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Article 18
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(Approval for Operation)
Approval from the Competent Authority is required for the operation of any securities finance enterprise, securities central depository enterprise, or any other securities-related service enterprise.
Regulations governing the conditions for establishment, application and approval procedures, finances, operations, management, and other matters for compliance with respect to the securities enterprises referred to in the preceding paragraph shall be prescribed by the Competent Authority.
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Article 53
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(Disqualifications and Discharge of Directors, Supervisors, or Managerial Officers)
No person who falls within any of the following categories shall serve as the director, supervisor, or managerial officer of a securities firm; those appointed and currently serving in any of these capacities shall be discharged; the Competent Authority shall also make written request to the Ministry of Economic Affairs to void the registration of such person as a director, supervisor, or managerial officer:
- Any person specified in any subparagraph of Article 30 of the Company Act.
- Any person who served as the director, supervisor, managerial officer or other equivalent position in a juristic person at the time when it was adjudged bankrupt, and that three years have not elapsed since the finalization of the bankruptcy, or that the reconciliation has not yet been fulfilled.
- Any person with whom in the last three years a financial institution has refused to transact, or who has a bad credit record.
- Any person who has been sentenced under this Act to a criminal penalty of severity equal to or greater than the imposition of a criminal fine, and three years have not elapsed since the completion of sentence execution, the expiration of suspension of sentence, or the pardon of such punishment.
- Any person who has violated the provision of Article 51 hereof.
- Any person who was discharged from his position under Article 56 or subparagraph 2 of Article 66 hereof within the last three years.
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Article 56
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(Sanctions for Legal Violations of Securities Firms)
If any director, supervisor, or employee of a securities firm is found to have committed any act which violates this Act or another related act or regulation, and if such violation may affect the normal operation of the said securities firm, the Competent Authority, in addition to ordering the said securities firm to suspend business operation of such person for not more than one year or discharge such person at any time, may also impose sanctions in accordance with Article 66 depending on the severity of the violation.
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Article 66
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(Sanctions for Legal Violations by Securities Firms)
Where a securities firm has violated this Act or any order issued hereunder, in addition to being subject to the punishment provided under this Act, the Competent Authority may, depending on the severity of the offense, impose any of the following sanctions, and furthermore may order the securities firm to correct the violation within a prescribed period:
- warning.
- ordering the securities firm to remove its directors, supervisors, or managerial officers from their office.
- suspending the business, in whole or in part, of the company or its branch for a period of not more than six months.
- voiding or revoking the business license of the company or its branch.
- other necessary measures.
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