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Enforcement Decree Of The Specialized Credit Financial Business Act


Published: 2012-01-06

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 Article 1 (Purpose)   print
The purpose of this Decree is to provide for matters delegated by the Specialized Credit Finance Business Act and matters necessary for the enforcement thereof.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 1-2 (Scope of Prohibition of Settlement, etc.)   print
(1) "Financial instrument prescribed by Presidential Decree, including financial investment instrument, etc. under Article 3 (1) of the Financial Investment Services and Capital Markets Act" in subparagraph 3 (a) of Article 2 of the Specialized Credit Finance Business Act (hereinafter referred to as the "Act") means a financial instrument falling under one of the following subparagraphs:
1. Financial investment instruments prescribed in Article 3 (1) of the Financial Investment Services and Capital Markets Act;
2. Deposits, installment savings, or installment contributions.
3. Financial instruments prescribed in ordinance of the Prime Minister which are applicable Mutatis Mutandis to subparagraph 1 or 2.
(2) "The payment of costs and money for using matters prescribed by Presidential Decree" in Article 2 (3) (d) means any of following subparagraphs:
1. The payment of costs and money for taking advantage of the casino as prescribed in the Tourism Promotion Act: Provided, That the payment by a foreigner (including an emigrant to overseas under in Article 2 of the Emigration Act) shall be excluded if he/she makes payment at a casino licensed under the Tourism Promotion Act by a credit card issued by a person carrying on a business equivalent to the credit card business in a foreign country;
2. The payment of costs and money for taking advantage of the bicycle and motorboat racing prescribed in subparagraph 1 or 2 of Article 2 of the Bicycle and Motorboat Racing Act;
3. The payment of costs and money for taking advantage of the speculative acts prescribed in Article 2 (1) 1 of the Act on Special Cases concerning Regulation and Punishment of Speculative Acts, etc.;
4. The payment of costs and money for taking advantage of the traditional bullfighting match prescribed in subparagraph 2 of Article 2 of the Traditional Bullfighting Match Act;
5. The payment of costs and money for using horse racing prescribed in subparagraph 1 of article 2 of the Korean Racing Association Act;
6. The payment of money made in sequence of a purchase of a merchandise coupon issued by a person who does not have a contract with a credit card company for transactions of merchandise coupons by means of a credit card; the contract hereof means the contract whereby a issuer of the merchandise coupons (including a person who has concluded a contract with the issuer for a consignment sale of the merchandise coupons. The same shall apply hereinafter) provides the credit card holders with the merchandise coupons issued by the issuer according to the transactions by means of a credit card (The same shall apply to subparagraph 7 hereunder);
7. The payment of money made by a personal credit card holder in sequence of a purchase exceeding the monthly use limit of one million won (in total of purchases by a prepaid card and merchandise coupon; the merchandise coupon shall be limited to that issued by an issuer who has a contract with a credit card company for transaction of a merchandise coupon).
(3) "Matters prescribed by Presidential Decree" in subparagraph 5-2 of Article 2 means any act falling under the following subparagraphs:
1. In case where a transaction by means of a credit card is made; act confirming whether the credit card is used by the credit card holder himself/herself in a valid way;
2. In case where a transaction by means of a credit card is made; act using an electronic device to transmit to a credit card company electronic information on financial transaction by means of a credit card presented by the card holder as prescribed in subparagraph 8 of Article 2 of the Electronic Financial Transactions Act.
[This Article Newly Inserted by Presidential Decree No. 22196, Jun. 11, 2010]
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 Article 2 (Scope, etc. of Facilities Leasing)   print
(1) "Goods prescribed by Presidential Decree" in subparagraph 10 of Article 2 of the Act means the goods set out in the following subparagraphs: <Amended by Presidential Decree No. 21674, Aug. 5, 2009; Presidential Decree No. 22196, Jun 11, 2010>
1. Facilities, installations, machinery and apparatus;
2. Construction machinery, vehicles, ships and aircraft;
3. Real property and property rights directly related to the goods referred to in subparagraphs 1 and 2;
4. Real estate for business use [limited to cases where the real estate for business use is used by the small and medium manufacturer that has acquired such real estate (including small and medium manufacturers that has acquired a contract for facilities leasing in accordance with the acquisition or transfer of the business during the period for facilities leasing)] acquired from a small and medium manufacturer [referring to small and medium enterprises under Article 2 of the Framework Act on Small and Medium Enterprises, which are manufacturers under Korean Standard Industrial Classification publicly notified by the Commissioner of the Korea National Statistical Office pursuant to Article 22 of the Statistics Act];
5. Other goods prescribed by Ordinance of the Prime Minister to provide banking convenience to general people.
(2) and (3) Deleted. <by Presidential Decree No. 16261, Apr. 24, 1999>
(4) "Certain period prescribed by Presidential Decree" in subparagraph 10 of Article 2 of the Act means the period equivalent to 20/100 of the durable years under Articles 28, 29, and 29-2 of the Enforcement Decree of the Corporate Tax Act. <Amended by Presidential Decree No. 21674, Aug. 5, 2009>
(5) "Period prescribed by Presidential Decree" in subparagraph 11 of Article 2 of the Act means one year. <Amended by Presidential Decree No. 21674, Aug. 5, 2009>
(6) Where the contract for facilities leasing, etc. under Article 29 of the Act (hereinafter referred to as "facilities leasing, etc.") is terminated and a new contract for facilities leasing, etc. is concluded, the period which has elapsed before the termination of the previous contract shall be deducted in applying the periods under paragraphs (4) and (5). <Amended by Presidential Decree No. 21674, Aug. 5, 2009>
(7) The Financial Services Commission may, when a small and medium manufacturer uses real estate for business use pursuant to paragraph (1) 4, establish and publicly announce standards for usage, such as size of area, etc. <Newly Inserted by Presidential Decree No. 21674, Aug. 5, 2009>
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 Article 2-2 (Scope, etc. of Specially Interested Parties)   print
(1) "Person in special relationship prescribed by Presidential Decree" in subparagraph 17 (1) of Article 2 of the Act means persons falling under any of the following subparagraphs (hereinafter referred to as "specially interested parties"):
1. Where the principal is an individual, a person falling under any of the following items:
(a) A spouse (including persons in a de facto marriage; hereinafter the same shall apply);
(b) Any paternal relative within the sixth degree of relationship and the wife of a paternal relative within the fourth degree of relationship;
(c) The husband of a paternal relative within the third degree of relationship and the children thereof;
(d) Any maternal relative within the third degree of relationship and the spouse and children therof;
(e) Any paternal relative of the spouse within the second degree of relationship and the spouse thereof;
(f) Any lineal ascendant of the natural family of an adopted person;
(g) Any person who is adopted to another family and the spouse thereof, and a lineal descendant of both families;
(h) The birth mother of a person born out of wedlock;
(i) Any person who maintains his/her livelihood with the principal''s money or other property and a person who makes a living together with the principal;
(j) Where the principal, alone or jointly with a person in any relationship under items (a) through (i), invests more than 30/100, or exercises a de facto control over the matters material to the operation of a corporation or group, such as appointment or dismissal of executives, etc., the corporation or group and the executives thereof;
(k) Where the principal, alone or jointly with a person in any relationship under items (a) through (j), invests more than 30/100, or exercises a de facto control over the matters material to the operation of a corporation or group, such as appointment or dismissal of executives, etc., the relevant corporation or group and the executives thereof;
2. Where the principal is a corporation or group, a person falling under any of the following items:
(a) Any executive;
(b) Any affiliated company and the executive thereof;
(c) Any individual who, alone or jointly with the person in any relationship under each item of subparagraph 1, invests more than 30/100 in the principal or exercises a de facto control over the matters material to the operation of the principal, such as appointment or dismissal of executives, etc., and the person or group (excluding affiliates; hereafter the same shall apply in this subparagraph) in any relationship under each item of subparagraph with such individual and the executives thereof;
(d) Where the principal, alone or jointly with a person in any relationship under items (a) through (c), invests more than 30/100 or exercises a de facto control over the matters material to the operation of a group, such as appointment or dismissal of executives, etc., the relevant group and the executives thereof.
