ENFORCEMENT DECREE OF THE FINANCIAL HOLDING COMPANIES ACT

Article 1(Purpose) #

The purpose of this Decree is to provide for matters mandated by the Financial Holding Companies Act and matters needed for the enforcement of said Act. <Amended on May 26, 2005>

Article 2(Scope of financial business) #

(1) “Financial business” in Article 2 (1) 1 of the Financial Holding Companies Act (hereinafter referred to as the “Act”) means financial and insurance business in accordance with the Korean Standard Industrial Classification announced by the Commissioner of the National Data Office under Article 22 (1) of the Statistics Act; provided, holding companies other than financial holding companies shall be excluded. <Amended on May 26, 2005; Oct. 23, 2007; Oct. 17, 2017; Oct. 1, 2025>

(2) "Companies closely related to the operation of financial business" in Article 2 (1) 1 of the Act means companies aiming at the operation of any of the following business: <Amended on Dec. 2, 2010; Oct 23, 2015; Dec. 30, 2015; Oct. 21, 2021>

1. Provision of services, such as electronic and data processing, to companies conducting financial business (hereinafter referred to as "financial institutions");

2. Management of real estate and other assets held by financial institutions;

3. Investigation and research related to financial business;

4. Operations including asset management conducted by managing general partners of an institutional private equity fund established under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "institutional private equity fund");

5. Other business directly related to the business affairs unique to financial institutions or business determined and publicly notified by the Financial Services Commission as necessary to efficiently carry out affairs of financial institutions.

(3) "Standards prescribed by Presidential Decree" in the part other than the items of Article 2 (1) 1 of the Act means that a company becomes the largest contributor (where the affiliated company is an institutional private equity fund, a managing general partner of such institutional private equity fund) to an affiliated company under subparagraph 12 of Article 2 of the Monopoly Regulation and Fair Trade Act (excluding companies which fall under any of the following; hereinafter referred to as "affiliated company"), solely or jointly with the persons referred to in subparagraphs 1 and 2 of Article 16 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (hereafter referred to as "specially related person" in this paragraph); provided, cases where the number of stocks held by the company is smaller than the number of stocks held by each specially related person shall be excluded: <Amended on May 26, 2005; Nov. 12, 2007; Jul. 29, 2008; Jan. 18, 2010; Dec. 2, 2010; Dec. 30, 2010; Feb. 11, 2014; Oct. 23, 2015; Dec. 30, 2015; Aug. 16, 2017; Aug. 11, 2020; Feb. 17, 2021; Oct. 21, 2021; Dec. 28, 2021; Dec. 19, 2023>

1. Where a venture investment company defined in subparagraph 10 of Article 2 of the Venture Investment Promotion Act acquires stocks of another domestic company for the purpose of investing in a business starter, such other domestic company;

2. Where a venture capitalist established under the Specialized Credit Finance Business Act has acquired the stocks of another domestic company with the aim to support venture businessmen, such domestic company;

3. Where an institutional private equity fund has acquired the stocks of another company to increase the value of the invested company in order to distribute such profits to its personnel, such company;

4. Where a first-, second-, or third-tier subsidiary (including other companies owned by a financial holding company pursuant to Articles 19-2 and 32 of the Act; hereinafter referred to as "subsidiary, etc.") of a financial holding company has acquired the stocks of a company for carrying out a potential public-private partnership project designated by the competent authority under Article 8-2 of the Act on Public-Private Partnerships in Infrastructure (limited to companies falling under Article 104-31 (1) of the Act on Restriction on Special Cases concerning Taxation), such company for carrying out a potential public-private partnership project;

5. Where an investment trader under the Financial Investment Services and Capital Markets Act has subscribed or acquired the stocks of another company under the same Act and holds them for the period of not exceeding three months from the date of acquisition, such company;

6. Where a financial institution which is a subsidiary or similar of a financial holding company acquires stocks of another company which is undergoing joint management procedures in accordance with the Corporate Restructuring Promotion Act or voluntary agreements between creditors to promote corporate restructuring (hereinafter referred to as "joint management procedures") or rehabilitation procedures in accordance with the Debtor Rehabilitation and Bankruptcy Act (hereinafter referred to as "rehabilitation procedures") for corporate restructuring through debt-equity swap and other means, such company; provided, where two years have passed for such company since joint management procedures or rehabilitation procedures were suspended or completed (where the period has been extended after obtaining approval from the Financial Services Commission under Article 33 (3) of the Corporate Restructuring Promotion Act, referring to the extended period), such company shall be excluded;

7. An investment company provided for in Article 9 (18) 2 of the Financial Investment Services and Capital Markets Act (including investment companies established pursuant to foreign statutes and regulations), which does not fall under any of the following items:

(a) An investment company which is a privately placed fund prescribed in Article 9 (19) of the Financial Investment Services and Capital Markets Act (including a privately placed fund established pursuant to foreign statutes and regulations);

(b) An investment company which controls other companies (referring to the control provided for in Article 2 (1) 1 of the Act; hereinafter the same shall apply).

(4) The primary business referred to in Article 2 (1) 1 of the Act means that the aggregate of the stock price (including shares; hereinafter the same shall apply) of a subsidiary (excluding foreign corporations) held by a company is at least 50/100 of the total amount of assets of the relevant company. In such cases, the stock price of the subsidiary and the total amount of assets of the relevant company shall be based on those shown in the statement of financial position as of the date which falls under any of the following (hereinafter referred to as "base date"): <Amended on Nov. 12, 2007; Sep. 29, 2021>

1. In cases of a company which is newly established, merged or incorporated by division, merger through division, or physical division in the relevant business year, the date of registration of establishment, date of registration of merger or date of registration of division, respectively;

2. In cases of companies other than those in subparagraph 1, the date of settlement of accounts of the preceding business year; provided, where it intends to obtain authorization under Article 3 of the Act with the total amount of stock values of a subsidiary exceeding 50/100 of the total amount of assets of the relevant company before the date of settlement of accounts of the relevant business year, the date on which such cause occurred.

(5) "Not less than the standards prescribed by Presidential Decree" in Article 2 (1) 1 (b) of the Act means that the total amount of assets indicated in the statement of financial position as of the base date shall be not less than 500 billion won. <Added on Jan. 18, 2010; Jul. 28, 2016; Sep. 29, 2021>

(6) "Financial institution prescribed by Presidential Decree" in Article 2 (1) 6-4 (c) of the Act means any of the following companies: <Added on Jan. 18, 2010>

1. A financial securities company under Article 9 (17) 3 of the Financial Investment Services and Capital Markets Act (hereinafter referred to as "financial securities company");

2. A merchant bank under Article 336 (1) of the Financial Investment Services and Capital Markets Act (hereinafter referred to as "merchant bank"); provided, cases where a financial investment business entity under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "financial investment business entity") merges with a merchant bank under Article 4 (1) of the Act on the Structural Improvement of the Financial Industry are excluded.

Article 3(Scope of specially related persons) #

(1) "Person in a special relationship prescribed by Presidential Decree with the principal" in Article 2 (1) 7 of the Act means any person having relationship defined in any subparagraph of Article 1-4 (1) of the Enforcement Decree of the Banking Act with the subject person (hereinafter referred to as "specially related person").

(2) Notwithstanding paragraph (1), a person falling under any of the following shall be excluded from the scope of the same person under Article 2 (1) 7 of the Act: <Amended on Oct. 9, 2009; Nov. 15, 2010; Dec. 30, 2010; Oct. 23, 2015; Feb. 17, 2021; Oct. 21, 2021>

1. A company conducting a solicited private investment project designated by the competent authorities pursuant to Article 8-2 of the Act on Public-Private Partnerships in Infrastructure; provided, it is limited to a company defined in Article 104-31 (1) of the Restriction of Special Taxation Act if the company is not the same person, which includes a fund under Article 5 of the National Finance Act or a corporation managing and operating such fund (including a corporation entrusted with management and operation of funds under Acts; hereinafter referred to as "funds, etc");

2. If a bank (referring to a bank with authorization under the Banking Act; hereinafter the same shall apply) or a bank which is a subsidiary, etc. of a bank holding company acquires stocks of another company through debt-equity swap in order to conduct corporate restructuring under the Corporate Restructuring Promotion Act or the Debtor Rehabilitation and Bankruptcy Act (including cases equivalent thereto), such company;

3. If a private equity fund falling under any of the following acquires stocks of another company for the purpose of increasing the value of the company in which the institutional private equity fund has invested and then distributing profits therefrom to its partners, such company:

(a) An institutional private equity fund which is a subsidiary, etc. of a bank under the proviso to Article 37 (2) of the Banking Act;

(b) A private equity fund exclusive for institutions that is a subsidiary, etc. of a bank holding company.

[This Article Wholly Amended on Dec. 3, 2008]

Article 3-2(Definition of non-financial contributor) #

(1) "Finance business prescribed by Presidential Decree" in Article 2 (1) 8 (a) of the Act means the types of business under Article 2 (1) or services referred to in each subparagraph of paragraph (2) of the same Article.

(2) "Amount prescribed by Presidential Decree" in Article 2 (1) 8 (b) of the Act means two trillion won.

[This Article Added on Aug. 21, 2002]

Article 3-3(Criteria for exercise of de facto influence and participation in management) #

(1) A person who exercises de facto influence over the major affairs of management pursuant to Article 2 (1) 10 (b) of the Act shall be any of the following persons: <Amended on Jul. 28, 2016>

1. A stockholder who has appointed the representative or a majority of the directors of a financial holding company (referring to a bank holding company in the case of Article 2 (1) 10 (b) of the Act) by himself or herself or by means of the agreement, contract, etc. with other stockholders;

2. A person designated by the Financial Services Commission, who is recognized as exercising dominant influence over major decision-making or the execution of affairs of a financial holding company and its first and second-tier subsidiaries (in the case of Article 2 (1) 10 (b) of the Act, referring to a bank holding company and its first- and second-tier subsidiaries (hereinafter referred to as "bank holding company, etc.")), such as managerial strategy, changes of organization.

(2) Deleted. <Feb. 11, 2014>

[This Article Wholly Amended on Oct. 9, 2009]

Article 3-4 #

Deleted. <Jan. 18, 2010>

Article 4(Application for authorization) #

(1) Any person who intends to obtain authorization under Article 3 (1) of the Act shall file an application, in which the following matters are stated, with the Financial Services Commission: <Amended on Feb. 29, 2008>

1. Trade names of the financial holding company and its subsidiaries, etc. (hereinafter referred to as "financial holding company, etc.");

2. Location of the main office of the financial holding company, etc.;

3. Name, resident registration number and address of the representative and officers of the financial holding company, etc.;

4. Matters concerning the capital of the financial holding company, etc.;

5. Matters concerning manpower and physical facilities of the financial holding company, etc.;

6. Types of business run by subsidiaries, etc.

(2) The following documents shall be attached to the application for authorization under paragraph (1), in which case the Financial Services Committee shall verify a corporation registration certificate of a subsidiary, etc. by sharing administrative information under Article 36 (1) of the Electronic Government Act: <Amended on Mar. 17, 2004; May 26, 2005; Feb. 29, 2008; Oct. 9, 2009; May 4, 2010; Nov. 2, 2010; Jan. 5, 2021>

1. Articles of incorporation of the financial holding company, etc.;

2. Business plans (including estimated financial statements) and estimated statement of revenues and expenditures of the upcoming three business years of the financial holding company, etc.;

3. Documents in which the location and name of the main office, branch office, etc. of the financial holding company, etc. are entered;

4. Deleted; <Nov. 2, 2010>

5. Financial statements and documents attached thereto, of the financial holding company, etc.;

6. Resumes and career certificates of executive officers of the financial holding company, etc.;

7. Names or titles of stockholders holding at least 1/100 of the total number of issued stocks of the financial holding company, etc. as of the date of application for authorization and a document indicating the number of such stocks;

8. Other documents necessary for the examination of requirements for authorization under the Act or this Decree, as determined by the Financial Services Commission.

