Presidential Decree No. 20947, Jul. 29, 2008 Amended by Presidential Decree No. 21291, Feb. 3, 2009 Presidential Decree No. 21480, May 6, 2009 Presidential Decree No. 21518, May 29, 2009 Presidential Decree No. 21565, jun. 26, 2009 Presidential Decree No. 21611, Jul. 1, 2009 Presidential Decree No. 21744, Sep. 21, 2009 Presidential
Decree No. 21765, Oct. 1, 2009 Presidential Decree No. 21835, Nov. 20, 2009 Presidential Decree No. 21898, Dec. 21, 2009 Presidential Decree No. 21904, Dec. 24, 2009 Presidential Decree No. 21978, Jan. 6, 2010 Presidential Decree No. 22003, Jan. 27, 2010 Presidential Decree No. 22151, May 4, 2010 Presidential Decree No. 22197, jun. 11, 2010 Presidential Decree No. 22467, Nov. 2, 2010 Presidential Decree No. 22493, Nov. 15, 2010 Presidential
Decree No. 22516, Dec. 7, 2010 Presidential Decree No. 22637, Jan. 24, 2011 Presidential Decree No. 22718, Mar. 22, 2011 Presidential Decree No. 23073, Aug. 11, 2011 Presidential Decree No. 23197, Sep. 30, 2011 Presidential Decree No. 23285, Nov. 4, 2011 Presidential Decree No. 23488, Jan. 6, 2012 Presidential Decree No. 23496, Jan. 6, 2012 Presidential Decree No. 23644, Feb. 29, 2012 Presidential Decree No. 23924, jun. 29, 2012 Presidential
Decree No. 24317, Jan. 16, 2013 Presidential Decree No. 24435, Mar. 23, 2013 Presidential Decree No. 24497, Apr. 5, 2013 Presidential Decree No. 24636, jun. 21, 2013 Presidential Decree No. 24655, Jul. 5, 2013 Presidential Decree No. 24841, Nov. 13, 2013 Presidential Decree No. 25050, Dec. 30, 2013 Presidential Decree No. 25279, Mar. 24, 2014 Presidential Decree No. 25532, Aug. 6, 2014 Presidential Decree No. 25553, Aug. 12, 2014 Presidential
Decree No. 25843, Dec. 9, 2014 Presidential Decree No. 25945, Dec. 30, 2014 Presidential Decree No. 26135, Mar. 3, 2015 Presidential Decree No. 26190, Apr. 7, 2015 Presidential Decree No. 26600, Oct. 23, 2015 Presidential Decree No. 26817, Dec. 30, 2015 Presidential Decree No. 26898, Jan. 12, 2016 Presidential Decree No. 26961, Feb. 5, 2016 Presidential Decree No. 27037, Mar. 11, 2016 Presidential Decree No. 27115, Apr. 29, 2016 Presidential
Decree No. 27205, May 31, 2016 Presidential Decree No. 27291, jun. 28, 2016 Presidential Decree No. 27290, jun. 28, 2016 Presidential Decree No. 27322, Jul. 6, 2016 Presidential Decree No. 27414, Jul. 28, 2016 Presidential Decree No. 27444, Aug. 11, 2016 Presidential Decree No. 27472, Aug. 31, 2016 Presidential Decree No. 27556, Oct. 25, 2016 Presidential Decree No. 27751, Dec. 30, 2016 Presidential Decree No. 27861, Feb. 13, 2017 Presidential
Decree No. 28040, May 8, 2017 Presidential Decree No. 28384, Oct. 17, 2017 Presidential Decree No. 28564, Dec. 29, 2017 Presidential Decree No. 28796, Apr. 10, 2018 Presidential Decree No. 31612, Apr. 6, 2021 Presidential Decree No. 31696, May 18, 2021 Presidential Decree No. 31784, jun. 18, 2021 PART I GENERAL PROVISIONS The terms used in this Decree shall be defined as follows: <Amended on Oct. 23, 2015; Jul. 28, 2016; Apr. 23, 2019; Feb. 9, 2021>
Article 3 (Scope of Financial Investment Instruments)
Article 3-2 (Securities Only Subject to Regulation of Submission, etc. of Registration Statements) "Securities prescribed by Presidential Decree" in Article 4 (1) 2 of the Act means securities on which the equity shares of a limited partnership company, a limited liability company, a limited partnership or an undisclosed association established under the Commercial Act is indicated: Provided, That collective investment securities are excluded herefrom. [This Article Newly Inserted on Aug. 27, 2013] Article 4 (Requirements for Corporate Commercial Paper) "Requirements prescribed by Presidential Decree" in Article 4 (3) of the Act, means instruments tendered by a person falling under any of the following subparagraphs who makes a payment on behalf of a corporation under a commission agreement with the corporation and produced in the form of a bill with the words "corporate commercial paper" printed thereon: <Amended on Mar. 3, 2015; Aug. 20, 2019>
Article 4-2 (Financial Investment Instruments Excluded from Derivatives-Combined Securities) [This Article Newly Inserted on Aug. 27, 2013] Article 4-3 (Financial Investment Instruments Excluded from Derivatives) "Financial investment instruments prescribed by Presidential Decree" in the proviso, with the exception of the subparagraphs, of Article 5 (1) of the Act means any of the following financial investment instruments:
[This Article Newly Inserted on Aug. 27, 2013] Article 5 (Trading of Foreign Derivatives) "Trading of foreign derivatives prescribed by Presidential Decree" in Article 5 (2) 2 of the Act means any of the following: <Amended on Aug. 27, 2013>
Article 6 (Exclusion of Collective Investments from Application)
Article 6-2 (Investable Assets of Investment Advisory Business) "Investable assets prescribed by Presidential Decree" in Article 6 (7) of the Act means the following assets: <Amended on Oct. 23, 2015; Sep. 28, 2018; Mar. 10, 2020>
[This Article Newly Inserted on Aug. 27, 2013] Article 6-3 (Scope, etc. of Prime Brokerage Business)
[This Article Newly Inserted on Aug. 27, 2013] Article 7 (Exemption of Financial Investment Business from Application)
Article 7-2 (Scope of Application) "Other financial institutions, etc. prescribed by Presidential Decree" in Article 8 (9) 3 of the Act means the following financial institutions, etc.: <Amended on Jul. 28, 2016>
[Moved from Article 24; previous Article 7-2 moved to Article 7-3 <Jul. 28, 2016>] Article 7-3 (Financial Investment Instruments Market, etc.)
[This Article Newly Inserted on Aug. 27, 2013] [Moved from Article 7-2 <Jul. 28, 2016>] Article 8 Deleted. <Jul. 28, 2016> Article 9 Deleted. <Jul. 28, 2016> Article 10 (Scope, etc. of Professional Investors)
Article 11 (Public Offering and Public Sale of Securities)
Article 12 Deleted. <Aug. 27, 2013> Article 13 (Scope of Foreign Corporations)
Article 14 (Criteria for Privately Placed Funds)
Article 14-2 (Business Entities subject to Clearing and Trades subject to Clearing)
[This Article Newly Inserted on Jul. 8, 2013] Article 14-3 (Objects of Credit Rating)
[This Article Newly Inserted on Aug. 27, 2013] Article 14-4 (Methods, etc. of Issuing Securities through Crowdfunding Brokerage)
[This Article Newly Inserted on Jan. 12, 2016] Article 14-5 (Scope of Issuers of Online Small-Value Securities)
[This Article Newly Inserted on Jan. 12, 2016] PART II FINANCIAL INVESTMENT BUSINESSES CHAPTER I AUTHORIZATION AND REGISTRATION OF FINANCIAL INVESTMENT BUSINESSES SECTION 1 Requirements and Procedures for Authorization
Article 15 (Authorized Business Units, etc.)
Article 16 (Requirements for Authorization, etc.)
Article 17 (Method, Procedures, etc. for Authorization)
Article 18 (Preliminary Authorization)
Article 19 (Relaxed Requirements for Maintenance of Authorization)
Article 19-2 (Mitigation of Requirements for Revision to Authorization) "Mitigated requirements prescribed by Presidential Decree" in Article 16 (2) of the Act means the requirements under the following classifications: <Amended on May 8, 2017>
[This Article Newly Inserted on Jun. 11, 2010] SECTION 2 Requirements and Procedure for Registration Article 20 (Registered Business Units) Article 21 (Requirements, etc. for Registration)
Article 22 (Method, Procedures, etc. for Registration)
Article 23 (Relaxed Requirements for Maintenance of Registration) "Relaxed requirements prescribed by Presidential Decree" in Article 20 of the Act means the following: <Amended on May 8, 2017; Jan. 15, 2019>
Article 23-2 (Mitigation of Requirements for Revision to Registration) "Mitigated requirements prescribed by Presidential Decree" in Article 21 (2) of the Act means the requirements under the classification falling under each item of subparagraph 2 of Article 23. [This Article Newly Inserted on Jun. 11, 2010] CHAPTER II GOVERNANCE OF FINANCIAL INVESTMENT BUSINESS ENTITY [Previous Article 24 moved to Article 7-2 <Jul. 28, 2016>] Article 25 Deleted. <Jul. 28, 2016> Article 26 Deleted. <Jul. 28, 2016> Article 26-2 Deleted. <Jul. 28, 2016> Article 27 Deleted. <Jul. 28, 2016> Article 28 Deleted. <JJul. 28, 2016> Article 29 Deleted. <Jul. 28, 2016> Article 30 Deleted. <Jul. 28, 2016> Article 31 Deleted. <Jul. 28, 2016> Article 32 Deleted. <Jul. 28, 2016> Article 32-2 (Person in Charge of Derivatives Business)
[This Article Newly Inserted on Jul. 1, 2009] Article 33 Deleted. <Jul. 28, 2016> CHAPTER III MAINTENANCE OF SOUND BUSINESS MANAGEMENT SECTION 1 Supervision over Soundness in Business Management
Article 34 (Maintenance, etc. of Financial Soundness)
Article 35 (Guidelines for Soundness in Business Management)
Article 36 (Deadline, etc. for Submission of Business Reports)
SECTION 2 Restrictions, etc. on Trading with Major Shareholders Article 37 (Restrictions, etc. on Trading, etc. with Major Shareholders)
Article 38 (Limits on Credit Granting)
Article 39 (Transactions, etc. Requiring No Resolution by Board of Directors)
Article 40 (Grounds for Restriction on Transactions with Major Shareholders) "As specified further by Presidential Decree" in Article 34 (7) of the Act means any of the following cases:<Amended on Oct. 1, 2009>
Article 41 (Scope of Exercise of Undue Influence)
CHAPTER IV BUSINESS CONDUCT RULES SECTION 1 Common Rules of Business Conduct Subsection 1 Duty of Good Faith Article 42 (Restrictions on Trade Name)
Article 43 (Business Scope of Financial Investment Business Entities)
Article 44 (Public Notice of Incidental Business)
Article 45 (Scope of Affairs Prohibited to be Entrusted) "Internal control affairs prescribed by Presidential Decree" in the proviso to Article 42 (1) of the Act means the following affairs: Provided, That the affairs prescribed and publicly notified by the Financial Services Commission where it is unlikely to undermine investor protection and sound trading practices shall be excluded herefrom: <Amended on Jul. 1, 2009; Sep. 30, 2011; Aug. 27, 2013; Oct. 23, 2015; Jan. 12, 2016; Jul. 28, 2016; May 8, 2017; Jun. 25, 2019; May 18, 2021>
Article 46 (Reporting, etc. on Entrusted Affairs)
Article 47 (Scope of Essential Affairs)
Article 48 Deleted. <May 18, 2021> Article 49 (Guidelines for Providing Information on Entrusted Affairs)
Article 50 (Suspending Exchange of Information among Financial Investment Business Entities)
[This Article Wholly Amended on May 18, 2021] Article 51 Deleted. <May 18, 2021> Subsection 2 Investment Recommendations Article 52 Deleted. <Mar. 23, 2021> Article 52-2 Deleted. <Mar. 23, 2021> Article 53 Deleted. <Mar. 23, 2021> Article 54 Deleted. <Mar. 23, 2021> Article 55 Deleted. <Mar. 23, 2021> Article 56 (Qualifications for Investment Solicitors) "Qualifications prescribed by Presidential Decree" in Article 51 (1) 2 of the Act means a person who satisfies all of the following requirements:
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 for entrustment of business affairs, including the following conditions, with the Association:
Article 58 (Method, Procedures, etc. for Registration)
Article 59 Deleted. <Mar. 23, 2021> Subsection 3 Prohibition of Use of Job-Related Information Article 59-2 (Terms and Conditions)
[This Article Newly Inserted on Dec. 31, 2019] Article 60 Deleted. <Mar. 23, 2021> Article 61 Deleted. <Mar. 23, 2021> Article 62 (Keeping and Maintaining Records)
Article 63 (Depositing of Acquired Securities)
Article 64 (Trading of Financial Investment Instruments by Executive Officers and/or Employees)
Article 64-2 (Measures to Protect Customer Service Personnel) "Measures prescribed by Presidential Decree, such as legal measures" in Article 63-2 (1) 4 of the Act means the following measures:
[This Article Newly Inserted on Jun. 28, 2016] Article 65 (Operating Fund, etc. of Foreign Financial Investment Business Entity)
SECTION 2 Rules on Business Conduct by Financial Investment Business Entities Subsection 1 Rules on Business Conduct by Investment Traders and Investment Brokers Article 66 (Exception to Prohibition on Self-Contracting) "Cases prescribed by Presidential Decree" in subparagraph 2 of Article 67 of the Act means any of the following cases: <Amended on Jun. 28, 2016; May 8, 2017>
[This Article Newly Inserted on Aug. 27, 2013] Article 66-2 (Duty of Best Execution)
[This Article Newly Inserted on Aug. 27, 2013] Article 67 (Period for Disposition of One's Own Stocks) "Period prescribed by Presidential Decree" in the latter part of Article 69 of the Act means three months from the acquisition date. Article 68 (Prohibition on Unsound Business Activities)
Article 69 (Credit Granting)
Article 70 (Method for Giving Notice of Details of Trading)
Article 71 (Exception to Deposits of Financial Securities Companies) "Investment trader or broker prescribed by Presidential Decree" in the former part of Article 74 (2) of the Act means the following persons: Article 72 (Exceptional Transfer, etc. of Investor's Deposit) "Cause prescribed by Presidential Decree" in subparagraph 3 of Article 87-2 of the Act means a case falling under any of the following subparagraphs: <Amended on May 18, 2021>
Article 73 (Time for Public Notice of Payment of Investor's Deposit) "Period prescribed by Presidential Decree" in the latter part, with the exception of the subparagraphs, of Article 74 (5) of the Act means two months from the date an event under any subparagraph of the aforesaid paragraph occurs: Provided, That the period may be extended by one month or less, subject to the prior verification of the Financial Services Commission, if it is not possible to issue a public notice and make public disclosure within the period because of the occurrence of an event beyond control. Article 74 (Management of Investor's Deposit)
Article 75 (Scope, etc. of Investor's Deposit)
Article 76 (Depositing of Securities Deposited by Investors)
Article 77 (Special Cases concerning Sale of Collective Investment Securities)
Article 77-2 (Contracts Corresponding to Contracts for Deposit with Investment Risks) "Contract corresponding thereto prescribed by Presidential Decree" in the main clause of Article 77 (1) of the Act means a contract for issuance of gold savings account, etc. [This Article Newly Inserted on Aug. 27, 2013] Article 77-3 (Designation, etc. of Comprehensive Financial Investment Business Entities)
[This Article Newly Inserted on Aug. 27, 2013] Article 77-4 (Contracts, etc. for Prime Brokerage Services)
[This Article Newly Inserted on Aug. 27, 2013] Article 77-5 (Scope of Credit Granting)
[This Article Newly Inserted on Aug. 27, 2013] Article 77-6 (Services of Comprehensive Financial Investment Business Entities)
[This Article Newly Inserted on Jun. 28, 2016] Article 78 (Guidelines, etc. for Services of Alternative Trading Systems)
[This Article Wholly Amended on Aug. 27, 2014] Subsection 2 Rules on Business Conduct by Collective Investment Business Entities Article 79 (Methods, etc. of Giving Instructions on Asset Management)
Article 80 (Exceptions to Restrictions on Limits of Asset Management)
Article 81 (Grounds, etc. for Exceeding Limits of Restrictions on Asset Management in Exceptional Circumstances)
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 by any of the following methods:
Article 83 (Restrictions on Borrowing Money)
Article 84 (Scope of Interested Parties) "Interested party prescribed by Presidential Decree" in the main clause, with the exception of the subparagraphs, of Article 84 (1) of the Act means any of the following persons: <Amended on Jul. 1, 2009; Mar. 10, 2020>
Article 85 (Exceptions to Restrictions on Trading with Interested Parties) "Transactions prescribed by Presidential Decree" in Article 84 (1) 4 of the Act means the following transactions: <Amended on Jul. 1, 2009; Sep. 30, 2011; Jun. 29, 2012; Aug. 27, 2013; Oct. 23, 2015; Sep. 28, 2018>
