Home | Databases | WorldLII | Search | Feedback Laws of the Republic of Korea

ENFORCEMENT DECREE OF THE ACT ON THE ESTABLISHMENT, ETC. OF FINANCIAL SERVICES COMMISSION

1

ENFORCEMENT DECREE OF THE ACT ON THE ESTABLISHMENT, ETC. OF FINANCIAL SERVICES COMMISSION

Presidential Decree No. 15751, Apr. 1, 1998

Amended by Presidential Decree No. 16823, May 29, 2000 Presidential Decree No. 20054, May 16, 2007

Presidential Decree No. 20653, Feb. 29, 2008

Article 1 (Purpose)

The purpose of this Decree is to provide for matters delegated by the Act on the Establishment, etc. of Financial Services Commission as well as for those necessary for the enforcement thereof. Article 2 (Recommendation of Members)

(1) If the term of office of any member of the Financial Services Commission expires under Article 4 (1) 6 of the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Act"), the Chairman of the Financial Services Commission (hereafter referred to as the "Chairman" in this Article) shall request the recommendation institution concerned to recommend a candidate at least thirty days prior to such expiration. (2) If the office of a member referred to in paragraph (1) becomes vacant, the Chairman shall, without delay, request the recommendation institution concerned to recommend a candidate.

Article 3 (Establishment Registration of Financial Supervisory Service) (1) The establishment registration of the Financial Supervisory Service shall include the following matters: 2

May 29, 2000>

1. Purpose;

2. Name;

3. Place of main office;

4. Name, resident registration number and domicile of the Governor of the Financial Supervisory Service;

5. Names and resident registration numbers of the Deputy Governors, Assistant Governors and Auditor; and

6. Method of public announcement. (2) An application for the establishment registration referred to in paragraph (2) shall be accompanied by the following documents:

1. Articles of Incorporation; and

2. Certified copy of a certificate of authorization for the Articles of Incorporation.

(3) The members of the establishment committee shall be joint applicants for the establishment registration referred to in paragraph (1). Article 4 (Establishment Registration of Branch, etc.) The Financial Supervisory Service shall, if it establishes a branch or sub-branch, register the following matters:

1. Place and establishment date of the said branch or sub-branch within two weeks in the place of main office; or

2. Matters referred to in Article 3 (1) 1 through 4 and 6 within three weeks in the place of the said branch or sub-branch. Article 5 (Registration of Change of Address)

(1) The Financial Supervisory Service shall, if it changes the address of its main office, register the new place and the date of such change in the former place and matters referred to in subparagraphs of Article 3 (1) in the new place within two weeks.

(2) The Financial Supervisory Service shall, if it changes the address of its branch or sub-branch, register the new place and the date of such change in the main office and the former place and matters referred to in Article 3 (1) 1 through 4 and 6 in the new place within three weeks. Article 6 (Registration of Modification)

If matters referred to in subparagraphs of Article 3 (1) are modified, such modification shall be registered in the place of the main office within two weeks. In this case, if matters referred to in Article 3 (1) 1 through 4 ENFORCEMENT DECREE OF THE ACT ON THE ESTABLISHMENT, ETC. OF FINANCIAL SERVICES COMMISSION

3

and 6 are modified, such modification shall, in addition of that place, be registered in the place of a branch or sub-branch within three weeks. Article 7 (Competent Register Office)

(1) The registration of the Financial Supervisory Service shall come under the jurisdiction of a district court, its branch or register office having jurisdiction over the place of the main office, a branch or sub-branch. (2) Each register office shall keep a register of the Financial Supervisory Service.

Article 8 (Verification Documents)

An application for registration of establishment or change of address of a branch or sub-branch or for that of modification of matters referred to in Article 3 (1) 1 through 4 and 6 shall be accompanied by documents verifying such establishment, change of address or modification. Article 9 (Appointment of Agent)

(1) The Governor shall, if he/she appoints an agent under Article 36 of the Act, register the following matters in the place of the main office, a branch or sub-branch having the agent within two weeks:

1. Name, resident registration number and domicile of the said agent; and

2. In case any authority of the said agent is restricted, the contents of such restriction.

(2) Any employee who may be appointed as an agent of the Governor under Article 36 (2) of the Act shall be a person who is engaged in affairs related to legal proceedings for not less than two years or has much knowledge and experience on such affairs.

Article 10 (Public Announcement)

The Governor shall publicly announce the registered matters at a competent court or register office without delay.