Article 5(Detailed criteria for authorization) #

(1) The business plan of a financial holding company, etc. under subparagraphs 1 and 2 of Article 4 (1) of the Act shall meet all of the following criteria; provided, the criteria set forth in subparagraph 1 may not apply to a person who intends to obtain authorization whose largest stockholder is the Government or institution prescribed in any of subparagraphs 1 through 3 of paragraph (3): <Amended on May 26, 2005; Nov. 12, 2007; Feb. 29, 2008; Jul. 29, 2008; Jan. 18, 2010; Dec. 2, 2010>

1. The business plan shall be appropriate for the continuous operation of the relevant business, and the estimated financial statements and earnings prospects shall have feasibility in light of the business plan;

2. The method of procurement of funds, such as the money needed for carrying out the business plan, is required to be appropriate;

3. The business plan must not violate statutes and regulations and nor disrupt the sound order on the financial market;

4. Deleted; <Jan. 18, 2010>

4-2. Where a subsidiary, being a foreign corporation, intends to control a second-tier subsidiary, such second-tier subsidiary shall not be a domestic financial institution;

5. The business plan must not substantially restrict competition on relevant markets.

(2) "Persons determined by Presidential Decree" in Article 4 (1) 3 of the Act means any of the following persons: <Amended on Nov. 12, 2007>

1. The largest stockholder of a corporation which is the largest stockholder;

2. The representative of a corporation which is the largest stockholder;

3. Stockholders who exercise de facto influence over major managerial affairs of a corporation which is the largest stockholder.

(3) Large stockholders shall meet the requirements set forth in Appendix 1; provided, the foregoing shall not apply to any of the following persons: <Amended on Aug. 21, 2002; May 26, 2005; Nov. 12, 2007; May 29, 2009; Oct. 9, 2009; Dec. 2, 2010; Mar. 24, 2014; Dec. 30, 2014; Feb. 17, 2022>

1. Deleted; <Dec. 30, 2014>

2. The Korea Deposit Insurance Corporation established under the Depositor Protection Act (hereinafter referred to as the "Korea Deposit Insurance Corporation");

3. The Korea Asset Management Corporation under the Act on the Establishment of Korea Asset Management Corporation;

Article 5-2(Report of financial holding company subject to authorization) #

(1) "Unavoidable causes determined by Presidential Decree" in Article 5-2 (1) of the Act means any of the following cases: <Amended on Feb. 29, 2008; Jul. 29, 2008>

1. Where the stock price of a subsidiary has increased;

2. Where the stockholders' rights of a subsidiary have changed because of reduction of capital of the subsidiary, disposal of stocks held by other stockholders, or other causes similar thereto as determined and publicly notified by the Financial Services Commission;

3. Where the total amount of assets of the financial holding company subject to authorization under Article 5-2 of the Act (hereinafter referred to as "financial holding company subject to authorization") has decreased;

4. Where a financial holding company subject to authorization has come to hold the stocks of a subsidiary because of the exercise of security right, acceptance of payment in kind, testamentary gift or other causes similar thereto as determined and publicly notified by the Financial Services Commission;

5. Where a financial holding company subject to authorization has come to hold the stocks of a subsidiary in the course of conducting the business of acquisition of securities under Article 9 (11) of the Financial Investment Services and Capital Markets Act under the permission of the Financial Services Commission;

6. Where a financial institution which amounts to a financial holding company subject to authorization comes to hold the stocks of a subsidiary within the scope of operations or asset management under the statutes and regulations applicable to such financial institution, as determined and publicly notified by the Financial Services Commission.

(2) "Period determined by Presidential Decree" in Article 5-2 (1) of the Act means four months from the base date (the base date under the proviso to Article 2 (4) 2 is not applicable; hereinafter the same shall apply). <Amended on Jan. 18, 2010>

(3) "Period determined by Presidential Decree" in the main clause of Article 5-2 (2) of the Act means one year from the base date. <Amended on Jan. 18, 2010>

[This Article Added on Nov. 12, 2007]

Article 5-3(Control relationship between financial institution and financial holding company) #

"Control relationship prescribed by Presidential Decree" in the main clause of Article 7 (1) of the Act means that a financial institution actually controls the business affairs of a financial holding company according to the standards under Article 4 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act. <Amended on Dec. 28, 2021>

[This Article Added on Nov. 12, 2007]

Article 5-4(Requirements for permission of control relationship between financial holding company and other financial holding companies) #

(1) Where a financial holding company intends to establish a control relationship with another financial holding company in accordance with Article 7 (1) 1 of the Act, it shall meet all of the following requirements:

1. The financial holding company is required to hold the total number of issued stocks of another financial holding company (hereinafter referred to as "intermediary holding company"), with which it intends to establish a control relationship; provided, the same shall not apply where a control relationship is intended to be established with an intermediary holding company to be established by means of share swap or share transfer and the following requirements are satisfied:

(a) The financial holding company is required to hold at least 95/100 of the total number of issued stocks of the intermediary holding company;

(b) The financial holding company is required to be unable to acquire the total number of issued stocks of the intermediary holding company due to unavoidable causes, such as cases where the financial holding company has requested a person to be another stockholder of the intermediary holding company (hereafter referred to as "minority stockholder" in this item) to sell such stocks, but such minority stockholder fails to sell such stocks within two months from the date of receiving such request for sale or the whereabouts of such minority stockholder cannot be identified;

2. The subsidiaries controlled by the same intermediary holding company (excluding intermediary holding companies which control only subsidiaries which are foreign corporations) are required to operate the same type of business or operate business related to one another; provided, the same shall not apply for two years from the date of incorporation into an intermediary holding company if there is any subsidiary which differs in the type of business or operates business related to other subsidiaries as at the time of incorporation into an intermediary holding company;

3. The intermediary holding company is required not to control second-tier subsidiaries; provided, where an intermediary holding company controls only subsidiaries which are foreign corporations, it may control second-tier subsidiaries.

(2) The Financial Services Commission may determine and publicly notify detailed criteria for the requirements in each of the subparagraphs of paragraph (1). <Amended on Feb. 29, 2008>

[This Article Added on Nov. 12, 2007]

Article 5-5(Requirements for permission of control relationship between investment companies and financial holding companies) #

(1) Where an investment company under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "investment company"), an institutional private equity fund or special purpose company under the same Act (hereinafter referred to as "special purpose company") intends to establish a control relationship with respect to a financial holding company under Article 7 (1) 2 of the Act, the relevant investment company, an institutional private equity fund or special purpose company shall meet the requirements classified in the following: <Amended on Jul. 29, 2008; Oct. 23, 2015; Oct. 21, 2021>

1. In cases of investment companies, all of the following requirements shall be satisfied:

(a) The number of stocks held by a financial institution must be under 30/100 of the total number of issued stocks of the relevant investment company;

(b) No financial institution shall exercise dominant influence over the major managerial affairs of the relevant investment company;

2. In cases of institutional private equity funds, all of the following requirements shall be satisfied:

(a) No financial institution shall be a managing general partner of an institutional private equity fund;

(b) The shares held by a financial institution must be under 30/100 of the total amount of investment of the relevant institutional private equity fund;

(c) No financial institution may exercise dominant influence over the major managerial affairs of the relevant institutional private equity fund;

3. In cases of specific purpose companies, all of the following requirements shall be satisfied:

(a) Each institutional private equity fund which is a stockholder or partner of the relevant special purpose company must meet all of the requirements in each item of subparagraph 2;

(b) The number of stocks or shares held by a financial institution must be under 30/100 of the total number of issued stocks with voting rights or total amount of investment of the relevant special purpose company;

(c) No financial institution may exercise dominant influence over the major managerial affairs of the relevant special purpose company.

(2) The Financial Services Commission may determine and publicly notify detailed criteria for the requirements in each of the subparagraphs of paragraph (1). <Amended on Feb. 29, 2008>

Article 5-6(Requirements for foreign financial institutions) #

(1) "Foreign financial institution prescribed by Presidential Decree" in Article 7 (1) 3 of the Act means a company and a specially related person thereto (hereinafter referred to as "foreign financial holding company") which controls a company conducting banking business, financial investment business, insurance business, and other business similar thereto determined and publicly notified by the Financial Services Commission in a foreign country (hereafter referred to as "business company" in this Article) through holding stocks or exercising a dominant influence by means of appointment and dismissal of executive officers, etc. in order to manage the operation of the business company. <Amended on Feb. 29, 2008; Jan. 18, 2010>

(2) Any company holding the stocks of a domestic financial holding company or exercising a dominant influence thereon from among foreign financial holding companies shall meet all of the following requirements: <Amended on Feb. 29, 2008>

1. The total amount of assets, scale of business, etc. must be appropriate for conducting international business activities and have a high international credit rating;

2. The capital adequacy ratio against risk-weighted assets in accordance with the criteria set by the Bank of International Settlements must be at least 8/100 for the last three consecutive years or cases similar thereto, which meet the criteria as determined and publicly notified by the Financial Services Commission.

(3) In the application of paragraph (2), where it is impracticable or unreasonable to apply the whole or part of the requirements referred to in the subparagraphs of the same paragraph because the relevant company is not a business company, if there exists a foreign financial holding company which is a business company (limited to a business company which actually controls the management of the relevant company or a business company of which management is actually controlled by the relevant company) satisfying the whole or part of the requirements, the relevant company shall be deemed to satisfy such requirements.

