information in writing; provided, the Commission may make such notification by means of oral statement or through information and communications network, etc. as prescribed and publicly notified by the Financial Services Commission and, in such cases, the Commission shall deliver documents related to the results without delay upon request of the informant, etc. <Added by Presidential Decree No. 21291, Feb. 3, 2009> |
| (6) | An informant may, if he/she is treated unfavorably by the institution to which he/she belongs in connection with a report or information, demand the Financial Services Commission to take necessary measures, such as restoration to original state. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (7) | The Financial Services Commission may, if it finds that a demand made by an informant in accordance with paragraph (6) is founded, demand the head of the institution to which the informant belongs to take proper measures, such as restoration to original state: Provided, That if the institution to which an informant belongs is not an institution subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission, the Commission may recommend the head of the institution to which the informant belongs or the head of a related institution to take proper measures. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (8) | The Financial Services Commission may, if it recognizes that a report or information received leads to detect unfair trade or any similar act or to take measures accordingly, authorize the Governor of the Financial Supervisory Service to pay a reward not exceeding 100 million won to the informant within the limit of the budget of the Financial Supervisory Service in accordance with the guidelines prescribed and publicly notified by the Financial Services Commission. <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
| (9) | Necessary matters concerning the method of receiving a report or information on unfair trade or any similar act, the procedure for processing such report or information, the payment of rewards, and similar matters shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters prescribed in paragraphs (1) through (8). <Amended by Presidential Decree No. 21291, Feb. 3, 2009> |
법령보기 화면
| Article 385 (Reporting by Electronic Document) |
|
| (1) | A person who filles a registration statement, a report, or any other document or data (hereinafter referred to as the "registration statement, etc.") with the Financial Services Commission, the Securities and Futures Commission, the Governor of the Financial Supervisory Service, the Exchange, the Association, or the Korea Securities Depository in accordance with the Act, this Decree, or any other Acts and subordinate statutes may file it by electronic document (referring to standardized data prepared in an electronic format with a device capable of processing information, such as a computer, and transmitted, received, or stored in the form of a document; hereinafter the same shall apply) through an information communications network under the Act on Promotion of Information and Communications Network Utilization and Information Protection, etc. |
| (2) | The standard form, method, procedure, etc. necessary for submitting a registration statement, etc. by electronic document shall be prescribed and publicly notified by the Financial Services Commission. In such cases, the Financial Services Commission may, if a registration report, etc. is also submitted to the Exchange, the Association, or the Korea Securities Depository, hear opinions of the relevant institution when it establishes or amends the standard form, method, procedure, etc. for the registration report, etc. |
| (3) | Matters concerning registration statements, etc. submitted in accordance with any regulations related to business affairs of the Exchange, the Association, or the Korea Securities Depository may be prescribed by the relevant institution, notwithstanding the former part of paragraph (2). |
법령보기 화면
| Article 386 (Exchange of Information for which Consultation not Required) |
|
The term "as prescribed by Presidential Decree" in the proviso to Article 437 (4) of the Act means cases falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> | 1. | Where the Exchange exchanges general information concerning the system and current status of the securities exchange or the derivatives market; |
| 2. | Where the Exchange is obligated to disclose, to the public, records or any other information acquired in accordance with the Act, this Decree, or any other relevant Act and subordinate statutes or regulations; |
| 3. | Where the Exchange exchanges information about results of a measure taken pursuant to the Act, this Decree, or any other Acts and subordinate statutes or regulations; and |
| 4. | Where the Exchange exchanges any information identical with or similar to information already exchanged after consultation with the Financial Services Commission in accordance with the latter part of Article 437 (4) of the Act. |
법령보기 화면
| Article 387 (Delegation or Entrustment of Authority) |
|
| (1) | Pursuant to Article 438 (2) of the Act, the Financial Services Commission shall delegate its authority over the following matters to the Securities and Futures Commission: |
