ENFORCEMENT DECREE OF THE ASSET-BACKED SECURITIZATION ACT

Article 1(Purpose) #

The purpose of this Decree is to provide for matters delegated by the Asset-Backed Securitization Act and for those necessary for the enforcement thereof. <Amended on Dec. 4, 2018>

Article 2(Originator) #

The term "persons specified by Presidential Decree" in subparagraph 2 (r) of Article 2 of the Asset-Backed Securitization Act (hereinafter referred to as the "Act") means the following entities: <Amended by Presidential Decree No. 16994, Oct. 31, 2000; Presidential Decree No. 17422, Dec. 15, 2001; Presidential Decree No. 17791, Dec. 5, 2002; Presidential Decree No. 18146, Nov. 29, 2003; Presidential Decree No. 18297, Feb. 28, 2004; Presidential Decree No. 20261, Sep. 10, 2007; Presidential Decree No. 20947, Jul. 29, 2008; Presidential Decree No. 21480, May 6, 2009; Presidential Decree No. 21518, May 29, 2009; Presidential Decree No. 21835, Nov. 20, 2009; Presidential Decree No. 26369, Jun. 30, 2015; Presidential Decree No. 27037, Mar. 11, 2016; Presidential Decree No. 27205, May 31, 2016; Presidential Decree No. 27511, Sep. 22, 2016; Dec. 4, 2018; Dec. 19, 2023>

1. The Korea Deposit Insurance Corporation or a financial company authorized to perform liquidation under the Depositor Protection Act;

2. The Small and Medium Business Corporation established under the Small and Medium Enterprises Promotion Act;

3. Deleted; <May 16, 2023>

4. A trust business entity established under the Financial Investment Services and Capital Markets Act (hereafter referred to as "trust business entity");

5. Deleted. <Dec. 19, 2023>

6. The Credit Guarantee Fund established under the Credit Guarantee Fund Act or the Korea Technology Guarantee Fund established under the Korea Technology Finance Corporation Act;

7. The Korea Housing and Urban Guarantee Corporation established under the Housing and Urban Fund Act;

8. A local public enterprise carrying on any housing business or land development business under the Local Public Enterprises Act;

9. The following National Federations:

(a) The National Agricultural Cooperative Federation under the Agricultural Cooperatives Act;

(b) The National Federation of Fisheries Cooperatives established under the Fisheries Cooperatives Act;

(c) The Korean Federation of Community Credit Cooperatives established under the Community Credit Cooperatives Act;

(d) The National Credit Union Federation of Korea established under the Credit Unions Act;

(e) The National Forestry Cooperative Federation under the Forestry Cooperatives Act;

9-2. A cooperative or a credit cooperative from among the following entities the loan size of which is not less than 100 billion won as of the end of the immediately preceding business year, or a cooperative or a credit cooperative the loan size of which is less than 100 billion won as of the end of the immediately preceding business year and to which a National Federation specified in the relevant law has agreed to perform the affairs of transferring or entrusting underlying assets for the purpose of asset-backed securitization;

(a) A cooperative under the Agricultural Cooperatives Act;

(b) A cooperative under the Fisheries Cooperatives Act;

(c) A community credit cooperative established under the Community Credit Cooperatives Act;

(d) A credit union established under the Credit Unions Act;

(e) A cooperative under the Forestry Cooperatives Act.

10. An agricultural cooperative assets management company established under the Act on the Structural Improvement of Agricultural Cooperatives; and

11. The Korea Housing Finance Corporation established under the Korea Housing Finance Corporation Act;

12. The Korea Inclusive Finance Agency established under Article 3 of the Microfinance Support Act.

Article 2-2(Modification of Minor Matters of Asset-backed Securitization Plan) #

"If it intends to change any of the minor matters prescribed by Presidential Decree" in the latter part of Article 3 (1) of the Act means either of the following cases:

1. Where it is intended to correct miscalculation, clerical error, ommission, or any other obvious error equivalent thereto.

