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Laws of the Republic of Korea |
1
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
Presidential Decree No. 15569, Dec. 31, 1997
Amended by Presidential Decree No. 15761, Apr. 1, 1998 Presidential Decree No. 15817, June 24, 1998
Presidential Decree No. 16261, Apr. 24, 1999
Presidential Decree No. 16323, May 24, 1999
Presidential Decree No. 17264, Jun. 30, 2001
Presidential Decree No. 17645, Jun. 29, 2002
Presidential Decree No. 18170, Dec. 30, 2003
Presidential Decree No. 18297, Feb. 28, 2004
Presidential Decree No. 18312, Mar. 17, 2004
Presidential Decree No. 18365, Apr. 19, 2004
Presidential Decree No. 18401, May 25, 2004
Presidential Decree No. 20120, Jun. 28, 2007
Presidential Decree No. 20549, Jan. 18, 2008
Presidential Decree No. 20653, Feb. 29, 2008
Article 1 (Purpose)
The purpose of this Decree is to provide for matters delegated by the
Specialized Credit Financial Business Act and matters necessary
for the
enforcement of such matters.
(1) The term "goods prescribed by Presidential Decree" in subparagraph
10 of Article 2 of the Specialized Credit Finance Business
Act (hereinafter
referred to as the "Act") means the goods of the following subparagraphs:
1. Facilities, installations, machinery and apparatus;
2. Construction machinery, vehicles, ships and aircraft; and
3. Real property and property rights directly related to the goods referred
to in subparagraphs 1 and 2.
(2) Deleted.
(4) The term "fixed period as prescribed by Presidential Decree" in
subparagraph 10 of Article 2 of the Act means the period corresponding
to 20/100 of the durable years as prescribed by Articles 28, 29 and 29-2
of the Enforcement Decree of Corporate Tax Act.
(5) The term "fixed period as prescribed by Presidential Decree" in
subparagraph 11 of Article 2 of the Act means one year.
(6)
Where a new contract for facilities lease, etc. is entered into due to
the termination of a contract for facilities lease, etc.,
in the application
of the period as referred to in paragraphs (4) and (5), the period which
has elapsed before the termination
of the previous contract shall be deducted.
Article 2-2 (Scope, etc. of Persons in Special Relationship)
(1) The term "person in
special relationship as prescribed by Presidential
Decree" in subparagraph 17 (a) of Article 2 of the Act means persons
(hereinafter
referred to as a "person in a special relationship") falling under
any of the following subparagraphs:
1. A person falling under any of the following items, in casess where
the person in question is an individual:
(a) A spouse (including a person in a de facto marriage relationship;
hereinafter the same shall apply);
(b) A paternal blood relative within the sixth degree and a wife of
a paternal relative within the fourth degree;
(c) A husband and children of a paternal blood relative within the
third degree;
(d) A maternal blood relative within the third degree and his/her spouse
and children;
(e) A paternal blood relative within the second degree of a spouse,
and his/her spouse;
(f) A lineal ascendant of the family of his/her birth of an adopted person;
(g) A person whose child has been adopting family by
an adopter, his/her
spouse and a lineal descendant of both families of a person and
his/her spouse whose child has been adopted
by an adopter;
(h) The real mother of a person born out of wedlock;
(i) A person who maintains his/her livelihood by his/her money
and
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
3
other property, and a person who lives in the same livelihood;
(j) The corporation concerned or the organization concerned and its
executive, in cases where the person in question invests alone or
jointly with a person in any relationship referred to in items
(a)
through (i), above, more than 30/100 or he/she is exercising his/her
substantial influence over the principal matters of the
operation
of a corporation or organization, such as appointment and dismissal
of an executive, etc.; and
(k) The corporation or organization concerned and its executive, in
casesss where the person in question invests alone or jointly
with
a person in the relationship as referred to in items (a) through
(j), above, more than 30/100 or he/she exercises substantial
influence over the principal matters of the operation of a corporation
or an organization, such as appointment and dismissal of
executives,
etc.; and
2. A person falling under any of the following items in casesss where
the person in question is a juristic person or organization:
(a) An executive;
(b) An affiliated company or its executive;
(c) An individual who invests in the person in question, alone or jointly
with a person in the relationship referred to in the items
of
subparagraph 1 more than 30/100 or who exercises substantial
influence over the principal matters of the operation of the person
in question, such as appointment and dismissal of executives, and
a person or organization (excluding an affiliated company;
hereinafter
the same shall apply) in a relationship with him/her
referred to in the items of subparagraph 1, and its executive; and
(d) The
organization concerned or its executive, in casesss where the
person in question invests alone or jointly with a person in a
relationship
referred to in items (a) through (c), above, more than
30/100 or exercises substantial influence over the principal matters
of
the operation of the organization such appointment and dismissal
of executives, etc.
(2) The term "person prescribed by Presidential Decree" in subparagraph
17 (b) of Article 2 of the Act means a person falling under
any of the
following subparagraphs:
1. A stockholder who has solely elected of more than a half the representative
director or directors or pursuant to mutual agreement
or contract, etc.
with other stockholders; and
2. A stockholder as determined by the Financial Services Commission
as a person deemed to exercise dominant influence over decisions
on
the principal proceedings or the performance of principal affairs, such
as the management strategies and change in organization,
etc..
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
Article 2-3 (Scope of Credit Offerings)
(1) The term "things as prescribed by Presidential Decree" in subparagraph
18 of Article 2 of the Act means the following subparagraphs:
1. The amount of credit created by the purchase, etc. (including provided
with services) of goods by corporate credit card under
Article 7-2 (3)
5 of the Restriction of Special Taxation Act;
2. The amount of financing of the fund to credit card members;
3. The expenses a facilities lease business operator has paid for the
acquisition of the particular goods delivered to a user of
leased facilities
and all the expenses paid for the facilities lease to a user of the leased
facilities under the lease contract
for the facilities;
4. The amount of deferred payment sales;
5. The amount of installment financing used (including all the expenses
a user of installment financing paid for the purchase of
the goods under
the contract for sale and purchase of the goods);
6. The amount invested and amount financed to a new technology business
operator;
7. The amount of loan;
8. The amount of discounted off a bill;
9. The amount purchased on credit sold under Article 46 (1) 2 of the
Act;
10. The amount purchasing of the credit or the securities; and
11. The amount of payment guarantee.
(2) The Financial Services Commission may, notwithstanding paragraph
(1), not include the transactions
falling under any of the following
subparagraphs in the scope of credit offering:
1. A transaction deemed too minor to incur the loss to a financial institution;
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE
BUSINESS ACT
5
and
2. A transaction deemed appropriate to exclude from the scope of credit
offering in light of the situation of the transaction concerned,
such
as effect, etc. on the financial market.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
Article 2-4 (Scope of One's Own Capital)
The term "thing as prescribed by Presidential Decree" in subparagraph 19
of Article 2 of the Act means the amount of money with
addition or deduction
of an amount of money caused by errors in the settlement of accounts to
or from the total amount of paid-in
capital, capital surplus and profit surplus,
etc..
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
Article 3 (Concurrent Credit Business Operator)
(1) The term "person as prescribed by Presidential Decree" in Article 3
(3) 1 of the Act means a person falling under any of the
following
subparagraphs:
1. A financial institution authorized by the Banking Act;
2. Korea Development Bank established under the Korea Development
Bank Act;
3. Industrial Bank of Korea established under the Industrial Bank of
Korea Act;
4. Export-Import Bank of Korea established under the Export-Import
Bank of Korea Act;
5. Deleted. 6. A merchant bank established under the Merchant Banks Act;
7. A mutual savings bank established under the Mutual Savings Banks
Act;
8. The National Federation of Credit Unions established under the Credit
Unions Act;
9. The Federation of Community Credit Cooperatives established under
the Community Credit Cooperatives Act; and
10. Deleted.
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
6
1. A person operating a large scale store under subparagraph 3 of Article
2 of the Distribution Industry Development Act; and
2. A person making a business by continuously guiding the management
of and supplying the goods to the multiple wholesale and retail
stores
in the same line of business under a contract.