(4) The Financial Services Commission may determine and publicly notify detailed criteria for the requirements referred to in the subparagraphs of paragraph (2). <Amended on Feb. 29, 2008>

[This Article Added on Nov. 12, 2007]

Article 5-7(Requirements for permission for control relationship between foreign financial institutions and financial holding companies) #

(1) Where a foreign financial institution intends to establish a control relationship with a financial holding company under Article 7 (1) 3 of the Act, it shall satisfy the following requirements: <Amended on Feb. 29, 2008>

1. Any foreign financial holding company is required to hold the total number of issued stocks of a domestic financial holding company with which the foreign financial holding company intends to establish a control relationship (hereinafter referred to as "domestic holding company"); provided, the same shall not apply where a control relationship is established with a domestic holding company established by means of share swap or share transfer and all of the following requirements are satisfied:

(a) The foreign financial holding company is required to hold at least 95/100 of the total number of issued stocks of the domestic holding company;

(b) The foreign financial holding company is required to be unable to acquire the total number of issued stocks of the domestic holding company due to unavoidable causes, such as cases where even though the foreign financial holding company requested a person to be another stockholder of the domestic holding company (hereafter referred to as "minority stockholder" in this item) to sell such stocks, such minority stockholder fails to sell such stocks within two months from the date on which he or she received such request for sale or the whereabouts of such minority stockholder is unable to be confirmed;

2. Where there exists a domestic financial institution which is an affiliated company with a foreign financial holding company (excluding the relevant domestic holding company and the subsidiaries and second-tier subsidiaries thereof (hereafter referred to as "domestic holding company, etc." in this subparagraph); hereafter referred to as "domestic affiliated company" in this subparagraph), the requirements determined and publicly notified by the Financial Services Commission based on the matters concerning restrictions on the acts of subsidiaries, etc. under Article 48 of the Act for credit extension, asset transactions, stock holding, etc. between domestic affiliated companies and domestic holding companies, etc. are to be satisfied.

(2) The Financial Services Commission may determine and publicly notify detailed criteria for the requirements referred to in each subparagraph of paragraph (1). <Amended on Feb. 29, 2008>

[This Article Added on Nov. 12, 2007]

Article 5-8(Termination of control relationship with financial holding companies) #

(1) "Unavoidable causes prescribed by Presidential Decree" in the main clause of Article 7 (2) of the Act means any of the following cases: <Amended on Feb. 29, 2008; Jul. 29, 2008>

1. Where there is change in the stockholder's right of such company because of reduction of capital of a financial holding company, disposition of stocks held by other stockholders, or other causes similar thereto as determined and publicly notified by the Financial Services Commission;

2. Where a financial institution which has a control relationship with a financial holding company (hereafter referred to as "controlling financial institution" in this Article) has come to hold the stocks of the financial holding company because of the exercise of security rights, acceptance of payment in substitutes, testamentary gift or other grounds similar thereto as determined and publicly notified by the Financial Services Commission;

3. Where a controlling financial institution comes to hold the stocks of a financial holding company in the course of conducting the business of acquisition of securities under Article 9 (11) of the Financial Investment Services and Capital Markets Act under the permission of the Financial Services Commission;

4. Where a controlling financial institution rapidly comes to hold the stocks of a financial holding company within the scope of the operation and asset management under the statutes and regulations applicable to such financial institution as determined and publicly notified by the Financial Services Commission.

(2) "Period determined by Presidential Decree" in the main clause of Article 7 (2) of the Act means one year from the base date. <Amended on Jan. 18, 2010>

[This Article Added on Nov. 12, 2007]

Article 6 #

Deleted. <Jul. 28, 2016>

Article 6-2(Report on status of stock holdings) #

(1) "Those prescribed by Presidential Decree" in Article 8 (2) of the Act shall be following persons: <Amended on Dec. 30, 2014>

1. The Government;

2. The Korea Deposit Insurance Corporation;

3. The Korea Development Bank (limited to cases where stocks are acquired using the Financial Stability Fund established under the Act on the Structural Improvement of the Financial Industry);

4. A person approved by the Financial Services Commission under Article 8 (3) of the Act, where a person who was a stockholder, etc. holding stocks in excess of the limit issued by a bank under Article 16-4 (1) of the Act with approval of the Financial Services Commission under Article 15 (3) of the Banking Act becomes stockholders, etc. holding stocks in excess of limit under Article 10-2 of the Act, issued by a financial holding company which controls the relevant bank as a subsidiary, etc. through stock swap or stock transfer.

(2) "Matters prescribed by Presidential Decree" in Article 8 (2) of the Act shall be as follows: <Amended on Feb. 11, 2014; Oct. 23, 2015; Oct. 21, 2021>

1. Matters on the same person;

2. Matters falling under the following categories in cases of an institutional private equity fund, etc. (referring to the institutional private equity fund under Article 8-5 (2) of the Act; hereinafter the same shall apply):

(a) Stockholders or partners;

(b) The amount of investments by limited partners or general partners of a private equity fund exclusive for institutions;

3. Matters on the current status of stock holdings or changes thereof, and the reasons therefor;

4. Matters on the purpose of stock holdings and the involvement in the management of a bank holding company, etc.;

5. Others prescribed and publicly notified by the Financial Services Commission as detailed matters necessary for the confirmation of the status of stock holdings or changes in the ratio of stock holdings.

(3) The same person who falls under any of the subparagraphs of Article 8 (2) of the Act shall report the matters stated in each subparagraph of paragraph (2) to the Financial Services Committee by the deadline specified in the following; Where the person and his or her specially related person have to report together, whoever has the largest number of stocks may be designated as a representative to make a report under joint signature: <Amended on Dec. 2, 2010; Aug. 16, 2017>

Article 6-3(Requirements and procedure for approval of holding of stocks in excess of holding limit) #

(1) A person who intends to hold the stocks of a bank holding company under Article 8 (3) of the Act shall satisfy the requirements provided for in Appendix 2; provided, where the Financial Services Commission deems that there exists a special cause, such as liquidation of insolvent financial institutions under subparagraph 2 of Article 2 of the Act on the Structural Improvement of the Financial Industry, it may grant approval even to a person who fails to satisfy the requirements in Appendix 2. <Amended on May 26, 2005; Feb. 29, 2008; Jun. 29, 2021>

(2) When granting approval under Article 8 (3) of the Act, the Financial Services Commission may restrict the time, method, etc. of acquisition of stocks when the Commission deems it necessary in light of the applicant's qualifications, composition of shares held by a bank holding company, etc. <Amended on Feb. 29, 2008>

(3) A person who intends to obtain approval under Article 8 (3) of the Act shall file an application for approval with the Financial Services Commission, stating the following matters: <Amended by Presidential Decree 21776, Oct. 9, 2009>

1. Matters on the applicant;

2. Current status of holding stocks issued by a bank holding company;

3. Plan for acquiring stocks issued by a bank holding company.

(4) The application for approval under paragraph (3) shall include the following documents: <Added on Oct. 9, 2009; Oct. 30, 2018>

1. The articles of incorporation (limited to corporations);

2. Documents equivalent to the corporation registration certificate, in cases of a foreign company;

3. Financial statements as of the end of the recent business year and semi-annual financial statements after the end of the recent business year (limited to corporations);

4. Audit report and review report on the financial statements under subparagraph 3 prepared by a accounting auditor (referring to an auditor under subparagraph 7 of Article 2 of the Act on External Audit of Stock Companies; hereinafter the same shall apply);

5. Where a person intending to obtain approval is an institution subject to inspection by the Financial Supervisory Service under Article 38 of the Act on the Establishment of Financial Services Commission, financial status calculated in accordance with the standards for financial soundness applicable to such institution and review report thereof prepared by an accounting auditor;

Article 6-4(Processing period of approval for holding of stocks) #

"Period prescribed by Presidential Decree" in Article 8 (4) of the Act means 60 days from the date of receipt of application for approval; provided, the period prescribed and publicly notified by the Financial Services Commission, such as period for supplementing defects of the application for approval, shall not be included in calculation of the processing period. <Amended on Oct. 9, 2009>

[This Article Added on Aug. 21, 2002]

Article 6-5(Period of time to be considered as non-financial devotee) #

(1) "Period prescribed by Presidential Decree" in Article 8-2 (1) of the Act means three months.

(2) "Requirements, including financial soundness, etc., prescribed by Presidential Decree" in Article 8-2 (2) of the Act means the requirements in subparagraph 1 (a) and subparagraph 4 (a) through (c) of Appendix 2. <Amended on Oct. 9, 2009; Feb. 11, 2014>

[This Article Added on Aug. 21, 2002]

Article 6-6(Requirements for approval of conversion plans) #

(1) The conversion plan under Article 8-2 (3) 1 of the Act shall meet all of the following requirements: <Amended on Oct. 9, 2009>

1. The assumptions on which the conversion plan is based, such as prospects on the market conditions, etc. are required to be rational;

2. The conversion plan is required to be realizable within the proposed execution period in light of the volume of issued stocks, volume of assets, etc. of a non-financial company subject to disposal;

3. Quarterly execution plan is required to be included.

(2) The Financial Services Commission shall review the status of conversion plan being executed by a person subject to conversion under Article 8-3 (2) of the Act on a quarterly basis. <Amended on Oct. 9, 2009>

(3) The Financial Services Commission may prescribe and publicly notify the necessary matters on detailed standards for the requirements under each subparagraph of paragraph (1) and the review of the status of execution of conversion plan, such as methods of review under paragraph (2). <Amended on Oct. 9, 2009>

[This Article Added on Aug. 21, 2002]

Article 6-7 #

Deleted. <Oct. 9, 2009>

Article 7(Requirements for prevention of conflict of interests of fund) #

(1) "Systems prescribed by Presidential Decree" in Article 8-2 (3) 2 (a) of the Act means systems satisfying all the following requirements: <Amended on Jul. 28, 2016>

1. The standards for exercising voting rights to prevent conflict of interests shall be established. In such cases, the standards shall include the statement that voting rights shall be exercised in a manner that does not influence any resolution made by the number of stocks calculated by subtracting the number of stocks held in excess of the limit under Article 8-2 (1) of the Act among the number of stocks held by the fund, etc. from the number of stocks held by stockholders present at the general meeting of stockholders of the bank holding company which issued the stocks held by the fund, etc. in cases where any voting rights are exercised on the matters which do not have standards for exercising voting rights, when the number of stock of a bank holding company held by the fund, etc. exceeds the limit on the number of stocks specified in Article 8-2 (1) of the Act;

2. The internal control guidelines (referring to the internal compliance guidelines pursuant to Article 24 (1) of the Act on Corporate Governance of Financial Companies; hereinafter the same shall apply) shall be established in order to verify, assess, and manage the possibility of a conflict of interests, such as where the information obtained by a stockholder of a bank holding company shall be managed in order to prevent use of such information for any purposes other than the exercise of stockholders' appraisal rights;

3. Other matters prescribed and publicly notified by the Financial Services Commission as necessary to prevent a conflict of interests.

(2) "Requirements prescribed by Presidential Decree" in Article 8-2 (3) 2 (c) of the Act means cases where the fund, etc. complies with the guidance of asset management under Article 79 of the National Finance Act.

