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ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Presidential Decree No. 18325, Mar. 22, 2004

Amended by Presidential Decree No. 18596, Dec. 3, 2004 Presidential Decree No. 18736, Mar. 8, 2005

Presidential Decree No. 19302, Jan. 27, 2006

Presidential Decree No. 19327, Feb. 9, 2006

Presidential Decree No. 19455, Apr. 27, 2006

Presidential Decree No. 19806, Dec. 29, 2006

Presidential Decree No. 20120, Jun. 28, 2007

Presidential Decree No. 20462, Dec. 28, 2007

Presidential Decree No. 20553, Jan. 18, 2008

Presidential Decree No. 20653, Feb. 29, 2008

CHAPTER GENERAL PROVISIONS

Article 1 (Purpose)

The purpose of this Decree is to prescribe the matters delegated by the Indirect Investment Asset Management Business Act and other matters necessary for the enforcement thereof.

Article 2 (Definitions of Terms and Exception to Application) (1) The definitions of terms used in this Decree shall follow those as determined by the Indirect Investment Asset Management Business Act (hereinafter referred to as the "Act").

(2) The term "entities prescribed by Presidential Decree" in the proviso to the portion other than each item of subparagraph 1 of Article 2 of the Act means the following entities:

1. The special purpose company and the trust company under the Asset-Backed Securitization Act;

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

2. The real estate investment company under the Real Estate Investment Company Act;

3. The corporate restructuring investment company under the Corporate Restructuring Investment Companies Act;

4. The ship investment company under the Ship Investment Company Act;

5. The specialized restructuring company and the corporate restructuring association under the Industrial Development Act;

6. The small and medium enterprise start-up investment company and the small and medium enterprise start-up investment association under the Support for Small and Medium Enterprise Establishment Act;

7. The Fund of Funds for Small and Medium Enterprise Investments, the Korea Venture Fund, and the private investment association under the Act on Special Measures for the Promotion of Venture Businesses;

8. The venture capitalist and the venture business investment association under the Specialized Credit Financial Business Act;

9. The securities finance company under the Securities and Exchange Act (limited to the case where the entrustment of money is made in accordance with Article 147 (1) 7 of the Securities and Exchange Act;

10. The trust company under the Trust Business Act: Provided, That it shall be limited to the case where the trust company jointly manage the entrusted money for the efficient management of trust fund, falling under any one of following items, and the trust company shall be prohibited from soliciting or selling trust goods with the aim of joint managing:

(a) In case of the trust of aggregate properties under Article 10 (2) of the Trust Business Act in which the entrustment ratio of money is not more than 40/100; or

(b) In case where it is inevitable for the management of profits accruing from the management of trust property or for the management of the trust property left after the expiration or redemption of trust;

11. The specialized company for cultural industries under the Framework Act on the Promotion of Cultural Industries; and

12. The specialized association for component and material under the Act on Special Measures for the Promotion of Specialized Enterprises, etc. for Component and Material.

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Article 3 (Objects of Indirect Investment)

The term "others prescribed by Presidential Decree" in subparagraph 1 (e) of Article 2 of the Act means any one (including those identical with or similar to these, which are issued, created or distributed in foreign countries and denominated in foreign currency) of the following subparagraphs:

1. Indirect investment securities issued under the Act and the beneficiary certificates issued under the Trust Business Act; 1-2. Shares of a private equity fund;

2. Claims for insurance money against insurance companies (limited to those transferable to a third person);

3. Money receivables (excluding those represented by securities or bills) whose creditor is any creditor financial institution under subparagraph 1 of Article 2 of Corporate Restructuring Promotion Act (including the corporation which was a financial institution under the Act on the Structural Improvement of the Financial Industry and for which the liquidation procedures or the bankruptcy procedures under the Debtor Rehabilitation and Bankruptcy Act are in progress);

4. Bills (excluding those referred to in subparagraph 7 (b) of Article 2 of the Act);

5. Beneficial rights from the trust of any one of following items; (a) Money (excluding the trust of money corresponding to the indirect investment);

(b) Securities;

(d) Real assets;

(e) Money receivables; or

(f) Those provided in subparagraphs 1 through 4 and 6 through 10;

6. Contracted investment shares or rights entitled to the distribution of profits earned from the specific business;

6-2. Bonds and certificates provided by Article 2-3 (1) 3-5 of the Enforcement Decree of the Securities and Exchange Act;

7. Shares of any cooperative (limited to cooperatives under Article 2 (2) 5 through 8) formed under the cooperative contract with the aim of ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

managing the assets provided in any one of the following items and distributing profits accruing from the management of such assets; (a) Assets under subparagraph 1 (a) through (d) of Article 2 of the Act; and

(b) Assets under subparagraphs 1 through 6 and 8 through 10;

8. Rights on the use of real estate including superficies, right to lease on a deposit basis, right of lease, etc.;

9. Fishery rights;

10. Mining concessions; or

11. Other things which have similar property values to subparagraphs 1 through 10 and determined as the objects of investment by the Financial Services Commission.

Article 4 (Investment Advisory Assets)

(1) The term "assets prescribed by Presidential Decree" in the main sentence of subparagraph 5 of Article 2 of the Act means assets under subparagraph 1 (a) and (b) (limited to the transactions performed on currencies, securities or interest rates or the prices of currencies, securities or interest rates or price-based index numbers) of Article 2 of the Act, assets under subparagraph 1 of Article 3 of this Decree and assets operated following the methods under each subparagraph of Article 87 (3) of the Act: Provided, That, where securities companies or asset management companies run concurrently investment advisory business or discretionary investment business, real estate and the rights on the use of real estate such as superficies, right to lease on a deposit basis, right of lease, etc. shall be included. (2) The term "advice that is prescribed by Presidential Decree" in the proviso to subparagraph 5 of Article 2 of the Act means advice on the value of investment advisory assets or on the investment judgment on the investment advisory assets (hereinafter referred to as the "investment advice"), which falls under any one of following subparagraphs:

1. Offering of advice on investment by the person other than any company who has registered an investment advisory business, by means of periodicals, publications, communication or broadcasting that are issued for or transmitted to many and unspecified persons and available to them at any time; or

2. Offering of advice on investment in addition to other businesses, without ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

additional compensation.

Article 5 (Scope of Investment Securities)

The term "what is prescribed by Presidential Decree" in subparagraph 7 (a) of Article 2 of the Act means securities or certificates under Article 2 (1) 6 (limited to stock certificates of an investment company) and 7 (limited to stock certificates issued by a foreign investment company) of Securities and Exchange Act and under Article 2-3 (1) 1, 2, 2-2, 3, 3-5, 6, 7 and 8 of the Enforcement Decree of the Securities and Exchange Act.

Article 6 (Financial Institutions)

The term "financial institutions prescribed by Presidential Decree" in subparagraph 7 (b) of Article 2 of the Act means financial institutions under each of following subparagraphs:

1. The financial institutions incorporated with authorization under the Banking Act;

2. The credit business divisions of the National Agricultural Cooperative Federation and National Federation of Fisheries Cooperatives from among financial institutions under Article 5 of the Banking Act;

3. The Korea Development Bank under the Korea Development Bank Act;

4. The Export-Import Bank of Korea under the Export-Import Bank of Korea Act;

5. The Industrial Bank of Korea under the Industrial Bank of Korea Act;

6. The Merchant Banks under the Merchant Banks Act;

7. The Mutual Savings Banks under the Mutual Savings Banks Act; and

8. Securities companies and securities finance companies under the Securities and Exchange Act.

Article 7 (Scope of Securities Denominated in Foreign Currency) The term "securities denominated in foreign currency prescribed by Presidential Decree" in subparagraph 7 (c) of Article 2 of the Act means securities identical with or similar to those under subparagraph 7 (a) or (b) of Article 2 of the Act.

Article 8 (Foreign Markets)

The term "other foreign markets which are prescribed by Presidential ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Decree" in subparagraph 8 of Article 2 of the Act means markets opened under the Acts and subordinate statutes of the contracting state under Article 2 (1) 3 of the Adjustment of International Taxes Act or those officially approved by the government or supervisory organs of such state, and any other markets approved by the Financial Services Commission.

Article 9 (Transaction of Exchange Traded Derivatives) The term "transactions prescribed by Presidential Decree" in subparagraph 8 of Article 2 of the Act means any one of the following transactions:

1. Transactions involving an agreement between parties on the transfer of currencies, investment securities, interest rates, indirect investment securities, real estate or real assets (hereafter referred to as the "financial instruments, etc." in this Article) or of the amount of money calculated by applying the prices, interest rates, etc. of the financial instruments, etc. (in the case of resale or redemption, including the transactions settled in such a way as to deliver a balance between the previously agreed price and the price at the time of resale or redemption) at a predetermined price at a certain time in the future;

2. Transactions involving an agreement between parties on the transfer of the amount of money calculated by applying a difference between the index previously agreed on a particular index (referring to the index calculated by using the prices, interest rates, etc. of financial instruments, etc.; hereafter in this Article referred to as the "index, etc.") and the numerical value of the index, etc. at a certain time in the future;

3. Transactions involving an agreement on the exchange of financial instruments, etc. or the amounts of money calculated by applying the index, etc. at a predetermined price for a certain period of time in the future;

4. Transactions involving an agreement on the establishment of transactions falling under any one of the following subparagraphs by means of the expression of will by one party subject to the payment of prices therefor to the other party:

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

(a) Transactions under subparagraph 1 through 3;

(b) Buying and selling transactions of financial instruments, etc.; or (c) Transactions involving the transfer of the amount of money calculated according to a difference in predetermined numerical values based on the index, etc.

5. Transactions in the combined form of transactions under subparagraphs 1 through 4;

6. Selling and buying transactions of the securities and certificates provided by Article 2-3 (1) 6 through 8 of the Enforcement Decree of the Securities and Exchange Act (including the securities and certificates issued by foreign financial institutions, which are similar thereto); or

7. Other transactions similar to those under subparagraphs 1 through 6, which are prescribed by Ordinance of the Prime Minister. Article 10 (Transaction of Over-the-Counter Derivatives) The term "transactions prescribed by Presidential Decree" in subparagraph 9 of Article 2 of the Act means the transactions other than the case of bearing obligation to pay the principal and interest of basic assets according to the contract when any credit scandal occurs, from among the transactions whose result is related to the credit risk in the basic assets [referring to the transactions that involve the right to demand the fulfillment of the contract or the duty to fulfill the contract among the transaction parties at the time of occurrence of any credit scandal due to the non-performance of debts, a drop in credit rating, or any other causes stipulated in relation to the basic assets (hereafter in this Article referred to as the "credit scandal")] from among the transactions falling under any subparagraph of Article 9. Article 10-2 (Scope of Specially Related Persons) The term "persons who having special relationship as prescribed by Presidential Decree" under subparagraph 17 (a) of Article 2 of the Act means persons falling under any one of the following subparagraphs (hereinafter referred to as the "specially related persons"):

1. Where the principle is an individual, the persons who fall under any one of following items:

(a) The spouse (including the person in de facto marriage; hereinafter the same shall apply)

(b) The kinsfolk within a paternal second cousin and wives of kinsfolk ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

within a paternal firth cousin;

(d) The maternal kinfolk of not more than three degrees of relationship and their spouses and children;

(e) The spouse's paternal kinfolk of not more than two degrees of relationship and their spouses;

(f) The lineal ascendants of the birth parents of an adoptee; (g) The lineal ascendants of a person who enters in other family as an adopted child and his/her spouse, and the lineal descendants of an adoptive family of the person who enters in other family as an adopted child;

(h) The natural mother of a person born out of wedlock; (i) The persons who maintain livelihood based on the money or other property of the principal and the persons sharing livelihood with the principal;

(j) Where the principal invests 30/100 or more in any corporation or any group solely or jointly with the related persons under items (a) through (i) or exercises de facto influence on the major matters of management, such as appointing or dismissing of executives, of the corporation or the group, the relevant corporation or group and its executives; or

(k) Where the principal invests 30/100 or more in any corporation or any group solely or jointly with the related persons under items (a) through (j) or exercises de facto influence on the major matters of management, such as appointing or dismissing of executives, of the corporation or the group, the relevant corporation or group and its executives; or

2. Where the principle is a corporation or a group, the persons who fall under any one of following items:

(a) Executives;

(b) Affiliated companies and executives thereof;

(c) Individuals who invest 30/100 or more in the principal solely or jointly with the related persons under each item of subparagraph 1 or exercise de facto influence on the major matters of management, such as appointing or dismissing of executives, of the principal, ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

and any person or any group (excluding affiliated companies; hereinafter the same shall apply in this subparagraph) having relationship under each item of subparagraph 1 with the individuals and the executives thereof; or

(d) Where the principal invests 30/100 or more in any group solely or jointly with the related persons under items (a) through (c) or exercises de facto influence on the major matters of management, such as appointing or dismissing of executives, of the group, the relevant group and its executives.

[This Article Newly Inserted by Presidential Decree No. 20553, Jan. 18, 2008] Article 10-3 (Scope of Major Stockholders)

The term "persons prescribed by Presidential Decree" in subparagraph 17 (b) of Article 2 of the Act means the persons falling under any one of following subparagraphs:

1. Stockholders who appoint the chief executive or the majority of directors solely or on the agreement or contract, etc. with other stockholders; or

2. Stockholders who are prescribed by the Financial Services Commission as exercising dominant influence on the major decision making or the execution of business such as the management strategy, the change of organization, etc.

[This Article Newly Inserted by Presidential Decree No. 20553, Jan. 18, 2008] CHAPTER INDIRECT INVESTMENT

MANAGER AND RELATED

PERSONS

SECTION 1 Asset Management Company

Article 11 (Asset Management Company)

The term "financial institutions prescribed by Presidential Decree" in Article 4 (1) of the Act means financial institutions falling under any of the following subparagraphs:

1. The credit business divisions of the National Agricultural Cooperative Federation and National Federation of Fisheries Cooperatives from among financial institutions under Article 5 of the Banking Act; ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

2. The Korea Development Bank under the Korea Development Bank Act;

3. The Export-Import Bank of Korea under the Export-Import Bank of Korea Act;

4. The Industrial Bank of Korea under the Industrial Bank of Korea Act;

5. Domestic branches of foreign financial institutions under the Banking Act; and

6. Domestic branches of foreign insurance business operators under the Insurance Business Act.

Article 12 (Selling of Indirect Investment Securities by Asset Management Company)

(1) Any asset management company may sell indirect investment securities of an indirect investment fund operated by itself after fulfilling the criteria under each of the following subparagraphs in accordance with Article 4 (3) of the Act:

1. Deleted;

2. Selling shall be made in such a way as provided in any of the following items:

(a) Way of selling by means of the seller's window; (b) Way of selling by means of the Internet homepage; (c) Way of selling by means of mails or telephone calls; and (d) Other ways prescribed by Ordinance of the Prime Minister;

3. The selling business and the management business of indirect investment property shall not be performed by the same executives and employees; and

4. The information on indirect investors, which it acquires by operating the general meeting of beneficiaries or the general meeting of stockholders of the indirect investment fund shall not be used for the sale of indirect investment securities.

(2) Where any asset management company sells indirect investment securities in accordance with paragraph (1), necessary matters including ways of receiving money shall be prescribed by Ordinance of the Prime Minister.

Article 13 (Detailed Requirements for License)

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

(1) The detailed requirements for manpower and physical facilities of any asset management company under Article 5 (1) 2 of the Act shall be as follows:

1. It shall secure fund managers in accordance with Article 9 (1) of the Act, and necessary manpower including computer staff, etc. required for executing the business of the asset management company;

2. It shall be equiped with data-processing equipment which is necessary for executing the business of the asset management company and secure enough space for business including offices, etc. In this case, the data-processing equipment shall be operated separately from data-processing equipment for the business of asset management company, the business of distribution company and other company's business; and

3. It shall be equipped with the secondary equipment necessary to maintain the continuity of business in case where any accident including blackout, fire, etc. occurs.

(2) The business program under Article 5 (1) 3 of the Act shall comply with requirements falling under each of the following subparagraphs:

1. The forecast on earnings shall be justifiable and the business program shall be feasible; and

2. It shall neither violate Acts and subordinate statutes nor be feared to undermine the sound financial order.

(3) The term "persons prescribed by Presidential Decree" in Article 5 (1) 5 of the Act means a person falling under any one of the following subparagraphs:

1. The largest stockholder of a corporation which is the largest stockholder (where de facto controller of the corporation which is the largest stockholder is evidently different from the largest stockholder of the corporation, including such de facto controller); or

2. The representative of the corporation which is the largest stockholder. (4) Large stockholders shall meet the requirements prescribed in the attached Table 1: Provided, That where financial institutions under the Banking Act, insurance companies under the Insurance Business Act, or merchant banks under the Merchant Banks Act seek to obtain a license for asset management business in accordance with Articles 134 through 136 of the Act, the Financial Services Commission may prescribe such ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

requirements otherwise.

(5) The Financial Services Commission may determine specific criteria regarding detailed requirements under paragraphs (1) through (4). Article 13-2 (Approval on Alteration of Large Stockholders) (1) The term "person prescribed by Presidential Decree" in Article 5-2 (1) of the Act means a person falling under any one of the following subparagraphs:

1. The State;

2. The Korea Deposit Insurance Cooperation under the Depositor Protection Act; or

3. The stockholder (limited to the stockholder who is not the largest stockholder) who is specially related with the largest stockholder and holds less than 1/100 of the total number of the issued stock with the voting right.

(2) Deleted. (3) The term "requirements prescribed by Presidential Decree" in Article 5-2 (1) of the Act shall be requirements prescribed in the attached Table 1-2

(4) Any person who intends to obtain the approval in accordance with Article 5-2 (1) of the Act shall submit to the Financial Services Commission a written application for approval of alteration of large stockholders in which the matters falling under each of the following subparagraphs are entered:

1. Matters regarding the applicant;

2. The current status of holding the stocks issued by the asset management company which seeks to be a large stockholder; and

3. The plan for acquiring stocks issued by the asset management company which seeks to be a large stockholder.

(5) Written application under paragraph (4) shall be accompanied by the following documents:

1. The articles of incorporation (limited to a juristic person);

2. In case of any foreign company, the document corresponding to a certified ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

copy of the corporate register;

3. The business registration certificate;

4. Deleted;

5. The financial statements as of the end of the latest business year or the semi-annual financial statements as from the end of the latest business year (limited to a juristic person);

6. The audit report and review report of an external auditor on the financial statements under subparagraph 5;

7. Where the person who intends to be a large stockholder is a financial institution, the financial state calculated following the criteria regarding financial soundness applicable to the financial institution and the review report of external auditor thereon; or

8. Other documents required for the review on requisites for approval, which are prescribed by the Financial Services Commission. (6) In this case, the official in charge who has accepted the written application under paragraph (4) shall confirm the administrative information falling under each of the following subparagraphs through the mutual utilization of administrative information pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act: Provided, That, if the applicant does not agree to the confirmation, he/she shall attach the document concerned (in case of subparagraph 2, it may be substituted with the attachment of the business registration certificate):

1. A certified copy of the corporate register (limited to the domestic corporation);

2. A certified copy of the resident registration card; and

3. A certified copy of the corporate register of the asset management company which seeks to be a large stockholder.

(7) In the event that the contents of the written application submitted in accordance with paragraph (4) are found to be defective, the Financial Services Commission may request the supplementation of the written application. In this case, the period required for the supplementation of the written application shall not be included in the period under paragraph (7).

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

(8) The Financial Services Commission shall, when it accepts the written application under paragraph (4), confirm whether requirements under paragraph (3) are fulfilled and decide whether or not to give the approval therefor, within 60 days (the period required for receiving data provided by another institution or any foreign financial supervisory organization, etc. necessary for the confirmation on whether the requirements for a large stockholder are met or not, shall not be included in the foregoing) from the day of receiving the application, and notify in writing the applicant of the result without delay. In this case, if the Commission disapproves the application, it shall clarify the reason therefor.

(9) The methods and procedures for application of approval under Article 5-2 (1) of the Act and other detailed matters necessary for the specific criteria for requirements under paragraph (3) shall be prescribed by the Financial Services Commission. [This Article Newly Inserted by Presidential Decree No. 19302, Jan. 27, 2006] Article 14 (Written Application for License)

(1) Matters under each of the following subparagraphs shall be entered in a written application for license under Article 6 (1) of the Act:

1. Firm name and the location of the main office;

2. Matters concerning the capital;

3. The names, resident registration numbers and addresses of the representative and officers;

4. Matters concerning fund managers under Article 9 (1) of the Act;

5. Matters concerning manpower and physical facilities; and

6. Other matters required for the review on requisites for license, which are prescribed by the Financial Services Commission. (2) The written application for license under Article 6 (1) of the Act shall be accompanied by the following documents. In this case, the official in charge shall confirm a certified copy of the corporate register through the mutual utilization of administrative information pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, and if the applicant disagrees with such confirmation, he/she shall attach it. ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

1. The articles of incorporation;

2. Deleted;

3. The resumes and career records of executives;

4. The documents including names or titles of stockholders who hold 1/100 or more of the total number of the issued stock as of the date when the application for license is submitted, and the number of stocks held by them;

5. The business programs (including the pro forma financial statements) of two business years after the commencement of business and the estimated statements of receipts and disbursements concerned;

6. The financial statements and the accessory detailed statements; and

7. Other documents required for the review on requisites for license, which are prescribed by the Financial Services Commission. (3) Where an application has been filed for a preliminary license in accordance with Article 15, if the contents on the license application and attached documents submitted at the time of filing the application for preliminary license are not altered, the matters to be stated on such application shall not be required to be entered or the submission of such attached documents may be omitted.

(4) When granting a license under Article 4 (1) of the Act, the Financial Services Commission may attach terms to the license as referred to in any of the following subparagraphs in accordance with Article 6 (3) of the Act:

1. The terms governing the largest stockholder of the asset management company and his/her specially related persons on the maintenance of share and the restriction of transfer within a specific period not exceeding 3 years from the date of license;

2. The terms restricting kinds of indirect investment funds to be created or established by the asset management company by taking into account the ability for management of the asset management company including the securing of fund managers under Article 9 (1) of the Act; or

3. Other terms prescribed by the Financial Services Commission as necessary for the purport of regulations governing the license, the protection of customers, and the maintenance of sound order within financial industries.

(5) The Financial Services Commission may determine specific contents ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

of the written application for license under paragraphs (1) and (2), compiling method of attached documents and terms under paragraph (4).

Article 15 (Preliminary License)

(1) Any person who intends to apply for a preliminary license in accordance with Article 6 (2) of the Act shall submit to the Financial Services Commission the written application for preliminary license stating the matters under each subparagraph of Article 14 (1), accompanied by documents under each subparagraph of Article 14 (2): Provided, That for the matters under Article 14 (1) 2 and 5, it may be replaced by the submission of a plan for implementation.

(2) When any asset management company seeks to apply for a preliminary license in accordance with paragraph (1), it shall fulfill the requirements for license under Article 5 of the Act and Article 13 of this Decree: Provided, That when a plan for implementation has been submitted in accordance with the proviso to paragraph (1), such plan for implementation shall be required to be feasible.

(3) Any person who is granted a preliminary license shall, after implementing the details of and conditions to the preliminary license, apply for a main license within six months from the date on which the preliminary license is granted: Provided, That if the Financial Services Commission prescribes separately the deadline for applying main license at the time of granting the preliminary license, or if the Financial Services Commission approves the extension of the application period for main license after granting the preliminary license, a main license may be applied for within such deadline. (4) The collecting of opinions from interested persons, etc. where an application for preliminary license or main license is accepted, the public notice thereon, the procedures for license examination, and other matters necessary for license shall be prescribed by Ordinance of the Prime Minister. Article 16 (Finance-Related Acts and Subordinate Statutes) (1) The term "finance-related Acts and subordinate statutes prescribed by Presidential Decree" in Article 8 (1) 3 of the Act shall be Acts or subordinate statutes under each of the following subparagraphs ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

(hereinafter referred to as "finance-related Acts and subordinate statutes"):

1. The Bank of Korea Act;

2. The Banking Act;

3. The Korea Development Bank Act;

4. The Industrial Bank of Korea Act;

5. The Export-Import Bank of Korea Act;

6. The Korea Securities and Futures Exchange Act;

7. The Securities and Exchange Act;

8. The Futures Trading Act;

9. The Insurance Business Act;

10. The Merchant Banks Act;

11. The Trust Business Act;

12. The Mutual Savings Banks Act;

13. The Specialized Credit Financial Business Act;

14. The Credit Guarantee Fund Act;

15. The Deleted;

16. The Korea Technology Credit Guarantee Fund Act;

17. The Credit Unions Act;

18. The Community Credit Cooperatives Act;

19. The Support for Small and Medium Enterprise Establishment Act;

20. The Use and Protection of Credit Information Act;

21. The Foreign Exchange Transactions Act (including the Foreign Exchange Control Act before April 1, 1999);

22. The Act on the Establishment, etc. of Financial Services Commission;

23. The Asset-Backed Securitization Act;

24. The Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation;

25. The Act on Real Name Financial Transactions and Guarantee of Secrecy;

26. The Foreign Investment Promotion Act (including the Foreign Investment and Foreign Capital Inducement Act before November 17, 1998);

27. The Act on the Structural Improvement of the Financial Industry;

28. The Real Estate Investment Company Act; ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

29. The Korea Housing Finance Corporation Act;

30. The Public Notice of Values and Appraisal of Real Estate Act;

31. The Housing Act;

32. The Depositor Protection Act; and

33. The Guarantee of Workers' Retirement Benefits Act; (2) The term "persons prescribed by Presidential Decree" in Article 8 (1) 5 of the Act means executives and employees at the time when causes making up reasons for revocation of the license for, authorization for or registration of business have accrued (in the case of corporations or companies for which any authorization or permission, etc. has been revoked pursuant to Article 14 (2) of the Act on the Structural Improvement of the Financial Industry, referring to the officers or employees at the time when causes making up reasons for timely corrective measures under Article 10 of the same Act have occurred), who fall under any of the following subparagraphs:

1. The auditor or the members of the audit board;

2. Officers who have been subjected to caution, warning, censure, suspension of duties, demand for dismissal or other measures by the Financial Services Commission or the Governor of the Financial Supervisory Service due to illegal or unlawful acts in connection with an occurrence of causes making up reasons for revoking any permission, authorization, registration, etc.;

3. Employees who have been subjected to measures corresponding to a demand for suspension of duties or heavier by the Financial Services Commission or the Governor of the Financial Supervisory Service due to illegal or unlawful acts in connection with an occurrence of causes making up reasons for revoking any permission, authorization, registration, etc.; and

4. Persons subject to sanctions under subparagraph 2 or 3, who have resigned or retired prior to being subjected to such sanctions. Article 17 (Fund Managers)

(1) Every asset management company shall secure, as its full-time executives and employees, five or more (two or more in case where a license for the asset management company is obtained, under the conditions that only a real estate fund shall be established or created, from the Financial ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Services Commission, or the special account under Article 135 (1) of the Act whose scale is not larger than that prescribed by Ordinance of the Prime Minister, or the management is performed by ways falling under each subparagraph of Article 116 (1) of this Decree) of fund managers fulfilling the requirements under any one of the following subparagraphs, who do not fall under any subparagraph of Article 8 (1) of the Act in accordance with Article 9 (1) of the Act:

1. Any person who has worked not less than 3 years at financial institutions under subparagraphs 3 through 5 of Article 6, securities-related organizations under the Securities and Exchange Act (including foreign securities-related organizations which are similar thereto), financial institutions under Article 38 of the Act on the Establishment, etc. of Financial Services Commission, the Korea Investment Corporation under the Korea Investment Corporation Act, international financial institutions under each subparagraph of Article 2 (1) of the Act on the Measures for the Admission to International Financial Institutions, specialized departments in charge of the management of assets which the fund managers under Article 8 (1) of the State Finance Act establish in accordance with Article 77 (1) of the same Act, or pension services, etc. entrusted with the management and operation of funds in accordance with the Acts which are grounds for founding funds under the attached Table 2 of the same Act (hereinafter referred to as the "securities-related institutions, etc." ) and has worked not less than 2 years in the business of managing the indirect investment property (including the trust property under the Trust Business Act), the proprietary property whose scale of management is not less than that prescribed by Ordinance of the Prime Minister, or the fund under the State Finance Act as assets under subparagraph 1 (a) or (b) of Article 2 of the Act (hereinafter referred to as the "duty specialized in management");

2. Any person who has worked not less than 2 years for the duty specialized in management at the securities-related institution, etc. with a master's degree or higher in any securities-related field including business administration, economics, etc.;

3. Any person who has worked not less than 2 years, as a certified public ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

accountant, for the duty specialized in management at the securities-related institution, etc.;

4. Deleted; or

5. Any person who has passed the examination recognized by the Financial Services Commission as the one that can be used to verify the ability as a fund manager.

(2) When any asset management company seeks to create or establish a real estate fund (including any indirect investment fund which invests over 40/100 of the indirect investment property in the buying of beneficiary rights following the entrustment of a claim on loan offered to any corporation which runs the business related to the development of real estate, the buying of investment securities issued by any corporation which is established with the aim of the business related to the development of real estate and the buying of beneficiary rights following the entrustment of such investment securities; hereafter the same shall apply in this Article), it shall secure three or more fund managers who fulfill the requirements under any one of the following subparagraphs and do not fall under any of subparagraphs of Article 8 (1) of the Act, as its full-time executives and employees, in addition to fund managers under paragraph (1). In this case, not less than two of them shall fall under subparagraphs 1 through 4:

1. Any person who has worked not less than 5 years in the field related to the appraisal of real estate or the real estate-related field as a certified appraiser of real estate;

2. Any person who has worked not less than 3 years in the business related to the management of real estate including the aquisition, management and development thereof, advice thereon, etc. (hereafter referred to as the "real estate management business" in this paragraph) with a master's degree or higher in real estate-related field;

3. Any person who has worked not less than 3 years in the duty of managing real estate from among the persons who have worked not less than 5 years at any foreign real estate investment company which performs the business of investing in or managing real estate as its main business;

4. Any person who has worked not less than 3 years in the duty of managing real estate at any real estate investment company, any real estate ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

investment counsel company or any asset management company under the Real Estate Investment Company Act, any trust company under the Trust Business Act (limited to the case of trust property), or any other real estate related company or institution, etc. determined and published by the Financial Services Commission; or

5. Any person who is a fund manager under paragraph (1) and finishes the training prescribed by Ordinance of the Prime Minister. (3) Notwithstanding paragraph (1), when any asset management company creates or establishes an indirect investment fund (including any indirect investment fund which invests over 40/100 of the indirect investment property in the buying of beneficiary rights following the entrustment of a claim on loan offered to any infrastructure-related corporation, the buying of investment securities issued by any infrastructure-related corporation and the buying of beneficiary rights following the entrustment of such investment securities; hereafter the same shall apply in this Article) which invests in the infrastructure under the Act on Private Participation in Infrastructure (hereafter referred to as the "infrastructure" in this paragraph), it shall secure three or more fund managers who fulfill the requirements under any one of the following subparagraphs and do not fall under any of subparagraphs of Article 8 (1) of the Act, as its full-time executives and employees:

1. Any person who has worked not less than 3 years for the business relating to the infrastructure (hereafter referred to as the "business of managing infrastructure" in this paragraph) including the business of investment, loaning, development, management, advice, etc. with a master's degree or higher in an infrastructure-related field including business administration, economics, etc.;

2. Any person who has worked not less than 2 years for the business of managing infrastructure as a certified public accountant or an attorney-at-law;

3. Any person who has worked not less than 3 years for the business of managing infrastructure at any financial institution under Article 6;

4. Any person who has worked not less than 3 years for the business of managing infrastructure at any foreign financial institution which ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

manages assets in relation to the infrastructure, whose scale is not less than the amount of one trillion won; or

5. Any person who has worked not less than 5 years for the business of managing infrastructure.

(4) The fund managers under paragraph (2) shall not manage the indirect investment property other than the real estate fund, and the fund managers under paragraph (3) shall not manage the indirect investment property other than the indirect investment fund which invests in the infrastructure. (5) In calculating the numbers of fund managers under paragraphs (1) through (3), if any identical person satisfies the requirements for fund managers under paragraphs (1) through (3), the said person shall be included in the respective numbers of fund managers.

