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Special purpose companies for mortgage-backed bonds act

SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

Act No. 5692, Jan. 29, 1999

Amended by Act No. 5982, May 24, 1999

Act No. 6182, Jan. 21, 2000

Act No. 6429, Mar. 28, 2001

Act No. 6678, Mar. 30, 2002

Act No. 6916, May 29, 2003

Act No. 7428, Mar. 31, 2005

Act No. 8635, Aug. 3, 2007

Act No. 8852, Feb. 29, 2008

Act No. 8863, Feb. 29, 2008

Act No. 9617, Apr. 1, 2009

Act No.10044, Feb. 4, 2010

Article 1 (Purpose)

The purpose of this Act is to contribute to the development of the national economy by prescribing matters necessary for the establishment and operation of special purpose companies for mortgage securitization and for the issuance of mortgage-backed bonds and mortgage-backed securities in order to expand the foundation of housing finance by supplying housing funds on a long-term and stable basis.

Article 2 (Definitions)

(1) For the purpose of this Act, the terms used in this Act are as follows:

<AmendedbyActNo.6182,Jan.21,2000:ActNo.6429,Mar.28,2001;ActNo.6916,May

29, 2003>

1. The term “mortgage securitization” means the one falling under any of the following items:
(a) The act that a special purpose company for mortgage securitization issues mortgage-backed bonds after offering a mortgage that has been transferred from a financial institution as security, and pays principal and interest thereof; or
(b) The act that a special purpose company for mortgage securitization
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

issues mortgage-backed securities on the basis of a mortgage that has been transferred from a financial institution, and divides benefits from the management, operation and disposal of the mortgage;
2. The term “mortgage” means a claim on the loaned money (including loaned money to compensate for the money needed for the purchase or construction of a house) needed for the purchase or construction of a house pursuant to the provisions of Article 2 of the Housing Act and on the loaned money for the redemption of the aforementioned money, which is a claim secured with a mortgage established on the house concerned;
3. The term “mortgage-backed bond” means a bond issued by putting up a mortgage as security;
4. The term “mortgage-backed securities” means profit-making securities issued on the basis of a mortgage;
5. The term “equity capital” means the total of core capital and
supplementary capital according to the standards of the International
Settlement Bank;
6. The term “financial institution” means the one falling under any of the following items:
(a) Korea Development Bank pursuant to the Korea Development Bank
Act;
(b) Industrial Bank of Korea pursuant to the Industrial Bank of Korea
Act;
(c) Financial institutions established on the authorization pursuant to the Banking Act (including those deemed as financial institutions pursuant to Articles 5 and 59 of the same Act);
(d) Long-Term Credit Bank pursuant to the Long-Term Credit Bank
Act;
(e) Insurance enterprisers pursuant to the Insurance Business Act; (f) Mutual savings banks pursuant to the Mutual Savings Banks Act;
(g) Specialized credit financial businesses pursuant to the Specialized
Credit Financial Business Act;
(h) Those who operate and manage the National Housing Fund pursuant to the Housing Act; or
(i) Those who correspond to items (a) through (h) and are prescribed
by Presidential Decree; and
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

7. The term “special purpose company for mortgage securitization” means the one who has been authorized with the business of mortgage securitization pursuant to the provisions of Article 3.
(2) The detailed extent of equity capital pursuant to the provisions of paragraph 1 (5) shall be prescribed by Presidential Decree.

Article 3 (Authorization of Mortgage Securitization Business)

(1) Those who intend to operate a mortgage securitization business pursuant to this Act shall obtain authorization from the Financial Services Commission. <Amended by Act No. 5982, May 24, 1999; ActNo.8863,Feb.29,2008> (2) Anyone who intends to obtain authorization pursuant to the provisions of paragraph (1) shall satisfy the conditions in the following items:
1. That it shall be a stock company;
2. That the capital shall be 25 billion won or more; and
3. That the capital ratio shall be above the standard prescribed by
Presidential Decree.
(3) Anyone who intends to obtain authorization pursuant to the provisions of paragraph (1) shall submit an application to the Financial Services Commission together with the papers laid down by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>

Article 4 (Registration of Mortgage Securitization Plan)