| 1. | Authority to conduct an investigation into violations of Part Ⅲ of the Act; and |
| 2. | Authority to take measures against violations under subparagraph 1 pursuant to the Act or this Decree: Provided, That the following measures shall be excluded herefrom: |
| (a) | Imposition of penalty surcharges exceeding 500 million won; |
| (b) | Suspension of business in whole for one month or longer; and |
| (c) | Closure of branch offices or other sales offices. |
| (2) | Pursuant to Article 438 (3) of the Act, the Financial Services Commission shall entrust its authority over the following matters to the Exchange or the Association: |
| 1. | Authority over the following matters to the Exchange: |
| (a) | Authority to place restrictions on the trading volume of exchange- traded derivatives among the matters under subparagraph 7 of Article 416 of the Act; and |
| (b) | Authority over other matters similar to those under item (a) and specified and publicly notified by the Financial Services Commission; and |
| 2. | Authority over the following matters to the Association: |
| (a) | Authority to receive reports under the main sentence of and proviso to Article 56 (1) of the Act and to examine whether they fall under paragraph (6) of the aforesaid Article; |
| (b) | Authority to receive related data submitted in accordance with Article 10 (3) 16 and 17 (including foreigners similar thereto); and |
| (c) | Authority over other matters similar to those under items (a) and (b) and specified and publicly notified by the Financial Services Commission. |
| (3) | Pursuant to Article 438 (4) of the Act, the Financial Services Commission or the Securities and Futures Commission shall entrust its authority over the matters under subparagraphs of the Appendix 20 to the Governor of the Financial Supervisory Service. |
| (4) | The Exchange, the Association, and the Governor of the Financial Supervisory Service shall report the details of business affairs entrusted pursuant to paragraphs (2) and (3) and carried out accordingly to the Financial Services Commission or the Securities and Futures Commission every six months: Provided, That the Financial Services Commission may establish a different reporting cycle for business affairs specified and publicly notified by the Financial Services Commission. |
법령보기 화면
| Article 388 (Rate and Limit of Allotted Contributions) |
|
| (1) | The rate of the contributions allotted pursuant to Article 442 (1) of the Act shall be prescribed and publicly notified by the Financial Services Commission within the limit on the rates set in the following subparagraphs. In such cases, if there is a change in total issue value after a registration statement is accepted, the rate shall be based on the changed total issue value: |
| 1. | 2/10000 of total issue value in cases of issuing stocks; and |
| 2. | 1/1000 of total issue value in the case of issuing securities other than those under subparagraph 1 (or 4/10000 of total issue value in cases of issuing securities under a universal shelf registration statement). |
| (2) | The limits on contributions under Article 442 (1) of the Act and the return of contribution collected in excess of the limits shall be governed by Article 12 (3) and (4) of the Enforcement Decree of the Act on the Establishment, etc. of Financial Services Commission. |
| (3) | Necessary mattes concerning the collection method and return of contributions shall be prescribed and publicly notified by the Financial Services Commission, in addition to the matters prescribed in para graphs (1) and (2). |
법령보기 화면
| Article 389 (Material Facts) |
|
The term "material facts specified by Presidential Decree" in subparagraph 18 of Article 444 of the Act means facts falling under any subparagraph of Article 157.
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on February 4, 2009: Provided, That Article 4 of the Addenda shall enter into force on August 4, 2008.
Article 2 (Repeal of Other Acts and Subordinate Statutes)
The following Acts and subordinate statutes shall be repealed respectively:
| 3. | The Enforcement Decree of the Indirect Investment Asset Management Business Act; |
| 6. | The Enforcement Decree of the Korea Securities and Futures Exchange Act. |
Article 3 Deleted.
Article 4 (Matters Concerning Establishment of Korea Financial Investment Association)
| (1) | The committee for establishment of the Korea Financial Investment Association under Article 3 (2) of the Addenda of the Act (hereinafter referred to as the "establishment committee") shall be comprised of persons falling under the following subparagraphs and commissioned by the Chairperson of the Financial Services Commission pursuant to Article 3 (3) of the Addenda of the Act: |
| 1. | Two persons recommended by the Chairperson of the Financial Services Commission; and |
| 2. | Each person recommended by the Korea Securities Dealers Association established pursuant to Article 162 of the former Securities and Exchange Act, the Korea Futures Association established with a permit pursuant to Article 75 of the former Futures Trading Act, and the |
Asset Management Association of Korea established with a permit pursuant to Article 160 (3) of the former Indirect Investment Asset Management Business Act respectively (hereinafter referred to as "associations subject to merger").