(6) The Asset Management Association of Korea may determine details necessary for registering fund managers including ways of registering fund managers, procedures for registration, revocation and suspension of effect of registration, restriction on renewed registration, etc. Article 18 (Appointment, etc. of Outside Directors) The term "asset management company prescribed by Presidential Decree" in the former part of Article 10 (1) of the Act and in Article 12 (1) of the Act means any asset management company in which the sum of total amount of the operational assets of the indirect investment funds is not less than six trillion won as of the end of the latest business year: Provided, That any asset management company of the following subparagraphs shall be excluded:

1. The domestic branches and other types of business places (hereinafter referred to as "domestic branches, etc.") of foreign asset management companies under Article 156 of the Act (hereinafter referred to as "foreign asset management companies");

2. The asset management companies for which the termination within 6 months due to mergers, etc. has been settled at the regular general meeting of stockholders;

3. The asset management companies for which rehabilitation procedures have been commenced in accordance with the Debtor Rehabilitation and Bankruptcy Act;

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4. The asset management companies which have been declared bankrupt; and

5. The asset management companies whose dissolution has been resolved. Article 18-2 (Outside Directors of Asset Management Company) (1) The term "companies which have important business relationship prescribed by Presidential Decree or which are competitors or collaborators" in Article 10 (4) 10 of the Act means corporations (excluding institutional investors under Article 163 (1) 1 and foreign financial institutions corresponding thereto) falling under each of the following subparagraphs:

1. The corporation whose total amount of transaction with the relevant asset management company is not less than 10/100 of the total amount of the assets (referring to the total amount of the assets of the asset management company on the balance sheet as of the end of the latest business year) or the total amount of sales (referring to the total amount of the sales of the asset management company on the statement of profit and loss as of the end of the latest business year; hereafter the same shall apply in this Article) during the last three business years;

2. The corporation which concludes a single transaction contract equivalent to the amount not less than 10/100 of the total sales amount with the relevant asset management company during the latest business year;

3. The corporation, the total amount of lending or borrowing money, securities and other types of certificates or instruments and providing debt guarantee including furnishing any security etc. by the relevant asset management company to and from which, is 10/100 or more of the capital (referring to the capital of the relevant company on the balance sheet as of the end of the latest business year) during the latest business year;

4. The corporation in which the relevant asset management company invests 5/100 or more of the capital (referring to the capital of the corporation in which the relevant company has invested) as of the date on which the regular general meeting of stockholders is held;

5. The corporation with which the relevant asset management company concludes a contract on technical cooperation;

6. The accounting firm which is appointed as an auditor of the relevant ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

asset management company; or

7. The corporation which concludes an advisory contract for giving counsel on laws, business administration, etc. with the relevant asset management company.

(2) The term "persons prescribed by Presidential Decree" in Article 10 (4) 12 of the Act means the persons falling under each of the following subparagraphs:

1. Any person who holds the post of outside director, part-time director, or part-time auditor at two or more corporations listed on the stock market or on the KOSDAQ market in addition to the relevant asset management company; or

2. Any attorney-at-law, certified public accountant or certified tax accountant who has worked for the relevant asset management company as an accounting auditor or a tax agency, or has concluded contracts for giving counsel on laws, business administration, etc. with the relevant company, or any person who provides other kinds of counseling service to the relevant company;

3. Any person who holds stocks (referring to the holding of stocks under Article 21 (1) of the Securities and Exchange Act) equivalent to 1/100 or more of the total number of the issued stock of the relevant asset management company; or

4. Any person whose balances from the transaction (excluding fixed form of transactions with the relevant asset management company in accordance with the standardized contracts under Article 2 (1) of the Regulation of Standardized Contracts Act) with the relevant asset management company, other than subparagraph 3, is not less than 100 million won.

[This Article Newly Inserted by Presidential Decree No. 20553, Jan. 18, 2008] Article 19 (Internal Control Standards)

(1) The internal control standards under Article 11 (1) of Act (hereinafter referred to as the "internal control standards") shall contain the matters falling under each of the following subparagraphs:

1. Matters concerning the division of work load and the organizational structure;

2. Matters concerning the guideline on control of risks which may occur ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

in the process of the management of indirect investment property or the execution of business;

3. Matters concerning the procedures that shall necessarily be observed by executives and employees when they do the business;

4. Matters concerning the establishment of efficient communication system for the information necessary for the decision making on the business administration;

5. Matters concerning procedures and ways by which the confirmation on whether executives and employees have complied with internal control standards or not is possible and measures against executives and employees who have violated internal control standards;

6. Matters concerning procedures or standards for the prevention of any unfair trade including reports on the details of transaction of investment securities, exchange traded derivatives, and over-the-counter derivatives by executives and employees;

7. Matters concerning the procedures of enactment or amendment of internal control standards;

8. Matters concerning the procedures for the appointment and dismissal of the compliance officer under Article 11 (2) of the Act;

9. Matters concerning whether regulations and internal guidelines related to the exercise of voting rights of stocks held as an indirect investment property are observed; or

10. Specific standards regarding matters under subparagraphs 1 through 9, which are prescribed by the Financial Services Commission. (2) Every asset management company (excluding the domestic branches, etc. of any foreign asset management company) shall, when it seeks to formulate or change the internal control standards, go through a resolution thereon of the board of directors.

(3) Every asset management company shall, in order to secure the independence of duty of the compliance officer, have the compliance officer conduct his/her duty on the position independent from those of executives and employees.

Article 19-2 (Audit Committee of Asset Management Company) The term "specialists in accounting or finance, as prescribed by Presidential Decree" in Article 12 (2) 2 of the Act shall be the persons who fall under any one of the following subparagraphs: 26

20653, Feb. 29, 2008>

1. Any person who holds qualification for a certified public accountant and has worked not less than 5 years for the duty related to such qualification after being certified;

2. Any person who has worked not less than 5 years as a researcher, a full-time lecturer or higher in finance or accounting related field at a research institute or university with a master's degree or higher in the field of finance or accounting;

3. Any person who has worked not less than 5 years in finance or accounting related field at a corporation listed on the stock market or the KOSDAQ market as an executive or who has worked not less than 10 years therein as an executive or employee;

4. Any person who has worked not less than 5 years in finance or accounting related field or in other related supervisory field for the State, a local government, a public agency under the Act on the Management of Public Agencies, the Financial Supervisory Service, the Korea Securities and Futures Exchange under the Korea Securities and Futures Exchange Act (hereinafter referred to as the "Korea Securities and Futures Exchange") or a securities-related institution under Article 2 (17) of the Securities and Exchange Act; or

5. Any person who has worked not less than 5 years in finance or accounting related field at an institution subject to inspection (including any foreign financial institution corresponding thereto) under 38 of the Act on the Establishment, etc. of Financial Services Commission. [This Article Newly Inserted by Presidential Decree No. 20553, Jan. 18, 2008] Article 20 (Minority Stockholders' Rights)

(1) The term "asset management company prescribed by Presidential Decree" in Article 13 (1) of the Act means any asset management company (excluding domestic branches, etc. of any foreign asset management company) in which the sum of total amount of the operational assets of the indirect investment funds is not less than six trillion won as of the end of the latest business year.

(2) The term "any person who has held the stock under the conditions as prescribed by Presidential Decree" in Article 13 (1) through (6) of the Act means each person who holds stocks in ways of any subparagraph of Article 84-20 (2) of the Enforcement Decree of the Securities and Exchange ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Act. (3) The term "corporation prescribed by Presidential Decree" in Article 13 (2) through (6) of the Act means any asset management company whose capital is not less than 100 billion won as of the end of the latest business year.

Article 21 (Restrictions on Trading of Securities by Executives and Employees)

The term "case that is prescribed by Presidential Decree" in Article 15 (1) of the Act means any case falling under each of the following subparagraphs:

1. The case of any subparagraph of Article 35 of the Enforcement Decree of the Securities and Exchange Act. In this case, the "securities company" shall be deemed the "asset management company";

2. The case of saving in securities (referring to saving in securities pursuant to the business of securities savings under Article 50 of the Securities and Exchange Act) within 50/100 (if the calculated amount is less than 100 thousand won, it shall be deemed 100 thousand won) of a monthly pay. In this case, the amount of the monthly pay shall be obtained following the methods of calculating fixed monthly pay in accordance with Article 17 (4) of the Enforcement Decree of the Income Tax Act; and

3. The case of performing terms of exchange traded derivatives or over-the-counter derivatives transacted before becoming executives and employees of the asset management company.

Article 22 Deleted. Article 23 (Management of Proprietary Property of Asset Management Company)

(1) The term "case that is prescribed by Presidential Decree" in the proviso to the portion other than each subparagraph of Article 16 (1) of the Act means the case falling under each of the following subparagraphs:

1. Where the provisions of Article 16 (1) 1 of the Act are applied, the act of guaranteeing the repayment of debts for others approved by the Financial Services Commission due to any inevitable causes ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

including the efficiency promotion of asset management, etc.;

2. Where the provisions of Article 16 (1) 2 of the Act are applied, the act of acquiring assets denominated in foreign currency falling under any one of the following items within the scope not exceeding 30/100 of the capital:

(a) Office buildings of the overseas branches or the overseas offices or the residential real estates of employees who work therefor; (b) Facilities, articles, fixtures or rights which are necessary for the business of the overseas branches or the overseas offices; or (c) Assets approved by the Financial Services Commission due to any inevitable causes including the efficiency promotion of asset management, etc.;

3. Where the provisions of Article 16 (1) 3 of the Act are applied, the act of acquiring investment securities under any of the following items within the scope (excluding the case of item (h)) equivalent to the capital of the asset management company:

(a) Investment securities under each subparagraph of Article 73 (1) or Article 73 (2) 1 through 4;

(b) Debentures under Article 2 (1) 3 of the Securities and Exchange Act;

(d) Investment securities acquired as a result of exercise of a security right, receipt of reimbursement of a debt, or receipt of gift. In this case, the acquired investment securities shall be disposed of immediately;

(e) Stocks of an investment company which shall be taken over at the time when the investment company is established, as a promoter of the relevant investment company;

(f) Newly issued stocks which shall be taken over within 10/100 of the total number of stocks issued by an investment company after its establishment, as a promoter of the relevant investment company at the time of its establishment;

(g) Stocks of an overseas corporation acquired with the approval of the Financial Services Commission in order to acquire its shares after the corporation is established;

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

(h) Investment securities or shares of a private equity fund approved by the Financial Services Commission due to any inevitable causes including the promotion of efficiency in the asset management; or (i) Indirect investment securities of the short-term financial indirect investment funds operated by other asset management companies; and

4. In the case to which the provisions of Article 16 (1) 4 of the Act are applied, the case falling under any one of the following items: (a) Extension of credit to an executive within the scope of the lesser amount between the annual wage (referring to the amount of wage subject to income tax payed by the relevant asset management company during the service term) and 100 million won; or (b) In the case of falling under subparagraphs 2 and 3 and the extension of credit under Article 16 (1) 4 of the Act, such extension of credit. (2) The term "transactions prescribed by Presidential Decree" in Article 16 (1) 4 of the Act means those falling under any one of the following subparagraphs:

1. Transaction of offering securities for any large stockholder (including his/her specially related persons; hereafter the same shall apply in this paragraph);

2. Transaction of endorsing bills (excluding the endorsement having no security right under Article 15 (1) of the Bills of Exchange and Promissory Notes Act) for any large stockholder;

3. Transaction of stipulating an investment for any large stockholder;

4. Transaction falling under any one of the following items, which is made with the aim of evading the restriction (referring to the restriction on lending properties with economic values such as money or securities, guarantee of fulfillment of liabilities, purchasing securities, in fact, just to supply fund, and transaction under any one of subparagraphs 1 through 3) on extension of credit to any large stockholder: (a) Cross-transaction by means of a contract or collusion, etc. with any third party; or

(b) Transaction using over-the-counter financial derivatives, trust contract, hedging, etc. In this case, specific instruments, types, criteria, or such shall be determined and published by the Financial ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Services Commission; or

5. Other transactions which are accompanied with credit risk including undertaking of financial liabilities, and determined and prescribed by the Financial Services Commission.

(3) The term "acts prescribed by Presidential Decree" in Article 16 (1) 5 of the Act means those falling under any one of the following subparagraphs:

1. Deleted;

2. Acts of trading exchange traded derivatives or over-the-counter derivatives; or

3. Acts of investing in assets (including beneficiary certificates of investment trust issued by himself/herself) under each subparagraph of Article 3: Provided, That the cases of subparagraphs 4 and 8 of Article 3 and paragraph (1) 2 (e), (f), (h) (limited to the shares of a private equity fund) and (i) of this Article shall be excluded. (4) The term "cases determined by Presidential Decree" in the former part of Article 16 (2) of the Act means the cases where the credit extension is to be made within the scope of the lesser amount between the amount of a single transaction, determined and published by the Financial Services Commission, corresponding to 10/10000 of the capital and 1 billion won: Provided, That the amount of the transaction falling under any field of normal transactions of the relevant asset management company, which is made in accordance with the standardized contract under Article 2 of the Regulation of Standardized Contracts Act, shall be excluded from the amount of the single transaction. (5) The term "matters prescribed by Presidential Decree" in Article 16 (4) of the Act means those falling under any of the following subparagraphs:

1. Amount of the credit extension as of the end of the quarter;

2. Increased or decreased amount of the credit extension during the quarter;

3. Transactional terms of the credit extension; or

4. Other matters determined and published by the Financial Services Commission.

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(6) The term "cases prescribed by Presidential Decree" in Article 16 (7) of the Act means those falling under any of the following subparagraphs:

1. Where the liabilities of any stockholder (the foregoing shall be applied only to a company including any specially related persons which is a company; hereafter the same shall apply in this paragraph) exceeds the asset; or

2. Where any stockholder is rated a non-investment grade by two or more operators of credit rating service under the Use and Protection of Credit Information Act.

Article 24 (Classification, etc. of Asset Soundness) (1) Every asset management company shall classify soundness of assets held by itself as of the end of every quarter as prescribed by the Financial Services Commission and accumulate appropriations for bad debts.

(2) Every asset management company shall report to the Financial Services Commission on the results of classification of asset soundness and of the accumulation of appropriations for bad debts under paragraph (1). In this case, the asset management company shall report a properly estimated collection amount of assets below the specific rating, as prescribed by the Financial Services Commission.

(3) Every asset management company shall prepare and maintain the records on transactions which are not indicated on financial statements (hereinafter referred to as the "non-ledger transaction") in order to maintain the soundness of assets held by it.

(4) The Financial Services Commission may determine detailed matters necessary for preparing and keeping of records on the non-ledger transaction in accordance with paragraph (3).

Article 25 (Guidelines for Risk Control)

(1) Every asset management company shall prepare guidelines for risk control, subject to a resolution by the board of directors, in order to maintain the efficiency in operating the proprietary property and to control the risk in accordance with Article 16 (8) of the Act.

(2) Every asset management company shall, when it prepares guidelines ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

for risk control or changes the important matters thereof, report thereon to the Financial Services Commission.

(3) If it is deemed necessary, the Financial Services Commission may ask an asset management company to improve the guidelines for risk control. (4) The Financial Services Commission may determined the contents of the guidelines for risk control under paragraph (1) and other necessary detailed matters. Article 26 (Accounting of Proprietary Property)

(1) Every asset management company shall, in accordance with Article 16 (8) of the Act, manage the accounting of proprietary property pursuant to the provisions of the following subparagraphs:

1. The fiscal year shall be the period set by Ordinance of the Prime Minister;

2. The indirect investment property and the proprietary property of the asset management company shall be strictly divided and accounted accordingly; and

3. The working rule governing accounting method for the business of indirect investment asset management and the financial accounting standards as determined by the Financial Services Commission shall be complied with.

(2) The Financial Services Commission may prescribe detailed matters necessary for the accounting of proprietary property including accounting method, kinds of accounts, the order for arrangement thereof, etc., which are not determined in the working rule governing accounting method for the business of indirect investment asset management and the financial accounting standards under subparagraph 3 of paragraph (1).

Article 26-2 (Scope of Exercise of Unjust Influence) The term "acts prescribed by Presidential Decree" in Article 16-2 (1) 3 of the Act shall be acts falling under any one of the following subparagraphs:

1. Act of demanding that an asset management company do unlawful acts; or

2. Act of demanding transaction with the large stockholder himself/herself or a third party on terms that are different from conventional transaction terms regarding interest rate, commission, security, etc. ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

[This Article Newly Inserted by Presidential Decree No. 20553, Jan. 18, 2008] Article 27 (Report, etc. on Management)

(1) Every asset management company shall, in accordance with Article 17 (1) of the Act, submit the report on the settlement of accounts which includes the matters falling under each of the following subparagraphs to the Financial Services Commission and the Asset Management Association of Korea under Article 160 of the Act (hereafter referred to as the "Asset Management Association of Korea"), within three months from the end of the relevant fiscal year:

1. Written statement indicating the date and time of the general meeting of stockholders and the purport of the resolution made therein;

2. Financial Statements; and

3. Audit report. (2) Every asset management company shall, in accordance with Article 17 (1) of the Act, submit the regular report as of the end of quarter which include the matters falling under each of the following subparagraphs to the Financial Services Commission and the Asset Management Association of Korea, within 20 days from the end of every quarter:

1. Balance sheet;

2. Statement of profit and loss;

3. Matters concerning the classification of asset soundness under Article 24;

4. Report on the standards regarding financial soundness prescribed by the Financial Services Commission; and

5. Other matters than subparagraphs 1 through 4, required for the confirmation on the company management, prescribed by Ordinance of the Prime Minister.

(3) Every asset management company may submit the report under paragraphs (1) and (2) in the form of written or electronic data as prescribed by the Financial Services Commission.

(4) Every asset management company shall, when it falls under any one of subparagraphs of Article 17 (4) of the Act, report to the Financial Services Commission thereon without delay: Provided, That the Financial Services ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Commission may determine the deadline for report separately in recognition of the importance level of the fact: Article 28 (Public Disclosure of Business Operation) (1) Every asset management company shall publish matters on business operation in accordance with Article 17 (3) by means of Internet homepages of the relevant asset management company and the Asset Management Association of Korea or by posting on the bulletin board in front of the headquarters, branch offices and business places of the relevant asset management company, and submit the contents thereof to the Financial Services Commission. (2) The term "matters that are prescribed by Presidential Decree" in Article 17 (3) 5 of the Act means those falling under the following subparagraphs:

1. The profile of the company including its representative, the date of establishment, etc.;

2. The paid-in capital and the kinds and number of issued stocks;

3. Matters concerning the major stockholders who holds 10/100 or more of the total number of the issued stocks;

4. Matters concerning stock dividends including dividend rate, earnings for the current period per share, dividend payout ratio, etc.; and

5. Other matters corresponding to subparagraphs 1 through 4, which are prescribed by the Financial Services Commission. (3) The Financial Services Commission may, when any asset management company publishes the matters to be published under paragraph (1) falsely or unfaithfully, such as the ommission of important matter, ask the relevant asset management company to correct the published matters or make a re-publication. (4) Every asset management company shall, when its business soundness is harmed or may be harmed because it falls under any of the following subparagraphs, publish relevant matters:

1. The occurrence of large loss, financial incident, etc.;

2. The occurrence of significant change in the financial structure including increase or decrease of capital, large borrowings, etc.;

3. The change of the largest or major stockholders; or ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

4. Other cases corresponding to subparagraphs 1 through 3 as prescribed by the Financial Services Commission.

(5) Where an asset management company publishes matters on business operation in accordance with paragraphs (3) and (4), the Financial Services Commission may determine the details regarding the time and procedures thereof. Article 29 (Matters to be Considered for Approval or Authorization) (1) The term "matters prescribed by Presidential Decree" in the latter part of Article 18 (1) of the Act means those falling under each of the following subparagraphs:

1. Whether the standards for financial soundness prescribed by the Financial Services Commission are satisfied or not; or

2. Whether the capital under Article 5 (1) 1 of the Act is maintained or not.

(2) The term "matters prescribed by Presidential Decree" in the latter part of the portion other than each subparagraph of Article 18 (2) of the Act means those falling under each of the following subparagraphs:

1. Whether a dissolution, merger, etc. undermines the sound financial order or not;

2. Whether a dissolution, merger, etc. causes unjust disadvantages to indirect investors or not; or

3. Whether the procedures and contents of a dissolution, merger, etc. have any defect in view of the Act, the Commercial Act, the Monopoly Regulation and Fair Trade Act and finance-related Acts and subordinate statutes.

Article 30 (Scope of Restrictions on Exchange of Personnel and Information)

(1) Concurrently holding posts of or seconding executives and employees (excluding a part-time auditor and, where the business of any asset management company is held concurrently in accordance with Articles 134 through 136 of the Act, they shall be limited to executives and employees who execute the business of the licensed asset management company concerned) under Article 20 (1) 1 of the Act mean the act of having executives and employees of any asset management company hold concurrently duties of executives and employees of its affiliate company or the act of having ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

executives and employees of any asset management company be seconded to its affiliate company.

(2) The joint acts under Article 20 (1) 2 of the Act mean the acts falling under any of the following subparagraphs, performed by any asset management company jointly with any distribution company in order to increase the interests of such distribution company or indirect investors:

1. Acts by any distribution company that has any asset management company buy assets held by indirect investors with the aim under any of the following items:

(a) Additional selling of indirect investment securities: (b) Acquiring of commissions following intermediating the transaction of assets; or

2. Acts by any distribution company that has any asset management company buy investment securities held or issued by indirect investors in securities markets, etc. under subparagraph 8 of Article 2 of the Ac (hereinafter referred to as the "securities markets, etc.") for the purpose of any item of subparagraph 1 in order to raise the market price of such investment securities.

(3) The provision of information prescribed in Article 20 (1) 3 of the Act means the provision by any asset management company of details of asset portfolio of the indirect investment property or the information on selling and buying of assets which has come to know during executing its duty, to its affiliate or a distribution company and vise versa. (4) The term "acts prescribed by Presidential Decree" in Article 20 (1) 4 of the Act means those falling under any one of the following subparagraphs:

1. Acts of using offices or the data-processing equipment relating to the management of any indirect investment property by any asset management company jointly with its affiliate company or any distribution company: Provided, That this shall not include the act of using jointly the data-processing equipment after obtaining approval from the Financial Services Commission as there is no concern for ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

the occurrence of the conflict of interests with the indirect investment fund by equipping them with any cutoff system for the prevention of unfair use of information on the indirect investment property and by preparing internal control standards;

2. Acts of providing money, goods. convenience, etc. for selling or as an compensations for selling in addition to remunerations paid for selling by any asset management company to any distribution company or the executives and employees of any distribution company or to an acquisition adviser under Article 61-2 (2) of the Act by ways of omitting the making and keeping of records on the purpose of providing money, goods. convenience, etc. and its details, the receiver, etc. In this case, the details necessary for scope of and limits on money, goods, convenience, etc. shall be prescribed by the Financial Services Commission.

(5) The term "cases prescribed by Presidential Decree" in Article 20 (2) of the Act means those falling under any one of the following subparagraphs:

1. As regards acts under Article 20 (1) 1 of the Act, the cases prescribed by Ordinance of the Prime Minister and approved by the Financial Services Commission as there is no conflict of interest in relation to the management of indirect investment property of any asset management company; or

2. Cases falling under any one of the following items from among those under Article 20 (1) 3 of the Act:

(a) The case of providing information not undermining interests of indirect investors including information on the past management of indirect investment property as prescribed by Ordinance of the Prime Minister to any distribution company or any affiliate company; (b) The case of providing information by any asset management company to its affiliate company in order to have the latter perform the business of ordering sale and purchase of investment securities following the management of indirect investment property by such asset management company, or the task of checking on the observance of the internal control standards of such asset management company; or

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

(c) The case of providing information to an affiliate company with the approval of the Financial Services Commission for the purpose of performing duties including report or publication of held stocks, etc. in accordance with domestic and foreign Acts and subordinate statutes.

(6) Any person who is provided with information on indirect investment property in accordance with paragraph (5) may use such information only for the intended purpose, and shall not use it for trades or other duties, nor provide it to a third party.

(7) The requirements for a contract which shall be concluded in case where information is provided in accordance with paragraph (5) 2 (b) and other necessary matters concerning the system by which the conflict of interests can be prevented shall be prescribed by Ordinance of the Prime Minister. Article 31 (Scope of Undisclosed Information on Management of Indirect Investment Property)

The undisclosed management information of the indirect investment fund under Article 21 of the Act means information falling under each of the following subparagraphs:

1. The fact of intending to sell or buy specific assets with indirect investment property;

2. The fact regarding the composition of assets held by the indirect investment fund; or

3. Other facts equivalent to subparagraphs 1 and 2, which have significant influence on the investment judgment of indirect investors and are prescribed by Ordinance of the Prime Minister.

SECTION 2 Persons Related to Indirect Investment

Article 32 (Trustee Company and Asset Custody Company) (1) The term "businesses prescribed by Presidential Decree" in Articles 23 (2) 5 and 24 (2) 3 of the Act means those falling under each of the following subparagraphs:

1. The receipt of interests, dividends, earnings, rentals, etc. accruing from the indirect investment property;

2. The receipt of new stocks issued without compensation; ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

3. The revenue from the redemption of investment securities;

4. The revenue of interests accruing from the operation of free cash; or

5. Other businesses corresponding to subparagraphs 1 through 4 as recognized and published by the Financial Services Commission. (2) Every trustee company and every asset custody company shall secure experts under any of the following subparagraphs who do not fall under any one of subparagraphs of Article 8 (1) of the Act, in accordance with Articles 23 (3) 2, and 24 (3) of the Act:

1. Two or more of compliance experts who belong to any compliance-related department and fulfill requirements under any of the following items: (a) Any person who has worked not less than two years in the regulation-related field from among those who have worked not less than three years at any securities-related institution, etc. or any general fund administrator; or

(b) Any attorney-at-law who has worked not less than two years in the regulation-related field at any securities-related institution, etc. or any general fund administrator; or

2. Two or more of indirect investment fund accounting experts who belong to any accounting-related department and fulfilling requirements under any one of the following items:

(a) Any person who has worked not less than two years in the business of calculating asset values including securities, etc., the business of a trustee company or asset custody company from among those who have worked not less than three years at any securities-related institution, etc., any insurance company under the Insurance Business Act, or any general fund administrator; or (b) Any certified public accountant who has worked not less than 2 years for the duty related to the calculation of value of securities or other assets at any securities-related institution, etc. or any general fund administrator.

(3) The term "physical facilities prescribed by Presidential Decree" in Article 23 (3) 3 of the Act means those falling under each of the following subparagraphs:

1. The data-processing equipment separated from the business other than ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

the business of a trustee company (including the business of managing and keeping in custody assets falling under each item of subparagraph 1 of Article 2 of the Act in accordance with other Acts; hereafter the same shall apply in this Article). In this case, such data-processing equipment shall be equipped with necessary secondary equipment so as to maintain the continuity of business where any accident including blackout, fire, etc. occurs; or

2. Office which is spatially separated from those for running business other than those of a trustee company and use its own door. (4) The term "requirements prescribed by Presidential Decree" in Article 23 (3) 4 of the Act means the standards for financial soundness prescribed by the Financial Services Commission.

(5) The standards for financial soundness under paragraph (4) shall not apply to the securities finance companies under the Securities and Exchange Act. (6) Any person who intends to be registered as a trustee company or an asset custody company shall submit an application for registration to the Financial Services Commission. In this case, matters to be entered in the application for registration and matters necessary for the accompanying documents shall be prescribed by Ordinance of the Prime Minister.

Article 33 (General Fund Administrator)

(1) The term "financial institutions prescribed by Presidential Decree" in Article 25 (1) 3 of the Act means the financial institutions under subparagraphs 1 through 4 of Article 11.

(2) The term "businesses prescribed by Presidential Decree" in Article 25 (2) 5 of the Act means those falling under each of the following subparagraphs:

1. The notice and publication prescribed by Acts and subordinate statutes or the articles of incorporation;

2. The business of convening and managing the board of directors or the general meeting of stockholders; and

3. Other matters entrusted by an investment company. (3) The term "amount prescribed by Presidential Decree" in Article 25 (3) 1 of the Act shall be two billion won.

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

(4) The term "fund managers satisfying the standard of which is prescribed by Presidential Decree" in Article 25 (3) 2 of the Act shall be fund managers under Article 32 (2) 2.

(5) The term "physical facilities prescribed by Presidential Decree" in Article 25 (3) 3 of the Act means those falling under each of the following subparagraphs:

1. The data-processing equipment separated from the business other than the business of a general fund administrator. In this case, such data-processing equipment shall be equipped with necessary secondary equipment so as to maintain the continuity of business where any accident including blackout, fire, etc. occurs; and

2. Office which is spatially separated from those for running business other than those of a general fund administrator and use its own door. (6) Any person who intends to be registered as a general fund administrator shall submit an application for registration to the Financial Services Commission. In this case, matters to be entered in the application for registration and matters necessary for the accompanying documents shall be prescribed by Ordinance of the Prime Minister.

Article 34 (Distribution Company)

(1) The term "persons prescribed by Presidential Decree" in Article 26 (1) 4 of the Act means those falling under each of the following subparagraphs:

1. Futures companies (limited to the case of selling any derivative fund) under the Futures Trading Act;

2. Merchant banks under the Merchant Banks Act; and

3. The securities finance companies under the Securities and Exchange Act.

(2) The term "physical facilities, including data-processing equipment, which are prescribed by Presidential Decree" in Article 26 (5) 3 of the Act means data-processing equipment separated from other businesses (referring to the businesses of any asset management company, any trustee company, any asset custody company, and any general fund administrator which are run by a distribution company) than the business of a distribution company. In this case, such data-processing equipment shall be equipped with necessary secondary equipment so as to maintain the continuity of ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

business where any accident including blackout, fire, etc. occurs. (3) Any person who intends to be registered as a distribution company shall submit an application for registration to the Financial Services Commission. In this case, matters to be entered in the application for registration and matters necessary for the accompanying documents shall be prescribed by Ordinance of the Prime Minister.

CHAPTER INDIRECT INVESTMENT

FUND

SECTION 1 Composition and Registration of Indirect Investment Fund

Sub-Section 1 General Rules

Article 35 (Kinds of Indirect Investment Fund)

(1) The term "ratio prescribed by Presidential Decree" in subparagraph 1 of Article 27 of the Act means 40/100.