Article 3-2 (Attached Documents for Permission and Registration)
(1) A person who intends to obtain the permission of a credit card
business
under the provisions of Article 4 of the Act shall submit an application
(including an application in electronic form)
documents of the following
subparagraphs to the Financial Services Commission. In such cases, a
public official in charge shall
confirm a certified copy of registration of
a corporation through the joint use of administrative information under
Article 21
(1) or 22-2 (1) of the Electronic Government Act. If an applicant
does not consent to the confirmation, he/she shall attach such
documents
thereto: 1. The articles of association;
2. Deleted. 3. Documents proving payment of capital;
4. A plan of operation for three years after commencement of a business
(including estimated financial statements and estimated statement
of
accounts concerning earnings);
5. Financial statements and documents annexed thereto;
6. Financial statements and documents annexed thereto of the corporation
concerned in cases where a major stockholder under the provisions
of Article 4 is a corporation;
7. Documents showing the present business status, such as actual results
of credit and number of business connections, etc., in cases
where an
applicant for permission is a specialized credit finance company or a
concurrent credit business operator; and
8. A curriculum vitae and certificates of career of an executive.
(2) A person who intends to make registration of a facilities lease
business,
an installment financial business or a new technology project finance
business under the provisions of Article 4 shall
submit an application to
the Financial Services Commission with the attached the documents as
referred to in paragraph (1) 1, 3.
5. 7 and 8 thereto. In such cases, a
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
7
public official in charge shall confirm a certified transcript of registration
of a corporation through the joint use of the administrative
information
under Article 21 (1) or 22-2 (1), if an applicant does not consent to such
confirmation, he/she shall attach it to
the application.
(1) The term "investor as prescribed by Presidential Decree" in Article
6 (1) 1 of the Act means a major stockholder (including
a stockholder
in a special relationship with the main stockholder).
(2) The term "investor as prescribed by Presidential Decree"
in Article
6 (1) 2 of the Act means a major stockholder (including a stockholder
in a special relationship with the main stockholder).
[This Article Wholly Amended by Presidential Decree No. 20549, Jan. 18, 2008]
Article 5 (Persons in Default)
The term "person as prescribed by Presidential Decree" in Article 6 (1)
3 of the Act means a person who has incurred the bad debt
repayment
credit to the institutions as referred to in subparagraphs 1 through 22
of Article 2 (2) of the Enforcement Decree of
Use and Protection of Credit
Information Act, and whose credit information is intensively controlled
and utilized by the credit
information intensive institution under Article
17 (2) 1 of the Use and Protection of Credit Information Act, and in whose
case
three years have not passed from the date of such intensive control
and utilization.
[This Article Wholly Amended by Presidential Decree No. 20549, Jan. 18, 2008]
Article 6 (Related Finance Acts and Subordinate Statutes
)
The term "acts and subordinate statutes related to finance as prescribed
by Presidential Decree" means the acts and subordinate
statutes of the
following subparagraphs:
1. Banking Act;
2. Acts and subordinate statutes as referred to in subparagraphs 1 through
26 of Article 13 (1) of the Enforcement Decree of Banking
Act;
3. Act on the Structural Improvement of the Financial Industry; and
4. Act on Real Name Financial Transactions and Guarantee of Secrecy.
[This Article Wholly Amended by Presidential Decree No. 16261,
Apr. 24, 1999]
Article 6-2 (Standard of Financial Soundness Necessary for Approval of
ENFORCEMENT DECREE OF SPECIALIZED CREDIT
FINANCE BUSINESS ACT
8
Credit Card Business)
(1) The Standard of financial soundness under the provisions of Article
6 (1) 5 shall be in accordance with the classification of
the following
subparagraphs: 1. In cases where an applicant for permission is an institution subject
to inspection of the Financial Supervisory Service under
the provisions
of Article 38 of the Act on the Establishment. etc. of Financial Services
Commission: It shall satisfy the standard
of financial soundness as
prescribed by the Financial Services Commission, taking into account
the standard concerning sound management
as prescribed by the Acts
and subordinate statutes concerning the establishment and operation,
etc. of the institution concerned;
2. Deleted; and 3. In cases where an applicant is a person other than subparagraph 1:
The rate of total amount of debts against its own capital of
the company
concerned (including the business conglomerate concerned, except a
company operating financial business or insurance
business in casesss
where a major stockholder is a company belonging to a business
conglomerate (excluding a business conglomerate
falling under Article
17 (1) 1 and 2 of the Enforcement Decree of the same Act; hereinafter
referred to as the "business conglomerate")
under the provisions of
subparagraph 2 of Article 2 of the Monopoly Regulation and Fair Trade
Act) shall be less than the rate
as prescribed by the Financial Services
Commission within the extent of 200/100.
(2) The term "corporation as prescribed by Presidential Decree" in Article
6 (1) 6 of the Act means a corporation whose major stockholder
(including
stockholders who are persons in a special relationship with the main
stockholder) is a person falling under any of subparagraphs
1 through
5 of Article 6 (1) of the Act.
be arranged by a person who intends to obtain the permission of the credit
card business under the provisions of Article 6 (2) 2
of the Act shall be
as follows:
1. Necessary human resources, such as specialized human resources with
the specialty concerning credit card business and personnel
necessary
for computerization shall be arranged; and
2. Necessary computerization facilities for the operation of credit card
business shall be built, and storage, etc shall be secured.
(2) A plan of operation under the provisions of Article 6 (2) 3 of the Act
shall satisfy the requirements of the following subparagraphs:
1. A plan for securing credit card members and credit card member storage
necessary for the smooth operation of credit card business
shall be
appropriate and realizable;
2. A plan for raising the fund for prompt settlement of the purchase price
related to use of credit cards shall be appropriate and
realizable;
3. The prospect of earnings and expenses shall be appropriate and
realizable; and
4. It shall not be apprehended to the sound financial order.
(3) The term "persons as prescribed by Presidential Decree" in Article
6
(2) 4 of the Act means the persons of the following subparagraphs:
1. The main stockholder of a corporation who is the main stockholder
(including the substantially dominant person in casesss where
a person
who substantially dominates the principal management affairs of a
corporation who is the main stockholder is expressly
different from
the main stockholder of the corporation); and
2. The representative of a corporation who is the main stockholder.
(4) The main stockholder under Article 6 (2) 4 of the Act shall
satisfy
the requirements as prescribed in annexed Table 1.
(5) The term "requirements as prescribed by Presidential Decree" in Article
6 (3) of the Act means the requirements under annexed
Table 1-2.
(6) The Financial Services Commission may determine the definite matters
concerning the requirements as referred to
in paragraphs (1) through (5).
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS
ACT
10
Article 6-4 (Application for Cancellation of Registration)
A person who intends to apply for cancellation of registration under
the
provisions of Article 10 (1) of the Act shall submit to the Financial Service
commission an application for cancellation of
registration in which the
matters of the following subparagraphs are stated:
1. Name of a company;
2. Contents of the specialized credit financial business for which
cancellation of registration is intended; and
3. Reason for cancellation of registration.
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
Article
6-5 (Standards, etc. of Operation of Incidental Business)
(1) A concurrent credit business operator who has made a registration
of a credit card business under the provisions of the proviso to Article
3 (1) of the Act shall not operate the incidental business
under the provisions
of Article 13 (1) of the Act. 1. An average balance, during a quarter, of the credit (excluding the
credit incurred by purchasing of the goods or being provided
with services
with corporate credit card under the provisions of Article 7-2 (3) 5
of the Restriction of Special Taxation Act by
a person in special
relationship with a credit card business operator under the provisions
of Article 50 (1) of the Act) incurred
by purchasing of the goods or
being provided with services, etc. with credit card by the credit card
members; and
2. An amount of money used with a debit card during a quarter by a
debit card member.
(3) A credit card business operator may have a third party conduct the
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS
ACT
11
business of the following subparagraphs for him/her under the provisions
of Article 13 (2) of the Act:
1. Business of issuance of debit cards and prepaid cards;
2. Business of sale of prepaid cards (including the affairs of refund);
and
3. Business of settlement of accounts of purchase price used by debit
cards and prepaid cards (including the business of approval
of
transactions)
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001>
Article 6-6 (Renewal or Issuance in Substitution of
Credit Card and Debit
Card)
A credit card business operator may, when falling under any of the following
subparagraphs, renew or issue in substitution credit
cards and debit cards
under the provisions of the proviso to Article 14 (1) of the Act: 1. In cases of obtaining the written consent (including the consent by
an electronic document bearing an officially approved digital
signature
under the provisions of subparagraph 3 of Article 2 of the Digital
Signature Act as an electronic document under the
provisions of
subparagraph 1 of Article 2 of the same Act) to the renewal or issuance
as substitution for a credit card or a debit
card which has not been
used within a period of six months prior to the scheduled date of renewal
or issuance in substitution from
the credit card member concerned and
the debit card member concerned; and
2. In cases where no objection has been raised within 20 days after the
notifying the credit card member or debit card member concerned
of
the scheduled issuance one month prior to the scheduled date of renewal
or issuance in substitution for a credit card or debit
card which has
been used within the period of six months prior to renewal or issuance
in substitution.