(2) "Person prescribed by Presidential Decree" in subparagraph 17 (b) of Article 2 of the Act means a person falling under any of the following subparagraphs:
1. A stockholder who, alone or in accordance with the consent, contract, etc. with other stockholders, has appointed the representative director or a majority of directors;
2. A stockholder determined by the Financial Services Commission as exercising dominant influence on major decision-making or execution of operation, such as managerial strategies, changes in organization, etc.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 2-3 (Scope of Credit Extension)   print
(1) "Transactions which are prescribed by Presidential Decree" in subparagraph 18 of Article 2 of the Act means each of the following subparagraphs: <Amended by Presidential Decree No. 22196, Jun. 11, 2010>
1. The amount of credit incurred from purchase, etc. of goods (including services provided) with a corporate purchase card under Article 7-2 (3) 5 of the Restriction of Special Taxation Act;
2. The amount of financing of funds to credit card holders;
3. The expenses incurred from the acquisition of specific goods that a person carrying on facilities leasing business transfers to a leasee in accordance with a contract for facilities leasing and all the expenses incurred from the facilities leasing to the leasee;
4. The amount of sales of deferred payment;
5. The amount from installment financing (including all the expenses incurred from the purchase of goods by a customer of installment financing services in accordance with a contract for purchase or sale of goods);
6. The amount of investment in and loans to a venture business operator;
7. Loans;
8. Discount amount of bills;
9. The amount of trade credits purchased under Article 46 (1) 2 of the Act;
10. The amount of bonds or securities purchased under subparagraph 1 of Article 16;
11. The amount of payment guarantee;
12. The call loan (which refers to the capital transfer of less than 30 days pursuant to a short-term capital transaction between financial companies).
(2) The Financial Services Commission may not, notwithstanding paragraph (1), include any transaction falling under any of the following subparagraphs in the scope of credit extension:
1. Transactions determined as unlikely to incur any damages to financial institutions;
2. Transactions determined as appropriate to be excluded from the scope of the credit extension, in light of the situation of the relevant transactions, such as the effect on the financial market, etc.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 2-4 (Scope of Equity Capital)   print
"Amount prescribed by Presidential Decree" in subparagraph 19 of Article 2 of the Act means the amount of money with addition or deduction of an amount of money caused by errors in the settlement of accounts to or from the total amount of paid-in capital, capital surplus and profit surplus, etc.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
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 Article 3 (Concurrent Loan Service Provider)   print
(1) "Person prescribed by Presidential Decree" in Article 3 (3) 1 of the Act means a person falling under any of the following subparagraphs: <Amended by Presidential Decree No. 22493, Nov. 15, 2010; Presidential Decree No. 23496, Jan. 6, 2012>>
1. A bank authorized under the Banking Act;
1-2. The Nonghyup Bank established under the Agricultural Cooperatives Act;
2. The Korea Development Bank established under the Korea Development Bank Act;
3. The Industrial Bank of Korea established under the Industrial Bank of Korea Act;
4. The Export-Import Bank of Korea established under the Export-Import Bank of Korea Act;
5. A merchant bank established under the Financial Investment Services and Capital Markets Act;
6. The Korea Federation of Savings Bank established under the Mutual Savings Banks Act;
7. The National Federation of Credit Unions established under the Credit Unions Act;
8. The Federation of Community Credit Cooperatives established under the Community Credit Cooperatives Act.
(2) "Person prescribed by Presidential Decree" in Article 3 (3) 2 of the Act means a person falling under any of the following subparagraphs:
1. A person operating a large scale store under subparagraph 3 of Article 2 of the Distribution Industry Development Act;
2. A person carrying on a business of continuously guiding the management of and supplying the goods to the multiple wholesale and retail stores in the same line of business under a contract.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 3-2 (Attached Documents for License and Registration)   print
(1) A person who intends to obtain a license for credit card business pursuant to Article 4 of the Act shall file an application (including applications in electronic format) with the Financial Services Commission, accompanying documents falling under each of the following subparagraphs. In such cases, a public official in charge shall confirm a certified copy of corporate registration through the joint use of administrative information under Article 36 (1) or (2) of the Electronic Government Act: <Amended by Presidential Decree No. 22151, May 4, 2010>
1. Articles of incorporation;
2. Documents proving the payment of capital;
3. Business plans (including estimated financial statements and statement on estimated revenue and expenditure) for three years from the commencement of business;
4. Financial statements and accompanying documents;
5. If the largest stockholder under Article 4 is a corporation, the financial statements thereof and accompanying documents;
6. If an applicant is a specialized credit financial business company or concurrent loan service provider, documents indicating the current status of business, including credit performance, the number of customers, etc.;
7. Resume and certificate of career of an executive.
(2) A person who intends to register facilities leasing business, installment financing business, or venture capital business pursuant to Article 4 of the Act shall file an application with the Financial Services Commission, accompanying the documents under paragraph (1) 1, 2, 4, 6, and 7. In such cases, a public official in charge shall confirm a certified copy of corporate registration through the joint use of administrative information under Article 36 (1) or (2) of the Electronic Government Act. <Amended by Presidential Decree No. 22151, May 4, 2010>
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 4 (Scope of Investors)   print
(1) "Investor prescribed by Presidential Decree" in Article 6 (1) 1 of the Act means a major stockholder (including a stockholder in a special relationship with the largest stockholder).
(2) "Investor prescribed by Presidential Decree" in Article 6 (1) 2 of the Act means a major stockholder (including a stockholder in a special relationship with the largest stockholder).
[This Article Wholly Amended by Presidential Decree No. 20549, Jan. 18, 2008]
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 Article 5 (Persons in Default)   print
"Person prescribed by Presidential Decree" in Article 6 (1) 3 of the Act means a person who has incurred loan charge-off to institutions under Article 2 (3) 1, 3, and 4 and Article 5 (1) 1 through 18 of the Enforcement Decree of the Use and Protection of Credit Information Act, whose credit information is intensively controlled and utilized in a comprehensive credit information collection agency under Article 25 (2) 1 of the Use and Protection of Credit Information Act, and for which three years have not elapsed from the date of such intensive control and utilization. <Amended by Presidential Decree No. 21765, Oct. 1, 2009>
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6 (Finance-Related Acts and Subordinate Statutes )   print
"Finance-related Acts and subordinate statutes as determined by Presidential Decree" in Article 6 (1) 4 of the Act means the Acts and subordinate statutes under the following subparagraphs (hereinafter referred to as "finance-related Acts and subordinate statutes"): <Amended Presidential Decree No. 21775, Oct. 9, 2009; Presidential Decree No. 22493, Nov. 15, 2010>
1. The Banking Act;
2. The Acts and subordinate statutes under Article 13 (1) 1 through 46 of the Enforcement Decree of the Banking Act;
3. and 4. Deleted. <by Presidential Decree No. 21775, Oct. 9, 2009>
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6-2 (Standards for Financial Soundness Necessary for License of Credit Card Business)   print
(1) The standards for financial soundness under Article 6 (1) 5 of the Act shall follow the classifications under each subparagraph:
1. If an applicant for license is an institution subject to inspection by the Financial Supervisory Service pursuant to Article 38 of the Act on the Establishment, etc of Financial Services Commission: The applicant shall comply with standards for financial soundness prescribed by the Financial Services Commission, taking into account the standards for sound management prescribed by the Acts and subordinate statutes concerning the establishment and operation of the relevant institution;
2. If an applicant is a person other than those under subparagraph 1: The ratio of total liabilities to equity capital of the relevant company [if a major stockholder is a company belonging to an enterprise group under subparagraph 2 of Article 2 of the Monopoly Regulation and Fair Trade Act (excluding enterprise groups falling under Article 17 (1) 1 and 2 of the Enforcement Decree of the same Act; hereinafter referred to as "enterprise group"), including enterprise groups which exclude the companies carrying on financial business or insurance business] shall be less than the ratio prescribed by the Financial Services Commission within the scope of 200/100.
(2) "Corporation, which is prescribed by Presidential Decree" in Article 6 (1) 6 of the Act means a corporation (including a stockholder who is a specially interested party of the largest stockholder) that is a major stockholder falling under Article 6 (1) 1 through 5 of the Act.
(3) The Financial Services Commission may prescribe the details on the standards under paragraph (1).