(2) The case of investing for the purpose of avoiding any risk in accordance with subparagraph 2 of Article 27 of the Act means the case where any asset management company manages indirect investment property of a derivative fund as the exchange traded derivatives or the over-the-counter derivatives, operating them in the ways in which the appraised amount of the risk [referring to the amount calculated by using arithmetic mean of daily appraised amounts of the risk of every month (if the relevant indirect investment fund is terminated or dissolved before every such full month, referring to a period of up to the relevant date of termination or dissolution) as of the date becoming each full month from the date of creation or establishment of the relevant indirect investment fund; hereafter the same shall apply in this paragraph] involved in the transaction of the exchange traded derivatives and the over-the-counter derivatives exceeds 10/100 of the total amount of the assets of the indirect investment fund as from the date becoming a full month from the date of creation or establishment of the relevant indirect investment fund. In this case, ways of calculating the appraised amount of the risk involved in the ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

transaction of the exchange traded derivatives and the over-the-counter derivatives shall be prescribed by Ordinance of the Prime Minister in accordance with the latter part of Article 88 (1) 3 (a) of the Act.

(3) The term "ratio prescribed by Presidential Decree" in subparagraph 6 of Article 27 of the Act means 50/100.

(4) The term "indirect investment funds prescribed by Presidential Decree" in subparagraph 7 of Article 27 of the Act means indirect investment funds whose main objects of investment are assets under each subparagraph (excluding subparagraphs 1 and 8) of Article 3 (hereinafter referred to as the "indirect investment funds for special assets").

Sub-Section 2 Investment Trust

Article 36 (Matters to be Entered in Trust Deed)

The term "matters prescribed by Presidential Decree" in Article 28 (2) 8 of the Act means matters falling under each of the following subparagraphs:

1. Type of investment trusts under Article 27 of the Act; 1-2. Object of investment (including the major object of investment determined and published by the Financial Services Commission (hereinafter referred to as the "major object of investment");

2. Title of investment trust;

3. Matters concerning the business of the asset management company or the trustee company;

4. Matters concerning any additional trust;

5. Matters concerning the beneficiary certificates;

6. Where the trust contract term is fixed, such term;

7. Matters concerning the appraisal of investment trust property and calculation of the standard price;

8. Matters concerning the alternation of trust deed;

9. Matters concerning the distribution of profits, etc.;

10. Calculation methods of trust fees or other fees paid to the asset ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

management company, trustee company, distribution company and general fund administrator, and the payment means and period;

11. Matters concerning the prices meeting claims for the redemption of beneficiary certificates, and the amount to be deducted in the case of meeting claims for the redemption (hereinafter referred to as the "redemption commissions");

12. Matters concerning the transfer of business of the asset management company;

13. Matters concerning the change of the trustee company;

14. Matters concerning the termination of trust contract; and

15. Other matters other than subparagraphs 1 through 14 which may affect the interests of indirect investors and are determined by the Financial Services Commission to be necessarily entered in the trust deed.

Article 37 (Standard Trust Deed)

In the standard trust deed under Article 30 (1) of the Act, the following matters shall be included:

1. Characteristics, risk levels to be beared, and limits on asset management of objects of investment by kinds of investment trusts under Article 27 of the Act;

2. Matters to be entered in the trust deed in accordance with Article 28 (2) of the Act; or

3. Other matters necessary for the investment judgment of investors and the protection of indirect investors as prescribed by the Financial Services Commission.

Article 38 (Alteration of Trust Deed)

(1) The term "cases prescribed by Presidential Decree" in the main sentence of Article 31 (1) of the Act means those falling under each of the following subparagraphs:

1. The case of change of a trust deed following the amendment of the Act and this Decree or under the order from the Financial Services Commission; or

2. The case of changing minor matters such as a simple correction of words used in a trust deed.

(2) The term "matters that are prescribed by Presidential Decree" in Article ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

31 (2) 4 of the Act means those falling under each of the following subparagraphs:

1. Change in the kind of an investment trust under Article 27 of the Act: Provided, That, this shall not include the case where the change into other kind of investment trust is scheduled at the time of establishment of such investment trust and so the details are indicated in the trust deed concerned;

2. Transfer of the business of an asset management company: Provided, That this shall not include the case in which the transfer is caused by a merger or division of the relevant asset management company;

3. Change into an irredeemable investment trust of an investment trust other than an irredeemable investment trust;

4. Change of the major objects of investment; or

5. Extension of the date of paying the price for redemption. (3) The term "grounds prescribed by Presidential Decree" in the proviso to the portion other than each subparagraph of Article 31 (3) of the Act shall be those falling under any subparagraph of paragraph (1) or the proviso to subparagraph 1 of paragraph (1).

Article 39 (Restrictions on Sales and Advertisements) The term "case that is prescribed by Presidential Decree" in the proviso to Article 33 of the Act means the case being not feared to undermine the interests of beneficiaries even in the case of advertising the summary of an investment trust, because the selling of new types of beneficiary certificates is scheduled under any amendment of the relevant Acts and subordinate statutes. In this case, the fact that the details of the investment trust may be altered in accordance with any amendment of the relevant Acts and subordinate statutes shall be indicated in such advertisement. Article 40 (Payment of Securities, etc.)

(1) When any asset management company seeks to create an investment trust by receipt of payment of securities, real estates or real assets in accordance with the proviso to Article 34 of the Act, such investment trust shall meet the following requirements: Provided, That for the investment trust established with the aim of concluding a contract for blind trust of stocks under the Public Service Ethics Act, the provisions of subparagraph 2 shall not apply: 46

Apr. 27, 2006>

1. It shall be a private investment trust; and

2. The consent shall be obtained from all of other beneficiaries (referring to other investors in the case where an investment trust is initially created).

(2) Where any asset management company seeks to create an investment trust by receipt of payment of securities, real estates or real assets in accordance with paragraph (1), the payment shall made in accordance with a price prescribed by the appraisal committee under Article 95 (3) of the Act (hereinafter referred to as the "indirect investment property appraisal committee"; hereinafter the same shall apply) based on prices under each of subparagraphs of Article 82 (1).

Article 41 (Additional Establishment of Irredeemable Investment Trust) (1) The term "time prescribed by Presidential Decree" in Article 35 (2) of the Act means the time falling under each of the following subparagraphs:

1. When the confirmation as being not feared to undermine the interests of the existing beneficiaries is given from the trustee company;

2. When an investment trust is additionally created within the scope of profit dividends obtained from the investment trust; or

3. When the consent is obtained from all of the existing beneficiaries. (2) When any asset management company issues beneficiary certificates additionally in accordance with paragraph (1), it may determine the issue price of such beneficiary certificates taking into account the standard price under Article 85 (1) and prices transacted at the securities market and at the KOSDAQ market in accordance with Article 96 (1) of the Act.

Sub-Section 3 Investment Company

Article 42 (Matters to be Entered in Articles of Incorporation) (1) The term "matters that are prescribed by Presidential Decree" in Article 37 (2) 9 of the Act means those falling under each of the following subparagraphs:

1. Kinds of investment companies under Article 27 of the Act; ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

1-2. Objects of investment (including the major objects of investment);

2. Matters concerning asset operation and management;

3. Matters concerning the redemption of stocks;

4. Matters concerning the issuance and retirement of stocks;

5. Matters concerning the appraisal of assets;

6. Calculation method of the standard price;

7. Criteria on the pays for directors;

8. Matters concerning the change of articles of incorporation;

9. Matters concerning the distribution of profits, etc.;

10. Summary of a business entrustment contract which to be entered into with any asset management company, any asset custody company, any distribution company or any general fund administrator (including matters concerning the calculation of pay and other commissions and the ways and time of payment thereof);

11. If the period of existence or the grounds for dissolution are prescribed, the contents thereof;

12. Accounting period of any investment company; or

13. Other matters than subparagraphs 1 through 12 which are prescribed by the Financial Services Commission as necessary to be entered in the articles of incorporation of any investment company for the protection of stockholders.

(2) The term "amount prescribed by Presidential Decree" in Article 37 (5) of the Act shall be one billion won.

Article 43 (Payment of Securities, etc.)

The provisions of Article 40 shall mutatis mutandis apply to the case where any promoter intends to pay the amount of subscribed stock in securities, real estates or real assets in accordance with the proviso to Article 38 (2) of the Act. In this case, the "investment trust" shall be deemed the "investment company" and the "beneficiary", the "stockholder." Article 44 (Documents to be Attached to Incorporation Registration) The term "documents prescribed by Presidential Decree" in Article 40 (3) of the Act shall be the following documents:

1. Articles of incorporation:

2. Documents attesting the subscription of stocks;

3. Investigation report of directors;

4. Documents attesting the accepting of appointments by directions; ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

5. Documents attesting the entrustment of the business of transferring titles; or

6. Documents attesting the paid-in and keeping of prices for stocks by the banks and other financial institutions which are in charge of the paid-in of prices for stocks.

Article 45 (Details on Registration)

(1) The term "amount prescribed by Presidential Decree" in Article 41 (2) 2 of the Act shall be one hundred million won. (2) The term "case that is prescribed by Presidential Decree" in the proviso to Article 41 (5) of the Act shall the case being not feared to undermine the interests of stockholders even in the case of advertising the summary of investment company, because the selling of stocks of a new type of investment company is scheduled under any amendment of the relevant Acts and subordinate statutes. In this case, the fact that the details of investment company may be altered in accordance with any amendment of the relevant Acts and subordinate statutes shall be indicated in such advertisement.

(3) The matters falling under each of the following subparagraphs shall be entered in the investment company registration book:

1. Name of an investment company;

2. Date of incorporation;

3. Registration number;

4. Date of registration;

5. Names of an asset management company, asset custody company, distribution company and general fund administrator; and

6. Other matters necessary for the investment judgment of investors and protection of indirect investors as prescribed by the Financial Services Commission.

(4) The Financial Services Commission shall keep the investment company registration book for public reading and post it on the Internet homepage. (5) Any investment company shall submit an application for registration accompanied by the following documents to the Financial Services Commission. In this case, the official in charge shall confirm a certified copy of the corporate register through the mutual utilization of ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

administrative information pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, and if the applicant disagrees with such confirmation, he/she shall attach it.

1. The articles of incorporation of the investment company;

2. Deleted;

3. Documents attesting the payment of stock prices; and

4. The copy of a business entrustment contract which is entered into with any asset management company, any asset custody company, any distribution company or any general fund administrator. Article 46 (Exemption from Application of Alteration Registration) The term "case that is prescribed by Presidential Decree" in Article 42 (1) of the Act shall be the case of falling under each of the following subparagraphs:

1. The case where the registered matters are altered in accordance with the amendment of the Act and this Decree or under the order from the Financial Services Commission; or

2. The case of changing minor matters such as a simple correction of words used in registered matters.

Article 47 (Alternation of Articles of Incorporation) The term "matters that are prescribed by Presidential Decree" in Article 44 (1) 4 of the Act shall be those falling under each of the following subparagraphs:

1. Change of the kind of an investment company under Article 27 of the Act: Provided, That this shall not include the case where the change into other kind of investment company is scheduled at the time of establishment of such investment company and so the details are indicated in the articles of incorporation;

2. Change of an asset management company: Provided, That this shall not include the case in which the change is caused by a merger or division of the asset management company;

3. Change of an open-end investment company under Article 52 (2) of the Act into a redemption-prohibited investment company;

4. Change of the major object of investment; or

5. Extension of the date of paying the price for redemption. ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Article 48 (Issuance of New Stocks by Redemption-Prohibited Investment Company)

The term "cases that are prescribed by Presidential Decree" in Article 45 (2) of the Act shall be those falling under each of the following subparagraphs: Amended by Presidential Decree No. 20553, Jan. 18, 2008>

1. The case confirmed by an asset custody company as being not feared to undermine the interests of the existing stockholders;

2. When stocks of an investment company is additionally issued within the scope of profit dividends obtained from the investment company; or

3. When the consent is obtained from all of the existing stockholders. SECTION 2 Issuance of Indirect Investment

Securities

Sub-Section 1 Beneficiary Certificates of Investment Trust Article 49 (Beneficiary Certificates)

(1) The term "manner prescribed by Presidential Decree" in Article 48 (2) of the Act shall be the manner prescribed by Article 174 (5) of the Securities and Exchange Act.

(2) The term "matters prescribed by Presidential Decree" in Article 48 (3) 5 of the Act shall be those falling under each of the following subparagraphs:

1. Marks and numbers;

2. Time for distributing profits;

3. Conditions for redeeming beneficiary certificates (in the case of the beneficiary certificates issued in accordance with Article 35 of the Act, the purport that claims for the redemption may are not allowed);

4. If the period of a trust contract is prescribed, such period; and

5. The name of a distribution company who has sold the relevant beneficiary certificates.

Article 50 (Beneficiaries' Roster)

The term "case prescribed by Presidential Decree" in Article 49 (3) of the Act shall be the case where the following matters are provided to ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

the asset management company concerned in order to hold the general meeting of beneficiaries:

1. Names of beneficiaries; or

2. Numbers of beneficiary certificates held by beneficiaries. Sub-Section 2 Stocks of Investment Company

Article 51 (Issuance of Stock Certificates)

The term "way prescribed by Presidential Decree" in Article 51 (2) of the Act shall be the way prescribed by Article 174 (5) of the Securities and Exchange Act. Article 52 (Publication of Issue Prices of New Stocks) Every open-end investment company shall, when it issues new stocks in accordance with Article 52 (3) of the Act, publish the daily issue price on Internet homepages of the relevant asset management company and the relevant distribution company or on the bulletin boards in front of the headquarters, branch offices or business places of the relevant asset management company and the relevant distribution company. Article 53 (Terms for Issuing New Stocks)

(1) The term "ways prescribed by Presidential Decree" in Article 53 (2) of the Act means the way of calculating the standard price under Article

85. (2) Every redemption-prohibited investment company, notwithstanding the provisions of paragraph (1), may determine the issue price of new stocks in consideration of the amount calculated in accordance with paragraph (1) and the transaction price at the securities market or at the KOSDAQ market. SECTION 4 Sales and Redemption of Indirect

Investment Securities

Sub-Section 1 Sales

Article 54 (Investment Prospectus)

(1) The term "cases prescribed by Presidential Decree" in the latter part of Article 56 (1) of the Act means those falling under each of subparagraphs ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

of Article 38 (1) or 46.

(2) The matters under Article 56 (4) 2 of the Act shall be made easily readable for everyone by using ways including the stating in bold style. (3) The term "matters prescribed by Presidential Decree" in Article 56 (4) 5 of the Act means those falling under each of the following subparagraphs:

1. Name of an indirect investment fund;

2. Kind of an indirect investment fund;

3. Profiles of an asset management company, a trustee company or an asset custody company;

4. Matters concerning any investment risk involving an indirect investment fund;

5. Matters concerning the publication when important matters of a trust deed or the articles of incorporation of an investment company are altered;

6. Pays and other commissions paid to an asset management company, a trustee company, an asset custody company, or a distribution company, etc.;

7. Matters concerning ways of selling or redemption of indirect investment securities;

8. Matters concerning the restriction on and deferment of redemption;

9. Matters concerning redemption commissions;

10. Matters concerning the major objects of investment;

11. Matters concerning the management ways of indirect investment property, the restriction on management and the management strategy;

11-2. When investment securities or exchange traded derivatives are traded, the criteria for appointing the relevant broker company;

12. Methods for the asset appraisal of an indirect investment fund and for calculation of the standard price;

13. Matters concerning the distribution of profits, etc.;

14. Matters concerning the accumulation of reserve funds under Article 104 (1) of the Act;

15. Matters concerning the retirement or dissolution of an indirect investment fund;

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

16. Matters concerning the taxation on investment incomes of indirect investors; or

17. The basis point of time prescribed by the Financial Services Commission for discerning the dates of claims for buying or redemption of indirect investment securities.

(4) Every distribution company shall provide the investment prospectus offered by the asset management company of investment trust or the investment company to investors by means of direct delivery or delivery by mail, or by using its Internet homepage or e-mail. (5) The asset management company of investment trust or the investment company shall update the contents of investment prospectus not less than once in every period prescribed by Ordinance of the Prime Minister.

(6) The cost required for preparing and providing the investment prospectus shall be borne by the asset management company and the distribution company after the consultation.

(7) The Financial Services Commission may determine detailed matters to be entered in the investment prospectus, ways of preparing and providing the investment prospectus, and other necessary details.

Article 55 (Working Rules Governing Acts of Selling) (1) The term "acts that are prescribed by Presidential Decree" in Article 57 (1) 5 of the Act means those falling under each of the following subparagraphs:

1. Act of providing to investors, information for judgement which is not founded on facts or speculated information whose source is not presented;

2. Act of selling indirect investment securities without informing investors of the matters that are known to him/her as having a severe adverse impact on their value;

3. Act of not informing investors, in an adequate and precise manner, of the major points of the trust deed or the articles of incorporation of investment company and the investment prospectus related to the characteristics of indirect investment and the investment risk involved therein including the dividends based on actual performance, possible ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

loss of the capital, etc.;

4. Act of disseminating false information regarding the selling of indirect investment securities and other groundless rumors;

5. Act of persistently recommending indirect investment securities which are too risky to be the subject of the investment in the light of the recognition held by the investor against the investment, and his/her investment objectives and financial conditions;

6. Act of entrusting the selling business to other persons than executives and employees of distribution company: Provided, That this shall not include the case of entrusting the acquisition advisory business of indirect investment securities in accordance with Article 61-2 of the Act;

7. Act of a distribution company, when it runs the business of loaning money, to recommend to acquire indirect investment securities as a condition for loaning;

8. Act of getting other persons than those who finish the training under Article 57 (5) of the Act to sell indirect investment securities or to solicit the acquisition of indirect investment securities;

9. The act of making a replenishment (including the replenishment made in an indirect way) for the earnings of an indirect investment fund or indirect investors with the proprietary property of the distribution company;

10. The act of getting the employees in charge of performing the selling business to be concurrently charged with the business of a trustee company, asset custody company or general fund administrator or the management business of proprietary property; or

11. The acts of executives and employees in charge of performing the selling business to receive money, goods, convenience, etc. exceeding limits thereon under Article 30 (4) 2.

(2) The executives and employees in charge of performing the selling business of distribution companies shall undergo the training program satisfying the following subparagraphs and recognized by the Financial Services Commission in accordance with Article 57 (5) of the Act: Provided, That the forgoing shall not apply to the case where the executives and employees in charge of performing the selling business of distribution companies had undergone the training program within one year before ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

the date of taking charge of the selling business of the distribution companies:

1. The regulations on indirect investment securities, the working rules governing the selling acts shall be included in training subjects; and

2. Times for training shall not be less than 30 hours. Article 56 (Restrictions on Selling)

(1) The term "grounds prescribed by Presidential Decree" in Article 58 (1) of the Act means the case where the audit opinion presented by an accounting auditor is other than proper. In this case, the asset management company shall notify the distribution company of the fact, and the distribution company shall immediately suspend the selling upon being notified thereon.

(2) When the audit opinion of an accounting auditor comes not to fall under paragraph (1) after the asset management company corrects the calculation of the standard price or accounting, the asset management company shall notify the distribution company thereof without delay. In this case, the distribution company may resume the selling. Article 57 (Selling Advertisement)

(1) The term "matters prescribed by Presidential Decree" in Article 59 (2) 6 of the Act means those falling under each of the following subparagraphs:

1. Matters under each of subparagraphs of Article 56 (4) of the Act;

2. The fact that indirect investment property is safely kept and managed by a trustee company or an asset custody company, separated from the proprietary property or such trustee company or asset custody company;

3. The fact that compliance officers and accounting auditors of a trustee company, an asset custody company or an asset management company check whether the indirect investment property is properly managed or not;

4. Matters regarding any asset management company, any trustee company, any asset custody company, any distribution company, or any general fund administrator;

5. Matters concerning investors who match with the investment purpose ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

of an indirect investment fund;

6. Earning structure of an indirect investment fund;

7. Results of appraisal performed by any indirect investment fund appraisal company, etc.; or

8. Other matters than subparagraphs 1 through 7, which are necessary for the investment judgment of investors and prescribed by Ordinance of the Prime Minister.

(2) Every asset management company, investment company or distribution company shall, when it advertises in relation with the indirect investment, observe the matters falling under each of the following subparagraphs when it regards the ways of advertising:

1. In case of indicating the management performances, there shall be no concern over the misunderstanding of indirect investors caused by indicating only the result of period in which the management performances are successful;

2. In case of using a comparison advertising, there shall be no concern over the misunderstanding of indirect investors caused by indicating that any indirect investment fund of another company is inferior or unfavorable without any evident ground; or

3. When any asset management company or any distribution company advertises in relation with the indirect investment, it shall do so following the procedures prescribed by the Financial Services Commission including obtaining prior confirmation of a compliance officer of the relevant company.

Article 58 (Selling Prices, Commissions, etc.)

(1) The term "cases that Presidential Decree prescribes" in the proviso to Article 60 (1) of the Act means those falling under each of the following subparagraphs:

1. Deleted;

2. The case where any distribution company sells indirect investment securities, based on the standard price calculated first after the paid-in date of funds, etc., to the investors who paid-in the funds, etc. after the basis point of time fixed in order to discern the dates of claiming ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

the purchase of indirect investment securities prescribed in the investment prospectus;

3. The case falling under any one of the following items in which any distribution company sells indirect investment securities of a short-term financial indirect investment fund based on the standard price published on the date of paying purchase prices by investors: (a) The case where any investor concludes a prior contract with any distribution company to buy indirect investment securities of the short-term financial indirect investment fund on the date of settlement with the settlement fund earned after selling or redemption of securities, etc.; or

(b) The case where any investor concludes a prior contract with any distribution company to buy indirect investment securities of the short-term financial indirect investment fund on the date of receiving with the money earned on a regular basis such as salary, etc.; or

4. The case where any distribution company sells indirect investment securities of a short-term financial indirect investment fund to the fund of funds which combines and manages the foreign exchange equalization fund under Article 13 of the Foreign Exchange Transactions Act or the free cash under Article 81 of the State Finance Act, and the selling is made based on the standard price published on the payment date of buying prices.

(2) Every distribution company may receive the following commissions or remunerations in return for selling indirect investment securities or for providing services continuously to indirect investors as prescribed by the trust deed or the articles of incorporation of the investment company and the investment prospectus in accordance with Article 60 (2) of the Act:

1. Commissions paid for selling: Money received by any distribution company directly from indirect investors in return for selling of indirect investment securities to the indirect investors;

2. Remunerations paid for selling: Money received by any distribution company from an indirect investment fund in proportion to the daily scale of indirect investment property in return for providing services continuously to indirect investors; or

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

3. Deleted. (3) Commissions paid for selling in accordance with paragraph (2) 1 may differ on the basis of selling methods, distribution company, selling amount, investment period, etc. as prescribed by the trust deed or the articles of incorporation of the investment company.

(4) The remunerations and commissions acquired by any distribution company in accordance with paragraph (2) shall not exceed the following limits: Provided, That, in the case of any private offering indirect investment fund under Article 175 of the Act, the forgoing shall not apply:

1. Commissions paid for selling: 5/100 of paid-in or redeemed amount;

2. Remunerations paid for selling: 5/100 of the annual average value of indirect investment property; or

3. Deleted. (5) The Financial Services Commission may determine the requirements for applying the selling price under paragraph (1), method for calculating the specific limit on the remunerations or commissions under paragraphs (2) and (4), and other necessary details. Article 58-2 (Entrustment of Business of Advising Acquisition) (1) The term "persons described by Presidential Decree" in Article 61-2 (1) of the Act means those falling under each of the following subparagraphs:

1. Any person who fulfills requirements for registrating as insurance solicitor, insurance agency, or certified insurance broker in accordance with the attached Table 3 of the Enforcement Decree of the Insurance Business Act and has worked for the insurance solicitation;

2. Any person who has passed an examination that is implemented by the Korea Securities Dealers Association in accordance with Article 162-2 of the Securities and Exchange Act to verify the ability as an expert; or

3. Any person who has passed an examination that is conducted to verify the ability as a fund manager in accordance with Article 17 (1) 5. (2) The term "matters prescribed by Presidential Decree" in Article 61-2 (2) 4 of the Act means those falling under each of the following subparagraphs:

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

1. Matters relating to the termination of a trust contract;

2. Matters relating to remunerations for entrustment, etc.; or

3. Matters relating to limits on the provision of money, goods, convenience, etc. under Article 30 (4) 2.

(3) Any acquisition adviser, when he/she concludes a trust contract in accordance with Article 61-2 (2), shall not conclude trust contracts with two or more distribution companies and in case of an acquisition adviser who is an insurance solicitor, he/she shall not conclude trust contracts with other insurance company than the one to which he/she belongs. [This Article Newly Inserted by Presidential Decree No. 20553, Jan. 18, 2008] Sub-Section 2 Redemption

Article 59 (Grounds for Distribution Company Not to Comply with Claim for Redemption)

The term "grounds prescribed by Presidential Decree" in the proviso to Article 62 (2) of the Act means the computer failure caused by natural disasters and other grounds equivalent thereto, recognized by the Financial Services Commission as a distribution company may have difficulty operating its business activities normally.

Article 60 (Exceptions to Ways of Redemption)

(1) The term "case that is prescribed by Presidential Decree" in the main sentence of Article 63 (1) of the Act means the case where the date of redemption is prescribed in excess of 15 days from the receipt date of claim for redemption, in the trust deed of an indirect investment fund or the articles of incorporation of an investment company which invests in a real estate fund, a property fund, an indirect investment fund for special assets or the assets located outside the Republic of Korea. (2) The term "case that is prescribed by Presidential Decree" in the proviso to Article 63 (2) of the Act means the case falling under any one of the following subparagraphs:

1. Where any distribution company (excluding any asset management company which sells indirect investment securities in accordance with Article 4 (3) of the Act) buys indirect investment securities from ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

individual investors within the scope of the larger amount between the amount equivalent to 5/100 of the selling scale of indirect investment securities by short-term financial indirect investment funds and the amount prescribed by Ordinance of the Prime Minister; or

2. Where any distribution company buys relevant indirect investment securities inevitably as a result of indirect investors' claim for redemption of indirect investment securities (excluding the indirect investment securities of short-term financial indirect investment funds) based on the amount.

Article 61 (Redemption Prices and Commissions)

(1) Indirect investment securities shall be redeemed by applying the standard price of the date prescribed by the trust deed or the articles of incorporation of the investment company within the date of redemption under the main sentence of Article 63 (1) of the Act. (2) The term "case that is prescribed by Presidential Decree" in the proviso to Article 64 (1) of the Act means the case falling under any one of the following subparagraphs where the purport that the redemption will be made based on the standard price which is calculated on the date before the date when investors claim for redemption and published on the date of the investors' claim for redemption is stated in the trust deed or the articles of incorporation of the investment company.

1. The case where investors conclude a prior contract with any distribution company to redeem indirect investment securities of a short-term financial indirect investment fund, which falls under any one of the following items:

(a) The case where investors conclude a prior contract with any distribution company to redeem indirect investment securities of a short-term financial indirect investment fund in order to pay the settlement amount following the purchase of securities, etc.; or

(b) The case where investors conclude a prior contract with any distribution company to redeem indirect investment securities of a short-term financial indirect investment fund in order to perform the regularly occurring debts including the payment of public impositions, etc.; or

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

2. The case where the fund of funds which combines and manages the foreign exchange equalization fund under Article 13 of the Foreign Exchange Transactions Act and the free cash under Article 81 of the State Finance Act redeems indirect investment securities of a short-term financial indirect investment fund.

(3) Redemption commissions of indirect investment securities shall be imposed when the redemption is made within the period for imposition prescribed by the trust deed or the articles of incorporation of the investment company. In this case, the redemption commissions may be imposed on the basis of redemption amount or earnings.

(4) The Financial Services Commission may determine detailed matters necessary for redemption prices and commissions.

Article 62 (Grounds for Deferment of Redemption)

The term "grounds prescribed by Presidential Decree" in the former part of Article 65 (1) of the Act means those falling under each of the following subparagraphs:

1. The case where claims for redemption may not actually be met because the selling of the indirect investment property is impossible, which falls under any of the following items:

(a) The case where the indirect investment property cannot be sold due to causes including a significant slump in transaction, etc.; (b) The case where the indirect investment property cannot be sold due to the close-down, shut-down or suspension of business in securities market, etc. or other grounds equivalent thereto; or (c) The case of the occurrence of natural disasters or other grounds corresponding thereto;

2. The grounds for which the interests of indirect investors or the equality among indirect investors is feared to be undermined, which fall under any of the following items:

(a) The case where the meeting of claims for redemption by selling indirect investment property is feared to harm interests of indirect investors due to the dishonor, etc. of assets which belong to the indirect investment property;

(b) The case where the meeting of claims for redemption is feared to harm interests of indirect investors because the fair appraisal of ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

the indirect investment property is impossible; or (c) The case where the meeting of claims for large quantity of redemptions is feared to undermine the equality among indirect investors; or

3. Other grounds equivalent to subparagraph 1 or 2 and recognized by the Financial Services Commission as the grounds for which the deferment of redemption is required.

Article 63 (Matters to Go through Resolution of General Meeting for Deferment of Redemption)

Where any asset management company of investment trust or any investment company defers the redemption in accordance with the latter part of Article 65 (1) of the Act, the general meeting of beneficiaries or the general meeting of stockholders (hereinafter referred to as the "general meeting for redemption deferment") shall resolve the following matters:

1. The time and ways of making payments of the redemption money if the redemption resumes;

2. If the continued deferment of the redemption is intended, the deferred term of the redemption and the ways to pay the redemption money if the redemption resumes; and

3. If a partial redemption is intended, the ways of disposing assets falling under the grounds for deferring the redemption under Article 65 (1). Article 64 (Ways of Redemption at Resumption of Redemption) (1) Every asset management company of investment trust or every investment company shall perform the redemption as determined in the general meeting for redemption deferment when the grounds for deferring the redemption are removed in whole or in part after the date of the general meeting for redemption deferment in accordance with Article 65 (5) of the Act.

(2) Every asset management company of investment trust or every investment company may perform the redemption without convening the general meeting for redemption deferment if the grounds for deferring the redemption are removed before holding the general meeting for redemption deferment.

Article 65 (Partial Redemption)

(1) Where any asset management company of investment trust or any investment company redeems a part of the indirect investment securities in accordance with Article 66 (1) of the Act, or the partial redemption ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

is resolved in the general meeting for redemption deferment, the assets falling under the grounds for deferring the redemption shall be separated from the other assets (hereinafter referred to as the "normal assets") as of the date before the date when the decision on partial redemption is made.

(2) Where any asset management company of investment trust or any investment company creates or establishes a separate indirect investment fund in accordance with Article 66 (2) of the Act, it may continue to issue and sell indirect investment securities of the indirect investment fund composed of the normal assets.

(3) The Financial Services Commission may determine necessary detailed matters regarding the ways, procedures, etc. of partial redemption. SECTION 4 Institutions of Indirect Investment Fund Article 66 (Ways of Exercise of Voting Rights by Means of Written Documents)

(1) The Korea Securities Depository shall, where it delivers documents necessary for the exercise of voting rights when it notifies the convocation of the general meeting of beneficiaries in accordance with Article 71 (4) of the Act, make such documents evidently represent the intention of the relevant beneficiaries by using the way of indicating for or against, etc. and deliver the data for reference by beneficiaries when they exercise the voting rights, submitted from the asset management company as prescribed by Ordinance of the Prime Minister.

