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Registration of bonds and debentures act

REGISTRATION OF BONDS AND DEBENTURES ACT

REGISTRATION OF BONDS AND DEBENTURES ACT

Act No. 2164, Jan. 1, 1970

Amended by Act No. 5453, Dec. 13, 1997

Act No. 5505, Jan. 13, 1998

Act No. 5746, Feb. 5, 1999

Act No. 7761, Dec. 29, 2005

Act No. 8863, Feb. 29, 2008

Article 1 (Purpose)

The purpose of this Act is to contribute to the development of capital market by making it easy to issue bonds and by making sure of the preservation of bondholders’ rights.

Article 2 (Definitions)

For the purpose of this Act, the term “bonds” means securities listed in the following subparagraphs: <Amended by Act No. 5505, Jan. 13, 1998; Act No.

7761, Dec. 29, 2005; Act No. 8863, Feb, 29, 2008>

1. Bonds issued by a local government;
2. Bonds issued by a corporation pursuant to the provisions of special
Acts;
3. Corporate debentures;
4. Bonds designated by the Financial Services Commission from among bonds issued by foreign governments, foreign public organizations or foreign corporations; and
5. Certificates of deposit.

Article 3 (Registrar)

The registration of bonds pursuant to this Act shall be handled by a corporation (hereinafter referred to as the “registrar”) prescribed by Presidential Decree, which has been registered with the Financial Services Commission . <Amended by Act No. 5746, Feb. 5, 1999; Act No. 8863, Feb, 29, 2008>

Article 4 (Registration and Cancellation of Bonds)

(1) Bond issuers may designate a registrar of the relevant bonds.
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REGISTRATION OF BONDS AND DEBENTURES ACT

(2) Bondholders, pledgees or other interested parties of bonds which have been designated pursuant to the provisions of the preceding paragraph may respectively register their rights with the designated registrar.
(3) The registrar shall not reject the registration of rights pursuant to the provisions of the preceding paragraph without justifiable grounds.
(4) When the registration of bonds has been completed, the registrar shall issue a certificate of registration as prescribed by Ordinance of the Prime Minister. <Amended by Act No. 5505, Jan. 13, 1998; Act No. 5746, Feb. 5, 1999; Act

No. 8863, Feb, 29, 2008>

(5) Any person who has had his/her bonds registered may request the registrar for the cancellation thereof at any time: Provided, That this shall not apply where the conditions of issuance of bonds stipulates not to issue bond certificates. <Amended by Act No. 5746, Feb. 5, 1999>

Article 5 (Registration of Bonds and Bond Certificates)

(1) Bond certificates shall not be issued for registered bonds.
(2) When the registrar registers bonds for which bond certificates have been already issued, the bond certificates shall be withdrawn.
(3) When the registration of bonds has been cancelled, bondholders may request for the issuance of bond certificates as prescribed by Presidential Decree.

Article 6 (Transfer of Registered Bonds)

(1) When registered bonds payable to a bearer have been transferred, have been put to the object of security rights or have been entrusted as trust assets, no one may raise an objection against the issuer of the relevant bonds or against a third party, unless they are registered.
(2) When registered bonds payable to a payee have been transferred, have been put to the object of security rights or have been entrusted as trust assets, no one may raise an objection against the issuer of the relevant bonds or against a third party, unless they are registered and the purport thereof is entered in the bond register which is kept by the issuer.

Article 7 (Restriction on Request for Transfer Registration)

The registrar may suspend the registration of bonds for a period not exceeding one month before the date of redemption or interest payment due to the transfer of rights except for cases of inheritance, bequest, merger, auction or forcible execution.

Article 8 (Pledging of Registered Bonds as Security)

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REGISTRATION OF BONDS AND DEBENTURES ACT

Where registered bonds are deposited or bailed as security pursuant to the provisions of Acts and subordinate statutes, they shall substitute as security by registering the purport thereof.

Article 9 (Bond Register)

The registrar shall keep a bond register as prescribed by Ordinance of the Prime Minister, and shall state necessary matters therein. <Amended by Act No. 5505, Jan. 13, 1998; Act No. 5746, Feb. 5, 1999; Act No. 8863, Feb, 29, 2008>

Article 10 (Entries in Original Bond Register)

(1) When the registration of bonds has been completed, the registrar shall, without delay, notify the issuer who keeps the original bond register of the purport as prescribed by Ordinance of the Prime Minister. <Amended by Act No. 5505, Jan. 13, 1998; Act No. 5746, Feb. 5, 1999; Act No. 8863, Feb, 29, 2008> (2) When the issuer who keeps the original bond register has been notified as referred to in the preceding paragraph, he/she shall, without delay, enter the purport in the original bond register.

Article 11 (Damaged or Destroyed Register)

When all or part of the bond register has been damaged or destroyed, the registrar may take measures, such as rewriting the register or recovering registration upon approval by the Financial Services Commission. <Amended by Act No. 5505, Jan. 13, 1998; Act No. 8863, Feb, 29, 2008>

Article 12 (Access to Bond Register and Issuance of Certified Copies and

Simplified Copies Thereof)

Registered bondholders or other interested parties may request for access to bond register and annexed documents, or for the issuance of certified copies or simplified copies of the bond register.

Article 13 (Fees)

The registrar may collect fees for the registration of bonds, for access to the bond register and annexed documents, or for the issuance of certified copies or simplified copies of the bond register. <Amended by Act No. 5505,

Jan. 13, 1998; Act No. 5746, Feb. 5, 1999>

Article 14 (Supervision)

(1) The Financial Services Commission shall supervise the registrar regarding the affairs of registration of bonds. <Amended by Act No. 5505, Jan.