2. Where it is intended to make any change to a simple wording or a name;

3. Where it is intended to change matters that do not affect the protection of investors who invested in asset-backed securities and for which there is a clear basis for such change;

[This Article Newly Inserted on Dec. 19, 2023]

Article 3(Entries in Asset-backed Securitization Plan) #

The term "other matters prescribed by Presidential Decree" in subparagraph 8 of Article 4 of the Act means the following:

1. Matters relating to the protection of investors in asset-backed securities;

2. In borrowing funds in connection with the asset-backed securitization in question, plans for such borrowing.

Article 4(Registration of Transfer, etc. of Assets) #

(1) If any originator or a special purpose company,etc., (referring to a special purpose company, a trust business entity, a foreign corporation specializing in the business of asset-backed securitization; hereinafter the same shall apply) that registers the transfer, etc. of underlying assets under Article 6 (1) and (2) of the Act makes a request for the issuance of a document verifying such registration, the Financial Services Commission shall issue it without delay. <Amended on Dec. 19, 2023>

(2) A special purpose company, etc. shall designate a person responsible for keeping and managing contracts, registration certificates, registration certificates, and other supporting documents on the transfer, etc. of underlying assets pursuant to Article 6 (5) of the Act. <Amended on Dec. 19, 2023>

(3) In designating the person responsible for the management under paragraph (2), any special purpose company, etc. shall designate a person other than the originator in question: Provided, That this provision shall not apply when the originator in question keeps and manages the original and a person other than the originator keeps and manages its copy (including an electronic record), respectively, which can be made available to the Financial Services Commission or investors. <Amended on Feb. 29, 2008>

Article 5(Servicer) #

The term "person who meets the requirements prescribed by Presidential Decree" in Article 10 (1) 4 of the Act means any corporation which meets the following requirements: <Amended on Feb. 29, 2008; Oct. 1, 2009; Dec. 19, 2023>

1. Its capital shall amount to no less than one billion won;

2. The number of its managing officers, including five or more of the following experts, is to be twenty or more:

(a) Two or more attorneys-at-law, certified public accountants or appraisers;

(b) One or more persons who have performed such duties as are determined by the Financial Services Commission, including the management of claims, the issuance of securities, etc.;

3. Its officers or employees are not to fall under any subparagraph of Article 27 (1) of the Use and Protection of Credit Information Act;

4. If its largest investor is a foreigner, the foreigner is to specialize in the asset management business or to carry on such business in addition to any other business: Provided, That this provision shall not apply when a corporation whose largest investor is the foreigner (limited to a corporation) carries on the asset management business.

Article 5-2(Entrustment of Affairs) #

A third person who may be entrusted with his or her duties pursuant to Article 23 (1) of the Act shall be a person who meets the following requirements.

1.Business affairs related to the management, operation, and borrowing of funds of a special purpose company: any of the following persons:

(a) A trust business entity who is entrusted with the property under Article 103 (1) 1 of the Financial Investment Services and Capital Markets Act, who meets the requirements under subparagraph 2 (d);

B. A professional investor (excluding a collective investment scheme) under the Capital Markets and Financial Investment Services Act, who holds all of the asset-backed securities issued by the relevant a special purpose company and satisfies all the requirements of subparagraph 2

2.Business other than those referred to in subparagraph 1: all of the following requirements shall be satisfied;

(a) The person shall be a corporation;

(b) Its equity capital shall be at least 500 million won;

(c) It shall have at least three full-time workforce, including at least two of any of the following experts;

(i) Two or more attorneys-at-law, certified public accountants or appraisers;

(ii) A person who has at least two years' experience in performing duties entrusted pursuant to Article 10 (1) or 23 (1) of the Act;

(d) Where he or she performs the duties entrusted pursuant to Article 10 (1) of the Act by the same special purpose company, he or she shall have a system for preventing conflicts of interest determined and publicly notified by the Financial Services Commission;

[This Article Newly Inserted on Dec. 19, 2023]

[Previous Article 5-2 moved to Article 5-9 <Dec. 19, 2023>]

Article 5-2(Entrustment of Affairs) #

(1) The Financial Services Commission shall entrust the following duties to the Governor of the Financial Supervisory Service established under the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Governor of the Financial Supervisory Service"), pursuant to Article 38 of the Act:

"Affairs prescribed by Presidential Decree" in subparagraph 6 of Article 38 of the Act means the following business affairs:

1. Execution of investigative affairs such as an order to submit reports and data under Article 34 (1) and (2) of the Act or a request under article 426 (2) and (4) of the Financial Investment Services and Capital Markets Act which is applied mutatis mutandis in paragraph (3) of that Article;

2.Measures prescribed in subparagraphs 1 and 2 of article 5-5

[This Article Newly Inserted on Dec. 19, 2023]