(1) When a special purpose company for mortgage securitization (hereinafter referred to as “mortgage securitization company”) intends to securitize a mortgage, it shall register a plan for the securitization of mortgage (hereinafter referred to as “mortgage securitization plan”) with the Financial Services Commission by submitting the papers laid down by the Financial Services Commission. The same shall apply when a change in the mortgage securitization plan is intended. <Amended by Act No. 8863, Feb. 29, 2008>
(2) The mortgage securitization plan shall include the matters listed in the following subparagraphs:
1. The name of the mortgage securitization company and the address of office;
2. The period of the mortgage securitization plan;
3. The detail and total amount of mortgage and the evaluated value of the specialized evaluation organization;
4. The kinds, total amount and conditions of issue of the mortgage-backed
bonds and mortgage-backed securities intended for issue;
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

5. Matters regarding the management, operation and disposal of mortgage [including trust where it is established pursuant to the provisions of Article 12 (1)];
6. The mortgage administrator where the business of management, operation and disposal of mortgages is entrusted pursuant to the provisions of Article 10 (1); and
7. Other matters prescribed by Presidential Decree.
(3) Where there exist grounds falling under any of the following subparagraphs, the Financial Services Commission may reject the registration of a mortgage securitization plan or request for the change in the contents thereof: <Amended by Act No. 8863, Feb. 29, 2008>
1. Where there is a fraudulent statement in the application for registration, or where a necessary statement is missing in the application for registration; or
2. Where there is a matter that violates Acts and subordinate statutes
in the contents of the mortgage securitization plan.
(4) When the Financial Services Commission rejects registration or requests for the change in the mortgage securitization plan pursuant to the provisions of paragraph (3), it shall notify the mortgage securitization company concerned of the cause in writing by indicating it clearly and in detail.

<Amended by Act No. 8863, Feb. 29, 2008>

Article 5 (Registration of Transfer, etc. of Mortgage)

(1) When there is a transfer, trust or return of mortgage according to the mortgage securitization plan, the mortgage securitization company shall register the fact with the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>
(2) When a mortgage securitization company intends to register the
transfer, etc. of mortgage pursuant to the provisions of paragraph (1), it shall submit an application for registration and a contract on the transfer, etc. of mortgage to the Financial Services Commission. <Amended by Act No.

8863, Feb. 29, 2008>

(3) Following matters shall be stated in the application for registration pursuant to the provisions of paragraph (2), and the matter in subparagraph
1 shall be submitted by means of electronic record or a method corresponding
thereto: <Amended by Act No. 8863, Feb. 29, 2008>
1. The detail of mortgage;
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

2. The method and schedule of transfer, trust or return of mortgage and the method of payment;
3. Whether it satisfies the requirements for counteraction against the
transfer of claim;
4. The requirements for the revocation of the contract on the transfer of mortgage, etc.;
5. Whether the transferor has the preferential buying right where the transferee, etc. dispose of the claim concerned; and
6. Other matters laid down by the Financial Services Commission, which
are needed for the protection of investors.
(4) The mortgage securitization company shall preserve and manage the contract document regarding the transfer, etc. of mortgage, the certificate of the completion of registration, the certificate of registration and other papers as prescribed by Presidential Decree, and shall comply when there is a request for perusal from the Financial Services Commission or the investor concerned. <Amended by Act No. 8863, Feb. 29, 2008>
(5) The form of the application for registration and the method of entry in the application for registration, and the matters necessary for handling procedures, etc. shall be prescribed by the Financial Services Commission.

<Amended by Act No. 8863, Feb. 29, 2008>

[This Article Wholly Amended by Act No. 6182, Jan. 21, 2000]

Article 5-2 (Method of Transfer)

Pursuant to the mortgage securitization plan, the transfer of mortgage shall be done according to the methods in the following subparagraphs. In such cases, it shall not be deemed as the establishment of security right:
1. That it shall be done by means of sale and purchase or exchange;
2. That the transferee shall have the beneficiary right and the disposal right on the mortgage. In such cases, the transferee shall be deemed to have the beneficiary right and the disposal right of the mortgage even if the transferee has the preferential right to purchase the mortgage when the transferee disposes of the mortgage concerned;
3. That the transferor shall not have the right to claim the return of mortgage, and the transferee shall not have the right to claim the remuneration for mortgage; and
4. That the transferee shall accept the perils regarding the property that
has been transferred: Provided, That the transferor bears the perils
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

regarding the mortgage concerned for a certain period of time or bears the responsibility (where the transferor of mortgage has stood guarantee for debtor’s resources, this shall be included) of warranty against defects, this shall not apply.