Article 11 (Application Mutatis Mutandis to Registration) Except as otherwise provided in this Decree, the Non-Contentious Case Litigation Procedure Act shall apply mutatis mutandis to the registration of the Financial Supervisory Service. In this case, "head office" and "branch" referred to in the said Act shall be deemed to be "main office" and "branch or sub-branch", respectively.

Article 12 (Share in Expenses)

ENFORCEMENT DECREE OF THE ACT ON THE ESTABLISHMENT, ETC. OF FINANCIAL SERVICES COMMISSION

4

(1) The rate of expense-sharing under Article 47 (2) of the Act shall be annually determined by the Financial Services Commission to the extent of 15/10000 of the total amount of assets as of the end of the preceding business year per institution subject to examination under Article 38 of the Act, taking into account the scale of shares in expenses according to financial institutions, the total liabilities and operating profits (insurance premium proceeds, in the case of any insurer referred to in subparagraph 4 of Article 38) per such institution, etc. In this case, the scale of shares in expenses according to financial institutions shall be annually determined by the Financial Services Commission according to financial institutions categorized as follows, taking into account the financial resources referred to in subparagraphs 1 through 3 and 5 of Article 46 of the Act, personnel of the Financial Supervisory Service supervising or examining relevant financial institutions, the scale of operating profits thereof, etc.:

1. Institutions subject to examination referred to in subparagraphs 1, 5 through 9, 11 and 12 of Article 38 of the Act and other similar institutions subject to examination referred to in subparagraph 14 of Article 38 of the Act, which are determined by the Financial Services Commission;

2. Institutions subject to examination referred to in subparagraphs 2, 3 and 10 of Article 38 of the Act and other similar institutions subject to examination referred to in subparagraph 14 of Article 38 of the Act, which are determined by the Financial Services Commission; and

3. Institutions subject to examination referred to in subparagraph 4 of Article 38 of the Act and those referred to in subparagraph 14 of Article 38 of the Act, which do not fall under subparagraphs 1 and 2 of this paragraph.

(2) The Financial Services Commission shall establish the detailed standards necessary for the calculation of the rate of expense-sharing referred to in the former part of paragraph (1) and the scale of shares in expenses according to financial institutions referred to in the latter part of the said paragraph. In this case, it shall, in advance, hear opinions of respective financial institutions.

(3) Shares in expenses referred to in Article 47 (1) of the Act, together ENFORCEMENT DECREE OF THE ACT ON THE ESTABLISHMENT, ETC. OF FINANCIAL SERVICES COMMISSION

5

with those referred to in Article 206-8 (1) 1 and 2 of the Securities and Exchange Act shall not exceed the amount obtained by subtracting that referred to in subparagraphs 2 and 3 of this paragraph from that referred to in subparagraph 1 of this paragraph:

1. Costs actually incurred in operating the Financial Supervisory Service within the scope of its budgeted operating costs;

2. Contributions referred to in subparagraphs 1 through 3 of Article 46 of the Act (limited to those used for operating costs of the Financial Supervisory Service; and

3. Revenues referred to in subparagraph 5 of Article 46 of the Act (excluding shares in expenses referred to in Article 206-8 (1) 1 and 2 of the Securities and Exchange Act).

(4) If shares in expenses paid under Article 47 (1) of the Act plus those paid under Article 206-8 (1) 1 and 2 of the Securities and Exchange Act exceed the ceiling under paragraph (3) of this Article, the Financial Supervisory Service shall refund the amount calculated in accordance with the following formula to the institutions making such payment under Article 47 (1) of the Act in accordance with the scale of such shares as determined by the Financial Services Commission: Provided, That such amount may be carried forward to the next fiscal year when approved by the Financial Services Commission under Article 50 of the Act, and the amount so carried forward shall be taken into account in collecting shares in expenses of the next year: shares in expenses paid under Article 47 (1) of the Act plus those paid under Article 206-8 (1) 1 and 2 of the Securities and Exchange Act which exceed the ceiling under paragraph (3) of this Article×shares in expenses paid under Article 47 (1) of the Act/shares in expenses paid under Article 47 (1) of the Act plus those paid under Article 206-8 (1) 1 and 2 of the Securities and Exchange Act.

(5) Matters concerning the method of collection of shares in expenses under paragraph (1), the refund thereof under paragraph (4), etc. shall be determined by the Financial Services Commission.