[This Article Added on Oct. 9, 2009]

Article 8 #

Deleted. <Feb. 11, 2014>

Article 9(Approval on stock holdings of institutional private equity funds) #

(1) Deleted. <Feb. 11, 2014>

(2) An institutional private equity fund, etc. under Article 8-5 (2) of the Act shall have managing general partners of the institutional private equity fund, etc. or executive officers of the managing general partners (including the persons falling under Article 401-2 (1) 3 of the Commercial Act; hereafter the same shall apply in this paragraph) who satisfy all the following requirements: <Amended on Feb. 11, 2014; Oct. 23, 2015; Jul. 28, 2016; Oct. 21; 2021>

1. The managing general partner shall be a corporation and three years have passed since the incorporation of the relevant corporation;

2. The executive officers of the managing general partner shall not fall under any of the subparagraphs of Article 5 (1) of the Act on Corporate Governance of Financial Companies;

3. The following standards shall be satisfied; provided, this shall not apply where the degree of violation, etc. is deemed minor:

(a) The person shall not have been subject to criminal punishment equivalent to or heavier than a sentence of fine for a violation of statutes and regulations pursuant to Article 5 of the Enforcement Decree of the Act on Corporate Governance of Financial Companies (hereinafter referred to as "finance-related statutes and regulations"), the Monopoly Regulation and Fair Trade Act, or the Punishment of Tax Offenses Act during the recent five years;

(b) The person shall not have been a majority stockholder or his or her specially related person of an institution which was designated as an insolvent financial institution under the Act on the Structural Improvement of the Financial Industry or whose permission or authorization of business was revoked pursuant to the finance-related statutes and regulations during the recent five years; provided, persons who, by a court ruling, are found to have no liability for insolvency or who meet the standards prescribed and publicly notified by the Financial Services Commission, such as sharing economic responsibilities resulting from insolvency, shall be excluded herefrom;

4. A private equity fund exclusive for institutions, etc. in which the person serves or served as an executive partner shall satisfy any of the following conditions:

(a) Where the amount (excluding the amount invested by the relevant executive partner) invested in one private equity fund exclusive for institutions, etc. is at least 500 billion won and is at least the amount determined and publicly notified by the Financial Services Commission;

Article 9-2(Period of reporting in cases of exceeding stockholding limits) #

(1) In Article 10 (2) 1 (a) and Article 10 (2) 2 (a) of the Act, the "period prescribed by Presidential Decree" means 5 business days from the date on which a predetermined event (hereinafter referred to as "trigger event") occurs based on objective and reasonable criteria established in advance as at the time of issuance with respect to convertible contingent capital securities issued pursuant to Article 15-2 (1) 3 of the Act (hereinafter referred to as "convertible contingent capital securities"), contingent capital securities convertible into stocks of a bank holding company issued pursuant to Article 33 (1) 4 of the Banking Act (hereinafter referred to as "contingent capital securities convertible into stocks of a bank holding company"), and contingent capital securities convertible into stocks of a financial holding company issued pursuant to Article 114-2 (1) 3 of the Insurance Business Act (hereinafter referred to as "contingent capital securities convertible into stocks of a financial holding company"). <Amended on Aug. 16, 2017; June 27, 2023>

(2) "Period prescribed by Presidential Decree" in the main clause of Article 10 (2) 1 (b) of the Act and the main clause of Article 10 (2) 2 (b) of the Act means 6 months from the date of occurrence of the trigger event with respect to contingent convertible bonds for mandatory conversion, contingent convertible bonds convertible into stocks of a bank holding company, or contingent convertible bonds convertible into stocks of a financial holding company, respectively. <Amended on Aug. 16, 2017; Jun. 27, 2023>

[This Article Added on Jul. 28, 2016]

Article 10(Procedures for reviewing eligibility of stockholders holding stocks in excess of limit) #

(1) The Financial Services Commission shall, on a semi-annual basis, review whether a stockholder holding stocks in excess of the limit meets the requirements, etc. for excess holding pursuant to Article 10-2 of the Act; provided, the Financial Services Commission may, if specifically deemed necessary, conduct a review at any time, such as in cases where there is any sign of illegal trading between the stockholder holding stocks in excess of the limit and a bank holding company, etc.

(2) Necessary details on the procedures for, methods, etc. of a review on suitability of stockholders holding stocks in excess of the limit shall be determined and publicly notified by the Financial Services Commission.

[This Article Added on Oct. 9, 2009]

Article 11(Business affairs of financial holding companies) #

(1) "Business affairs prescribed by Presidential Decree" in Article 15 of the Act means the following business affairs: <Amended on Jan. 18, 2010; Dec. 30, 2015>

1. Affairs concerning business administration:

(a) Setting business goals and approving business plans with respect to subsidiaries, etc.;

(b) Evaluation of business performance of subsidiaries, etc. and determination of remuneration;

(c) Determination of management governance structure with respect to subsidiaries, etc.;

(d) Inspection of business affairs and status of property of subsidiaries, etc.;

(e) Internal control and risk management of subsidiaries, etc.;

(f) Affairs incidental to items (a) through (e);

2. Affairs incidental to business administration:

(a) Financial support to subsidiaries, etc. (including loans of money, securities, and other properties having economic value, guarantee of an obligation, and other direct and indirect transactions involving transactional credit risks; hereafter the same shall apply in this Article);

(b) Procurement of funds for investment in subsidiaries, etc. or providing financial support to subsidiaries, etc.;

(c) Provision of resources necessary for the business of subsidiaries, etc., including support for the development and sale of financial products of subsidiaries, etc.;

(d) Business entrusted by subsidiaries, etc. to support the business of the subsidiaries, etc., including computer, legal affairs, accounting, etc.;

(e) Other business affairs which do not require authorization, license or approval, etc. under statutes and regulations.

(2) Detailed matters concerning paragraph (1) 2 (c) and (d) are as prescribed in Appendix 3. <Added on Jan. 18, 2010>

[This Article Wholly Amended on Aug. 21, 2002]

[Title Amended on Jan. 18, 2010]

Article 11-2(Issuance of financial bond) #

(1) Any bank holding company may issue corporate bonds referred to in the subparagraphs of Article 15-2 (1) of the Act (hereinafter referred to as "financial bond") in the manner of selling after setting a selling period in advance.

(2) Any trigger event referred to in Article 15-2 (1) 2 and 3 of the Act shall satisfy all the following standards:

1. An event shall satisfy the requirements determined and publicly notified by the Financial Services Commission which is highly unlikely to be changed or occur with usual efforts by a bank holding company which has issued or intends to issue corporate bonds referred to in Article 15-2 (1) 2 and 3 of the Act (hereinafter referred to as "contingent convertible bond") (hereinafter referred to as "issuing bank holding company") or interested persons related to the issuance of contingent convertible bonds, such as stockholders and investors of the issuing bank holding company;

2. An event shall be sufficiently notified or announced to the public under Article 176-12 (2) 2 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act.

(3) "Corporate bonds prescribed by Presidential Decree" in Article 15-2 (1) 4 of the Act means corporate bonds determined and publicly notified by the Financial Services Commission which are debt securities issued by a bank holding company in accordance with the standards of the Bank for International Settlements or debt securities issued by a person running financial business in accordance with finance-related statutes and regulations or foreign statutes and regulations equivalent thereto.

(4) Contingent convertible bonds may expire when the relevant issuing bank holding company faces liquidation or bankruptcy.

(5) Necessary detailed matters related to requirements for issuing financial bonds and issuing methods therefor, other than those prescribed in paragraphs (1) through (4), shall be determined and publicly notified by the Financial Services Commission.

[This Article Added on Aug. 16, 2017]

Article 12(Approval for incorporation of company as subsidiaries) #

(1) Any person who wishes to obtain approval for incorporation of a company as a subsidiary, etc. under Article 16 (1) of the Act shall submit an application for approval in which the following matters are entered to the Financial Services Commission: <Amended on Feb. 29, 2008>

1. Trade name of a company which intends to be incorporated into a subsidiary, etc. (hereinafter referred to as "company subject to incorporation") and a financial holding company;

2. Location of the head office of a financial holding company and company subject to incorporation;

3. Names, resident registration numbers and addresses of the representative and executive officers of a financial holding company and company subject to incorporation;

4. Matters concerning the capital of a financial holding company and company subject to incorporation;

5. Matters concerning manpower and physical facilities of a financial holding company and company subject to incorporation;

6. Type of business to be conducted by a company subject to incorporation.

(2) The application for approval under paragraph (1) shall be accompanied by the following documents. In this case, the Financial Services Committee shall verify the corporation registration certifications of a financial holding company and a company subject to incorporation by sharing administrative information under Article 36 (1) of the Electronic Government Act: <Amended on Mar. 17, 2004; May 26, 2005; Feb. 29, 2008; Oct. 9, 2009; May 4, 2010; Nov. 2, 2010; Oct. 23, 2015; Jan. 5, 2021; Oct. 21, 2021>

1. Articles of incorporation of financial holding companies and companies subject to incorporation;

2. Business plans (including estimated financial statements) and estimated statement of revenue and expenditure of a financial holding company and company subject to incorporation for three business years after the company subject to incorporation is incorporated into a subsidiary, etc.;

3. Documents in which the locations and names of the main office, branch office, etc. of a financial holding company and company subject to incorporation are entered;

4. Deleted; <Nov. 2, 2010>

5. Financial statements and documents attached thereto of a financial holding company and company subject to incorporation;

Article 13(Detailed requirements for approval of incorporation into subsidiaries) #

(1) The business plan under Article 17 (1) 1 of the Act shall meet each of the following requirements: <Amended on Aug. 21, 2002; May 26, 2005; Nov. 12, 2007; Dec. 30, 2015>

1. The business plan is required to be appropriate for the continuous operation of business and maintenance of sound management of a financial holding company and company subject to incorporation, and the estimated financial statements and prospects for profits are required to be feasible in light of the business plan;

2. The method of procurement of funds, such as the money needed for carrying out the business plan, is required to be appropriate;

3. The business plan must not violate statutes and regulations and nor disrupt the sound order on the financial market;

4. Deleted; <Jan. 18, 2010>

4-2. Where a foreign corporation to be incorporated into a subsidiary intends to control a second-tier subsidiary or where a subsidiary which is a foreign corporation (hereinafter referred to as "foreign subsidiary") intends to newly incorporate a second-tier subsidiary, such second-tier subsidiary must not be a domestic financial institution;

5. The business plan must not substantially restrict competition on relevant markets.

(2) Detailed criteria for the soundness of financial standing and business management conditions under Article 17 (1) 2 of the Act shall be as follows: <Amended on Nov. 12, 2007; Feb. 29, 2008>

1. The equity capital of a financial holding company, etc. and of a company subject to incorporation is required to meet the criteria for capital adequacy determined and publicly notified by the Financial Services Commission under subparagraph 1 of Article 28;

2. The business management conditions of a financial holding company, etc. and of a company subject to incorporation are required to be sound as a result of an assessment of soundness of business management of the financial holding company, etc. and company subject to incorporation conducted under conditions determined and publicly notified by the Financial Services Commission.

(3) The provisions of Article 5 (5) shall apply mutatis mutandis with respect to the propriety of the rate of share swap under Article 17 (1) 3 of the Act.