[This Article Newly Inserted by Act No. 6182, Jan. 21, 2000]

Article 6 (Special Cases concerning Requirements for Counteraction against Transfer of Mortgage)

(1) The transfer, trust or return of mortgage pursuant to the mortgage
securitization plan shall not stand against the debtor unless the transferor (including truster; the same shall apply hereinafter) or transferee (including trustee; the same shall apply hereinafter) notifies the debtor or the debtor agrees: Provided, That the transferor or transferee notified the debtor of the transfer of claim (including the trust or return of claim; the same shall apply hereinafter) at the address falling under any of the following subparagraphs two times or more by means of contents-certified post but the post has returned because the address was unknown, etc., public announcement of the fact of the transfer of claim in two or more daily newspapers (one or more daily newspapers whose distribution territory is the whole nation shall be included) that have the debtor’s address within their main distribution territory shall be deemed as notification to the debtor on the date of public announcement: <Amended by Act No. 6182, Jan.

21, 2000>

1. Debtor’s address entered in the register (refers to the last address that the transferor or transferee knows in case the address entered in the register is not the debtor’s last address); or
2. The last address that the transferor or transferee knows in case the debtor’s address is not entered in the register.
(2) When the registration pursuant to the provisions of Article 5 (1) regarding
the transfer, trust or the return of mortgage pursuant to the mortgage securitization plan has been made, it shall be deemed to have satisfied the requirements for counteraction pursuant to the provisions of Article
450 (2) of the Civil Act against a third party other than the debtor of the mortgage concerned. <Amended by Act No. 6182, Jan. 21, 2000>

Article 6-2 (Conclusion of Claim Secured with Right to Collateral Security)

When the financial institution has sent a notice to a debtor by contents-certified post stating the intention to conclude the amount of
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

the claim that is secured with the right to collateral security and to transfer all of the claim without generating additional claim in case the mortgage intended for transfer pursuant to the mortgage securitization plan is a claim secured with the right to collateral security, it shall be deemed that the claim concerned has been concluded on the day next to the day when the notice has been sent: Provided, That the debtor has raised an objection within ten days, this shall not apply.

[This Article Newly Inserted by Act No. 6182, Jan. 21, 2000]

Article 7 (Special Cases concerning Acquisition of Mortgage)

The mortgage securitization company shall acquire the mortgage established to secure mortgage that has been transferred or entrusted in accordance with the mortgage securitization plan when registration pursuant to the provisions of Article 5 (1) is made. <Amended by Act No. 6182, Jan. 21, 2000>

Article 8 (Public Notice of Registered Papers, etc.)

(1) The Financial Services Commission shall make papers regarding registration or registration of change pursuant to the provisions of Articles
4 and 5 available for public access. <Amended by Act No. 8863, Feb. 29, 2008> (2) The mortgage securitization company shall prepare and keep papers regarding the detail and present condition of the mortgage so that the investors of the mortgage securitization company concerned may have access to them.

Article 9 (Management of Mortgage)

(1) The mortgage securitization company shall separately manage the mortgages (including the property right, such as money, etc. acquired following the management, operation and disposal of mortgages) liable for securitization and the assets which are not liable for securitization, and the mortgages shall be separately managed according to the mortgage securitization plan.
(2) The mortgages managed separately pursuant to the provisions of paragraph (1) shall not constitute a bankruptcy foundation of the mortgage securitization company.
(3) The creditor of the mortgage securitization company shall not perform
forcible execution against the mortgages separately managed pursuant to the provisions of paragraph (1), and shall not be liable for the preservative measures or suspension orders pursuant to the Debtor Rehabilitation and
Bankruptcy Act. <Amended by Act No. 7428, Mar. 31, 2005>
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

(4) The provisions of paragraph (2) shall apply mutatis mutandis in case where the procedures for rehabilitation have begun pursuant to the Debtor Rehabilitation and Bankruptcy Act. <Amended by Act No. 6182, Jan. 21, 2000; Act No. 7428, Mar. 31, 2005>

Article 10 (Entrustment of Mortgage Management)

