ENFORCEMENT DECREE OF THE SPECIAL ACT ON SUPPORT FOR FINANCIAL INNOVATION

Article 1(Purpose) #

The purpose of this Decree is to prescribe matters delegated by the Special Act on Support for Financial Innovation and matters necessary for enforcement of the said Act.

Article 2(Scope of Finance-Related Statutes or Regulations) #

“Statutes or regulations prescribed by Presidential Decree” in subparagraph 1 of Article 2 of the Special Act on Support for Financial Innovation (hereinafter referred to as the "Act") means any of the following. <Amended on Feb. 17, 2022; Aug. 23, 2022>

1. Any of the following statutes:

(a) The Act on the Establishment of Korea Asset Management Corporation;

(b) The Korea Technology Finance Corporation Act;

(c) The Act on the Credit Guarantee for Farmers and Fishers;

(d) The Trade Insurance Act;

(e) The Venture Investment Promotion Act;

(f) The Credit Guarantee Fund Act;

(g) The Depositor Protection Act;

(h) Deleted. <Mar. 23, 2022>

(i) The Korea Housing Finance Corporation Act;

2. Presidential Decree, Ordinance of the Prime Minister, or Ordinance of the Ministry which prescribes matters delegated by the Acts specified in attached Table of the Act or the Acts specified in the items of subparagraph 1 of the Act or matters necessary for the enforcement thereof;

3. Acts specified in the attached Table of the Act, Acts referred to in the items of subparagraph 1, matters delegated by statutes or regulations referred to in subparagraph 2, administrative rules prescribing matters necessary for the enforcement thereof, and all other regulations granting authority to administrative agencies.

Article 3(Scope of Financial Business) #

"Affairs prescribed by Presidential Decree" in subparagraph 2 of Article 2 of the Act means the following affairs:

1. Provision of services such as electronic computer systems and information processing, to companies engaged in financial and insurance business under subparagraph 2 of Article 2 of the Act (hereinafter referred to as "financial and insurance business");

2. Management of assets held by companies engaging in financial and insurance activities;

3. Investigation and research related to financial and insurance activities;

4. Other affairs prescribed and publicly notified by the Financial Services Commission as those directly related to the inherent business affairs of a company engaging in financial or insurance activities or necessary for the efficient performance of business affairs of a company engaging in financial or insurance activities.

Article 4(Scope of Financial Companies) #

Institutions prescribed by Presidential Decree, such as Corporations and funds established under individual Acts and engaged in financial business in subparagraph 3 (p) of Article 2 of the Act means any of the following institutions: <Amended on Feb. 17, 2022>

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

2. The Korea Technology Finance Corporation under the Korea Technology Finance Corporation Act.

3. The Credit Guarantee Fund for Farmers and Fishermen under the Act on the Credit Guarantee for Farmers and Fishers;

4. The Korea Credit Guarantee Fund established under the Credit Guarantee Fund Act;

5. The Korea Deposit Insurance Corporation under the Depositor Protection Act;

6. The Korea Securities Depository prescribed in Article 294 of the Financial Investment Services and Capital Markets Act and the Exchange that obtained permission under Article 373-2 of that Act;

7. The Korea Housing Finance Corporation under the Korea Housing Finance Corporation Act;

8. A non-profit corporation established with permission from the Financial Services Commission pursuant to Article 32 of the Civil Act, which is a person who performs finance-related affairs;

9. Association established under finance-related statutes or regulations;

10. Other institutions recognized by the Financial Services Commission after review by the Innovative Finance Review Committee established under Article 13 of the Act (hereinafter referred to as the "Innovative Finance Review Committee").

Article 5(Composition and Operation of Innovative Finance Review Committee) #

(1) "Persons prescribed by Presidential Decree" in, with the exception of its subparagraphs, Article 13 (3) of the Act means the Vice Chairperson of the Financial Services Commission under Article 4 (2) of the Act on the Establishment, etc. of Financial Services Commission.

(2) "Persons prescribed by Presidential Decree" in Article 13 (3) 6 of the Act means any of the following persons:

1. Persons appointed by the Governor of the Financial Supervisory Service under Article 29 (2) of the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Governor of the Financial Supervisory Service") from among the senior deputy governors of the Financial Supervisory Service under Article 29 (3) of that Act;

2. The head of an institution providing support for innovative financial services under Article 26 (1) of the Act.

(3) The term of office of a member falling under Article 13 (3) 2 through 5 of the Act (hereinafter referred to as "commissioned member") shall be two years and may be renewed only once.