(4) The Financial Services Commission may set up detailed criteria for the detailed requirements in paragraphs (1) through (3). <Amended on Feb. 29, 2008>

Article 14(Scope of companies subject to reporting) #

(1) "Company prescribed by Presidential Decree" in Article 18 (1) of the Act means any of the following financial institutions or companies; provided, where a first-tier subsidiary acquires a second-tier subsidiary (excluding cases where a subsidiary becomes a managing general partner of an institutional private equity fund), owning less than 50/100 of the total number of issued stocks of the second-tier subsidiary being acquired (30/100 where such second-tier subsidiary is a listed stock company or joint stock company under Article 43-2 (1) of the Act (hereinafter referred to as "joint stock company")), such second-tier subsidiary (except for a foreign corporation in case of subparagraph 2) shall be excluded, and where a second-tier subsidiary acquires a third-tier subsidiary, owning less than 50/100 of the total number of issued stocks of the third-tier subsidiary being acquired (30/100 where such third-tier subsidiary is a listed stock company or joint stock company), such third-tier company (excluding a foreign corporation in case of subparagraph 2) shall be excluded, and the same shall apply where a third or lower-tier subsidiary includes a further lower-tier company as a subsidiary: <Amended on Aug. 21, 2002; May 26, 2005; Nov. 12, 2007; Feb. 29, 2008; Jul. 29, 2008; Jan. 18, 2010; Dec. 2, 2010; Oct. 23, 2015; Oct. 21, 2021>

1. A financial institution which does not require authorization or permission from the Financial Services Commission as at the time of the establishment of the relevant financial institution; provided, foreign corporations which are to be incorporated into the subsidiaries or second-tier subsidiaries (limited to companies controlled by a subsidiary which is a foreign corporation) of financial holding companies and mainly operate the same types of business as those of domestic financial institutions for which the authorization or permission of the Financial Services Commission are required shall be excluded;

2. A financial institution the total amount of assets of which is under 100 billion won as of the end of the recent business year;

3. Where a subsidiary, etc. of a financial holding company as of the time of authorization under Article 3 of the Act or a subsidiary, etc. newly acquired under Article 16 of the Act becomes a subsidiary, etc. of a financial holding company because of change in the relationship of stock holding between financial holding companies, etc., merger, division, merger through split-off, physical division between subsidiaries, etc., and other causes as determined and publicly notified by the Financial Services Commission, such subsidiaries, etc.;

(a) Deleted; <Jan. 18, 2010>

Article 15(Scope of second-tier subsidiaries) #

(1) "Financial institution prescribed by Presidential Decree" in Article 19 (1) 1 of the Act means the following financial institutions: <Amended on May 26, 2005; Nov. 12, 2007; Feb. 29, 2008; Jul. 29, 2008; Oct. 1, 2009; Oct. 9, 2009; Jan. 18, 2010; Feb. 11, 2014; Jan. 6, 2015; Dec. 30, 2015; Aug. 4, 2020>

1. Financial institutions established in a foreign country;

2. Financial institutions conducting business affairs, which subsidiaries are able to conduct and which do not require authorization, permission, etc. under statutes and regulations;]

3. Where a subsidiary is a bank, merchant bank, or an investment trader or investment broker under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "investment trader or investment broker"), or insurance company under the Insurance Business Act (hereinafter referred to as "insurance company"), the companies are as classified in the following:

(a) Where a subsidiary is a bank or a merchant bank: Credit information companies and claims collection agencies under the Credit Information Use and Protection Act, credit card business entities under the Specialized Credit Finance Business Act; and trust business entities, investment traders (limited to investment traders dealing with no more than exchange-traded derivatives under the Financial Investment Services and Capital Markets Act), investment brokers (limited to investment brokers dealing with no more than derivatives under the Financial Investment Services and Capital Markets Act), investment advisory business entities (hereinafter referred to as "investment advisory business entities"), discretionary investment business entities (hereinafter referred to as "discretionary investment business entities"), and collective investment entities (hereinafter referred to as "collective investment entities"), under the Financial Investment Services and Capital Markets Act;

(b) Where a subsidiary is an investment trader or investment broker: Collective investment entities, investment advisory business entities, discretionary investment business entities, and investment traders or investment brokers;

(c) Where a subsidiary is an insurance company: Collective investment entities;

4. Other financial institutions closely related to the business of a subsidiary, as determined by Prime Ministerial Decree.

(2) "Company prescribed by Presidential Decree" in Article 19 (1) 2 of the Act means any company under Article 2 (2).

Article 16 #

Deleted. <Nov. 24, 2014>

Article 16-2(Approval of conversion plans to non-bank holding company) #

(1) A person who intends to obtain approval under Article 22 (1) of the Act shall submit, to the Financial Services Commission, a plan to convert into a non-bank holding company (hereafter referred to as "conversion plan" in this Article).

(2) A conversion plan under paragraph (1) shall meet all the following requirements:

1. Assumptions, etc., including the forecast, etc. on market conditions which are prerequisite to a conversion plan shall be reasonable and rational;

2. A conversion plan shall be realizable within the execution period specified in the plan, in view of investment relationship within the relevant enterprise group, shareholder composition, etc. of a company subject to conversion under Article 22 (1) of the Act (hereafter referred to as "company subject to conversion" in this Article);

3. A plan to supply resources to capital, etc. required for carrying out the plan shall be appropriate;

4. The details of a conversion plan shall not violate any statute or regulation and shall not be likely to undermine sound financial order;

5. An organizational operating system required for carrying out and managing a conversion plan shall be in place;

6. Quarterly execution plans shall be included therein;

7. It shall be possible to meet the requirements under subparagraph 1 (b) and (c) of Appendix 4 until a conversion plan is executed;

8. It shall be possible to satisfy the requirements in the provisions specified in each subparagraph of Article 22 (2) of the Act until a conversion plan is executed.

(3) A company subject to conversion which intends to have a grace period for regulations on restricted activities extended under the proviso to Article 22 (2) of the Act shall file with the Financial Services Commission an application for the extension of a grace period by 60 days prior to the date of expiration of the grace period.

(4) The Financial Services Commission shall review the execution status of a conversion plan of a company subject to conversion on a quarterly basis pursuant to Article 22 (6) of the Act.

(5) The Financial Services Commission shall, when it orders the execution of a conversion plan pursuant to Article 22 (7) of the Act, do so in writing stating matters to be executed, a period of execution, etc.

Article 16-3(Detailed requirements for authorization of insurance holding companies) #

(1) "Requirements prescribed by Presidential Decree" in Article 23 of the Act means the authorization requirements and detailed requirements of an insurance holding company under subparagraph 1 of Appendix 4.

(2) "Requirements prescribed by Presidential Decree" in Article 24 of the Act means the approval requirements for acquisition of subsidiary, etc. by an insurance holding company and detailed requirements under subparagraph 2 of Appendix 4. <Amended on Nov. 24, 2014>

(3) The Financial Services Commission may determine and publicly notify the specific contents of the detailed requirements under paragraphs (1) and (2).

[This Article Added on Jan. 18, 2010]

Article 16-4(Detailed requirements for authorization of financial investment holding companies) #

(1) "Requirements prescribed by Presidential Decree" in Article 29 of the Act means the authorization requirements and detailed requirements of a financial investment holding company under subparagraph 1 of Appendix 4.

(2) "Requirements prescribed by Presidential Decree" in Article 30 of the Act means the approval requirements for acquisition of subsidiary, etc. by a financial investment holding company and detailed requirements under subparagraph 2 of Appendix 4. <Amended on Nov. 24, 2014>

(3) The Financial Services Commission may determine and publicly notify the specific contents of the detailed requirements under paragraphs (1) and (2).

[This Article Added on Jan. 18, 2010]

Article 16-5(Restriction on trading with large stockholders) #

(1) "Standards prescribed by Presidential Decree" in the main clause of Article 34 (2) of the Act means the limit under subparagraph 1 of Appendix 5.

(2) "Standards prescribed by Presidential Decree" in the former part of Article 34 (3) of the Act means the limit under subparagraph 2 of Appendix 5.

(3) Stocks acquired by a non-bank holding company and its subsidiaries, etc. (hereinafter referred to as "non-bank holding company, etc.") through a trust for which the operation method of money which is trust property is designated by a trust (including a person designated by a trustor; hereafter the same shall apply in this paragraph) shall not be construed as the acquisition of stocks (including investment shares) under Article 34 (3) of the Act; provided, the foregoing shall not apply where a trustor is a non-bank holding company, etc.

(4) "Period prescribed by Presidential Decree" in Article 34 (4) of the Act means one year; provided, the Financial Services Commission may extend the period by up to one year, if deemed unavoidable in the light of the volume of stocks held in excess of the limit by a non-bank holding company, etc., the securities exchange conditions, etc.

(5) "Above the standards prescribed by Presidential Decree" in Article 34 (5) and (6) 1 and 2 of the Act means an amount of a single transaction (in cases of acquiring bonds or stocks issued by a large stockholder prescribed in Article 34 (5) of the Act, excluding the amount of bonds or stocks acquired in an overseas market which is a securities exchange or market similar thereto under the Financial Investment Services and Capital Markets Act) equivalent to 10/10,000 of the net total of the equity capital of the relevant non-bank holding company, etc. or one billion one, whichever is smaller. In such cases, the detailed standards of computing the amount of a single transaction shall be determined and publicly notified by the Financial Services Commission.

(6) The equity capital of a non-bank holding company, etc. and its net total amount under paragraph (5) shall be computed in the manner prescribed by the following classifications:

1. Where a non-bank holding company, etc. extends credit to a large stockholder pursuant to Article 34 (5) and (6) 1 of the Act: The method prescribed in Article 24 (3) and (4);

2. Where a non-bank holding company, etc. acquires bonds or stocks issued by a large stockholder under Article 34 (5) and (6) 2 of the Act: The method prescribed in Article 24-3 (6) and (7).

Article 16-6(Limit of credit extension) #

(1) "Standards prescribed by Presidential Decree" in the main clause of Article 36 (1) of the Act means the limit respectively specified in subparagraphs 3 and 4 of Appendix 5.

(2) When computing credit extension under Article 36 (1) of the Act, the credit extension provided for the same borrower of a subsidiary, etc. which does not fall under any subparagraph of Article 24 (1) and the same individual or corporation shall be excluded.

(3) Credit extension under Article 36 (1) of the Act shall be computed according to the standards prescribed in Article 24 (2).

[This Article Added on Jan. 18, 2010]

Article 17 #

Deleted. <Jul. 28, 2016>

Article 18 #

Deleted. <Jul. 28, 2016>

Article 19 #

Deleted. <Jul. 28, 2016> Articles 19-2 Deleted. <Jul. 28, 2016>

Article 19-3 #

Deleted. <Jul. 28, 2016>

Article 19-4 #

Deleted. <Jul. 28, 2016>

Article 19-5 #

Deleted. <Jul. 28, 2016>

Article 20 #

Deleted. <Jul. 28, 2016>

Article 20-2 #

Deleted. <Jan. 18, 2010>

Article 21 #

Deleted. <Jan. 18, 2010>

Article 21-2(Special cases concerning standards for large stockholders of subsidiaries of financial holding company) #

"Subsidiary, etc. prescribed by Presidential Decree" in subparagraph 3 of Article 42-2 of the Act means a subsidiary, etc. falling under Article 14 (1) 1 or 3.

[This Article Added on Jan. 18, 2010]

[Previous Article 21-2 moved to Article 21-3 <Jan. 18, 2010>]

Article 21-3(Mitigation of criteria for holding stocks of foreign subsidiaries) #

(1) "De facto control prescribed by Presidential Decree" in the former part of Article 43-2 (3) of the Act means cases where all of the following requirements are satisfied: <Amended on Feb. 29, 2008; Dec. 30, 2015>

1. The financial holding company must be the largest investor in a foreign subsidiary;

2. The financial holding company must not be unreasonably restricted in the exercise of stockholder's rights with respect to such foreign subsidiary in light of the stock dispersion level of the foreign subsidiary, statutes and regulations of the relevant country, etc.;

3. The financial holding company must manage the business of such foreign subsidiary by means of appointing its executive officers or employees as the executive officers of such foreign subsidiary and others as determined and publicly notified by the Financial Services Commission.

