ENFORCEMENT DECREE OF THE KOREA FINANCE CORPORATION ACT

Article 1(Purpose) #

The purpose of this Decree is to prescribe matters delegated by the Korea Finance Corporation Act, and those necessary for the enforcement thereof.

Article 2(Contribution Securities, etc) #

(1) With respect to its capital, the Korea Finance Corporation (hereinafter referred to as the "Corporation") shall issue contribution securities and grant them to the Government whenever the Government makes contributions pursuant to Article 4 of the Korea Finance Corporation Act (hereinafter referred to as the "Act") or the reserve is transferred to its capital pursuant to Article 30 (2) of the Act.

(2) The following matters shall be stated in the contribution securities and the President of the Corporation (hereinafter referred to as the "President") shall affix his/her signature and seal thereto:

1. Title of the Corporation;

2. The date on which the Corporation is established;

3. Capital;

4. Contributors;

5. Amount of contributions.

Article 3(Registration of Incorporation) #

(1) The registration of the Corporation'' incorporation referred to in Article 6 of the Act shall be filed at the place where its principal office is located within two weeks from the date on which the Corporation's articles of incorporation is authorized pursuant to Article 4 (2) of the Addenda of the Act.

(2) The following matters shall be stated in the registration of incorporation:

1. Objective;

2. Title of the Corporation;

3. Seat of its principal office;

4. Seats of its branch offices or local offices;

5. Capital;

6. Method of contribution;

7. Name, resident registration number and address of the President;

8. Names and addresses of directors and auditors;

9. Method of public notices.

(3) The following documents shall be attached to an application for the registration of incorporation:

1. Articles of incorporation;

2. A division plan under Article 2 (1) of the Addenda of the Act;

3. Documents attesting that authorization under Article 4 (2) of the Addenda of the Act has been obtained;

4. Documents attesting the President''s qualifications.

(4) The Corporation shall register the matters stipulated under paragraph (2) 1 through 3, 7 and 9 also at the seats of its branch or local offices within three days after filing the registration of its incorporation.

Article 4(Registration of Establishment of Branch Offices, etc.) #

Where the Corporation has established a branch office or local office, it shall file the registration thereof according to the following classifications. In such cases, an application for registration shall be accompanied by documents attesting that the branch office or local office has been established:

1. To register the seat and the establishment date of a branch office or local office at the seat of its principal office, within two weeks from the date on which the Corporation has established the branch office or local office;

2. To register the matters stipulated under Article 3 (2) 1 through 3, 7 and 9 at the seat of a newly established branch office or local office within three weeks from the date on which the Corporation has established the branch office or local office.

Article 5(Registration of Relocation) #

(1) Where the Corporation relocates its principal office to another place, it shall register its new seat and the date on which the principal office has been relocated at the former seat within two weeks, and matters stipulated under each subparagraph of Article 3 (2) shall be registered at the new seat.

(2) Where the Corporation relocates its branch office or local office to another place, it shall register the new seat and the date on which the branch office or local office has been relocated at the seat of the principal office and the former seat of the branch office or local office within two weeks, and matters stipulated under Article 3 (2) 1 through 3, 7 and 9 shall be registered at the new seat of the branch office or local office.

(3) An application for the registration of relocation under paragraphs (1) and (2) shall be accompanied by documents attesting that the principal office, a branch office or local office has been relocated.

Article 6(Registration of Alteration) #

Where any matters stipulated under the subparagraphs of Article 3 (2) are altered, such altered matters shall be registered at the seat of the principal office within two weeks, and where matters stipulated under Article 3 (2) 1 through 3, 7 and 9 are altered, such altered matters shall be registered also at the seat of the branch office or local office within three weeks. In such cases, an application for registration of alteration shall be accompanied by documents attesting that the already registered matters have been altered.

Article 7(Registration on Appointment of Agent) #

(1) Where an agent is appointed pursuant to Article 19 of the Act, the following matters shall be registered at the seat of the principal, branch office, or local office for which the agent is appointed within two weeks from the date the agent is appointed:

1. Name and address of the agent;

2. Where the authority of the agent is restricted, the details of such restrictions.

(2) Where matters falling under any subparagraph of paragraph (1) have been altered, such alteration shall be registered in the same manner as stipulated in the same paragraph (1).

(3) An application for registration referred to in paragraphs (1) and (2) shall be accompanied by the following documents:

1. Documents attesting that the agent has been appointed pursuant to Article 19 of the Act;

2. Where any restriction is applicable to the relevant agent under paragraph (1) 2, documents attesting such restriction.