13, 1998; Act No. 8863, Feb, 29, 2008>

(2) When necessary, the Financial Services Commission may have the registrar report the affairs of registration, may have the governor of the
Financial Supervisory Service examine the affairs of registration and
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REGISTRATION OF BONDS AND DEBENTURES ACT

relevant documents, or may issue orders necessary for supervision. <Amended by Act No. 5505, Jan. 13, 1998; Act No. 8863, Feb, 29, 2008>
(3) The governor of the Financial Supervisory Service may collect
examination fees as prescribed by the Financial Services Commission.

<Amended by Act No. 5505, Jan. 13, 1998; Act No. 8863, Feb, 29, 2008>

Article 15 (Suspension and Cancellation of Registration.)

When the registrar has violated this Act or any order pursuant to this Act, the Financial Services Commission may order the suspension of registration, may order the succession of registration by any other registrar or may cancel the registration thereof. <Amended by Act No. 5746, Feb. 5, 1999; Act No. 8863, Feb, 29, 2008>

[This Article Wholly Amended by Act No. 5505, Jan. 13, 1998]

Article 15-2 (Hearings)

Where the Financial Services Commission intends to cancel the registration of the registrar pursuant to Article 15, it shall hold a hearing. <Amended by Act No. 5746, Feb. 5, 1999; Act No. 8863, Feb, 29, 2008>

[This Article Newly Inserted by Act No. 5453, Dec. 13, 1997]

Article 16 (Status of Officers and Staff of Registrar)

The officers and staff of the registrar engaged in the registration of bonds shall be deemed as public officials in the application of Criminal Act or other penal provisions

Article 17 (Penal Provisions)

(1) Any person who falls under any of the following subparagraphs shall be sentenced to imprisonment with prison labor for one year or less or be fined 5 million won or less: <Act No. 8863, Feb, 29, 2008>
1. Any person who conducts the registration of bonds without registering with the Financial Services Commission; or
2. Any person who conducts the registration of bonds continuously even though his/her registration has been cancelled pursuant to the provisions of Article 15.
(2) The imprisonment and fine pursuant to paragraph (1) may be enforced concurrently.

[This Article Newly Inserted by Act No. 7761, Dec. 29, 2005]

Article 18 (Joint Penal Provisions)

When the representative of a judicial person or an agent, employee or worker of a judicial person or an individual has committed any violation set out
in Article 17 regarding the business of the judicial person or individual,
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REGISTRATION OF BONDS AND DEBENTURES ACT

the judicial person or individual shall be fined pursuant to the same Article in addition to the punishment upon the violator.

[This Article Wholly Amended by Act No. 7761, Dec. 29, 2005]

Article 19 (Imposition, etc. of Fines for Negligence)

(1) When the officers or staff of registrar who are engaged in the registration of bonds have violated this Act or an order pursuant to this Act, have rejected, have obstructed or have evaded examination, they shall be fined
2 million won or less for negligence. <Newly Inserted by No. 5746, Feb. 5, 1999>
(2) When the registrar has failed to report pursuant to the provisions of Article 14 (2), it shall be fined for negligence as prescribed by the preceding paragraph.
(3) The fines for negligence pursuant to the provisions of paragraphs (1) and (2) shall be imposed and collected by the Financial Services Commission as prescribed by Presidential Decree. <Newly Inserted by Act No. 5505, Jan. 13,

1998; Act No. 8863, Feb, 29, 2008>

(4) Any person who is dissatisfied with the disposition of fine for negligence pursuant to paragraph (3) may raise an objection to the authority that had made such disposition within 20 days from the date on which he/she has received the notification of such disposition. <Newly Inserted by Act No.

5505, Jan. 13, 1998>

(5) When any person who has been fined for negligence pursuant to the provisions of paragraph (3) raises an objection pursuant to the provisions of paragraph (4), the authority that had made such disposition shall, without delay, notify the competent court of such fact, and the court, upon notified, shall try the case of fine for negligence pursuant to the Non-Contentious Case Litigation Procedure Act. <Newly Inserted by Act No. 5505, Jan. 13, 1998>
(6) When an objection has not been raised within the period of time pursuant to the provisions of paragraph (4) and the fine for negligence has not been paid, it may be collected pursuant to the examples of disposition of default on national taxes. <Newly Inserted by Act No. 5505, Jan. 13, 1998>

ADDENDUM <Act No. 2164, Jan. 1, 1970>

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

ADDENDA <Act No. 5453, Dec. 13, 1997>

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REGISTRATION OF BONDS AND DEBENTURES ACT

Article 1 (Enforcement Date)

This Act shall enter into force on January 1, 1998. (Proviso Omitted.)

Article 2 Omitted.

ADDENDA <Act No. 5505, Jan. 13, 1998>

Article 1 (Enforcement Date)

This Act shall enter into force on April 1, 1998. (Proviso Omitted.)

Article 2 (Transitional Measures Concerning Dispositions, etc.)

Authorization and other acts executed by administrative agencies, etc., or reports and other acts performed toward administrative agencies, etc. pursuant to former provisions at the time when this Act enters into force shall be deemed as acts by administrative agencies, etc., or acts toward administrative agencies, etc. pursuant to this Act.

Articles 3 through 5 Omitted.

ADDENDA <Act No. 5746, Feb. 5, 1999>

Article 1 (Enforcement Date)

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

Article 2 (Transitional Measures Concerning Registrar)

The registrar authorized pursuant to former provisions at the time when this Act enters into force shall be deemed as having been registered with the Financial Supervisory Commission pursuant to the amended provisions of Article 3.

ADDENDUM <Act No. 7761, Dec. 29, 2005>

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

ADDENDA <Act No. 8863, Feb. 29, 2008>

Article 1 (Enforcement Date)

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

Articles 2 though 5 Omitted.

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