[This Article Newly Inserted by Presidential Decree No. 17645, June 29, 2002]
Article 6-7 (Issuance of Credit Cards and Method of
Recruiting Credit
Card Members)
(1) The term "matters as prescribed by Presidential Decree" in Article 14
(2) 2 (e) of the Act means the following matters:
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
12
1. Whether an applicant of credit card has a debt (hereinafter referred
to as "debt in arrears") which he/she has failed to refund
to the credit
card business operator or other financial institutions (referred to the
financial institutions under the provisions
of Article 2 of the Act on
the Structural Improvement of the Financial Industry) within the term
of redemption or not; and
2. Method of refund or repayment when the debt in arrears has been
refunded or repaid.
(2) The term "person older than the age prescribed by Presidential Decree"
in Article 14 (3) 2 of the Act means a person 18 years
old or older.
(3) The term "requirements as prescribed by Presidential Decree" in Article
14 (3) 3 of the Act means the following
requirements:
1. In cases of a minor, written consent of a legal representative and
documents evidencing his/her income, such as a certificate
of
employment and a certificate of tax payment, etc. shall be submitted;
and
2. It shall be confirmed by the method prescribed by Ordinance of the
Prime Minister whether he/she is the person in question.
(4)
The term "recruitment as prescribed by Presidential Decree" in Article
14 (4) 2 of the Act means the recruitment of a credit card
by a credit
card business operator without confirmation as to whether he/she is the
person in question by means of an officially
issued digital signature under
the provisions of subparagraph 3 of Article 2 of the Digital Signature Act:
Provided, That cases
where it can be confirmed that the person in question
has applied for credit card ownership by the information that can identify
the person in question such as identification card issuance institution and
date of issuance, etc. of an applicant and by receiving
the signature of
the person in question, shall be excluded.
(5) Under the provisions of Article 14 (4) 3 of the Act, a credit card business
operator shall not recruit credit card by means
of the following
subparagraphs: 1. Recruitment providing or on the condition of providing economic benefit
exceeding 10/100 of annual holder fee of the credit card
(referring
to an average annual membership fee of major credit cards, if there
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE
BUSINESS ACT
13
is no annual membership fee) in connection with the issuance of credit
cards;
2. Recruitment in the street, such as roads and private roads, etc, under
the provisions of Article 2 of the Road Act and Article
2 of the Private
Road Act; and
3. Recruitment through visit: Provided, That cases where a visit after
obtaining prior consent or a visit to a place of business
shall be excluded.
(6) Matters concerning the average annual membership fee of paragraph
(5) 1, the scope of street of subparagraph
2, the procedure for prior consent
and the scope of place of business of proviso to subparagraph 3 shall be
determined and publicly
announced by the Financial Services Commission.
1. Conditions of transaction, such as annual fees, interest rates, fees,
limits on use, methods of settlement, dates of settlement,
terms of
credit card validity and level of credit class, etc.;
2. Procedures by which credit card or debit card holders may raise objections
in cases of a dispute arising between a credit card
business operator
and a credit card or debit card holders; and
3. Matters deemed that there is intention, negligence or gross negligence
of a credit card member or a debit card member in cases
where theft
or loss, forgery or falsification of a credit card or a debit card arise.
[This Article Wholly Amended by Presidential
Decree No. 18365, Apr. 19, 2004]
Article 6-8 (Matters to be Observed by Recruiters)
A recruiter shall observe the matters of the
following subparagraphs under
the provisions of Article 14-2 (2) of the Act in the recruitment of credit
card members:
1. A recruiter shall inform an applicant that he/she is a recruiter registered
with the Financial Services Commission under the provisions
of Article
14-3 (1) of the Act;
2. A recruiter shall explain to an applicant the conditions of transaction
of credit card, such as contractual terms and conditions
and annual
membership fee, etc. for the credit card;
3. A recruiter shall confirm whether an applicant is identity and have
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS
ACT
14
each applicant complete an application and the relevant documents,
etc. in person, according to issuance of credit card;
4. A recruiter shall enter his/her name and registration number in the
application for issuance of credit card drawn up by an applicant;
5. No recruiter shall mediate the conclusion of a contract of issuance
of credit card for a person other than for a credit card business
operator;
6. A recruiter shall observe the procedures as prescribed by Article 14
(4) of the Act and Article 6-7 (5) of this Decree in the
recruitment
of credit card holders; and
7. A recruiter shall not reveal or make use of confidential information,
such as credit information (referring to the credit information
as
prescribed by subparagraph 1 of Article 2 of the Use and Protection
of Credit Information Act) and private life, etc. of an
applicant which
he/she has obtained in the course of recruiting credit card members.
[This Article Newly Inserted by Presidential
Decree No. 18365, Apr.19, 2004]
Article 6-9 (Responsibility for Credit Card)
The term "fixed period as prescribed by Presidential Decree" in Article 16
(2) of the Act means the period of 60 days from the date
of receipt of
the notification of loss or theft, etc. as prescribed by paragraph 1 of the
same Act.
[This Article Newly Inserted by Presidential Decree No. 18365, Apr. 19, 2004]
Article 6-10 (Scope of Intention or Gross Negligence)
The scope of intention or gross negligence as prescribed by Article 16 (9)
of the Act shall be as the following subparagraphs:
1. Leakage of a personal identification number intentionally or by gross
negligence; and
2. Transfer or offer for purposes of security of a credit card or a debit
card.
[This Article Newly Inserted by Presidential Decree No. 17645, June 29, 2002]
Article 6-11 (Matters to be observed by Agency for
Settlement of Accounts,
etc.)
An agency for settlement of accounts as referred to in subparagraph 5
of Article 2 of the Act shall observe the matters of the following
subparagraphs
under the provisions of Article 19 (5) of the Act:
1. An agency shall submit the credit information of a person selling the
goods or providing the services, and the details of agency
for transactions
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
15
by credit card, debit card or prepaid card (hereinafter referred to as
"credit card, etc.") to a credit card business operator;
2. An agency shall make a trade name and address of a person selling
the goods or providing the services known to the credit card,
the debit
card or the prepaid card holders (hereinafter referred to as the "credit
card holders, etc."); and
3. Each agency shall comply with demands for cancellation of order,
repayment, etc. by the credit card, etc.
[This Article Newly Inserted by Presidential Decree No. 17645, June 29, 2002>
Article 6-12 (Termination of Contract with Merchant
Stores)
A credit card business operator shall, when falling under any of the following
subparagraphs, terminate a contract for
member store made with a credit
card merchant store under the provisions of Article 21 of the Act: 1. In cases where a credit card merchant store has been subject to a
punishment in violation of the provisions of Article 19 (3)
and (4)
or 20 (1) of the Act;
2. In cases where a credit card member store has been notified in writing
by the government tax office concerning a violation of
the provisions
of Articles 19 (1), (3) through (5) and 20 (1); and
3. Other cases as prescribed by Ordinance of the Prime Minister as cases
corresponding to subparagraphs 1 and 2.
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
Article 7 (Restriction on Recruitment of Merchant
Stores)
The scope of merchant stores which a concurrent credit business operator
who has made a registration of a credit card business
under the provisions
of the proviso to Article 3 (1) of the Act may recruit under the provisions
of Article 23 (1) of the Act,
shall be as set out under the following
subparagraphs: 1. A business operator who conducts business activity in the place of
business of the concurrent credit business operator concerned;
2. A business operator who has entered into a sales agency contract with
the concurrent credit business operator concerned; and
3. A business operator who conducts a business by introduction of trade
name, trade mark and management technique of the concurrent
credit
business operator concerned according to a management trust contract,
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS
ACT
16
etc..
Article 7-2 (Restriction on Limit on Use of Prepaid Card, etc.)
(1) The maximum amount of money of issue on the face of a prepaid
card
under the provisions of Article 24 of the Act shall be one half of a million
won: Provided, That in cases of registered prepaid
cards, shall be the
maximum two million won.
1. Matters concerning the standard as prescribed by a credit card business
operator under the provisions of Article 14 (2) 2 of the
Act;
2. Matters to be observed when fixing the limit of use of a credit card;
3. Matters concerning the contents of contractual terms and conditions
as prescribed by a credit card business operator;
4. Matters concerning the management of member stores;
5. Matters concerning the protection and adminstration of credit
information, including the prohibition of rejection of issuance
of credit
cards in casesss where there is no procedure for separate consent of
credit card members, etc. for the provision and
use of credit information,
and no consent to the offer and use of the credit information;
6. Matters to be observed according to credit collection;
7. Matters concerning the examination procedure in casess where a credit
card member raises an objection to the purchase price used
under the
provisions of Article 16 (10) of the Act; and
8. Matters to be observed when classifying members for the application
of fee rate.
