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Article 11-3
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A securities firm director, supervisor, or related party thereof, who acts concurrently as a director or supervisor of any other financial institution as set forth in Article 11-1, paragraph 1 will be presumed to have a conflict of interest unless the securities firm and that financial institution have a controlling and subordinate relation as defined in the Company Act or such concurrent appointment is allowed under these Regulations.
The term "director" or "supervisor" as used in the preceding paragraph means those within the following scope:
- A juristic person or a natural person appointed by such juristic person to exercise the duties.
- A juristic person or an elected natural person representative who represents such juristic person.
- An elected natural person who is neither appointed by nor a representative of the government or a juristic person.
The term "related party" of a director or supervisor as used in paragraph 1 means parties related to the same natural person or the same juristic person, within the following scope:
- Parties related to the same natural person:
- The spouse and lineal relatives of that natural person.
- Any enterprise in which that natural person and natural persons referred to in the preceding item hold in aggregate more than one-third of the outstanding voting shares or capital, or any enterprise or foundation in which that natural person and natural persons referred to in the preceding item serve as the chairman or general manager or in a majority of the director positions.
- Parties related to the same juristic person:
- The chairman of that juristic person and his or her spouse and lineal relatives.
- Any enterprise in which that juristic person and natural persons referred to in the preceding item hold more than one-third of the outstanding voting shares or capital, or any enterprise or foundations in which that juristic person and natural persons referred to in the preceding subparagraph serve as the chairman or general manager or in a majority of the director positions.
- Affiliates of that juristic person. The term "affiliate" shall be as defined under Articles 369-1 to 369-3, Article 369-9, and Article 369-11 of the Company Act.
The preceding three paragraphs shall not apply to the government or to a securities firm in which the government directly and/or indirectly holds 100 percent of the shares. However, the natural person appointee(s) or representative(s) of the government or securities firm designated to serve in the director or supervisor capacity shall not concurrently serve in any position in another financial institution unless with the approval of the FSC.
If a securities firm director, supervisor, or related person thereof, has a conflict of interest set out in paragraph 1 or the preceding paragraph, the FSC may order the securities firm to make adjustments within a prescribed period of time; the person shall be dismissed if the securities firm fails to adjust within the time period and without justifiable reason.
Those who were already serving as a director or supervisor of a securities firm prior to the enforcement of the 28 October 2022 amendment to this article may continue to serve for the duration of their original term, without being subject to the restrictions in the preceding five paragraphs.
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