(1) Pursuant to the mortgage management entrustment contract, the mortgage securitization company may entrust the business of management, operation and disposal of mortgage to those (hereinafter referred to as “mortgage administrator”) who fall under any of the following subparagraphs: <Amended by Act No. 9617, Apr. 1, 2009>
1. A financial institution; or
2. A credit information company which has been permitted to do the businesses listed in Article 4 (1) 1 through 3 of the Use and Protection of Credit Information Act.
(2) Notwithstanding the provisions of Article 5 (1) of the Use and Protection of Credit Information Act, the financial institution, who is a mortgage administrator, falling under paragraph (1) 1 may perform the business of collection of claims pursuant to Article 4 (1) 3 of the same Act within the extent of businesses entrusted pursuant to the provisions of paragraph (1). <Amended by Act No. 6182, Jan. 21, 2000; Act No. 9617, Apr. 1, 2009>
(3) The mortgage securitization company may not stand against the debtor of mortgage on the ground that the right of mortgage administrator to receive payment has ceased to exist because it terminated the mortgage management entrustment contract: Provided, That the debtor has known or could have known that the right of the mortgage administrator to receive payment became extinct, this shall not apply.
(4) A mortgage administrator shall manage the mortgage that he/she manages on the entrustment pursuant to the provisions of paragraph (1) separately from his/her inherent property, and shall prepare and equip with a book on the management of the mortgage.
(5) Where the mortgage administrator becomes bankrupt, the mortgage that is managed on entrustment pursuant to the provisions of paragraph (1) shall not constitute the mortgage administrator’s bankruptcy foundation, the mortgage securitization company may request the delivery of the mortgage to the mortgage administrator or bankruptcy administrator.
(6) The provisions of paragraph (5) shall apply mutatis mutandis to the
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

case where the rehabilitation procedures pursuant to the Debtor
Rehabilitation and Bankruptcy Act has begun. <Amended by Act No. 7428, Mar.

31, 2005>

(7) The creditor of a mortgage administrator may not perform forcible execution on the mortgage being managed on the entrustment pursuant to the provisions of paragraph (1), which shall not be liable for the preservative measures or suspension order pursuant to the Debtor Rehabilitation and Bankruptcy Act. <Amended by Act No. 7428, Mar. 31, 2005>

Article 11 (Issue of Mortgage-Backed Bond)

(1) The mortgage securitization company may issue mortgage-backed bonds by taking as security the mortgage which is managed separately according to the mortgage securitization plan pursuant to the provisions of Article
9.
(2) The holder of mortgage-backed bonds shall have the right to be repaid from the mortgage by taking precedence over third parties except for the cases prescribed by other Acts.
(3) Where the holder of mortgage-backed bonds has not been repaid all or part of the principal and interest of mortgage by the preferential repayment pursuant to the provisions of paragraph (2), he/she may be repaid from the asset which is not liable for securitization from among the assets of the mortgage securitization company.
(4) Deleted. <by Act No. 8635 Aug. 3, 2007> [This Article Wholly Amended by Act No. 6182, Jan. 21, 2000]

Article 12 (Issue of Mortgage-Backed Securities)

(1) Notwithstanding the provisions of Article 2 of the Trust Act, the mortgage securitization company may issue mortgage-backed securities by establishing a trust whose trustee is itself according to the mortgage securitization plan.
(2) The establishment of a trust pursuant to the provisions of paragraph (1) shall become valid when it is registered with the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>
(3) Mortgage-backed securities shall be unsigned: Provided, That there
is a request from the beneficiary of mortgage-backed securities, they may be inscribed.
(4) The transfer and other exercise of right of mortgage-backed securities
shall be by mortgage-backed securities: Provided, That to the case of
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

inscribed mortgage-backed securities, the provisions of Articles 337, 338,
340 and 358-2 shall apply mutatis mutandis. <Amended by Act No. 6182, Jan.