[This Article Wholly Amended by Presidential Decree No. 17645, June 29, 2002]
Article 8 (Deposits)
The term "amount of money as prescribed by Presidential Decree" in Article
25 (1) of the Act means the amount of money equivalent
to 3/100 of the
total amount of prepaid cards issued as at the end of each quarter.
Article 9 (Executor of Right of Deposit)
A person who can be an executioner of a right under the provisions of
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ACT
17
Article 26 92) of the Act shall be a person falling under any of the following
subparagraphs:
1. A financial institution authorized by the Banking Act;
2. A financial institution established by a special Act; and
3. An incorporated association established with the authorization of the
Financial Services Commission, such as the Specialized Credit
Financial
Business Association, etc. under the provisions of Article 62 of the
Act.
Article 10 (Utilization of Various Funds)
(1) A facilities lease business operator who intends to borrow funds under
the provisions of Article 29 of the Act shall submit
documents proving
that a person (hereinafter referred to as the "user of leased facilities")
who has entered into a contract of
facilities lease, etc. is a person in receipt
of loan of the fund concerned, and a written contract of facilities lease,
etc. to
the loan transaction institution.
(2) In cases of paragraph (1), a facilities lease business operator may
borrow money by means of comprehensively determining the
amount of
loan and conditions of utilization, etc. in consultation with the loan
transaction institution.
Article 11 (Import of Medical Appliances)
A facility lease business operator who intends to obtain permission or report
under Article 42 (1) of the Pharmaceutical Affairs
Act, in order to import
medical appliances which are the specific goods, shall attach facilities lease
a contract to a written
application or a written report.
Article 13 (Special Case for Registration and Entry)
A facilities lease business operator who intends to register and effect
registration
of a ship or an aircraft in his/her possession under the provisons
of Article 33 (2) of the Act shall submit an application, attaching
a written
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
18
contract of the facilities lease, etc. and documents proving that a user
of the leased facilities has fulfilled the necessary conditions
for registration
and registry.
Article 13-2 (Facilities Lease to Small or Medium Enterprise)
The rate of the facilities lease to small and medium enterprises under
the
provisions of Article 37 of the Act shall be more than 30/100 of the annual
operation amount of facilities leases, etc. except
for the facilities lease,
etc. of the following subparagraphs:
1. Facilities leases, etc. to public agencies and non-profit organizations;
2. Facilities leases, etc. to other facilities lease business operator for
his/her facilities lease, etc. to users of leased facilities;
3. Facilities leases, etc. of passenger vehicles; and
4. Facilities leases, etc. of the goods manufactured by small and medium
enterprises.
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
Article 14 (Scope of Fund)
The term "fund as prescribed by Presidential Decree" in Article 42 of the
Act means the fund pursuant to Article 4 (1) of the Act
on the Special
Measures for the Promotion of Venture Businesses.
Article 15 Deleted.
The term "businesses as prescribed by Presidential Decree" in Article 46
(1) 5 of the Act means the businesses of the following
subparagraphs:
1. Businesses Purchasing the credit held by other specialized credit
financial business operators and concurrent credit business
operators
in connection with the business referred to in Article 46 (1) 1 through
4 of the Act, or the securities issued based
on such credit:
2. Payment guarantee businesses;
3. Securitized asset management businesses under the Asset-Backed
Securitization Act; and
4. Other businesses as prescribed by Ordinance of the Prime Ministry
as businesses related to the specialized credit financial business
and
lending business.
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
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Article 17 (Operating Standards of Lending Businesses)
As prescribed by Article 46 (2) of the Act, the average balance of a specialized
credit finance company, during one quarter, of the credit incurred by lending
business prescribed by paragraph (1) 3 of the same
Article shall not exceed
the total amount of the average balance, during a quarter, of the credit
caused by the business prescribed
by paragraph (1) 1 and (1) 2 of the
same Article as of the end of each quarter. In such cases, the credit of
the following subparagraphs
shall be excluded in computation of the amount
of credit incurred by the lending business prescribed by paragraph (1)
3 of the
same Article: 1. Credit incurred by lending to enterprises;
2. Credit incurred by relending to the obligator with the modification
in expiry and interest rate, etc. of the credit for the credit
readjustment
of the obligator;
3. Housing mortgage credit as prescribed by subparagraph 3 of Article
2 of the Korea Housing Finance Corporation Act; and
4. Credit incurred by the financing business to the credit card members
as prescribed by Article 13 (1) 1 of the Act.
[This Article Newly Inserted by Presidential Decree No. 18365, Apr. 19, 2004>
Article 18 (Methods of Raising Fund)
(1) The term "methods as prescribed by Presidential Decree" in Article
47 (1) 5 of the Act means the following methods:
1. Borrowing and issuance of foreign currency securities being performed
by registration as a foreign currency business management
agency as
prescribed by Article 8 of the Foreign Exchange Transactions Act;
2. Transfer of the credit held in connection with the businesses of Article
46 (1) 1 through 4 of the Act; and
3. Issuance of the securities based on the credit possessed in connection
with the businesses of Article 46 (1) 1 through 4 of the
Act.
(2) The provisions of Article 19 (1) shall apply mutatis mutandis to cases
where a specialized credit finance company raises
funds by means prescribed
by paragraph (1) 3.
Article 19 (Restriction on Issuance, etc. of Corporate Bonds or Bills)
(1) A specialized credit finance company shall not issue
bonds or bills,
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
20
or sell the securities possessed by methods of the following subparagraphs
as prescribed by Article 47 (2) of the Act:
1. Issuance or sale to an individual; and
2. Issuance or sale to unspecified multiple corporations by public
subscription, sale over the counter or any other similar means.
(2) The provisions of paragraph (1) shall not apply to the issuance of
bonds or bills by means of the following subparagraphs:
1. Issuance of bonds by acquisition by a person who has obtained the
permission of a securities business under the Securities and
Exchange
Act; and
2. Issuance of bills through acquisition, discount or mediation of a merchant
bank under the Merchant Banks Act or a securities company
under
the Securities and Exchange Act.
Article 19-2 (Extent of Persons in Special Relationship with Major
Stockholder)
The term "person in a special relationship with major stockholder" in Article
50 (1) of the Act means a person in a special relationship
with the majority
stockholder.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008>
Article 19-3 (Amount of Transactions with Major Stockholder,
etc.)
(1) The term "amount of money as prescribed by Presidential Decree" in
the former part of Article 50 (2) of the Act means
the lesser of the amount
of a single transaction (hereinafter referred to in this Article as the "amount
of single transaction"),
which is equivalent of his/her own capital or one
billion won as determined and publicly announced respectively by the
Financial
Services Commission: Provided, That in cases of the acquisition
of stocks, the amount of money acquired from the securities exchanges
and the KOSDAQ market under the Korea Securities and Futures Exchange
Act, or from a foreign market as a market similar thereto,
shall be excluded
from the amount of single transaction.
(2) The term "Transactions as prescribed by Presidential Decree" in the
former part of Article 50 (2) of the Act means transactions
acquiring
corporate bonds issued by means of public subscription or sale under Article
2 (3) or (4) of the Securities and Exchange
Act.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS
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Article 19-4 (Report and Public Announcement of Transactions with Major
Stockholder)
(1) The term "matters as prescribed by Presidential Decree" in Article 50
(4) of the Act means the matters of the following subparagraphs:
1. Scale of the credit offering to major stockholders as of the end of each
quarter;
2. Amount of increase and decrease of the credit offering and terms and
conditions of transaction of the credit offering during each
quarter;
3. Amount of stocks acquired by the major stockholders as of the end
of each quarter;
4. Amount of increase and decrease of the stocks held and price of acquisition
of the stocks possessed during each quarter; and
5. Other matters as prescribed by the Financial Services Commission.
(2) A specialized credit finance company shall report and publicly
announce
the matters of paragraph (1) within one month from the end of each quarter.
[This Article Newly Inserted by Presidential
Decree No. 20549, Jan. 18, 2008]
Article 19-5 (Deferred Period for Amount Exceeding Limit of Credit
Offering)
The term "period as prescribed by Presidential Decree" in Article 50 (5)
of the Act means a year.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008>
Article 19-6 (Extent of Exercise of Undue Influence
of Major stockholders)
The term "act as prescribed by Presidential Decree" in Article 50-2 (5)
3 of the Act means an act falling
under any of the following subparagraphs:
1. An act demanding a specialized credit finance company to an act in
violation; and
2. An act demanding to engage in transactions with a major stockholder
himself/herself or a third party on terms and conditions different
from
those of normal transactions in interest, fee and mortgage.