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6-3 (Detailed Requirements for License of Credit Card Business)   print
(1) A person who intends to obtain a license of credit card business under Article 6 (2) 2 of the Act shall meet the detailed requirements for experts and physical facilities under each subparagraph:
1. The person shall have necessary experts with specialty in credit card business and personnel for computerization;
2. The person shall install electronic computer system necessary for carrying on credit card business and secure stores, etc.
(2) The business plan under Article 6 (2) 3 of the Act shall comply with the requirements under each of the following subparagraphs:
1. A plan for securing credit card holders and credit card merchants necessary for the smooth operation of credit card business shall be appropriate and realizable;
2. A plan for financing funds for prompt settlement of charges related to the use of credit cards shall be appropriate and realizable;
3. The prospect of revenue and expenditure shall be appropriate and realizable;
4. It shall be unlikely to undermine sound financial order.
(3) "Person prescribed by Presidential Decree" in Article 6 (2) 4 of the Act shall be as follows:
1. The largest stockholder (if a person who has de facto control over the matters material to the corporation that is the largest stockholder is obviously different from the largest stockholder of the corporation, including the person who has de facto control) of the corporation that is the largest stockholder;
2. The representative of the corporation that is the largest stockholder.
(4) The major stockholder under Article 6 (2) 4 of the Act shall meet the requirements under the attached Table 1.
(5) "Requirements prescribed by Presidential Decree" in Article 6 (3) of the Act shall be as provided for in the attached Table 1-2.
(6) "The cases prescribed by Presidential Decree" in proviso to Article 6-2 means the cases where all the requirements of the following subparagraphs shall be met: <Newly Inserted by Presidential Decree No. 22196, Jun. 11, 2010>
1. There shall not be an interference in protection of private information;
2. There shall not be worries about the interference of profit of a credit card holder or a credit card merchant due to delay of credit card services;
3. There shall not be interference on observing the criteria for internal control as prescribed in Article 50-6 of the Act.
(7) The Financial Services Commission may prescribe the details of the requirements under paragraphs (1) through (6). <Amended by Presidential Decree No. 22196, Jun. 11, 2010>
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6-4 (Application for Cancellation of Registration)   print
Any person who intends to apply for cancellation of registration pursuant to Article 10 (1) of the Act shall file, with the Financial Services Commission, an application for cancellation of registration stating the matters under each subparagraph:
1. Name of the company
2. Details of the specialized credit financial business for which cancellation of registration is applied;
3. Grounds for cancellation of registration.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6-5 (Standards, etc. of Operation of Incidental Business)   print
(1) No concurrent loan service provider who is registered for credit card business pursuant to the proviso to Article 3 (1) of the Act shall carry on incidental business under Article 13 (1) of the Act.
(2) Any credit card company shall not, as at the end of each quarter, have the aggregate of the amounts under each subparagraph exceed the average balance of the credit, during each quarter, incurred by the lending of funds to credit card holders under Article 13 (1) 1 of the Act (excluding credit incurred by re-lending of funds by the credit card company to the credit card holder after modifying terms and conditions of the lending in order to readjust the lending to such credit card holder):
1. The average balance of the credit, during the quarter, accruing from purchasing goods or receiving services by the credit card holder using a credit card (excluding the credit accruing from the purchase of goods or receipt of services by a person in a special relationship under Article 50 (1) of the Act with the credit card company using the exclusive-use card for business purchase under Article 7-2 (3) 5 of the Restriction of Special Taxation Act);
2. The amount of payment of debit cards of debit card holders during the quarter.
(3) Any credit card company under Article 13 (2) of the Act may have a third party perform business under each subparagraph on behalf of the company:
1. Issuance of debit cards and pre-paid cards;
2. Sales of pre-paid cards (including refund);
3. Settlement of payment of debit cards and pre-paid cards (including approval of transactions).
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6-6 (Renewal or Reissuance of Credit Cards and Debit Cards)   print
Any credit card company may renew or reissue a credit card or debit card pursuant to the proviso to Article 14 (1) of the Act in cases falling under any of the following subparagraphs:
1. Credit cards or debit cards which have not been used within six months before the scheduled renewal or re-issuance: Where the credit card company obtain a consent, in writing, (including the consent through electronic documents under subparagraph 1 of Article 2 of the Digital Signature Act with the certified digital signature under subparagraph 3 of Article 2 of the same Act) from the relevant credit card holders or debit card holders with respect to the renewal or re-issuance;
2. Credit cards or debit cards which have been used within six months before the scheduled renewal or re-issuance: Where the credit card company notifies the relevant credit card holders or debit card holders of the scheduled renewal or re-issuance before one month from the date of the scheduled renewal or re-issuance and such holders do not raise any objection within 20 days from the notification.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6-7 (Issuance of Credit Cards and Method of Recruiting Credit Card Holders)   print
(1) "Matters prescribed by Presidential Decree" in Article 14 (2) 2 (e) of the Act means the following matters:
1. Whether an applicant of credit card has a debt which he/she has failed to pay to the credit card company or other financial institutions (referring to the financial institutions under Article 2 of the Act on the Structural Improvement of the Financial Industry) within the term of redemption (hereinafter referred to as "debt in arrears");
2. If the debt is paid or reimbursed, methods of such payment or reimbursement.
(2) "Persons who are above the ages as prescribed by Presidential Decree" in Article 14 (3) 2 of the Act shall mean any person who has completed his/her eighteenth year.
(3) "Requirements prescribed by Presidential Decree" in Article 14 (3) 3 of the Act shall be as follows:
1. In cases of a minor, written consent of a legal representative and documents proving incomes of the legal representative, such as certificate of employment, certificate of payment of tax, etc. shall be submitted;
2. It shall be confirmed whether an applicant is the person in question according to methods prescribed by Ordinance of the Prime Minister.
(4) "Recruitments which are prescribed by Presidential Decree" in Article 14 (4) 2 of the Act means the recruitment of credit card holders by a credit card company without confirming whether the applicant is the person in question via the certified digital signature under subparagraph 3 of Article 2 of the Digital Signature Act: Provided, That cases where it may be confirmed that an applicant is the person in question through the information that can identify the person, such as the issuing authorities or issuance date of identification card of the applicant, or through receiving signature of the person in question shall be excluded herefrom.
(5) Pursuant to Article 14 (4) 3 of the Act, a credit card company shall not recruit credit card holders in a method falling under each of the following subparagraphs:
1. Recruitments providing, or on the condition of providing, economic benefit exceeding 10/100 of the annual fees (if the annual fee is not more than the average annual fee of major credit cards, referring to the relevant average annual fee) of the credit card with respect to the issuance of the credit card;
2. Recruitments on the street, such as roads and private roads under Article 2 of the Road Act and Article 2 of the Private Road Act;
3. Recruitments through visit: Provided, That visiting after obtaining a prior consent or visiting workplace sites shall be excluded herefrom.
(6) Matters on the average annual fee under paragraph (5) 1, the scope of street under subparagraph 2, the procedures for a prior consent and the scope of workplace sites under the proviso to subparagraph 3 shall be prescribed and publicly announced by the Financial Services Commission.
(7) "Matters prescribed by Presidential Decree" in the main sentence of Article 14 (5) of the Act shall be as follows:
1. Terms of transactions, such as annual fee, interest rate, commission, maximum limit, payment method, payment date, valid period of credit card, credit rating level, etc.;
2. Procedures for raising objections by credit card holders or debit card holders when any dispute between a credit card company and credit card holders or debit card holders arises;
3. Matters recognized that there exists any intention, negligence or gross negligence of credit card holders or debit card holders when their credit cards or debit cards are stolen, lost, forged or falsified.
