REGULATION

ON

REPORTING OF SHAREHOLDINGS BY OFFICERS AND PRINCIPAL SHAREHOLDERS AND DISGORGEMENT OF SHORT-SWING PROFITS

Regulation on Reporting of Shareholdings by Officers and Principal Shareholders and

Disgorgement of Short-Swing Profits

CONTENTS

I.	General Provisions

§1.	Purpose

II.	Reporting Of Shareholdings by Officers and Principal Shareholders

§2.	Base Date of Reporting on Changes

§3.	Number of Copies of Reports to be Filed and Disclosure

§4.	Measures on Violation

III.	Calculation Method of Short-Swing Profits and Exceptions of Disgorgement

§4-2.	[Deleted]

§5.	Ex-day Conversion of Price and Quantity

§5-2.	Purchase Price, Etc. Following Exercise of Rights to Securities Option

§6.	Trading by Multiple Accounts

§7.	Taxation Treatment

§8.	Filing of Evidence

§9.	Disclosure of Measures on Violation

§9-2.	Exceptions of Disgorgement of Short-Swing Profits

IV.	Supplementary Provisions

§10.	Delegation of Power

Addenda

Enacted on April 1, 1998

Amended on June 24, 1998

Amended on March 24, 1999

Amended on August 4, 1999

Amended on October 6, 2000

Amended on January 28, 2002

CHAPTER I.

GENERAL PROVISIONS

§1. Purpose

The purpose of this Regulation is to prescribe the necessary matters related to the reporting of shareholdings by officers and principal shareholders, calculation method of short-swing profits, and exceptions of disgorgement under Article 188 of the Securities and Exchange Act (hereinafter, "the Act"), Article 83-5 paragraph (5) through paragraph (13) and Article 83-6 of the Enforcement Decree of the Act (hereinafter, "the Decree")

CHAPTER II.

REPORTING ON SHAREHOLDINGS BY EXECUTIVES AND PRINCIPAL SHAREHOLDERS

§2. Base Date of Reporting on Changes

Under Article 83-5 paragraph (11) subparagraph 4 of the Decree "The day determined by the Securities Futures Commission" means such day as prescribed under the following subparagraphs.

1. In the case of acquisition of new shares allotted by an issuance of new shares, the day after the payment for the new shares;

2. In the case of acquisition of bonus issues due to the transfer of surplus to capital, the closing day of the bonus issues;

3. In the case of acquisition of new shares due to stock dividend, the day when the general shareholders' meeting for the resolution on stock dividends was hold;

4. Where new stocks are acquired by exercising rights granted to convertible bonds or bonds with warrant, the date when such rights are exercised;

5. In the case of acquisition of shares due to a merger, the registration date of the merger;

6. In the case of acquisition of new shares due to stock split or reverse split, the day when the old share certificates are surrendered;

7. In the case of acquisition of shares due to inheritance, the day on which such inheritance is fixed according to simple or qualified acceptance for one heir, and the day on which the partition of the estate related to such stock is completed for two or more heirs;

8. Where stocks are acquired by exercising rights granted to exchangeable bonds, the date when such rights are exercised

9. Where stocks are acquired or disposed of by the exercise or allocation of securities option, the date when settlement is made

10. Where changes are not applicable under subparagraph 1 through 9, the date on which legal conduct that is the cause for the changes becomes effective in accordance with general principles of laws such as the Civil Act or the Commercial Act;

§3. Number of Copies of Reports to be Filed and Disclosure

(1) When it makes a report pursuant to Article 188 paragraph (6) of the Act, an officer or principal shareholder of a listed corporation or registered corporation (hereinafter, "listed corporation, etc.") shall, file two copies each of the report on shareholding status of officers and principal shareholders (including facsimile transmission) with the SFC and either the KSE or the KSDA, respectively

(2) The FSC, the KSE, and the KSDA shall provide and disclose the reports filed pursuant to the provisions of paragraph (1) for two years of the day of receipt for public view.

§4. Measures on Violation

When it deems that an officer or principal shareholder violates Article 188 paragraph (6) of the Act, The SFC may take any of the following measures against such officers or principal shareholders:

1. Indictment or notification to investigation authorities;

2. Warning or attention;

3. Request to submit a memorandum.

CHAPTER III.

CALCULATION METHOD OF SHORT-SWING PROFITS AND EXCEPTIONS OF DISGORGEMENT

§4-2. [Deleted October 6, 2000]

§5. Ex-day Conversion of Price and Quantity

In the case of ex-right or ex-dividends after buying or selling shares, the short-swing profits shall be calculated on the basis of sales price and quantity to be converted in accordance with the formula as annexed.

5-2. Purchase Price, Etc. Following Exercise of Rights to Securities Option

Purchase or sales price of the stocks acquired or disposed of by exercise of rights to securities option shall be governed by the attached forms.

§6. Trading by Multiple Accounts

In the event a same party conducts transactions using multiple accounts, the total accounts shall be considered a single account.

§7. Taxation Treatment

In calculating short-swing profits, taxes on bonus issues or on dividends, uncollected interest in arrears, and interest on margin transaction shall not be considered.