Article 5-3(Disclosure of Issuance Details of Asset-Backed Securities) #

(1) A special purpose company, etc. (including a company that has not registered an asset securitization plan pursuant to Article 3 of the Act; hereafter the same shall apply in this Article and Article 5-4) shall publish the matters in the subparagraphs of that Article (hereinafter referred to as "issuance details" in this Article) pursuant to Article 33-2 of the Act on the website of the Korea Securities Depository under Article 294 of the Financial Investment Services and Capital Markets Act in accordance with the following methods and procedures:

1.It shall be disclosed as prescribed in each of the following items;

(a) Where asset-backed securities (including securities equivalent to securitized securities issued by a company which has not registered an asset securitization plan pursuant to Article 3 of the Act; hereafter the same shall apply in this Article and Article 5-4) have been issued, it shall be disclosed without delay;

(b) Where the details, etc. of issuance of asset-backed securities are changed or the redemption of asset-backed securities is completed in full, the disclosure shall be made within ten business days from the date of change or the completion of redemption;

2.Where a securitization plan under Article 3 of the Act (including an asset securitization plan not registered pursuant to Article 3 of the Act) includes matters concerning a number of asset-backed securities, the issuance details, etc. shall be disclosed each time each asset-backed securities are issued. Provided, that the details of other asset-backed securities may be disclosed collectively when the issuance details, etc. of the asset-back securities to be issued for the first time are disclosed, and if a change exists in the details to be disclosed when issuing other asset-backed securities, the change shall be disclosed.

3.Where a special purpose company, etc. issues asset-backed securities on the basis of underlying assets or asset-backed securities transferred or entrusted by another special purpose company, etc., it shall disclose the details, etc. of the asset-backed securities to be finally issued;

(2) "Matters prescribed by Presidential Decree" in subparagraph 4 of Article 33-2 of the Act means the following:

1. Name of a special purpose company, etc.;

2. A person entrusted with the management of underlying assets pursuant to Article 10 (1) and entrusted affairs;

3. A person entrusted with affairs pursuant to Article 23 (1) of the Act and entrusted affairs;

Article 5-4(Compulsory Holding of Asset-Backed Securities) #

(1) "Persons prescribed by Presidential Decree" in the main clause, with the exception of the subparagraphs, of Article 33-3 of the Act means the following:

1. A person determined and publicly notified by the Financial Services Commission as a person who transfers or entrusts underlying assets to a special purpose company, etc;

2. Any other person deemed and publicly notified by the Financial Services Commission as necessary to hold the asset-backed securities for the protection of investors who have invested in such securities;

(2) A person who holds asset-backed securities pursuant to the main sentence, with the exception of subparagraphs, of Article 33-3 of the Act shall hold such securities in accordance with the following standards and procedures.

1. In issuing asset-backed securities on the basis of underlying assets or asset-backed securities which a special purpose company, etc. has been transferred from, entrusted, or provided in a similar manner by another special purpose company, etc. (including cases where it has been transferred, entrusted, or provided in a similar manner), a person who transfers, entrusts, or provides underlying assets to a special purpose company, etc. for the first time in a similar manner, determined and publicly notified by the Financial Services Commission, shall hold the asset-backed securities;

2. He or she shall hold asset-backed securities in an amount equivalent to 5/100 of the balance of the issued amount of asset-backed securities in a manner prescribed and publicly notified by the Financial Services Commission;

3. In issuing asset-backed securities on the basis of underlying assets or asset-backed securities which a special purpose company, etc. has been transferred from, entrusted, or provided in a similar manner by another special purpose company, etc. (including cases where it has been transferred, entrusted, or provided in a similar manner), a person who transfers, entrusts, or provides underlying assets to a special purpose company, etc. for the first time in a similar manner, determined and publicly notified by the Financial Services Commission, shall hold the asset-backed securities;

4.The period during which the asset-backed securities shall be held shall be until the maturity date of the asset-backed securities (where a special purpose company, etc. completes the collection of the price necessary for redemption of asset-backed securities through early redemption or disposal of underlying assets before the maturity date, the collection completion date).