Article 86 (Restrictions, etc. on Acquisition of Securities of Affiliated Companies)
Article 87 (Prohibition on Unsound Business Conduct)
Article 88 (Restriction on Contingent Remuneration)
Article 89 (Restriction. on Exercise of Voting Rights)
Article 90 (Maintaining Records of Exercise of Voting Rights)
Article 91 (Public Disclosure, etc. of Exercise of Voting Rights)
Article 92 (Asset Management Reports)
Article 93 (Means, etc. of Ad Hoc Public Disclosure)
Article 94 (Reporting on, and Public Disclosure of, Collective Investment Property)
Article 95(Inspection, Public Disclosure, etc. of Account Books and Documents)
Article 96 (Special Cases concerning Management of Derivatives)
Article 97 (Special Cases concerning Management of Real Property)
Subsection 3 Rules on Business Conduct by Investment Advisory Business Entities and Discretionary Investment Business Entities Article 98 (Execution of Contracts)
Article 99 (Prohibition of Unsound Business Conduct)
Article 99-2 (Restrictions etc. on Contingent Remuneration)
[This Article Newly Inserted on Aug. 27, 2013] Article 100 (Delivery, etc. of Discretionary Investment Report)
Article 101 (Special Cases concerning Offshore Investment Advisory Business Entity)
Article 102 (Reporting on Quasi-Investment Advisory Businesses)
Subsection 4 Rules on Business Conduct by Trust Business Entities Article 103 (Classification of Trusts)
Article 104 (Methods of Conducting Trust Business)
Article 105 (Acquisition of Trust Property with Proprietary Property) "Circumstances prescribed by Presidential Decree" in Article 104 (2) 2 of the Act means where the Financial Services Commission deems that all of the following requirements are met:
Article 106 (Methods of Managing Trust Property)
Article 107 (Management of Surplus Funds)
Article 108 Deleted. <Feb. 3, 2009> Article 109 (Prohibition on Unsound Business Activities)
Article 110 (Trust Contracts) "Matters prescribed by Presidential Decree" in subparagraph 10 of Article 109 of the Act means the following matters: <Amended on Jan. 15, 2019>
Article 111 (Reporting on Issuance of Beneficiary Certificates)
Article 112 (Purchase 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 (4) of the Act. <Amended on Jan. 15, 2019> Article 113 (Restriction. on Exercise of Voting Rights)
Article 114 (Public Disclosure of Exercise of Voting Rights) Public disclosure of the exercise of voting rights under Article 112 (7) of the Act shall be made as follows:
[This Article Wholly Amended on Jun. 29, 2012] Article 115 (Inspection and Public Disclosure of Account Books and Documents)
Article 116 (Entrusted Establishment of Accounting Principles) Article 117 (Exemption from Audit) "Circumstances prescribed by Presidential Decree" in the proviso of Article 114 (3) of the Act means any of the following cases:
Article 118 (Appointment of Auditors)
Article 118-2 (Auditor's or Others' Liabilities for Damage) An auditor shall be jointly liable for damage with a director and an auditor of the trust business entity as prescribed in Article 115 (3) of the Act only where the aggregate amount treated as income of the person filing a claim for the damage during the 12-month period immediately preceding the month in which the claim is made does not exceed 150 million won. [This Article Newly Inserted on Mar. 3, 2015] [Previous Article 118-2 moved to Article 118-3 <Mar. 3, 2015>] Article 118-3 (Special Cases concerning Managerial Trusts)
[This Article Newly Inserted on Aug. 27, 2013] [Moved from Article 118-2 <Mar. 3, 2015>] CHAPTER V SPECIAL CASES CONCERNING CROWDFUNDING BROKERS, ETC. Article 118-4 (Requirements for Registration)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-5 (Method, Procedures, etc. for Registration)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-6 (Relaxed Requirements for Maintenance of Registration) "Relaxed requirements prescribed by Presidential Decree" in Article 117-4 (8) of the Act means the requirements classified as follows: <Amended on May 8, 2017; Jun. 18, 2021>
[This Article Newly Inserted on Jan. 12, 2016] Article 118-7 (Restriction on Names) "Words prescribed by Presidential Decree" in Article 117-5 (1) of the Act means "financial investment" (including corresponding Korean words) or any other foreign words (including corresponding Korean words) which has a similar meaning. [This Article Newly Inserted on Jan. 12, 2016] Article 118-8 (Internal Control Guidelines)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-9 (Subscription for Securities)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-10 (Other Matters concerning Regulation, etc. of Business Activities)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-11 (Managing Institutions, etc. of Subscription Deposits)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-12 (Grounds for Exceptional Transfer, etc. of Subscription Deposits)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-13 (Preferential Payment of Subscription Deposits)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-14 (Management, etc. of Subscription Deposits Placed in Deposit or Trust Account)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-15 (Limit on Securities Issued by Public Offering through Crowdfunding Brokerage)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-16 (Measures, etc. to be Taken by Issuers of Online Small-Value Securities)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-17 (Protection of investors, Restriction on their Activities, etc., Including Investment Limits)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-18 (Ascertaining Facts of Posted Matters)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-19 (Persons Liable for Damage) "Person prescribed by Presidential Decree, such as a certified public accountant, a certified appraiser or a credit rating specialist, (including the organization with which he or she is affiliated)" in Article 117-12 (1) 4 of the Act means a certified public accountant, appraiser, credit rating specialist, attorney-at-law, patent attorney, tax accountant, or any other person with recognized qualifications (including an organization with which he or she is affiliated). [This Article Newly Inserted on Jan. 12, 2016] Article 118-20 (Central Record Keeping Agency)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-21 (Central Recording Keeping Agency’s Affairs Managing Limit of Issuance, etc.)
[This Article Newly Inserted on Jan. 12, 2016] Article 118-22 (Exception to Prohibition on Provision of Information) [This Article Newly Inserted on Jan. 12, 2016] Article 118-23 (Measures to be Taken by Providers of Electronic Message Board Services)
[This Article Newly Inserted on Jan. 12, 2016] PART III ISSUANCE AND CIRCULATION OF SECURITIES CHAPTER I REGISTRATION STATEMENT Article 119 (Securities Exempt from Application of Chapter I of Part III of Act)
Article 120 (Cases subject to Reporting on Public Offering or Sale)
Article 121 (Universal Shelf Registration Statements)
Article 122 (Supplements to Universal Shelf Registration Statements, etc.)
Article 123 (Scope of Forward-Looking Statements) Article 124 (Verification and Examination of Registration Statement by Representative Director) "Matters prescribed by Presidential Decree" in Article 119 (5) of the Act means the following matters: <Amended on Oct. 30, 2018>
Article 124-2 (Special Cases concerning Submission of Registration Statement of Sale)
[This Article Newly Inserted on Aug. 27, 2013] Article 125 (Matters to be Contained in Registration Statements and Accompanying Documents)
Article 126 (Matters to be Contained in Universal Shelf Registration Statement and Accompanying Documents)
Article 127 (Matters, etc. to be Contained in Registration Statements on Collective Investment Securities)
Article 128 (Matters to be Contained in Registration Statements on Asset-Backed Securities and Accompanying Documents)
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 registration statements, 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. Article 129-2 (Standards for Recognition of Homogeneity of Issuance or Sale of Securities) "Matters prescribed by Presidential Decree" in Article 119 (8) of the Act means the following: <Amended on Feb. 9, 2021>
[This Article Newly Inserted on Apr. 10, 2018] Article 130 (Corrections, etc. of Registration Statements)
Article 131 (Preparation and Public Disclosure of Investment Prospectus)
Article 132 (Persons Exempt from Issuing Investment Prospectus)
Article 133 (Methods of Preparing Preliminary Investment Prospectus)
Article 134 (Method of Preparing Short-Form Investment Prospectus)
Article 135 (Persons Liable for Losses Incurred due to False Statements, etc.)
Article 137 (Public Offering or Sale without for registration Statement)
Article 138 (Measures of Financial Services Commission) "Measures prescribed by Presidential Decree" in the former part, with the exception of the subparagraphs, of Article 132 of the Act means any of the following measures:
CHAPTER II SYSTEMS RELATED TO CORPORATE ACQUISITION OR MERGER SECTION 1 Public Tender Offer Article 139 (Securities Eligible for Public Tender Offer) "Voting stocks or any other securities prescribed 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."):
Article 140 (Guidelines for Calculating Number of Opposite Parties to Public Tender Offer)
Article 141 (Scope of Specially Related Persons)
Article 142 (Possession Similar to Ownership) "Those owned and similarly possessed, as prescribed further by Presidential Decree" in the main clause of Article 133 (3) of the Act means any of the following:
Article 143 (Purchase, etc. for which No Public Tender Offer is Required) "Purchasing, etc. prescribed by Presidential Decree" in the proviso of Article 133 (3) of the Act means any of the following:
Article 144 (Purchase not Deemed Purchase in Securities Market) "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 market. Article 145 (Public Notice, etc. of Tender Offer)
Article 146 (Tender Offer Statement, etc.)
Article 147 (Prohibition on Change of Terms and Conditions of Tender Offer) "Terms and conditions prescribed by Presidential Decree" in the proviso of Article 136 (3) of the Act means any of the following:
Article 148 (Preparation, etc. of Prospectus for Tender Offer) Each prospectus for tender offer shall state the matters referred to in the subparagraphs of Article 134 (2) of the Act pursuant to Article 137 (1) of the Act: Provided, That a tender offeror may omit to state the matters prescribed and publicly notified by the Financial Services Commission therein, if the tender offeror is a stock-listed corporation. Article 149 (Expression of Opinions on Tender Offer)
Article 150 (Exceptional Revocation of Tender Offer) "As prescribed further by Presidential Decree" in the proviso of Article 139 (1) of the Act means any of the following cases: <Amended on Aug. 27, 2013>
Article 151 (Acquisition of Stocks in Any Manner other than Tender Offer) "As prescribed by Presidential Decree" in the proviso of Article 140 of the Act means any of the following cases:
Article 152 (Measures of Financial Services Commission)
SECTION 2 Reports on Stocks Held in Bulk Article 153 (Reporting on Stocks, etc. Held in Bulk)
Article 154 (Special Cases concerning Reporting on Stocks Held in Bulk)
Article 155 (Reporting on Changes in Material Facts) "Material fact prescribed by Presidential Decree, such as a change in an essential term and condition of the contract" in Article 147 (4) of the Act means any of the following: <Amended on Jul. 1, 2009; Jan. 29, 2020>
Article 156 (Dispatching Reports on Holding Stocks in Bulk to Issuer) "Person prescribed by Presidential Decree, in cases of stocks, etc. prescribed by Presidential Decree" in Article 148 of the Act means any of the following persons:
Article 157 (Scope of Material Facts) "Material fact prescribed by Presidential Decree" in Article 150 (1) of the Act means any of the following:
Article 158 (Period for which Exercising Voting Rights is Restricted) "Time period prescribed by Presidential Decree" in Article 150 (1) of the Act means any of the following periods:
Article 159 (Measures of Financial Services Commission) "Measures prescribed by Presidential Decree" in Article 151 (2) of the Act means measures falling under any of the following subparagraphs:
SECTION 3 Restriction on Solicitation to Exercise Voting Right by Proxy Article 160 (Method of Delivering Proxy Forms) A proxy solicitor under Article 152 (1) of the Act (hereinafter referred to as "proxy solicitor") shall deliver to a solicited voting right-holder under the aforesaid paragraph (hereinafter referred to as "solicited voting right-holder") the proxy form and reference documents as follows before or simultaneously when he or she solicits to exercise voting rights by proxy: <Amended on Dec. 9, 2014; Jan. 5, 2021>
Article 161 (Cases Not Deemed Solicitation to Exercise Voting Rights by Proxy) "Case prescribed by Presidential Decree" in the proviso, with the exception of the subparagraphs, of Article 152 (2) of the Act means any of the following cases:
Article 162 (Scope of Public-Purpose Corporation) "Public-purpose corporation" in Article 152 (3) of the Act (hereinafter referred to as "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:
Article 163 (Matters to be Stated in Proxy Form and Reference Documents)
Article 163-2 (Calculation of Periods Related to Solicitation to Exercise Voting Rights by Proxy) [This Article Newly Inserted on Aug. 27, 2013] Article 164 (Submission Date of Proxy Form and Reference Documents) Article 165 (Demand for Correction)
Article 166 (Measures of Financial Services Commission)
CHAPTER III LISTED CORPORATION'S BUSINESS REPORTS Article 167 (Corporations, etc. Obligated to Submit Business Reports)
Article 168 (Matters to be Contained in Business Reports and Accompanying Documents)
Article 169 (Verification and Examination of Representative Director and Another Director on Business Report) "Matters prescribed by Presidential Decree" in Article 159 (7) of the Act means the following matters: <Amended on Oct. 30, 2018>
Article 170 (Descriptions and Accompanying Documents of Half-yearly and Quarterly Reports)
Article 171 (Grounds, etc. for Submission of Reports on Material Facts)
Article 172 (Institutions Requested to Furnish Information) The Financial Services Commission may request necessary information from any of the following institutions by sending it a document (including an electronic document) stating the grounds for such request or by facsimile transmission: <Amended on Aug. 27, 2013; Apr. 29, 2016; Jan. 5, 2021>
Article 173 (Scope of Securities Subject to Liability for Damage)
Article 174 (Matters Excluded from Public Disclosure of Business Reports) "Matters prescribed by Presidential Decree" in the latter part of Article 163 of the Act means any of the following matters: <Amended on Jun. 11, 2010; Oct. 30, 2018> Article 175 (Measures of Financial Services Commission)
Article 176 (Special Cases concerning Submission of Business Reports)
[Title Amended on Nov. 13, 2013] CHAPTER III-2 SPECIAL CASES CONCERNING STOCK-LISTED CORPORATIONS Article 176-2 (Guidelines for Acquisition and Disposal of Treasury Stocks)
[This Article Newly Inserted on Feb. 3, 2009] Article 176-3 Deleted. <Jul. 5, 2013> Article 176-4 Deleted. <Jul. 5, 2013> Article 176-5 (Requirements, Methods, etc. of Merger)
[This Article Newly Inserted on Feb. 3, 2009] Article 176-6 (Requirements, Methods, etc. for Business Acquisition or Transfer, etc.)