[This Article Wholly Amended by Presidential Decree No. 21647, Aug. 5, 2009]
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 Article 6-8 (Matters to be Observed by Recruiters, etc.)   print
(1) Any person who recruits credit card holders pursuant to Article 14-2 (2) of the Act (hereinafter referred to as "recruiter") shall comply with the matters under each subparagraph when recruiting credit card holders: <Amended by Presidential Decree No. 23643, Feb. 28, 2012>
1. The recruiter shall inform an applicant that he/she is entitled to recruit credit card holders pursuant to Article 14-2 (1) of the Act;
2. The recruiter shall explain the terms of transactions for credit cards, such as terms and conditions and annual fees of the credit card;
3. The recruiter shall confirm whether the applicant is the person in question, and shall help the applicant prepare an application and documents related to the issuance of a credit card on his/her own. If such confirmation and preparation of an application for credit card issuance are conducted for a disabled person under the Act on the Prohibition of Discrimination against Disabled Persons, Remedy against Infringement of their Rights, Etc., proper conveniences under Article 4 (2) of the same Act shall be provided;
4. The recruiter shall indicate his/her name and registration number (including other signs indicating the identity of the recruiter) on his/her own in the application for the issuance of the credit card prepared by the applicant;
5. The recruiter shall not arrange for the conclusion of contracts for the issuance of credit cards for a person other than credit card companies;
6. The recruiter shall follow the methods under Article 14 (4) of the Act and Article 6-7 (5) of this Decree when recruiting credit card holders;
7. The recruiter shall not divulge or use personal confidential information, such as credit information and privacy of the applicant acquired in the course of recruiting credit card holders for any purpose other than business.
(2) The Financial Services Commission may, when deemed necessary for the investigation pursuant to Article 14-5 (4) of the Act, request the recruiter to submit any of the matters prescribed in the following subparagraphs: <Newly Inserted by Presidential Decree No. 22196, Jun. 11, 2010>
1. Submission of a statement on facts and circumstances about the matters under investigation;
2. Submission of a books, documents and other materials required for the investigation. <Newly Inserted by Presidential Decree No. 22196, Jun. 11, 2010>
(3) A person who conducts investigation as prescribed in paragraph (2) shall keep a voucher showing his/her authority and present it to the persons concerned. <Newly Inserted by Presidential Decree No. 22196, Jun. 11, 2010>
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6-9 (Liability to Credit Card Holders)   print
"Period as prescribed by Presidential Decree" in Article 16 (2) of the Act means the period of 60 days from the date on which the notification of loss, theft, etc. under paragraph (1) of the same Article is received.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6-10 (Scope of Intent or Gross Negligence)   print
The scope of intent or gross negligence as prescribed by Article 16 (9) of the Act shall be as follows:
1. Leakage of a personal identification number intentionally or by gross negligence; and
2. Transfer or offer for the purposes of security of a credit card or debit card.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6-11 (Standards for Establishment of Credit Card Merchants'' Association)   print
(1) "Standards prescribed by Presidential Decree, such as annual sales, etc." in Article 18-2 (1) of the Act means that all the requirements of the following subparagraphs shall be met: <Amended by Presidential Decree No. 23643, Feb. 28, 2012>
1. The members shall be a small and micro enterprise prescribed in subparagraph 2 of Article 2 of the Act on Special Measures for Development of Small and Micro Enterprises;
2. Each of annual sales amount or annual transaction amount by credit cards, debit cards and prepaid cards (hereinafter collectively referred to as "credit cards, etc.") shall be less than 200 million won.
(2) The Financial Services Commission may prescribe and publicly announce the matters for detail standards of the requirements prescribed in each of subparagraphs of paragraph (1).
[This Article Newly Inserted by Presidential Decree No. 22196, Jun. 11, 2010]
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 Article 6-12 (Matters to be Observed by Agency for Settlement, etc.)   print
For the purpose of Article 19 (5) of the Act, an agency for settlement under subparagraph 5 (b) of Article 2 of the Act shall comply with the following matters: <Amended by Presidential Decree No. 22196, Jun. 11, 2010>
1. The agency shall submit the credit information of a person who sells goods or provides services and the details of agency of the transactions by credit cards, etc. to the credit card company;
2. The agency shall inform the credit card holders, debit card holders, or prepaid card holders (hereinafter referred to as "credit card holder, etc.") of the trade name and address of a person who sells goods or provides services;
3. If credit card holders, etc. request the cancellation of transactions or refund, etc., the agency shall comply with such request.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 6-13 (Matters to be Observed by Acting Merchant for Receipt)   print
"Matters prescribed by Presidential Decree" in subparagraph 3 of Article 19-2 of the Act means each provisions set forth in the following subparagraphs:
1. To submit to the credit card company details of vicarious activities which have been performed among any provisions of the subparagraphs of Article 1-2 (3) (hereinafter in this Article referred to as "receipt") and credit information about the credit card merchants for which he/she has been consigned for the receipt;
2. To make available to the credit card holders of the names and addresses of the credit card merchants for which he/she has been consigned for the receipt;
3. To comply with the request of the credit card holders for cancellation of a transaction or a refund;
4. Matters to be prescribed and publicly announced by the Financial Services Commission to secure safety and reliability of information and communications network used for the transmission and processing of the credit information of credit card holders among the acting merchants for receipt, credit card company and credit card merchants for which the receipt is consigned and electronic devices prescribed in Article 1-2 (3) 2.
[This Article Newly Inserted by Presidential Decree No. 22196, Jun. 11, 2010]
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 Article 6-14 (Termination of Merchant Agreement)   print
A credit card company shall terminate the merchant agreement concluded with a credit card merchant pursuant to Article 21 of the Act in cases falling under any of the following subparagraphs:
1. Where a credit card merchant is sentenced to any punishment in violation of Article 19 (3), (4) or 20 (1) of the Act;
2. Where a credit card merchant receives a written notice from the tax office with respect to the violations of Article 19 (1), (3) through (5), and Article 20 (1) of the Act;
3. Others prescribed by Ordinance of the Prime Minister as corresponding to those under subparagraphs 1 and 2.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 7 (Restriction on Recruitment of Merchants)   print
For the purpose of the proviso to Article 3 (1) of the Act, the scope of credit card merchants which may be recruited pursuant to Article 23 (1) of the Act by a concurrent loan service provider who makes registration of credit card business shall be as follows:
1. A business operator carrying on business activities in the place of business of the concurrent loan service provider;
2. A business operator entering into a contract for sales agency with the concurrent loan service provider;
3. A business operator conducting business activities by adopting the trade name, trade mark and management technique of the concurrent loan service provider in accordance with the contract for management consignment.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 7-2 (Restriction on Limit on Use of Prepaid Card, etc.)   print
(1) The maximum limit of face value of a prepaid card under Article 24 of the Act shall be 500,000 won: Provided, That in cases of a registered prepaid card, the maximum limit shall be five million won. <Amended by Presidential Decree No. 22196, Jun. 11, 2010>
(2) "Matters prescribed by Presidential Decree" in subparagraph 10 of Article 24 of the Act shall be as follows:
1. If any separate procedure for consent of credit card holders, etc. with respect to the provision and use of credit information is not available or there is no consent on the provision and use of credit information, matters on the protection and management of credit information including the prohibition on refusal to issue a credit card;
2. If any credit card holder raises objections on the amount used pursuant to Article 16 (10) of the Act, matters on the procedures for inspections.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 7-3 (Violations of Credit Card Companies)   print
(1) Specific types of and guidelines for violations under Article 24-2 (2) of the Act shall be as prescribed by the attached Table 1-3.
(2) The Financial Services Commission shall prescribe and publicly announce detailed standards for types of and guidelines for violations under paragraph (1) as the Commission deems necessary to apply to specific violations among those under paragraph (1).
[This Article Newly Inserted by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 8 (Deposits)   print
"Amount of money prescribed by Presidential Decree" in Article 25 (1) of the Act means the amount equivalent to 3/100 of the total amount of pre-paid cards issued as at the end of each quarter.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 9 (Executor of Right of Deposit)   print
Any person eligible to become a right executor under Article 26 (2) of the Act shall be a person falling under any of the following subparagraphs: <Amended by Presidential Decree No. 22493, Nov. 15, 2010>
1. Any bank authorized under the Banking Act;
2. Any financial institution established in accordance with a special Act;
3. Other incorporated association established upon the authorization of the Financial Services commission, such as the Specialized Credit Financial Business Association, under Article 62 of the Act.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 10 (Utilization of Various Funds)   print
(1) Any facilities leasing business operator who intends to borrow funds pursuant to Article 29 of the Act shall submit documents verifying that a person concluding a contract for facilities leasing, etc. (hereinafter referred to "leasee") is a person eligible for loans of the funds, and a written contract of facilities leasing, etc. to a loan transaction institution.