(4) Even if the term of office of a commissioned member has expired, he or she may perform his or her duties until his or her successor is commissioned.

(5) A majority of the members of the Innovative Finance Review Committee shall constitute a quorum, and any decision thereof shall require the concurring vote of at least a majority of those present.

(6) Where a member falling under Article 13 (3) 1 of the Act is unable to attend a meeting of the Innovative Finance Review Committee due to unavoidable reasons, a public official belonging to the relevant agency may attend the meeting on his or her behalf. In such cases, a public official who attends the meeting on his or her behalf may speak or participate in voting at the meeting.

(7) Allowances, travel expenses, and other necessary expenses may be paid to members, relevant public officials, and relevant experts who attend a meeting of the Innovative Finance Review Committee within budgetary limits: provided, that this shall not apply where a public official attends a meeting of the Committee in direct connection with his or her duties.

(8) Except as provided in paragraphs (1) through (7), matters necessary for the composition and operation of the Innovative Finance Review Committee shall be prescribed and publicly notified by the Financial Services Commission.

Article 6(Exclusion, Challenge, Recusal, Abstention, and Dismissal of Members) #

(1) Where a member of the Innovative Finance Review Committee falls under any of the following cases, he or she shall be excluded from review or resolution of the relevant agenda:

1. If the committee member or his or her current or former spouse becomes a party to the relevant agenda (if the party is a corporation, organization or other similar entity, including its executive officers; hereafter the same shall apply in this subparagraph and subparagraph 2) or is a joint right holder or joint obligor with a party to the relevant agenda;

2. If the committee member is a current or former relative of any party involved in the relevant agenda item;

3. Where a member has worked for a corporation, organization, etc. to which a party to the relevant agenda belongs within the last three years

4. If the committee member of the corporation or organization to which the committee member belongs is the current or former representative or agent of any party involved in the relevant agenda item.

(2) Where there exists a ground not to expect fair review or resolution by a member, the party to the relevant agenda may apply for a challenge to such member to the Innovative Finance Review Committee, and the Innovative Finance Review Committee shall adopt a resolution to decide on whether to challenge or not. In such cases, the member subject to such application for a challenge shall not participate in the resolution.

(3) If a committee member is to be disqualified under any subparagraph of paragraph (1), he or she shall voluntarily refrain from participating in the proceedings of review and resolution on the relevant agenda.

(4) Where a commissioned member falls under any of the following cases, the Chairperson of the Financial Services Commission may dismiss such member:

1. Where he or she becomes incapable of performing his or her duties due to any mental or physical disability;

2. Where a member has committed a misdeed regarding his or her duties;

3. If a member is found incompetent for the office due to neglect of duty or indecent conduct or on any other ground;

4. If a member voluntarily discloses that he or she has difficulty in performing duties;

5. Where the member fails to recuse himself or herself despite falling under grounds for exclusion in the subparagraphs of paragraph (1).

Article 7(Support for Innovative Financial Services) #

(1) A person who intends to receive contributions or subsidies under Article 26 (1) of the Act shall prepare an application and submit it to the Financial Services Commission, along with a business plan and a budget execution plan, as prescribed and publicly notified by the Financial Services Commission.

(2) Upon receipt of an application under paragraph (1), the Financial Services Commission may grant contributions or subsidies to the applicant if the applicant meets all of the following criteria:

1. The applicant shall be an institution highly related to the development and advancement of innovative financial services, which is a non-profit corporation established with permission from the Financial Services Commission pursuant to Article 32 of the Civil Act, or a person who performs similar role, who is deemed necessary by the Financial Services Commission;

2. The business plan and budget execution plan shall be appropriate.

(3) No supporting agency for innovative financial services under Article 26 of the Act that have received contributions or subsidies pursuant to paragraph (2) (hereinafter referred to as a "supporting agency for innovative financial services") shall not use such contributions or subsidies for any purpose other than the originally intended purposes.

(4) Where an institution supporting innovative financial services has used contributions or subsidies for any purpose other than the intended purpose without good cause, the Financial Services Commission may recover all or part of the contributions or subsidies.

(5) The Financial Services Commission may request a supporting agency for innovative financial services to report affairs, accounting, property, etc. concerning contributions or subsidies or to submit necessary data to guide and supervise the operation of contributions or subsidies.

Article 8(Compensation for Damages in Cases of Inability to Purchase Liability Insurance) #

(1) Where an innovative financial service provider is unable to purchase liability insurance pursuant to the proviso to Article 27 (2) of the Act, he or she shall submit the following data to the Financial Services Commission and prepare a compensation plan in consultation with the Financial Services Commission before he or she provides innovative financial services:

1. A statement on reasons for inability to purchase liability insurance;

2. A plan for compensation for damage to users including the methods, standards, and procedures for compensation for damage in the event of damage to users.