Article 5-5(Measures by Financial Services Commission) #

"Measures prescribed by Presidential Decree" in Article 34 (4) of the Act means the following measures:

1. Warning;

2. Caution;

3. Filing an accusation or informing an investigation agency of a violation of the Act, if any;

[This Article Newly Inserted on Dec. 19, 2023]

Article 5-6(Reporting by Special Purpose Company) #

"Significant grounds prescribed by Presidential Decree" in Article 35-2 (1) 3 of the Act means the following:

1. Where it becomes impossible to perform business normally due to a default, bankruptcy, dissolution, suspension of business, or cancellation of authorizations, permits, etc. necessary for business operation of a special purpose company, etc., an originator, a person entrusted with the management of underlying assets pursuant to Article 10 (1) of the Act, or a person entrusted with business pursuant to Article 23 (1) of the Act; or other causes;

2. A contract necessary for the execution of an asset securitization plan under Article 3 of the Act, an entrustment contract under article 10 (1) of the act, or modification or termination of an entrustment contract under article 23 (1) of the act, article 10 (1) of the act or article 23 of the act. where the performance of the relevant contract becomes impossible due to the re-entrustment of entrusted affairs under article (1) or other reasons

3. Where it becomes impossible to perform a contract on the transfer or entrustment of underlying assets, or the establishment of a pledge or mortgage on underlying assets, or where the exercise of the rights of interested parties is significantly disrupted due to reasons such as the filing of a lawsuit.

4. Other cases prescribed and publicly notified by the Financial Services Commission to protect investors.

[This Article Newly Inserted on Dec. 19, 2023]

Article 5-8(Penalty Surcharges) #

(1) Where the Financial Services Commission imposes a penalty surcharge under Article 38-3, it shall comply with the following standards:

1.Where a violation has continued for at least one year or has been repeated three or more times, 50/100 or more of the upper limit of the penalty surcharge under article 38-3 (1) of the Act shall be imposed as a penalty surcharge. Provided, that in cases falling under any of the items of subparagraph 2, the penalty surcharge may be reduced.

2. Where a violation falls under any of the following items, a penalty surcharge shall be reduced or exempted:

(a) Where it is deemed that the details of the violation of the Act are insignificant;

(b) Where a violation of the Act is corrected without delay;

(2) The Financial Services Commission shall delegate the authority to impose penalty surcharges under Article 38-3 (3) of the Act (excluding penalty surcharges exceeding one billion won) pursuant to Article 438 (2) of the Capital Markets and Financial Investment Services Act which is applied mutatis mutandis in Article 38-3 (3) of the Act to the Securities and Futures Commission.

(2) Except as provided in paragraph (1), detailed matters necessary for imposing a penalty surcharge shall be prescribed and publicly notified by the Financial Services Commission.

[This Article Newly Inserted on Dec. 19, 2023]

Article 5-9(Processing Personally Identifiable Information) #

(1) The Financial Services Commission (including a person who is entrusted with affairs of the Financial Services Commission under Article 38) may manage data that contain resident registration numbers, passport numbers, or alien registration numbers under subparagraph 1, 2, or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act, where it is inevitable to conduct the following affairs: <Amended on Dec. 19, 2023>

1. Registration of asset-backed securitization plan pursuant to Article 3 of the Act;

2. Refusal, etc. of registration under Article 5 of the Act;

3. Registration of transfer, etc. of securitization assets pursuant to Article 6 of the Act;

4. Appointment of a liquidator under Article 26 of the Act;

5. Investigation under Article 34 of the Act;

6. Order for business improvement under Article 34 of the Act;

7. Cancellation of asset-backed securitzation plans under Article 38-2 of the Act.

(2) A person who evaluates securitization assets pursuant to subparagraph 4 of Article 4 of the Act, originator, servicer pursuant to Article 10 (1) of the Act, and a person entrusted with the affairs by a special purpose company pursuant to Article 23 (1) of the Act may handle information including resident registration numbers, passport numbers, and alien registration numbers under subparagraph 1, 2 or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act, if it is inevitable for any of the following: <Newly Inserted by Presidential Decree No. 25532, Aug. 6, 2014>

1. Registration of asset-backed securitization plan pursuant to Article 3 of the Act;

2. Evaluation of securitization assets pursuant to subparagraph 4 of Article 4 of the Act;

3. Registration of transfer, etc. of securitization assets pursuant to Article 6 of the Act;

4. Management of securitization assets pursuant to Article 11 of the Act;

5. Business entrusted pursuant to Article 23 (1) of the Act.

[This Article Newly Inserted by Presidential Decree No. 23488, Jan. 6, 2012]

[Moved from Article 5-2 <Dec. 19, 2023>]

Article 6(Guidelines for Imposition of Administrative Fines) #

(1) Guidelines for the imposition of an administrative fine under Article 42 (1) of the Act shall be as specified in the attached Table

[This Article Wholly Amended on Dec. 4, 2018]