Article 8(Reckoning Period of Registration) #

A period of registration for matters which need to be authorized by the Financial Services Commission, among those to be registered under Articles 3 through 7 shall be reckoned from the date on which the relevant letter of authorization is served.

Article 9(Mutatis Mutandis Application of the Non-Contentious Case Litigation Procedure Act) #

The Non-Contentious Case Litigation Procedure Act shall apply mutatis mutandis to the registration of the Corporation unless otherwise specifically provided for in this Decree. In such cases, the term "branch office" referred to in the said Act shall be construed as the "branch office or local office".

Article 10(Public Notice on Incorporation) #

Where the Corporation has completed the registration of incorporation under Article 3, it shall promptly provide a public notice thereon, as stipulated by its articles of incorporation.

Article 11(Business) #

(1) "Cases prescribed by Presidential Decree" in Article 21 (1) 3 of the Act means any of the following cases:

1. An enterprise showing signs of insolvency under subparagraph 5 of Article 2 of the Corporate Restructuring Promotion Act, or an enterprise showing signs of insolvency which is determined by an agreement, etc. between creditor banks stipulating joint management, etc. for corporate restructuring, and recognized as having potential for normalization of its management;

2. Where the supply of fund is deemed necessary to maintain the stabilization of financial markets as credit markets face a continued difficulties in supplying fund to enterprises;

3. Where urgent financial support is deemed necessary due to reasons such as a war, terrorism, etc.;

4. Other cases where the Finance Services Commission deems the supply of fund necessary for the stabilization of financial markets.

(2) "Areas specified by Presidential Decree" in Article 21 (1) 4 of the Act means any of the following projects or fields:

1. Projects for developing and fostering high-tech technologies and products, and new and renewable energy which greatly contribute to the advancement of industrial structures;

2. Projects for fostering new growth engine industries or promoting sustainable growth;

3. Other fields for which the Finance Services Commission deems it necessary to supply of fund to ensure the development of national economy.

(3) "Financial institutions specified by Presidential Decree" in Article 21 (3) 1 of the Act means any of the following: <Amended by Presidential Decree No. 22493, Nov. 15, 2010; Presidential Decree No. 23496, Jan. 6, 2012>

1. A bank established under the Banking Act;

2. The Korea Development Bank under the Korea Development Bank Act;

3. The Industrial Bank of Korea Industrial Bank of Korea Act;

4. A field of credit business of the Nonghyup Bank;

5. A field of credit business of the National Fisheries Cooperatives Federation under the Fisheries Cooperatives Act;

6. A specialized credit financial business company and a concurrent loan service provider under the Specialized Credit Financial Business Act;

7. Other financial institutions determined by the Finance Services Commission.

(4) "Financial institutions specified by Presidential Decree" in Article 21 (3) 2 of the Act means the financial institutions referred to in each subparagraph of paragraph (3) and the following:

1. A small and medium business start-up investment company under subparagraph 4 of Article 2 of the Support for Small and Medium Enterprise Establishment Act and a small and medium business start-up investment cooperative under subparagraph 5 of the same Article;

2. The Fund of Funds for Small and Medium Enterprise Investments under Article 4-2 of the Act on Special Measures for the Promotion of Venture Businesses and the Korea Venture Fund under Article 4-3 of the same Act;

3. A specialized investment association for components and materials under Article 6 of the Act on Special Measures for the Promotion of Specialized Enterprises, etc. for Components and Materials;

4. A corporate restructuring association registered under Article 15 of the Industrial Development Act (referring to the Act before it was wholly amended by Act No. 9584) and a private equity fund for improving corporate structure under Article 20 of the Industrial Development Act;

5. A venture business investment association under Article 41 (3) of the Specialized Credit Financial Business Act;

6. A privately placed fund under Article 9 (19) of the Financial Investment Services and Capital Markets Act;

7. Other persons who are engaged in finance-related affairs and determined by the Finance Services Commission.

Article 12(Methods of Issuing Policy Bank Bonds) #

Where the Corporation issues policy bank bonds pursuant to Article 23 (1) of the Act (hereafter referred to as "bonds" in this Chapter), it may issue them at a par, discount or premium value.

Article 13(Methods of Issuing Bonds) #

(1) Bonds shall be either issued by public offering or by a contract with a specific person on the transfer or underwriting of bonds.

(2) The issuance of bonds by public offering shall be made by inviting subscription or by competitive bidding or sale.

Article 14(Subscription for Bonds) #

(1) A person who intends to subscribe for bonds shall enter the number of bonds he/she intends to subscribe for and his/her address on two copies of an application for bonds, and sign and seal them.