| (2) | The establishment committee may prescribe matters concerning appointment of the chairperson of the establishment committee and matters necessary for operation of the establishment committee, including the method and procedure for adopting resolutions. |
| (3) | The merger agreement under Article 3 (5) of the Addenda of the Act shall contain descriptions of the following matters: |
| 1. | The name and purposes of the Association and the domicile of the central association; |
| 2. | Property that each association subject to merger shall transfer to the Association and the value of such property; |
| 3. | The date of the general meeting of members at which a resolution on approval for merger is to be adopted; |
| 4. | The date of merger; and |
| 5. | Other matters necessary for merger. |
| (4) | The resolution on approval for merger under Article 3 (5) of the Addenda of the Act shall be completed within three months from the lapse of one year after promulgation of the Act. |
| (5) | The associations subject to merger shall retain the following documents in their principal places of business for six months from one week before the date of general meeting of members for adopting a resolution on approval for merger in accordance with Article 3 (19) of the Addenda of the Act: |
| 2. | The last balance sheets of the associations subject to merger. |
| (6) | The associations subject to merger shall, when each of them calls the general meeting of members for adopting a resolution on approval for merger, notify its members of the agenda of the meeting and outlines of the merger agreement in writing by no later than one week before the date of general meeting of member. |
| (7) | If it fails to adopt a resolution on merger within the period under paragraph (4), the Financial Services Commission may amend terms and conditions of the merger agreement. |
| (8) | Articles 363 (1) and (2), 364, 368 (3) and (4), 371 (2), and 373 of the Commercial Act shall apply mutatis mutandis to the inaugural general meeting under Article 3 (8) of the Addenda of the Act. In such cases, the term "shareholders" in Article 363 (1) of the aforesaid Act shall be construed as "members", the term "company" in the aforesaid paragraph as "establishment committee", the term "domicile of its head office" in Article 364 of the aforesaid Act as "domicile of the central association", the term "shareholders" in Article 368 (3) of the aforesaid Act as "members", the term "shareholders" in Article 371 (2) of the aforesaid Act as "members", and the term "chairperson and directors present" in Article 373 (2) of the aforesaid Act as "chairperson of the establishment committee and members of the establishment committee present". |
| (9) | The associations subject to merger shall, when they are merged, complete the registration of dissolution of the associations subject to merger without delay upon receiving approval of the Financial Services Commission under Article 3 (10) of the Addenda of the Act. |
| (10) | When the registration of establishment is completed in accordance with Article 3 (12) of the Addenda of the Act, it shall be deemed that transactions of stocks, which were made in accordance with Article 84- 28 (5) of the Enforcement Decree of the Securities and Exchange Act but for which payment has not been settled, have been made under the same terms and conditions in accordance with Article 178. |
Article 5 (Important Contracts Subject to Reporting on Holding of Stocks in Large Volume)
The term "material facts specified by Presidential Decree, such as terms and conditions of important contracts" in Article 21 (2) of the Addenda of the Act means facts falling under any subparagraph of Article 155.
Article 6 (Exceptions to Restriction on Sale)
| (1) | The term "as specified by Presidential Decree" in the proviso to Article 30 (1) of the Addenda of the Act means cases where a collective investment scheme under the Act is registered with the Financial Services Commission in accordance with Article 29 of the Addenda of the Act and a registration statement is filed with the Financial Services Commission in accordance with Article 119 (1) or (2) of the Act. |
| (2) | The term "as specified by Presidential Decree" in the proviso to Article 30 (2) of the Addenda of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where it is inevitable for a securities investment trust or a securities investment company, to which a favor in taxation is granted pursuant to the Restriction of Special Taxation Act, to issue additional beneficiary certificates or issue additional stocks of the securities investment company; |
| 2. | Where a securities investment trust equivalent to a trust of lump-sum retirement benefits under Article 34 of the Labor Standards Act issues additional beneficiary certificates of the trust at the time when the Indirect Investment Asset Management Business Act (Act No. 6987) enters into force; and |
| 3. | Where a securities investment company incorporated in accordance with Article 79 of the former Securities Investment Company Act entrusted management of assets of the securities investment company to any person other than an asset management company under the aforesaid Act. |
| (3) | The term "as specified by Presidential Decree" in the proviso to Article 30 (3) of the Addenda of the Act means cases falling under any of the following subparagraphs: |
| 1. | Where a trustor of a money trust created in accordance with the Trust Business Act at the time when the Indirect Investment Asset Management Business Act (Act No. 6987) enters into force, in which it is allowed to entrust additional money until the termination of the trust under the former trust deed, requested to accept such additional entrustment by the deadline set by the trust; and |
| 2. | Where a holder of an insurance policy of a special account created in accordance with the Insurance Business Act at the time when the Indirect Investment Asset Management Business Act (Act No. 6987) enters into force, in which it is allowed to pay additional insurance premiums until the termination of the payment period, requested to accept such additional payment by the deadline set by the insurance contract. |
Article 7 (Applicability to Requirements or Prerequisites for Maintenance of Authorization for or Registration of Financial Investment Business Entities)
The requirements under subparagraphs 1 (e) (ⅰ) and 4 (d) of the Appendix 2, prescribed pursuant to items of Article 19 (1) 2 and subparagraph 2 of Article 23, shall be applicable to offenses committed on or after the date this Decree enters into force.