[This Article Newly Inserted by Presidential Decree No. 20549,
Jan. 18, 2008]
Article 19-7 (Requirements of Qualifications for Executives)
(1) The term "person as prescribed by Presidential
Decree" in the body
of Article 50-3 of the Act means a person falling under any of the
subparagraphs of Article 401-2 (1) of the
Commercial Act.
subparagraph 4 of Article 50-3 of the Act means the following acts and
subordinate statutes:
1. Act on the Structural Improvement of the Financial Industry;
2. Banking Act;
3. Deleted; 4. Merchant Banks Act;
5. Trust Business Act;
6. Securities and Exchange Act;
7. Futures Trading Act;
8. Indirect Investment Asset Management Business Act;
9. Insurance Business Act;
10. Mutual Savings Banks Act;
11. Credit Unions Act;
12. Use and Protection of Credit Information Act;
13. Special Purpose Companies for Mortgage-Backed Bonds Act; and
14. Korea Housing Finance Corporation Act.
(3) The term "person as prescribed by Presidential Decree" in subparagraph
7 of Article
50-3 of the Act means a person falling under any of the following
subparagraphs as an executive and an employee (in cases of a corporation
or a company of which permission, authorization or registration has been
cancelled under Article 14 of the Act on the Structural
Improvement of
the Financial Industry, referring to an executive and an employee at the
time when the grounds for timely corrective
measures under the provisions
of Article 10 of the same Act arises) at the time when the grounds for
cancellation of permission,
authorization or registration of business arises:
1. An auditor or a member of the audit committee;
2. An executive who has been subject to measures, such as caution, warning,
censure, suspension from office, demand for dismissal
and other
measures due to unlawful and unjustifiable conduct in connection with
the occurrence of grounds for the cancellation
of permission,
authorization or registration pursuant to Acts and subordinate statutes
related to finance under the Act and the
provisions of paragraph (2);
3. An employee who has been subject to the measures equivalent to, or
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
23
higher than suspension from office due to unlawful and unjustifiable
Acts in connection with the occurrence of grounds for the cancellation
of permission, authorization or registration pursuant to the Acts and
subordinate statutes related to finance under the Act and
the provisions
of paragraph (2); and
4. A person who has resigned from his/her position or resigned from his/her
office before being punished as a person subject to punishment
under
the provisions of subparagraph 2 or 3.
(4) The term "person as prescribed by Presidential Decree" in subparagraph
8 of Article 50-3 of the Act means a person falling under
any of the following
subparagraphs as a person deemed responsible for the grounds for the
timely corrective measures, etc. for
a financial institution as a result of
close examination by the Governor of the Financial Supervisory Service
of the grounds for
such timely corrective measures, etc. for the financial
institution: 1. An executive who has received advice of dismissal or an order for
suspension from office;
2. An employee who has received a disposition of suspension from office
or dismissal from office; and
3. A person who has resigned from his/her position or resigned his/her
office before he/she is punished as a person subject to punishment
under the provisions of subparagraph 1 or 2
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
Article 19-8 (Election of Outside Directors, etc.)
(1) The term "specialized credit finance company falling under the standard
as prescribed by Presidential Decree in consideration
of asset and
management business, etc." in the former part of Article 50-4 (1) of the
Act, in Article 50-5 (1) of the Act and in
50-7 (1) of the Act means a
credit card business operator whose total assets as at the end of the latest
business year is two trillions
or more.
(2) The term "corporation in an important business relationship or in a
competitive relationship in business or in a cooperative
relationship as
prescribed by Presidential Decree" in Article 50-4 (4) 10 of the Act means
a corporation (excluding an institutional
investor under Article 17-2 (8)
of the Enforcement Decree of the Corporate Tax Act and the corresponding
ENFORCEMENT DECREE OF
SPECIALIZED CREDIT FINANCE BUSINESS ACT
24
foreign financial institution) of the following subparagraphs:
1. A corporation whose total business results with the relevant company
during the recent three business years is more than 10/100
of the
total amount of assets (referring to the total amount of assets in the
balance sheet of the relevant company as at the end
of the latest business
year) or the total amount of sales (referring to the total amount of
sales in the profit and loss statements
of the relevant company as
of the end of the latest business year);
2. A corporation who has made a single transaction contract with the
relevant company during the latest business year, the amount
of which
is equivalent to more than 10/100 of its total amount of sales;
3. A corporation to and for whom the total amount of money, securities
and other bills or bonds lent or borrowed and the amount of
guarantee
for obligation, such as provision of security, etc. by the relevant company
during the recent business year is more than
10/100 of the capital
(referring to the capital in the balance sheet of the relevant company
as at the end of the latest business
year);
4. A corporation in which the relevant company has invested more than
5/100 of the capital (referring to the capital of a corporation
in which
the relevant company has invested) as at the date of the regular general
meeting of stockholders of the relevant company;
5. A corporation who has entered into a technical cooperation agreement
with the relevant company;
6. An accounting corporation elected as an auditor of the relevant company;
and
7. A corporation who has entered into an advisory contract with the relevant
company, such as for legal advice, management advice,
etc.
(3) The term "person as prescribed by Presidential Decree" in Article 50-4
(4) 12 of the Act means any of the following person:
1. A person holding office as an outside director, non-standing director
or non-standing auditor of more than two different stock
listed
corporations or KOSDAQ listed corporations other than the relevant
company;
2. An attorney-at-law, an certified public accountant or licensed tax
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
25
accountant conducting audits or firm for taxation business of the relevant
company, or making an advisory contract with the relevant
company,
such as for legal advice, management advice, etc., or a person providing
other advisory services;
3. A person hold stocks equivalent to more than 1/100 of the total number
of issued stocks of the relevant company; and
4. A person whose balance of transactions (excluding standardized
transactions with the relevant company being conducted by standardized
contracts under Article 2 (1) of the Regulation of Standardized Contracts
Act) with the relevant company exceeds 100 million won,
other than
under subparagraph 3.
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
Article 19-9 (Requirements for Audit Committee)
The term "accounting or financial specialist as prescribed by Presidential
Decree" in Article 50-5 (2) 2 of the Act means any of
the following persons:
1. A person who is qualified as a certified public accountant and has
been engaged in business related to such qualifications for
more than
five years after obtaining such qualifications;
2. A person who has an academic degree higher than a master's degree
in finance or accounting and has worked as a researcher or an
instructor
in a field related to finance or accounting with a research institute
or a university for more than five years;
3. A person who has worked with a listed stock corporation or a KOSDAQ
listed corporation in business related to finance or accounting
as an
executive for more than five years or an employee and executive for
more than ten years;
4. A person who has worked with the State, a local government, a public
agency under the Act on the Management of Public Agencies,
for the
Financial Supervisory Service, the Korea Securities and Futures
Exchange under the Korea Securities and Futures Exchange
Act or
an institution related to securities under Article 2 (17) of the Securities
and Exchange Act in a business related to finance
or accounting or
in supervisory business, for more than five years; and
5. A person who has worked with an institution subject to inspection
under Article 38 of the Act on the Establishment, etc. of Financial
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
26
Services Commission in business related to finance or accounting for
more than five years.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
Article 19-10 (Internal Control Standards)
(1) The matters of the following subparagraphs shall be included among
of internal control standards (hereinafter referred to as
the "internal control
standards") under the provisions of Article 50-6 (1) of the Act:
1. Matters concerning the division of business and a structure organization;
2. Matters concerning the management of risk arising in the management
of assets or operation of business;
3. Matters concerning the necessary procedures to be observed in the
performance of business by executives or employees;
4. Matters concerning the construction of the system for efficient delivery
of the necessary information for decision making by management;
5. Matters concerning the procedure and method for ascertaining as to
whether the executives and employees observe internal control
standards, and the dismissal of executives and employees who have
violated internal control standards;
6. Matters concerning the procedure and standards for the prevention
of unfair trade such as a report, etc. on the details of transaction
of
the securities by executives and employees;
7. Matters concerning the establishment of internal control standards
or the procedure for amendment thereof; and
8. Matters as prescribed by the Financial Services Commission as the
definite standard concerning the matters of subparagraphs 1
through
7.
(2) A specialized credit finance company shall, when it intends to establish
or amend internal control standards, undergo a resolution
of the board
of directors.
(3) The Financial Services Commission may recommend the modification
of internal control standards to prevent reoccurrence of violations
against
the Acts and subordinate statutes for a specialized credit finance company
which has been discovered to have violated the
Acts and subordinate statutes
as a result of inspection by the Financial Supervisory Service under the
provisions of Article 53-2
of the Act.
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
Article 19-11 (Duties of Compliance Officers, etc.)
(1) A specialized credit finance company shall, when it appoints or dismisses
a compliance officer (hereinafter referred to as
the "compliance officer")
under the provisions of Article 50-6 (2) of the Act, notify the Financial
Services Commission of such
fact.