[This Article Newly Inserted on Feb. 3, 2009] Article 176-7 (Appraisal Rights of Shareholders)
[This Article Newly Inserted on Feb. 3, 2009] Article 176-8 (Methods, etc. of Issuance and Allocation of Stocks)
[This Article Newly Inserted on Aug. 27, 2014] Article 176-9 (Exceptions, etc. to Special Cases concerning Allocation of Stocks to Members of Employee Stock Ownership Association)
[This Article Newly Inserted on Feb. 3, 2009] [Title Amended on Jul. 16, 2013] Article 176-10 (Minimum Issue Price of Stocks to be Issued Less Than Par Value) "Price calculated by the methods prescribed by Presidential Decree" in the latter part of Article 165-8 (2) of the Act means 70 percent of the highest of the prices calculated by the following methods:
[This Article Newly Inserted on Feb. 3, 2009] Article 176-11 Deleted. <Jul. 5, 2012> Article 176-12 (Issuance, etc. of Convertible Contingent Capital Securities)
[This Article Newly Inserted on Aug. 27, 2014] Article 176-13 (Issuance, etc. of Bail-In Contingent Capital Securities)
[This Article Wholly Amended on Aug. 27, 2013] Article 176-14 (Matters to be Reported at General Meeting of Shareholders concerning Dividends and Method of Calculating Market Price of Stocks Dividends)
[This Article Newly Inserted on Feb. 3, 2009] [Title Amended on Jun. 28, 2016] Article 176-15 (Special Cases concerning Dividends of Public Purpose Corporations, etc.)
[This Article Newly Inserted on Feb. 3, 2009] Article 176-16 (Corporations Issuing Non-Voting Stocks)
[This Article Newly Inserted on Feb. 3, 2009] Article 176-17 (Standards, etc. for Financial Management of Stock-listed Corporations)
[This Article Newly Inserted on Feb. 3, 2009] Article 176-18 (Reporting, etc. on Granting Stock Options)
[This Article Newly Inserted on Feb. 3, 2009] Article 176-19 (Special Cases concerning Outside Directors and Standing Auditors) [This Article Newly Inserted on Nov. 13, 2013] CHAPTER IV OVER-THE-COUNTER TRADING Article 177 (Method of Over-the-Counter Trading) Except for trading conducted under Articles 178 (1) and 179, securities or over-the-counter derivatives outside a securities market or an alternative trading system shall be traded between a single seller and a single buyer in accordance with Article 166 of the Act. <Amended on Aug. 27, 2013> Article 177-2 (Exemption from Deliberation on Over-the-Counter Derivatives) "Cases prescribed by Presidential Decree" in the proviso, with the exception of the items, of Article 166-2 (1) 6 of the Act means any of the following cases:
[This Article Newly Inserted on Jun. 11, 2010] Article 178 (Over-the-Counter Trading through Association, etc.)
[Title Amended on May 8, 2017] Article 179 (Over-the-Counter Trading through Inter-Dealer Brokers) Every investment broker who holds authorization for 2i-11-2i of attached Table 1 (hereinafter referred to as "inter-dealer broker") among the authorized business units referred to in the aforesaid Table pursuant to Article 166 of the Act shall observe the following guidelines when acting as a broker for trading of debt securities outside a securities market: <Amended on Aug. 27, 2013>
Article 180 (Over-the-Counter Trading through Specialized Bond Dealer)
Article 181 (Repurchase Agreements)
Article 182 (Transactions of Borrowing and Lending Securities)
Article 183 (Over-the-Counter Trading of Commercial Paper, etc.)
[Title Amended on Apr. 5, 2013] Article 184 (Transactions, etc. in Overseas Markets)
Article 185 (Other Over-the-Counter Trading of Securities)
Article 186 Deleted; <Feb. 3, 2009> Article 186-2 (Transactions for Risk Avoidance) "Transactions to hedge 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 some of the 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 each of the following requirements at the time of execution of such contracts:
[This Article Newly Inserted on Feb. 3, 2009] Article 186-3 (Duties to Clear Over-the-Counter Trading)
[This Article Newly Inserted on Jul. 8, 2013] Article 187 (Limits on Acquisition, etc. of Securities or Exchange-Traded Derivatives by Foreigners)
Article 188 (Registration, etc. of Foreigner's Investment)
Article 189 (Accounting Auditor's Audit Certificate)
Article 190 (Special Cases concerning Audit of Foreign Corporations, etc.)
Article 191 (Scope of Securities Subject to Liability for Damage)
Article 192 (Alternative Payment for Security Deposit)
Article 193 Deleted. <Jun. 25, 2019> PART IV REGULATION OF UNFAIR TRADING Article 194 (Scope of Employees Obligated to Return Short-Swing Profit) "Person as prescribed by Presidential Decree" in the former part, with the exception of the subparagraphs, 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"):
Article 195 (Methods, etc. of Calculation of Short-Swing Profit)
Article 196 (Securities Exempt from Return of Short-Swing Profit)
Article 197 (Public Disclosure of Short-Swing Profit) "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:
Article 198 (Exceptions to Return of Short-Swing Profits) "Cases prescribed by Presidential Decree" in Article 172 (6) of the Act means any of the following: <Amended on Dec. 7, 2010; Aug. 27, 2013; Jun. 25, 2019>
Article 199 (Duration Applicable Mutatis Mutandis to Investment Traders) The provisions applicable mutatis mutandisto investment traders with respect to insiders' short-swing profits as provided for in Article 172 (7) of the Act shall apply mutatis mutandisto cases where an investment trader makes a purchase or sale within three months from the date an underwriting contract is executed and makes a sale or purchase within six months from the date of such sale or purchase (excluding cases falling under subparagraph 4 of Article 198): Provided, That where an investment trader makes a trade for manipulation for stabilization or market creation, the provisions shall apply mutatis mutandisto cases where it makes a purchase or sale during the relevant period 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 falling under subparagraph 3 of Article 198). Article 200 (Reporting on Status of Specific Securities Owned by Executive Officers)
Article 200-2 (Reporting on Exchange-Traded Derivatives Held in Bulk)
[This Article Newly Inserted on Feb. 3, 2009] Article 201 (Disclosure, etc. of Information)
Article 202 (Market Price Subject to Market Price Manipulation) "Market price prescribed by Presidential Decree" in Article 176 (2) 1 of the Act means the first formed market price in the securities market for newly listed securities (including the listing prescribed and publicly notified by the Financial Services Commission). Article 203 (Persons Authorized to Conduct Manipulation for Stabilization and Market Creation) "Person prescribed by Presidential Decree" in Article 176 (3) 1 of the Act means a person falling under any of the following subparagraphs:
Article 204 (Methods of Manipulation for Stabilization, etc.)
Article 205 (Methods of Market Creation, etc.)
Article 206 (Persons Eligible for Entrustment of Manipulation for Stabilization) "Person prescribed by Presidential Decree, such as an executive officer of the issuer" in Article 176 (3) 3 of the Act means any of the following: <Amended on Jul. 28, 2016>
Article 206-2 (Cases Eligible for Price Manipulation) [This Article Newly Inserted on Aug. 27, 2013] Article 207 (Scope of Linked Securities) "Securities prescribed by Presidential Decree" in Article 176 (4) 3 of the Act means the following securities: <Amended on Dec. 21, 2009>
Article 207-2 (Exception to Prohibition on Market Disturbance) "Circumstances prescribed by Presidential Decree" in the proviso, with the exception of the subparagraphs, of Article 178-2 (1) of the Act means any of the following:
[This Article Newly Inserted on Jun. 30, 2015] Article 208 (Restrictions on Short Sales)
Article 208-2 (Reporting on Net Positions)
[This Article Newly Inserted on Jun. 28, 2016] Article 208-3 (Public Disclosure of Net Positions)
[This Article Newly Inserted on Jun. 28, 2016] Article 208-4 (Restrictions on Acquisition of Stocks by Public Offering or Sale by Short Sellers)
[This Article Newly Inserted on Apr. 6, 2021] Article 208-5 (Information on Borrowing Transactions Related to Borrowing Public Sale)
[This Article Newly Inserted on Apr. 6, 2021] PART V COLLECTIVE INVESTMENT SCHEME CHAPTER I GENERAL PROVISIONS Article 209 (Registration Requirements for Collective Investment Scheme) "Requirements prescribed by Presidential Decree" in Article 182 (2) 4 of the Act means the following requirements: <Amended on Dec. 21, 2009; Aug. 27, 2013; Jul. 28, 2016; May 26, 2020>
Article 210 (Exemption from Revised Registration) "Circumstances prescribed by Presidential Decree" in the former part of Article 182 (8) of the Act means any of the following:
Article 211 (Methods, Procedures, etc. for Registration)
Article 211-2 (Cross-Selling Agreement)
[This Article Newly Inserted on May 26, 2020] Article 212 (Business Affairs of Fund Accounting and Administration Company) "Business Affairs prescribed by Presidential Decree" in Article 184 (6) 5 of the Act means the any of the following affairs:
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 it has issued and acquired later within one month from the acquisition date in any of the following manners:
Article 214 (Keeping and Maintaining Records of Data of Investment Company, etc.)
CHAPTER II ORGANIZATION OF COLLECTIVE INVESTMENT SCHEMES SECTION 1 Investment Trust Article 215 (Matters to be Stated in Trust Contract) "Matters prescribed by Presidential Decree" in Article 188 (1) 8 of the Act means the following: <Amended on Jun. 29, 2012; Mar. 10, 2020>
Article 216 (Reasons for being Excused from General Meeting of Beneficiaries) "Reason prescribed by Presidential Decree" in Article 188 (2) 2 of the Act means any of the following: <Amended on Jun. 29, 2012>
Article 217 (Matters Subject to Resolution of General Meeting of Beneficiaries) "Matters prescribed by Presidential Decree" in Article 188 (2) 4 of the Act means the following matters: <Amended on Apr. 7, 2015>
Article 218 (Methods of and Procedures for Verification of Details of Issuance of Beneficiary Certificates) A collective investment business entity that has established an investment trust pursuant to the latter part, with the exception of the subparagraphs, of Article 189 (5) of the Act and the representative director of a trust business entity responsible for keeping in custody and managing assets held by the investment trust (in cases of a company with executive directors, referring to its representative executive director) shall verify whether the matters referred to in the subparagraphs of the same paragraph, which are electronically registered or recorded at an electronic registry, are consistent with the details of the issuance of beneficiary certificates to notify the results to the collective investment business entity that has established the investment trust via the electronic registry. [This Article Wholly Amended on Jun. 25, 2019] Article 219 (Special Cases concerning Prohibition on Furnishing Information) Article 220 (Convening General Meetings of Beneficiaries)
Article 221 (Exercise of Voting Rights in Writing)
Article 222 (Buy-Out of Beneficiary Certificates from Dissenting Beneficiaries)
[This Article wholly Amended on Aug. 27, 2013] Article 223 (Grounds for Termination Allowed without Approval) "Circumstances prescribed by Presidential Decree" in the proviso of Article 192 (1) of the Act means any of the following cases. In such cases, such termination shall satisfy the guidelines prescribed and publicly notified by the Financial Services Commission: <Amended on Jun. 11, 2010>
Article 224 (Method, Procedures, etc. for Approval of Termination)
Article 224-2 (Grounds for Exemption from Mandatory Termination) "Cases prescribed by Presidential Decree" in the proviso of Article 192 (2) 5 of the Act means the following cases: <Amended on Oct. 23, 2015; Jun. 28, 2016; Oct. 25, 2016; Sep. 28, 2018>
[This Article Newly Inserted on Aug. 27, 2013] Article 225 (Reasons for Partial Termination) "Case as prescribed by Presidential Decree" in Article 192 (5) of the Act means any of the following cases:
Article 225-2 (Special Cases concerning Mergers of Small-Scale Investment Trusts)
[This Article Newly Inserted on Aug. 27, 2013] Article 226 (Merger of Investment Trusts)
SECTION 2 Collective Investment Scheme in Form of Company Article 227 (Matters to be Stated in Articles of Incorporation)
Article 228 (Accompanying Documents for Registration of Incorporation)
Article 229 (Amendments to Articles of Incorporation)
Article 230 (Condition of Issuance of New Stocks) "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 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 market. Article 231 (Grounds for Disqualification as Supervisory Director)
Article 231-2 (Grounds for Exemption from Mandatory Dissolution) "Cases prescribed by Presidential Decree" in the proviso of Article 202 (1) 7 of the Act means the following cases: <Amended on Oct. 23, 2015; Jun. 28, 2016; Oct. 25, 2016; Sep. 28, 2018>
[This Article Newly Inserted on Aug. 27, 2013] Article 232 (Registration of Liquidator)
Article 233 (Omission of Procedure for Peremptory Notice to Creditors)
Article 233-2 (Special Cases concerning Mergers of Small-Scale Investment Companies)
[This Article Newly Inserted on Aug. 27, 2013] Article 234 (Matters to be Stated in Articles of Incorporation)
Article 235 (Descriptions of Equity Securities)
Article 236 (Mandatory Provisions of Articles of Association)
Article 236-2 (Matters, etc. to be Stated in Articles of Incorporation)
[This Article Newly Inserted on Aug. 27, 2013] SECTION 3 Collective Investment Scheme in Form of Association Article 237 (Matters to be Stated in Partnership Agreements)
Article 238 (Reporting, etc. on Dissolution)
[Title Amended on Aug. 27, 2013] Article 239 (Matters to be Stated in Undisclosed Association Agreements) "Matters prescribed by Presidential Decree" in Article 224 (1) 9 of the Act means the following: <Amended on Aug. 27, 2013; Mar. 10, 2020>
CHAPTER III TYPES OF COLLECTIVE INVESTMENT SCHEMES SECTION 1 Types of Collective Investment Schemes Article 240 (Minimum Investment Ratio, etc. by Type of Collective Investment Schemes)
Article 241 (Money Market Funds)
SECTION 2 Collective Investment Schemes in Extraordinary Form Article 242 (Closed-End Fund)
Article 243 (Multiple-Class Funds)
Article 244 (Umbrella Funds)
Article 245 (Master-Feeder Funds)
Article 246 (Requirements for Exchange-Traded Funds) "Requirements prescribed by Presidential Decree" in the latter part of Article 234 (1) 1 of the Act means meeting each of the following requirements: <Amended on Feb. 3, 2009>
Article 247 (Designated Participating Company) "Person prescribed by Presidential Decree" in Article 234 (2) of the Act means a person who engages in both the investment trading business (excluding any underwriting business) and the investment brokerage business (limited to commissioned sale business) for securities and is designated by a collective investment business entity to perform the following business affairs (hereinafter referred to as "designated participating company"): <Amended on Feb. 3, 2009>
Article 248 (Creation, Establishment, etc.)