(2) Every asset management company shall keep in its headquarters the documents regarding the exercise of voting rights submitted by beneficiaries in accordance with Article 71 (5) of the Act and the data for the reference by beneficiaries when they exercise the voting rights, for six months from the date of the general meeting of beneficiaries. (3) Every beneficiary may make a demand for the inspection or copies of documents and data under paragraph (2) at any time during the business hours of the asset management company.

Article 67 (Opposition Beneficiary's Right to File Claim for Purchase of ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Beneficiary Certificates)

When any asset management company seeks to buy beneficiary certificates with the investment trust property in accordance with Article 73 (3) of the Act, it shall buy them as prescribed in the trust deed by deeming as the redemption is claimed on the date on which the claim period for buying expires.

Article 68 Deleted. SECTION 5 Management of Indirect Investment

Property

Article 69 (Ways of Management by Kind of Assets) Every asset management company may, when it manages the indirect investment property in accordance with Article 87 (2) of the Act, manage it by means of any of the following subparagraphs other than aquisition or selling or by ways prescribed by Ordinance of the Prime Minister if it is necessary for the efficient management of the indirect investment property:

1. Investment securities and the indirect investment securities of the exchange traded indirect investment fund: lending or borrowings;

2. Real estate: management, improvement, development or lease; or

3. Ship: management, improvement or lease. Article 70 (Kinds of Objects of Asset Management by Indirect Investment Funds)

(1) When any asset management company manages the indirect investment property in accordance with Article 87 (2) of the Act, kinds of assets to be managed by the kinds of the indirect investment fund shall be the same as the attached Table 2.

(2) Every asset management company shall, when it manages the indirect investment property of short-term financial indirect investment fund, do so in accordance with the following standards:

1. No asset management company shall manage assets or assets denominated in foreign currency under Article 2 (1) 5 through 8 of ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

the Securities and Exchange Act and Article 2-3 (1) 1, 1-2, 2-2, 3, 3-2 through 3-5, and 6 through 8 of the Enforcement Decree of the said Act;

2. No asset management company shall manage the indirect investment securities of indirect investment fund (including the fund of funds) other than the short-term financial indirect investment fund;

3. The selling of bonds with the condition of redemption shall be made within the scope prescribed by Ordinance of the Prime Minister;

4. No asset management company shall manage investment securities by way of lending them; and

5. Every asset management company shall meet requirements prescribed by Ordinance of the Prime Minister for the stable management of short-term financial indirect investment fund, including the restriction on deadline for the assets which may be incorporated, etc. (3) Every asset management company shall, when it manages the indirect investment property of the fund of funds (excluding the case where the management is made by combining the free cash under Article 81 of the State Finance Act), do so in accordance with the following standards: Provided, That, the provisions of subparagraphs 1, 1-2 and 4 shall not be applied to the indirect investment fund established by an insurance company in accordance with Article 135 (1) of the Act:

1. In case of indirect investment securities of the indirect investment fund managed by the same asset management company (including any foreign asset management company), the asset management company shall invest within 50/100 of the total amount of the assets of each fund of funds: Provided, That where the indirect investment property of the fund of funds is invested in indirect investment securities falling under the following items, this shall not apply: (a) Where the indirect investment property of the indirect investment fund managed by any foreign asset management company is invested in assets under each item of subparagraph 1 of Article 2 of the Act, which is issued, established or distributed in foreign countries, or in other similar assets denominated in foreign currency, the indirect investment securities of such indirect investment fund; ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

(b) Indirect investment securities of the exchange traded indirect investment fund (including those similar to the forgoing and issued in foreign countries under the foreign Acts and subordinate statutes) which satisfy the requirements prescribed by Ordinance of the Prime Minister from among the exchange traded indirect investment funds under Article 137 of the Act;

1-2. In case of indirect investment securities of the same indirect investment fund (including those similar to the forgoing and set up or established in foreign countries under the foreign Acts and subordinate statutes), the asset management company concerned shall invest within 20/100 of the total amount of the assets of each fund of funds: Provided, That in the case of the following items, this shall not apply: (a) The case of investing up to 100/100 of the total amount of the assets of each fund of funds in the indirect investment securities (including those similar to the forgoing and issued in foreign countries under the foreign Acts and subordinate statutes) of the exchange traded indirect investment fund which satisfies the requirements prescribed by Ordinance of the Prime Minister from among the exchange traded indirect investment funds under Article 137 of the Act; or

(b) The case of investing up to 30/100 of the total amount of the assets of each fund of funds in the indirect investment securities (including those similar to the forgoing and issued in foreign countries under the foreign Acts and subordinate statutes) of other exchange traded indirect investment funds than those under item (a);

2. No asset management company shall invest in the indirect investment securities of other fund of funds;

3. No asset management company shall invest in the indirect investment securities (including foreign indirect investment securities issued in the similar way to those of the indirect investment securities of the private offering indirect investment fund under Article 175 of the Act) of a private offering indirect investment fund; and

4. Every asset management company shall fulfill the requirements prescribed by Ordinance of the Prime Minister for the protection of indirect investors including the limits on pay and commissions in the ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

fund of funds.

Article 71 (Restrictions on Ways of Managing Assets) (1) The term "persons prescribed by Presidential Decree" in Article 88 (1) 1 of the Act means interested persons under Article 77 (1). (2) The term "ratio prescribed by Presidential Decree" in Article 88 (1) 2 (a) of the Act means 10/100.

(3) The term "ratio prescribed by Presidential Decree" in Article 88 (1) 3 (b) of the Act means 15/100.

(4) The term "period prescribed by Presidential Decree" in the main sentence of Article 88 (1) 4 (a) of the Act means the period under each of the following subparagraphs:

1. Real estates located within the country: 3 years; or

2. Real estates located outside the country: 6 months. (5) The term "grounds prescribed by Presidential Decree" in the proviso to Article 88 (1) 4 (a) of the Act means the case of merger, retirement or dissolution of a real estate fund.

(6) The term "case that is prescribed by Presidential Decree" in the proviso to Article 88 (1) 4 (c) of the Act means the case falling under each of the following subparagraphs:

1. The case of merger, termination or dissolution of a real estate fund; or

2. The case where the disposal of land is inevitable because the feasibility of the real estate development project concerned is remarkably deteriorated and the impossibility of its continued execution is objectively proved due to any enactment, amendment, abolition, etc. of related Acts or subordinate statutes after purchasing the relevant land in order to execute the real estate development project. Article 72 (Restrictions on Limit, etc. of Asset Management) The term "act that is prescribed by Presidential Decree" in Article 88 (1) 5 of the Act means those falling under each of the following subparagraphs:

1. The act of selling bonds on the condition of redemption in excess of the ratio prescribed by Ordinance of the Prime Minister within the ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

scope of the total amount of bonds held by each of indirect investment funds (excluding the short-term financial indirect investment funds);

2. The act of lending investment securities in excess of the ratio prescribed by Ordinance of the Prime Minister within the scope of the investment securities held by each of indirect investment funds (including the indirect investment securities of traded indirect investment funds: hereafter the same shall apply in this subparagraph and subparagraph 2-2);

2-2. The act of borrowing investment securities in excess of the ratio prescribed by Ordinance of the Prime Minister within the scope of the total amount of the assets held by each of indirect investment funds;

3. The act of investing in assets under subparagraph 1 of Article 3 in excess of 5/100 [20/100, in case of investing in foreign indirect investment securities, 95/100 or more of the total amount of the assets of which is operated in the assets denominated in foreign currency (hereafter referred to as the "foreign assets" in this Article) or in case of investing in indirect investment securities, 95/100 or more of the total amount of the assets of which is operated in foreign assets in ways of entrusting under Article 164 (1) 1 (a) (the proviso)] of the total amount of the assets held by each of indirect investment funds: Provided, That the forgoing shall not apply to the indirect investment fund falling under any one of the following items: (a) Fund of funds under subparagraph 6 of Article 27 of the Act; (b) Indirect investment fund established by an insurance company in accordance with Article 135 (1) of the Act; or

4. The act of investing the indirect investment property (excluding the indirect investment property of a derivative fund) in exchange traded derivatives or over-the-counter derivatives in excess of the criteria under the following items. In this case, ways of calculating the appraised amount of the risk involved in the transaction of the exchange traded derivatives and the over-the-counter derivatives and the total appraised amount of risks in the total amount of the assets of indirect investment fund shall be prescribed by Ordinance of the Prime Minister in accordance with the latter part of Article 88 (1) 3 (a) of the Act: ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

(a) The appraised amount of the risk [referring to the amount calculated by using arithmetic mean of daily appraised amounts of the risk of every month (if the relevant indirect investment fund is terminated or dissolved before the date of one full month, referring to a period of up to the relevant date of termination or dissolution) as of the date becoming each full month from the date of creation or establishment of the relevant indirect investment fund] caused by the transaction of exchange traded derivatives and over-the-counter derivatives shall be within 10/100 of the total amount of the assets held by the relevant indirect investment fund: or (b) The total appraised amount of risks in the indirect investment property including the appraised amount of the risk caused by the transaction of exchange traded derivatives and over-the-counter derivatives shall be within the scope of the total amount of the assets held by the relevant indirect investment fund; or

5. Act of investing in violation of the standards prescribed by the Financial Services Commission when operating the indirect investment property in assets under each of the following items:

(a) The subordinated bonds with a condition that, in case of bankruptcy of an issuer of such bonds, they have a lower priority than other debts and can be repayable after other debts have been paid only in the case where there exists a residual property; (b) The bonds that are issued only by other means than the offering or sales provided by Article 2 (3) or (4) of the Securities and Exchange Act;

(d) Treasury stocks (referring to the stocks issued by indirect investors) under Article 189-2 of the Securities and Exchange Act. Article 73 (Exception to Restrictions on Limit of Asset Management) (1) Every asset management company may, when it invests in investment securities under each of the following subparagraphs in accordance with Article 88 (2) of the Act, invest in the same item up to the ratio of 100/ 100 of the total amount of the assets of each indirect investment fund:

1. State bonds;

2. Monetary stabilization bonds issued by the Bank of Korea under Article ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

69 of the Bank of Korea Act; or

3. Bonds whose redemption of principal and interest is guaranteed by the Government.

(2) Every asset management company may, when it invests in investment securities, etc. under each of the following subparagraphs, invest in the of each indirect investment fund:

1. Municipal bonds;

2. Bonds and bills issued by government-invested institutions under the Framework Act on the Management of Government-Invested Institutions (referring to bills corresponding to investment securities under subparagraph 7 (a) and (b) of Article 2 of the Act; hereafter the same shall apply in this paragraph);

3. Bonds, debt certificates or bills issued by financial institutions under subparagraphs 1 through 6 and 8 of Article 6;

4. Bonds (limited to bonds issued in accordance with Article 2 (3) of the Securities and Exchange Act),�debt certificates or bills guaranteed by financial institutions under subparagraphs 1 through 6 and 8 of Article 6;

5. Indirect investment securities of exchange traded indirect investment fund (including those issued under foreign Acts and subordinate statutes which are similar to the indirect investment securities of exchange traded indirect investment fund);

6. The subordinated bonds from among bonds issued under Article 31 of the Asset-Backed Securitization Act or the subordinated beneficiary certificates from among the beneficiary certificates issued under Article 32 of the said Act (limited to those acquired as indirect investment property in accordance with the trust deed or the articles of incorporation of the investment company in which the subordinated bonds or the subordinated beneficiary certificates is stated as a main object of investment);

7. The bonds secured with mortgage-backed bonds or mortgage-backed securities (limited to those whose payments are guaranteed by any special purpose company for mortgage-backed bonds under the Special Purpose Companies for Mortgage-Backed Bonds Act or by any financial ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

institution under subparagraphs 1 through 6 and 8 of Article 6) issued under the Special Purpose Companies for Mortgage-Backed Bonds Act or the Korea Housing Finance Corporation Act;

8. The investment securities (limited to those acquired as the indirect investment property in accordance with the trust deed or the articles of incorporation of an investment company in which the investment in securities issued with the aim of raising funds necessary for business takeover or merger is prescribed) issued by any company and its partner company (hereafter referred to as the "business takeover or merger company, etc." in this Article) for the former to raise funds necessary for merger with the latter or for the incorporation of the latter into an affiliate company (hereafter referred to as the "business takeover or merger" in this Article);

9. The bonds (limited to those acquired as the indirect investment property in accordance with the trust deed or the articles of incorporation of an investment company in which the investment in securities issued with the aim of raising funds necessary for the business takeover or merger is prescribed) issued in accordance with Article 31 of the Asset-Backed Securitization Act for the purpose of raising funds necessary for the business takeover or merger, based on the assets of the business takeover or merger company, etc.; 9-2. Bonds issued by the member country of the Organization for Economic Cooperation and Development; or

10. Other investment securities other than subparagraphs 1 through 9-2 which are prescribed by Ordinance of the Prime Minister as not feared to undermine the protection of indirect investors and the stable management of the indirect investment property.

(3) Every asset management company, where the relative importance (it shall be calculated by markets including the securities market, the KOSDAQ market and other similar markets located in foreign countries, and the way of calculation, the base date for calculation and the period for application shall be prescribed by Ordinance of the Prime Minister) of an aggregate value of listed stocks whose issuer is the same company exceeds 10/100, may invest in such stocks with the indirect investment property within the scope not exceeding such relative importance of an aggregate value of listed stocks. In this case, the indirect investment fund which may ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

invest 10/100 or more of the indirect investment property in stocks listed on the KOSDAQ market shall be limited to the case where the investment is allowed only for stocks listed on the KOSDAQ, market in accordance with the trust deed or the articles of incorporation of the investment company concerned. (4) Every asset management company may manage the indirect investment property of the real estate fund in the following ways:

1. Where the trust deed or articles of incorporation of any real estate fund prescribe that the investment securities of a company (hereinafter referred to as the "real estate development company") established for the development of specific real estate by fixing its existence period can be acquired, the method of managing the property in the following way:

(a) The method by which it invests in investment securities of the same item issued by the real estate development company within real estate fund; or

(b) The method by which it invests the total amount of the assets of each real estate fund or the total amount of the assets of the total real estate funds managed by the asset management company by one and the same real estate development company;

2. The method of investing in the investment securities under any of the following items within the scope of 100/100 of the total amount of the assets of each real estate fund;

(a) The asset-backed securities issued under the Asset-Backed Securitization Act which are issued based on real estate, real estate trade receivables (referring to trade receivables which occur as a result of sale or lease of real estate) or real estate-backed securities (limited to the case where the total of whose basic assets includes 70/100 or more of the value of securitization assets); or (b) The bonds secured with mortgage-backed bonds or mortgage-backed securities (whose payments are guaranteed by any special purpose companies for mortgage-backed bonds under the Special Purpose ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Companies for Mortgage-Backed Bonds Act or by any financial institution under subparagraphs 1 through 6 and 8 of Article 6) issued under the Special Purpose Companies for Mortgage-Backed Bonds Act or the Korea Housing Finance Corporation Act;

3. Where the trust deed or the articles of incorporation of any investment company prescribes that the investment securities (including securities or instruments that carry the indication of the investment share: hereafter in this subparagraph and subparagraph 4, the same shall apply) of a company which satisfies requirements under the following items (hereinafter referred to as the "company for specific purpose of real estate investment") can be acquired within the scope of 100/100 of the total amount of the assets of each real estate fund, the method by which it invests in investment securities of the same item issued by the company for specific purpose of real estate investment within estate fund;

(a) It shall be established with the aim of investing in real estate or the investment securities of another company for specific purpose of real estate investment; or

(b) The total amount of real estates or the assets under subparagraph 8 of Article 3 from among the assets held by the company for specific purpose of real estate investment and its subsidiary company (referring to the companies equivalent to the subsidiary company under the Act on External Audit of Stock Companies) shall be 90/100 or more; or

4. The method by which it invests the total amount of the assets of each real estate fund or the total amount of the assets of the total real estate funds managed by the asset management company in the investment securities of one and the same company for specific purpose (5) The term "grounds which are prescribed by Presidential Decree" in the main sentence of Article 88 (3) of the Act means those falling under each of the following subparagraphs:

1. Fluctuation in prices of assets, including investment securities, etc., held by the indirect investment fund;

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

2. Partial expiration of the investment trust or a partial retirement of stocks of the investment company;

3. Exercise of security rights;

4. Merger of corporations which have issued investment securities held by the indirect investment fund;

5. The case where the relevant investment securities have come not to fall under investment securities under subparagraph 8 of paragraph (2), because the scheduled business takeover or merger is not realized within one year from the issuance date of the investment securities held by the indirect investment fund in accordance with the same subparagraph; or

6. The case where the investment limit under paragraph (3) is exceeded due to a decrease in the relative importance of an aggregate value of listed stocks whose issuer are the same company, which are held by the indirect investment fund.

(6) The term "period prescribed by Presidential Decree" in Article 88 (4) of the Act shall be one month.

(7) Deleted. Article 74 (Disposal, etc. of Treasury Stock of Investment Company) (1) The stocks acquired by an investment company in accordance with Article 89 (1) 1 of the Act shall be disposed of by means of the following subparagraphs:

1. Retirement of stocks; or

2. Selling through any distribution company or directly to a third party. (2) Every investment company may, when it borrows funds in accordance with the proviso to other portion than subparagraphs of Article 89 (2) of the Act, do so only from any financial institution falling under any of subparagraphs of Article 6. In this case, it shall not buy (excluding the resale and redemption of exchange traded derivatives and over-the-counter derivatives) assets additionally until the whole amount of borrowings is completely repaid.

Article 75 (Instructions, etc. Given for Management of Assets) (1) Where any asset management company of investment trust gives a direction on acquisition or sale of assets to a trustee company in accordance with Article 90 (1) of the Act, or where any investment company gives a direction on keeping and management of assets to an asset custody ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

company in accordance with Article 90 (5) of the Act, the contents of direction shall be managed through a data-processing system in an objective and precise manner.

(2) The term "case prescribed by Presidential Decree" in the proviso to Article 90 (1) of the Act means the case where any asset management company manages assets by prescribing the way falling under any one of the following subparagraphs in the trust deed:

1. Selling and buying of investment securities;

2. Transaction of exchange traded derivatives;

3. Short-term lending;

4. Lending of funds (limited to the cases following the provisions of Article 116 (4));

5. Trading of indirect investment securities (limited to indirect investment securities or foreign indirect investment securities listed on the securities markets, etc.); or

6. Trading of the means of foreign payment under the Foreign Exchange Transactions Act (hereinafter referred to as the "means of foreign payment") used for the transaction of assets denominated in foreign currency and the trading of future exchange (referring to the transaction in which means of foreign payment are traded and the price thereof is settled at an agreed time in future exceeding three business days from the date of contracting the selling and buying of means of foreign payment, based on the exchange rate that is agreed in advance at the time of concluding the contract, which is performed outside of a securities market, etc.) with the aim to hedge a risk of fluctuation in the foreign exchange rate of the assets denominated in foreign currency.

(3) The procedures necessary for the instruction on acquisition, selling, custody, management of assets in accordance with paragraphs (1) and (2), and other detailed matters necessary for the protection of indirect investors shall be prescribed by Ordinance of the Prime Minister.

Article 76 (Prohibited Act in Managing Assets)

(1) The term "related securities company prescribed by Presidential Decree" ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

in subparagraph 8 of Article 91 of the Act means those falling under each of the following subparagraphs:

1. The securities company which belongs to the same business group (referring to the business groups provided in subparagraph 2 of Article 2 of the Monopoly Regulation and Fair Trade Act; hereinafter the same shall apply) as the asset management company; or

2. The securities company which sells the indirect investment securities of the total indirect investment funds managed by the asset management company above the ratio prescribed by Ordinance of the Prime Minister. (2) The term "manager company prescribed by Presidential Decree" in subparagraph 10 of Article 91 of the Act means a company that is invited to takeover of investment securities from the company that issues the investment securities and determines the conditions, etc. for takeover and runs the business of takeover or subscription of the investment securities.

(3) The term "act that is prescribed by Presidential Decree" in subparagraph 11 of Article 91 of the Act means those falling under each of the following subparagraphs:

1. In trading the investment securities or exchange traded derivatives held by the indirect investment fund through each related securities company or a futures brokerage company which is its affiliate company, the act of trading them in excess of the ratio respectively determined by Ordinance of the Prime Minister (in trading the said property with a related securities company or a futures brokerage company which is its affiliate company via a third party or in other roundabout ways, the amount of trade shall be added up at the time of calculating the ratio) in view of the total trade amount of stocks, the total trade amount of investment securities other than stocks or the total trade amount of exchange traded derivatives on a monthly basis;

2. The act of an asset management company to trade its assets with the indirect investment fund managed by itself (including the ways under each subparagraph of Article 87 (3) of the Act and each subparagraph of Article 69 of this Decree);

3. The act of an asset management company to allow the indirect investment ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

funds managed by itself to mutually trade the assets of the same quantity at the same time: Provided, That this shall not include the case falling under each of the following items and confirmed by the compliance officer of the asset management company:

(a) Where it is inevitable to comply with the investment limit prescribed in the trust deed of the initially created or established indirect investment fund or the articles of incorporation of the investment company concerned;

(b) Where it is inevitable to rescind partially the investment trust or retire a part of the stocks of the investment company concerned; (c) Where it is necessary to dispose of the assets held by the relevant indirect investment fund in order to settle without difficulty the accounts payable following the whole rescission of the investment trust or the dissolution of the investment company concerned; or (d) Other cases that are approved by the Financial Services Commission as being not feared to undermine the interests of indirect investors;

4. The act of an asset management company to transfer the assets of the indirect investment fund managed by itself to another indirect investment fund managed by itself: Provided, That this shall not include the case falling under each of the following items and confirmed by the compliance officer of the asset management company: (a) The case of rescinding all investment trusts or dissolving the investment company concerned; or

(b) Other cases that are approved by the Financial Services Commission as being not feared to undermine the interests of indirect investors; or

5. Other acts other than subparagraphs 1 through 4, which are prescribed by Ordinance of the Prime Minister as being feared to undermine the interests of indirect investors.

(4) The Financial Services Commission may determine the price of trading, procedures and ways of trade, and other necessary details in the case under the proviso to the portion other than items of paragraph (3) 3 and the proviso to the portion other than items of subparagraph 4.

Article 77 (Scope of Interested Persons)

(1) The term "interested person prescribed by Presidential Decree" in the ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

main sentence of the portion other than subparagraphs of Article 92 (1) of the Act means those falling under each of the following subparagraphs:

1. The executives and employees of an asset management company and their spouses;

2. The affiliate companies of an asset management company, the executives and employees of such affiliate companies and their spouses;

3. The largest stockholder and major stockholders of an asset management company and their spouses;

4. The related distribution company prescribed by Ordinance of the Prime Minister;

5. The trustee company or asset custody company prescribed by Ordinance of the Prime Minister; or

6. The supervisory director of an investment company whose corporate director is an asset management company.

(2) The term "transactions prescribed by Presidential Decree" in Article 92 (1) 4 of the Act means those falling under any one of the following subparagraphs:

1. Transactions under Article 88 (1) 1 of the Act: Provided, That this shall not include the case where the indirect investment property is managed in ways of the following items to the largest stockholder, major stockholders and affiliate companies of an asset management company (hereafter referred to as the "related entity" in this subparagraph):

(a) Way of providing a short-term lending to the related entity through any fund brokerage company prescribed by the Merchant Banks Act;

(b) Way of buying bills issued by any securities finance company under the Securities and Exchange Act; or

2. Transactions approved by the Financial Services Commission as there is no concern for the friction of interest with the indirect investment fund including the trading of over-the-counter derivatives, the investment in any real estate or infrastructure, etc.; ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

3. Transactions performed by interested persons with any asset management company with the limited purpose of intermediation of bonds or the assets under subparagraph 7 (b) of Article 2 of the Act. In this case, the form, ways, etc. of transaction which corresponds to the limited purpose of intermediation shall be determined and published by the Financial Services Commission; or

4. Deposition in any financial institution (it shall not exceed 10/100 of the amount deposited in any financial institution from among total indirect investment property managed by any asset management company).

Article 78 (Restrictions on Acquisition of Investment Securities of Affiliate Companies)

(1) The term "limit prescribed by Presidential Decree" in Article 92 (5) of the Act means any of the following subparagraphs:

1. Where any asset management company acquires the stocks issued by any affiliate company with each indirect investment property, the acquisition amount of total stocks issued by the affiliate company shall be 10/100 of the total amount of the assets of each indirect investment fund: Provided, That, where the total sum of the relative importance (referring to the relative importance calculated by applying Article 73 (3) mutatis mutandis; hereinafter the same shall apply) of an aggregate value of listed stocks issued by the affiliate company exceeds 10/100, the asset management company may acquire such stocks up to the relative importance of the total value of stocks issued by the affiliate company from among the aggregate value of listed stocks; or

2. Where any asset management company invests the total indirect investment property in investment securities (excluding stocks) issued by an affiliate company (excluding cases of the State, the local governments or the government-invested institutions under the Framework Act on the Management of Government-Invested Institutions; hereafter the same shall apply in this subparagraph), the amount corresponding to the ratio of investment in the asset management company by all of affiliate companies. (2) Where any asset management company, in accordance with the proviso ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

to paragraph (1) 1, acquires the total stocks of any affiliate company more than 10/100 of the total amount of the assets of each indirect investment fund, the relevant asset management company shall, in accordance with the main sentence of Article 94 (1) of the Act, exercise voting rights with regard to the stocks of the affiliate company which exceed the relative importance of stocks by each affiliate company held in the indirect investment property on the basis of 10/100 of the total amount of the assets of the indirect investment fund in accordance with Article 94 (1) 3 of the Act.

(3) The amount corresponding to the ratio of contribution by all of affiliate companies under paragraph (1) 2 to the relevant asset management company shall be the amount calculated by multiplying the ratio obtained by dividing the number of stocks with voting rights of the asset management company held by all of the affiliate companies by the total number of the issued stocks with voting rights of the asset management company, by the equity capital of th asset management company (referring to the total of the capital, reserves and other surplus, and if such total is below the capital, it refers to the capital; hereafter the same shall apply in this Article).

(4) Where any asset management company is found to have exceeded the limit under each of subparagraph of paragraph (1) and paragraph (2), even if it has not additionally acquired the investment securities issued by an affiliate company, due to any such cause as prescribed by Ordinance of the Prime Minister, it shall manage in a way of complying with the limit under each of subparagraph of paragraph (1) within three months from the date on which such cause accrued.

Article 79 (Restrictions, etc. on Exercise of Voting Right) (1) The term "persons who are prescribed by Presidential Decree as being interested" in Article 94 (1) 1 (a) of the Act means the specially related persons and joint holders under Article 10-3 (2) and (4) of the Enforcement Decree of the Securities and Exchange Act.

(2) The term "person who is prescribed by Presidential Decree" in Article 94 (1) 1 (b) of the Act means any of the following subparagraphs: 81

by Presidential Decree No. 20553, Jan. 18, 2008>

1. Related distribution companies and their affiliates; or

2. Large stockholders of the asset management company of investment trust or the investment company.

(3) The term "case where there exists a relation that is prescribed by Presidential Decree" in Article 94 (1) 2 (b) of the Act means the relation of a related distribution company, including its affiliated company or major stockholder, of the asset management company of investment trust or the investment company. Article 80 (Making and Keeping Records on Exercise of Voting Right) (1) The term "ratio or amount prescribed by Presidential Decree" in Article 94 (7) of the Act means 5/100 of the total amount of the assets of each indirect investment fund or one billion won.

(2) Every asset management company shall state matters concerning the exercise of its voting rights on a corporation subject to the public disclosure of the voting rights and the contents thereof (where the voting rights are not exercised, the grounds therefor) in the report on the management of assets under Article 121 of the Act and the business report under Article 124 of the Act.

SECTION 6 Appraisal and Accounting

Article 81 (Exceptions, etc. to Principles for Appraising Indirect Investment Property)

(1) The term "cases which are prescribed by Presidential Decree" in the proviso to Article 95 (1) of the Act means the cases where any asset management company appraises a short-term financial indirect investment fund based on the book value. In this case, the asset management company shall check occasionally a difference between the standard price appraised by the asset management company according to the book value and the standard price appraised according to market prices, and if the difference exceeds or is being feared to exceed the ratio prescribed by Ordinance of the Prime Minister, it shall take necessary measures as prescribed by the trust deed or the articles of incorporation of the investment company. (2) The Financial Services Commission may determine detailed matters ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

necessary for the specific methods for appraisal of the book value under paragraph (1). Article 82 (Method of Appraisal by Indirect Investment Properties) (1) The appraisal by kind of assets belonging to any indirect investment property shall be made based on the following standards:

1. Stocks listed on the securities market or the KOSDAQ market (hereinafter referred to as the "listed stocks"): the closing price traded at the securities market or at the KOSDAQ market as of the reference day of appraisal: Provided, That, when any private equity fund manages its property in ways under Article 144-7 (1) 1 or 2 of the Act, the stocks may be appraised based on the acquisition cost;

2. Unlisted stocks: the acquisition cost or a price based on the price information provided by any bond appraisal company, any accounting firm under the Certified Public Accountant Act, or any person who has been granted a license for credit rating in accordance with Article 4 of the Use and Protection of Credit Information Act;

3. Exchange traded derivatives: the price published by the securities market, etc. on which the exchange traded derivatives are traded;

4. Listed bonds (limited to the bonds whose prices are formed in the securities market for 10 consecutive days or more a month during the three months immediately preceding the month to which the reference day of appraisal belong): the price based on the price information provided by two or more bond appraisal companies based on the closing price of the bonds traded at the securities market on the reference day of appraisal;

5. Unlisted bonds (including the listed bonds which do not fall under subparagraph 4): the price based on the price information provided by two or more bond appraisal companies;

6. Listed stocks and listed bonds which are securities denominated in foreign currency: the closing price traded at the securities market located in a country in which the said securities are bought or the price based on the price information provided by two or more bond appraisal companies;

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7. Real estate: the appraisal shall be made in accordance with the following items:

(a) The real estate which is bought within one year: the acquisition price: Provided, That, where there exist any significant fluctuations in the market price or asset value of the real estate, it may be appraised in accordance with item (b) after going through the resolution of the indirect investment property appraisal committee under Article 83; and

(b) The real estate for which one has passed since its aquisition: the price calculated by two or more appraisal and assessment business operators provided by the Public Notice of Values and Appraisal of Real Estate Act in accordance with Article 16 of the Enforcement Decree of the Real Estate Investment Company Act; or

8. Other types of assets: Prices calculated as prescribed by Ordinance of the Prime Minister.

(2) The methods for appraising in case where the provisions of paragraph (1) may not apply due to such causes as there exists no transaction on the reference day of appraisal and the detailed standards of the appraisal under paragraph (1) shall be prescribed by Ordinance of the Prime Minister. Article 83 (Indirect Investment Property Appraisal Committee) (1) Every asset management company (excluding the case where any insurance company manages the investment trust property of the special account in the ways prescribed in each subparagraph of Article 116 (1)) shall organize an indirect investment property appraisal committee including the following persons as its members in accordance with Article 95 (3) of the Act:

1. The executives in charge of the appraisal of the indirect investment property;

2. The executives in charge of the management of the indirect investment property;

3. The compliance officer; and

4. Other persons recognized by the Financial Services Commission as being necessary to perform the appraisal business of the indirect investment property.