(2) A compliance officer shall exercise the duties of his/her office with
the diligence of a good supervisor, and shall not take
charge of duties
of either of the following business:
1. Business concerning asset management; and
2. Business of a specialized credit finance company under the provisions
of Article 46 (1) of the Act.
(3) A specialized credit finance company shall, when a compliance officer
demands any of its executives or employees to submit any
data or information
in the performance of his/her duties, have such executive or employee
relevant meet such demand faithfully.
(4) A specialized credit financial company shall not cause any undue
disadvantage in personnel affairs to a person who has been
a compliance
officer due to any reason in connection with the performance of the duties
concerned.
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
Article 19-12 (Exercise, etc. of Minority Stockholder's
Rights)
(1) The term "person who possesses stocks as prescribed by Presidential
Decree" in Article 50-7 (1) through (6) of the
Act means a person who
holds stocks by the following means:
1. Possession of stocks;
2. Acquisition of a power of attorney concerning the exercise of stockholder's
rights; and
3. Joint exercise of stockholder's rights of more than two stockholders.
(2) The term "specialized credit financial company falling
under the standard
as prescribed by Presidential Decree" in Article 50-7 (2) through (6) of
the Act means a credit card business
operator whose capital as of the
end of the latest business year exceeds 100 billion won.
[This Article Newly Inserted by Presidential
Decree No. 17264, June 30, 2001]
Article 19-13 (Restriction on Transactions with Major Stockholders, etc.)
ENFORCEMENT DECREE OF
SPECIALIZED CREDIT FINANCE BUSINESS ACT
28
The term "case as prescribed by Presidential Decree" in body of Article
50-8 (2) of the Act means cases falling under any of the
following
subparagraphs: 1. In cases where the liabilities of a major stockholder (applicable to
a company only, including persons in a special relationship,
being a
company; hereinafter the same shall apply in this Article) exceed its
assets;
2. In cases where the credit risk of a major stockholder is classified under
the standard as prescribed by the Financial Services
Commission as
a result of the appraisal of the credit risk of the major stockholder
concerned according to the standard of classification
of the soundness
of assets as prescribed by the Financial Services commission by the
financial institution (excluding a financial
institution whose major
stockholder is the major stockholder concerned) who is the largest credit
provider to the major stockholder;
and
3. In cases where a major stockholder is appraised as being in the class
ineligible for investment by more than two credit appraisal
business
operators of the credit appraisal business operators under the Use and
Protection of Credit Information Act
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
Article 19-14 (Management Guidelines)
The matters of the following subparagraphs shall be included in the
management guideline under the provisions of Article 53-3 (1)
of the Act:
1. Matters concerning the holding standards for one's own capital;
2. Matters concerning the standards of soundness classification and
management of the assets hold by a specialized credit finance
company,
such as loan credit, etc.;
3. Matters concerning the accumulation standards for appropriation and
reserves; and
4. Matters concerning the standards for risk management and accounts
management.
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
Article 19-15 (Matters to be Reported)
(1) In cases where a ground prescribed by the subparagraphs of Article
54 (2) of the Act arises, it shall be reported to the Financial
Services
commission within seven days from the date on which such round has
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS
ACT
29
arisen.
(2) In cases of Article 54 (2) 3 of the Act, when the main stockholder
concerned has been approved as a major stockholder under
Article 6 (3)
of the Act, notwithstanding the Article 54 (2) of the Act, he/she shall
be deemed to have reported.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
Article 20 (Grounds for Demand for Designation as
Auditor)
The term "case applicable to a reason as prescribed by Presidential Decree"
in Article 56 of the Act means cases falling
under any of the following
subparagraphs: 1. In cases where the Act or the order of the Financial Services Commission
under the Act has been violated in the recent three years;
2. In cases where the Financial Services Commission recognizes that it
is necessary to designate an auditor as a result of inspection
under
the provisions of Article 53 (2) or 69 of the Act.
Article 21 (Standards, etc. for Suspension of Business and Imposition
of
Penalty Surcharges)
(1) The period of suspension of business or the amount of penalty surcharges
according to the classification of violations subject
to the order of suspension
of business or the imposition of penalty surcharges under the provisions
of Article 57 (1) of the Act
or Article 58 (1) through (3) shall be as specified
in the annexed Table 2.
concerned, etc.
(2) A person who has been notified under the provisions of paragraph
(1) shall pay the penalty surcharge to the receiving agency
as prescribed
by the Financial Services Commission within 20 days: Provided, That when
the payment of the penalty surcharge can
not be made within that period
due to natural disaster or other unavoidable reason, the payment shall
be made within seven days
after such ground has.
1. Resolution of the Financial Services Commission;
2. Tax collection resolution and a notice; and
3. Payment demand notice.
(2) The Commissioner of the National Tax Service shall, when the business
concerning the disposition on
default entrusted under the provisions of
paragraph (1) is complete, notify the Financial Services Commission in
writing of the
time of the completion of such business and other necessary
matters within 30 days from the date of completion.
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
Article 23 (Contributions)
(1) Deleted.
of contributions under the provisions of Article 69 (3) of the Act.
(1) The Financial Services Commission shall entrust the Governor of the
Financial Supervisory Service (hereinafter referred to in
this Article as
the "Governor of the Financial Supervisory Service") under the Act on the
Establishment, etc. of Financial Services
Commission with the following
business, under the provisions of Article 69-2 (1) of the Act:
1. Receipt of applications for registration, notification as to whether
registered or not and cancellation of registration under
the provisions
of Article 3, 7 and 10 of the Act;
1-2. Grant of opportunities for submission of opinions under the provisions
of Article 14-4 (3) of the Act and notices to recruiters
under the provisions
of paragraph 4 of the same Article;
2. Requests for and receipt of reports under the provisions of Article 53
(2) of the Act;
3. Receipt of reports under the provisions of Article 54 of the Act; and
4. Acceptance of notices of appointment and dismissal of compliance officers
under Article 19-11 (1).
(2) The Financial Services Commission shall entrust, under the provisions
of Article 69-2 (2) of the Act, the head (hereinafter
referred to in this
Article as the "head of the association") of the specialized credit financial
business association established
under the provisions of Article 62 of the
Act with the business under the provisions of Article 54-2 (2) of the Act.
[This Article Newly Inserted by Presidential Decree No. 17264, June 30, 2001]
Article 24 (Procedure for Imposition and Collection
of Penalty Surcharges)
(1) The Financial Services Commission shall, when it imposes a penalty
surcharge under the provisions of
Article 72 (2) of the Act, notify a person
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
32
subject to disposition of penalty surcharge of the payment with a clear
statement as to the violation and the amount of penalty
surcharge, etc.
in writing after the investigation and confirmation of the violation concerned.
(2) The Financial Services Commission
shall, when it intends to impose
a penalty surcharge as prescribed by paragraph (1), provide a person subject
to disposition of
a penalty surcharge with an opportunity of a state of
an opinion orally or in writing, with the fixed period of ten days or longer.
In such cases, if no statement of opinion is made by the fixed date, he/she
shall be deemed to have no opinion.
(3) The Financial Services Commission shall, in determination of the amount
of a penalty surcharge, take into account the motive
for the violation
concerned and the consequences, etc.. thereof
(4) The procedure for collection of penalty surcharges shall be prescribed
by Ordinance of the Prime Minister.
This Decree shall enter into force on January 1, 1998.
Article 2 (Abrogation of other Acts and Subordinate Statutes)
The Acts and
subordinate statutes of the following subparagraphs are
abrogated:
1. Enforcement Decree of Credit Card Business Act; and
2. Enforcement Decree of Equipment Rental Business Act.
Article 3 (Transitional Measures Concerning Scope of Recruitment of
Merchant
Stores)
The provisions of Article 7 shall not apply to the merchant stores recruited
under the authorization of the Minister of Finance
of Economy prior to
the enforcement of this Decree by a concurrent credit business operator
who has obtained the permission of
the credit card business under the
provisions of Article 3 (2) 2 of the Act.
Article 4 Deleted.
Article 5 Omitted
ADDENDA
(2) through (4) Omitted
ADDENDA
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 6 Omitted
ADDENDUM
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted
ADDENDUM
This Decree shall enter into force on July 1, 2002.
Article 2 (Transitional Measures Concerning Restriction of Business
Incidental
to Credit Cards)
(1) A credit card business operator managing an incidental business in
excess of the limit under the amended provisions of Article
6-5 (2) at
the time when this Decree enters into force, shall bring it into compliance
with the amended provisions by December
31, 2003. In order to perform
such compliance, shall submit to the Financial Supervisory Commission
for approval a detailed plan
for incremental reduction of the part exceeding
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
34
the limit by July 31, 2002.