(2) In cases of paragraph (1), a facilities leasing business operator may borrow loans by means of comprehensively determining the amount of loans and the terms of use, etc. in consultation with a loan transaction institution.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 11 (Import of Medical Appliances)   print
Any facilities leasing business operator who intends to obtain permission or make report under Article 42 (1) of the Pharmaceutical Affairs Act in order to import medical appliances which are the specific goods under Article 31 (1) of the Act shall attach a written contract for facilities leasing, etc. to the application or report.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 12 (Special Case concerning Administrative Disposition)   print
Any facilities leasing business operator who intends to be subject to special cases concerning administrative disposition under Article 32 of the Act shall submit a written contract for facilities leasing, etc. and documents verifying that the leasee meets the requirements necessary for the relevant disposition.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 13 (Special Case concerning Registration)   print
Any facilities leasing business operator who intends to make registration of a ship or aircraft in his/her possession pursuant to Article 33 (2) of the Act shall attach, to an application, a written contract for facilities leasing, etc. and documents proving that the leasee meets the requirements necessary for such registration.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 13-2 (Facilities Leasing to Small or Medium Enterprise)   print
The rate of the facilities leasing to small or medium enterprises under Article 37 of the Act shall be not less than 30/100 of the annual execution amount of the facilities leasing, other than the facilities leasing, etc. under each of the following subparagraphs:
1. Facilities leasing, etc. to public institutions under the Act on the Management of Public Institutions and non-profit organizations;
2. Facilities leasing, etc. to another facilities leasing business operator for carrying on facilities leasing to a leasee;
3. Facilities leasing, etc. of passenger vehicles;
4. Facilities leasing, etc. of goods manufactured by small and medium enterprises.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 14 (Scope of Funds)   print
"Funds prescribed by Presidential Decree" in Article 42 of the Act means funds under Article 4 (1) of the Act on the Special Measures for the Promotion of Venture Businesses.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 15 Deleted. <by Presidential Decree No. 16261, Apr. 24, 1999>   print
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 Article 16 (Business)   print
"Business, which is prescribed by Presidential Decree" in Article 46 (1) 5 of the Act means businesses under each of the following subparagraphs: <Amended by Presidential Decree No. 22196, Jun. 11, 2010>
1. Purchase of credit held by other financial companies (referring to the institutions prescribed in each subparagraphs of Article 38 of the Act on the Establishment, etc. of Financial Services Commission) or securities issued based thereon with respect to the business under Article 46 (1) 1 through 4 of the Act;
2. Payment guarantee;
3. Business of managing securitization assets under the Asset-Backed Securitization Act;
4. Others prescribed by Ordinance of the Prime Minister as related to the specialized credit financial business and loan business.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 17 (Operating Standards of Loan Business)   print
For the purpose of Article 46 (2) of the Act, no specialized credit financial business company shall maintain the average balance, during each quarter, of the credit incurred from the loan business under paragraph (1) 3 of the same Article as at the end of each quarter in excess of the aggregate of the average balances, during the quarter, of credits under paragraph (1) 1 (excluding credit card business) and paragraph (1) 2 of the same Article. In such cases, the following credits shall be excluded from the calculation of the amount of credit incurred from the loan business under paragraph (1) 3 of the same Article:
1. Credit incurred by lending to enterprises;
2. Credit incurred by re-lending funds to the debtor after modifying terms and conditions of the lending for readjusting the lending to such debtor;
3. Mortgage-backed bonds under subparagraph 3 of Article 2 of the Korea Housing Finance Corporation Act;
4. Credit incurred by distribution business of funds to credit card holders under Article 13 (1) 1 of the Act.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 18 (Ways of Raising Funds)   print
(1) "Ways prescribed by Presidential Decree" in Article 47 (1) 5 of the Act shall be as follows:
1. Borrowing and issuance of foreign currency securities, which are conducted by being registered as a foreign exchange agency under Article 8 of the Foreign Exchange Transactions Act;
2. Transfer of credit held with respect to the business affairs under Article 46 (1) 1 through 4 of the Act;
3. Issuance of securities based on the credit held with respect to the business affairs under Article 46 (1) 1 through 4 of the Act.
(2) Article 19 (1) shall apply mutatis mutandis to cases where a specialized credit financial business company raises funds by the method prescribed by paragraph (1) 3.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19 (Restriction on Issuance, etc. of Corporate Bonds or Bills)   print
(1) For the purpose of Article 47 (2) of the Act, no specialized credit financial business company shall issue corporate bonds or bills, or sell securities held in a manner falling under each of the following subparagraphs:
1. Issuance or sale to an individual;
2. Issuance or sale to unspecified multiple corporations by public offering, sales on the counter or any other means similar thereto.
(2) Paragraph (1) shall not apply to the issuance of corporate bonds or bills by the methods falling under any of the following subparagraphs:
1. Issuance of corporate bonds through underwriting of the person who obtains authorization of investment trading business in accordance with the Financial Investment Services and Capital Markets Act;
2. Issuance of bills through underwriting, discount, or arrangement by a merchant bank under the Financial Investment Services and Capital Markets Act or an investment broker or investment trader under the same Act.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19-2 (Extent of Persons in Special Relationship with Major Stockholders)   print
"Person in a special relationship with major stockholder as prescribed by Presidential Decree" in Article 50 (1) of the Act means a person in a special relationship with the largest stockholder.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
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 Article 19-3 (Amount of Transactions with Major Stockholders, etc.)   print
(1) "Amount which is prescribed by Presidential Decree" in the former part of Article 50 (2) of the Act means the amount of single transaction prescribed and publicly notified by the Financial Services Commission (hereafter referred to as the "amount of single transaction" in this Article), which is the lesser of the amount equivalent to 10/10,000 of equity capital or one billion won: Provided, That in cases of stock acquisition, the amount acquired on the securities market, the KOSDAQ market or similar markets located in a foreign country under the Financial Investment Services and Capital Markets Act shall be excluded from the amount of single transaction.
(2) "Transaction prescribed by Presidential Decree" in the former part of Article 50 (2) of the Act means the transaction made to acquire corporate bonds issued by offering or sale under Article 9 (7) or (9) of the Financial Investment Services and Capital Markets Act.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19-4 (Reporting and Public Announcement of Transactions with Major Stockholders)   print
(1) "Matters prescribed by Presidential Decree" in Article 50 (4) of the Act means those falling under any of the following subparagraphs: <Amended by Presidential Decree No. 20653, Feb. 29, 2008>
1. Scale of the credit extension to major stockholders as at the end of each quarter;
2. Amount of increase and decrease of the credit extension and terms and conditions of transaction of the credit extension during each quarter;
3. Amount of stocks acquired by major stockholders as at the end of each quarter;
4. Amount of increase and decrease of the stocks held and price of acquisition of the stocks possessed during each quarter;
5. Other matters prescribed by the Financial Services Commission.
(2) Any specialized credit financial business company shall report and publicly announce the matters under paragraph (1) within one month from the end of each quarter.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
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 Article 19-5 (Deferred Period for Amount Exceeding Limit of Credit Extension)   print
"Period prescribed by Presidential Decree" in Article 50 (5) of the Act means one year.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
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 Article 19-6 (Extent of Exercise of Undue Influence of Major stockholders)   print
"Act prescribed by Presidential Decree" in Article 50-2 (5) 3 of the Act means an act falling under any of the following subparagraphs:
1. Demanding a specialized credit financial business company to commit an offence;
2. Demanding any person to engage in a transaction with the major stockholder or any third party under conditions different from common terms of transaction with respect to interest rate, commission or security.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19-7 (Requirements for Qualifications of Executives, etc.)   print
(1) "Person prescribed by Presidential Decree" in Article 50-3 of the Act other than each subparagraph means a person falling under any of the subparagraphs of Article 401-2 (1) of the Commercial Act.