(2) Where an innovative financial service provider calculates the amount of compensation for damage in a plan for compensation for damage to users under paragraph (1) 2, he or she shall take into consideration the degree of damage, the period during which services are provided, the nature of services, etc.

(3) In any of the following cases, an innovative financial service provider shall inform the relevant user of whether he or she has purchased a liability insurance policy or the details of a plan for compensation for damage under paragraph (1) 2; and in cases falling under subparagraph 2, he or she shall without delay report to the Financial Services Commission the fact that he or she has received an application for compensation for damage:

1. Where he or she enters into a contract with a user for the provision of innovative financial services;

2. Where an application for compensation for damage is filed by a user who has suffered damage due to the provision or suspension of innovative financial services, etc.

Article 9(Procedures for Applying for Settlement and Mediation of Disputes) #

(1) An innovative financial service provider shall designate a person in charge of the settlement of disputes and its or his or her subordinate for the purpose of settling disputes, such as compensation for damage, under Article 28 (1) of the Act, and notify any user or other interested parties (hereafter referred to as “users, etc.”) of their contact details (referring to telephone number, facsimile telegraphy number, electronic mailing address, etc.) through the Internet, etc.

(2) Users, etc. may file an application for settlement of a dispute, such as compensation for damage, etc. under Article 28 (1) of the Act, with the head office or business office of an innovative financial service provider in writing or through the Internet, etc.

(3) Upon receipt of an application for dispute settlement under paragraph (2), an innovative financial service provider shall notify users, etc. of the results of investigation into disputes or settlement thereof within 30 days.

(4) Articles 33 through 43 of the Financial Consumer Protection Act shall apply to applications, etc. for dispute mediation under Article 28 (2) of the Act. <Amended on Mar. 23, 2021>

Article 10(Entrustment of Authority) #

(1) The Financial Services Commission shall entrust to the Governor of the Financial Supervisory Service the authorities and affairs referred to in Appendix 1 in accordance with Article 31 of the Act.

(2) The Governor of the Financial Supervisory Service shall report the details on processing affairs entrusted under paragraph (1) to the Financial Services Commission every six months; provided, the cycle of reporting may be separately determined in cases prescribed and publicly notified by the Financial Services Commission.

Article 11(Handling Sensitive Information and Personally Identifiable Information) #

(1) If unavoidable to conduct the following affairs, the Financial Services Commission, a relevant administrative agency under Article 4 (1) of the Act, the innovative financial review committee, an administrative agency under Article 24 (3) of the Act, a designated supervisory agency or the Governor of the Financial Supervisory Service under Article 29 (1) of the Act (or any person who is entrusted with the affairs of the Financial Services Commission pursuant to Article 38-7 (3) of the Act or Article 26 of this Decree) may, in extenuating circumstances, manage information that corresponds to any criminal history record prescribed in subparagraph 2 of Article 18 of the Enforcement Decree of the Personal Information Protection Act, and materials in which any resident registration number, passport number, or alien registration number is stated pursuant to subparagraph 1 or 4 of Article 19 of that Decree; provided, information constituting a criminal history record under subparagraph 2 of Article 18 of the Enforcement Decree of the Personal Information Protection Act shall be excluded in cases of business affairs provided in subparagraphs 4 and 13: <Amended on Dec. 20, 2022>

1. Designation of innovative financial services under Article 4 of the Act;

2. Submission of an application for designation of innovative financial services under Article 5 of the Act;

3. Revocation of designation of innovative financial services pursuant to Article 7 of the Act;

4. Withdrawal, etc. of designation of innovative financial services pursuant to Article 8 of the Act;

5. Extension of designation period pursuant to Article 10 of the Act;

6. Order for suspension or decision of modification of innovative financial service pursuant to Article 11 of the Act;

7. Review of an application for designation of innovative financial services pursuant to Article 13 of the Act;

8. Business affairs concerning hearing of opinions, etc. referred to in Article 15 of the Act;

9. Submission, reporting, etc. of initial reports, intermediate reports, and final reports under Article 18 of the Act;

10. Application by innovative financial service provider for authorization or permission, etc. pursuant to Article 21 of the Act;

11. Merger, etc. by innovative financial service providers pursuant to Article 22 of the Act;

Article 12(Standard for Imposing Administrative Fines) #

The criteria for imposition of administrative fines under Article 35 (1) and (2) of the Act shall be as specified in attached Table 2.