Article 249 (Redemption of Collective Investment Securities of Exchange-Traded Fund)
Article 250 (Listing and Delisting of Exchange-Traded Funds)
Article 251 (Public Notice of Assets, etc. Owned)
Article 252 (Special Cases concerning Management)
Article 252-2 Deleted. <Nov. 13, 2013> " CHAPTER IV REDEMPTION OF COLLECTIVE INVESTMENT SECURITIES Article 253 (Events Excusing Performance in Response to Claims for Redemption) "Reason prescribed by Presidential Decree" in the proviso of 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 or her own business under normal circumstances. Article 254 (Special Cases concerning Methods for Redemption)
Article 255 (Redemption Price and Fees)
Article 256 (Grounds for Postponement of Redemption) "Cause prescribed by Presidential Decree" in the former part of Article 237 (1) of the Act means any of the following: <Amended on May 26, 2020>
Article 257 (Matters Subject to Resolution of General Meeting for Postponement of Redemption)
Article 258 (Redemption Methods When Redemption is Resumed)
[Title Amended on May 26, 2020] Article 259 (Partial Redemption)
CHAPTER V ASSESSMENT AND ACCOUNTING Article 260 (Methods for Assessment of Collective Investment Property)
Article 261 (Committee on Assessment of Collective Investment Property)
Article 262 (Calculation and Public Notice of Base Prices)
Article 263 (Entrustment of Establishment of Accounting Principles) "Corporation or organization prescribed by Presidential Decree" in the former part of Article 240 (2) of the Act means the Korea Accounting Institute. Article 264 (Exemption from Accounting Audits) "As specified further by Presidential Decree" in the proviso, with the exception of the subparagraphs, of Article 240 (3) of the Act means any of the following cases as of the end of a fiscal term and the day falling under any subparagraph of the aforesaid paragraph: <Amended on Aug. 27, 2013; May 26, 2020>
Article 265 (Appointment of Accounting Auditor)
Article 265-2 (Auditors’ Liability for Damage, etc.) Where an auditor shall be jointly liable for damage with a director and an auditor of the collective investment business entity or a supervisory director of the investment company under Article 241 (3) of the Act shall be limited only where the aggregate amount recognized as income of the claimant for the damage during the 12-month period immediately preceding the month in which the filing date of the claim falls does not exceed 150 million won. [This Article Newly Inserted on Mar. 3, 2015] Article 266 (Distribution of Profits)
Article 267 Deleted. <Oct. 23, 2015> CHAPTER VI SAFEKEEPING AND MANAGEMENT OF COLLECTIVE INVESTMENT PROPERTY Article 268 (Deposit, etc. of Securities)
Article 269 (Trust Business Entity's Duty to Monitor)
Article 270 (Reports on Safekeeping and Management of Assets)
CHAPTER VII SPECIAL CASES CONCERNING PRIVATELY PLACED FUNDS Article 271 (Investors in Hedge Funds)
[This Article Wholly Amended on Oct. 23, 2015] Article 271-2 (Requirements for Registration)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-3 (Relaxation, etc. of Requirements for Maintenance of Registration) "Relaxed requirements prescribed by Presidential Decree" in Article 249-3 (8) of the Act means the requirements classified as follows: <Amended on May 8, 2017; Jan. 15, 2019>
[This Article Newly Inserted on Oct. 23, 2018] Article 271-4 (Method, Procedures, etc. for Registration)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-5 Deleted. <Mar. 23, 2021> Article 271-6 (Advertisements Soliciting Investment in Hedge Funds)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-7 (Requirements for Creation or Establishment of Hedge Funds) "Requirements prescribed by Presidential Decree" in Article 249-6 (1) 4 of the Act means the requirements classified as follows: <Amended on Jul. 28, 2016>
[This Article Newly Inserted on Oct. 23, 2015] Article 271-8 (Exemption from Reporting on Changes)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-9 (Methods, Procedures, etc. for Reporting)
[This Article Newly Inserted on Oct. 23, 2018] Article 271-10 (Methods, etc. of Managing Collective Investment Property Held by Hedge Funds)
[This Article Newly Inserted on Oct. 23, 2018] Article 271-11 (Special Cases concerning Hedge Funds)
[This Article Newly Inserted on Oct. 23, 2018] Article 271-12 (Measures against Hedge Funds)
[This Article Newly Inserted on Oct. 23, 20185 SECTION 2 Private Equity Funds Article 271-13 (Reporting, etc. on Establishment of Private Equity Funds)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-14 (Partners and Contributions)
[This Article Newly Inserted on Oct. 23, 2018] Article 271-15 (Methods, etc. of Managing Collective Investment Property of Private Equity Funds)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-16 (Methods, etc. of Managing Surplus Fund)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-17 (Restrictions on Management, etc. of Collective Investment Property of Private Equity Funds)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-18 (Methods, etc. for Calculation of Investment Ratios)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-19 (Special-Purpose Companies)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-20 (Managing Members, etc.)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-21 (Requirements, etc. for Registration)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-22 (Restrictions on Transactions with Interested Parties, etc.)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-23 (Restrictions on Private Equity Funds, etc. Affiliated with Conglomerates subject to Limitations on Cross-Holdings)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-24 (Special Cases concerning Regulation on Holding Companies)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-25 (Special Cases concerning Private Equity Funds)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-26 (Measures against Private Equity Funds)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-27 (Special Cases concerning Private Equity Funds for Corporate Financial Stability, etc.)
[This Article Newly Inserted on Oct. 23, 2015] Article 271-28 (Special Cases concerning Privately Placed Funds, etc. Specializing in Start-up or Venture Business)
[This Article Newly Inserted on Feb. 13, 2017] SECTION 3 Special Provisions concerning Banks and Insurance Companies Article 272 (Special Provisions concerning Banks)
Article 273 (Special Provisions concerning Insurance Companies)
CHAPTER VIII SUPERVISION AND INSPECTION Article 274 (Supervision over Investment Companies, etc.)
Article 275 (Measures against Investment Companies, etc.) ((1) "Circumstances prescribed by Presidential Decree" in Article 253 (1) 7 of the Act means the following cases: <Amended on Aug. 27, 2013>
Article 275-2 (Revocation of Registration of Passport Funds)
[This Article Newly Inserted on May 26, 2020] CHAPTER IX COMPANIES RELATED TO COLLECTIVE INVESTMENT SCHEMES Article 276 (Requirements for Registration of Fund Accounting and Administration Company)
Article 277 (Method, Procedures, etc. for Registration)
Article 278 (Supervision over General Administration Companies)
Article 279 (Measures against General Administration Companies)
Article 280 (Requirements, etc. for Registration of Fund Rating Companies)
Article 281 (Method, Procedures, etc. for Registration)
Article 282 (Business Conduct Standards, etc.)
Article 283 (Supervision of Fund Rating Companies)
Article 284 (Measures against Fund Rating Companies)
Article 285 (Requirements for Registration of Bond Rating Companies)
Article 281 (Method, Procedures, etc. for Registration)
Article 287 (Working Rules, etc. on Business Conduct)
Article 288 (Supervision of Bond Rating Companies)
Article 289 (Measures against Bond Rating Companies)
Article 290 Deleted. <Oct. 23, 2015> Article 291 Deleted. <Oct. 23, 2015> Article 292 Deleted. <Oct. 23, 2015> Article293 Deleted. <Oct. 23, 2015> Article 294 Deleted. <Oct. 23, 2015> Article 295 Deleted. <Oct. 23, 2015> Article 296 Deleted. <Oct. 23, 2015> Article 297 Deleted. <Oct. 23, 2015> Article 297-2 Deleted. <Oct. 23, 2015> Article 298 Deleted. <Dec. 9, 2014> Article 299 Deleted. <Oct. 23, 2015> Article 300 Deleted. <Oct. 23, 2015> Article 300-2 Deleted. <Oct. 23, 2015> CHAPTER XI SPECIAL CASES CONCERNING FOREIGN COLLECTIVE INVESTMENT SECURITIES Article 301 (Qualification Requirements for Foreign Collective Investment Business Entities)
[Title Amended on May 26, 2020] Article 302 (Inspection, etc. of Account Books and Documents)
Article 303 (Sales Methods, etc. of Foreign Collective Investment Securities)
Article 304 (Deregistration of Foreign Collective Investment Schemes) "As prescribed further by Presidential Decree" in Article 282 (1) 7 of the Act means any of the following cases: <Amended on Mar. 3, 2015>
PART VI INSTITUTIONS RELATED TO FINANCIAL INVESTMENT BUSINESS CHAPTER I KOREA FINANCIAL INVESTMENT ASSOCIATION Article 305 (Registration of Incorporation)
"Entity prescribed by Presidential Decree" in Article 285 (1) of the Act means any of the following: <Amended on Aug. 27, 2013>
Article 307 (Business Affairs, etc.)
Article 308 (Organization and Articles of Incorporation)
Article 309 (Measures against Association)
CHAPTER II KOREA SECURITIES DEPOSITORY Article 310 (Securities, etc. Subject to Deposit)
Article 311 (Registration of Incorporation)
Article 312 (Special Interests) "Special interest prescribed by Presidential Decree" in Article 301 (5) of the Act means interests falling under any of the following subparagraphs:
Article 313 (Measures against Securities Depository)
Article 314 (Restriction on Return of Securities Deposited by Investors) "Cause prescribed by Presidential Decree" in Article 312 (3) of the Act means any of the following reasons:
Article 315 (Replenishment of Shortfall in Deposited Securities, etc.)
Article 316 (Matters Notified by Issuers) "Matters prescribed by Presidential Decree" in Article 314 (6) of the Act means the following matters: <Amended on Aug. 27, 2013>
Article 317 Deleted. <Aug. 27, 2013> Article 317-2 (Management of Stock Certificates in Name of Securities Depository) Where the Securities Depository receives stock certificates from the issuer as a result of exercising the rights of the stock certificates in the name of Securities Depository, the entry of which has not been changed in the name of the investor after they were returned to the investor through the depositor, it may sell, among such stock certificates, those for which one year has passed from the date of receipt, through the Association's over-the-counter transactions under Article 286 (1) 5 of the Act and manage the sale money in cash: Provided, That in cases prescribed and publicly notified by the Financial Services Commission, such as impossible over-the-counter transactions of stock certificates through the Association, they may be sold through a stock market even if one year has not passed after the date the stocks were received. [This Article Wholly Amended on Jun. 25, 2019] Article 318 Deleted. <Jun. 25, 2019> CHAPTER II-2 CENTRAL COUNTERPARTY Article 318-2 (Authorized Business Units for Clearing Business) The term "business units determined by Presidential Decree" in Article 323-3 (1) of the Act means units of business to be performed for a business entity subject to clearing as classified in subparagraphs of Article 14-2 (2). [This Article Newly Inserted on Jul. 8, 2013] Article 318-3 (Requirements for Authorization for Central Counterparty Clearing Business)
[This Article Newly Inserted on Jul. 8, 2013] Article 318-4 (Method, Procedures, etc. for Authorization for Central Counterparty)
[This Article Newly Inserted on Jul. 8, 2013] Article 318-5 (Preliminary Authorization)
[This Article Newly Inserted on Jul. 5, 2013] Article 318-6 (Special Interest) The term "special interest prescribed by Presidential Decree" in Article 323-9 (3) of the Act means any of the following concerns:
[This Article Newly Inserted on Jul. 8, 2013] Article 318-7 (Financial Investment Institutions) The term "any other financial investment institution prescribed by Presidential Decree" in Article 323-10 (2) 2 of the Act means the Securities Depository or a financial securities company. [This Article Newly Inserted on Jul. 5, 2013] Article 318-8 (Accumulation, Management, etc. of Joint Compensation Fund)
[This Article Newly Inserted on Jul. 5, 2013] Article 318-9 (Transaction Information, etc. subject to Preservation and Management)
[This Article Newly Inserted on Jul. 8, 2013] Article 318-10 (Restrictions on Stockholding) In any of the following cases, stocks issued by a central counterparty may be held in excess of 20 percent of the total number of outstanding voting stocks of the central counterparty, with approval from the Financial Services Commission as provided in subparagraph 2 of Article 323-18 of the Act:
[This Article Newly Inserted on Jul. 8, 2013] Article 318-11 (Dispositions against Central Counterparty)
[This Article Newly Inserted on Jul. 8, 2013] CHAPTER III SECURITIES FINANCE COMPANY Article 318-12 (Special Cases concerning Prohibition against Unauthorized Securities Finance Business) "Cases prescribed by Presidential Decree" in the proviso to Article 323-21 of the Act means where a person conducts the business affairs provided for in Article 326 (1) 1 or 3 of the Act pursuant to the finance-related statutes. <Amended on Jul. 28, 2016> [This Article Newly Inserted on Aug. 27, 2013] Article 319 (Authorization)
Article 320 (Business Affairs) "Business affairs prescribed by Presidential Decree" in Article 326 (2) 1 (a) of the Act means the following business affairs: <Amended on Aug. 27, 2013>
Article 321 (Special Interests) "Special interest prescribed by Presidential Decree" in Article 327 (3) of the Act means interests falling under any of the following subparagraphs:
Article 322 (Issuance of Bonds)
Article 323 (Approval on Discontinuance of Business) Article 370 (2) through (6) shall apply mutatis mutandisto 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. Article 324 (Measures against Securities Finance Companies)
CHAPTER III-2 CREDIT RATING COMPANY Article 324-2 (Exceptions to Prohibition on Credit Assessment without Authorization) "Cases prescribed by Presidential Decree" in the proviso of Article 335-2 of the Act means services provided by a corporate credit inquiry company referred to in the Credit Information Use and Protection Act for corporate credit ratings and technology credit assessment, which satisfy each of the following requirements: <Amended on Aug. 4, 2020>
[This Article Newly Inserted on Aug. 27, 2013] Article 324-3 (Requirements for Authorization, etc.)