(2) "Persons who are stipulated in Presidential Decree" in subparagraph 7 of Article 50-3 of the Act means a person falling under any of the following subparagraphs who is an executive at the time any reason for the revocation of permission, authorization or registration of business occurs (if the permission, authorization or registration of a corporation or company is revoked pursuant to Article 14 of the Act on the Structural Improvement of the Financial Industry, executives at the time any reason for timely corrective measures under Article 10 of the same Act occurs):
1. Any auditor or member of the audit committee;
2. Any executive subject to caution, warning, reprimand, suspension from office, request for dismissal or any other measure under the Act or finance-related Acts and subordinate statutes against unlawful or undue activities in regard to the occurrence of causes for the revocation of permission, authorization or registration;
3. Any employee subject to request for suspension or heavier punishment under the Act or finance-related Acts and subordinate statutes against unlawful or undue activities in regard to the occurrence of causes for the revocation of permission, authorization or registration;
4. Any person subject to sanctions under subparagraph 2 or 3, who has resigned or retired before such sanctions are taken.
(3) "Persons who are stipulated in Presidential Decree" in subparagraph 8 of Article 50-3 of the Act means any person falling under any of the following subparagraphs, who is recognized as responsible for the timely corrective measures, etc. to the financial institution as a result of examination of the grounds thereof by the Governor of the Financial Supervisory Service under the Act on the Establishment, etc. of Financial Services Commission:
1. Any executive subject to request for dismissal or suspension from office;
2. Any employee subject to suspension or dismissal;
3. Any person subject to the sanctions under subparagraph 1 or 2, who has resigned or retired before such sanctions are taken.
(4) "Persons subject to measures prescribed by Presidential Decree, such as suspension from office, suspension of the performance of duties or heavier, and for whom a period determined by Presidential Decree has not elapsed" in subparagraph 10 of Article 50-3 of the Act means a person falling under any of the following subparagraphs:
1. Any executive whose term expires after the measures of suspension from the performance of duties are taken by the Financial Services Commission in accordance with the Act or finance-related Acts and subordinate statutes and for whom four years have not elapsed from the date when the suspension of the performance of duties is terminated;
2. Any employee requested for the suspension from office by the Financial Services Commission in accordance with the Act or finance-related Acts and subordinate statutes, and for whom four years have not elapsed from the date when the suspension is terminated;
3. Any executive whose term expires or employee who is subject to suspension from office after the measures of suspension from the performance of duties are taken by any institution to which he/she belongs in accordance with the Act or finance-related Acts and subordinate statutes, and for whom four years have not elapsed from the date when the suspension of the performance of duties is terminated or the date when the suspension is terminated.
(5) "Period prescribed by Presidential Decree" in subparagraph 11 of Article 50-3 of the Act means three years.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19-8 (Election of Outside Directors, etc.)   print
(1) "Specialized credit financial business company falling under the standards prescribed by Presidential Decree" in the former part of Article 50-4 (1), Article 50-5 (1) and Article 50-7 (1) of the Act means a credit card company, the total assets of which is more than two trillion won as at the end of the latest business year.
(2) "Corporation that is in an important business relationship prescribed by Presidential Decree, a competitive relationship, or a cooperative relationship" in Article 50-4 (4) 10 of the Act means a corporation under each of the following subparagraphs (excluding a person under the proviso to Article 28 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act other than each subparagraph):
1. Any corporation whose total business performance with the relevant company during the latest three business years is more than 10/100 of the total assets (referring to the total assets on the balance sheet as at the end of the latest business year of the relevant company) or total amount of sales (referring to the total amount of sales on the income statement as at the end of the latest business year of the relevant company; hereafter the same shall apply in this Article);
2. Any corporation which has entered into a single contract of transaction equivalent to more than 10/100 of the total amount of sales with the relevant company during the latest business year;
3. Any corporation to whom the aggregate of the amount of money, marketable securities, or other securities or certificates lent or borrowed by the relevant company and the amount of guarantee for debts, such as the provision of collateral, is more than 10/100 of capital (referring to the capital on the balance sheet as at the end of the latest business year of the relevant company);
4. Any corporation in which the relevant company has invested more than 5/100 of capital (referring to the capital of the corporation to which the relevant company has invested) as at the date of a general meeting of stockholders of the relevant company;
5. Any corporation which has a contractual technical alliance with the relevant company;
6. Any accounting firm appointed as an auditor of the relevant company;
7. Any corporation that has entered into a contract for advisory services, such as legal consultation or management consultation, with the relevant company.
(3) "Persons prescribed by Presidential Decree" in Article 50-4 (4) 12 of the Act means persons under each of the following subparagraphs:
1. Any person who holds the office of an outside director, non-standing director or non-standing auditor of two or more other stock-listed corporations other than the relevant company;
2. Any attorney-at-law, certified public accountant, tax accountant, or any other similar person who enters into a contract for advisory services, such as legal consultation or management consultation, with the relevant company;
3. Any person holding stocks equivalent to more than 1/100 of the total number of outstanding stocks of the relevant company;
4. Any person, other than subparagraph 3, whose balance of the transaction (excluding the standardized transactions with the company which complies with the standardized contracts under Article 2 (1) of the Act on the Regulation of Terms and Conditions) with the relevant company is more than 100 million won.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19-9 (Requirements for Audit Committee)   print
"Accounting or finance specialist prescribed by Presidential Decree" in Article 50-5 (2) 2 of the Act means any person under the following subparagraphs:
1. Any person who holds a valid license as a certified public accountant and has at least five years of work experience in business related to such qualifications for at least five years after obtaining such license;
2. Any person who has a master''s degree or higher in the field of finance or accounting and has worked as a researcher or a full-time lecturer or in a higher position in a field related to finance or accounting at a research institute or a university for at least five years after earning the degree;
3. Any person who has worked at a stock-listed corporation in business related to finance or accounting as an executive for at least five years or as an employee and executive for at least ten years;
4. Any person who has worked in business related to finance or accounting or the supervisory business thereof for at least five years at the Government, local governments, public institutions under the Act on the Management of Public Institutions, the Financial Supervisory Service under the Act on the Establishment, etc. of Financial Services Commission, the Korea Exchange under the Financial Investment Services and Capital Markets Act, or institutions related to financial investment business under Article 9 (17) of the same Act (excluding organizations related to financial investment);
5. Any person who has worked in business related to finance or accounting for at least five years at an institution subject to inspection under Article 38 of the Act on the Establishment, etc. of Financial Services Commission.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19-10 (Internal Control Standards)   print
(1) Internal control standards under Article 50-6 (1) of the Act (hereinafter referred to as "internal control standards") shall contain the following matters:
1. Matters on the division of business and organizational structure;
2. Matters on the management of risk incurred in the course of managing assets or performing duties;
3. Matters on the procedures that the employee and executive shall comply with when performing their duties;
4. Matters on the establishment of a system to facilitate the efficient communication of information necessary for making decisions on management;
5. Matters on the procedures and methods to confirm whether the employees and executives comply with internal control standards and the treatment of the employees and executives who violates the internal control standards;
6. Matters on the procedures and standards to prevent unfair trading, such as reporting the details of transactions of securities by employees or executives;
7. Matters on the procedures for formulating or amending internal control standards;
8. Matters prescribed by the Financial Services Commission as specific standards on the matters under subparagraphs 1 through 7.
(2) Any specialized credit financial business company shall, when it formulates or amends internal control standards, undergo a resolution of the board of directors.
(3) Where any violation of Acts and subordinate statutes is discovered from a specialized credit financial business company as a result of the inspection by the Financial Supervisory Service under Article 53-2 of the Act, the Financial Services Commission may recommend the amendment of internal control standards to such specialized credit financial business company in order to prevent further violations of the Acts and subordinate statutes.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19-11 (Duties of Compliance Officers, etc.)   print
(1) Any specialized credit financial business company shall, when it appoints or dismisses a compliance officer under Article 50-6 (2) of the Act (hereinafter referred to as "compliance officer"), report it to the Financial Services Commission.
(2) Any compliance officer shall perform his/her duties with due fiduciary care, and shall not take charge in the duties of carrying out the following businesses:
1. Business of managing assets;
2. Business of a specialized credit financial business company under Article 46 (1) of the Act.
(3) Any specialized credit financial business company shall, when a compliance officer requests employees or executives to submit data or information in performing his/her duties, have such employees or executives to comply with such request in good faith.