(2) The indirect investment property appraisal committee shall report ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

to the board of directors of the asset management company (referring to the indirect investment asset management committee, in case of banks under Article 134 of the Act), semiannually, on the matters regarding the appraisal of the indirect investment property including whether the appraisal standards for indirect investment property are applied or not. (3) The indirect investment property appraisal committee shall, when it appraises the indirect investment property, strive to reflect the fair value of the assets and maintain the consistency in the appraisal. Article 84 (Principles for Appraising Indirect Investment Property) The term "matters prescribed by Presidential Decree" in Article 95 (4) 4 of the Act means those falling under any one of the following subparagraphs:

1. Detailed standards to be applied to the classification or the appraisal of dishonored bonds or dead assets, etc. prescribed by the Financial Services Commission;

2. Matters concerning the correction of an error in appraisal of indirect investment property or the ways of appraising assets, etc. for which the calculation of official price is difficult; or

3. Matters concerning the ways of appraising the uncollected balance, the amount payable, etc. under Article 105 (6) of the Act. Article 85 (Calculation Method of Standard Price) (1) The term "ways prescribed by Presidential Decree" in Article 96 (1) of the Act means the way of calculation by dividing the total amount of assets on the balance sheet as of the day before the date of publication less both the total amount of liabilities and the reserve under Article 92 (1) by the total number of beneficiary certificates or the total number of the issued stock of the investment company as of the day before the date of publication.

(2) The total amount of assets under paragraph (1) shall be calculated in accordance with the appraisal standards under Article 82. (3) Where there is an error in the calculation of the standard price published and posted by any asset management company of investment trust and any investment company in accordance with Article 96 (2) of the Act, the standard price shall be corrected without delay and then re-published and re-posted: Provided, That if a difference between the initially published and posted standard price and the corrected standard price is less than ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

1/1000 of the initially published and posted standard price, the forgoing shall not apply. (4) Any asset management company of investment trust or any investment company shall, when it seeks to correct the standard price under paragraph (3), obtain confirmation therefor from the compliance officer of the asset management company and the trustee company or the asset custody company. (5) Any asset management company of investment trust or any investment company shall, when it corrects the standard price under paragraph (3), report thereon to the Financial Services Commission as prescribed by the Financial Services Commission. (6) The Financial Services Commission may prescribed detailed matters required for the procedures for correction of standard prices, the report on the correction, etc. Article 86 (Period for Public Disclosure of Standard Price) The term "case that is prescribed by Presidential Decree" in the proviso to Article 96 (2) of the Act means the case where any indirect investment fund invests in the foreign securities under the Foreign Exchange Transactions Act and the trust deed or the articles of incorporation of the investment company separately prescribes the period for publication or posting of the standard price within 15 days due to the difficulties in a daily publication or posting of the standard price.

Article 87 (Entrustment of Development of Accounting Standards) (1) The Financial Services Commission shall, in accordance with Article 97 (3) of the Act, entrust the business of developing the accounting standards to the Korea Accounting Institute under Article 7-2 (1) of the Enforcement Decree of the Act on External Audit of Stock Companies.

(2) The Korea Accounting Institute shall, when it has developed or amended the accounting standards under paragraph (1), immediately submit them to the Financial Services Commission. Article 88 (Publication, etc. of Balance Sheet)

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(1) The corporate director of any investment company who has obtained the approval from the board of directors in accordance with Article 99 (2) of the Act shall publish the balance sheet on the Internet homepage or by e-mail or other means similar thereto.

(2) The corporate director of any investment company may submit the documents on the settlement of accounts under Article 99 (2) of the Act in the form of written documents or electronic data as prescribed by the Financial Services Commission.

Article 89 (Exemption, etc. from Audit of Accounting of Indirect Investment Property)

(1) The term "case that is prescribed by Presidential Decree" in the proviso to Article 100 (1) of the Act means the case falling under any one of the following subparagraphs as of the last day of the accounting term and the date falling under any one of subparagraphs of Article 100 (4) of the Act:

1. The case where the total amount of the assets of the indirect investment fund is no more than five billion won; or

2. The case where the total amount of the assets of the indirect investment fund is more than 5 billion won but not more than 10 billion won and no investment trust is additionally created or no stock of the investment company is newly issued for six months before the reference day.

(2) The cost necessary for the accounting audit shall be borne by the indirect investment fund which is the subject of the relevant account auditing.

Article 90 (Appointment of Accounting Auditor, etc.) (1) Where any asset management company of investment trust seeks to appoint or replace accounting auditors, it shall undergo the resolution of the audit committee (referring to the auditor's consent in case where any audit committee is not established), and where any investment company seeks to appoint or replace accounting auditors, it shall obtain the consent of the supervisory director.

(2) The Financial Services Commission shall prescribe the standards for accounting and audit of indirect investment property subject to the deliberation of the Securities and Futures Commission. 87

Presidential Decree No. 20653, Feb. 29, 2008>

(3) An accounting auditor shall, when he/she finishes the audit on accounting of indirect investment property, prepare an accounting audit report including the following matters and submit it immediately to the asset management company of investment trust or the investment company:

1. The balance sheet;

2. The statement of profit and loss;

3. The calculation of the standard price; and

4. The details on the transaction with interested persons. (4) The asset management company of investment trust or the investment company which has received the accounting audit report submitted in accordance with paragraph (3) shall submit it immediately to the Financial Services Commission and the Asset Management Association of Korea, and the distribution company, trustee company or asset custody company of the relevant indirect investment fund.

Article 91 (Distribution, etc. of Profits)

(1) Where any asset management company of investment trust or any investment company distributes profits, the distribution way of profits and period therefor shall be prescribed by the trust deed or the articles of incorporation of the investment company.

(2) Where any investment company seeks to distribute the total sum of profits by issuing stocks newly, the number of stocks to be issued, issuance period, and other necessary matters concerning stock issuance shall undergo the resolution of the board of directors as prescribed by the articles of incorporation of the investment company.

(3) Where any asset management company of investment trust or any investment company seeks to distribute cash or checks in excess of profits, it shall prescribe the purport thereof on the trust deed or the articles of incorporation of the investment company and determine in advance the ways of distributing profits and period thereof, and other necessary matters. Article 92 (Accumulation of Reserves)

(1) Where any asset management company of investment trust or any investment company seeks to accumulate a reserve under Article 104 (1) of the Act, it shall accumulate it within the limit of 10/100 of profits ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

accruing from the management of the indirect investment property and may establish a separate account of reserve in order to manage it. (2) The reserve under paragraph (1) shall be used for equalization of the distribution of the relevant indirect investment property. (3) The Financial Services Commission may determine the usage of reserve and other detailed matters necessary for reserve.

SECTION 7 Dissolution of Indirect Investment Fund, etc.

Article 93 (Termination of Investment Trust))

(1) The term "case that is prescribed by Presidential Decree" in the proviso to Article 105 (1) of the Act means any of the following subparagraphs:

1. The case of a unanimous consent of beneficiaries;

2. Where the capital of investment trust is short of the amount prescribed by Ordinance of the Prime Minister for one month continuously; or

3. The case where the redemption of all beneficiary certificates of investment trust is claimed and the rescission of the relevant trust contract is intended.

(2) The term "period set by Presidential Decree" in Article 105 (3) 5 of the Act means 6 months.

Article 94 (Ways of Disposal of Amount Payable)

(1) Every trustee company shall pay the amount payable of the investment trust on the date when an asset management company rescinds the relevant investment trust in accordance with Article 105 (1) or (2) of the Act. (2) Deleted. (3) Notwithstanding the provisions of paragraph (1), every asset management company of investment trust may, in case of the amount payable whose amount is decided, deal with the amount payable in such a way as to transfer it to other indirect investment fund operated by itself. In this case, the trustee company of such indirect investment fund shall be the same. Article 95 (Partial Termination of Investment Trust) The term "cases prescribed by Presidential Decree" in Article 105 (7) of ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

the Act means those falling under any one of the following subparagraphs:

1. Where the issued beneficiary certificates are not sold;

2. Where any beneficiary claims for the redemption of beneficiary certificates; or

3. Where any beneficiary claims to buy the beneficiary certificates in accordance with Article 73 (3) of the Act.

Article 96 (Merger of Investment Trusts)

The term "matters prescribed by Presidential Decree" in Article 106 (2) 7 of the Act means those falling under each of the following subparagraphs:

1. In case of distributing profits due to the merger of investment trust, the limit thereof;

2. In case of changing the contract period of investment trust or the accounting term of investment trust due to the merger of investment trust, the details thereof;

3. In case of changing trust fees or redemption commissions, etc., the details thereof;

4. The matters concerning the appraisal of investment trust property necessary for the calculation of the merger value of beneficiary certificates; or

5. The matters concerning disposal of odds that is short of one share in case of the issuance of beneficiary certificates due to a merger. Article 97 (Calculation Way of Merger Value of Beneficiary Certificates) (1) Where an investment trust is merged, the merger value shall be calculated based on an amount obtained by deducting the total amount of liabilities from the total amount of the assets on the balance sheet of the day before the date on which the investment trust merges. (2) Where an asset management company merges an investment trust, it shall without delay notify beneficiaries of the matters approved by the general meeting of beneficiaries regarding any subparagraph of Article 106 (2) of the Act.

(3) Where the asset management company notifies beneficiaries in accordance with paragraph (2), it shall entrust such notification to the Korea Securities Depository.

Article 98 (Registration of Liquidators, etc.)

The term "documents prescribed by Presidential Decree" in Article 111 (4) of the Act means those falling under each of the following subparagraphs: ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

1. Where a corporate director (including directors other than a supervisory director under Article 142 (5) of the Act) and a supervisory director become a liquidator and a liquidation overseer respectively, the articles of incorporation;

2. Where a liquidator and a liquidation overseer are appointed by the general meeting of stockholders, the documents attesting their acceptance of appointment; or

3. Where a liquidator and a liquidation overseer are appointed by the Financial Services Commission, the documents attesting such appointment.

Article 99 (Ommission of Preemptory Notice for Creditors) (1) Where any investment company seeks to omit the procedures for giving creditors a preemptory notice in accordance with Article 116 (2) of the Act, it shall publish the purport therof, matters on obligation including the details of debts, the way of meeting the obligation, etc. not less than twice in daily newspapers (referring to the daily newspapers that are registered as newspapers with a nationwide circulation under Article 12 (1) 6 of the Act on the Freedom of Newspapers, etc. and Guarantee of Their Functions and fall under subparagraph 2 (a) or (b) of Article 2 of the same Act; hereinafter the same shall apply), and report thereon to the Financial Services Commission without delay. (2) The term "cases prescribed by Presidential Decree" in the proviso to Article 116 (2) of the Act means those falling under each of the following subparagraphs:

1. The case where the liability for executing any contract involving futures transaction under the Futures Trading Act is in existence;

2. The case where a lawsuit which may have an important effect on the property of an investment company is pending; or

3. Other cases necessary for the protection of creditors, which are prescribed by the Financial Services Commission.

SECTION 8 Public Disclosure and Report

ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

Article 100 (Report on Management of Assets)

(1) Where any asset management company provides a report on the management of assets to the indirect investors in accordance with Article 121 (1) of the Act, it shall mail it by going through the distribution company: Provided, That, if any indirect investor indicates an intention that he/she will receive a report on the management of assets by an e-mail, it may provide it by e-mail.

(2) The term "case that is prescribed by Presidential Decree" in the proviso to Article 121 (1) of the Act an exchange traded investment trust (1) of the Act means any of the following subparagraphs:

1. Where an indirect investor indicates an intention that he/she rejects the receipt of a report on the management of assets;

2. Where any asset management company establishes or creates and manages any short-term financial indirect investment fund, and a report on the management of assets is published once or more per month, as prescribed by Ordinance of the Prime Minister; 2-2. Where any asset management company which has listed the indirect investment securities of an irredeemable investment trust under Article 35 of the Act or a redemption-prohibited investment company under Article 45 of the Act publishes a report on the management of assets of the indirect investment fund at least once in 3 months as prescribed by Ordinance of the Prime Minister; or

3. Where the appraisal amount of indirect investment securities held by an indirect investor is not more than 10 thousand won, the trust deed or the articles of incorporation of the investment company prescribes that a report on the management of assets will not provided. (3) The term "turnover rate of such trading" in Article 121 (2) 4 of the Act means a rate obtained by dividing the total amount of stocks sold during the management period by the average price of stocks held during the relevant period.

(4) The term "matters prescribed by Presidential Decree" in Article 121 (2) 5 of the Act means those falling under any one of the following subparagraphs:

1. Details on assets including the investment securities which belong ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

to indirect investment property as of the reference day;

2. Details on fund managers of the indirect investment fund; 2-2. Monthly transaction amount, commissions, and the relative importance of transactions on stocks, investment securities other than stocks, or exchange traded derivatives by brokerage companies;

3. Details on transactions with the interested persons in accordance with Article 92 (2) of the Act;

4. The matters concerning the exercise of voting rights on a corporation subject to the public disclosure of voting rights in accordance with Article 80 (2), and the details thereof (where the voting rights are not exercised, the grounds therefor); or

5. Other important matters regarding the management of indirect investment property, as prescribed by the Financial Services Commission.

(5) The cost required for preparing and providing a report on the management of assets by any asset management company shall be borne by the indirect investment fund.

(6) The Financial Services Commission may prescribe the matters to be entered in the report on management of assets under paragraphs (1) through (5), the methods of the preparation thereof, and other necessary details. Article 101 (Ways of Ad Hoc Disclosure)

The ad hoc disclosure under Article 122 of the Act shall be made by the means falling under any one of the following subparagraphs:

1. Ways of putting on Internet homepages of the asset management company, distribution company and Asset Management Association of Korea;

2. Ways of notifying to indirect investors by e-mail; or

3. Ways of posting on the bulletin board in front of the headquarters, branch offices and business places of the relevant asset management company and distribution company.

Article 102 (Scope of Dead Assets)

The term "dead assets prescribed by Presidential Decree" in subparagraph 3 of Article 122 of the Act means the assets determined by the Financial Services Commission as non-performing due to such grounds as a bankruptcy of issuer, an application for composition, an application for commencement ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

of company reorganization procedures, etc.

Article 103 (Matters for Ad Hoc Disclosure)

The term "matters prescribed by Presidential Decree" in subparagraph 5 of Article 122 of the Act means those falling under any one of the following subparagraphs:

1. The alternation of the trust deed, the articles of incorporation of investment company or the investment prospectus: Provided, That this shall exclude the case where the trust deed, the articles of incorporation of investment company or the investment prospectus is altered on the grounds prescribed in any subparagraph of Article 38 (1) or any subparagraph of Article 46;

2. The merger or division of the asset management company or the transfer and acquisition by transfer of its business;

3. Where any asset management company or any general fund administrator miscalculates the standard price and corrects it. the details thereof; or

4. Other important matters necessary for the management of the indirect investment property, as prescribed by Ordinance of the Prime Minister. Article 104 (Trustee Company Report and Asset Custody Company Report) (1) Every trustee company or every asset custody company shall, when it furnishes a trustee company report or an asset custody company report in accordance with Article 123 (1) of the Act, mail it in written form through a distribution company: Provided, That if an indirect investor indicates an intention that he/she will receive the trustee company report or the asset custody company report by e-mail, it may provide it by e-mail:

1. Deleted; and

2. Deleted. (2) The term "cases prescribed by Presidential Decree" in the proviso to Article 123 (1) of the Act means those falling under any one of the following subparagraphs:

1. Where an indirect investor indicates an intention that he/she rejects the receipt of the trustee company report or the asset custody company report;

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2. Where an trustee company or an asset custody company publishes the trustee company report or the asset custody company report of the indirect investment fund falling under any one of the following items as prescribed by Ordinance of the Prime Minister: (a) Short-term financial indirect investment fund; (b) Indirect investment fund whose indirect investment securities are listed in accordance with Article 35 or 45 of the Act; or (c) Exchange traded indirect investment fund under Article 137 of the Act; or

(3) The term "matters prescribed by Presidential Decree" in Article 123 (1) 5 of the Act means those falling under each of the following subparagraphs:

1. In case of confirming the appropriateness of transaction with the interested person in accordance with Article 92 (3) of the Act, the details thereon;

2. Matters concerning the appointment of an accounting auditor; or

3. Other matters necessary for the protection of indirect investors, as determined by the Financial Services Commission.

(4) Every trustee company or every asset custody company shall submit a trustee company report or an asset custody company report to the Financial Services Commission and the Asset Management Association of Korea within two months from the end of the accounting term of the indirect investment fund. (5) The Financial Services Commission may prescribe the matters to be entered in a trustee company report and an asset custody company report, the methods of the preparation thereof, and other necessary details. Article 105 (Report on and Public Disclosure of Indirect Investment Property)

(1) Every asset management company of investment trust or every investment company shall, in accordance with Article 124 (1) of the Act, ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

prepare a business report on the indirect investment property by classifying into documents under the following subparagraphs in accordance with the standards determined by the Financial Services Commission and submit it to the Financial Services Commission and the Asset Management Association of Korea by 20 days after the end of every quarter:

1. Current status on the establishment of investment trusts or on the change in the capital of investment company;

2. Current status on the management of investment trust property, a list of the standard prices of beneficiary certificates or current status on the management of the investment company property and a list of the standard prices of stocks of investment company; or

3. The documents concerning the exercise of voting rights on the corporation subject to the public disclosure of voting rights in accordance with Article 80 (2), and the contents thereof (where the voting rights are not exercised, the grounds therefor).

(2) The provisions of Article 27 (3) shall apply to the submission of documents in accordance with Article 124 (1) and (2) of the Act. In this case a "report" shall be deemed a "document".

(3) The Asset Management Association of Korea shall, in accordance with Article 124 (4) of the Act, compare the management performances of respective indirect investment properties by the kinds of indirect investment properties, the objects of investment, the kinds of assets purchased, etc. as prescribed by Ordinance of the Prime Minister and publish the findings of such comparison. Article 106 (Public Reading of Books and Documents) (1) The term "grounds prescribed by Presidential Decree" in Article 125 (1) of the Act means those falling under any one of the following subparagraphs:

1. If the books and documents including the details on the selling and buying order of indirect investment property, etc. are provided, there exist concerns over use by the person who is served with them for trades or other duties, or over the provision of them to a third party;

2. If the books and documents including the details on the selling and buying order of indirect investment property, etc. are provided, it is evidently deemed that such provision may cause any loss to other ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

indirect investors; or

3. For the books and documents regarding a terminated investment trust or a dissolved investment company, it is impossible to comply with the request for inspection by indirect investors due to any causes including the elapse of the keeping period under Article 102 (3) of the Act.

(2) The account book and documents in respect of which indirect investors may claim for reading or the delivery of the certified copies or abridged copies shall be the same as the following subparagraphs:

1. The detailed statement of indirect investment property;

2. The ledger on standard prices of indirect investment securities;

3. The financial statements and the accessory detailed statement thereof; or

4. The detailed statement on selling and buying assets. (3) Every asset management company, every investment company or every distribution company shall, when it declines the claims from indirect investors due to causes under each of subparagraphs of paragraph (1), notify the relevant indirect investors of such purport in writing. Article 107 (Public Disclosure of Exercise of Voting Rights) (1) The public disclosure of the exercise of voting rights under Article 127 (1) of the Act shall be made by means falling under any one of the following subparagraphs:

1. Where any corporation which has issued stocks, voting rights of which are intended to be exercised is a stock-listed corporation or an association-registered corporation under the Securities and Exchange Act, it shall publish the matters on the intention of exercising voting rights through the securities market or the KOSDAQ market by 5 days before the general meeting of stockholders; or

2. Where any corporation which has issued stocks, voting rights of which are intended to be exercised is neither a corporation listed on the stock market nor a corporation listed on the KOSDAQ market under the Securities and Exchange Act, it shall make publication for public reading in ways of any of subparagraphs of Article 101. (2) Where there exist difficulties in performing the publication under paragraph (1) until five days before the date of the general meeting of ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

stockholders because the details of the matters to be resolved at the general meeting of stockholders are not determined until five days before the date of the general meeting of stockholders, the asset management company of investment trust or the investment company shall publish such purport before the date of the general meeting of stockholders, and publish the details on voting right exercised in the general meeting of stockholders in accordance with methods of publishment under paragraph (1) not later than five days after the date of the general meeting of stockholders. (3) The term "materials that are prescribed by Presidential Decree" in Article 127 (2) of the Act means those falling under each of the following subparagraphs:

1. Internal guidelines on the exercise of voting rights of the asset management company of investment trust or the investment company;

2. Numbers of stocks by kinds of indirect investment funds held by the asset management company of investment trust or the investment company in relation to the exercise of voting rights; and

3. Whether the relation between the asset management company of investment trust or the investment company and the corporation subject to the exercise of voting rights falls under the relationship under Article 79 (1) or (2).

SECTION 9 Custody and Management of Indirect

Investment Property

Article 108 (Obligation of Trustee Company, etc. to Manage with Care of Good Manager)

The term "cases that are prescribed by Presidential Decree" in the proviso to Article 129 (2) of the Act means those falling under any one of the following subparagraphs: Provided, That in case of subparagraphs 2 and 3, 10/100 of the total amount deposited in financial institutions or of the total sum of short-term lending in each indirect investment property shall not be exceeded:

1. The case where a trustee company or an asset custody company trades the cash left over after an asset management company manages the indirect investment property in the object of investment, with its own ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

proprietary property, as provided in the details of trust contract under Article 28 (1) of the Act or the articles of incorporation of investment company under Article 37 (2) of the Act;

2. Deposition in any financial institution (excluding the case under subparagraph 1);

3. Short-term lending; or

4. Purchase or selling of foreign currencies in accordance with the Foreign Exchange Transactions Act.

[This Article Wholly Amended by Presidential Decree No. 19455, Apr. 27, 2006] Article 109 (Deposit, etc. of Investment Securities) (1) The term "investment securities prescribed by Presidential Decree" in Article 130 (2) of the Act means the securities under Article 2 (1) or (2) of the Securities and Exchange Act and the investment securities designated by the Korea Securities Depository from among investment securities under subparagraph 7 (b) of Article 2 of the Act. (2) When any trustee company or any asset custody company performs the implementation under Article 130 (3) of the Act with regard to the investment securities under paragraph (1), it shall do so in a way that the delivery of the investment securities and the payment of price occur at once.

Article 110 (Overseeing Responsibilities of Trustee Company, etc.) (1) Every trustee company or every asset custody company shall, after implementing the management instructions given by any asset management company of investment trust or any investment company in accordance with Article 131 (1) and (2) of the Act, confirm whether its asset management is in violation of the standards prescribed by the Financial Services Commission including matters falling under each of the following subparagraphs:

1. Matters prescribed in Articles 87 through 92 of the Act and Articles 69 through 78 of this Decree: Provided, That if there exist plural trustee companies or asset custody companies of the total indirect investment funds managed by the asset management company, Article 88 (1) 2 (b) of the Act and Articles 76 (3) 1 and 78 (1) 2 of this Decree shall be excluded;

2. The investment limit by assets, prescribed in the trust deed or the ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

articles of incorporation of the investment company; or

3. Other matters necessary for the overseeing of asset management activities, as determined by the Financial Services Commission. (2) When the supervisory directors of a trustee company or of an investment company have made a report in accordance with Article 131 (4) of the Act, the asset management company of investment trust or the investment company shall post the following matters on the bulletin boards in front of the headquarters, branch offices and business places of the distribution company of the relevant indirect investment securities for the reading of beneficiaries or publish them on its Internet homepage:

1. The details of management instructions given from the asset management company of investment trust or the investment company;

2. Matters violating Acts and subordinate statutes, trust deed or articles of incorporation of investment company, investment prospectus, etc. from among the management directions from any asset management company of investment trust or any investment company; and

3. Where any asset management company of investment trust or any investment company raises any objection to the Financial Services Commission in accordance with Article 131 (5) of the Act, the details thereof and the contents of a decision by the Financial Services Commission thereon.

(3) Where the Financial Services Commission receives the claim for objection from any asset management company in accordance with Article 131 (5) of the Act, it shall determine, within one month, whether the act of managing assets violates Acts and subordinate statutes, trust deed or articles of incorporation of investment company, or investment prospectus and the methods, time, etc. for correcting a violation, if any, and shall without delay notify the relevant asset management company thereof.

Article 111 (Obligations of Confirmation by Trustee Company and Asset Custody Company)

The term "matters prescribed by Presidential Decree" in Article 132 (1) 5 of the Act means the details of asset distribution by kinds of the investment trust property and the results of distribution under Article 90 (3) of the Act: Provided, That, if there exist plural trustee companies or asset custody ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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companies for the total indirect investment funds managed by the relevant asset management company, the forgoing shall not apply.

CHAPTER SPECIAL RULES GOVERNING

FINANCIAL INSTITUTIONS,

ETC. BY OTHER ACTS

Article 112 (Restriction on Establishment of Indirect Investment Fund) The term "indirect investment fund prescribed by Presidential Decree" in Article 134 (3) 5 of the Act means a short-term financial indirect investment fund.

Article 113 (System for Prevention of Conflict of Interests) (1) The bank under Article 134 (1) of the Act (hereinafter referred to as the "bank") shall create a system for preventing the conflict of interests including the matters set forth in the following subparagraphs in accordance with Article 134 (7) of the Act:

1. It shall be composed of independent departments, which carry out the execution of business and the report thereon independently;

2. Where the persons who are in charge of businesses under each subparagraph of Article 134 (7) of the Act have any business meeting or any communication among them, they shall keep the records thereon and undergo the confirmation on the matters therof from the compliance officer not less than once per month;

3. The exchange of employees for the business under each subparagraph of Article 134 (7) of the Act or the transfer of employees in charge of the business under Article 134 (7) 2 through 4 of the Act within the period prescribed by Ordinance of the Prime Minister is required not to be made;

4. The employees in charge of performing the selling business of indirect investment securities are required not to concurrently hold the post under Article 134 (7) 2 through 4 of the Act;

5. Its office is required to be spatially separated and use its own door so that the sharing of information is not possible; ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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6. The electronic data regarding the business under each subparagraph of Article 134 (7) of the Act shall be independently stored to evade a sharing and provided for inspection; or

7. Other system by which the conflict of interests can be prevented other than those under subparagraphs 1 through 6, as prescribed by Ordinance of the Prime Minister.

(2) The term "persons who are prescribed by Presidential Decree" in the main sentence of Article 134 (7) of the Act means the persons falling under any of subparagraphs of Article 401-2 (1) of the Commercial Act.

(3) The term "business that is prescribed by Presidential Decree" in the proviso to Article 134 (7) of the Act means the business falling under any one of the following subparagraphs:

1. The business under subparagraph 3 of Article 18-2 of the Enforcement Decree of the Banking Act;

2. The business which has no direct relation with those of Article 134 (7) 2 through 4 of the Act from among the businesses under subparagraph 4 of Article 18-2 of the Enforcement Decree of the Banking Act, as determined and published by the Financial Services Commission;

3. The business under subparagraph 2 of Article 18-3 of the Enforcement Decree of the Banking Act; or

4. The business which has no direct relation with those of Article 134 (7) 2 through 4 of the Act from among the businesses under subparagraph 4 of Article 18-3 of the Enforcement Decree of the Banking Act, as determined and published by the Financial Services Commission. Article 114 (Indirect Investment Asset Management Committee, etc.) (1) The indirect investment asset management committee under Article 134 (9) of the Act shall perform the following businesses:

1. The preparation of a business plan and budget regarding the business of asset management;

2. The establishment of strategy on the management of indirect investment property; and

3. The resolution on matters falling under the following items: ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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(a) The decision on the deferment of redemption;

(b) The convocation of the general meeting of beneficiaries (excluding the case falling under Article 70 (3) of the Act) and its deferment; (c) The decision on the purchase of beneficiary certificates by the right to file a claim for purchase of the beneficiary certificates; (d) The appointment and dismissal of members of the indirect investment property appraisal committee;

(e) The establishment and change of the appraisal standards of indirect investment property; or

(f) The merger of investment trusts.

(2) The compliance officer of a bank shall, when he/she performs the job of compliance officer under this Decree, be deemed as the compliance officer under this Decree.

Article 115 (Restriction on Joint Acts, etc. by Banks) No bank shall perform the acts falling under any of the following subparagraphs in accordance with Articles 20 (1) 2 and 134 (10) of the Act:

1. The act of using information regarding any company (excluding disclosed informations including those on credit ratings) obtained in connection with the execution of businesses under the Baking Act for the duties under Article 134 (7) 2 through 4 of the Act;

2. The act of discriminating customers by connecting the business under the Baking Act and the business of selling indirect investment securities.

3. The act of investing the indirect investment property in the investment securities (limited to the case where the person who has been served with a loan is appraised as a non-investment-grade person by a credit rating company) issued by any person who has earned a loan under the Baking Act from a bank, for the purpose of promoting the interest of such bank;

4. The act of using information on the indirect investment property for businesses under the Baking Act;

5. The act of using information obtained during the execution of the general affairs management business for the businesses under the Baking Act; or

6. Other acts than subparagraphs 1 through 5 as prescribed by Ordinance ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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of the Prime Minister as being required to be restricted for the protection of indirect investors.

Article 116 (Special Rules Governing Insurance Company) (1) The term "ways prescribed by Presidential Decree" in the main sentence of Article 135 (2) of the Act means the ways falling under any one of the following subparagraphs in which an insurance company manages the investment trust property:

1. Ways of entrusting the management and the whole business of offering management instructions to another asset management company;

2. Ways of managing the whole of investment advisory assets from among the investment trust property by means of a discretionary investment; or

3. Ways of managing the whole of investment trust property by means of other indirect investment securities.

(2) The term "persons prescribed by Presidential Decree" in the main sentence of Article 135 (2) of the Act means those falling under any one of subparagraphs of Article 401-2 (1) of the Commercial Act.

(3) The term "businesses that are prescribed by Presidential Decree" in the proviso to Article 135 (2) of the Act means those falling under any one of the following subparagraphs:

1. The businesses under Article 16 (1) and (3) of the Enforcement Decree of the Insurance Business Act; or

2. The business which is not directly related to the investment in assets and the management thereof in accordance with subparagraph 1 of Article 2 of the Act among the businesses under the Insurance Business Act.

(4) An insurance company may manage assets belonging to the investment trust property in accordance with Article 135 (3) of the Act in ways of the loaning to the persons who have subscribed the relevant insurance as prescribed by the Insurance Business Act.

(5) The provisions of Articles 113 (1) 1, 3, 4 and 6, and 115 (excluding ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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the case where the management is made by means of each subparagraph of Article 116 (1)) shall apply mutatis mutandis to insurance companies. In this case the "bank" shall be deemed the "insurance company" and the "Banking Act", the "Insurance Business Act." Article 117 (Special Rules Governing Merchant Banks) The provisions of Articles 113 and 115 shall apply mutatis mutandis to merchant banks. In this case the "bank" shall be deemed the "merchant bank" and the "Banking Act", the "Merchant Banks Act."

CHAPTER SPECIAL INDIRECT

INVESTMENT FUND, ETC.