[This Article Newly Inserted on Aug. 27, 2013] Article 324-4 (Method, Procedures, etc. for Authorization of Credit Rating Company)
[This Article Newly Inserted on Aug. 27, 2013] Article 324-5 (Preliminary Authorization)
[This Article Newly Inserted on Aug. 27, 2013] Article 324-6 (Internal Control Guidelines for Credit Assessment, etc.)
[This Article Newly Inserted on Aug. 27, 2013] Article 324-7 (Incidental Business)
[This Article Newly Inserted on Aug. 27, 2013] Article 324-8 (Business Conduct Standards, etc. of Credit Rating Companies)
[This Article Newly Inserted on Aug. 27, 2013] Article 324-9 (Submission, Public Notification, etc. of Credit Rating Statements)
[This Article Newly Inserted on Aug. 27, 2013] Article 324-10 (Dispositions in Relation to Credit Rating Companies)
[This Article Newly Inserted on Aug. 27, 2013] Article 325 (Business Affairs, etc. of Merchant Banks)
Article 326 (Issuance of Cover Bills)
Article 327 (Selection, etc. of Eligible Business Entities)
Article 328 (Dealing with Unsecured Bills, etc.)
Article 329 (Cash Management Account)
Article 330 (Working Rules on Business Conduct)
Article 331 (Authorization for Branches)
Article 332 (Issuance of Bonds)
Article 333 (Special Cases concerning Collective Investment Business)
Article 334 (Limits on Credit Granting to Same Borrower)
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:
Article 336 (Scope of Credit Granting) The credit granting referred to in Article 342 (1) of the Act shall consist of the following, and specific scope of such credit granting shall be prescribed and publicly notified by the Financial Services Commission: <Amended on Jun. 28, 2016>
Article 337 (Scope of Same Borrower and Related Persons)
Article 338 (Restriction on Transactions with Major Shareholders)
Article 339 (Limits on Investment in Securities)
Article 340 (Prohibited Acts regarding Funding) "Act prescribed by Presidential Decree" in Article 345 (1) 3 of the Act means using a transaction of over-the-counter derivatives, a trust contract, a linked transaction, etc. with intent to circumvent the limits prescribed in Article 342 through 344 of the Act. Article 341 (Holding Reserve Assets)
Article 342 (Restrictions, etc. on Acquisition of Real Estate) Article 343 Deleted. <Jul. 28, 2016> Article 344 (Measures against Merchant Banks)
CHAPTER V FUND BROKERAGE COMPANY Article 345 (Authorization for Fund Brokerage Companies)
Article 346 (Restrictions on Activities of Fund Brokerage Companies)
Article 347 (Measures against Fund Brokerage Companies)
CHAPTER VI SHORT-TERM FINANCIAL COMPANY Article 348 (Business Affairs, etc. of Short-Term Finance Companies)
Article 349 (Measures against Short-Term Finance Companies)
CHAPTER VII TRANSFER AGENCY COMPANY Article 350 (Prerequisites for Registration)
Article 351 (Procedures for Registration, etc.)
Article 352 (Measures against Transfer Agents)
CHAPTER VIII ORGANIZATIONS RELATED TO FINANCIAL INVESTMENT Article 353 (Establishment of Organizations Related to Financial Investment)
Article 354 (Measures against Organizations Related to Financial Investment)
Article 354-2 (Exception to Prohibition against Establishment of Markets without Permission) "Cases prescribed by Presidential Decree" in subparagraph 3 of Article 373 of the Act means any of the following cases: <Amended on Jun. 28, 2016; May 8, 2017; Aug. 20, 2019>
[This Article Newly Inserted on Aug. 27, 2013] Article 354-3 (Requirements, etc. for Permission for Exchange)
[This Article Newly Inserted on Aug. 27, 2013] Article 354-4 (Method, Procedures, etc. for Permission for Exchange)
[This Article Newly Inserted on Aug. 27, 2013] Article 354-5 (Preliminary Authorization)
[This Article Newly Inserted on Aug. 27, 2013] Article 354-6 (Responsibilities of Exchange) [This Article Newly Inserted on Aug. 27, 2013] Article 355 (Abnormal Transactions) "Abnormalities in trading prescribed by Presidential Decree" in Article 377 (1) 8 of the Act means transactions or activities that are likely to violate Article 174, 176, 178, 178-2 or 180 of the Act in the securities market (including trades of securities via an alternative trading system; hereafter the same shall apply in this Article) or the derivatives market and that fall under any of the following. In such cases, transactions or activities discovered in the course of examination or supervision of abnormal transactions under Article 404 of the Act that are likely to violate Article 147, 172, 173 or 173-2 (2) of the Act shall be presumed to be abnormal transactions: <Amended on Feb. 3, 2009; Aug. 27, 2013; Jun. 30, 2015>
Article 356 (Qualifications for Executive Officers)
Article 357 (Special Interests) "Special interests prescribed by Presidential Decree" in Article 383 (2) of the Act means interests falling under any of the following subparagraphs:
Article 357-2 (Audit Committee) [This Article Newly Inserted on Jul. 28, 2016] Article 358 (Members of Director Nomination Committee) "Stock-listed corporations prescribed by Presidential Decree" in Article 385 (2) 3 of the Act means corporations recommended by an organization established by and consisting of stock-listed corporations for each securities market prescribed and publicly notified by the Financial Services Commission among securities markets established and operated by the exchange. [This Article Wholly Amended on Aug. 27, 2013] Article 359 (Categories of Members) "Member prescribed by Presidential Decree" in Article 387 (2) 3 of the Act means a member falling under any one of the following subparagraphs:
Article 360 (Securities Subject to Public Disclosure Regulations) "Other securities prescribed by Presidential Decree" in the former part of Article 391 (1) of the Act means any of the following securities:
Article 361 (Requests for Information, etc.) An exchange may request necessary information from an administrative agency and other related institutions in writing (including an electronic document) or by facsimile in accordance with the following guidelines pursuant to Article 392 (2) of the Act. In such cases, the written request shall state the reasons for requesting such information: <Amended on Jan. 5, 2021>
Article 362 (Accumulation, Management, etc. of Joint Compensation Fund)
Article 363 (Making Claims, etc. for Reimbursement)
Article 364 (Publication of Quotations)
Article 365 (Qualifications, etc. for Chairperson of Market Oversight Commission)
Article 366 (Restriction on Holding of Stocks)
Article 367 (Measures against Exchange)
[This Article Wholly Amended on Aug. 27, 2013] Article 368 (Market Efficiency Promotion Committee)
PART VIII SUPERVISION AND DISPOSITIONS CHAPTER I ORDERS, APPROVAL, ETC. Article 369 (Orders to Financial Investment Business Entities to Take Measures)
Article 370 (Matters subject to Approval)
Article 371 (Matters, etc. subject to Reporting)
CHAPTER II INSPECTION AND MEASURES Article 372 (Entrustment of Inspection)
Article 373 (Measures against Financial Investment Business Entities)
Article 374 (Measures against Executive Officers and/or Employees)
CHAPTER III INVESTIGATIONS Article 375 (Demands to Financial Investment Business Entities to Submit Data) To request materials from a financial investment business entity, an institution related to financial investment business, or an exchange, the Financial Services Commission (referring to the Securities and Futures Commission, in cases of a violation of any of Articles 172 through 174, 176, 178, 178-2,180, and 180-2 through 180-5 of the Act; hereafter the same shall apply in Articles 376 and 377) shall make such request in writing, stating the purpose for which such materials are used, the type, issue, and item of the financial investment instrument subject to investigation, the type of trading, the trading period, etc. pursuant to Article 426 (4) of the Act. <Amended on Jun. 30, 2015; Apr. 6, 2021> Article 376 (Measures Following Results of Investigation)
Article 377 (Public Announcements of Findings from Investigations and Measures Taken) The Financial Services Commission may publicly announce the following information and data necessary for preventing violations through a newspaper, broadcasting medium, website or any other means pursuant to Article 426 (8) of the Act: Provided, That public announcements may be omitted completely or partially, where an accusation is filed against a person involved, an offense is informed to an investigation agency, or any other reason prescribed and publicly notified by the Financial Services Commission exists:
Article 378 (Investigative Officers) "Person prescribed 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 Article 379 (Standards for Imposing Penalty Surcharges)
Article 380 (Procedure for Imposition of Penalty Surcharges)
Article 381 (Extension of Deadline for Payment and Payment in Installments)
Article 382 (Additional Charges) "Additional charges as prescribed by Presidential Decree" in Article 434 (1) of the Act means an amount calculated by multiplying the amount of the penalty surcharge in default by the rate of six percent per annum. In such cases, the period for which additional charges are collected shall not exceed 60 months. <Amended on Mar. 22, 2011> Article 383 (Entrustment of Disposition against Default on Payment)
Article 383-2 (Interest Rates for Additional Payment on Refund) "Interest rates for additional payment prescribed by Presidential Decree" in Article 434-3 of the Act means the interest rates determined by the Financial Services Commission and provided by public notice, taking into consideration the interest rates for time deposits of financial institutions. [This Article Newly Inserted on Feb. 3, 2009] Article 383-3 (Disposition on Deficits) "Reasons prescribed by Presidential Decree" in subparagraph 6 of Article 434-4 of the Act means any of the following cases:
[This Article Newly Inserted on Feb. 3, 2009] PART IX SUPPLEMENTARY PROVISONS Article 384 (Reporting, etc. of Violations)
Article 385 (Reporting, etc. by Electronic Documents)
Article 386 (Exchange of Information for which Consultation not Required) "Cases prescribed by Presidential Decree" in the proviso to Article 437 (4) of the Act means the following cases: <Amended on Feb. 3, 2009>
Article 387 (Delegation or Entrustment of Authority)
Article 387-2 (Processing of Sensitive Information and Personally Identifiable Information)
[This Article Newly Inserted on Jan. 6, 2012] Article 388 (Apportionment Rate, Limit, etc. of Expenses)
Article 388-2 (Re-Examination of Regulations)
[This Article Wholly Amended on Dec. 30, 2013] PART X PENALTY PROVISIONS Article 389 (Material Facts) "Material fact prescribed by Presidential Decree" in subparagraph 18 of Article 444 of the Act means a fact falling under any subparagraph of Article 157. Article 390 (Criteria for Imposing Administrative Fines) The criteria for imposing administrative fines prescribed in Article 449 (1) through (3) of the Act shall be as specified in attached Table 22. <Amended on Oct. 17, 2017> [This Article Newly Inserted on Mar. 3, 2015] ADDENDA <Presidential Decree No. 20947, Jul. 29, 2008> 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 Statutes) The following statutes are hereby repealed, respectively: Article 3 Deleted. <by Presidential Decree No. 21291, Feb. 3, 2009> Article 4 (Matters Concerning Establishment of Korea Financial Investment Association)
Article 5 (Important Contracts Subject to Reporting on Stocks, etc. Held in Bulk) "Material fact prescribed by Presidential Decree, including the essential terms and conditions of the contract" in Article 21 (2) of the Addenda to the Act means the matters provided for in the subparagraphs of Article 155. Article 6 (Special Cases concerning Restriction on Sale)
Article 7 (Applicability to Maintaining Requirements for Authorization for or Registration of Financial Investment Business Entities) The requirements prescribed in subparagraphs 1 (e) (i) and 4 (d) of attached Table 2, referred to in items of Article 19 (1) 2 and subparagraph 2 of Article 23, shall begin to apply from the first violation committed on or after the date this Decree enters into force. Article 8 (Applicability to Executive Officers) The requirements prescribed in the subparagraphs of Article 27 (3) shall begin to apply from the first violation committed on or after the date this Decree enters into force. Article 9 (Applicability to Requirements for Maintaining Authorization for Securities Finance Companies) The requirements prescribed in subparagraphs 1 (e) (i) and 4 (d) of attached Table 2, referred to in Article 319 (2) 2, shall begin to apply from the first violation committed on or after the date this Decree enters into force. Article 10 (Applicability to Requirements for Maintaining Authorization for Fund Brokerage Companies) The requirements prescribed in subparagraphs 1 (e) (i) and 4 (d) of attached Table 2, referred to in Article 345 (3) 2, shall begin to apply from the first violation committed on or after the date this Decree enters into force. Article 11 (Applicability to Requirements for Maintaining Authorization for Short-Term Finance Companies) The requirements prescribed in subparagraphs 1 (e) (i) and 4 (d) of attached Table 2, referred to in Article 348 (5) 2, shall begin to apply from the first violation committed on or after the date this Decree enters into force. Article 12 (Special Cases concerning Requirements for Maintaining Authorization for Foreign Financial Investment Business Entities, etc.) Where a branch office or any other business office (hereafter in this Article referred to as "branch office, etc.") of a foreign financial investment business entity, a foreign financial institution permitted under the Banking Act, or a foreign insurance company permitted under the Insurance Business Act (hereafter in this Article referred to as "financial investment business entity, etc.") engages in a business equivalent to the investment trading business as of one year after the promulgation of the Act, "70 percent" in Article 19 (1) 1 shall be construed as "50 percent" for the purposes of applying the requirements prescribed in the aforesaid subparagraph: Provided, That the same shall not apply to any of the following cases: <Amended by Presidential Decree No. 21291, Feb. 3, 2009>
Article 13 (Special Cases concerning Restriction on Limits of Asset Management) For the purposes of Article 80 (1) 2 (c), "30 percent" in subparagraph 2 of the aforesaid paragraph shall be construed as "100 percent" until February 3, 2011. Article 14 (Special Cases concerning Money Trusts) Article 15 (General Transitional Measures)
Article 16 (Transitional Measures concerning Commercial Paper) Article 17 (Transitional Measures concerning Appointment of Outside Directors and Composition of Board of Directors) A person obligated to newly appoint an outside director in accordance with Article 28 (1) 1 (excluding persons referred to in the subparagraphs of Article 9 of the Addenda to the Act) shall elect the outside director 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 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 concerning Establishment of Audit Committee) A person obligated to establish a new audit committee in accordance with Article 29 (1) (excluding persons referred to in the subparagraphs of Article 10 of the Addenda to 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 18-2 (Transitional Measures concerning Qualifications for Full-time Auditor) Article 29 (3) shall not apply to any full-time auditor who holds office in a financial investment business entity, which is obliged to appoint a new full-time auditor under Article 27 of the Act as on February 4, 2009, until his/her term of office ends. [This Article Newly Inserted by Presidential Decree No. 21611, Jul. 1, 2009] Article 19 (Transitional Measures concerning Reporting on Net Operating Capital) Article 20 (Transitional Measures concerning Restriction on Use of Trade Names in Foreign Languages) A person who uses a trade name in violation of Article 42 as at the time this Decree enters into force may use the trade name only for six months after the date this Decree enters into force. Article 21 (Transitional Measures concerning Entrustment of Business Affairs) Business affairs entrusted as at the time 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 for entrustment of business affairs expires, notwithstanding Article 45. Article 22 (Transitional Measures concerning Qualifications for Investment Solicitors)