[This Article Wholly Amended by Presidential Decree No. 20054, May 16, 2007] Article 12-2 (Public Notice of Budget, Final Accounts, etc.) (1) The Financial Supervisory Service shall give public notice of the following ENFORCEMENT DECREE OF THE ACT ON THE ESTABLISHMENT, ETC. OF FINANCIAL SERVICES COMMISSION

6

matters on its Internet home page:

1. Objectives of management and plans for the budget and operation;

2. Statement of final accounts (including financial statements as well as annexes thereto);

3. Status of executives and other employees;

4. Budgeted personnel expenses and the status of payment thereof; and

5. Other matters determined by the Financial Services Commission. (2) Matters concerning the standards, procedures, etc. for public notice under paragraph (1) shall be determined by the Financial Services Commission. (3) If the Financial Supervisory Service is designated and publicly announced as a public entity under Articles 4 through 6 of the Public Entities Act, paragraphs (1) and (2) of this Article shall not apply. [This Article Newly Inserted by Presidential Decree No. 20054, May 16, 2007] Article 13 (Application for Submission of Dispute to Conciliation) (1) Any person who intends to apply for the submission of a relevant dispute to conciliation under Article 53 (1) of the Act shall submit to the Governor an application for submission of disputes to conciliation accompanied by the following documents:

1. Documents verifying the causes of such application and the facts related thereto;

2. A letter of attorney, in case of such application by an agent; and

3. Other evidentiary documents or materials necessary for the submission of disputes to conciliation.

(2) An application for submission of disputes to conciliation referred to in paragraph (1) shall include the following matters:

1. Names and domiciles (in the case of a body corporate, meaning its name, the place of its main office, and the name and domicile of its representative) of the claimant and the respondent (hereinafter referred to as the "parties");

2. Name and domicile of an agent, if any; and

3. Reasons for an application. Article 14 (Selection of Representatives)

(1) If many persons jointly apply for the submission of a relevant dispute to conciliation, not more than three representatives may be selected from ENFORCEMENT DECREE OF THE ACT ON THE ESTABLISHMENT, ETC. OF FINANCIAL SERVICES COMMISSION

7

among them.

(2) In any case in which claimants fail to select their representatives under paragraph (1), the Governor may, if deemed necessary, recommend the claimants to do so.

(3) Claimants shall, if they replace any of their representatives, notify the Governor without delay.

Article 15 (Supplement, etc. to Application for Submission of Dispute to Conciliation)

(1) The Governor shall, if deemed necessary to supplement an application for the submission of a relevant dispute to conciliation under Article 13, require the claimant to do so within a reasonable period of time. (2) The period of time required for the supplement under paragraph (1) of this Article shall not be included in that under Article 53 (3) of the Act.

Article 16 (Cases, etc. not Submitted to Conciliation Committee) (1) As used in Article 53 (2) 4 of the Act, the term "other cases provided for by Presidential Decree" means any of the following cases:

1. Cases in which the claimant does not supplement his/her application within a given period without any justifiable reason;

2. Cases in which a person having no direct interest in the application applies for the submission to conciliation;

3. Cases in which it is deemed that the claimant applies for the submission to conciliation for the purpose of obtaining any undue profit; or

4. Cases in which it is deemed that the submission to conciliation is not appropriate.

(2) The Governor shall, if he/she neither recommends an agreement nor submits a relevant dispute to the Financial Dispute Conciliation Committee (hereinafter referred to as the "Conciliation Committee") under the proviso of Article 53 (2) of the Act, notify the parties in writing. Article 17 (Meeting of Conciliation Committee)

(1) If the Chairperson of the Conciliation Committee (hereafter referred to as the "Chairperson" in this Article) intends to convene a meeting thereof under Article 54 (1) of the Act, he/she shall, in writing, communicate the date, time and place of the meeting and the matters to be submitted thereto to the members determined by him/her in the light of the contents of the meeting at least one week before it is held, unless the urgency of ENFORCEMENT DECREE OF THE ACT ON THE ESTABLISHMENT, ETC. OF FINANCIAL SERVICES COMMISSION

8

the situation so requires. (2) A meeting of the Conciliation Committee shall not be made public: Provided, That the meeting may be open to the parties and other interested persons if the Chairperson deems necessary to do so. Article 18 (Exclusion and Evasion of and Challenge to Member) (1) Any member of the Conciliation Committee shall be excluded from participation in deliberations and decisions on a case in respect of which an application for the submission to conciliation is made (hereinafter referred to as the "case"):