Article 118 (Requirements, etc. for Exchange Traded Indirect Investment Fund)

(1) The term "index numbers that meet the requirements prescribed by Presidential Decree" in Article 137 (1) 1 of the Act means the index numbers that meet the following requirements as of the date on which the exchange traded indirect investment fund is initially established or set up:

1. The index numbers are required to comprehensively show the price levels of items of securities traded at the securities market, the KOSDAQ market or other similar markets located in foreign countries;

2. The index numbers are required to be made public in a proper manner through the securities market or the KOSDAQ market, etc.; and

3. The composition items of index numbers, the relative importance of a single item constituting index numbers, etc. shall satisfy the requirements prescribed by Ordinance of the Prime Minister. (2) The term "distribution company prescribed by Presidential Decree" in Article 137 (3) of the Act means the person who is involved in the securities business under Article 2 (8) 1 and 2 of the Securities and Exchange Act from among distribution companies, and designated by an asset management company to take charge of the businesses under each subparagraph of Article 120 (1) (hereinafter referred to as the "designated ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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distribution company"). Article 119 (Set up or Establishment of Exchange Traded Indirect Investment Fund)

(1) Every asset management company may, when any designated distribution company claims for the creation or establishment of an exchange traded indirect investment fund or demands the issuance of new stocks, create or establish the exchange traded indirect investment fund or issue new stocks as prescribed by the trust deed or the articles of incorporation of the investment company.

(2) When any designated distribution company seeks to claim for the creation or establishment of an exchange traded indirect investment fund or demand the issuance of new stocks in accordance with paragraph (1), it shall change the cash, checks or investment securities (hereinafter referred to as the "paid-in amount, etc") paid by investors directly or through the distribution company into assets corresponding to a specific unit (hereinafter referred to as the "establishment unit") prescribed by Ordinance of the Prime Minister. (3) The method of paying the paid-in amount, etc, and other necessary matters concerning the creation or establishment of an exchange traded indirect investment fund or the issuance of new stocks shall be prescribed by Ordinance of the Prime Minister.

Article 120 (Designated Distribution Company of Exchange Traded Indirect Investment Fund)

(1) The designated distribution company of any exchange traded indirect investment fund shall perform the following businesses:

1. The business of requesting the creation or establishment of the exchange traded indirect investment fund or the issuance of new stocks from the asset management company;

2. The business of demanding the termination or dissolution of the exchange traded indirect investment fund or the partial retirement of stocks from the asset management company; or

3. The business of trading, or trading on entrustment, investment securities in order to change the paid-in amount, etc into assets corresponding to the establishment unit.

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(2) The designated distribution company of an exchange traded indirect investment fund shall endeavor to make the indirect investment securities of the exchange traded indirect investment fund smoothly traded on the securities market or the KOSDAQ market through the businesses under each subparagraph of paragraph (1) and the price thereof consistent with the net asset value per share or per unit of the relevant indirect investment securities. Article 121 (Redemption of Indirect Investment Securities of Exchange Traded Indirect Investment Fund)

(1) The indirect investors of an exchange traded indirect investment fund may demand the redemption of indirect investment securities by establishment units from any distribution company of such indirect investment securities (excluding any designated distribution company; hereafter the same shall apply in this Article) or from any designated distribution company of such indirect investment securities (limited to the case where the company which has sold the relevant indirect investment securities is a designated distribution company): Provided, That if the distribution company of the indirect investment securities cannot accept claims for the redemption due to any causes prescribed by Ordinance of the Prime Minister including dissolution, revocation of permission, suspension of business, etc. (hereafter referred to as the "dissolution, etc." in this Article), the indirect investors may claim for the redemption against the designated distribution company.

(2) A distribution company which has received a demand for redemption of the indirect investment securities of an exchange traded indirect investment fund in accordance with the main sentence of paragraph (1) shall demand the redemption of the indirect investment securities from the designated distribution company: Provided, That if the designated distribution company cannot perform the business related to the redemption of such indirect investment securities due to its dissolution, etc., the distribution company may ask the asset management company itself to comply with the demand for the redemption of indirect investment securities.

(3) The indirect investors of an exchange traded indirect investment fund may, if the designated distribution company from which they intends to ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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demand the redemption of the indirect investment securities of the exchange traded indirect investment fund in accordance with paragraph (1) is unable to perform the job relating to the redemption of the indirect investment securities due to its dissolution, etc., demand the redemption of such indirect investment securities directly from the asset management company. (4) When the designated distribution company receives a demand or claim for the redemption of indirect investment securities of an exchange traded indirect investment fund in accordance with paragraph (1) and the main sentence of paragraph (2), it shall ask the asset management company in case of exchange traded investment trust or the exchange traded investment company in case of exchange traded investment company, to comply with the redemption without delay.

(5) When the indirect investors, distribution company or designated distribution company of indirect investment securities of an exchange traded indirect investment fund claims or demands the redemption in accordance with paragraphs (2) through (4), if the asset management company which shall meet such claim or demand is unable to do so due to its dissolution, etc., the former may claim the redemption directly to the trustee company or the asset custody company.

(6) The asset management company and the trustee company of an exchange traded investment trust which are demanded to comply with the redemption under paragraphs (2) through (5) shall comply with the redemption without delay, and the asset management company and the asset custody company of the exchange traded investment company shall ask the exchange traded investment company to comply with such redemption without delay. (7) The asset management company, the trustee company or the exchange traded investment company which shall comply with the redemption in accordance with paragraphs (2) through (6) shall comply with the redemption with investment securities (excluding the case prescribed by Ordinance of the Prime Minister) by means of a partial rescission of the exchange traded investment trust or a partial retirement of stocks of the exchange traded investment company. In this case, the redemption shall be based on assets held by the relevant indirect investment property after the termination of management of the indirect investment property as of the day when the request for redemption is accepted.

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(8) When the distribution company, designated distribution company, asset management company, trustee company or asset custody company of which the redemption is demanded or claimed in accordance with paragraphs (1) through (6) is unable to redeem the indirect investment securities by the date prescribed in the trust deed or the articles of incorporation of the trust company due to its dissolution, etc., it shall delay the redemption in accordance with Article 65 of the Act and shall without delay notify indirect investors of the fact.

Article 122 (Delisting, etc. of Exchange Traded Indirect Investment Fund) (1) The Korea Securities and Futures Exchange may, where the grounds prescribed by Ordinance of the Prime Minister occur to the indirect investment securities of an exchange traded indirect investment fund, delist the relevant indirect investment securities in accordance with Article 137 (4) of the Act.

(2) Every asset management company shall, if the indirect investment securities of an exchange traded indirect investment fund are delisted in accordance with paragraph (1), terminate the investment trust or dissolve the investment company within the days fixed by Ordinance of the Prime Minister from the date of delisting. In this case, with respect to the exchange traded indirect investment fund which is an investment trust, the provisions of Article 105 (1) of the Act shall not apply. (3) Where any asset management company terminates the investment trust or dissolves the investment company in accordance with paragraph (2), it shall report to the Financial Services Commission within seven days from the date of termination or dissolution.

Article 123 (Public Disclosure, etc. of Assets Held by Exchange Traded Indirect Investment Fund)

(1) Every asset management company of investment trust or every investment company shall publish everyday the portfolio of paid-in assets, etc. of the exchange traded indirect investment fund as of the day before the date of publication, at the securities market or at the KOSDAQ market. (2) The Korea Stock Exchange or the Korea Securities Dealers Association ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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under Article 162 of the Securities and Exchange Act (hereinafter referred to as the "Korea Securities Dealers Association") shall publish the value of net assets of the exchange traded indirect investment fund and the tracked error rate (referring to the difference between the fluctuation rate of value of net assets per account or share of the indirect investment securities of the exchange traded indirect investment fund and the fluctuation rate of index numbers targeted by the exchange traded indirect investment fund) as prescribed by Ordinance of the Prime Minister.

(3) The matters to be published in accordance with paragraph (1), the procedures therefor and other necessary matters shall be prescribed by Ordinance of the Prime Minister.

Article 124 (Special Case regarding Instructions Given for Management of Exchange Traded Indirect Investment Fund)

(1) Every asset management company may manage the indirect investment property of the exchange traded indirect investment fund in the following ways in accordance with Articles 88 (2) and 92 (6) of the Act, notwithstanding the provisions of Articles 71 (2) and 78:

1. The act of investing the assets of each exchange traded indirect investment fund in the investment securities of the same item up to 30/100 of the total amount of the assets. In this case, the investment securities issued by the same company with the exception of stocks, shall be deemed the same item; or

2. The act of investing the total amount of the assets of each exchange traded indirect investment fund over 10/100 of the total number of stocks issued by the same company.

(2) Every asset management company may trade in investment securities, etc. with the interested persons with the aim of the setup or establishment of any exchange traded indirect investment fund or of the issuance of new stocks notwithstanding the main sentence of Articles 92 (1) of the Act.

Article 125 (Multi-Class Fund)

The asset management company, etc. under Article 137 (1) of the Act (hereinafter referred to as the "asset management company, etc.") which ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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seeks to create or establish a multi-class fund shall, when it reports on the enactment of a trust deed in accordance with Article 29 of the Act or makes the registration of an investment company in accordance with Article 41 of the Act, report or register the matters on fees and commissions by various kinds of indirect investment securities. Article 126 (Umbrella Fund)

(1) The asset management company, etc. which seeks to create or establish an umbrella fund shall, when it reports on the enactment of a trust deed in accordance with Article 29 of the Act or makes the registration of an investment company in accordance with Article 41 of the Act, report or register the matters on a transformable indirect investment fund. (2) Where the types of transformable indirect investment funds in an umbrella fund are changed, any change in the trust deed shall be reported in accordance with Article 31 of the Act or a registration on change of investment company shall be made in accordance with Article 42 of the Act.

(3) No asset management company, etc. shall create or establish an umbrella fund in which a conversion between the investment trust and the investment company is allowed.

Article 127 (Master-Feeder Fund)

(1) The asset management company, etc. which seeks to create or establish a master-feeder fund shall, when it reports on the enactment of a trust deed in accordance with Article 29 of the Act or makes the registration of an investment company in accordance with Article 41 of the Act, report or register the matters on a master-type indirect investment fund acquired by the feeder-type indirect investment fund.

(2) Where a master-type indirect investment fund in the master-feeder fund is changed, the change in the trust deed shall be reported in accordance with Article 31 of the Act or the change of the investment company shall be registered in accordance with Article 42 of the Act. (3) In the case of a master-feeder fund, only a feeder-type indirect investment fund may be an indirect investor of the master-type indirect investment fund, and a distribution company may sell only the indirect investment securities of the feeder-type indirect investment fund to or accept a claim for redemption thereof from investors. Article 128 (Securities Investment Company for Corporate Restructuring) ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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(1) The term "ratio prescribed by Presidential Decree" in Article 141 (1) 1 of the Act means 50/100.

(2) The term "business group prescribed by Presidential Decree" in Article 141 (1) 1 of the Act means a business group (excluding the business group under Article 17 (1) 1 or 2 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act) wherein the total amount of assets of domestic companies, which is indicated on the balance sheet as of the immediately preceding business year, is not less than 5 trillion won. (3) The term "securities that are prescribed by Presidential Decree" in Article 141 (1) 1 of the Act means those falling under each of the following subparagraphs:

1. Securities newly issued as a result of any paid-in capital increase or the issuance of bonds, etc; or

2. Securities acquired by any financial institution prescribed by Ordinance of the Prime Minister as a result of converting a loan made to an enterprise into an investment therein, for which six months have not passed since the acquisition thereof.

(4) The term "period prescribed by Presidential Decree" in Article 141 (1) 2 of the Act means three years.

(5) In managing the assets of any securities investment company for corporate restructuring under Article 141 (2) of the Act, the foreign asset management company concerned shall have an agency, in the Republic of Korea, to effect liaison, etc. with the Financial Services Commission, which may be necessary for supervision.

Article 129 (Securities Investment Company for Business Takeover) (1) The term "business group prescribed by Presidential Decree" in Article 142 (2) of the Act means the business group subject to the mutual equity investment limit provided by Article 9 of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as the "conglomerate").

(2) Every contribution to any securities investment company for business takeover by all of financial institutions which belong to the same conglomerate shall not exceed 10/100 of the total number of the issued ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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stocks of the securities investment company for business takeover. (3) Every securities investment company for business takeover shall have a director appointed in accordance with Article 142 (4) of the Act perform the business of managing the investment company property, or entrust such business to an asset management company, an investment counsel company (limited to the case of performing the discretionary investment business), a securities company, a financier for new technology project under the Specialized Credit Financial Business Act or other persons approved by the Financial Services Commission. (4) Every securities investment company for business takeover shall state in the articles of incorporation the purport that it employs 60/100 or more of the investment company property to incorporate other companies into its affiliate companies, within one year after its registration. Article 130 (Special Case for Real Estate Fund and Property Fund) (1) Every asset management company may give a loan necessary to perform a real estate-related business to a corporation which runs the business related to the development of real estate (including the real estate investment company under the Real Estate Investment Company Act, the real estate trust company under the Trust Business Act or other type of real estate funds) as provided in the trust deed or articles of incorporation of the real estate fund. In this case, the loan shall not exceed 100/100 of the total amount of the net assets of the real estate fund.

(2) Where any asset management company provides a loan in accordance with paragraph (1), it shall secure proper means for the collection of such loan, such as establishing of a mortgage on real estate or receiving of payment guarantee from the constructor concerned.

(3) Every real estate fund may borrow funds by ways of providing real estate as a security, etc. as prescribed by the following subparagraphs: Provided, That if the general meeting of beneficiaries or the general meeting of stockholders resolves different matters than each of the following subparagraphs, it may borrow funds in accordance with such resolution: 113

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1. The amount of borrowings shall not exceed twice the total amount of net assets of indirect investment property; or

2. The borrowing shall be made from any financial institution, etc. falling under any one of the following subparagraphs:

(a) The financial institution falling under each of subparagraphs of Article 6;

(b) The insurance company under the Insurance Business Act; (c) The fund under the State Finance Act;

(d) Other types of real estate funds; or

(e) Foreign financial institutions, etc. equivalent to items (a) through (d).

(4) No asset management company shall manage the funds borrowed in accordance with paragraph (3) in ways other than the investment in real estate.

(5) The report on the on-the-spot survey under Article 143 (3) of the Act shall contain the matters falling under each of the following subparagraphs:

1. Current state, transaction price and transaction cost of real estate;

2. Financial data related to real estate;

3. Factors that may affect the profits from real estate; or

4. Other matters necessary for the decision on the transaction of real estates, as prescribed by the Financial Services Commission. (6) Where any asset management company seeks to invest in a real estate development project using the real estate fund in accordance with Article 143 (4) of the Act, it shall prepare, in advance, a business program including the following subparagraphs and publish it as prescribed by Ordinance of the Prime Minister:

1. Matters concerning business program including an implementation schedule, ways of implementation, and building plans, etc.;

2. Matters concerning the raising, investment and collection of funds;

3. Matters concerning estimated profits and losses;

4. Matters concerning risks involved in the relevant project;

5. Matters concerning outsourcing including the execution of construction works, etc.; and

6. Other matters necessary for the protection of indirect investors, as ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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determined by the Financial Services Commission.

(7) Every asset management company which manages a real estate fund may, notwithstanding the provisions of Article 164 (1) 1, execute the business under subparagraph 2 of Article 69 and other businesses accidential thereto, through any third party.

Article 131 (Special Case for Derivative Fund)

(1) The term "standards that are set by Presidential Decree" in Article 144 (1) of the Act means the case where the total appraised amount of the risk involved in the indirect investment property including the appraised amount of the risk involved in the transaction of exchange traded derivatives and over-the-counter derivatives corresponds to twice the total amount of the assets of the indirect investment fund concerned (for the private offering indirect investment fund under Article 175 (1) of the Act, five times). In this case, ways of calculating the appraised amount of the risk involved in the transaction of the exchange traded derivatives and the over-the-counter derivatives and the total appraised amount of the risk involved in the indirect investment property shall be as prescribed by Ordinance of the Prime Minister in accordance with the latter part of Article 88 (1) 3 (a) of the Act.

(2) The term "indexes on the risk prescribed by Presidential Decree" in Article 144 (2) of the Act means each of the following indexes (in case of the exchange traded derivatives or the over-the-counter derivatives prescribed by the Financial Services Commission including the case where the calculation of index is impossible due to the lack of data necessary for calculating the index on risk, subparagraph 3 shall not apply):

1. The contract amount;

2. The profit structure as of the due date following the transactions of exchange traded derivatives or over-the-counter derivatives;

3. The change of profit structure of the indirect investment property following the fluctuation in market conditions or where the market price is changed in a way unfavorable to the indirect investment fund within the scope of specific confidence interval during the specific ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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holding period, the maximum amount of estimated loss which may occur in the transaction of exchange traded derivatives or over-the-counter derivatives; or

4. Other indexes which may be an important base for investors when they make an investment judgement, in relation to the risk prescribed by the Financial Services Commission.

(3) Every asset management company of investment trust or every investment company shall state in the investment prospectus the fact that the summary of index related to risk in accordance with paragraph (2) and the index on the risk will be published, and shall publish the index related to risk as prescribed by Ordinance of the Prime Minister. (4) The Financial Services Commission may determine the specific methods of calculating the index on risk under paragraph (2) and other necessary details. CHAPTER -2 PRIVATE EQUITY FUND

Article 131-2 (Requisites, etc. for Private Equity Fund) The term "way that is recognized by many and unspecified persons, which is prescribed by Presidential Decree" in Article 144-2 (1) 2 of the Act means the way of informing any person who has been invited to subscribe as a partner of the matters regarding the subscription to partnership or the procedures of acquisition of investment share by advertising on newspapers, broadcasting or magazines, etc., by distributing printed matters including a notice, a pamphlet, etc. by holding a presentation meeting on investment, or by using electronic communications etc., with the aim to solicit them to acquire the investment share of a private equity fund, which can be recognizable by many and unspecified persons. [This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] Article 131-3 (Partners)

The term "persons prescribed by Presidential Decree" in Article 144-3 (3) of the Act means a fund, an individual and a juristic person under each of subparagraphs of Article 163 (1).

[This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] Article 131-4 (Equity Investment by Partners)

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(1) Where an equity investment by any partner is made by means of securities in accordance with the proviso to Article 144-4 (1) of the Act, such securities shall be appraised in accordance with Article 82. (2) The term "amount prescribed by Presidential Decree" in Article 144-4 (2) of the Act shall be two billion won in case where the partner is a juristic person (including the fund under the State Finance Act and the indirect investment fund), and one billion won in case where the partner is an individual.

(3) Where financial institutions which belong to the same conglomerate invest in any private equity fund, such investment shall not be made in excess of 10/100 of the total share of the private equity fund. (4) Methods and procedures of equity investments by partners under paragraphs (2) and (3), and other necessary details regarding such investments shall be determined by the Financial Services Commission. [This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] Article 131-5 (Registration of Private Equity Fund) (1) The term "documents prescribed by Presidential Decree" in Article 144-6 (1) of the Act means documents falling under each of the following subparagraphs:

1. Deleted;

2. Documents stating the name and details on contribution of a company in which the partner in charge of performing the business or his/her specially related person participates as a large stockholder;

3. When the partner in charge of performing the business is a company, the following documents:

(a) Deleted; (b) Financial statements for the last 3 business years; and (c) Details on large stockholders including their names and resident registration numbers (in case of a company, the firm name and business operator registration number), the number of stocks held by them, etc.;

4. Working rules under Article 144-11 (3) of the Act;

5. When the private equity fund entrusts its business to a third party, ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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the written business entrustment contract which is concluded with the said third party; and

6. Other documents necessary to protect the interests of partners of the private equity fund, which are determined and prescribed by the Financial Services Commission.

(2) The official in charge who has received a written application for registering the private equity fund under Article 144-6 (1) of the Act shall confirm the administrative information falling under each of the following subparagraphs through the mutual utilization of administrative information pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act: Provided, That if the applicant disagrees with such confirmation, he/she shall attach the relevant documents:

1. A certified copy of the corporate register of the private equity fund; and

2. When a partner in charge of performing the business is a company, a certified copy of the corporate register of the relevant partner. [This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] Article 131-6 (Methods of Managing Property of Private Equity Fund) (1) The term "case of managing the property jointly with any other private equity fund under the conditions as prescribed by Presidential Decree" in Article 144-7 (1) of the Act means the case of holding the property by ways of agreeing on the performance of an act falling under any one of the following subparagraphs under an agreement or a contract, etc. with the principal:

1. The act of jointly acquiring or disposing of stock certificates, in- struments that carry the indication of preemptive right to new stocks, convertible bond certificates, bond certificates with subscription warrant or exchangeable bond certificates (hereafter referred to as the "stocks, etc." in this paragraph);

2. The act of transferring and acquiring by transfer stocks, etc. after jointly or separately acquiring them; or

3. The act of exercising voting rights (including the rights to order the exercise of the voting rights) jointly.

(2) The term "company prescribed by Presidential Decree" in Article 144-7 (1) 1 of the Act means those falling under any one of the following ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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subparagraphs:

1. Private equity funds;

2. Companies falling under Article 2 (2) 1 through 4 and 11; or

3. Where the sum of the following items from among the total amount of assets held by a foreign company and its subsidiary company (referring to any foreign company equivalent to the subsidiary company under the Act on External Audit of Stock Companies) is 5/100 or more, such foreign company:

(a) Investment securities issued by a corporation established in the Republic of Korea;

(b) Money receivables against a corporation established in the Republic of Korea;

(c) Real estates or real assets located in the Republic of Korea; (d) Assets falling under any of subparagraphs of Article 3, which are issued or created in the Republic of Korea; or

(e) Exchange traded derivatives or over-the-counter derivatives (limited to those the basic asset of which can be acquired by means of exercise, etc. of rights) whose objects are any assets under items (a) through (d) or the index numbers based on them; or

4. Other companies similar to those under subparagraphs 1 through 3, as determined and published by the Financial Services Commission. (3) The term "investment that makes it possible to exercise the de facto control of major corporate governance matters, including appointments and dismissals of executives, of any other company in which such investment is made" in Article 144-7 (1) 2 of the Act means the investment performed in such a way as to second or appoint executives (referring to directors, CEO, general partners in charge of performing the business, auditors or other persons equivalent thereto who have the right to participate in important decision making regarding the business operation) by means of the acquisition of stocks or shares.

(4) The term "exchange traded derivatives or over-the-counter derivatives prescribed by Presidential Decree" in Article 144-7 (1) 4 of the Act means exchange traded derivatives under Article 9 or over-the-counter derivatives under Article 10.

(5) The term "investment that is prescribed by Presidential Decree" in ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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Article 144-7 (1) 7 of the Act means the case falling under any one of the following subparagraphs (in the cases of subparagraphs 1 and 2, referring to the case for the investment under Article 144-7 (1) 1 or 2 of the Act:

1. The investment in the bad debts under subparagraph 2 of Article 2 of the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation (including the claims which accrued from a lending transaction of a foreign financial institution equivalent to the financial institution under subparagraph 1 of Article 2 of the said Act and which correspond to bad debts in accordance with subparagraph 2 of Article 2 of the said Act);

2. The investment in money receivables held by any corporation (including any foreign corporation equivalent thereto) which was any creditor financial institution under subparagraph 1 of Article 2 of the Corporate Restructuring Promotion Act (including any foreign creditor financial institution equivalent thereto) or any financial institution under the Act on the Structural Improvement of the Financial Industry and for which the liquidation procedures or the bankruptcy procedures under the Debtor Rehabilitation and Bankruptcy Act are commenced, against any enterprise with a sign of insolvency (including any foreign enterprise equivalent thereto) under subparagraph 5 of the same Article; or

3. The investment in the assets prescribed by the Financial Services Commission, including real estates or money receivables, etc., which occur during any improvement in the business structure or control structure, etc. of any enterprise subject to investment. (6) The term "ratio prescribed by Presidential Decree" in Article 144-7 (2) 2 of the Act means 5/100.

(7) In the main sentence of Article 144-7 (3) of the Act, the term "period that is prescribed by Presidential Decree" means two years, and the term "ratio prescribed by Presidential Decree" means 50/100.

(8) Where the fund under the State Finance Act (hereafter referred to as the "fund" in this paragraph), which performs a contribution in any way other than promising a future contribution, becomes a parter of a ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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private equity fund in accordance with Article 144-7 (7) of the Act, the investment ratio may be calculated based on each of the following subparagraphs with regard to the relevant equity amount:

1. When calculating the ratio of 5/100 in accordance with paragraph (6): where the investment securities are bought with the equity amount of the fund, such equity amount and the amount of buying the investment securities shall not be included therein; and

2. When calculating the ratio of 50/100 in accordance with paragraph (7): it shall be calculated by excluding the equity amount of the fund in the property of the equity fund concerned.

[This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] Article 131-7 (Restriction on Management of Property of Private Equity Fund)

(1) When any private equity fund manages the property of the relevant equity fund in accordance with the proviso to Article 144-7 (3) of the Act, if it falls under any one of the following subparagraphs, it shall in advance submit to the Financial Services Commission a document in which the grounds therefor are stated, and obtain approval therefor from the Financial Services Commission:

1. Where it is difficult to determine enterprises subject to the investment;

2. Where the property of the relevant equity fund is insufficient to acquire the stocks of an enterprise subject to the investment; or

3. Other cases similar to subparagraphs 1 and 2, as determined and published by the Financial Services Commission.

(2) Where any corporation in which a private equity fund or a specific purpose company has invested falls under any one of the following subparagraphs, and sells the stocks and shares issued by such investment corporation or the stocks and shares issued by such specific purpose company in accordance with the provisos to Article 144-7 (4) and (5) of the Act, approval therefor shall be obtained form the Financial Services Commission after submitting in advance a document that contains the grounds therefor:

1. Where the business of the invested enterprise is suspended;

2. Where the operation of the invested enterprise is suspended for not ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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less than three months; or

3. Other cases determined and published by the Financial Services Commission as being feared to definitely undermine the interests of the partners.

(3) When any private equity fund sells stocks or shares of any other company in accordance with the main sentence of Article 144-7 (6) of the Act, such private equity fund shall sell stocks or shares of such other company within one month and then report thereon immediately to the Financial Services Commission. (4) When any private equity fund falls under any one of the following subparagraphs in accordance with the proviso to Article 144-7 (6) of the Act and does not sell stocks or shares issued by the enterprise subject to the investment, it shall obtain approval therefor from the Financial Services Commission after submitting in advance a document in which the grounds therefor are stated:

1. Where the trade of stocks of the enterprise subject to the investment at the securities market, etc. is suspended;

2. Where the trade of stocks of the enterprise subject to the investment at securities market, etc. is discontinued; or

3. Other cases similar to subparagraph 1 or 2, as determined and published by the Financial Services Commission.

(5) No partner in charge of performing the business of a private equity fund shall, in executing the business of the fund, entrust any third party with an essential business regarding the management of the property of the equity fund concerned, which falls under any one of the following subparagraphs:

1. The selection of an enterprise subject to the investment or a specific purpose company;

2. Where the stocks or shares of an enterprise subject to the investment or a specific purpose company are traded, the determination of the price, time, method, etc.;

3. The exercise of voting rights to the stocks or shares which are the property of the equity fund concerned or a specific purpose company; or

4. Other affairs corresponding to subparagraphs 1 through 3, as determined ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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and published by the Financial Services Commission from among affairs necessary for the protection of partners' interests. (6) The details necessary for the approval, etc. under paragraphs (1), (2) and (4) shall be prescribed by the Financial Services Commission. [This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] Article 131-8 (Restriction on Management of Property of Specific Purpose Company)

(1) The term "limitation set by Presidential Decree" in the latter part of Article 144-9 (3) of the Act means twice the capital of the relevant specific purpose company .

(2) The specific purpose company under Article 144-9 of the Act shall entrust the management of assets to the partners in charge of performing the business of a private equity fund who are stockholders or partners of the company.

[This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] Article 131-9 (Acts and Subordinate Statutes Governing Finance) (1) The term "Acts and subordinate statutes governing the finance prescribed by Presidential Decree" in Article 144-10 (3) of the Act means the Acts and subordinate statutes under Article 16 (1) 2 through 5, 7, 9, 10, 12 through 20, 24, 28 or 29.

(2) Where any person who executes the business prescribed in finance-related Acts and subordinate statutes under paragraph (1) becomes a partner in charge of performing the business of a private equity fund, he/she may execute the business within the limit not violating the restriction or prohibition in such Acts and subordinate statutes. [This Article Wholly Amended by Presidential Decree No. 19455, Apr. 27, 2006] Article 131-10 (Working Rules Governing Partners in Charge of Performing Business)

The term "act that is prescribed by Presidential Decree" in Article 144-11 (2) 4 of the Act means any one of the following subparagraphs:

1. The act of trading on any unfair conditions different from ordinary trade conditions without any justifiable reason in managing the property of an equity fund; or

2. The act of using information on the property of an equity fund for the management of one's own property.

[This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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Article 131-11 (Obligation of Partners in Charge of Performing Business to Give Explanation)

The partners in charge of performing business shall provide other partners with financial statements, etc. of the private equity fund and the specific purpose company in which the private equity fund invests and shall give an explanation therefor, not less than once per six months, and shall make and keep the records thereon, in accordance with Article 144-12 (1) of the Act.

[This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] Article 131-12 (Ways of Reporting Acquisition of Stocks by Banks, etc.) (1) When any private equity fund reports the acquisition (including when there exists any change in partners) of stocks of any financial institution under the Baking Act or any bank holding company under the Financial Holding Companies Act to the Financial Services Commission in accordance with Article 144-16 (3) and (4) of the Act, it shall make such a report in writing or an electronic document. (2) The procedures for reporting and other necessary details relating to the report under paragraph (1) shall be prescribed by the Financial Services Commission. [This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] Article 131-13 (Special Case for Regulating Holding Companies) (1) The provisons of Article 131-12 shall apply mutatis mutandis to the report under Article 144-17 (2) of the Act.

(2) The term "not less than one financial institution prescribed by Presidential Decree" in the proviso to Article 144-17 (3) of the Act means any financial institution under Article 2 (1) 1 of the Financial Holding Companies Act. In this case, Articles 45-2 through 45-4 of the Financial Holding Companies Act shall apply mutatis mutandis only in the case where a private equity fund governs a financial institution under the Banking Act. (3) Where any affiliate of a financial holding company under the Financial Holding Companies Act becomes a partner in charge of performing the business of a private equity fund, the provisions of Article 13 (1) 4 of the Enforcement Decree of the Financial Holding Companies Act shall not apply. [This Article Newly Inserted by Presidential Decree No. 18596, Dec. 3, 2004] ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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CHAPTER INVESTMENT ADVISORY

BUSINESS, ETC.

Article 132 (Requirements for Registration of Investment Counsel Company)

(1) Any company which seeks to register an investment advisory business or a discretionary investment business with the Financial Services Commission in accordance with Article 145 (1) of the Act shall secure investment advisory experts (hereinafter referred to as the "investment advisory experts") who fulfill the requirements under any of the following subparagraphs and do not fall under any of subparagraphs of Article 8 (1) of the Act. In this case, the investment advisory business shall secure two or more experts as its full-time executives and employees and the discretionary investment business shall secure four or more experts as its full-time executives and employees, respectively:

1. Any person falling under any of subparagraphs of Article 17 (1);

2. Any person who has worked not less than 3 years for any securities-related institution, etc. and has worked not less than 2 years in the business relating to corporate analysis, the investment advisory business or the discretionary investment business (excluding a career in the investment advisory business or the discretionary investment business at any securities company); or

3. Any person who passes an examination that is conducted by the Korea Securities Dealers Association to verify the ability as an expert in securities analysis.

(2) Notwithstanding paragraph (1), if any merchant bank (limited to a merchant bank which is newly established as a result of a merger or survives it after obtaining authorization under Article 4 of the Act on the Structural Improvement of the Financial Industry) seeks to register an investment advisory business, it shall secure four or more investment advisory experts as its full-time executives and employees.