Article 23 (Transitional Measures concerning Descriptions of Registration Statements, Half-Yearly and Quarterly Reports, and Accompanying Documents) Notwithstanding Articles 125 (3), 170 (1) and (2), where a corporation, whose total assets as of the end of the most recent business year are less than two trillion won and which is required to prepare consolidated financial statements, (including where the total assets of a corporation, whose total assets are less than two trillion won as of the end of the business year that begins on or after January 1, 2010, exceed two trillion won as of the end of the business year that begins on or after January 1, 2011) shall apply the Korean International Financial Reporting Standards (K-IFRS) for the business year that begins on or after January 1, 2011 and thereafter, it may describe matters concerning financial affairs and supplementary schedules (in the case of a registration statement, referring to the matters concerning financial affairs provided in Article 125 (1) 3 (c) and other matters prescribed and publicly notified by the Financial Services Commission) referred to in Article 168 (2) 7, and other matters prescribed and publicly notified by the Financial Services Commission, among descriptions of a registration statement, half-yearly or quarterly report on the basis of its financial statements, until the business year that begins on or after January 1, 2012, describe the audit opinion of an auditor on its financial statements (including where such audit opinion is substituted by verification and comments), and may submit a registration statement, 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 auditor on its financial statements. <Amended by Presidential Decree No. 21611, Jul. 1, 2009; Presidential Decree No. 22197, Jun. 11, 2010> Article 24 (Transitional Measures concerning Members of Market Efficiency Promotion Committee) Article 25 (Transitional Measures concerning Indirect Investment Schemes, etc.) Article 26 Omitted. Article 27 (Transitional Measures following Amendments to other Statutes) Article 28 (Relationship to other Acts) 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 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 statutes enforceable 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. ADDENDA <Presidential Decree No. 21480, May 6, 2009> Article 1 (Enforcement Date) This Decree shall enter into force on May 8, 2009. Articles 2 and 3 Omitted. ADDENDA <Presidential Decree No. 21518, May 29, 2009> Article 1 (Enforcement Date) This Decree shall enter into force on June 1, 2009. Articles 2 and 3 Omitted. ADDENDA <Presidential Decree No. 21565, Jun. 26, 2009> Article 1 (Enforcement Date) This Decree shall enter into force on June 30, 2009. (Proviso Omitted.) Articles 2 through 4 Omitted. ADDENDA <Presidential Decree No. 21611, Jul. 1, 2009> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Article 2 (Applicable Cases concerning Special Cases concerning Restriction on Limits of Asset Management) The amended provisions falling under Article 80 (1) 6 (a) through (c) shall not apply to any act committed prior to the enforcement of this Decree. Article 3 (Applicable Cases concerning Undisclosed Important Information) The amended provisions falling under Article 201 (1) shall apply beginning with the cases where information is disclosed, published, broadcasted, or provided after the date this Decree enters into force. Article 4 (Transitional Measures concerning Verification of Internal Control Guidelines by Financial Services Commission) Where any person files an application with the Financial Services Commission for verification of the internal control guidelines in accordance with the amended provisions of the latter part of Article 51 (2) 1 (b) within one month after this Decree enters into force, notwithstanding the same amended provisions, he/she may provide information according to the relevant internal control guidelines before he/she obtains verification from the Financial Services Commission. Article 5 (Transitional Measures concerning Executive Officers Holding other Jobs) The amended provisions of the same subparagraph shall not apply to an executive officer of a financial investment business entity who holds office this Decree enters into force and who holds other jobs, in violation of the amended provisions of Article 51 (2) 2 by the earlier of the expiration date of the term of office as an executive officer for the financial investment business entity, or the expiration date of the term of office as an executive officer of another company for which he/she holds an additional position. ADDENDA <Presidential Decree No. 21744, Sep. 21, 2009> Article 1 (Enforcement Date) This Decree shall enter into force on October 1, 2009. Articles 2 through 5 Omitted. ADDENDA <Presidential Decree No. 21765, Oct. 1, 2009> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Articles 2 through 5 Omitted. ADDENDA <Presidential Decree No. 21835, Nov. 20, 2009> Article 1 (Enforcement Date) This Decree shall enter into force on November 22, 2009. Articles 2 and 3 Omitted. ADDENDA <Presidential Decree No. 21898, Dec. 21, 2009> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Article 2 (Period of Validity)
Article 3 (Applicability, etc. concerning Limit of Sales Remuneration and Commission)
ADDENDA <Presidential Decree No. 21904, Dec. 24, 2009> Article 1 (Enforcement Date) This Decree shall enter into force on January 1, 2010. Articles 2 through 6 Omitted. ADDENDA <Presidential Decree No. 21978, Jan. 6, 2010> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Articles 2 through 4 Omitted. ADDENDA <Presidential Decree No. 22003, Jan. 27, 2010> Article 1 (Enforcement Date) This Decree shall enter into force on February 1, 2010. Articles 2 through 5 Omitted. ADDENDA <Presidential Decree No. 22151, May 4, 2010> Article 1 (Enforcement Date) This Decree shall enter into force on May 5, 2010. Articles 2 through 4 Omitted. ADDENDA <Presidential Decree No. 22197, Jun. 11, 2010> Article 1 (Enforcement Date) This Decree shall enter into force on June 13, 2010: Provided, That the amended provisions of Article 119 (1) 36 shall enter into force on July 6, 2010. Article 2 (Transitional Measure concerning Accounting Standards of Foreign Corporations, etc.) The amended provisions of Article 176 (6) shall start applying to the business year which begins first after January 1, 2010. Article 3 (Transitional Measure concerning Citation of other Statutes) By July 5, 2010, "the Korea Trade Insurance Corporation established under the Trade Insurance Act" in the amended provisions of Article 300-2 (1) 5 shall be deemed "the Korea Export Insurance Corporation established under the Export Insurance Act". ADDENDUM <Presidential Decree No. 22467, Nov. 2, 2010> This Decree shall enter into force on the date of its promulgation. ADDENDA <Presidential Decree No. 22493, Nov. 15, 2010> Article 1 (Enforcement Date) This Decree shall enter into force on November 18, 2010. Articles 2 through 5 Omitted. ADDENDA <Presidential Decree No. 22516, Dec. 7, 2010> Article 1 (Enforcement Date) This Decree shall enter into force on December 9, 2010. Articles 2 through 8 Omitted. ADDENDA <Presidential Decree No. 22637, Jan. 24, 2011> Article 1 (Enforcement Date) This Decree shall enter into force on January 24, 2011. (Proviso Omitted.) Articles 2 through 23 Omitted. ADDENDUM <Presidential Decree No. 22718, Mar. 22, 2011> This Decree shall enter into force on the date of its promulgation. ADDENDA <Presidential Decree No. 23073, Aug. 11, 2011> Article 1 (Enforcement Date) This Decree shall enter into force on August 19, 2011. Article 2 Omitted. ADDENDUM <Presidential Decree No. 23197, Sep. 30, 2011> This Decree shall enter into force on the date of its promulgation. ADDENDUM <Presidential Decree No. 23285, Nov. 4, 2011> This Decree shall enter into force on November 5, 2011. ADDENDA <Presidential Decree No. 23488, Jan. 6, 2012> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.) Article 2 Omitted. ADDENDA <Presidential Decree No. 23496, Jan. 6, 2012> Article 1 (Enforcement Date) This Decree shall enter into force on March 2, 2012. Article 2 Omitted. ADDENDA <Presidential Decree No. 23644, Feb. 29, 2012> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.) Articles 2 through 4 Omitted. ADDENDA <Presidential Decree No.23924, Jun. 29, 2012> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 208 (2) 3 shall enter into force two months after the date of its promulgation; the amended provisions of Articles 7 (3) 5-2, 68 (2) 4-2 through 4-4 and 181 (3) shall enter into force three months after the date of its promulgation; and the amended provisions of Article 296 (3) shall enter into force on January 1, 2013. Article 2 (Applicability concerning Issuance of Derivative-Combined Securities by Foreign Investment Traders) The amended provisions of Article 7 (3) 5-2 shall apply to derivative-combined securities issued outside Korea on or after the date the relevant provisions enter into force under the proviso to Article 1 of the Addenda. Article 3 (Applicability concerning Reports on Net Balance Held by Persons who have Sold Stocks Short) The amended provisions of Article 208 (2) 3 shall apply to stocks sold short on or after the date the relevant provisions enter into force under the proviso to Article 1 of the Addenda. Article 4 (Transitional Measures concerning Appointment, etc. of Outside Directors) Notwithstanding the amended provisions of Article 28 (3) 5, the term of office of a person who holds office as an outside director as at the time this Decree enters into force shall be subject to former provisions until his/her term of office expires. ADDENDUM <Presidential Decree No. 24317, Jan. 16, 2013> This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.) ADDENDA <Presidential Decree No. 24435, Mar. 23, 2013> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Articles 2 through 4 Omitted. ADDENDA <Presidential Decree No. 24497, Apr. 5, 2013> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Article 2 (Applicability to Modification of Standards for Submission of Reports on Material Facts) The amended provisions of Article 171 (1) shall apply beginning from the time when a resolution to acquire or transfer an essential business or asset is adopted after this Decree enters into force. ADDENDA <Presidential Decree No. 24636, Jun. 21, 2013> This Decree shall into force on the date of its promulgation. ADDENDA <Presidential Decree No. 24655, Jul. 5, 2013> Article 1 (Enforcement Date) This Decree shall enter into force on July 6, 2013. Article 2 (Applicability to Requirements for Authorization for Financial Investment Business) Amended Article 16 (8) 2 (c) shall begin to apply from a person who applies for authorization for financial investment business under Article 13 (1) of the Act or who applies for preliminary authorization for financial investment business under Article 14 (1) of the Act. Article 3 (Transitional Measures concerning Clearing Business, etc. of Transactions on Consignment by the Securities Depository)
ADDENDA <Presidential Decree No. 24697, Aug. 27, 2013> Article 1 (Enforcement Date) This Decree shall enter into force on August 29, 2013: Provided, That the following amended provisions shall enter into force on the dates specified in the following subparagraphs:
Article 2 (Applicability to Business Reports of Collective Investment Business Entities) Amended Article 94 (1) 3 shall begin to apply from the voting rights to be exercised on or after the date this Decree enters into force. Article 3 (Applicability to Calculation of Merger Value of Stock-Listed Corporations) Amended Article 176-5 (1) shall begin to apply from the first case where a board of directors adopts a resolution for a merger on or after the date this Decree enters into force. Article 4 (Applicability to Reports on Changes of Registered Matters of Private Equity Firms) Amended Article 290 (6) shall begin to apply from the first case where any matter referred to in subparagraphs of Article 290 (5) changes on or after the date this Decree enters into force. Article 5 (Applicability to Payment of Rewards for Reporting or Informing Unfair Trade, etc.) Amended Article 384 (8) shall begin to apply from the first report or information received on or after the date this Decree enters into force. Article 6 (Transitional Measures concerning Qualifications of Executive Officers) Where a person falling under amended Article 26-2 as at the time this Decree enters into force becomes to fall under any subparagraph of Article 24 (1) of the Act due to a cause which has occurred before this Decree enters into force, former provisions shall apply, notwithstanding amended Article 26-2. Article 7 (Transitional Measures concerning the Korea Exchange) Notwithstanding amended Article 354-3 (8), the Korea Exchange operating as at the time this Decree enters into force shall be deemed to have fulfilled the requirements for permission for an exchange: Provided, That it shall establish the system for preventing conflicts of interest prescribed in the same Article within six months from the date this Decree enters into force. Article 8 (Transitional Measures concerning Members of Director Nomination Committee) Notwithstanding amended Article 358, stock-listed corporations recommended by an organization established by the Korea Exchange with stock-listed corporations in a securities market as its members and stock-listed corporations recommended by an organization established by and consisting of stock-listed corporations in the KOSDAQ market under the former Article 358 shall be deemed to be the members of the director nomination committee. Article 9 (Transitional Measures concerning Requirements for Revocation of Authorization for Collective Investment Business Entities) Persons who have been authorized to engage in collective investment business referred to in 3-12-1, 3-12-2, 3-13-1, or 3-13-2 of attached Table 1 before this Decree enters into force shall be governed by the former provisions in respect of a period within which the persons shall commence its business, notwithstanding amended Article 373 (4) 1. Article 10 (Transitional Measures concerning Registration of Investment Advisory Business or Discretionary Investment Business) Persons who have been registered to engage in investment advisory business or discretionary investment business referred to in 5-0-1, 5-0-2, 6-0-1, or 6-0-2 of the former provisions of attached Table 3 as at the time this Decree enters into force shall be deemed to have been registered to engage in the investment advisory business or discretionary investment business referred to in 5-2-1, 5-2-2, 6-2-1, or 6-2-2 of the amended provisions of attached Table 3. Article 11 (Transitional Measures concerning Major Shareholders of Credit Rating Companies) In applying amended Article 335-6 of the Act to the major shareholders of a credit rating company deemed to be authorized under the Article 14 (1) of Addenda to the partially amended Financial Investment Services and Capital Markets Act (Act No. 11845) as at the time this Decree enters into force, the major shareholders shall