21, 2000>

(5) Those who acquire mortgage-backed securities shall succeed the right and duty on the mortgage-backed securities concerned.
(6) Matters in the following subparagraphs shall be stated in the
mortgage-backed securities and the representative of the mortgage securitization company shall affix his/her name and seal thereto: <Amended by Act No. 6182, Jan. 21, 2000>
1. Issue number;
2. The name of issuing company;
3. The name or nomenclature of beneficiary in the case of inscribed type;
4. Total amount of issue and the form of beneficiary right;
5. The time and place for the distribution of earnings;
6. Where a contract on the compensation of principal or profit is signed, the contents thereof;
7. The total amount of mortgage being the grounds for issue;
8. The contents of trust establishment;
9. Where payment is guaranteed, the contents thereof;
10. Where the method of operation of a mortgage is laid down, the contents thereof; and
11. Other matters prescribed by Presidential Decree.
(7) Notwithstanding the provisions of Article 29 of the Trust Act, a mortgage securitization company may acquire the mortgage-backed securities issued by the mortgage securitization company concerned with the asset other than that liable for mortgage securitization as prescribed by Presidential Decree.
(8) Where a mortgage securitization company issues mortgage securities pursuant to the provisions of paragraph (1), it shall be deemed as having been authorized to conduct such business under Article 12 of the Capital Market and Financial Investment Business Act. In such cases, the provisions of Article 3 of the Trust Act, and Articles 38 (6), 105, 107 and 110 (1) through (4) of the Capital Market and Financial Investment Business Act shall not apply. <Newly Inserted by Act No. 6182, Jan. 21, 2000; Act No. 8635, Aug.

3, 2007>

Article 13 (Payment Guarantee)

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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

The mortgage securitization company may guarantee payment within the extent not exceeding 30 times of equity capital of the mortgage securitization company concerned regarding mortgage-backed securities (including the mortgage-backed securities issued by the mortgage securitization company concerned) and the securitization securities issued by a special purpose company for securitization, etc. by having a mortgage as a securitization asset pursuant to the Asset-Backed Securitization Act. <Amended by Act

No. 6182, Jan. 21, 2000; Act No. 6678, Mar. 30, 2002>

Article 14 (Issue, etc. of Corporate Bonds)

(1) The mortgage securitization company may issue corporate bonds within the extent of 10 times of equity capital, and may borrow money within the extent of equity capital. In such cases, the total issue amount of mortgage-backed bonds shall not be included in the issue amount of the corporate bonds.
(2) Deleted. <by Act No. 8635 Aug. 3, 2007>

Article 15 (Limitation on Holding Additional Post and Additional Office by Officers, etc.)

Where it is apprehended that the interests of the financial institution that
transfers mortgage, mortgage administrator or trust enterpriser pursuant to the Secured Debentures Trust Act and the interest of the mortgage securitization company concerned clash, the officers and employees of the mortgage securitization company may hold the additional post or additional office of the organization concerned with the approval of the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>

Article 16 (Supervision)

(1) In order to protect investors in the mortgage-backed bonds and mortgage-backed securities and to devise the stability of bond market, the Financial Services Commission may supervise the business of mortgage securitization companies and may give necessary orders therefor, and may have the Governor of the Financial Supervisory Service established pursuant to the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the “Governor of the Financial Supervisory Service”) examine the business and the state of property of the mortgage securitization company. <Amended by Act No. 8863, Feb. 29, 2008>
(2) The Governor of the Financial Supervisory Service may request the
mortgage securitization company or the external auditor appointed pursuant
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

to the Act on External Audit of Stock Companies to submit books, written documents and other data necessary for the examination pursuant to the provisions of paragraph (1). <Newly Inserted by Act No. 6182, Jan. 21, 2000>
(3) In order to have the mortgage securitization company secure soundness in management, the Financial Services Commission may lay down standards for management guidance as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008>
(4) When the Financial Services Commission recognizes that the soundness
in management of the mortgage securitization company is apprehended to be substantially damaged as it has failed to satisfy the standards for management guidance pursuant to the provisions of paragraph (2), etc., it may request for the measures necessary for the improvement of management, such as increase in capital, limitation on profit sharing, etc.

<Amended by Act No. 8863, Feb. 29, 2008>

Article 17 (Consultation on Matters concerning Housing Policy)

The Financial Services Commission shall consult with the Minister of Land, Transport and Maritime Affairs in advance on the matters recognized to have influence on the execution of housing policy, which relate to the business of mortgage securitization company. <Amended by Act No. 5982, May 24, 1999; Act No. 8852, Feb. 29, 2008; Act No. 8863, Feb. 29, 2008>

Article 18 (Revocation, etc. of Authorization)

Where a mortgage securitization company falls under any of the following subparagraphs, the Financial Services Commission may order business suspension for a period of time less than six months as set by it, or may revoke the authorization pursuant to the provisions of Article 3: <Amended by Act No. 8863, Feb. 29, 2008>
1. Where it has obtained authorization pursuant to the provisions of Article
3 by means of fraud or other fraudulent methods;
2. Where it has come to fall short of the requirements for authorization pursuant to the provisions of Article 3;
3. Where it has carried on business during the period of business suspension;
or
4. Where it has violated this Act or an order pursuant to this Act.