(2) Detailed matters concerning the procedure and methods for verifying that the financial holding company is able to secure de facto control over such foreign subsidiary under paragraph (1) pursuant to Article 43-2 (3) of the Act may be determined and publicly notified by the Financial Services Commission. <Amended on Feb. 29, 2008>

(3) When deciding an investor of a joint stock company under Article 43-2 (1) of the Act, pursuant to Article 43-2 (4) of the Act, a financial holding company, the large stockholder of the financial holding company and its specially related person shall be deemed one investor. <Added on Jan. 18, 2010>

[This Article Added on Nov. 12, 2007]

[Moved from Article 21-2 <Jan. 18, 2010>]

Article 22(Cause of exceeding limit of credit extension) #

(1) Cases where the total amount of credit provided by a financial holding company, etc. to the same borrower may exceed 25/100 of the net total amount of the equity capital of the financial holding company, etc. due to the cause under Article 45 (1) 1 of the Act shall be as follows: <Amended on Mar. 8, 2005; May 26, 2005; Mar. 29, 2006; Feb. 29, 2008; Aug. 16, 2017>

1. Where credit is additionally provided to a company which is undergoing the rehabilitation procedure or promoting management normalization jointly with a financial institution for corporate restructuring, etc.;

2. Where credit is additionally provided to a person who has acquired a company which falls under subparagraph 1 under the conditions as determined in the contract of acquisition;

3. Cases recognized by the Financial Services Commission as inevitable for industrial development, such as promotion of infrastructure projects or stabilization of people's livelihood.

(2) Cases where the total amount of credit provided by a financial holding company to the same borrower may exceed 25/100 of the net total amount of equity capital of the financial holding company, etc. due to a cause under Article 45 (1) 2 of the Act shall be as follows: <Amended on Feb. 29, 2008>

1. Where a financial holding company is newly established;

2. Where there is change in the composition of a subsidiary, etc., such as cases where a company which is not a subsidiary, etc. is newly incorporated into a subsidiary, etc.;

3. Where the equity capital of the financial holding company, etc. has decreased;

4. Where the amount converted to won currency has increased due to exchange rate fluctuations;

5. Where there is change in the composition of the same borrowers;

6. Where a merger, or transfer and takeover of business occurs between companies to which credit is provided;

7. Other cases recognized by the Financial Services Commission as having exceeded the limit of credit extension by inevitable causes not attributable to the financial holding company, etc., such as rapid changes in economic conditions.

(3) "Amount computed according to the method prescribed by Presidential Decree" in the main clause of Article 45 (3) of the Act means the smaller amount between the amount equivalent to 25/100 of the net total amount of equity capital of the financial holding company, etc. and the amount equivalent to the rate of contribution made by the same person to the relevant financial holding company.

Article 23(Reduction of excess credit provided) #

(1) Where a financial holding company, etc. exceeds the limit of credit extension in the main clause of Article 45 (1) of the Act and the main clause of the Article 45 (2) and (3) due to the cause under Article 45 (1) 2 of the Act, it shall take measures to meet the relevant limit on credit extension according to the order provided for in the following, within one year from the date on which it came to exceed the limit of credit; provided, where a financial holding company, etc. has obtained the approval of the Financial Services Commission on a detailed plan it submitted to meet the limit of credit extension as determined by the Financial Services Commission, it shall comply with the relevant plan: <Amended on Feb. 29, 2008; Jan. 18, 2010>

1. Credit offered most recently;

2. In cases of credit offered on the same date, the credit the amount of which is smaller.

(2) "In cases of unavoidable causes prescribed by Presidential Decree" in the proviso to Article 45 (4) of the Act means any of the following cases: <Amended on Feb. 29, 2008>

1. Where the recovery of credit within a fixed period of time is impracticable because the maturity date of credit already provided has not arrived;

2. Where the causes under subparagraphs 3 and 4 of Article 22 (2) persist for a long term and it is feared that if the relevant credit is recovered, it would undermine the management stability of the recipient of such credit;

3. Other cases similar to subparagraphs 1 and 2 determined by the Financial Services Commission as not likely to undermine the soundness of assets of the relevant financial holding company even if the situation in which the limit on credit provision is exceeded persists for a certain period of time.

Article 24(Scope of application of limit of credit extension) #

(1) The scope of subsidiaries, etc. under Article 45 (5) of the Act shall include the subsidiaries, etc. of a financial holding company, which are financial institutions falling under any of the following: <Amended on Jul. 29, 2008; Jan. 18, 2010>

1. Banks;

2. Merchant banks;

3. Financial investment business entities;

4. Insurance companies;

5. Mutual savings banks under the Mutual Savings Banks Act (hereinafter referred to as "mutual savings bank");

6. Specialized credit financial companies under the Specialized Credit Finance Business Act (hereinafter referred to as "specialized credit financial company").

(2) Standards for extending credit under Article 45 (5) of the Act shall be classified as follows: <Amended on Jan. 18, 2010; Jan. 24, 2011; Dec. 30, 2015>

1. Where the subsidiary, etc. is a bank: Credit extension as defined in Article 2 (1) 7 of the Banking Act;

2. Where the subsidiary, etc. is a merchant bank: Credit extension as prescribed in Article 342 (1) of the Financial Investment Services and Capital Markets Act;

3. Where the subsidiary, etc. is a financial investment business entity: Lending assets having economic value, such as money and securities, guarantee of the discharge of obligation, or purchase of securities taking the character of funding, and other direct and indirect transactions determined and publicly notified by the Financial Services Commission which accompany credit risk in transactions;

4. Where the subsidiary, etc. is an insurance company: Credit extension as defined in subparagraph 13 of Article 2 of the Insurance Business Act;

5. Where the subsidiary, etc. is a mutual savings bank: Credit extension as defined in subparagraph 6 of Article 2 of the Mutual Savings Banks Act;

6. Where the subsidiary, etc. is a specialized credit financial company: Credit extension as defined in subparagraph 18 of Article 2 of the Specialized Credit Finance Business Act.

(3) The method of calculating equity capital under Article 45 (5) of the Act shall be classified as follows: <Amended on Jan. 18, 2010; Jan. 24, 2011>

1. Where the subsidiary, etc. is a bank: Equity capital as defined in Article 2 (1) 5 of the Banking Act;

Article 24-2(Limit of credit extension to major investors of bank holding company) #

(1) "Percentage prescribed by Presidential Decree" in the main clause of Article 45-2 (1) of the Act means 25/100.

(2) "Percentage prescribed by Presidential Decree" in Article 45-2 (2) of the Act means 25/100.

(3) "Amount prescribed by Presidential Decree" in Article 45-2 (4) and (5) of the Act means the lesser of the amount equivalent to 10/10,000 of the net total of equity capital of a financial holding company, etc. in a single transaction, or five billion won. In such cases, the detailed criteria for the calculation of a single transaction amount by type of credit extension shall be determined by the Financial Services Commission. <Amended on Feb. 29, 2008>

(4) "Transaction prescribed by Presidential Decree" in Article 45-2 (4) of the Act means a transaction to acquire corporate debentures issued by means of public offering or public sale under Article 9 (7) and (9) of the Financial Investment Services and Capital Markets Act. <Amended on May 26, 2005; Jul. 29, 2008>

(5) In accordance with Article 45-2 (6) of the Act, a banking holding company, etc. shall make public the size of credit extended to large stockholders as at the end of each quarter, an increase or decrease in the amount of credit extended, conditions of transaction of credit extension, and other matters determined by the Financial Services Commission within one month from the lapse of the end of each quarter. <Amended on Feb. 29, 2008>

(6) The provisions of Article 24 shall apply mutatis mutandis to the scope of subsidiaries, etc. criteria for credit extension, calculation method of equity capital and net total of equity capital under Article 45-2 (1) through (5) of the Act.

(7) Major investors prescribed in Article 45-2 (9) of the Act shall not include, among the specially related persons thereof, a non-profit corporation, association or organization which is a public service corporation, etc. prescribed in Article 16 (1) of the Inheritance Tax and Gift Tax Act (hereinafter referred to as "public service corporation, etc."). <Added on Jul. 8, 2013>

[This Article Added on Aug. 21, 2002]

[Title Amended on Jan. 18, 2010]

Article 24-3(Limit on acquisition of stocks issued by major investors) #

(1) "Percentage prescribed by Presidential Decree" in Article 45-3 (1) of the Act means 1/100.

(2) Stocks acquired by a bank holding company, etc. by means of entrustment for which the operation method of money which is trust property is designated by a trustor (including a person designated by a trustor; hereafter the same shall apply in this paragraph) shall not be deemed the acquisition of stocks under Article 45-3 (1) of the Act; provided, the same shall not apply where the trustor is a bank holding company, etc.

(3) "Period prescribed by Presidential Decree" in Article 45-3 (2) of the Act means one year; provided, the Financial Services Commission may, when deemed unavoidable in light of the volume of stocks held by a bank holding company, etc. in excess of the holding limit, securities exchange conditions, etc., extend such period, fixing another period. <Amended on Feb. 29, 2008>

(4) "Amount prescribed by Presidential Decree" in Article 45-3 (3) and (4) of the Act means the smaller amount between the amount equivalent to 10/10000 of the net total amount of equity capital of a bank holding company, etc. as a single transaction amount (in the case of Article 45-3 (3) of the Act, excluding the amounts acquired on the securities exchange under the Financial Investment Services and Capital Markets Act or other exchanges similar thereto in foreign countries), and five billion won. <Amended on May 26, 2005; Jul. 29, 2008>

(5) In accordance with Article 45-3 (5) of the Act, a bank holding company, etc. shall make public the volume of stocks acquired, as issued by large stockholders as of the end of each quarter, increase or decrease in the amount of stocks in possession in the current quarter, acquired price of stocks in possession, and other matters determined by the Financial Service Commission within one month from the lapse of each quarter. <Amended on Feb. 29, 2008>

(6) The equity capital of a bank holding company, etc. under Article 45-3 (1) of the Act and paragraph (4) of this Decree shall be calculated by subtracting, from the total amount of equity capital of the relevant bank holding company, etc., the amounts which fall under the following: <Amended on Jan. 18, 2010>

1. Stocks of a subsidiary, etc., which are held by the bank holding company, etc.;

2. Stocks held between subsidiaries, etc. and stocks of the bank holding company, etc., which are held by subsidiaries, etc.

(7) The method of calculating equity capital under Article 45-3 (1) and paragraph (4) of this Decree shall be as classified in the following: <Amended on Jan. 18, 2010; Sep. 29, 2021>

Article 24-4(Prohibition on major investors from exercising undue influence) #

"Conducts prescribed by Presidential Decree" in subparagraph 4 of Article 45-4 of the Act means any of the following conducts:

1. Demanding unfavorable contract conditions, such as interest rate or collateral, without justifiable grounds when extending credit to business competitors;

2. Causing a bank holding company to transfer assets without consideration to a public service corporation, etc. prescribed in Article 24-2 (7), or to trade or exchange assets with, or extend credit to a public service corporation, etc. on terms that are substantially unfavorable to the banking holding company in light of the general terms and conditions of transactions.