(2) The application for bonds shall be prepared by the President stating the following matters:

1. Title of the Corporation;

2. Total amount of bonds to be issued;

3. A nominal value of a bond;

4. Interest rate on bonds;

5. Method of, and deadline for redemption of bonds;

6. Method and timing of paying interest;

7. Issuing price or the minimum price of a bond;

8. Capital and paid-in capital of the Corporation;

9. Statement that they are being issued under pursuant to Article 24 (2) of the Act, where issued thereunder;

10. Total amount of unredeemed bonds, if any.

(3) Notwithstanding paragraph (2) 4, where the interest rate of a bond is not specified, a subscriber shall enter the subscribed interest rate in the application for bonds.

(4) Notwithstanding paragraph (2) 7, where the issuing price of a bond is not specified or its minimum price is specified, a subscriber shall enter the subscripted price in the application for bonds.

Article 15(Total Underwriting of Bonds) #

Article 16(Total Amount of Bonds to be Issued) #

Where it is stated in the application for subscription that bonds are validly issued even though the total amount of the subscribed bonds are less than that of bonds to be issued as specified in the application of bonds, the total amount of subscription shall be the total amount of bonds to be issued.

Article 17(Paying Underwriting Value of Bonds) #

The President shall pay the full amount of each bond upon the completion of the subscription of bonds.

Article 18(Timing of Issuing Bonds) #

No certificate of bonds shall be issued until the total amount of the issued bonds is paid up: Provided, That this shall not apply where the bonds are issued pursuant to Article 19.

Article 19(Issuance of Bonds by Sale) #

(1) Where bonds are issued by means of sale, the period of sale shall be fixed in advance, and a public notice on such period and matters stipulated under Article 14 (2) 1 through 7 shall be provided.

(2) In cases under paragraph (1), an application for subscription need not be executed.

(3) Matters stipulated under Article 14 (2) 1, 3 through 6 and the numbers of bonds shall be entered in the bonds to be issued under paragraph (1).

Article 20(Bonds Ledger) #

(1) The Corporation shall keep the bonds ledger stating the following matters at its principal office:

1. Total number of bonds and the serial number of each bond;

2. The date on which a bond is issued;

3. Matters stipulated under Article 14 (2) 2 through 6.

(2) Where bonds are the registered ones, the following matters shall be entered in the bonds ledger, in addition to those referred to in paragraph (1):

1. Address and name of a bondholder;

2. Acquisition date of a bond.

(3) Any holder of bonds is entitled to request the inspection of the bonds ledger at any time during the business hours of the Corporation.

Article 21(Registered Bonds) #

(1) The transfer of a registered bond shall not oppose the Corporation and any third party unless the name and address of the transferee are entered in the bonds ledger, and the name of the transferee is entered on the bond certificate.

(2) A pledge in a registered bond shall not oppose the Corporation or any third parties unless the name and address of the pledgee are entered in the bonds ledger.

(3) When a pledge is created pursuant to paragraph (1), the Corporation shall enter a statement to that effect on the bond certificate.

Article 22(Retirement of Bonds) #

The Corporation may purchase and retire bonds to the extent that business provided for in Article 21 of the Act are not impeded.

Article 23(Loss of Coupons) #

(1) Where any coupon attached to an unregistered bond has been lost at the time of its redemption, an amount equivalent thereto shall be deducted from the sum to be repaid.

(2) The bearer of the coupon stated in paragraph (1) may claim the payment of the deducted amount in exchange for the coupon, at any time.

Article 24(Notices, etc. to Subscribers for Bonds) #

(1) Notices or peremptory notices to subscribers for bonds shall be sent to the address entered on the application for subscription: Provided, That where there exists another address separately notified to the Corporation, such notices or peremptory notices shall be sent to that address.

(2) Paragraph (1) shall apply to notices or peremptory notices sent to holders of a right of bonds before the bond certificate is issued.

(3) Notices or peremptory notices to holders of registered bonds shall be sent to the address entered in the bonds ledger. In such cases, the proviso to paragraph (1) shall apply mutatis mutandis.

(4) Notices or peremptory notices to holders of unregistered bonds may be replaced by public notices.

Article 25(Transfer of Reserve to Capital) #

(1) Where the Corporation intends to transfer the reserve to its capital pursuant to Article 30 (2) of the Act, it shall obtain approval from the Minister of Strategy and Finance, following resolution thereon by the Steering Committee under Article 9 (1) of the Act.

(2) Where the Minister of Strategy and Finance grants approval pursuant to paragraph (1), he/she consider its impacts on soundness in management of, and efficient business performance of the Corporation, and consult, in advance, with the Financial Services Commission about the propriety of transferring the reserve to capital.