(3) Where the largest stockholder (where there exists any de facto controller ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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in addition to the largest stockholder, referring to such controller) of any company (excluding securities companies) which seeks to register an investment advisory business or a discretionary investment business is a foreigner, such foreigner shall fulfill the requirements falling under each of the following subparagraphs: Provided, That when the foreigner is a holding company and it is difficult or unreasonable that the whole or a part of the following subparagraphs applies to such holding company, if a company (limited to a company which controls actually the business administration of such holding company, or a company whose business administration is actually under the control of such holding company) designated by the holding company at the time when the application for registration is made fulfills the requirements under the whole or a part of the following subparagraphs, it shall be deemed that such holding company fulfills the requirements;

1. It shall run the investment advisory business or the discretionary investment business in its own country;

2. Deleted; and

3. It is required not to have been subjected by the supervisory authorities of its own country to an administrative measure equivalent to a warning against corporation or a harsher disposition from the supervision authority or to a criminal punishment equivalent to a fine penalty or harsher for the last three years.

(4) The large stockholder of any company which seeks to register an investment advisory business or a discretionary investment business shall meet the requirements falling under subparagraph 1 (e) of the attached Table 1: Provided, That when any asset management company or any securities company seeks to register an investment advisory business or a discretionary investment business, the Financial Services Commission may determine the requirements thereon differently. (5) The Financial Services Commission may determine specific standards regarding the detailed requirements under paragraph (4).

Article 133 (Application for Registration of Investment Counsel Company) (1) Any person who intends to register an investment advisory business ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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or a discretionary investment business in accordance with Article 145 (1) of the Act shall submit an application for registration containing the matters falling under each of the following subparagraphs to the Financial Services Commission:

1. Name and location of the company;

2. Matters regarding the capital;

3. Matters regarding executives;

4. Matters regarding investment advisory experts; and

5. Ways of executing business, and other matters than subparagraph 1 through 4 as prescribed by the Financial Services Commission as necessary for registration.

(2) The application under paragraph (1) shall be accompanied by the following documents: In this case, the official in charge shall confirm a certified copy of the corporate register through the mutual utilization of administrative information pursuant to Article 21 (1) or 22-2 (1) of the Electronic Government Act, and if the applicant disagrees with such confirmation, he/she shall attach it:

1. Articles of incorporation;

2. Documents containing the names or titles of stockholders (where the applicant is a corporation listed on the stock market or on the KOSDAQ market, the largest stockholder and his/her specially related persons and other major stockholders) and the number of stocks held by them;

3. The business programs for the following two business years and the estimated statement of receipts and disbursements;

4. Deleted; and

5. The balance sheet and the statement of profit and loss as of the immediately preceding business year.

Article 134 (Maintenance of Minimum Amount of Net Assets of Investment Counsel Company)

Every investment counsel company shall maintain the minimum amount of net assets falling under any one of the following subparagraphs on and after the date on which one year expires after registering itself with the Financial Services Commission in accordance with Article 145 (2) of the Act:

1. The investment advisory business: 200 million won; or ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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2. The discretionary investment business: 2 billion won. Article 135 (Execution of Registration)

(1) The Financial Services Commission, in case of an application for registration under Article 133 is made, shall not reject such application excluding the case falling under any of the following subparagraphs:

1. The case where the applicant fails to fulfill the requirements for registration under Article 145 (1) of the Act and Article 132 of this Decree; or

2. The case where there exists a false statement or an omission regarding any important matters stated in the application for registration or its attached documents.

(2) When the Financial Services Commission deems that an application for registration submitted meets the requirements for registration under Article 132, it shall deliver to the applicant a registration certificate of investment advisory business or a registration certificate of discretionary investment business which contains the matters prescribed by Ordinance of the Prime Minister. (3) The Financial Services Commission shall, if it rejects the registration because of falling under any subparagraph of paragraph (1), notify the applicant of the ground therefor.

Article 136 (Change in Registration)

Every investment counsel company shall submit any changed matters to the Financial Services Commission within two weeks from the date of change in case of a change in the matters of subparagraphs 1, 4 and 5 in the documents submitted in accordance with Article 133 (1) or in its major stockholders, or within seven days after the end of a quarter to which the date of change belongs in case of a change in the matters of subparagraphs 2 and 3. Article 137 (Report of Closing Business)

Where any investment counsel company seeks to close the investment advisory business or the discretionary investment business, it shall report thereon to the Financial Services Commission before publishing the closing of the investment advisory business or the discretionary investment business in accordance with Article 37 of the Securities and Exchange ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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Act applied mutatis mutandis in Article 148 of the Act. Article 138 (Notification, etc. to Customers of Investment Result, etc .) (1) Every investment counsel company shall prepare and deliver a report under Article 146 (2) of the Act including the matters prescribed by Ordinance of the Prime Minister to any customer who has concluded a contract for discretionary investment (excluding the institutional investors or funds under Article 163 (1) 1), once or more per quarter.

(2) Every investment counsel company shall deliver the report under paragraph (1) directly, in a way of mailing or such or by e-mailing: Provided, That if a customer may refer the report at his/her pleasure on the Internet homepage or in other similar ways in accordance with a contract for discretionary investment, the delivery shall be deemed to be made. (3) The Financial Services Commission may prescribe a form of report and ways of provision under paragraphs (1) and (2) and other necessary details. Article 139 (Investment Counsel Contracts, etc.)

(1) Every investment counsel company shall, when it seeks to conclude any investment counsel contract or any discretionary investment contract with any customer (excluding the institutional investors and funds under Article 163 (1) 1; hereafter the same shall apply in this Article), deliver in advance the written data containing the following subparagraphs to the relevant customer in ways prescribed by the Financial Services Commission:

1. The scope of investment counsel service and ways of providing such service or the scope of discretionary investment and the object of such investment;

2. The general procedures or guidelines prescribed by the company in regard to the implementation of the investment advisory business or the discretionary investment business;

3. The names and important career of executives and employees who actually perform the investment advisory business or the discretionary investment business;

4. The procedures prescribed by the company in order to prevent the ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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conflict of interests with customers;

5. The fact that the results of investment will revert to investors in regard to investment counsel contracts or discretionary investment contracts, and the matters regarding responsibilities of investors;

6. The matters regarding commission;

7. In case of discretionary investment contracts, the way of appraising investment records and the notice of the results of investment to each of customers; and

8. Other matters than subparagraphs 1 through 7, as prescribed by the Financial Services Commission, as may be important as a basis for judgement when customers decide on whether they will conclude a contract.

(2) Every investment counsel company shall, prior to the conclusion of a discretionary investment contract, grasp in writing the investment objectives, investment experience, level of risk preference and scheduled term for investment (hereinafter referred to as the "investment objectives, etc.") of each customer.

(3) When any investment counsel company seeks to conclude an investment counsel contract or a discretionary investment contract, it shall do so by using written documents in which the following matters are stated and when written data are delivered to a customer pursuant to paragraph (1), the contents of the contract shall not be different from the contents stated on such written data:

1. Matters under each of subparagraphs of paragraph (1);

2. Matters relating to contracting parties;

3. Term and date of the contract;

4. Matters relating to the change in or rescission of the contract; and

5. In the case of a discretionary investment contract, the title and the name of office of a securities company or any other financial institution in which the discretionary investment assets concerned are deposited. Article 140 (Ways of Entrusting Discretionary Investment) (1) Every investment counsel company shall, when it invests discretionary investment assets, take into consideration the investment objectives, etc. of the customers concerned.

(2) No investment counsel company shall perform the following acts on ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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entrustment by customers:

1. Act of designating or changing any securities company or any other financial institution in which discretionary investment assets are deposited;

2. Act of depositing or withdrawing discretionary investment assets;

3. Act of exercising the voting rights and other rights of the securities which belong to discretionary investment assets: Provided, That the exercise of rights prescribed by Ordinance of the Prime Minister shall be excluded; and

4. Other acts than those under subparagraphs 1 through 3, which may cause the conflict of interests or a dispute with customers, as prescribed by Ordinance of the Prime Minister.

Article 141 (Commission)

No investment counsel company shall be paid additionally by customers other compensations than commission (including the piece rate commissions paid by customers based on trading profits or appraisal profits as prescribed by Ordinance of the Prime Minister) agreed when the investment counsel contracts or the discretionary investment contracts are concluded.

Article 142 (Prohibited Acts by Investment Counsel Company) (1) The term "act that is prescribed by Presidential Decree" in Article 147 (1) 8 of the Act means any one of the following subparagraphs:

1. Act of promising or guaranteeing the realization of a fixed earning or earning rate;

2. Act of using information including the trends on trade orders made by customers, etc. obtained in connection with the execution of one's business for the self-interest or the interests of any third party;

3. Act of receiving money other than the compensation for the service of investment counsel or discretionary investment after concluding an investment counsel contract or a discretionary investment contract with any specially related person under subparagraph 2 of Article 10-2 in order to make a replenishment of interests of the investment counsel company;

4. Act of recommending buying or selling and other trades by providing ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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an assertive judgement on a rise or fall of prices of specific securities to a customer in connection with the trade of securities and other transactions;

5. Act of using any unjust means to conceal an illegal transaction made by a customer in connection with the trade of securities and other transactions; or

6. Other acts than those under subparagraphs 1 through 5, which may cause any harm to investors due to the conflict, etc. of interests with customers, as prescribed by Ordinance of the Prime Minister. (2) The term "cases that are prescribed by Presidential Decree" in the proviso to the portion other than each subparagraph of Article 147 (2) of the Act means those falling under each of the following subparagraphs:

1. Trade made through an open market in which many and unspecified persons participate, including the securities market, etc.;

2. Trade that is recognized as favorable for discretionary investment assets in the light of general trade terms;

3. Trade in which a securities company invests the assets whose discretionary investment is entrusted in the assets held as its proprietary property after obtaining an explicit consent thereto from the customer with whom the discretionary investment contract is concluded; or

4. Trade in which a securities company sells indirect investment securities of an exchange traded indirect investment fund after borrowing them with discretionary investment assets in order to avoid any risk involved in the investment in discretionary investment assets. (3) The term "acts prescribed by Presidential Decree" in Article 147 (2) 5 of the Act means those falling under each of the following subparagraphs:

1. The act of trading excessively frequently or causing any severe risk in the light of the scope of discretionary investment and the investment objectives, etc.

2. The act of using discretionary investment assets for the acts prohibited under Articles 188-2 and 188-4 of the Securities and Exchange Act and Articles 31 and 31-2 of the Futures Trading Act;

3. The act of being provided money or convenience from any securities companies or other financial institutions in which discretionary ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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investment assets are deposited, in relation to the transaction of discretionary investment assets;

4. The act of managing discretionary investment assets not by individual customers but by summing up several customers' assets; or

5. The act of trading discretionary investment assets on any unfair conditions different from the ordinary trade conditions for the purposes of promoting one's own or any third party's interests. Article 143 (Public Disclosure of Business Details) (1) The methods and procedures for preparation and the forms of a business report prepared by any investment counsel company in accordance with Article 47 (1) of the Securities and Exchange Act applied mutatis mutandis under Article 148 of the Act shall be prescribed by the Financial Services Commission.

(2) The Financial Services Commission shall offer a business report submitted in accordance with paragraph (1) for the public inspection, except the matters which might undermine the secrets of customers or be against the interests of the investment counsel company concerned. (3) The Financial Services Commission may publish the business reports submitted in accordance with paragraph (1) through the Asset Management Association of Korea as prescribed by the Financial Services Commission. Article 144 (Special Case for Securities Company, etc.) (1) Notwithstanding Article 132 (1) and (3), when any securities company seeks to register an investment advisory business or a discretionary investment business, it shall secure nine or more experts (hereinafter referred to as the "experts in the asset planning") who fulfill the requirements under any one of the following subparagraphs and do not fall under any one of subparagraphs of Article 8 (1) of the Act, as its full-time executives and employees:

1. Any person who falls under any one of Article 17 (1) 1 through 3;

2. Any person who has worked not less than 3 years for any securities-related institution, etc., and has worked not less than 2 years in the business relating to corporate analysis, the investment advisory business or the discretionary investment business; or ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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3. Any person who has passed the examination recognized by the Financial Services Commission to verify the ability as an expert in the asset planning.

(2) When any securities company seeks to run an investment advisory business or a discretionary investment business in the field of real estate, it shall secure three or more experts in the asset planning who fulfill the requirements under any of the following subparagraphs and do not fall under any of subparagraphs of Article 8 (1) of the Act, as its full-time executives and employees, in addition to experts in the asset planning under paragraph (1):

1. Any person who falls under any of Article 17 (2) 1 through 4; or

2. The experts in the asset planning who has finished the training prescribed by Ordinance of the Prime Minister.

(3) Every securities company shall register experts in the asset planning under paragraphs (1) and (2) with the Korea Securities Dealers Association. (4) Every securities company that has registered a discretionary investment business may, if it is necessary for the efficient management of discretionary investment assets, manage part of them by depositing in any financial institution.

(5) Every securities company that has registered a discretionary investment business may, with regard to assets under subparagraph 1 (a) through (c) of Article 2 of the Act and subparagraph 8 of Article 3 of this Decree from among discretionary investment assets, entrust the discretionary investment business to any third person who runs a discretionary investment business (including the person who runs the business of discretionary investment in accordance with foreign Acts and subordinate statutes), under the explicit agreement of a customer who has concluded the discretionary investment contract. In this case, the third person who has been entrusted with the business of discretionary investment shall not entrust once again the entrusted assets to any other person.

(6) Where any securities company runs an investment advisory business or a discretionary investment business, the provisions of Articles 134 and 136 shall not apply.

(7) The provisions of paragraphs (4) through (6), shall apply mutatis mutandis to any asset management company that has registered an ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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investment advisory business or a discretionary investment business. In this case, the "securities company" shall be deemed the "asset management company."

(8) Where any asset management company that has registered a discretionary investment business runs the discretionary investment business on the assets under subparagraph 1 (c) of Article 2 of the Act and subparagraph 8 of Article 3 of this Decree, it shall secure three or more fund managers under Article 17 (2) as its full-time executives and employees, in addition to fund managers under Article 17 (1). (9) The provisions of paragraphs (4) and (5) shall apply mutatis mutandis to the investment counsel company which has registered a discretionary investment business. In this case, the "securities company" shall be deemed the "investment counsel company."

Article 145 (Report on Similar Investment Advisory Business) The term "what is prescribed by Presidential Decree" in Article 149 (1) of the Act means the investment advice serviced by other persons than investment advisory companies, subject to the payment of a fixed fee, by means of periodicals, publications, communications, e-mails, or broadcasting, etc. issued or transmitted to many and unspecified persons and bought or received by many and unspecified persons at their pleasure. Article 146 (Registration, etc. of Foreign Investment Advisory Business Operators)

(1) When any foreign investment advisory business operator intends to run an investment advisory business or a discretionary investment business in the Republic of Korea in the ways prescribed in Article 150 (1) 1 or 2 of the Act, it shall fulfill the requirements falling under each of the following subparagraphs:

1. It shall secure the capital under any of the following items: (a) For the investment advisory business: 500 million won or more; and

(b) For the discretionary investment business: 3 billion won or more;

2. It shall secure the following foreign investment advisory experts (referring to those who fulfil the requirements equivalent to those for investment advisory experts under Article 132 (1); hereafter the ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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same shall apply in this Article) as its full-time executives and employees:

(a) For the investment advisory business: two or more foreign investment advisory experts; or

(b) For the discretionary investment business: four or more foreign investment advisory experts; and

3. It shall satisfy the requirements under Article 132 (3) 3 and paragraph (4) of the same Article.

(2) When any foreign investment advisory business operator intends to run an investment advisory business or a discretionary investment business in the Republic of Korea in the ways under Article 150 (1) 3 of the Act, it shall fulfill the requirements falling under each of the following subparagraphs:

1. He/she shall meet the requirements under Article 132 (3) 1 through

3. In this case, "3 years" in subparagraph 3 of the said paragraph shall be deemed "2 years"; and

2. The business fund of his/her branch office or business place shall not be less than the amount provided in any of the following items for each business that he/she intends to run:

(a) For the investment advisory business: 300 million won; or (b) For the discretionary investment business: 1 billion won. (3) Articles 133, 135 and 136 shall apply mutatis mutandis to the registration of an investment advisory business or a discretionary investment business in the Republic of Korea by any foreign investment advisory business operator, and Articles 15-4 through 15-6 of the Enforcement Decree of the Securities and Exchange Act, to the branches, etc. of any foreign investment advisory business operator. (4) The Financial Services Commission may prescribe requirements demanded of foreign investment advisory experts from among the requirements for registration under each of subparagraphs of paragraph (1) and other details necessary for registration. Article 147 (Ways of Running Business of Offshore Investment Advisory Business Operators)

(1) In case of the person which runs an investment advisory business ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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or a discretionary investment business only in the ways under Article 150 (1) 1 or 2 of the Act (hereinafter referred to as the "offshore investment advisory business operator"), the provisions of Articles 146 (2) and (3), 147, 152 and 166 of the Act and of Articles 37 and 47 (1), subparagraphs 2 and 3 of Article 52, and Articles 56 through 61 and 63 of the Securities and Exchange Act which are applied mutatis mutandis in Article 148 of the Act shall apply only to the investment advisory business or the discretionary investment business run by such offshore investment advisory business operator in the Republic of Korea.

(2) Every offshore investment advisory business operator shall have an agency, in the Republic of Korea, that falls under the requirements prescribed by Ordinance of the Prime Minister, to effect liaison, etc. with the Financial Services Commission, which may be necessary for supervision. (3) No offshore investment advisory business operator operating the discretionary investment business shall run such business by targeting other persons than institutional investors prescribed by Ordinance of the Prime Minister. (4) The securities denominated in foreign currency acquired by any offshore investment advisory business operator operating the discretionary investment business shall be in the custody of any foreign custody institution prescribed by the Financial Services Commission.

(5) In the investment counsel contract or the discretionary investment contract which is concluded by any offshore investment advisory business operator with a customer in accordance with Article 139, the contents that local laws shall govern the contract and any lawsuit regarding the contract shall be under the jurisdiction of a domestic court shall be included. (6) Every offshore investment advisory business operator shall prepare the basic procedures and standards to be followed by executives and employees in executing the task of checking on the observance of matters prescribed by Article 147 of the Act, and check the actual circumstances of the implementation on a regular basis.

(7) Other detailed matters necessary for the ways, procedures, etc. of ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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performing the business of the offshore investment advisory business operators shall be prescribed by the Financial Services Commission.

Article 148 (Indirect Investment Fund Appraisal Company) (1) Any person who intends to be registered as an indirect investment fund appraisal company in accordance with Article 154 (1) of the Act shall fulfill the requirements falling under each of the following subparagraphs:

1. It shall not be an asset management company or a distribution company, or an affiliate company under the Monopoly Regulation and Fair Trade Act;

2. There shall be no person falling under any of subparagraphs of Article 8 (1) of the Act from among its executives;

3. Its paid-in capital shall not be less than 500 million won;

4. It shall have an indirect investment fund appraisal system recognized by the Financial Services Commission, which is appropriate for appraising the indirect investment fund; and

5. It shall have three or more appraisal experts who meet the requirements under any one of the following items:

(a) They have worked not less than 3 years at any securities-related institution, etc. and have involved not less than 2 years in the duty of appraising or analyzing investment securities, indirect investment funds, etc. or of analyzing corporations; or (b) They have worked not less than 2 years, as certified public accountants, in the duty of appraising or analyzing investment securities, indirect investment funds, etc. or of analyzing corporations at any securities-related institution, etc. (2) The term "matters prescribed by Presidential Decree" in Article 154 (2) of the Act mean those falling under each of the following subparagraphs:

1. They shall perform the business of appraising the indirect investment fund in a consistent manner by following generally accepted and fair standards;

2. They shall not use the undisclosed information; and

3. They shall not use the information acquired for the appraisal of indirect ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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investment fund to perform other business.

(3) Every asset management company may furnish the details on indirect investment properties, directly or through the Asset Management Association of Korea, to the indirect investment fund appraisal company. (4) Every indirect investment fund appraisal company that runs concurrently other business than the business of indirect investment fund appraisal shall have the following system by which the conflict of interests between the business of indirect investment fund appraisal and other business can be prevented:

1. The prohibition of concurrent holding of office by employees and dispatching of them;

2. The information regarding the indirect investment property shall not be exchanged;

3. The diverse businesses run by it shall be assigned to each independent department, and the execution of business and the report thereon shall be made independently;

4. The electronic data regarding the businesses in which it is involved shall be stored independently to evade a sharing and provided for inspection; and

5. It shall develop the system by which the conflict of interests can be prevented, as recognized by the Financial Services Commission as necessary for the fair appraisal of indirect investment fund. (5) Every indirect investment fund appraisal company shall publish the detailed standards on the appraisal of indirect investment funds by means of Internet homepages of the Asset Management Association of Korea and run by itself or by posting on the bulletin board in front of the headquarters of the indirect investment fund appraisal company. (6) The provisions of Article 133 shall apply mutatis mutandis to the indirect investment fund appraisal company .

(7) The Financial Services Commission may determine the procedures for registration of the indirect investment fund appraisal company, the provision of appraisal data, the publication of standards for appraising indirect investment funds and other necessary details.

Article 149 (Bond Appraisal Company)

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(1) Any person who intends to be registered as a bond appraisal company in accordance with Article 155 (1) of the Act shall fulfill the requirements falling under each of the following subparagraphs:

1. There shall be no person falling under any of subparagraphs of Article 8 (1) of the Act from among its executives;

2. Its paid-in capital shall not be less than 3 billion won;

3. It shall secure ten or more full-time appraisal and analysis personnel including three or more investment securities analysis experts (referring to persons who have passed an examination that is conducted by the Korea Securities Dealers Association in accordance with Article 162-2 of the Securities and Exchange Act to verify the ability as an expert in securities analysis or who have worked 3 years or more for the job of appraising or analyzing investment securities at any securities-related institution, etc.);

4. It shall have physical facilities including data-processing equipment, necessary for performing the business of appraising investment securities;

5. It shall secure a price appraisal system recognized by the Financial Services Commission as appropriate for appraising investment securities; and

6. Where any corporation which belongs to any conglomerate or any financial institution under any of subparagraphs of Article 3 (1) of the Enforcement Decree of the Securities and Exchange Act invests in any bond appraisal company, the investment amount shall be 10/100 or less of the capital.

(2) The term "matters prescribed by Presidential Decree" in Article 155 (2) of the Act means those falling under each of the following subparagraphs:

1. They shall perform the business of appraising the investment securities including bonds, etc. in a consistent manner by following generally accepted and fair standards;

2. They shall not use the undisclosed information; and

3. They shall not use the information acquired for performing the price appraisal business of investment securities including bonds, etc., to perform any other business.

(3) Every asset management company may, when it is provided with the ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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appraisal price of investment securities which belong to the indirect investment property from a bond appraisal company, get the indirect investment fund to bear the cost therefor.

(4) The provisions of Article 133 shall apply mutatis mutandis to the bond appraisal companies. In this case, the "investment counsel company" shall be deemed the "bond appraisal company."

(5) The Financial Services Commission may determine the procedures for registration of bond appraisal companies, the provision of appraisal data, the publication of appraisal standards and other necessary details. CHAPTER LOCAL BUSINESS OF

FOREIGN ASSET

MANAGEMENT COMPANY

Article 150 (License, etc. of Foreign Asset Management Company) (1) In the event that any foreign asset management company under Article 156 (1) of the Act (hereinafter referred to as the "foreign asset management company") seeks to obtain a license for opening its branch offices, etc. in the Republic of Korea, it shall submit an application for license to the Financial Services Commission.

(2) The assets that are locally held by each of the foreign asset management companies under the latter part of Article 156 (5) of the Act means those falling under each of the following subparagraphs:

1. Cash, and other deposits, installment savings or installments deposited in local financial institutions;

2. Securities deposited or kept in custody within the Republic of Korea;

3. Credits including loans provided to any local resident;

4. Fixed assets located in the Republic of Korea; and

5. Other assets than subparagraphs 1 through 4, for which a compulsory execution is possible under domestic laws and the realization is easy, as prescribed by the Financial Services Commission. (3) The matters to be entered in the application for license under paragraph ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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(1), attached documents, and other necessary matters shall be prescribed by Ordinance of the Prime Minister.

Article 151 (Representative of Domestic Branch, etc. of Foreign Asset Management Company, and His/Her Acting Person)

(1) Where the representative of a domestic branch, etc. of any foreign asset management company becomes not to exist, or the representative becomes unable to perform his/her duty but a new representative is not appointed or any person who vicariously performs his/her business is not designated, any person who has an interest with the relevant domestic branch, etc. may demand the appointment of a person who temporarily performs business for him/her (hereinafter referred to as the "acting person") from the Financial Services Commission.

(2) The Financial Services Commission shall, when there exists any request from an interested person in accordance with paragraph (1), order the relevant domestic branch, etc. to appoint a new representative or designate an acting person within ten day.

(3) The Financial Services Commission shall, when the relevant domestic branch, etc. fails to appoint a representative or designate an acting person within the term under paragraph (2), designate an acting person without delay and the relevant domestic branch, etc. shall immediately register the fact in the location of the domestic branch, etc.

(4) The Financial Services Commission may, when it designates an acting person in accordance with paragraph (3), order the relevant domestic branch, etc. to pay reasonable remunerations to the acting person.

Article 152 (Detailed Requirements for License for Establishment of Local Branches, etc. of Foreign Asset Management Company) (1) Where any foreign asset management company seeks to establish its local branches, etc, its large stockholders shall meet the requirements under items (b) through (d) of subparagraph 4 of the attached Table 1. (2) The provisions of Article 13 (1) and (2) shall apply mutatis mutandis to the license for establishing local branches, etc. of foreign asset ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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management companies. In this case, the "asset management company" shall be deemed the "local branches, etc. of the foreign asset management company".

Article 153 (Distribution Company of Foreign Indirect Investment Securities)

Where any foreign asset management company sells foreign indirect investment securities in the Republic of Korea in accordance with Article 159 (1) of the Act, it shall have a distribution company under Article 26 of the Act (hereinafter referred to as the "sale agent") sell foreign indirect investment securities vicariously.

Article 154 (Report on Local Sales of Foreign Indirect Investment Securities)

(1) When any foreign asset management company seeks to sell foreign indirect investment securities in the Republic of Korea in accordance with Article 159 (1) of the Act, it shall submit a report on sale accompanied by the following documents to the Financial Services Commission in advance:

1. The trust deed or the articles of incorporation of the investment company;

2. The business prospectus and the business report of the foreign asset management company;

3. The investment prospectus;

4. A copy of the contract for appointment of a local agent in accordance with paragraph (6); and

5. Other documents prescribed by the Financial Services Commission. (2) No foreign asset management company shall sell or advertise for selling foreign indirect investment securities in the Republic of Korea before the acceptance of a report under paragraph (1).

(3) When any foreign asset management company falls under any one of the following subparagraphs, it shall without delay submit a report on the suspension of sale to the Financial Services Commission:

1. Where the foreign asset management company seeks to suspend the sale of foreign indirect investment securities;

2. Where the contract term or the period of existence of the foreign indirect investment fund is terminated or expires, the contract is rescinded, or the fund is dissolved;

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3. Where the foreign asset management company fails to meet the criteria determined by the Financial Services Commission in accordance with Article 155 (2); or

4. Where the foreign asset management company fails to meet the requirements under Article 159 (2) of the Act.

(4) When any foreign asset management company submits a report on the suspension of sale in accordance with paragraph (3), it shall also submit to the Financial Services Commission the documents containing the reason for suspending the sale of relevant foreign indirect investment securities, measures for protection of indirect investors after the suspension of sale, the transfer of vicarious sales business, etc.

(5) When any foreign asset management company determines to change the matters falling under any one of the following subparagraphs from among those reported to the Financial Services Commission in accordance with paragraph (1), it shall submit a report on change to the Financial Services Commission by attaching the documents that attest the changed matters, within ten days from the date of such determination:

1. The change in fees or commissions borne by indirect investors;

2. The change of the foreign asset management company, the foreign trustee company or the foreign asset custody company, etc.; and

3. Other matters which may have any important effect on the interests of indirect investors, as prescribed by the Financial Services Commission.

(6) Any foreign asset management company shall have any local agent (hereinafter referred to as the "local agent") who meets the requirements prescribed by Ordinance of the Prime Minister within the Republic of Korea, to effect business liaison, etc. with the Financial Services Commission, which may be necessary for supervision.

(7) When any foreign asset management company has submitted a report on the suspension of sale or a report on change in accordance with paragraphs (3) through (5), it shall send individual indirect investors the documents in which major points of the reported matters are stated in Korean, via the sale agent or shall publish them on two or more daily newspapers. ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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(8) Where any foreign asset management company concludes a contract on vicarious selling after the report on sale is accepted under paragraph (1), it shall report the result thereof immediately to the Financial Services Commission via the sale agent or the local agent.

(9) The report on local sales of foreign indirect investment securities, and other measures necessary for the protection of indirect investors shall be prescribed by Ordinance of the Prime Minister.

[This Article Wholly Amended by Presidential Decree No. 19455, Apr. 27, 2006] Article 155 (Requirements for Local Sales of Foreign Indirect Investment Securities)

(1) The term "scale prescribed by Presidential Decree" in Article 159 (2) 1 of the Act means one trillion won. In this case, if any foreign asset management company entrusts the whole of management business of the relevant management asset to another foreign asset management company, the entrusted foreign asset management company shall be regarded as the foreign asset management company.

(2) The foreign indirect investment securities which any foreign asset management company may sell in the Republic of Korea in accordance with Article 159 (4) of the Act shall meet the following criteria:

1. They shall be issued or be scheduled to be issued in accordance with Acts of the member country (excluding vassal states) of the Organization for Economic Cooperation and Development, Hongkong or Singapore;

2. They shall definitely bear the matters regarding the price borne by indirect investors including commissions, etc., which shall not be determined in excessively high level in the light of the international practices;

3. The direct or indirect redemption of them shall be possible upon the request of indirect investors; and

4. Other criteria prescribed by the Financial Services Commission as necessary for the protection of indirect investors. (3) The methods for calculating the scale under paragraph (1) and other details necessary for the local sale of foreign indirect investment securities ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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shall be prescribed by the Financial Services Commission. Article 156 (Ways of Local Sales of Foreign Indirect Investment Securities) (1) Where a sale agent sells foreign indirect investment securities in accordance with Article 153, it shall follow any of the following ways:

1. The standard price of foreign indirect investment securities which are sold shall be published or posted on the bulletin board of the business place, etc. of the relevant sale agent as prescribed by the trust deed of the indirect investment securities or the articles of incorporation of the investment company concerned;

2. The investment prospectus and the report on the management of assets of foreign indirect investment securities which are sold shall be prepared in Korean and provided to indirect investors: Provided, That in the case of a foreign exchange traded indirect investment fund whose indirect investment securities are listed on the securities market or the KOSDAQ market and which is similar to any exchange traded indirect investment fund under Article 137 of the Act, the provision of the report on the management of assets may be substituted by a daily publication of the portfolio, etc. of relevant paid-in assets by the foreign asset management company concerned through the securities market or the KOSDAQ market; or

3. If it is deemed necessary for the investment judgement of indirect investors, various documents including the report on local sale, etc. shall be kept in the business place, etc. of the sale agent. (2) When a report on the management of assets is to be provided in accordance with Article 121 of the Act which applies mutatis mutandis under Article 159 (3) of the Act, the report on the management of assets may be delivered as prescribed by the trust deed of the relevant foreign indirect investment securities or the articles of incorporation of the investment company concerned.