[This Article Wholly Amended on Jul. 8, 2013]

Article 24-5(Restrictions on transactions with major investors) #

(1) "Cases prescribed by Presidential Decree" in Article 45-5 (2) of the Act means cases where a major investor (limited to companies; hereafter the same shall apply in this Article) is deemed highly likely to make illegal transactions with the relevant bank holding company, etc., falling under any of the following circumstances: <Amended on May 26, 2005; Feb. 29, 2008; Oct. 1, 2009; Jan. 18, 2010; Aug. 27, 2013>

1. Where liabilities exceed assets;

2. Where a financial institution (excluding a financial institution, the relevant major investor of which is a large stockholder) which has extended the largest share of credit to the relevant major investor classifies the relevant major investor below the criteria set by the Financial Services Commission, as a result of the credit risk assessment of the relevant major investor according to Forward-Looking-Criteria (FLC) set by the Financial Services Commission;

3. Where at least two credit rating companies which have obtained authorization for operating credit rating business under Article 335-3 of the Financial Investment Services and Capital Markets Act have rated the large stockholder as non-investment grade.

(2) "Measures prescribed by Presidential Decree, such as ordering a bank holding company, etc. to restrict extension of credit to a major investor" in Article 45-5 (2) of the Act means the following measures: <Amended on Jan. 18, 2010>

1. Prohibition on offering new credit to the major investor;

2. Restriction on transactions under Article 24-2 (4);

3. Prohibition on new acquisition of stocks issued by the major investor.

[This Article Added on Aug. 21, 2002]

[Title Amended on Jan. 18, 2010]

Article 25 #

Deleted. <Jan. 18, 2010>

Article 26(Entrustment of business affairs between subsidiaries) #

(1) "Business affairs prescribed by Presidential Decree" in the proviso to Article 47 (1) of the Act means the following business affairs (limited to where the authority to make decisions on the relevant business affairs is entrusted); provided, the business affairs determined and publicly notified by the Financial Services Commission as unlikely to spread risk to other subsidiaries, etc., to cause conflict of interests with customers, or to undermine sound trade order shall be excluded herefrom: <Amended on May 18, 2021>

1. Duties of compliance officers (referring to the compliance officer pursuant to Article 25 (1) of the Act on Corporate Governance of Financial Companies; hereinafter the same shall apply);

2. Internal audit business affairs;

3. Risk management business affairs;

(2) "Standards prescribed by Presidential Decree, such as the appropriateness of internal control guidelines" in the main clause of Article 47 (2) of the Act means the following standards: <Amended on Jul. 28, 2016>

1. The internal control guidelines of a financial holding company under Article 24 (1) of the Act on Corporate Governance of Financial Companies shall be established;

2. The operating standards for entrustment of business affairs of a financial holding company which contain the following shall be established:

(a) Matters concerning risk management and rating due to the entrustment of business affairs;

(b) Matters concerning the procedures of determining and cancelling entrustment;

(c) Matters concerning the management and supervision of entrustees;

(d) Matters concerning the protection of customer information;

(e) Matters concerning measures for contingencies, such as the bankruptcy, etc. of an entrustee;

(f) Matters concerning securing a means to demand data in respect of entrusted business affairs;

(g) Other matters determined and publicly notified by the Financial Services Commission;

3. A contract for entrustment of business affairs containing the following matters shall be entered into between subsidiaries, etc. which entrust or is entrusted with, business affairs:

(a) The scope of business affairs entrusted;

Article 27(Restrictions on acts of subsidiaries) #

(1) "Cases prescribed by Presidential Decree" in the proviso to Article 48 (1) of the Act means any of the following cases: <Amended on May 26, 2005; Nov. 12, 2007; Oct. 23, 2015; Oct. 21, 2021>

1. Where the limit on credit is exceeded by the following grounds:

(a) Where a financial holding company is newly established;

(b) Where a company which is not a subsidiary, etc. is newly incorporated into a subsidiary, etc. of a financial holding company;

(c) Where the equity capital of a subsidiary, etc. has decreased;

(d) Where the limit of credit extension under Article 48 (1) 3 of the Act is exceeded by the grounds in subparagraphs 4, 6, and 7 of Article 22 (2);

2. Where the stocks of another subsidiary, etc. are held by the following grounds:

(a) Where the stocks of the relevant company were already held by a subsidiary, etc. as at the time when a company which is not a subsidiary, etc. is incorporated into a subsidiary, etc.;

(b) Where a company to be incorporated into a subsidiary, etc. already holds the stocks of the other company to be incorporated into a subsidiary, etc. as at the time when it became a financial holding company;

(c) Where a subsidiary, etc. holds the stocks of the other subsidiary, etc. through the execution of security right;

(d) Cases of investing in an institutional private equity fund.

(2) Where a subsidiary, etc. exceeds the limit on credit due to the grounds in paragraph (1) 1 and 2 (a) through (c), or has held the stocks of another subsidiary, etc., it shall collect the credit exceeding the limit or dispose of the stocks within two years from such date; provided, the Financial Services Commission may, in cases of unavoidable causes prescribed and publicly notified by the Financial Services Commission, extend such period. <Amended on Nov. 12, 2007; Feb. 29, 2008; Dec. 31, 2008>

(3) In accordance with Article 48 (1) 2 (b) of the Act, any subsidiary, etc. may not hold the stocks of a foreign corporation controlled by another subsidiary, etc. of a financial holding company to which the relevant subsidiary, etc. belongs in excess of the limit under the following classifications: <Added on Jan. 18, 2010>

1. The stock price of an individual foreign corporation controlled by another subsidiary, etc.: 10/100 of the equity capital of the relevant subsidiary, etc. (referring to equity capital under the subparagraphs of Article 24-3 (7); hereafter the same shall apply in this paragraph);

Article 27-2(Provision and management of customer information) #

(1) "Internal business management prescribed by Presidential Decree, such as credit risk management" in Article 48-2 (1) and (2) of the Act means any of the following business affairs, other than the introduction of products and services to customers or recommendation of their purchase thereof: <Added on Nov. 24, 2014>

1. Risk management, such as credit risk management, and internal control;

2. Inspection of business affairs and property status;

3. Analysis of customers and development of products and services;

4. Performance management;

5. Conduct of entrusted business affairs.

(2) "Matters prescribed by Presidential Decree" in Article 48-2 (1) 6 of the Act means any of the following matters: <Added on Nov. 24, 2014>

1. Approval of a customer information officer under Article 48-2 (6) of the Act in requesting and providing customer information;

2. Inspection of the provision and use of customer information.

(3) Where a financial holding company, etc. provides, pursuant to Article 48-2 (1) and (2) of the Act, customer information to a financial holding company, etc. to which the financial holding company, etc. belongs, the financial holding company, etc. shall allow customers to inquire the details referred to in the subparagraphs of paragraph (4) (hereafter referred to as "matters of inquiry" in this Article) on the website in accordance with the procedures determined and publicly notified by the Financial Services Commission. In such cases, the financial holding company, etc. shall comply with the following matters: <Added on Dec. 30, 2015>

1. Establishing a customer information inquiry system for a customer to conveniently check the matters of inquiry and posting the method, procedures, etc. for using the customer information inquiry system on the website, etc.;

2. Verifying whether a person requesting for inquiry is the subject of such customer information related to the matters of inquiry. In such cases, a financial holding company, etc. may select and utilize the methods ensuring the safety and credibility in verifying customer identities, taking into account the types, characteristics, risks, etc. associated with financial transaction and other commercial transactions;

3. Allowing a customer who has checked the matters of inquiry to designate any of the methods specified in the subparagraphs of paragraph (5).

Article 28(Management guidelines) #

The management guidelines to be formulated by the Financial Services Commission under Article 50 (2) of the Act shall include the following matters: <Amended on Feb. 29, 2008; Jan. 18, 2010; Feb. 11, 2014>

1. Matters concerning appropriateness of the capital of financial holding companies, etc.;

2. Matters concerning soundness of the capital of financial holding companies, etc.;

3. Matters concerning business management conditions, such as the business management execution system of a financial holding company, etc.;

4. Other matters deemed necessary for the security of sound management, such as whether a financial holding company, etc. observes statutes and regulations.

Article 29 #

Deleted. <Jan. 18, 2010>

Article 30(Business reports) #

"Other matters prescribed by Presidential Decree" in Article 54 (1) of the Act means the following matters: <Amended on Feb. 29, 2008>

1. Conditions of a financial holding companies in general, etc., such as the history, organization, etc. of the financial holding company, etc.;

2. Matters concerning the details of the business affairs conducted by subsidiaries, etc.;

3. Status of executive officers of financial holding companies, etc.;

4. Matters concerning the brief personal record of outside directors and compliance officers of financial holding companies, etc.;

5. Matters concerning the largest stockholder (including his or her specially related persons) and major stockholders of financial holding companies, etc.;

6. Matters concerning transactions made between financial holding companies, etc.;

7. Matters concerning stores and management of workforce of financial holding companies, etc.;

8. If a financial holding company, etc., or any executive officer or employee thereof has been subject to any measure taken by the Financial Services Commission or the Governor of the Financial Supervisory Service over the preceding five years, such fact;

9. Other matters concerning the operation or management of financial holding companies, etc., recognized and determined by the Financial Services Commission as necessary to be made known to the general public.

[Title Amended on Aug. 21, 2002]

Article 31(Publication of management) #

(1) A financial holding company shall publish the following matters under Article 56 of the Act: <Amended on May 26, 2005; Feb. 29, 2008>

1. Matters concerning the finances, and profits and losses of the financial holding company, etc.;

2. Matters concerning the procurement and management of funds of the financial holding company, etc.;

3. If the financial holding company has been subject to any measure taken in accordance with Article 57 of the Act, or Articles 10 and 14 of the Act on the Structural Improvement of the Financial Industry, such fact;

4. Other matters recognized as necessary for the protection of the rights and interests of depositors and investors and determined by the Financial Services Commission.

(2) The Financial Services Commission may determine detailed criteria for the matters for publication in subparagraphs 1 through 3 of paragraph (1). <Amended on Feb. 29, 2008>

Article 31-2(Scope of finance-related statutes and regulations) #

"Finance-related statutes and regulations prescribed by Presidential Decree" in the latter part of Article 57 (1) of the Act means the finance-related statutes and regulations. <Amended on Jul. 28, 2016>

[This Article Added on Jan. 18, 2010]

[Previous Article 31-2 moved to Article 31-3 <Jan. 18, 2010>]

Article 31-3(Sanctions for institutional private equity funds) #

(1) "Measures prescribed by Presidential Decree" in Article 57-3 (3) 5 of the Act means any of the following measures:

1. Demand or recommendation to improve methods of business affairs;

2. Other measures that can be taken by the Financial Services Commission under the Act, this Decree or other relevant statues or regulations.

