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ENFORCEMENT DECREE OF THE SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

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ENFORCEMENT DECREE OF THE SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

Presidential Decree No. 16410, Jun. 30, 1999

Amended by Presidential Decree No. 16770, Apr. 1, 2000 Presidential Decree No. 18312, Mar. 17, 2004

Presidential Decree No. 20653, Feb. 29, 2008

Article 1 (Purpose)

The purpose of this Decree is to prescribe the matters delegated by the Special Purpose Companies for Mortgage-Backed Bonds Act and the matters necessary for the enforcement thereof.

Article 2 (Equity Capital)

The core capital and supplementary capital included in the equity capital pursuant to the provisions of Article 2 (1) 5 of the Special Purpose Companies for Mortgage-Backed Bonds Act ((hereinafter referred to as the "Act") shall be those laid down by the Financial Services Commission according to the standards in the following subparagraphs pursuant to the provisions of Article 2 (2) of the Act:

1. That the core capital shall be the real net asset of the financial institution, such as capital, retained profit, etc., which has the characteristic of permanency;

2. That the supplementary capital shall be the capital having the characteristic corresponding to subparagraph 1, such as posterior claim, etc., which is able to make up for the loss arising from business activities; and

3. That those, such as the right of business, treasury stocks, etc. of the special purpose company for mortgage sucuritization company (hereinafter referred to as the "mortgage securitization company"), which do not contribute to the fullness of capital shall not be included in ENFORCEMENT DECREE OF THE SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

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the core capital and supplementary capital.

Article 3 (Capital Ratio, etc.)

(1) The term "capital ratio" as referred to in Article 3 (2) 3 of the Act means the ratio gained by dividing equity capital by risk-weighted asset in the consolidated balance sheet.

(2) The term the "standards prescribed by Presidential Decree" as referred to in Article 3 (2) 3 of the Act means 8/100.

Article 4 (Mortgage Securitization Plan)

The term "other matters prescribed by Presidential Decree" as referred to in Article 4 (2) 7 means those in the following subparagraphs:

1. Matters regarding the financial institution that has transferred mortgages;

2. Matters regarding the protection of investors of mortgage-backed bonds or mortgage-backed securities; and

3. Where the mortgage securitization company intends to borrow and operate money in connection with the mortgage securitization concerned, such plan.

Article 5 (Registration of Transfer, etc. of Mortgage) (1) Where a mortgage securitization company that has registered the fact of transfer, etc. of mortgages pursuant to the provisions of Article 5 (1) of the Act requests for the issue of a document verifying the fact of registration, the Financial Services Commission shall issue it without delay. (2) The mortgage securitization company shall preserve and manage the contract, certificate of registration, certificate of completion of registration, and other evidencing documents regarding the transfer, etc. of mortgage pursuant to the provisions of Article 5 (4) of the Act by designating a person to take charge thereof.

(3) In designating a person to take charge pursuant to the provisions of paragraph (2), the mortgage securitization company shall designate one who is not the financial institution that has transferred the mortgage concerned to itself: Provided, That the financial institution that has transferred the mortgage concerned preserves and manages the original, and a person other than the financial institution preserves and manages a copy (including those in electronic record) so that a perusal by the Financial Services Commission or investors is possible, this shall not apply. 3

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

[This Article Wholly Amended by Presidential Decree No. 16770, Apr. 1, 2000] Article 6 (Acquisition Cost of Mortgage-Backed Securities) Where the mortgage securitization company acquires mortgage-backed securities with an asset other than the one liable for mortgage securitization pursuant to the provisions of Article 12 (7) of the Act, the acquisition cost shall be by the market price available in the Korea Stock Exchange or KOSDAQ pursuant to the Securities and Exchange Act: Provided, That the mortgage-backed securities concerned have not been listed in the Korea Stock Exchange or registered with the KOSDAQ, it shall be the amount obtained by dividing the total amount of the mortgage (refers to the amount on the grounds of the amount evaluated at the time when the mortgage-backed securities have been acquired) which is the grounds for the issue of mortgage-backed securities by the total number (excluding those that have been already repaid at the time when the mortgage-backed security has been purchased) of the mortgage-backed securities. [This Article Wholly Amended by Presidential Decree No. 16770, Apr. 1, 2000] Article 7 (Standards for Management Guidance)

The standards for management guidance that the Financial Services Commission lays down pursuant to the provisions of Article 16 (2) of the Act shall include the matters in the following subparagraphs:

1. Matters regarding the appropriateness of capital;

2. Matters regarding the soundness of asset;

3. Matters regarding the securing of liquidity; and

4. Other matters recognized as necessary for the securing of soundness of management.

Article 8 (Fine for Negligence)

(1) When the Financial Services Commission imposes a fine for negligence pursuant to the provisions of Article 26 (2) of the Act, it shall notify the person liable for the disposition of a fine for negligence by stating clearly the fact of violation, amount of a fine for negligence, etc. in writing to complete the payment thereof after the act of violation concerned is investigated and confirmed.

(2) When the Financial Services Commission intends to impose a fine for negligence pursuant to the provisions of paragraph (1), it shall give the ENFORCEMENT DECREE OF THE SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

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person liable for the disposition of imposition of a fine for negligence to express his/her opinion orally or in writing (including electronic document) by specifying a period of 10 days or more. In this case, it shall be deemed that there is no opinion when there is no statement within the specified period of time.

(3) In determining the amount of a fine for negligence, the Financial Services Commission shall consider the motive, result, etc. of the violation concerned. ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation. Article 2 Omitted.

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

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

Article 2 Omitted.