(2) The credit sold shall be excluded from the credit which has arisen
for credit card holders of the amended provisions of Article
6-5 (2) by
December 31, 2004.
ADDENDA
(2) (Applicability Concerning Renewal or Issuance in Substitution of Credit
Cards and Debit Cards) The amended provisions of subparagraph
1 of Article
6-6 shall apply from the credit card or the debit card first renewed or issued
in substitution after this Decree enters
into force.
(3) (Applicability concerning Requirements for Principal Investors at the
Time of Approval of Credit Card Business)
The amended provisions of annexed
Table 1 shall apply from the relevant requirements of the first application
for approval of the
credit card business after this Decree enters into force.
(4) (Transitional Measures concerning Restriction on Incidental Business
of Credit Card Business Operator) A credit card business operator managing
an incidental business in excess of the limit under
the amended provisions
of Article 6-5 (2) at the time when this Decree enters into force, shall bring
it into compliance with the
amended provisions by December 31, 2007. In
order to perform such compliance, shall submit to the Financial Supervisory
Commission
for approval a detailed plan for incremental reduction of the
part exceeding the limit by January 31, 2004.
ADDENDA
This Decree shall enter into force on March 1, 2004.
Articles 2 through 5 Omitted
ADDENDUM
(1) (Enforcement Date) This Decree shall enter into force on April 21, 2004.
(2) (Applicability concerning Period of Facilities
Lease) The amended
provisions of Article 2 (4) shall apply from the relevant period of the contract
for facilities lease first
entered into after this Decree enters into force.
(3) (Transitional Measures concerning Management Standard of Loan
Business of
Specialized Credit Financial Company) A specialized credit finance
company managing a loan business in excess of the limit under
the amended
provisions of Article 17 at the time when this Decree enters into force, shall
bring it into compliance with the amended
provisions by December 31, 2008.
In order to perform such compliance, it shall submit for approval a detailed
plan for incremental
reduction of the part exceeding the limit to the Financial
Supervisory Commission by June 30, 2004.
ADDENDA
This Decree shall enter into force on May 30, 2004.
Article 2 Omitted
ADDENDUM
This Decree shall enter into force on January 20, 2008: Provided, That
the amended provisions of annexed Table 1 shall enter into
force on March
20, 2008.
Article 2 (Applicability Concerning Requirements for Major Stockholder)
The amended provisions of annexed Table 1 shall apply from
the
requirements concerned of an application under Article 3-2 (1) firstly
submitted to the Financial Services Commission after
this Decree enters
into force.
This Decree shall enter into force on the date of its promulgation: Provided,
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS
ACT
36
That of Presidential Decree which is amended under Article 2 of the Addenda,
the amended part of Presidential Decree promulgated
prior to this Decree
enters into force, but its enforcement date has not arrived, shall enter
into force on the relevant Presidential
Decree respectively.
Article 2 Omitted.
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
37
Classification Requirements
1. In cases where a
major stockholder is
an institution
(excluding
specialized private
equity fund
companies;
hereinafter referred to
as a "financial
institution") subject
to inspection by the
Financial Services
Commission under
Article 38 of the Act
on the Establishment,
etc. of Financial
Services Commission
(a) An amount of money (hereinafter referred to as "its own
capital") subtracting the total amount of the liabilities from
the
total amount of the assets in the balance sheet as
of the end of the recent business year shall be more than
three times the amount
of money to be invested, and satisfy
the standard as prescribed by the Financial Services
Commission.
(b) The standards concerning the financial soundness
applicable to such financial institution shall meet the
standards prescribed
by the Financial Services
Commission.
(c) In cases where such financial institution belongs to a
business conglomerate, etc. subject to restriction of mutual
investment
(hereinafter referred to as the "business
conglomerate, etc. subject to restriction of mutual
investment") under the Monopoly Regulation
and Fair
Trade Act, or is a company belonging to the affiliated
principal obligers (hereinafter referred to as the "affiliated
principal obligators"), as a business conglomerate under
the same Act, as prescribed by the Financial Services
Commission, the
rate of liabilities of the business
conglomerate, etc. subject to restriction of mutual
investment or the affiliated principal
obligers (referring
to the rate dividing the total amount of liabilities in the
balance sheet as of the end of the recent business
year
by its own capital, in this case, a financial institution shall
be excluded from the companies subject to computation
of
the rate of liabilities; hereinafter the same shall apply)
shall not exceed 300/100 and satisfy the standard prescribed
by the
Financial Services Commission.
[Attached Table 1]
(d) The investment funds shall not be funds raised by borrowing
as prescribed by the Financial Services Commission.
(e) The following
requirements shall be met: Provided, That
if the degree of violation, etc. is deemed insignificant, it
shall be excluded:
() It shall not have been sentenced by a fine or
heavier criminal punishment in the last five
years in violation of the Act, this Decree, Acts and
subordinate statutes related to finance (referring to
the Acts and subordinate
statutes related to finance
as referred to in Article 19-7 (2); hereinafter the same
shall apply), the Monopoly Regulation and
Fair Trade
Act and the Punishment of Tax Evaders Act.
() It shall not have violated sound credit order, such
as default of obligations, etc. in the recent five years.
() It shall not
have been designated as an insolvent
financial institution under the Act on the
Structural Improvement of the Financial Industry, or
shall not be a major stockholder or a person in a special
relationship with
such major stockholder of a financial
institution permission, authorization or registration for
which has been cancelled under
the Act or other Acts
and subordinated statutes: Provided, That a person
recognized as not responsible for such insolvency by
a declaration of the court or a person falling under
the standard prescribed by the Financial Services
Commission such as assuming,
etc. the financial
responsibility for the insolvency, shall be excluded.
() It shall not have violated other sound financial
transaction order as
prescribed by the Financial
Services Commission.
2. In cases where a
major stockholder is a
domestic corporation
(a) Its own capital as of the end of the recent business year
shall exceed three times the amount of money to be invested
and meet
the standard prescribed by the Financial Services
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
39
(excluding
specialized private
equity fund
companies and
investment purpose
companies;
hereinafter the same
shall apply) other than
subparagraph 1
Commission.
(b) The rate of liabilities as of the end of the latest business
year shall not exceed 300/100 and meet the standard
prescribed
by the Financial Services Commission.
(c) In cases where the corporation concerned belongs to a
business conglomerate, etc. subject to restriction on mutual
investment
or is a company belonging to the principal
obligators affiliated, the rate of liabilities of the business
conglomerate, etc. subject
to restriction of mutual
investment or the principal obligators affiliated concerned
shall not exceed 300/100 and meet the standard
prescribed
by the Financial Services Commission.
(d) The requirements of subparagraph 1 (d) and (e)
shall be met.
3. In cases where a
major stockholder is
an individual as a
national Korean
(a) He/she shall not fall under any of the
subparagraphs of Article 50-3 of the Act.
(b) He/she shall meet the requirements of
subparagraph 1 (d) and (e).
4. In cases where a
major stockholder is a
foreign corporation
(hereinafter referred
to as: foreign
corporation)
established under
foreign Acts and
subordinate statutes
(a) It shall be managing, as a financial business, a
business as prescribed by the Financial Services
Commission as of the date of application for
permission.
(b) Its own capital as of the end of the recent business year
shall exceed three times the amount of money to be invested
and satisfy
the standard prescribed by the Financial
Services Commission.
(c) It shall be confirmed that it has received the credit appraisal
class higher than investment grade from an internationally
recognized credit appraisal institution or that it meets the
standard concerning the financial soundness as prescribed
by a supervisory
institution of its native country.
(d) It shall neither have received an administrative disposition
equivalent to or higher than
a corporate warning from
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
40
a supervisory institution of its home country nor have
been punished for crime by a fine or higher in connection
with the management
of a financial business in the latest
three years.
(e) It shall meet the requirements of subparagraph
(e).
5. In cases where a
major stockholder is a
specialized private
equity fund company
or an investment
purpose company
In cases where an executive of a specialized private equity
fund company, a limited liability partner whose stake of
investment
exceed 30/100 and a limited liability partner who
has substantial control of a specialized private equity fund
company falls under
any of the following items, or a person
who performs an asset management business of the investment
purpose company as an executive
of a specialized private equity
fund company who is a stockholder or a member of the
investment purpose company falls under any
of the following
items, he/she shall meet each of the requirements of the
following relevant items as classified:
(a) In cases of a financial institution of subparagraph 1: It
shall meet the requirements of subparagraph 1 (b), (c)
and (d);
(b) In cases of a domestic corporation of subparagraph 2:
It shall meet the requirements of subparagraphs 1 (e) and
2 (b) and (c);
(c) In cases of an individual as a native of subparagraph 3:
He/she shall meet the subparagraphs 1 (e) and 3 (a); and
(d) In cases
of a foreign corporation of subparagraph 4: It
shall meet the requirements of subparagraphs 1 (e), 2 (b)
(excluding a corporation
managing a financial business)
and, 4 (c) and (d).