(2) "Measures prescribed by Presidential Decree" in Article 57-3 (4) 1 (e) of the Act means any measure referred to in any of the subparagraphs of paragraph (1).

(3) "Measures prescribed by Presidential Decree" in Article 57-3 (4) 2 (e) of the Act means any of the following measures:

1. Caution;

2. Other measures that can be taken by the Financial Services Commission under the Act, this Decree or other relevant statues or regulations.

(4) "Measures prescribed by Presidential Decree" in Article 57-3 (4) 3 (f) of the Act means any of the following measures:

1. Warning;

2. Other measures that can be taken by the Financial Services Commission under the Act, this Decree or other relevant statues or regulations.

[This Article Added on Oct. 9, 2009]

[Title Amended on Oct. 21, 2021]

[Moved from Article 31-2 <Jan. 18, 2010>]

Article 32(Authorization for dissolutions and mergers) #

(1) A financial holding company shall, when it intends to obtain authorization for its dissolution under Article 60 (1) of the Act, submit an application stating the grounds for and time of dissolution to the Financial Services Commission, attaching the following documents thereto: <Amended on Feb. 29, 2008>

1. Minutes of the general meeting of stockholders which has passed a resolution on dissolution;

2. Register of stockholders and executive officers as at the time of dissolution;

3. Schedule for dissolution and liquidation procedures;

4. Financial statements of the recent business year;

5. Plan for disposal of assets and debts.

(2) When a financial holding company intends to obtain authorization for merger under Article 60 (1) of the Act, it shall submit an application stating the grounds for and time of merger to the Financial Services Commission, attaching the following documents thereto: <Amended on Feb. 29, 2008; Sep. 29, 2021>

1. Merger contract;

2. Articles of incorporation of a company which survives merger or is established by such merger;

3. Statement of financial position and list of assets of each company subject to merger.

(3) When the Financial Services Commission intends to grant authorization for dissolution or merger under Article 60 (1) of the Act, it shall examine whether the following requirements are satisfied: <Amended on May 26, 2005; Feb. 29, 2008; Jul. 28, 2016>

1. The dissolution or merger must not restrict competition in the relevant markets or undermine the sound order of the financial market;

2. The financial holding company which remains after or is established by such merger must satisfy the management guidelines set by the Financial Services Commission under Article 50 of the Act;

3. The dissolution or merger must not unreasonably put customers at a disadvantage;

4. The procedure and details of the dissolution or merger must not have any defect in light of the Commercial Act, Monopoly Regulation and Fair Trade Act, and finance-related statutes and regulations.

(4) The Financial Services Commission may determine detailed criteria for application documents for dissolution or merger and the examination of requirements as referred to in paragraphs (1) through (3). <Amended on Feb. 29, 2008>

Article 33(Matters to be reported) #

"Cases prescribed by Presidential Decree" in subparagraph 6 of Article 61 of the Act means the following cases: <Amended on Nov. 12, 2007; Aug. 16, 2017>

1. Cases of receiving a punishment under Articles 70 and 71 of the Act;

2. Cases of becoming a party to a lawsuit which will exert substantial influence on the business affairs of a financial holding company;

3. Cases where a petition for bankruptcy is filed with respect to a financial holding company under the Debtor Rehabilitation and Bankruptcy Act;

4. Cases where an application for the commencement of rehabilitation procedures is filed under the Debtor Rehabilitation and Bankruptcy Act, cases where a court declaration on authorization of rehabilitation plan is confirmed and cases where such rehabilitation plan has become invalid;

5. Cases of being subject to a disposition of delinquency of taxes and the case of receiving a punishment in violation of tax-related statutes and regulations;

6. Cases where the requirements to be a financial holding company are not satisfied;

7. Cases where stocks of another company are acquired under Article 2 (3) 6 or where such stocks are sold or related joint management procedures or rehabilitation procedures are suspended or completed.

Article 33-2(Calculation method of stock purchase prices) #

(1) "Amount calculated by a method prescribed by Presidential Decree" in Article 62-2 (3) 1 of the Act means an amount calculated in the manner prescribed in each subparagraph of Article 176-7 (3) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act. <Amended on May 26, 2005; Feb. 3, 2009; Aug. 27, 2013>

(2) Where a company under Article 62-2 (3) 2 of the Act fails to reach an agreement with a stockholder on the purchase price of stocks, it shall appoint an accounting firm under the Certified Public Accountant Act, which does not fall under any of the following, as an accounting expert to calculate the purchase price of the stocks: <Amended on May 26, 2005; Feb. 29, 2008; Oct. 30, 2018>

1. An accounting firm which is placed under suspension by the Financial Services Commission under the Certified Public Accountant Act and thus being under the suspension of operation;

2. An accounting firm under the restrictions on carrying out auditing business for specific companies, as imposed by the Securities and Futures Commission under the Act on External Audit of Stock Companies;

3. Specially related persons of the relevant company;

4. An accounting firm which has conducted an audit of the relevant company for the recent two years, and an accounting firm which conducts an audit of the relevant company for the current business year.

[This Article Added on Aug. 21, 2002]

Article 33-3(Entrustment of authority) #

(1) The Financial Services Commission shall entrust the Governor of the Financial Supervisory Service with its authority under the subparagraphs of Appendix 7, pursuant to Article 63 of the Act.

(2) The Governor of the Financial Supervisory Service shall report the handling details of business affairs entrusted under paragraph (1) to the Financial Services Commission every six months; provided, the Financial Services Commission may separately set the time of reporting for business affairs determined and publicly notified by the Financial Services Commission.

[This Article Wholly Amended on Jan. 18, 2010]

Article 33-4(Management of sensitive information and personally identifiable information) #

Where it is essential for conducting the following, the Financial Services Commission (including any person entrusted with the authority of the Financial Services Commission under Article 33-3) and the Governor of the Financial Supervisory Service shall manage data containing the information equivalent to criminal history records referred to in subparagraph 2 of Article 18 of the Enforcement Decree of the Personal Information Protection Act, and resident registration numbers, passport numbers, license numbers of drivers' licenses, alien registration numbers, or domestic residential report numbers referred to in subparagraph 1-2 (a) (ii), Article 2 of the Credit Information Use and Protection Act: <Amended on Feb. 11, 2014; Nov. 24, 2014; Oct. 23, 2015; Dec. 30, 2015; Aug. 4, 2020; Oct. 21, 2021; Dec. 20, 2022>

1. Business affairs concerning authorization under Article 3 of the Act;

2. Business affairs concerning approval under the proviso to Article 5-2 (2) of the Act;

3. Business affairs concerning reporting, etc. on any change of capital and any modification to its articles of incorporation under Article 6-2 of the Act;

4. Business affairs concerning approval under the proviso to Article 7 (2) of the Act;

5. Deleted; <Jul. 28, 2016>

6. Business affairs concerning restriction, etc. on ownership of stocks of bank holding companies under Article 8 of the Act;

7. Business affairs concerning approval, etc. under Articles 8-2 and 8-5 of the Act;

8. Business affairs concerning appraisal, etc. of a conversion plan under Article 8-3 of the Act;

9. Business affairs concerning reporting by an institutional private equity fund, etc. under Article 8-6 of the Act;

10. Business affairs concerning examination on whether a foreign bank, etc. meets the standards under Article 9 of the Act;

11. Business affairs concerning restriction, etc. on voting rights of stocks held in excess of limit under Article 10 of the Act;

12. Business affairs concerning examination on eligibility, etc. of stockholders who hold stocks in excess of holding limit, etc. under Article 10-2 of the Act;

13. Business affairs concerning approval of and reporting on the inclusion of company into subsidiary, etc. under Articles 16 and 18 of the Act;

Article 34(Criteria for imposition of penalty surcharges) #

(1) "Statement of financial position prescribed by Presidential Decree" in subparagraph 1 of Article 64 of the Act means the statement of financial position of a financial holding company as of the end of the recent business year. <Added on Jan. 18, 2010; Sep. 29, 2021>

(2) The standards for imposition of penalty surcharges under Article 64 of the Act shall be as specified in Appendix 7-2. <Amended on Aug. 16, 2017>

(3) Deleted. <Aug. 16, 2017>

(4) When the Financial Services Commission intends to impose a penalty surcharge under Article 65 of the Act, it shall give written notice of the payment, indicating therein the type of the relevant offence and the amount of the penalty surcharge. <Amended on Feb. 29, 2008; Jan. 18, 2010>

(5) Any person in receipt of notice under paragraph (4) shall pay the penalty surcharge to the collecting agency designated by the Financial Services Commission within 60 days from the date on which the notice is issued. <Amended on Feb. 29, 2008; Jan. 18, 2010>

(6) Necessary matters concerning the imposition of penalty surcharges other than those provided for in this Decree, shall be determined by the Financial Services Commission. <Amended on Feb. 29, 2008; Jan 18, 2010>

Article 35(Extensions of payment deadline for penalty surcharges and payment by installment) #

(1) Where the Financial Services Commission postpones the deadline for payment of penalty surcharge under Article 68 (1) of the Act pursuant to the proviso to Article 29 of the Framework Act on Administration, it may not exceed one year from the day following the payment deadline.

(2) Where installment payments are all permitted under Article 68 (1) of the Act, the interval between the time limits for each installment payment shall be within six months and the frequency of installment payments shall not exceed three times.

(3) Except as otherwise provided in paragraphs (1) and (2), the Financial Services Commission shall prescribe and publicly notify matters necessary for extension of payment deadlines of penalty surcharges, application forms, etc., for payments in installment.

[This Article Wholly Amended on Dec. 12, 2023]

Article 36(Additional charge) #

"Additional charge prescribed by Presidential Decree" in the former part of Article 69 (1) of the Act means an amount calculated by applying 6/100 to the amount of penalty surcharges in arrears on a yearly basis. <Amended on Aug. 16, 2017>

Article 37(Demand) #

(1) Demand under Article 69 (2) of the Act shall be issued in writing within 15 days from the lapse of the payment deadline.

(2) Where a demand notice is issued under paragraph (1), the payment deadline of penalty surcharges in arrears shall be within ten days from the date of issue of demand notice.

Article 38(Entrustment of affairs of disposition on delinquency) #

(1) Where the Financial Services Commission entrusts affairs concerning disposition on delinquency to the Commissioner of the National Tax Service under Article 69 (3) of the Act, it shall do so in writing, attaching the following documents thereto: <Amended on Feb. 29, 2008>

1. A written resolution made by the Financial Services Commission;

2. A written resolution made to collect revenues and notices;

3. A demand notice for payment.

(2) When entrusted with the affairs of disposition on delinquency under paragraph (1), the Commissioner of the National Tax Service shall notify the Financial Services Commission of any of the following matters in writing within 30 days from the occurrence of such cause: <Amended on Feb. 29, 2008>

1. In cases where the affairs concerning disposition on delinquency has been completed, the time of completion of such affairs and other necessary matters;

2. In cases of any request from the Financial Services Commission for a report on the status of progress, such status of progress.

Article 39(Standards for imposition of administrative fines) #

The standards for the imposition of administrative fines under Article 72 (1) and (2) of the Act shall be as provided in Appendix 8.

[This Article Added on Feb. 11, 2014]