[This Article Wholly Amended by Act No. 5982, May 24, 1999]

Article 19 (Effect of Revocation of Authorization)

Where authorization has been revoked pursuant to the provisions of Article
18, the mortgage securitization company concerned shall dissolve. <Amended
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

by Act No. 5982, May 24, 1999>

Article 20 (Hearing)

Where the Financial Services Commission intends to revoke authorization pursuant to the provisions of Article 18, it shall hold a hearing. <Amended by Act No. 5982, May 24, 1999; Act No. 8863, Feb. 29, 2008>

Article 21 (Sanctions on Officers and Employees)

(1) Where an officer of a mortgage securitization company has violated this Act or an order pursuant to this Act, or has performed an act that greatly damages the soundness in the management of the mortgage securitization company, the Financial Services Commission may order the business suspension of the officer concerned, and may recommend the general meeting of stockholders to dismiss the officer concerned. <Amended by Act No. 8863, Feb. 29, 2008>
(2) Where an employee of a mortgage securitization company has violated
this Act or an order pursuant to this Act, or has performed an act that greatly damages the soundness in the management of the mortgage securitization company, the Governor of the Financial Supervisory Service may recommend the mortgage securitization company concerned to reprimand adequately, such as to dismiss, suspend from office, to reduce salary, to give a rebuke, etc.

Article 22 (Submission, etc. of Data)

(1) When it is necessary for an examination pursuant to the provisions of Article 16 (1), the Financial Services Commission may have the mortgage securitization company submit a report on the business and status of property. <Amended by Act No. 8863, Feb. 29, 2008>
(2) The mortgage securitization company shall submit a monthly trade report and the business report of each business year to the Financial Services Commission as prescribed by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>
(3) The mortgage securitization company shall make a public notice of
important information and data on the state of management as prescribed by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>

Article 22-2 (Provision and Utilization of Information on Debtors)

(1) Notwithstanding the provisions of Article 4 of the Act on Real Name Financial Transactions and Guarantee of Secrecy, the financial institution or mortgage securitization company may provide information on the payment
competence of the debtor of the mortgage concerned within the extent
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

necessary for the execution of mortgage securitization plan to the investors and transferees of mortgage, mortgage-backed bonds or mortgage-backed securities and other interested parties corresponding thereto.
(2) The transferee of mortgage (including the person who has been entrusted with the business) pursuant to the mortgage securitization plan shall not use the information on the payment competence of the debtor of the mortgage for a purpose other than the purpose of being repaid the mortgage concerned. [This Article Newly Inserted by Act No. 6182, Jan. 21, 2000]

Article 23 (Penal Provisions)

Anyone who falls under any of the following subparagraphs shall be punished by imprisonment of three years or less or a fine of 20 million won or less:

<Amended by Act No. 6182, Jan. 21, 2000>

1. Those who have obtained authorization pursuant to the provisions of
Article 3 (1) by means of fraud or other unlawful methods;
2. Those who have operated the mortgage securitization business without obtaining authorization pursuant to the provisions of Article 3 (1);
2-2. Those who have made out a false application for registration or contract pursuant to the provisions of Article 5 (2);
3. The financial institution or mortgage administrator who has transferred mortgage or those who hold the additional post or office as officer or employee of the trust enterpriser pursuant to the Secured Debentures Trust Act without obtaining approval pursuant to the provisions of Article
15; or
4. Those who have used the information on the payment competence of debtors for a purpose other than the purpose of being repaid the mortgage concerned in violation of the provisions of Article 22-2 (2).

Article 24 (Penal Provisions)

Anyone who falls under any of the following subparagraphs shall be punished by imprisonment of one year or less or a fine of 10 million won or less:
1. Those who have exceeded the limit of payment guarantee pursuant to the provisions of Article 13; or
2. Those who have exceeded the issue limit of corporate bonds or the loaning limit pursuant to the provisions of Article 14.