Remarks:
1. The requirements of subparagraph 1 (e) or 4 (d) only shall apply to
a person falling under any of the subparagraphs of Article
6-3 (3):
Provided, That in cases where a corporation which is the main stockholder
is a specialized private equity fund company
or an investment purpose
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
41
Classification Requirements
1. In cases where a
major stockholder is a
financial institution
(a) It shall meet the standard as prescribed by the
Financial Services Commission as the standard
concerning the financial soundness applied to the
financial institution concerned.
(b) In cases where the financial institution belongs to a business
conglomerate, etc. subject to restriction of mutual
company,
the requirements of subparagraph shall apply.
2. When computing its own capital, it shall include the increase and decrease
of capital to the date of application for permission
from the end of
the recent business year.
3. Where a foreign corporation which is a major stockholder, when applying
subparagraph 4, is a holding company, the holding company
concerned,
when a company (limited to a company with substantial control over
the management of the holding company concerned or
a company whose
management is substantial controlled by the holding company
concerned; hereinafter referred to in this subparagraph
as the
"designated company") designated by the holding company at the time
of application for permission meets all the requirements
of the following
items, shall be deemed to meet such requirements: Provided, That
the requirements of subparagraph 4 (b) shall
be met by either the
holding company concerned or the designated company:
(a) It shall be managing a financial business as prescribed
by the
Financial Services Commission domestically or abroad as of the
date of application for permission;
(b) The designated company shall meet the requirements of
subparagraph 4 (c) through (e).
4. A specialized private equity fund company and an investment purpose
company in this Table mean those under the Indirect Investment
Asset
Management Business Act.
[Attached Table 1-2]
investment or is a company belonging to the affiliated
principal obligers, the rate of liabilities (referred to the
rate dividing
the total amount of liabilities in the balance
sheet as of the end of the latest business year by its own
capital, in such cases,
the financial institution shall be
excluded from those subject to computation of the rate
of liabilities; hereinafter the same
shall apply) of the
business conglomerate, etc. subject to restriction of mutual
investment or the affiliated principal obligers
shall not
exceed 300/100 and meet the standard as prescribed by
the Financial Services Commission.
(c) It shall meet the following requirements; Provided, That
if the degree of violation, etc. is deemed insignificant, it
shall
be excluded.
() It must not have been punished for crime by a fine
or higher for violation of the Act, this Decree,
finance-related Acts and subordinate statutes,
Monopoly Regulation and Fair Trade Act and
Punishment of Tax Evaders Act in the recent five
years.
() It must not have violated sound credit order, such
as default of obligations, etc. in the latest five years.
() It must not
be a major stockholder or a person in
special relationship with such a major stockholder of
a financial institution which has been
designated as
an insolvent financial institution under the Act on the
Structural Improvement of the Financial Industry or
whose
permission, authorization or registration has
been cancelled under the Act or the dinance-related
Acts and subordinate statutes:
Provided, That a person
recognized as not responsible for the insolvency by
a declaration of the court or a person falling under
the standard prescribed by the Financial Services
Commission such as assuming, etc. financial
responsibility for the insolvency, shall be excluded.
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
43
() It shall have not violated other sound credit order
as prescribed by the Financial Services Commission.
2. In cases where a
major stockholder is a
domestic corporation
other than
subparagraph 1
(a) The rate of liabilities as of the end of the recent business
year shall not exceed 300/100 and meet the standard
prescribed
by the Financial Services Commission.
(b) In cases where the relevant corporation belongs to a business
conglomerate, etc. subject to restriction of mutual
investment
or is a company belonging to the affiliated
principal obligers, the rate of liabilities of the business
conglomerate, etc. subject
to restriction of relevant mutual
investment or the relevant affiliated principal obligers
shall not exceed 300/100 and meet the
standard as
prescribed by the Financial Services Commission.
(c) The fund raised by borrowing shall not exceed 2/3 of
the money invested.
(d) It shall meet the requirements of subparagraph
1 (c).
3. In cases where a
major stockholder is
an individual national
(a) He/she shall not fall under any of the subparagraphs
of Article 50-3 of the Act.
(b) He/she shall meet the requirements of
subparagraphs 1 (c) and 2 (c).
4. In cases where a
major stockholder is a
foreign corporation
(a) It shall be managing a finance business, as prescribed
by the Financial Services Commission as of the date of
application for
approval;
(b) It shall have received the credit appraisal class higher
than investment grade from an internally recognized credit
appraisal
institution or meets the standard concerning the
financial soundness as prescribed by a supervisory
institution of its native country.
(c) It shall neither have received an administrative disposition
equivalent to or higher than a corporate warning from
a supervisory
institution of its home country nor have
been criminally punished by a fine or higher in connection
ENFORCEMENT DECREE OF SPECIALIZED
CREDIT FINANCE BUSINESS ACT
44
with the management of a financial business in the recent
three years.
(d) It shall meet the requirements of subparagraph
1 (c).
5. In cases where a
major stockholder is a
specialized private
equity fund company
or an investment
purpose company
In cases where an executive of a specialized private equity
fund company, a limited liability partner whose investment
stakes exceed
30/100 and a limited liability partner who is
substantial control over a specialized private equity fund
company falls under any
of the following items, or a person
who performs an asset management business of the investment
purpose company as an executive
of a specialized private equity
fund company who is a stockholder or a member of the
investment purpose company falls under any
of the following
items, he/she shall respectively meet the requirements of the
following items as classified.
(a) In cases of a financial institution under subparagraph 1:
It shall meet the requirements of subparagraph 1.
(b) In cases of
a domestic corporation under subparagraph
2: It shall meet the requirements of subparagraph 2.
(c) In cases of an individual national
under subparagraph 3:
He/she shall meet the requirements of subparagraphs 1
(c) and 3 (a).
(d) In cases of a foreign corporation under subparagraph 4:
It shall meet the requirements of subparagraphs 1 (c),
2 (c) (excluding
a corporation managing a financial
business) and 4 (b) and (c).
Remarks;
1. Where a foreign corporation which is a major stockholder, when applying
subparagraph 4, is a holding company, the holding company
concerned,
when a company (limited to a company who has substantial control over
the management of the holding company concerned
or a company whose
management is substantially controlled by the relevant holding company;
hereinafter referred to in this subparagraph
as the "designated company")
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
45
designated by the holding company at the time of application for
permission meets all the requirements of the following items, shall
be
deemed to meet such requirements:
(a) It shall be managing a financial business as prescribed by the Financial
Services Commission domestically or abroad as of the
date of application
for permission.
(b) The designated company shall meet the requirements of subparagraph
4 (b) through (d).
2. A specialized private equity fund company and an investment purpose
company in this Table mean those under the Indirect Investment
Asset
Management Business Act.
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
46
Violation
Relevant
Articles of Act
Period of
Business
Suspension
Amount of
Penalty
Surcharge
1. When a credit card
business operator
manages incidental
business under the
provisions of the
subparagraphs of Article
13 (1) of the Act in
violation of the standard
under the provisions of
the same paragraph
Article 57 (1)
1 of the Act
Six months 100 million won
2. When a credit card
business operator
violates the provisions of
Articles 14, 16 (1)
through (4), 17, 18, 21,
22, 23 (1) or 25 (4) of the
Act
Article 57 (1)
2 of the Act
Three
months
50 million won
3. When a credit card
business operator violates
any order or measure of the
Financial Services
Commission under the
provisions of Articles 23 (2),
24, 25 (1), 53 (4) of the Act
Article 57 (1)
3 of the Act
Three
months
50 million won
4. When a specialized credit
finance company violates
the provisions of Articles
Article 58 (1)
of the Act
100 million won
[Attached Table 2]
ENFORCEMENT DECREE OF SPECIALIZED CREDIT FINANCE BUSINESS ACT
47
46, 47, 48, 49 (1) and (4)
or 50 of the Act
5. When a specialized credit
finance company violates any
order of the Financial
Services Commission under
the provisions of Article 49
(2) of the Act
Article 58 (1)
of the Act
50 million won
6. When a facilities lease
business operator violates
any order of the Financial
Services Commission under
the provisions of Article 37
of the Act
Article 58 (3)
1 of the Act
50 million won
7. When an installment
financing business
operator violates the
provisions of Article 39 or
40 of the Act
Article 58 (3)
2 of the Act
30 million won
8. When a new technology
project financing
company violates the
provisions of Article 45 of
the Act
Article 58 (3)
3 of the Act
30 million won
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