The Regulations on Financial Investment Business are revised as follows:
Paragraph (4) shall be newly inserted in Article 1-8 as follows:
(4) The documents under paragraph (1) submitted to a financial investment business entity pursuant to Article 10 (3) 17 (a) of the Decree shall be valid for two years from the date of submission.
In Article 3-14 (1) 4 (g), “A comprehensive financial investment business entity” is changed to “A comprehensive financial investment business entity (including overseas affiliates; the same applies hereafter in this subparagraph).”
Articles 4-20 (1) 5 (j) and subparagraphs 16 and 17 of the same paragraph shall be newly inserted as follows:
J. An act of soliciting the submission of documents under Article 10 (3) 17 (a) of the Decree
16. An act of not confirming the identity of the submitter or not recording/maintaining the confirmation result in person or video call in cases where documents under Article 10 (3) 17 (a) or Article 5-49-3 (1) 1 of the Decree are submitted for the first time
17. An act of trading or brokering over-the-counter derivatives for individual professional investors who do not meet the requirements under Article 5-49-3 (1)
Articles 5-49-2 and 5-49-3 are newly inserted, respectively, as follows:
Article 5-49-2 (Trading Standards, etc., for Contracts for Difference) (1) In cases where an investment trader or investment broker engages in an over-the-counter derivatives transaction (hereinafter referred to as a “contract for difference” in this Article) that falls under all of the following subparagraphs, he/she shall demand a guarantee deposit. In such cases, the guarantee deposit may be replaced with substitute securities.
1. The transactions shall fall under Article 5 (1) 3 of the Act.
2. The difference between the agreed-upon price and the agreed-upon price of covering transactions eliminating the agreed shall be settled in cash at the time of contract signing in connection with price changes of underlying assets such as stocks, stock indices, currencies (including foreign currencies), and general commodities.
3. The transactions shall be linked to a specific multiple (including a negative multiple) of price changes in underlying assets such as stocks.
4. The transactions shall be ones with a professional investor under Article 10 (3) 16 or 17 of the Decree.
(2) The guarantee deposit under paragraph (1) shall be an amount equivalent to the ratio (shall be 40/100 or more) determined in consideration of the investor's credit status and transaction status by item to the value of the underlying assets under paragraph (1) subparagraph 1.
(3) The balance after deducting the margin from the nominal contract amount of the margin transactions made in the name of an investment trader or investment broker shall be limited to the range obtained by subtracting the size of the total credit extension (excluding brokerage of contracts for difference in the name of another person and on the account of another person) pursuant to Article 4-23 (1) from the equity capital of the investment trader or investment broker.
(4) Investment traders or investment brokers shall submit the daily balance of contracts for difference transactions to the Association every day, in accordance with the rules established by the Association.
(5) Investment traders or investment brokers shall not initiate new contract for difference when the underlying asset of the contract for difference falls under any of the subparagraphs of Article 4-30 (2).
Article 5-49-3 (Investment Requirements for Over-the-Counter Derivatives) (1) In cases where a professional investor who is an individual intends to trade over-the-counter derivatives that are not for the purpose of risk hedging, he/she shall meet the following requirements:
1. He/she shall submit relevant data to the financial investment business entity pursuant to Article 1-7-2 (1) that can prove that he/she meets the requirements of subparagraph 2
2. He/she shall have experience in holding at least 300 million won of the following financial investment products based on the average balance at the end of the month for more than one year in the last five years as of the day before the date of submitting the data in subparagraph 1.
A. Equity securities under Article 4 (4) of the Act
B. Derivatives-linked securities under Article 4 (7) of the Act corresponding to complex financial products
C. Derivatives under Article 5 (1) of the Act
(2) A person who intends to submit related data to the financial investment business entity pursuant to paragraph (1) subparagraph 1 shall submit to the financial investment business entity documents stating the matters under Article 1-8 (1) 1 through 4 and attach the documents referred to in paragraph (2) subparagraphs 1 and 2 of the same Article.
(3) Article 1-8 (4) shall apply mutatis mutandis to the validity period of the documents submitted to the financial investment business entity pursuant to paragraph (2).
(4) Necessary matters concerning the form and preparation method of documents under paragraph (2) shall be determined by the Association.
Paragraph (6) is newly inserted in Attached Table 12 No. 1 as follows:
(6) Relevant data under Article 10 (3) 17 (a) or Article 5-49-3 (1) 1 of the Decree, and data from identifying him/her by face-to-face or video call