1. if he/she or a person who is or was his/her spouse is a party to the case or shares any interest with a party as joint holder of any rights or joint burdener of any duties;

2. If he/she has or had a relationship by blood or marriage to any party to the case;

3. If he/she participates or participated in the case as an agent of any party thereto; or

4. If he/she has given testimony or legal advice or made a damage appraisal concerning the case.

(2) Any party may make a request for challenge to a member if there exists any ground for which it would be difficult to expect impartial deliberations and decisions from the member. In this case, the Governor shall decide whether or not to accept such challenge without referring the request to the Conciliation Committee for resolution.

(3) If any member falls under paragraph (1) or (2), he/she may voluntarily refrain from deliberations and decisions on the case. Article 19 (Finding, etc.)

(1) The Governor may, if deemed necessary to investigate the case, require the parties to identify the facts or to submit materials. (2) The Conciliation Committee may, if necessary to deliberate on the case, request the Governor to investigate the case or to collect relevant materials. Article 20 (Hearing of Opinions of Parties)

(1) The Conciliation Committee may, if deemed necessary to hear opinions of the parties and other interested persons, request them to attend a meeting and present their opinions.

(2) The Conciliation Committee shall, if it intends to hear opinions under paragraph (1), notify the parties and other interested persons of the date ENFORCEMENT DECREE OF THE ACT ON THE ESTABLISHMENT, ETC. OF FINANCIAL SERVICES COMMISSION

9

and place of such hearing at least three days prior thereto, unless the urgency of the situation so requires.

(3) The parties and other interested persons may, with the permission of the Conciliation Committee, attend its meeting and present their opinions. Article 21 (Formation, etc. of Conciliation)

(1) The Governor shall, if he/she recommends acceptance of a proposed conciliation under Article 53 (5) of the Act, give notice of the effect of conciliation under Article 55 of the Act and those stated in paragraph (2) of this Article.

(2) If any party does not accept a proposed conciliation within twenty days after he/she receives it under paragraph (1), it shall be deemed that it is not accepted.

(3) The Governor shall, if any party accepts a proposed conciliation under paragraph (1), prepare and deliver a conciliation certificate. (4) Any financial institution shall, if it does not accept a proposed conciliation, submit the reasons therefor to the Governor. Article 22 (Notice of Proceedings)

Any party shall, if he/she institutes proceedings in respect of the case after applying for the submission to conciliation, notify the Governor without delay.

Article 23 (Employees Deemed to Be Public Officials in Applying Penal Provisions)

Those employees who are deemed to be public officials in applying the penal provisions of the Criminal Act or other Acts under Article 69 (2) of the Act shall be as follows: Provided, That all the employees of the Financial Supervisory Service shall be deemed to be public officials in applying Articles 129 through 132 of the Criminal Act:

1. Heads of offices (including those established under bureaus) and departments on the level of directors;

2. Heads of branches or sub-branches (including places of business);

3. Employees carrying out any examination, management guidance or management supervision with respect to financial institutions;

4. Employees carrying out any investigation of unfair transactions in the securities and futures market under financing-related Acts and subordinate statutes; and

ENFORCEMENT DECREE OF THE ACT ON THE ESTABLISHMENT, ETC. OF FINANCIAL SERVICES COMMISSION

10

5. Other heads of departments other than offices and bureaus. [This Article Newly Inserted by Presidential Decree No. 16823, May 29, 2000] ADDENDA

Article 1 (Enforcement Date)

This Decree shall enter into force on April 1, 1998: Provided, That Articles 3 through 22 and Article 3 of the Addenda shall do so on January 1, 1999. Article 2 (Establishment of Financial Supervisory Service) (1) Sections 1, 2, 4 and 5 of Chapter of the Act shall enter into force on January 1, 1999 under the proviso of Article 1 of the Addenda of the Act.

(2) As used in Article 7 (1) of the Addenda of the Act, the term "time provided for by Presidential Decree" means any time prior to July 1, 1998. Article 3 Omitted.

ADDENDUM This Decree shall enter into force on the date of its promulgation. ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on the date of its promulgation. Article 2 (Examples of Application)

The amended provisions of Article 12 shall apply to shares in expenses paid by institutions subject to examination on or after the date when this Decree enters into force.

ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)

Article 2 Omitted.