Article 8 (Applicability to Executives)
The requirements under subparagraphs of Article 27 (3) shall be applicable to offenses committed on or after the date this Decree enters into force.
Article 9 (Applicability to Requirements for Maintenance of Authorization for Securities Finance Companies)
The requirements under subparagraphs 1 (e) (ⅰ) and 4 (d) of the Appendix 2, prescribed pursuant to Article 319 (2) 2, shall be applicable to offenses committed on or after the date this Decree enters into force.
Article 10 (Applicability to Requirements for Maintenance of Authorization for Financial Brokerage Companies)
The requirements under subparagraphs 1 (e) (ⅰ) and 4 (d) of the Appendix 2, prescribed pursuant to Article 345 (3) 2, shall be applicable to offenses committed on or after the date this Decree enters into force.
Article 11 (Applicability to Requirements for Maintenance of Authorization for Short-Term Financial Companies)
The requirements under subparagraphs 1 (e) (ⅰ) and 4 (d) of the Appendix 2, prescribed pursuant to Article 348 (5) 2, shall be applicable to offenses committed on or after the date this Decree enters into force.
Article 12 (Special Exception to Requirements for Maintenance of Authorization for Foreign Financial Investment Business Entities)
In cases where a branch office or any other sales office (hereafter referred to as the "branch office, etc." in this Article) of a foreign financial investment business entity, a foreign financial institution under the Banking Act, or a foreign insurance company under the Insurance Business Act (hereafter referred to as the "financial investment business entity, etc." in this Article) engages in a business equivalent to the investment trading business as of one year after promulgation of the Act, the term "70/100" in Article 19 (1) 1 shall be construed as "50/100" in applying the requirements under the aforesaid subparagraph to it: Provided, That the same shall not apply to cases falling under any of the following subparagraphs: <Amended by Presidential Decree No. 21291, Feb. 3, 2009> | 1. | Where a branch office, etc. of a foreign financial investment business entity, etc. receives a revised authorization for an additional authorized business unit in accordance with Article 16 of the Act, files for registration of a financial investment business in accordance with Article 18 (1) of the Act, or files for revised registration in accordance with Article 21 of the Act; |
| 2. | Where a branch office, etc. of a foreign financial investment business entity, etc. receives authorization for a financial investment business, or files for registration of a financial investment business, for an additional newly authorized or registered business unit in accordance with Article 6 (1) of the Addenda of the Act; and |
| 3. | Where a foreign financial investment business entity, etc. installs an additional branch office, etc. in accordance with the latter part of Article 16 (9). |
Article 13 (Special Exception to Restriction on Limits of Asset Management)
In applying Article 80 (1) 2 (c), the term "30/100" in subparagraph 2 of the aforesaid paragraph shall be construed as "100/100" until February 3, 2011.
Article 14 (Special Exception to Money Trusts)
Article 109 (3) 5 shall not apply to money trusts under Article 14 (2) of the Addenda of the Indirect Investment Asset Management Business Act (Act No. 6987).
Article 15 (General Transitional Measures)
| (1) | Any approval, registration, order, disposition, or other action taken by the Financial Services Commission, the Securities and Futures Commission, or the Governor of the Financial Supervisory Service pursuant to the former Enforcement Decree of the Securities and Exchange Act, the former Enforcement Decree of the Futures Trading Act, the former Enforcement Decree of the Indirect Investment Asset Management Business Act, the former Enforcement Decree of the Trust Business Act, the former Enforcement Decree of the Merchant Banks Act, or the former Enforcement Decree of the Korea Securities and Futures Exchange Act at the time when this Decree enters into force shall be deemed to be the action taken by the Financial Services Commission, the Securities and Futures Commission, or the Governor of the Financial Supervisory Service pursuant to this Decree. |
| (2) | Any registration, application, report, or other action filed with, or taken in relation to the Financial Services Commission, the Securities and Futures Commission, or the Governor of the Financial Supervisory Service pursuant to the former Enforcement Decree of the Securities and Exchange Act, the former Enforcement Decree of the Futures Trading Act, the former Enforcement Decree of the Indirect Investment Asset Management Business Act, the former Enforcement Decree of the Trust Business Act, the former Enforcement Decree of the Merchant Banks Act, or the former Enforcement Decree of the Korea Securities and Futures Exchange Act at the time when this Decree enters into force shall be deemed to be the action filed with, or taken in relation to the Financial Services Commission, the Securities and Futures Commission, or the Governor of the Financial Supervisory Service pursuant to this Decree. |
Article 16 (Transitional Measures for Corporate Commercial Paper)
Article 17 (Transitional Measures for Appointment of Outside Directors and Composition of Board of Directors)
A person who is obligated to appoint new outside directors in accordance with Article 28 (1) 1 (excluding persons falling under any subparagraph of Article 9 of the Addenda of the Act) shall elect such outside directors by the date of the first general meeting of shareholders held after this Decree enters into force in accordance with Article 25 of the Act. In such cases, a person who is elected as an outside director at the general meeting of shareholders shall be deemed to have been recommended by the committee on the recommendation of candidates for outside directors in accordance with Article 25 (2) and (4) of the Act.