Article 25 (Joint Penal Provision)

When the representative of a corporation, or an agent, an employee or other servant of a corporation or an individual commits a violation listed
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

in Article 23 or 24 in connection with the business of the corporation or individual, not only shall such offender be punished but also such corporation or individual shall be punished by a fine prescribed in the relevant Article: Provided, That when the corporation or individual has not been neglect of considerable attention and supervision regarding the relevant business to prevent the violation, this shall not apply.

[This Article Wholly Amended by Act No. 10044, Feb. 4, 2010]

Article 26 (Fines for Negligence)
(1) Anyone who falls under any of the following subparagraphs shall be punished by a fine for negligence of five million won or less:
1. Those who have failed to separately manage mortgages and assets which
are not liable for mortgage securitization, or have failed to separately manage mortgages according to the mortgage securitization plan in violation of the provisions of Article 9 (1); or
2. Those who have failed to separately manage the mortgage that is managed on entrustment and the inherent property, or have failed to make out and equip with separate books on the management, operation and disposal of mortgage.
(2) The fine for negligence pursuant to the provisions of paragraph (1) shall be imposed and collected by the Financial Services Commission, as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008>
(3) Those who are dissatisfied with the disposition of fine for negligence pursuant to the provisions of paragraph (2) may raise an objection to the Financial Services Commission within 30 days from the day when they have received the notification of disposition. <Amended by Act No. 8863, Feb.

29, 2008>

(4) When those who received the disposition of the fine for negligence have raised an objection pursuant to the provisions of paragraph (3), the Financial Services Commission shall notify the competent court of the fact without delay, and the court which has received the notification shall judge on the case of the fine for negligence pursuant to the Non-Contentious Case Litigation Procedure Act. <Amended by Act No. 8863, Feb. 29, 2008>
(5) When an objection is not raised and the fine for negligence is not paid within the period of time pursuant to the provisions of paragraph (3), it shall be collected in accordance with the examples of disposition of default
on national taxes.
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SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

ADDENDUM

This Act shall enter into force three months after the date of its promulgation.

ADDENDA <Act No. 5982, May 24, 1999>

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation: Provided, That Article 3 (71) of Addenda shall enter into force on July 1, 1999 and the matters regarding amendment to Article 90 (4) 5 from among paragraph (72) of the same Article shall enter into force on August 6, 1999, respectively.

Articles 2 through 6 Omitted.

ADDENDUM <Act No. 6182, Jan. 21, 2000>

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

ADDENDA <Act No. 6429, Mar. 28, 2001>

Article 1 (Enforcement Date)

This Act shall enter into force on the date prescribed by Presidential Decree within the extent not exceeding two years from the date of its promulgation.
<Proviso Omitted.>

Articles 2 through 11 Omitted.

ADDENDUM <Act No. 6678, Mar. 30, 2002>

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

ADDENDA <Act No. 6916, May 29, 2003>

Article 1 (Enforcement Date)

This Act shall enter into force six months after the date of its promulgation.
<Proviso Omitted.>

Articles 2 through 13 Omitted.

ADDENDA <Act No. 7428, Mar. 31, 2005>

Article 1 (Enforcement Date)

This Act shall enter into force one year after the date of its promulgation.
16

SPECIAL PURPOSE COMPANIES FOR MORTGAGE-BACKED BONDS ACT

Articles 2 through 6 Omitted.

ADDENDA <Act No. 8635, Aug. 3, 2007>

Article 1 (Enforcement Date)

This Act shall enter into force one and half years after the date of its promulgation. <Proviso Omitted.>

Articles 2 through 44 Omitted.

ADDENDA <Act No. 8852, Feb. 29, 2008>

Article 1 (Enforcement Date)

This Act shall enter into force one year after the date of its promulgation.
<Proviso Omitted.>

Articles 2 through 7 Omitted.

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.

ADDENDA <Act No. 9617, Apr. 1, 2009>

Article 1 (Enforcement Date)

This Act shall enter into force six months after the date of its promulgation.

Articles 2 though 13 Omitted.

ADDENDUM <Act No. 10044, Feb. 4, 2010>

This Act shall enter into force on the date of its promulgation.
17