be deemed to have fulfilled the requirements prescribed in amended subparagraphs 1 (d) and 4 (c) of attached Table 13-2 in respect of the acts conducted before this Decree enters into force, notwithstanding amended subparagraph 4 (c) of the same Table. Article 12 Omitted. Article 13 (Relationship with Other Acts) Where any other statutes cites the former provisions of this Decree as at the time this Act enters into force, the relevant provisions of this Decree shall be deemed to be cited in lieu of the former provisions, if any corresponding provisions exists herein. ADDENDUM <Presidential Decree No. 24841, Nov. 13, 2013> This Decree shall enter into force on November 14, 2013. ADDENDUM <Presidential Decree No. 25050, Dec. 30, 2013> This Decree shall enter into force on January 1, 2014 (Proviso Omitted.) ADDENDA <Presidential Decree No. 25279, Mar. 24, 2014> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Articles 2 and 3 Omitted. ADDENDUM <Presidential Decree No. 25532, Aug. 6, 2014> This Decree shall enter into force on August 7, 2014. ADDENDA <Presidential Decree No. 25553, Aug. 12, 2014> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Articles 104 (6) and (7) and 106 (4) 1, and subparagraph 19 of attached Table 5 shall enter into force from the date three months elapse after the promulgation of this Decree. Article 2 (Applicable Cases concerning Matters to be Complied with when Concluding of Specified Money Trust or Changing its Management Method) The amended provisions of Article 104 (6) shall apply beginning with cases where a specified money trust is concluded (including renewal) on and after the enforcement date prescribed in the proviso to Article 1 of the Addenda. ADDENDA <Presidential Decree No. 25843, Dec. 9, 2014> Article 1 (Enforcement Date) This Decree shall enter into force on January 1, 2015: Provided, That the amended provisions of Articles 154 (1) 4 shall enter into force on the date of its promulgation, and the amended provisions of Articles 34 (1) and 35 (2) 1 shall enter into force on April 1, 2015, and the amended provisions of Article 109 (1) 4 shall enter into force on July 1, 2015. Article 2 (Applicable Cases concerning Prohibition against Unsound Business Conduct) The amended provisions of Article 109 (1) 4 shall apply beginning with cases where a trust business entity conducts a transaction (including the renewal of existing transactions) with the inherent property of a trust business entity using trust property on or after July 1, 2015. ADDENDA <Presidential Decree No. 25945, Dec. 30, 2014> Article 1 (Enforcement Date) This Decree shall enter into force on the date the registration for a merger under Article 4 (6) of the Addenda to the Korea Development Bank Act (Act No. 12663) is completed. Articles 2 through 5 Omitted. ADDENDA <Presidential Decree No. 26135, Mar. 3, 2015> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Article 2 (Applicable Cases concerning Exception to Prohibition against Commingling and Management of Trust Property) The amended provisions of Article 109 (3) 5 (b) shall apply beginning with cases where a trust business entity that fulfills the requirements prescribed and publicly notified by the Financial Services Commission creates a trust which provides a guarantee for indemnifying for losses or an assurance of profits under the proviso to Article 104 (1) after this Decree enters into force. ADDENDUM <Presidential Decree No. 26190, Apr. 7, 2015> This Decree shall enter into force from the date three months elapse after the promulgation of this Decree. ADDENDA <Presidential Decree No. 26205, Apr. 20, 2015> Article 1 (Enforcement Date) This Decree shall enter into force on April 29, 2015. Articles 2 and 3 Omitted. ADDENDA <Presidential Decree No. 26374, Jun. 30, 2015> Article 1 (Enforcement Date) This Decree shall enter into force on July 1, 2015. Article 2 (Applicability to Exception to Prohibition on Market Disturbance) Amended subparagraphs 1 through 3 of Article 207-2 shall also apply where any of the acts prescribed in the items of subparagraph 1 of the same Article has been conducted and where a corrective order or suspension order has been issued by the Government before this Decree enters into force. ADDENDA <Presidential Decree No. 26600, Oct. 23, 2015> Article 1 (Enforcement Date) This Decree shall enter into force on October 25, 2015: Provided, That amended Articles 318-8 (2) and (3), 362 (2), and 363 (2) shall enter into force on January 25, 2016. Article 2 (Method for Calculation of Total Amount of Collective Investment Securities in Relation to Special Cases for Collective Investment Business Entities, etc.)
Article 3 (Applicability to Sale of Foreign Collective Investment Securities in Korea) Amended Articles 7 (4) 6-2 and 301 (4) shall begin to apply from the foreign collective investment securities to be sold in Korea by a foreign investment trust, a foreign collective investment business entity of a foreign undisclosed investment association, or a foreign investment company, etc. in accordance with such amended provisions after this Decree enters into force. Article 4 (Applicability to Members or Stockholders of Special-Purpose Companies) Amended Article 271-19 (2) shall begin to apply from an agreement, contract, etc. to be concluded between an entity referred to in Article 271-19 (2) 2 and the managing member of a private equity fund that has invested in a special-purpose company, to participate jointly in the management of an enterprise in which the special purpose company invests, after this Decree enters into force. Article 5 (Special Cases concerning Registration of Hedge Fund Investment Business by Filing Reports) Where a person, who runs a collective investment business as at the time the Act is promulgated under Article 5 (1) of the Addenda to the Act and is authorized for the whole collective investment business or the collective investment business for the former hedge fund investment business, files a report upon having fulfilled the requirements for maintaining registration for a hedge fund investment business, and the Financial Services Commission verifies whether he/she fulfills the requirements for maintaining the registration under paragraph (2) of the same Article, only the requirements prescribed in amended subparagraph 1 of the same Article shall apply, notwithstanding amended Article 271-3. In such cases, a person who fails to fulfill the requirements prescribed in amended subparagraph 2 of Article 271-3 shall fulfill such requirements by no later than December 31, 2015. Article 6 (Special Cases concerning Registration of Hedge Fund Investment Business by Filing Applications) Notwithstanding amended Article 271-2 (5), the requirements prescribed in amended subparagraph 2 of Article 271-3 shall apply to a collective investment business entity that files an application to register its hedge fund investment business under Article 6 of the Addenda to the Act. Article 7 (Transitional Measures concerning Restriction on Collective Investment Scheme's Acquisition of Securities Issued by Affiliated Companies) Where a collective investment business entity authorized before this Decree enters into force fails to comply with amended Article 86 (1) 1, the collective investment business entity shall be deemed to comply with such amended provisions for six months from the date this Decree enters into force. Article 8 (Transitional Measures concerning Compensation for Damage, etc. by Central Counterparty) Notwithstanding amended Article 318-8 (2) and (3), compensation, etc. for losses incurred from default arising from any trade subject to clearing conducted before the enforcement dates prescribed in the proviso to Article 1 of the Addenda shall be governed by the former provisions. Article 9 Omitted. ADDENDUM <Presidential Decree No. 26817, Dec. 30, 2015> This Decree shall enter into force on the date of its promulgation. ADDENDUM <Presidential Decree No. 26898, Jan. 12, 2016> This Decree shall enter into force on January 25, 2016. ADDENDUM <Presidential Decree No. 26961, Feb. 5, 2016> This Decree shall enter into force on the date of its promulgation. ADDENDA <Presidential Decree No. 27037, Mar. 11, 2016> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Article 2 Omitted. ADDENDA <Presidential Decree No. 27115, Apr. 29, 2016> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Articles 2 through 5 Omitted. ADDENDA <Presidential Decree No. 27205, May 31, 2016> Article 1 (Enforcement Date) This Decree shall enter into force on September 30, 2016. (Proviso Omitted.) Articles 2 and 3 Omitted. ADDENDA <Presidential Decree No. 27290, Jun. 28, 2016> Article 1 (Enforcement Date) This Decree shall enter into force on July 30, 2016. (Proviso Omitted.) Article 2 Omitted. ADDENDA <Presidential Decree No. 27291, Jun. 28, 2016> Article 1 (Enforcement Date) This Decree shall enter into force on June 30, 2016: Provided, That amended Article 7-2 (2) shall enter into force on June 30, 2017; amended Article 81 (4) on the date of its promulgation; and amended Article 168 (2) on March 30, 2018, respectively. Article 2 (Transitional Measures concerning Suspension of Information Exchanges with Affiliated Companies, etc.) Notwithstanding amended Article 51 (2) 2, a person holding a concurrent office at or being dispatched to an affiliated company of a financial investment business entity or any of the companies referred to in the subparagraphs of Article 51 (1) as at the time this Decree enters into force shall be governed by the former provisions until the period of the concurrent office or dispatch expires. Article 3 (Transitional Measures concerning Grounds for Submission of Reports on Material Facts) Notwithstanding amended Article 171, submission of reports on material facts that occurred before this Decree enters into force shall be governed by the former provisions. Article 4 (Transitional Measures concerning Restriction on Affairs of External Assessment Institutions) Notwithstanding amended Article 176-5 (12), any restriction on the affairs of assessment imposed under Article 165-4 (3) of the Act on any ground that occurred before this Decree enters into force shall be governed by the former provisions. Article 5 (Transitional Measures concerning Requirements for Major Shareholders among Requirements for Authorization for Financial Investment Business) Notwithstanding amended subparagraph 1 (e) (i) of attached Table 2, persons who have applied for authorization for financial investment business before this Decree enters into force shall be governed by the former provisions. ADDENDA <Presidential Decree No. 27322, Jul. 6, 2016> Article 1 (Enforcement Date) This Decree shall enter into force on July 25, 2016. Articles 2 through 4 Omitted. ADDENDA <Presidential Decree No. 27414, Jul. 28, 2016> Article 1 (Enforcement Date) Articles 2 through 4 Omitted. ADDENDA <Presidential Decree No. 27444, Aug. 11, 2016> Article 1 (Enforcement Date) This Decree shall enter into force on August 12, 2016. Articles 2 through 8 Omitted. ADDENDA <Presidential Decree No. 27472, Aug. 31, 2016> Article 1 (Enforcement Date) This Decree shall enter into force on September 1, 2016. Articles 2 through 7 Omitted. ADDENDA <Presidential Decree No. 27556, Oct. 25, 2016> Article 1 (Enforcement Date) This Decree shall enter into force on December 1, 2016. Article 2 Omitted. ADDENDA <Presidential Decree No. 27751, Dec. 30, 2016> Article 1 (Enforcement Date) This Decree shall enter into force on January 1, 2017. (Proviso Omitted.) Articles 2 through 12 Omitted. ADDENDUM <Presidential Decree No. 27861, Feb. 13, 2017> This Decree shall enter into force on the date of its promulgation. ADDENDA <Presidential Decree No. 28040, May 8, 2017> Article 1 (Enforcement Date) This Decree shall enter into force on the date promulgation: Provided, That the amended provisions of Article 77-6 (3) 6 shall enter into force one year after the date of its promulgation. Article 2 (Applicability to Holding of Shares of Exchange in Excess of Limit) The amended provisions of Article 366 (1) shall also apply to any corporation that has completed its registration of merger before this Decree enters into force. Article 3 (Transitional Measures concerning Dispositions against Financial Investment Business Entities, etc. that have Violated Restrictions on Entrustment of Business Affairs) Notwithstanding the amended provisions of subparagraph 2 of Article 45, application of dispositions, etc. under Article 420 or 422 of the Act, notification, etc. under Article 424 of the Act, or penalty provisions under subparagraph 4 of Article 446 of the Acts, against any financial investment business entity, etc. that has violated the restrictions on entrustment of business affairs before this Decree enters into force, shall be governed by the former provisions. Article 4 (Transitional Measures concerning Dispositions against Collective Investment Business Entities, etc. that have Violated Restrictions on Limits of Asset Management) Notwithstanding the amended provisions of Article 80 (1) 5, 5-4 and 8-2, and 81 (3), application of dispositions, etc. under Article 420 or 422 of the Act, notification, etc. under Article 424 of the Act, or penalty provisions under subparagraph 9 of Article 446 of the Act, against any collective investment business entity, etc. that has violated the restrictions on limits of asset management before this Decree enters into force, shall be governed by the former provisions. Article 5 (Transitional Measures concerning Dispositions, etc. against Issuers who have Violated Obligation to Submit Registration Statements) Notwithstanding the amended provisions of Article 120 (2), application of dispositions, etc. under Article 420 or 422 of the Act, notification, etc. under Article 424 of the Act, penalty surcharges under Article 429 (1), or penalty provisions under Article 444 of the Act, against any issuer that has violated the obligation to submit registration statements before this Decree enters into force, shall be governed by the former provisions. Article 6 (Transitional Measures concerning Underwriters' Liabilities for Damage) Notwithstanding the amended provisions of Article 135 (2) 1, the scope of persons liable to compensate for the damage caused by false entry, etc. in a registration statement or investment prospectus submitted before this Decree enters into force, shall be governed by the former provisions. Article 7 (Transitional Measures concerning Dispositions, etc. against Collective Investment Business Entities, etc. that have Violated Restrictions on Additional Issuance of Collective Investment Securities of Closed-End Funds) Notwithstanding the amended provisions of Article 242 (1), application of dispositions, etc. under Article 420 or 422 of the Act or notification, etc. under Article 424 of the Act against any collective investment business entity, etc. that has violated the restrictions on additional issuance of collective investment securities of a closed-end fund before this Decree enters into force, shall be governed by the former provisions. Article 8 (Transitional Measures concerning Dispositions, etc. against Private Equity Funds that have Violated Methods of Operating Surplus Funds) Notwithstanding the amended provisions of Article 271-16 (5), application of dispositions, etc. under Article 249-21 of the Act against any private equity fund, etc. that has violated the methods of operating surplus funds, shall be governed by the former provisions. ADDENDA <Presidential Decree No. 28384, Oct. 17, 2017> Article 1 (Enforcement Date) This Decree shall enter into force on October 19, 2017: Provided, That the amended provisions of Articles 68 (5) 2-2 and 109 (3) 1-2 shall enter into force on January 1, 2018. Article 2 (Transitional Measures concerning Criteria for