Article 18 (Transitional Measures for Establishment of Audit Committee)
A person who is obligated to install a new audit committee in accordance with Article 29 (1) (excluding persons falling under any subparagraph of Article 10 of the Addenda of the Act) shall establish the audit committee by the date of the first general meeting of shareholders held after this Decree enters into force in accordance with Article 26 of the Act.
Article 19 (Transitional Measures for Report Related to Net Operating Capital)
| (1) | In cases where the duty to report the equity capital regulation ratio under Article 54-2 (2) of the former Securities and Exchange Act arises before this Decree enters into force, such cases shall be governed by the former Securities and Exchange Act, notwithstanding Article 34 (2). |
Article 20 (Transitional Measures for Restriction on Use of Trade Names in Foreign Languages)
A person who uses a trade name in violation of Article 42 at the time when this Decree enters into force may use such trade name for six months after the date this Decree enters into force.
Article 21 (Transitional Measures for Entrustment of Business Affairs)
Business affairs entrusted at the time when this Decree enters into force shall be deemed to have been entrusted in accordance with the Act and this Decree until the term of the contract on entrustment of business affairs expires, notwithstanding Article 45.
Article 22 (Transitional Measures for Qualifications for Investment Solicitors)
| (1) | A person who has successfully passed an examination conducted by a former association subject to merger at the time when this Decree enters into force and who has satisfied the requirements prescribed by the Association shall be deemed to have successfully passed an examination conducted by the Association pursuant to subparagraph 1 (a) and (b) of Article 56. |
| (2) | A person who has completed a training course designated by a former association subject to merger at the time when this Decree enters into force and who has satisfied the requirements prescribed by the Association shall be deemed to have completed a training course designated by the Association and confirmed by the Financial Services Commission pursuant to subparagraph 2 of Article 56. |
Article 23 (Transitional Measures for Descriptions of Half-yearly and Quarterly Reports, and Accompanying Documents)
Notwithstanding Article 170 (1) and (2), in cases where a corporation, whose total assets as of the end of the latest business year are less than two trillion won and which is obligated to prepare consolidated financial statements, shall apply the international accounting principles adopted by the Republic of Korea for the business year that begins on or after January 1, 2011 and thereafter, it may describe the matters concerning financial affairs and accompanying statements under Article 168 (2) 7, and other matters specified and publicly notified by the Financial Services Commission among descriptions of a half-yearly or quarterly report on the basis of financial statements of the corporation until the business year beginning on or after January 1, 2012, describe the audit opinion of an accounting auditor on financial statements of the corporation (including cases where such audit opinion is substituted by confirmation and comment), and may submit a half-yearly or quarterly report along with only a half-yearly audit report and a half-yearly review report or a quarterly audit report and a quarterly review report of the accounting auditor on financial statements of the corporation.
Article 24 (Transitional Measures for Members of Market Efficiency Promotion Committee)
The members commissioned pursuant to Article 13 (1) 6 of the former Enforcement Decree of the Korea Securities and Futures Exchange Act at the time when this Decree enters into force shall be deemed to have been commissioned as members of the market efficiency promotion committee pursuant to Article 368 (3).