Article 26(Supervision of Sound Management) #

(1) The Financial Services Commission shall supervise the Corporation to secure soundness in its management, as provided for in Articles 33 of the Act, this Chapter and the attached Table: Provided, That this shall not apply to business referred to in Article 21 (1) 3-2 of the Act.

(2) The Financial Services Commission may determine detailed matters necessary for supervision under paragraph (1).

Article 27(Disposal of Assets, etc. for Non-Business Use) #

Where the Corporation acquires any assets, the acquisition or retention of which is prohibited under the Act by exercising a security right, it shall dispose of them, as prescribed by the Financial Services Commission.

Article 28(Building Risk Control System) #

The Corporation shall prepare appropriate business conduct standards and procedures to control various risks which might occur in all process of its management, and shall build and operate a risk control system for the comprehensive management, etc. of its assets and debts.

Article 29(Those Subject to Supervision over Soundness) #

The supervision and inspection of the soundness of management by the Financial Services Commission shall be conducted only with respect to the matters which are not subject to the accounting inspection under Article 22 of the Board of Audit and Inspection Act and to the inspection of duties under Article 24 of the same Act.

Article 30(Guidance of Sound Management) #

(1) The Corporation shall classify the soundness of its holding assets on a regular basis, and accumulate and hold appropriate bad debt allowances: Provided, That where the holding assets are claims on the State, local governments, or public institutions under Article 4 of the Act on the Management of Public Institutions, bad debt allowances need not be accumulated or held.

(2) The Corporation shall observe the asset management standards determined by the Financial Services Commission, in consideration of the ratio of equity capital to assets weighted by risk pursuant to the standards of the Bank of International Settlements, and the ratio of current assets denominated in won currency to current liabilities denominated in won currency.

(3) Where the Financial Services Commission deems that the soundness of management of the Corporation might be severely impaired for its failure to meet the standards of sound management stipulated under this Chapter, the Financial Services Commission may request that the Corporation take necessary measures to correct it.

Article 31(Procedures, etc. for Authorization) #

The Financial Services Commission shall determine necessary procedures for the application of authorization, supervision, etc. stipulated in the Act.

Article 32(Inspection of Documents) #

Where the Financial Services Commission entrusts the Governor of the Financial Supervisory Service with affairs on inspections pursuant to Article 34 (2) of the Act, he/she shall do so in writing specifying the purpose, scope, etc. of inspections.

Article 33(Support Measures, for Stabilization of Financial Markets) #

(1) In accordance with Article 35 (1) of the Act, the Corporation shall take necessary measures such as entering into a special agreement, etc. so that financial support under Article 21 (1) 3 (hereafter referred to as "financial support" in this Article) can be provided in accordance with its intended purposes and the relevant plan.

(2) Matters under paragraph (1) shall include measures deemed necessary by the Corporation, including but not limited to an investigation and inspection on the management performance, asset condition, a plan for restructuring and the improvement of financial structure, other business trend and conditions of a person provided with the relevant financial support.

(3) Where a person provided with financial support fails to comply with measures referred to in paragraphs (1) and (2), or is negligent in performing such measures, the Corporation may request the person to redeem all or part of the provided financial support, or stop providing it.

(4) Where the purpose of the financial support has been attained, or is deemed unattainable, the Corporation shall take measures for efficiently recovering the subsidized fund, and take such measures against any person provided with financial support, as the sale of his/her assets, etc, request for dissolution or liquidation, application for bankruptcy, etc., if necessary.

(5) The Corporation shall prepare data on the current status, method, and needs for financial support in writing and preserve them for five years pursuant to Article 35 (2) of the Act, and present the relevant data to the Financial Services Commission, if so requested.

Article 34(Handling Sensitive Information and Personal Identification Information) #

Where it is inevitable to conduct the following business affairs, the Corporation or the Financial Services Commission (including a person who is entrusted with duties of the Financial Services Commission pursuant to Article 34 (2)) may handle the information equivalent to criminal history records under Article 18 (2) of the Enforcement Decree of the Personal Information Protection Act, and the information that contains a resident registration number, a passport number, driver's license numbers and an alien registration number:

1. Business affairs concerning registration under Article 6 of the Act;

2. Business affairs concerning the affairs and accounting investigation under Article 14 (4) of the Act;

3. Business affairs concerning providing funds under Article 21 of the Act;

4. Business concerning the management of surplus funds under Article 32 of the Act;

5. Business affairs concerning the supervision and subsequent follow-up work under Article 33 of the Act;

6. Business affairs concerning submission of reports and inspection of documents under Article 34 of the Act.

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