(3) The provisions of Articles 30 (4) 2, 55 and 57 shall apply mutatis mutandis to the sale agents of foreign indirect investment securities. In this case, the "distribution company" shall be deemed the "sale agent". (4) The matters regarding the invitation of investments by sale agents, and other necessary details, shall be prescribed by the Financial Services ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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Commission. Article 157 (Special Case for Sales of Foreign Indirect Investment Securities)

When any foreign asset management company sells foreign indirect investment securities in Republic of Korea, if it sells them only to the institutional investors prescribed by Article 147 (3), the provisions of Articles 154 through 156 (limited to the provisions regarding the selling advertisement under Article 57 applied mutatis mutandis in paragraph (3)) shall not apply.

CHAPTER ASSET MANAGEMENT

ASSOCIATION OF KOREA

Article 158 (Change of Articles of Association)

The term "matters prescribed by Presidential Decree" in Article 163 (2) of the Act means those falling under each of the following subparagraphs:

1. Objectives;

2. Name;

3. Qualifications for members; and

4. Business related to members. CHAPTER SUPERVISION

Article 159 (Measures regarding Supervision and Inspection) The term "measures prescribed by Presidential Decree" in Article 166 (5) 4 of the Act means those falling under each of the following subparagraphs:

1. Warning or caution against a company;

2. Demand for suspension of performing duties, warning or caution against executives of a company;

3. Demand for dismissal, suspension of performing duties, salary reduction, censure, warning, or caution against employees of a company; or

4. Order for correction or a demand for reimbursement against indirect investors.

Article 160 (Measures against Asset Management Company) ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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The term "measures prescribed by Presidential Decree" in Article 167 (2) 8 of the Act means those falling under each of subparagraphs of Article

159. Article 161 (Supervisory Order of Financial Services Commission) When the Financial Services Commission issues an order to change ways of performing the business, or other necessary orders in accordance with Article 173 (1) and (3) of the Act, it shall follow the provisions of the Act on the Establishment, etc. of Financial Services Commission and the Administrative Procedures Act. Article 162 (Entrustment of Business)

The Financial Services Commission shall entrust the business prescribed by the attached Table 3 to the Governor of the Financial Supervisory Service in accordance with Article 174 of the Act.

CHAPTER SUPPLEMENTARY

PROVISIONS

Article 163 (Special Case for Private Offering Indirect Investment Fund) (1) The term "requirements prescribed by Presidential Decree" in Article 175 (1) of the Act means those falling under any one of the following subparagraphs:

1. The case where indirect investors are the institutional investors under Article 17-2 (8) of the Enforcement Decree of the Corporate Tax Act or the funds (including the equivalent persons prescribed by foreign Acts or subordinate statutes) under the State Finance Act;

2. The case where indirect investors are the individuals who have bought indirect investment securities of each indirect investment fund not less than 10 billion won or the juristic persons who have bought them not less than 50 billion won; or

3. The case where any person who is required to make his/her personal assets public under the Public Service Ethics Act concludes a contract for the blind trust of stocks under the same Act. ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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(2) The term "number prescribed by Presidential Decree" in Article 175 (1) of the Act means 30 persons (if any person falls under any of subparagraphs of paragraph (1), he/she shall be excluded from the calculation of the number).

(3) In calculating the number of indirect investors of a private offering indirect investment fund in accordance with paragraph (2), if another indirect investment fund acquires 10/100 or more of indirect investment securities of the relevant private offering indirect investment fund, the number of beneficiaries of such other indirect investment fund shall be added up in such calculation.

(4) The term "cases prescribed by Presidential Decree" in Article 175 (1) of the Act means those falling under any one of the following subparagraphs:

1. The case of act falling under Article 88 (1) 2 or 3 of the Act;

2. The case of act falling under subparagraphs 1 through 3 or 5 of Article 72; or

3. The case of investing in accordance with Article 73. (5) When the provisions of the main sentence of the portion other than each item of Article 70 (3) 1-2 apply to the fund of funds which is a private offering indirect investment fund, "20/100" shall be read as "50/100" and the provisions of Article 70 (3) 2 through 4 shall not apply.

(6) Every asset management company may invest in other indirect investment securities up to 50/100 of the total amount of the assets of a private offering indirect investment fund (excluding the fund of funds). (7) The provisions of Article 130 (2) shall not apply to the real estate fund which is a private offering indirect investment fund.

Article 164 (Entrustment of Business)

(1) The term "business that is prescribed by Presidential Decree" in the former part of the portion other than each subparagraph of Article 176 (2) of the Act means the business other than those under each item classified by each of the following subparagraphs:

1. The asset management company: (a) The business of management and the offering of management ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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instructions: Provided, That the foregoing shall not apply to the case where any person located in a foreign country performs the business of management (including the way of discretionary investment) of assets denominated in foreign currency which are the assets under each of items of subparagraph 1 of Article 2 of the Act or similar thereto that are issued, created or distributed in the foreign country, the business of offering the management instructions, the investigation and analysis, and the business of simply ordering sale and purchase in accordance with Article 30 (5) 2 (b), by ways of entrusting to a person who has reported the fact that he/she has gotten a license necessary for the executing of the relevant business from the related State or has registered with or reported to the related State as prescribed by the Financial Services Commission:

(b) The business of appraising indirect investment property; (c) The business of observing the compliance (excluding the business of training for officers and employees and check-up under Article 30 (5) 2 (b)); or

(d) The business of managing risks involving the indirect investment property (excluding the business of simple calculation);

2. The trustee company or the asset custody company: (a) The business of keeping indirect investment property (excluding the business of keeping assets which are not deposited in the Korea Securities Depository);

(b) The business of executing directions from any management company; (c) The business of managing the rights on indirect investment property; (d) The business of paying the price for redemption and earnings; or (e) The business of overseeing the management in accordance with Acts and subordinate statutes; and

3. The general fund administrator: (a) The business (excluding the business of simple execution including a notice for the convocation of the general meeting of stockholders) regarding the management of an investment company; or (b) The business of calculating indirect investment property. (2) The term "matters prescribed by Presidential Decree" in Article 176 (2) 4 of the Act means those under any of the following subparagraphs: ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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1. Matters relating to the termination of a business entrustment contract;

2. Matters relating to remunerations paid for entrustment, etc; or

3. Other matters prescribed by Ordinance of the Prime Minister including the system by which the conflict of interests caused by the entrustment of business can be prevented.

(3) Where any person who entrusts the business under paragraph 176 (6) of the Act furnishes information, he/she shall meet the following requirements:

1. The information for provision shall be the one related to the entrusted business;

2. He/she shall keep the records on the provision of information; and

3. The management or supervision on the use of provided information by any trustee may be possible.

Article 165 (Restrictions on Piece Rate Remunerations) Where any asset management company creates or establishes an indirect investment fund which acquires remunerations or commissions in accordance with Article 177 (2) of the Act (hereinafter referred to the "piece rate remunerations"), it shall prescribe the following matters in the trust deed or the articles of incorporation of the investment company:

1. The purport that piece rate remunerations will be acquired, and their limit;

2. The calculation methods of piece rate remunerations;

3. The fact that it may be exposed to higher investment risk than any indirect investment fund which does not pay piece rate remunerations; and

4. Matters regarding the whole of pays including piece rate remunerations. Article 166 (Alloted Charges)

The share rates and limits of the alloted charges referred to in Article 180 of the Act, and other matters regarding the payment of alloted charges shall be governed by Article 12 of the Enforcement Decree of the Act on the Establishment, etc. of Financial Services Commission. Article 166-2 (Imposition Standards, etc. for Penalty Surcharges) (1) When the Financial Services Commission imposes penalty surcharges in accordance with Article 181-2 of the Act, it shall follow the following ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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standards in accordance with Article 181-3 (1) of the Act:

1. Where any violation falls under any one of the following items, the amount equivalent to 50/100 or more of the maximum amount of penalty surcharge as stipulated in Article 181-2 of the Act (hereinafter referred to as the "maximum amount of penalty surcharge") shall be levied as a penalty surcharge:

(a) Where the violation has occurred repeatedly thrice or more; or (b) Where the scale of profits acquired due to the relevant violation is not less than 100 million won; and

2. Where any violation falls under any one of the following items, the penalty surcharge shall be reduced or exempted:

(a) Where the violation is insignificant; or

(b) Where the violation is immediately corrected. (2) The calculation of the maximum amount of penalty surcharge shall be based on the total amount of credit extension actually made. (3) The Financial Services Commission shall, when it imposes a penalty surcharge in accordance with Article 181-2 of the Act, notify the violation, the amount of corresponding penalty surcharge, and the payment thereof by using a written notice stating matters under the following subparagraphs. Where the payment of a penalty surcharge is notified following the decision on extension of a period of payment or on payment in installments is made in accordance with Article 181-6 (1) of the Act, the same shall also apply:

1. Issuance number;

2. Payer of penalty surcharge;

3. Date of violation;

4. Classification of violation;

5. Amount of the penalty surcharge to be paid;

6. Payment deadline; and

7. Receiving agency. (4) The person who has received the notice in accordance with paragraph (3) shall pay the penalty surcharge to the receiving agency prescribed by the Financial Services Commission within 60 days from the date when the relevant notice is given.

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(5) The form of written notice under paragraph (3), and other details necessary for the imposition of penalty surcharges shall be prescribed by the Financial Services Commission.

[This Article Newly Inserted by Presidential Decree No. 20553, Jan. 18, 2008] Article 166-3 (Extending Period of Penalty Surcharge Payment) (1) The extension of a period for penalty surcharge payment under Article 181-6 (1) of the Act shall not exceed the period of one year from the next date to the original period of payment.

(2) Where the payment in installments in accordance with Article 181-6 (1) of the Act is allowed, the interval between respective installments shall be within six months and the number of installments shall not be more than three times.

(3) The application for extension of a period for payment or for payment in installments in accordance with Article 181-6 (2) of the Act shall be made using a written form stating matters under the following subparagraphs. In this case, it shall be accompanied by documents attesting the matters under subparagraph 6:

1. Issuance number of written notice for penalty surcharge payment;

2. Date of violation;

3. Classification of violation;

4. Imposed amount of penalty surcharge;

5. Payment deadline; and

6. Grounds for application for extension of a period for payment or for payment in installments.

(4) The form of written application under paragraph (3) shall be prescribed by the Financial Services Commission.

[This Article Newly Inserted by Presidential Decree No. 20553, Jan. 18, 2008] Article 166-4 (Fine for Default)

The term "fine for default determined by Presidential Decree" in Article 181-7 (1) of the Act means an amount calculated by applying 6/100 per annum to the defaulted penalty surcharge.

[This Article Newly Inserted by Presidential Decree No. 20553, Jan. 18, 2008] Article 167 (Imposition and Collection of Fine for Negligence) (1) When imposing a fine for negligence under Article 187 (1) and (2) of the Act, the Financial Services Commission shall notify a payment of ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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the said fine to the person subject to a disposition of the fine for negligence, by clarifying in writing the fact of offense, the amount of such fine, etc., after an investigation and verification of the relevant offense. In this case, ways of raising objection, period for objection, etc. shall be stated in a written notice for payment.

(2) The Financial Services Commission shall, when seeking to impose a fine for negligence under paragraph (1), provide the person subject to a disposition of fine for negligence with an opportunity to state any oral or written (including electronic documents) opinion during the prescribed period of not less than 10 days. In this case, the said person shall be deemed to have no opinion in the absence of statement of opinion within such period. (3) The Financial Services Commission shall, when determining the amount of fine for negligence, take account of the motive of offense, consequences thereof, etc. (4) The procedures for collecting fines for negligence shall be prescribed by the Financial Services Commission.

ADDENDA

Article 1 (Enforcement Date)

(1) This Decree shall enter into force on the date of its promulgation: Provided, That the provisions of Articles 49 ( 1), 51 and 109 shall enter into force on April 1, 2004; the provisions of Article 55 (2), on October 5, 2004; and the provisions of Article 131 ( 2) 3, on the date on which one year lapses after its promulgation.

(2) The term "date prescribed by Presidential Decree" in the proviso to Article 1 of the Addenda of the Act means April 1, 2004. Article 2 (Valid Term)

The provisions of Articles 58 (1) 1 and 61 ( 2) shall be effective until the date prescribed by Ordinance of the Ministry of Finance and Economy within the scope of three years.

Article 3 (Abrogation of Acts and Subordinate Statutes) The Enforcement Decree of the Securities Investment Trust Business Act and the Enforcement Decree of the Securities Investment Company Act ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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shall each be hereby abrogated: Provided, That the previous Enforcement Decree of Securities Investment Trust Business Act or the previous Enforcement Decree of Securities Investment Company Act shall apply to any securities investment trust that is established in accordance with the previous Securities Investment Trust Business Act, and any securities investment company that is incorporated in accordance with the previous Securities Investment Company Act, prior to the enforcement of this Decree. Article 4 (Special Case for Fund Manager of Asset Management Company) Any person who has worked 2 years or more for the duty specialized in management in any securities-related institution, etc. at the time of enforcement of this Decree shall be deemed to have managed the proprietary property not smaller than the scale prescribed by Ordinance of the Ministry of Finance and Economy in accordance with Article 17 ( 1) 1. Article 5 (Transitional Measures concerning Restriction on Loaning by Asset Management Company)

If any asset management company holds bonds as a result of an act under Article 23 (2 ) 1 at the time of enforcement of this Decree, such holding shall be terminated within six months after the enforcement date of this Decree.

Article 6 (Transitional Measures concerning Training of Executives and Employees of Distribution Company)

Any person who has undergone the training in accordance with Article 55 (2) at the Investment Trust Association under the previous Securities Investment Trust Business Act within one year prior to the enforcement of this Decree shall be deemed to have finished the training under Article 55 ( 2).

Article 7 (Transitional Measures concerning Transfer, etc. of Business of Asset Management Company)

The provisions of Articles 38 (2) 2 and 77 (2) 1 (proviso) shall not apply to an asset management company whose largest stockholder is a securities company converted under the Act on the Structural Improvement of the Financial Industry and which falls under the standards prescribed by the Financial Supervisory Commission, until three years elapse from the enforcement date of this Decree.

Article 8 (Transitional Measures concerning Restriction on Transfer of Bank Employees)

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The term for which an employee of a bank has engaged in the business under Article 134 (7) 2 through 4 of the Act at the bank at the time of enforcement of this Decree shall be included when calculating the term under subparagraph 3 of Article 113.

Article 9 (Transitional Measures concerning Requirements of Major Equity Investor)

From among the requirements for license that the truster companies under the previous Securities Investment Trust Business Act, merchant banks, the financial institutions under the Banking Act and insurance companies, which are deemed licensed as the asset management companies under Articles 6 and 14 of the Addenda of the Act, shall fulfill within three or six months from the enforcement date of the Act, the requirements for major equity investors under Article 13 ( 4) shall be excluded. Article 10 (Transitional Measures concerning Restriction on Selling of Beneficiary Certificates, etc.)

The term "case prescribed by Presidential Decree" in the proviso to Article 11 of the Addenda of the Act means the case falling under any of the following subparagraphs:

1. Where a securities investment trust or a securities investment company which is granted a tax incentive in accordance with the provision of the Restriction of Special Taxation Act is obliged to issue beneficiary certificates additionally or issue new stocks of the securities investment company;

2. Where the beneficiary certificates of a securities investment trust which corresponds to the trust for lump-sum retirement allowances under Article 34 of the Labor Standards Act are additionally issued; or

3. Where the management of assets of a securities investment company is entrusted to the securities investment company which is established under Article 79 of the previous Securities Investment Company Act but is not an asset management company.

Article 11 (Transitional Measures concerning Banks, Insurance Companies, etc.)

The term "case prescribed by Presidential Decree" in the proviso to Article 14 (2) of the Addenda of the Act means the case falling under any of the following subparagraphs:

1. With respect to a trust that allows any additional trust until the closing ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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of the trust in accordance with the previous trust contract from among the trust of money established under the Trust Business Act, where the truster of such trust as of the enforcement date of this Decree requests an additional trust until the deadline prescribed by the relevant trust; or

2. The special account under the Insurance Business Act, which falls under any of the following items:

(a) Where an insurance contract prescribes that the additional payment of insurance premiums is allowed until the payment date is closed and the insurance contracter prior to the enforcement of this Decree requests an additional payment until the deadline prescribed by the relevant insurance contract; or

(b) Where an additional establishment is allowed under the term prescribed by Ordinance of the Ministry of Finance and Economy. Article 12 Omitted.

Article 13 (Relationship with Other Acts and Subordinate Statutes) Where other Acts and subordinate statutes cite the previous Enforcement Decree of Securities Investment Trust Business Act, the previous Enforcement Decree of Securities Investment Company Act or the provisions thereof at the time of the entry into force of this Decree, this Decree or the corresponding provisions of this Decree, if any, shall be deemed to be cited in lieu of the previous provisions.

ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on December 6, 2004. Article 2 (Applicability to Fund Managers Specialized in Real Estate Fund of Asset Management Company)

The amended provisions of Article 17 ( 2) shall apply beginning with a real estate fund first established by an asset management company after enforcement of this Decree.

Article 3 (Applicability to Matters to be Entered in Investment Prospectus)

The amended provisions of Articles 54 (3) 17 and 58 (1) 2 shall apply beginning with an investment prospectus first provided by an asset management company six months after enforcement of this Decree. ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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Article 4 (Transitional Measures concerning Amount Payable Following Rescission of Investment Trust)

The disposal of the amount payable which has occurred as a result of the rescission of an investment trust established prior to the enforcement date of this Decree shall be governed by the previous provisions, notwithstanding the amended provisions of Article 94. Article 5 Omitted.

ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on the date of its promulgation. Articles 2 through 5 Omitted.

ADDENDUM This Decree shall enter into force on January 30, 2006. ADDENDA Article 1 (Enforcement Date)

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

Articles 2 through 32 Omitted.

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

(2) (Applicability of Requirements for Appraisal Experts) The requirements for appraisal experts under the amended provisions of Article 148 ( 1) 5 shall apply beginning with the indirect investment fund appraisal company which is first registered after the enforcement of this Decree. (3) (Transitional Measures concerning Report on Domestic Sale of Foreign Indirect Investment Securities) The foreign indirect investment securities whose report on sale is accepted under the previous provisions prior to the enforcement of this Decree shall be deemed to be those whose report on sale is accepted in accordance with Article 154 (1). ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on January 1, 2007. Articles 2 through 6 Omitted.

ADDENDUM This Decree shall enter into force on July 4, 2007. 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 January 20, 2008: Provided, That the amended provision of the attached Tables 1 and 1-2 shall enter into force on March 20, 2008, respectively.

Article 2 (Applicability to Requirements for Large Stockholders) The amended provision of the attached Table 1 shall apply beginning with the submission of an application for license under Article 6 (1) of the Act to the Financial Supervisory Commission, which is first filed after the enforcement of this Decree.

Article 3 (Applicability to Requirements for Approval on Alteration of Large Stockholder)

The amended provision of the attached Table 1 shall apply beginning with the submission of an application for the approval on alteration of large stockholders under Article 13-2 (4) to the Financial Supervisory Commission, which is first filed after the enforcement of this Decree. Article 4 (Transitional Measures concerning Decision-making Term of Approval on Alteration of Large Stockholders)

With regard to an application for the approval of controlling stockholders submitted to the Financial Supervisory Commission at the time when this decree enters into force, the previous provisions shall apply notwithstanding the amended provision of the former part of Article 13-2 (8). ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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[Table 1] Requirements for Large Stockholder (related to Article 13 (4)) Classification Requirements

1. Where a large stockholder is an

institution subject

to the inspection

of the Financial

S u p e r v i s o r y

Service in

accordance with

Article 38 of the

Act on the

Establishment, etc.

of Financial

S u p e r v i s o r y

O r g a n i z a t i o n s

(excluding a

private equity fund

and hereinafter

referred to as the

" f i n a n c i a l

institution")

(a) The amount obtained by subtracting the total

amount of liabilities from the total amount of

assets on the balance sheet as of the end of the

latest business year, (hereinafter referred to as the "capital") shall be three times or more the

amount to be contributed, which satisfies the

standards prescribed by the Financial Services

Commission;

(b) It shall satisfy the standards for financial

soundness that applies to the relevant financial

institution, as prescribed by the Financial

Services Commission;

business group, etc. subject to the mutual equity investment limit under the Monopoly Regulation

and Fair Trade Act (hereinafter referred to as the business group, etc. subject to the mutual equity investment limit) or is a business group under

the same Act which belongs to a major

debtor-affiliate (hereinafter referred to as the

"major debtor-affiliate") prescribed by the

Financial Services Commission, the debt ratio

(referring to the ratio obtained by dividing the

total amount of liabilities on the balance sheet by the capital as of the end of the latest business

year. In this case, a financial institution shall be excluded from the subject of calculating the debt ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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ratio; hereinafter the same shall apply) of such

business group, etc. subject to the mutual equity investment limit or the major debtor-affiliate

shall be 300/100 or less and satisfy the

standards prescribed by Financial Services

Commission;

(d) The contribution money shall not be the fund

raised by borrowings as prescribed by the

Financial Services Commission; and

(e) It shall satisfy the following requirements:

Provided, That the case where the violation, etc. is recognized as trivial shall be excluded:

() It is required not to have been subjected to a criminal punishment equivalent to a fine

penalty or harsher sentence in the last five

years in violation of the Act, this Decree,

finance-related Acts and subordinate statutes

(referring to finance-related Acts and

subordinate statutes under Article 16 (1);

hereinafter the same shall apply), the Monopoly

Regulation and Fair Trade Act and the

Punishment of Tax Evaders Act;

() It is required not to have harmed the sound

credit transaction order by defaulting

obligation, etc. in the last five years;

() It is required not to be a large stockholder or a specially related person of a financial

institution which has been designated as an

insolvent financial institution in accordance

with the Act on the Structural Improvement of

the Financial Industry or whose license or

authorization, etc. for business is revoked

under the Act or finance-related Acts and

subordinate statutes: Provided, That this shall

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not include the person who is recognized by a

court sentence as not having any responsibility

against such insolvency or who falls under the

criteria prescribed by the Financial Services

Commission including the case of bearing

economic liabilities following the insolvency;

and

() It is required not to have harmed other kinds

of sound financial transaction order as

prescribed by the Financial Supervisory

Commission.

2. Where a large stockholder is a

d o m e s t i c

c o r p o r a t i o n

(excluding a

private equity fund

and a specific

purpose company;

hereinafter the

same shall apply)

other than that

u n d e r

subparagraph 1

(a) The capital as of the end of the latest business year shall be three times or more the amount to

be contributed or more, which satisfies the

standards prescribed by the Financial Services

Commission;

(b) The debt ratio as of the end of the latest

business year shall be 300/100 or less and satisfy the standards prescribed by the Financial

Services Commission;

group, etc. subject to the mutual equity

investment limit or is a company which belongs

to a major debtor-affiliate, the debt ratio of such business group, etc. subject to the mutual equity investment limit or the major debtor-affiliate

shall be 300/100 or less and satisfy the

standards prescribed by Financial Services

Commission; and

(d) It shall satisfy the requirements under

subparagraph 1 (d) and (e).

3. Where a large stockholder is a

(a) He/she shall not fall under any of subparagraphs of Article 8 (1) of the Act; and

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domestic person

who is an

individual

(b) He/she shall satisfy the requirements under

subparagraph 1 (d) and (e).

4. Where a large stockholder is a

foreign corporation

established under

foreign Acts and

s u b o r d i n a t e

s t a t u t e s

( h e r e i n a f t e r

referred to as the

" f o r e i g n

corporation")

(a) It shall run the business of an asset management company in a foreign country as of the date when

an application for license is submitted;

(b) The capital as of the end of the latest business year shall be three times or more the amount to

be contributed or more, which satisfies the

standards prescribed by the Financial Services

Commission;

rating institution or to be confirmed as satisfying the standards on financial soundness determined

by a supervision institution of its country;

(d) It is required not to have been subjected by the supervision authorities of its country to an

administrative measure equivalent to a warning

against a corporation or harsher or to a criminal punishment equivalent to a fine penalty or

harsher sentence, in relation to the running of

financial business in the last three years; and

(e) It shall satisfy the requirements under

subparagraph 1 (e).

5. Where a large stockholder is a

private equity fund

or a specific

purpose company

Where a partner in charge of performing the business of a private equity fund, a limited partner whose investment share is 30/100 or more in the private equity fund and a limited partner who is a de facto controller of the private equity fund fall under any one of the following items or where a partner in

charge of performing the business of a private equity fund which is a stockholder or partner of a specific ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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purpose company, who performs the business of asset management of the specific purpose company, falls under any one of the following items, it shall satisfy the requirements under the division of each of the following items:

(a) In case of a financial institution under

subparagraph 1: It shall satisfy the requirements under subparagraph 1 (b), (c) and (e);

(b) In case of a domestic corporation under

subparagraph 2: It shall satisfy the requirements under subparagraphs 1 (e) and 2 (b) and (c);

individual under subparagraph 3: He/she shall

satisfy the requirements under subparagraphs 1

(e) and 3 (a); or

(d) In case of a foreign corporation under

subparagraph 4: It shall satisfy the requirements under subparagraphs 1 (e), 2 (b) (excluding a

corporation which runs a financial business) and

4 (c) and (d).

Note:

1. To any person falling under each of subparagraphs of Article 13 (3), only the requirements for large stockholder under subparagraph 1 (e) or 4 (d) shall apply respectively: Provided, That if a corporation which is the largest stockholder is a private equity fund or a specific purpose company, the requirements under subparagraph 5 shall apply.

2. In calculating the capital, the increased portion of capital until the date when the application for license is submitted from the end of the latest business year shall be included.

3. Where a foreign corporation who is a large stockholder is a holding company and it is difficult or unreasonable that the whole or a part of items of subparagraph 4 applies to the such holding company, if a company (limited to a company which controls actually the business ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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administration of such holding company, or a company whose business administration is actually under the control of such holding company) designated by the holding company at the time when the application for license is made fulfills the requirements under the whole or a part of items of subparagraph 4, it shall be deemed that such holding company fulfills the requirements.

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[Table 1-2] Requirements for Approval on Alteration of Large Stockholder (related to Article 13-2 (3))

Classification Requirements

1. Where a large stockholder is

a financial

institution

(a) It shall satisfy the standards for financial soundness which apply to the financial institution, as

prescribed by the Financial Services Commission;

(b) Where the financial institution belongs to a business group, etc. subject to the mutual equity investment limit or is a company which belongs to a major

debtor-affiliate, the debt ratio (referring to the ratio obtained by dividing the total amount of liabilities on the balance sheet by the capital as of the end of the latest business year, and in this case, a

financial institution shall be excluded from the

subject of calculating the debt ratio; hereinafter the same shall apply) of such business group, etc.

subject to the mutual equity investment limit or the major debtor-affiliate shall be 300/100 or less and satisfy the standards prescribed by the Financial Services Commission; and

(c) It shall satisfy the following requirements: Provided, That the case where the violation, etc. is recognized as trivial shall be excluded:

() It is required not to have been subjected to a criminal punishment equivalent to a fine penalty or harsher sentence in the last five years in violation of the Act, this Decree, finance-related Acts and subordinate statutes, the Monopoly Regulation and Fair Trade Act and the Punishment of Tax Evaders

Act;

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() It is required not to have harmed the sound credit transaction order by defaulting obligation, etc. in the last five years;

() It is required not to be a large stockholder or a specially related person of an financial institution which has been designated as an insolvent financial institution in accordance with the Act on the

Structural Improvement of the Financial Industry or whose license or authorization, etc. for business is revoked under the Act or finance-related Acts and subordinate statutes: Provided, That this shall not include the person who is recognized by a court

sentence as not having any responsibility against such insolvency or who falls under the criteria

prescribed by the Financial Services Commission

including the case of bearing economic liabilities following the insolvency; and

() It is required not to have harmed other kinds of sound financial transaction order as prescribed by the Financial Supervisory Commission.

2. Where a large stockholder is

a domestic

c o r p o r a t i o n

other than that

u n d e r

subparagraph 1

(a) The debt ratio as of the end of the latest business year shall be 300/100 or less and satisfy the

standards prescribed by the Financial Services

Commission;

(b) Where the corporation belongs to a business group, etc. subject to the mutual equity investment limit or is a company which belongs to a major

debtor-affiliate, the debt ratio of such business group, etc. subject to the mutual equity investment limit or the major debtor-affiliate shall be 300/100 or less and satisfy the standards prescribed by

Financial Services Commission;

(d) The fund raised by borrowings shall be 2/3 or less ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

167

of the contribution money; and

(e) It shall satisfy the requirements under subparagraph 1 (c).

3. Where a large stockholder is

a domestic

person who is

an individual

(a) He/she shall not fall under any of subparagraphs of Article 8 (1) of the Act; and

(b) He/she shall satisfy the requirements under

subparagraphs 1 (c) and 2 (c).

4. Where a large stockholder is

a foreign

corporation

(a) It shall run the business of an asset management company in a foreign country as of the date when

an application for approval is submitted;

(b) It is required to be rated investment grade or higher by any internationally recognized credit rating institution or to be confirmed as satisfying the

standards on financial soundless determined by a

supervision institution of its country;

administrative measure equivalent to a warning

against a corporation or harsher or to a criminal punishment equivalent to a fine penalty or harsher sentence, in relation to the running of financial business in the last three years; or

(d) It shall satisfy the requirements under

subparagraph 1 (c).

5. Where a large stockholder is

a private

equity fund or

a specific

p u r p o s e

company

Where a partner in charge of performing the business of a private equity fund, a limited partner whose

investment share is 30/100 or more in the private equity fund, and a limited partner who is a de facto controller of the private equity fund fall under any one of the following items or where a partner in

charge of performing the business of a private equity fund which is a stockholder or partner of a specific ENFORCEMENT DECREE OF THE INDIRECT INVESTMENT ASSET MANAGEMENT BUSINESS ACT

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purpose company, who performs the business of

asset management of the specific purpose company, falls under any one of the following items, it shall satisfy the requirements under the division of each of the following items:

(a) In case of a financial institution under

subparagraph 1: it shall satisfy the requirements under subparagraph 1;

(b) In case of a domestic corporation under

subparagraph 2: it shall satisfy the requirements under subparagraphs 1 (c) and 2 (a) and (b);

requirements under subparagraphs 1 (c) and 3 (a); or

(d) In case of a foreign corporation under subparagraph 4: it shall satisfy the requirements under

subparagraphs 1 (c) and 4 (b) and (c).

Note

1. To any person falling under each of subparagraphs of Article 13 (3), only the requirements for large stockholder under subparagraph 1 (c) or 4 (c) shall apply respectively: Provided, That if a corporation which is the largest stockholder is a private equity fund or a specific purpose company, the requirements under subparagraph 5 shall apply.

2. Where a foreign corporation who is a large stockholder is a holding company and it is difficult or unreasonable that the whole or a part of items of subparagraph 4 applies to the such holding company, if a company (limited to a company which controls actually the business administration of such holding company, or a company whose business administration is actually under the control of such holding company) designated by the holding company at the time when the application for license is made fulfills the requirements under the whole or a part of items of subparagraph 4, it shall be deemed that such holding company fulfills such requirements.

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[Table 2] Kinds of Objects of Asset Management by Indirect Investment Funds (related to Article 70 (1))