(4) No specialized credit financial business company shall put any former compliance officer at a disadvantage against others in relation to personnel management decisions due to any ground related to the performance of his/her duties.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19-12 (Exercise, etc. of Minority Stockholder's Rights)   print
(1) "Person who has held stocks as prescribed by Presidential Decree" in Article 50-7 (1) through (6) of the Act means any person who holds stocks by a method falling under each of the following subparagraphs:
1. Possession of stocks;
2. Acquisition of the power of delegation with the exercise of stockholders'' rights;
3. Joint exercise of stockholders'' rights of two or more stockholders.
(2) "Specialized credit financial business company falling under the criteria as stipulated by Presidential Decree" in Article 50-7 (1) through (6) of the Act means any credit card company whose capital is more than 100 billion won as at the end of the latest business year.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19-13 (Restriction on Transactions with Major Stockholders, etc.)   print
"Case as prescribed by Presidential Decree" in the main sentence of Article 50-8 (2) of the Act means those falling under any of the following subparagraphs: <Amended by Presidential Decree No. 20653, Feb. 29, 2008; Presidential Decree No. 21765, Oct. 1, 2009>
1. Where the liabilities of a major stockholder (limited to a company, including persons in a special relationship, which is a company; hereafter the same shall apply in this Article) exceed its assets;
2. Where the credit risk of a major stockholder is classified under the standard as prescribed by the Financial Services Commission as a result of the appraisal of the credit risk of the major stockholder concerned according to the standard of classification of the soundness of assets as prescribed by the Financial Services Commission by the financial institution (excluding a financial institution whose major stockholder is the major stockholder concerned) who is the largest credit provider to the major stockholder;
3. Where a major stockholder is rated as being in the class ineligible for investment by two or more credit rating agencies among credit rating agencies stipulated in the Use and Protection of Credit Information Act.
[This Article Newly Inserted by Presidential Decree No. 20549, Jan. 18, 2008]
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 Article 19-14 (Standards for Management Guidance)   print
The standards for management guidance under Article 53-3 (1) of the Act shall include the following matters:
1. Matters on the standards for holding equity capital;
2. Matters on the classification and management standards for assets held by a specialized credit financial business company, such as loans;
3. Matters on the standards for accumulating allowances and reserves;
4. Matters on the standards for risk management and standards for accounting.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 19-15 (Matters to be Reported)   print
(1) Where any ground prescribed by the subparagraphs of Article 54 (2) of the Act occurs, such ground shall be reported to the Financial Services Commission within seven days from the date on which such ground occurred.
(2) In cases of Article 54 (2) 3 of the Act, notwithstanding Article 54 (2) of the Act, the report shall be deemed to have been made when the relevant largest stockholder obtains approval from major stockholders pursuant to Article 6 (3) of the Act.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 20 (Grounds for Demand for Designation as Auditor)   print
"Where a specialized credit financial business company falls under any cause as determined by Presidential Decree such as the violation of this Act" in Article 56 of the Act means any case falling under any of the following subparagraphs:
1. Where the Act or the order issued by the Financial Services Commission under the Act is violated for the latest three years;
2. Where the Financial Services Commission recognizes that it is necessary to designate an auditor as a result of the inspection under Article 53-2 of the Act.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 21 (Standards, etc. for Suspension of Business and Imposition of Penalty Surcharges)   print
(1) The period of suspension of business or the amount of penalty surcharges according to the types of offences subject to the order of suspension of business or imposition of penalty surcharges pursuant to Article 57 (1) of the Act or Article 58 (1) through (3) of the Act shall be as prescribed in the attached Table 2.
(2) The Financial Services Commission may aggravate or mitigate sentences within the extent of a half of the period of suspension of business or the amount of penalty surcharges under paragraph (1), taking into account the severity and frequency of violations, etc.: Provided, That even in cases of the aggravation, the total period of suspension shall not exceed six months and the total amount of penalty surcharges shall exceed 100 million won.
(3) The amount of penalty surcharge for a credit extension exceeding the limit (hereinafter referred to as "excessive amount of credit extension") under Article 58 (4) shall be as prescribed in the attached Table 3, and the Financial Services Commission may, considering the motive, period, frequency of the violation and the size of profit acquired from the violation, increase or decrease the amount of penalty surcharge within the scope of 1/2: Provided, That the total amount of the penalty surcharge shall not exceed 20/100 of the excessive amount of credit extension. <Newly Inserted by Presidential Decree No. 22196, Jun. 11, 2010>
(4) Details which are not provided in this Decree but required for imposition of a penalty surcharge, etc. shall be prescribed and publicly announced by the Financial Services Commission. <Newly Inserted by Presidential Decree No. 22196, Jun. 11, 2010>
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 22 (Imposition and Payment of Penalty Surcharges)   print
(1) The Financial Services Commission shall, when it intends to impose penalty surcharges under the provisions of Article 58 (1) through (4) of the Act, notify the payment of the penalty surcharges, in writing, specifying the types of offences and the amount of the relevant penalty surcharges. <Amended by Presidential Decree No. 22196, Jun. 11, 2010>
(2) Any person who is notified pursuant to paragraph (1) shall pay the penalty surcharge to a receiving agency designated by the Financial Services Commission within 20 days from such notification: Provided, That when the person can not pay the penalty surcharge within the specified period due to natural disasters or any other inevitable ground, the person shall pay his/her penalty surcharge within seven days from the date when such reason is resolved.
(3) The receiving agency that receives penalty surcharges pursuant to paragraph (2) shall issue a receipt to the payer.
(4) The receiving agency shall, when it receives penalty surcharges pursuant to paragraph (2), report such fact to the Financial Services Commission without delay.
(5) The penalty surcharges shall not be paid in installments.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 22-2 (Entrustment of Dispositions on Default)   print
(1) The Financial Services Commission shall entrust the business on the disposition on default to the Commissioner of the National Tax Service pursuant to Article 58 (7) of the Act in writing, accompanying the documents under each of the following subparagraphs:
1. Resolution of the Financial Services Commission;
2. Resolution and notice of tax collection;
3. Demand notice of payment.
(2) The Commissioner of the National Tax Service shall, when the business on the disposition on default entrusted pursuant to paragraph (1) is completed, notify the date of completion and other necessary matters to the Financial Services Commission within 30 days from the date of completion in writing.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
law view
 Article 23 (Interest Rate of Additional Dues on Refund)   print
"Interest rate of additional dues prescribed by Presidential Decree" in Article 58-4 of the Act means an interest rate prescribed and publicly announced by the Financial Services Commission in consideration of the interest rates of term deposits of the banks (which are authorized by the Financial Services Commission for the banking business).
[This Article Newly Inserted by Presidential Decree No. 22195, Jun. 11, 2010.]
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 Article 23-2 (Entrustment of Authority)   print
(1) The Financial Services Commission shall entrust the business falling under each of the following subparagraphs to the Governor of the Financial Supervisory Service under the Act on the Establishment, etc. of Financial Services Commission (hereafter in this Article, referred to as the "Governor of the Financial Supervisory Service") pursuant to Article 69-2 (1) of the Act: <Amended by Presidential Decree No. 22196, Jun 11, 2010; Presidential Decree No. 23643, Feb. 28, 2012>>
1. Receipt of application for registration, notification as to whether registered, and revocation of registration under Articles 3, 7 and 10 of the Act;
2. Examination of fulfillment of the requirements for approval and registration of the specialized credit financial business under Article 6 (1) and (2) of the Act;
3. Evaluation of fulfillment of the requirements for approval of a person who seeks to be a majority stockholder under Article 6 (3) of the Act;
4. Evaluation of fulfillment of the requirements under proviso of Article 6 (2) of the Act;
5. Provision of opportunity to submit opinions under Article 14-4 (3) of the Act and notification to the recruiters under paragraph 4 of the same Article;
6. Examination under Article 14-5 (4) of the Act or request for submission of the matters under Article 6-8 (2) hereof;
7. Receipt of reports under Article 14-5 (5) of the Act;
7-2. Checking under Article 18-2 (2) of the Act and request for necessary data, and request for provision of data under paragraph (3) of the same Article;
8. Request for and receipt of the reports under Article 53 (2) of the Act;
9. Receipt of reports under Article 54 of the Act;
10. Receipt of reports under Article 54-3 (1) of the Act and reports under the proviso of the same paragraph, notification of financial terms and conditions to the Fair Trade Commission under paragraph (5) of the same Article, and orders issued under paragraph (7) of the same Article;
11. Receipt of notification of the appointment and dismissal of compliance officers under Article 19-11 (1).
(2) The Financial Services Commission shall entrust the business prescribed in Article 54-2 (2) of the Act to the head of the Specialized Credit Financial Business Association established in accordance with Article 62 of the Act (hereafter in this Article, referred to as "head of the Association") pursuant to Article 69-2 (2) of the Act,
(3) The Governor of the Financial Supervisory Service and the head of the Association shall report the results on dealing with the business entrusted pursuant to paragraphs (1) and (2) to the Financial Services Commission as prescribed by the Financial Services Commission.