§8. Filing of Evidence

(1) When the concerned officer has disgorged short-swing profits, such officer or the corporation concerned shall file with the SFC the evidence (including facsimile transmission).

(2) The evidence mentioned in paragraph (1) shall be the copies of the remittance slip, the receiving account ledger, and the accounting slips and ledgers.

§9. Disclosure of Measures on Violation

A listed corporation on which the measure has been imposed pursuant to Article 83-5 paragraph (8) of the Decree shall specify the fact in its annual report, semi-annual report, and quarterly report of the fiscal year thereof.

§9-2. Exceptions of Disgorgement of Short-Swing Profits

"Cases that the FSC shall not deem the trading as an act of misappropriating material information undisclosed to the public like the direct acquisition of securities from an issuer or a distributor," prescribed under Article 83-6 of the Decree means the following cases:

1. Acquisition of new shares through the exercise of rights for the stocks, convertible bonds, bonds with warrant (subscription warrant in the case of the issuance in a separate form), and the certificate of warrant (hereinafter, "stocks, etc.), which are already owned;

2. Subscription to stocks publicly offered or distributed under Article 8 of the Act;

3. Subscription to shares preferentially allotted to the ESOA members under Article 191-7 of the Act;

4. [Deleted]

5. Acquisition of forfeited shares or odd lot occurred in the case of rights offering;

6. Underwriting of stocks, etc. for the business prescribed in Article 28 paragraph (2) subparagraph (3) of the Act;

7. Trading to be executed by institutional investors under the trust contract, etc. of money.

8. Acquisition of shares by exercise of rights to exchangeable bonds (limited to exchangeable bonds for which exchange for stocks of the corporation concerned is available)

9. Acquisition of stocks granted as a matter of prize, bonus and etc. pursuant to the provisions of Article 36-7 subparagraph (2) of the Enforcement Rules of the Act

10. Sales of stocks and etc. (including exchangeable bonds under paragraph (8)) by tender offering pursuant to the provisions of Article 21 of the Act

CHAPTER IV.

SUPPLEMENTARY PROVISIONS

§10. Delegation of Power

(1) The SFC may delegate the following matters to the Governor:

1. Reception of evidence, the reception and disclosure of the reports on shareholdings by officers and principal shareholders;

2. Issuance of order to file reference reports or data for officers, employees, principal shareholders and other related persons; and investigation of its books, documents and other things;

3. Measures under Article 4 subparagraph 2 and 3;

4. Request for disgorgement of short-swing profits and subrogation request therefor.

(2) The Governor may formulate forms and other necessary details for the implementation of this Regulation.

Addenda

(April 1, 1998)

§1. Effective Date

This Regulation shall be effective on April 1, 1998.

§2. Repeal of Previous Regulations and Interim Measures

(1) On the effective date of this Regulation, the previous Regulation on Reporting Shareholding Status of Officers and Principal Shareholders and Disgorgement of Short-Swing Profits enacted by the former Securities Supervisory Commission (hereinafter, "the previous Regulation") shall be repealed,

(2) Receipts, requests for disgorgement, measures, formulation of forms, etc. conducted by the Securities and Exchange Commission or the Chairman of Securities Supervisory Board under the previous Regulation before the enforcement of this Regulation shall be deemed to have been conducted by SFC or the Governor in accordance with the repeal.

§3. Interim Measures on Business and Authority of FSS

Until the establishment of the FSS, the Governor shall be deemed the governor of the Securities Supervisory Board and the FSS shall be deemed the Securities Supervisory Board in this Regulation (including Addenda).

§4. Relations with Other Regulations

In case any other regulation cites the previous Regulation as of the enforcement date of this Regulation, the provisions which fall within the purview of this Regulation, if any, shall be deemed to have been cited in place of the previous Regulation

Addendum

(June 24, 1998)

This Regulation shall be effective on June 25, 1998,

Addenda

(March 24, 1999)

§1. Effective Date

This Regulation shall be effective on April 1, 1999.

§2. Interim Measures on Report on Shareholding Status

(1) The officers or principal shareholders who should report their shareholdings pursuant to the amended provisions of Article 3 shall report such status within one month from the effective date of this Regulation.

§3. Application to Disgorgement of Short-Swing Profits

The relevant provisions, in this Regulation, concerning the disgorgement of short-swing profits by officers, employees, or principal shareholders shall apply to the securities purchased first or sold after the enforcement of this Regulation

Addenda

(August 4, 1999)

§1. Effective Date

This Regulation shall be effective on August 7, 1999.

§2. Interim Measures on Exceptions of Disgorgement of Short-Swing Profits

In case short-term transactions which have been executed before the enforcement of this Regulation falls under the exceptions of the disgorgement of short-swing profits pursuant to the Regulation on Disclosure of Changes in Corporate Governance, such transactions shall be deemed to have been executed pursuant to this Regulation

Addendum

(October 6, 2000)

This Regulation shall be effective on the date of promulgation.

Addendum

(January, 28, 2002)

This Regulation shall be effective on the date of promulgation.