(1) Reasons for Proposal

This amendment aims to reflect matters mandated by the Financial Investment Services and Capital Markets Act (FISCM Act) and the demand for system improvement according to the actions, which have been announced, in the Enforcement Decree.

(2) Major Provisions

A. Reflect mandated matters related to the information exchange suspension system (Article 50

Stipulate “the information subject to the suspension of information exchanges,” “required matters including internal control standards” related to the suspension of information exchanges, and other “company compliance requirements” mandated by the revised FISCM Act (May 19, 2020).

B. Improve the financial investment entity entrustment system (Articles 45 and 46) 

Reflect the internal control work that is restricted from entrustment that is mandated by the revised FISCM Act (May 19, 2020) and convert the preliminary reporting to the Financial Services Commission, which is necessary for entrustment, to ex post facto reporting.

C. Establish credit granting criteria for comprehensive financial investment entities (Article 77-5) 

Stipulate the scope of overseas subsidiaries that are permitted to grant credit and the credit limit in connection with the criteria for the credit granted by a comprehensive financial investment entity to an overseas subsidiary that is mandated by the revised FISCM Act (Dec. 29, 2020).

D. Regulate multiple applications for public offering stocks (Article 68 (5) 4-2 and Article 387-2) 

Establish the basis for the collection and use of subscribers’ personal information by securities and finance companies and securities companies for the establishment and operation of the multiple subscription confirmation system and stipulate the unconfirmed multiple subscriptions and multiple distributions by securities companies as unsound business practices.

E. Allow the expansion of the method to express a will (Article 10 (3) and Article 61 (1)) 

Also allow additional telephone, fax, and e-mail as the method of expressing a will, which is currently only allowed in writing.

F. Add an exceptional reason to the provision of the mandatory allocation of new stocks to employee stock ownership associations (Article 176-9) 

Add a case “where an employee stock ownership association wants to be allocated less than 20%” as an exceptional reason for not distributing mandatorily to employee stock ownership associations (20% of the IPO quantity) during an IPO.

G. Stipulate the public announcement method and procedure for the concurrent running or incidental business reported to the Financial Services Commission by financial investment companies (Article 44)