[This Article Wholly Amended by Presidential Decree No. 21674, Aug. 5, 2009]
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 Article 24 (Processing Sensitive Information and Personally Identifiable Information)   print
The Financial Services Commission (including those entrusted with the business of the Financial Services Commission pursuant to Article 14-3 (3) and Article 58 (7) of the Act, and Article 23-3 of this Decree) and the Governor of the Financial Supervisory Service may process information containing criminal history records under subparagraph 2 of Article 18 of the Enforcement Decree of the Personal Information Protection Act and data containing resident registration numbers or alien registration numbers under subparagraph 1 or 4 of Article 19 of the same Decree, if necessary to perform affairs concerning the following;
License, registration, etc. under Article 3, 4, 6, 6-2, 10, and 14-3 of the Act;
Revocation, etc. of registration and imposition, collection, etc. of surcharges under Article 14-4, 57 and 58 of the Act;
Investigation, request for provision of necessary data, supervision, and inspection under Article 14-5 (4), 18-2, 50-8, 53 and 53-2 of the Act and follow-up measures thereof;
Report, etc. under Article 14-5 (5), 50 (3) and (4), and 54 of the Act and Article 19-11 (1) of this Decree;
Matters to be observed, criteria for internal control, etc. under Article 19, 19-2 and 50-6 of the Act;
Approval under Article 50 (6) of the Act;
Confirmation, etc. of causes for disqualification under Article 50-3, 50-4 (4) and 50-5 (3) of the Act.
[This Article Newly Inserted by Presidential Decree No. 23488, Jan. 6, 2012]
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 1998.
Article 2 (Repeal of other Acts and Subordinate Statutes)
The Acts and subordinate statutes of the following subparagraphs shall be repealed:
1. Enforcement Decree of Credit Card Business Act; and
2. Enforcement Decree of Equipment Rental Business Act.
Article 3 (Transitional Measures for Scope of Recruitment of Merchant Stores)
The provisions of Article 7 shall not apply to the merchant stores recruited after obtaining authorization of the Minister of Finance of Economy prior to the enforcement of this Decree by a concurrent credit business operator who has obtained the permission of the credit card business under the provisions of Article 3 (2) 2 of the Act.
Article 4 Deleted. <by Presidential Decree No. 16261, Apr. 24, 1999>
Article 5 Omitted.
ADDENDA <Presidential Decree No. 15761, Apr. 1, 1998>
(1) (Enforcement Date) This Decree shall enter into force on the date of its promulgation.
(2) through (4) Omitted.
ADDENDA <Presidential Decree No. 15817, Jun. 24, 1998>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDUM <Presidential Decree No. 16261, Apr. 24, 1999>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 16323, May 24, 1999>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDUM <Presidential Decree No. 17264, Jun. 30, 2001>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 17645, Jun. 29, 2002>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2002.
Article 2 (Transitional Measures for Restriction of Business Incidental to Credit Cards)
(1) Any credit card business operator managing an incidental business in excess of the limit under the amended provisions of Article 6-5 (2) at the time this Decree enters into force, shall bring it into compliance with the amended provisions by December 31, 2003. For the purpose of performing such compliance, he/she shall submit to the Financial Supervisory Commission for approval a detailed plan for incremental reduction of the part exceeding the limit by July 31, 2002.
(2) The credit sold shall be excluded from the credit which has arisen for credit card holders of the amended provisions of Article 6-5 (2) by December 31, 2004.
ADDENDA <Presidential Decree No. 18170, Dec. 30, 2003>
(1) (Enforcement Date) This Decree shall enter into force on the date of its promulgation.
(2) (Applicability to Renewal or Issuance in Substitution of Credit Cards and Debit Cards) The amended provisions of subparagraph 1 of Article 6-6 shall apply from the credit card or the debit card first renewed or issued in substitution after this Decree enters into force.
(3) (Applicability to Requirements for Principal Investors at the Time of Approval of Credit Card Business) The amended provisions of attached Table 1 shall apply from the relevant requirements of the first application for approval of the credit card business after this Decree enters into force.
(4) (Transitional Measures for Restriction on Incidental Business of Credit Card Business Operator) Any credit card business operator managing an incidental business in excess of the limit under the amended provisions of Article 6-5 (2) at the time this Decree enters into force, shall bring it into compliance with the amended provisions by December 31, 2007. For the purpose of performing such compliance, he/she shall submit to the Financial Supervisory Commission for approval a detailed plan for incremental reduction of the part exceeding the limit by January 31, 2004.
ADDENDA <Presidential Decree No. 18297, Feb. 28, 2004>
Article 1 (Enforcement Date)
This Decree shall enter into force on March 1, 2004.
Articles 2 through 5 Omitted.
ADDENDUM <Presidential Decree No. 18312, Mar. 17, 2004>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 18365, Apr. 19, 2004>
(1) (Enforcement Date) This Decree shall enter into force on April 21, 2004.
(2) (Applicability to Period of Facilities Lease) The amended provisions of Article 2 (4) shall apply from the relevant period of the first contract for facilities leasing after this Decree enters into force.
(3) (Transitional Measures for Management Standard of Loan Business of Specialized Credit Financial Company) Any specialized credit financial business company managing a loan business in excess of the limit under the amended provisions of Article 17 at the time this Decree enters into force, shall bring it into compliance with the amended provisions by December 31, 2008. For the purpose of performing such compliance, it shall submit for approval a detailed plan for incremental reduction of the part exceeding the limit to the Financial Supervisory Commission by June 30, 2004.
ADDENDA <Presidential Decree No. 18401, May 25, 2004>
Article 1 (Enforcement Date)
This Decree shall enter into force on May 30, 2004.
Article 2 Omitted.
ADDENDUM <Presidential Decree No. 20120, Jun. 28, 2007>
This Decree shall enter into force on July 4, 2007.
ADDENDA <Presidential Decree No. 20549, Jan. 18, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 20, 2008: Provided, That the amended provisions of attached Table 1 shall enter into force on March 20, 2008.
Article 2 (Applicability to Requirements for Major Stockholder)
The amended provisions of attached Table 1 shall apply from the requirements concerned of an application under Article 3-2 (1) firstly submitted to the Financial Services Commission after this Decree enters into force.
ADDENDA <Presidential Decree No. 20653, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That from among the Presidential Decrees which are amended under Article 2 of the Addenda, the amended part of Presidential Decree promulgated before this Decree enters into force, but its enforcement date has not arrived, shall enter into force on the respective enforcement date of the relevant Presidential Decree.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 20947, Jul. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 4, 2009. (Proviso Omitted.)
Articles 2 through 28 Omitted.
ADDENDUM <Presidential Decree No. 21674, Aug. 5, 2009>
This Decree shall enter into force on August 7, 2009.
ADDENDA <Presidential Decree No. 21765, Oct. 1, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 21775, Oct. 9, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on October 10, 2009.
Articles 2 through 3 Omitted.
ADDENDA <Presidential Decree No. 22151, May 4, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on May 5, 2010.
Articles 2 through 4 Omitted.
ADDENDUM <Presidential Decree No. 22196, Jun. 11, 2010>
This Decree shall enter into force on June 13, 2010.
ADDENDA <Presidential Decree No. 22493, Nov. 15, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on November 18, 2010.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 23488, Jan. 6, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted)
Article 2 Omitted.
ADDENDUM <Presidential Decree No. 23643, Feb. 28, 2012>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 23496, Jan. 6, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on March 2, 2012.
Article 2 Omitted.