Article 25 (Transitional Measures for Indirect Investment Schemes)
| (1) | An investment trust (excluding special accounts created by an insurance company) or an investment company created or established in accordance with the former Indirect Investment Asset Management Business Act at the time when this Decree enters into force shall be governed by the former Enforcement Decree of the Indirect Investment Asset Management Business Act. |
| (2) | Foreign indirect investment securities registered with the Financial Services Commission in accordance with the former Indirect Investment Asset Management Business Act at the time when this Decree enters into force shall be governed by the former Enforcement Decree of the Indirect Investment Asset Management Business Act. |
| (3) | A securities investment trust or a securities investment company under the proviso to Article 3 of the Addenda of the former Enforcement Decree of the Indirect Investment Asset Management Business Act (Presidential Decree No. 18325) shall be governed by the former Enforcement Decree of the Securities Investment Trust Business Act or by the former Enforcement Decree of the Securities Investment Company Act. |
Article 26 Omitted.
Article 27 (Transitional Measures following Amendment to Other Acts and Subordinate Statutes)
| (2) | In applying the amended provisions of Article 5 (1) 7 of the Enforcement Decree of the Corporate Restructuring Investment Companies Act, which are amended pursuant to Article 26 (39) of the Addenda, it shall be deemed that the term "Financial Investment Services and Capital Markets Act" includes the former Securities and Exchange Act, the former Merchant Banks Act, the former Trust Business Act, the former Indirect Investment Asset Management Business Act, and the former Futures Trading Act. |
| (6) | In applying the amended provisions of Article 27 (1) 4 of the Enforcement Decree of the Mutual Savings Banks Act, which are amended pursuant to Article 26 (65) of the Addenda, it shall be deemed that the term "Financial Investment Services and Capital Markets Act" includes the former Merchant Banks Act, the former Trust Business Act, the former Securities and Exchange Act, the former Futures Trading Act, the former Indirect Investment Asset Management Business Act, and the former Korea Securities and Futures Exchange Act. |
| (7) | In applying the amended provisions of Article 2 (1) 13 of the Enforcement Decree of the Ship Investment Company, which are amended pursuant to Article 26 (66) of the Addenda, it shall be deemed that the term "Financial Investment Services and Capital Markets Act" includes the former Securities and Exchange Act and the former Trust Business Act. |
| (8) | In applying the amended provisions of Article 15 (1) 4 of the Enforcement Decree of the Credit Unions Act, which are amended pursuant to Article 26 (70) of the Addenda, it shall be deemed that the term "Financial Investment Services and Capital Markets Act" includes the former Merchant Banks Act, the former Trust Business Act, the former Securities and Exchange Act, the former Futures Trading Act, and the former Indirect Investment Asset Management Business Act. |
| (11) | In applying the amended provisions of subparagraph 8 of the Appendix 1 of the Enforcement Decree of the Electronic Financial Transaction Act, which are amended pursuant to Article 26 (88) of the Addenda, it shall be deemed that the term "Financial Investment Services and Capital Markets Act" includes the former Securities and Exchange Act, the former Merchant Banks Act, the former Trust Business Act, the former Indirect Investment Asset Management Business Act, and the former Futures Trading Act. |
Article 28 (Relations to Other Acts and Subordinate Statutes)
A citation of a provision of the former Securities and Exchange Act or the Enforcement Decree of the aforesaid Act, the former Futures Trading Act or the Enforcement Decree of the aforesaid Act, the former Indirect Investment Asset Management Business Act or the Enforcement Decree of the aforesaid Act, the former Trust Business Act or the Enforcement Decree of the aforesaid Act, the former Merchant Banks Act or the Enforcement Decree of the aforesaid Act, or the former Korea Securities and Futures Exchange Act or the Enforcement Decree of the aforesaid Act by any other Act or subordinate statute enforceable at the time when this Decree enters into force, if any, shall be deemed to be a citation of the Act or this Decree or of corresponding provisions of the Act or this Decree in lieu of the previous provisions, if such corresponding provisions in the Act or this Decree exist.
ADDENDA<Presidential Decree No. 21291, Feb. 3, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 4, 2009.
Article 2 (Special Cases Concerning Restriction on Short Sale)
The amended provisions of Article 280 (2) other than each subparagraph shall apply starting with the restriction on short sale first made under this Decree. Article 3 Omitted.
Article 4 (Relations to Other Acts and Subordinate Statutes)
A citation of provisions of the former Securities and Exchange Act or the Enforcement Decree thereof, the former Futures Trading Act or the Enforcement Decree thereof in any other Act or subordinate statutes enforceable at the time when this Decree enters into force shall, if any, be deemed to be a citation of the Act or this Decree or of corresponding provisions of the Act or this Decree in lieu of the former provisions, if such corresponding provisions in the Act or this Decree exist.
Last updated : 2009-11-02