Imposing Penalty Surcharges) Notwithstanding the amended provisions of Article 379 and attached Table 19-2, the application of the criteria for imposing penalty surcharges against a violation committed before this Decree enters into force, shall be governed by the former provisions of Article 379. ADDENDA <Presidential Decree No. 28564, Dec. 29, 2017> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Article 2 (Transitional Measures concerning Continued Compliance with Requirements for Authorization for Credit Rating Business) Notwithstanding the amended provisions of subparagraph 1 (d) (iii) of attached Table 13-2, the application of the provisions on continued compliance with requirements for authorization under Article 335-6 of the Act to a person who has obtained authorization for credit rating business pursuant to Article 335-3 of the Act before this Decree enters into force, shall be governed by the former provisions for up to three months after this Decree enters into force. ADDENDUM <Presidential Decree No. 28796, Apr. 10, 2018> This Decree shall enter into force on May 1, 2018: Provided, That the amended provisions of Articles 14-5 (2) 3, 118-17 (4) 3 and 4, the main sentence of Article 118-17 (6), and Article 271-28 shall enter into force on the date of its promulgation. ADDENDUM <Presidential Decree No. 29201, Sep. 28, 2018> This Decree shall enter into force on September 28, 2018. ADDENDA <Presidential Decree No. 29269, Oct. 30, 2018> Article 1 (Enforcement Date) This Decree shall enter into force on November 1, 2018. Articles 2 through 11 Omitted. ADDENDA <Presidential Decree No. 29495, Jan. 15, 2019> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Articles 68 (5) 13-5 and 99 (2) 5 (i) shall enter into force one month after the date of its promulgation, and the amended provisions of Article 70 (1) shall enter into force six months after the date of its promulgation. Article 2 (Applicability to Prohibited Activities of Crowdfunding Broker) The amended provisions of Article 68 (5) 13-4 and 13-6 shall begin to apply to cases in which securities are placed for public offering through crowdfunding brokerage after this Decree enters into force. Article 3 (Applicability to Delivery of Discretionary Investment Reports) The amended provisions of Article 100 (3) shall begin to apply to cases in which a discretionary investment report is delivered by mail or other means after this Decree enters into force. Article 4 (Special Cases concerning Investors through Crowdfunding Brokerage) With regard to the requirements investors need to satisfy for investments through crowdfunding brokerage, "15 million won" in the amended provisions of Article 118-17 (3) 1 (c) shall be deemed "10 million won" until December 31, 2019. Article 5 (Transitional Measures Concerning Requirements for Maintaining Registration of Investment Advisory Business Entity, Discretionary Investment Business Entity and Hedge Fund Investment Business Entity)
Article 6 (Transitional Measures concerning Registration of Hedge Fund Investment Business) Notwithstanding the amended provisions of Article 271-2 (3) and attached Table 3, the previous provisions shall apply to equity capital requirements that need to be satisfied by a person who filed an application for the registration of hedge fund investment business as at the time this Decree enters into force. Article 7 (Transitional Measures concerning Registration of Investment Advisory Business or Discretionary Investment Business)
ADDENDUM <Presidential Decree No. 29619, Mar. 12, 2019> This Decree shall enter into force on the date of its promulgation. ADDENDUM <Presidential Decree No. 29711, Apr. 23, 2019> This Decree shall enter into force on July 1, 2019: Provided, That the amended provisions of subparagraph 6 of Article 2, Articles 87 (1) 5 and 99 (1) 1-2 shall enter into force three months after the date of its promulgation. ADDENDA <Presidential Decree No. 29892, Jun. 25, 2019> Article 1 (Enforcement Date) This Decree shall enter into force on September 16, 2019. (Proviso Omitted.) Articles 2 through 10 Omitted. ADDENDA <Presidential Decree No. 30049, Aug. 20, 2019> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Articles 10 (3) 17, 68 (5) 1-2 and 1-3, and 387-2 (1) 40-4 shall enter into force three months after the date of its promulgation. Article 2 (Transitional Measures concerning Requirements for Individual Professional Investors) Notwithstanding the amended provisions of Article 10 (3) 17, the previous provisions shall apply to requirements that need to be satisfied by an individual professional investor who submitted relevant materials to the Financial Services Commission before the enforcement date under the proviso of Article 1 of the Addenda. ADDENDUM <Presidential Decree No. 30118, Oct. 8, 2019> This Decree shall enter into force on the date of its promulgation. ADDENDUM <Presidential Decree No. 30306, Dec. 31, 2019> This Decree shall enter into force on January 1, 2020: Provided, That the amended provisions of Article 181 (3) shall enter into force six months after the date of its promulgation. ADDENDA <Presidential Decree No. 30381, Jan. 29, 2020> Article 1 (Enforcement Date) This Decree shall enter into force on February 1, 2020. Article 2 (Special Cases concerning Reporting on Changes of Important Matters) Notwithstanding Article 3 of the Addenda, a person who holds stocks, etc. in bulk under Article 147 (1) of the Act and desires to be subject to the amended provisions of Article 154 (3) 2 or (5) 3 as at the time this Decree enters into force shall file a report on changes with the Financial Services Commission and the Korea Exchange pursuant to the amended provisions of Article 147 (4) of the Act and Article 155 of this Decree within five days from the date this Decree enters into force. Article 3 (Transitional Measures concerning Changes in Details of Report or Period Thereof) Where the duty to report arises pursuant to Article 147 (1) of the Act before this Decree enters into force, but the deadline does not arrive as at the time this Decree enters into force, the previous provisions shall apply, notwithstanding the amended provisions of Articles 154 (3), (5) and 200 (9). ADDENDUM <Presidential Decree No. 30509, Mar. 3, 2020> This Decree shall enter into force on the date of its promulgation. ADDENDA <Presidential Decree No. 30525, Mar. 10, 2020> Article 1 (Enforcement Date) This Decree shall enter into force on April 1, 2020: Provided, That the amended provisions of the main clause of Article 260 (1) shall enter into force on July 1, 2020 and the amended provisions of the former part of Article 260 (3) shall enter into force on April 1, 2022. Article 2 (Applicability to Restrictions on Limits of Asset Management) The amended provisions of the provisos of Articles 80 (1) 3-3 and 252 (1) 1 shall begin to apply where an identical issue in the index exceeds 30 percent after this Decree enters into force. Article 3 (Applicability to Unfair Business Practice of Money Market Fund) The amended provisions of Article 87 (4) 8-2 shall begin to apply where a money market fund invests its collective investment property in assets under the provision, with the exception of the subparagraphs, of Article 241 (1) or manages such property not as prescribed in paragraph (2) of the same Article after this Decree enters into force. Article 4 (Applicability to Matters to Be Stated in Trust Contract) The amended provisions of subparagraph 9 of Article 215, Articles 227 (1) 8, 234 (1) 8, 236 (1) 8, 236-2 (1) 8, 237 (1) 7, and subparagraph 7 of Article 239 shall begin to apply to cases in which a trust contract, etc. is prepared or modified after this Decree enters into force. ADDENDA <Presidential Decree No. 30586, Mar. 31, 2020> Article 1 (Enforcement Date) This Decree shall enter into force on April 1, 2020. (Proviso Omitted.) Articles 2 through 9 Omitted. ADDENDUM <Presidential Decree No. 30719, May 26, 2020> This Decree shall enter into force on May 27, 2020. ADDENDA <Presidential Decree No. 30893, Aug. 4, 2020> Article 1 (Enforcement Date)
Articles 2 through 4 Omitted. ADDENDA <Presidential Decree No. 30934, Aug. 11, 2020> Article 1 (Enforcement Date) This Decree shall enter into force on August 12, 2020. Articles 2 through 5 Omitted. ADDENDA <Presidential Decree No. 31012, Sep. 10, 2020> Article 1 (Enforcement Date) This Decree shall enter into force on September 10, 2020. Articles 2 and 3 Omitted. ADDENDUM <Presidential Decree No. 31380, Jan. 5, 2021> This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.) ADDENDA <Presidential Decree No. 31441, Feb. 9, 2021> Article 1 (Enforcement Date) This Decree shall enter into force three months after the date of its Promulgation: Provided, That the amended provisions of Article 68 (5) 12-2, subparagraphs 1 and 5 of Article129-2, and Article 271 (2) 1 and 2 shall enter into force on the date of its promulgation. Article 2 (Applicability to Prohibition on Unsound Business Activities of Investment Trader or Investment Broker)
Article 3 (Applicability to Prohibition on Unsound Business Activities When Concluding Discretionary Investment Contract) The amended provisions of Article 99 (4) 1-2 and 1-3 shall begin to apply where a discretionary investment contract is concluded after this Decree enters into force. Article 4 (Applicability to Prohibition on Unsound Business Activities When Concluding Money Trust Contract) The amended provisions of Article 109 (3) 1-2 and 1-3 shall begin to apply where a money trust contract is concluded after this Decree enters into force. Article 5 (Transitional Measures concerning Matters to Be Observed for Trust Business) Notwithstanding the amended provisions of Article 104 (6) 2, the previous provisions shall apply where the money management method is modified in accordance with a specific money trust contract concluded before this Decree enters into force (excluding a contract renewed after this Decree enter into force). Article 6 (Transitional Measures concerning Submission of Universal Shelf Registration Statements) Notwithstanding the amended provisions of Article 121 (1) 4, the previous provisions shall apply where a universal shelf registration statement was filed before this Decree enters into force and the procedure for accepting the statement is in progress as at the time this Decree enter into force. ADDENDA <Presidential Decree No. 31444, Feb. 17, 2021> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.) Articles 2 through 21 Omitted. ADDENDUM <Presidential Decree No. 31516, Mar. 2, 2021> This Decree shall enter into force on the date of its promulgation. ADDENDA <Presidential Decree No. 31536, Mar. 16, 2021> Article 1 (Enforcement Date) This Decree shall enter into force on the date of its promulgation. Article 2 (Applicability to Unsound Business Activities) The amended provisions of Article 87 (4) 8-3 through 8-5 shall begin to apply where a collective investment business entity performs an activity falling under the same amended provisions after this Decree enters into force. Article 3 (Transitional Measures concerning Calculation of Number of Investors in Privately Placed Funds) Notwithstanding the amended provisions of Article 14 (3), the previous provisions shall apply to the calculation of the number of investors in a privately placed fund created or established before this Decree enters into force: Provided, That the number of investors shall be calculated pursuant to the amended provisions of Article 14 (3), where the collective investment securities of a privately placed fund created or established before this Decree enters into force satisfy the standards under the relevant amended provisions as another collective investment fund managed by the same collective investment business entity acquires them after this Decree enters into force. ADDENDA <Presidential Decree No. 31553, Mar. 23, 2021> Article 1 (Enforcement Date) This Decree shall enter into force on March 25, 2021. (Proviso Omitted.) Article 2 Omitted. ADDENDUM <Presidential Decree No. 31612, Apr. 6, 2021> This Decree shall enter into force on Apr. 6, 2021. ADDENDA <Presidential Decree No. 31696, May 18, 2021> Article 1 (Enforcement Date) This Decree shall enter into force on May 20, 2021. Article 2 (Transitional Measures concerning Public Announcement of Incidental Business) Where incidental business is reported pursuant to Article 41 (1) of the former Act or where a restriction order or corrective order is issued pursuant to paragraph (2) of the same Article before this Decree enters into force, the method of and procedure for the public announcement of the relevant incidental business shall be governed by the former provisions, notwithstanding the amended provisions of Article 44. Article 3 (Transitional Measures concerning Report on Business Entrustment) Notwithstanding the amended provisions of the main clause of Article 46 (1), with the exception of its subparagraphs, former provisions shall apply to reporting on the details of entrustment when it has entrusted business affairs pursuant to Article 42 (1) of the former Act before this Decree enters into force. Article 4 Omitted. ADDENDA <Presidential Decree No. 31784, Jun. 18, 2021> Article 1 (Enforcement Date) This Decree shall enter into force on June 30, 2021: Provided, That the amended provisions of Articles 68 (5) 4-2, 176-9 (3) 2, and 387-2 (7) and (10) shall enter into force on June 20, 2021. Article 2 (Applicability to Unsound Business Practices Related to Overlapped Subscriptions) The amended provisions of Articles 68 (5) 4-2 and 176-9 (3) 2 shall begin to apply from cases where a registration statement is submitted or a public disclosure is made pursuant to Article 119 (1) of the Act for public offering or sale of securities after the enforcement date prescribed in the proviso to Article 1 of the Addenda. Article 3 (Transitional Measures concerning Legal Period of Deemed Requirements for Maintenance of Registration of Crowdfunding Investment Brokers) Notwithstanding the amended provisions of subparagraph 1 of Article 118-6, the former provisions shall apply to the period during which a crowdfunding broker breaches the requirements for maintaining registration under the former subparagraph 1 of Article 118-6 before this Decree enters into force. What is permitted during the 20 day cooling off period?During the 20-day cooling off period, the SEC registration form is transformed into a “preliminary” prospectus, which can be given to potential investors on a solicited or unsolicited basis. Sometimes referred to as the “red herring,” this form is considered preliminary until the SEC officially registers the security.
What is allowed during the cooling off period?During this time of review known as the cooling off period no sales may be made and no checks can be accepted from investors. During this time a Registered Representative may accept indications of interest and may send out preliminary prospectuses.
What can be given to a client during the 20 day cooling off period for a new securities offering a prospectus b advertisement C recommendation D red herring?During the 20 day cooling off period, firms may only solicit or obtain indications of interest, publish tombstones, and offer red herrings (preliminary prospectus) to customers. They may not sell, take deposits for, or advertise the security until the issue's registration is effective (as per the SEC).
How long is the cooling off period for IPO?Soliciting Investors
Twenty-one days after the S-1 form is filed—a time known as the “cooling off period”—the company and its bank can meet with investors. It is during this period that the bank announces the terms of the IPO and begins taking orders from prospective investors. These orders are not guaranteed.
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