REGULATION

ON

SUPERVISION OF SECURITIES INVESTMENT COMPANY

Regulation on Supervision of Securities Investment Company

CONTENTS

I.	General Provisions

§1.	Purpose

§2.	Definitions

II.	Registration

Section 1. Establishment and Registration of Securities Investment Company

§3.	Filing of Stock Issuance by Public Offering at the Time of Establishment

§4.	Preparation and Provision of Prospectus

§5.	Preparation and Provision of Simplified Prospectus

§6.	Notice of Registration

§7.	Supplementation of Registration Application

§8.	Change of Registration

§9.	Processing Period

§10.	Delivery of Reference Materials for Absentee Resolution

Section 2. Registration of Asset Management Companies

§11.	Registration of Asset Management Companies

§12.	Information Required in Registration Application of Asset Management Companies

§13.	Approval of Concurrent Businesses of Asset Management Companies

§13-2.	Internal Control Standards

§14.	Approval of Selling of Shares by Custodians

III.	Supervision

§15.	Investment Ceiling on Privately-placed Bond Investments

§15-2.	Risk Calculation for Securities Option

§16.	Transactions between Asset Management Company and Securities Investment Company

§17.	Duties of the Asset Management Company when Acquiring Securities

§17-2.	Payment of Performance Fee

§18.	Management of Net Assets of Securities Investment Company

§19.	Disclosure of Issuance Price

§20.	Valuation of Assets

§21.	Method of Expressing of Management Performance

§22.	Comparative Disclosure of Management Performance

§23.	Information Required in Closing Documents

§24.	Maintenance and Disclosure of Books and Documents

IV.	Domestic Sale of Stocks Issued by Foreign Securities Investment Companies

§25.	Declaration of Stock Sale by Foreign Securities Investment Companies

§26.	Asset Management Size of Foreign Securities Investment Companies

§27.	Method of Distribution

V.	Dissolution and Liquidation of Securities Investment Companies

§28.	Report on Dissolution

§29.	Remuneration for Liquidators and Liquidation Supervisors

§30.	Restriction on Waiver of Procedure for Peremptory Notice to Creditors

§31.	Orders Related to Liquidation Supervision

VI.	Supplementary Provisions

§32.	Filing and Disclosure of Documents

§33.	Documents Prepared in Foreign Languages

§34.	Delegation of Powers

Addenda

Enacted on November 13, 1998

Amended on June 9, 2000

Wholly Amended on December 29, 2000. FSC 2000-129

Amended on July 3, 2001. FSC 2001-44

Amended on December 19, 2001. FSC 2001-100

Amended on August 1, 2002. FSC 2002-50

Amended on January 3, 2003. FSC 2002-85

CHAPTER I.

GENERAL PROVISIONS

§1. Purpose

The purpose of this Regulation is to prescribe the matters necessary for the enforcement of the items falling under the jurisdiction of the FSC among those pertaining to the supervision of securities investment companies, management companies, custodians, distributors, and transfer agents under the provisions of the Securities Investment Company Act (hereinafter, "the Act"), the Enforcement Decree of the Act (hereinafter, "the Decree"), the Enforcement Regulation of the Act (hereinafter, "the Enforcement Regulation"), the Act on Establishment of Financial Supervisory Organizations (hereinafter, "the Supervisory Act), the Enforcement Decree of the same Act, and any other relevant statutes.

§2. Definitions

The terms used herein this Regulation shall be defined pursuant to the Act, Decree, and the Enforcement Regulation.

1. "Privately placed securities investment company" means a securities investment company established under Article 79 paragraph (1) of the Act.  <Added January 3, 2003>

2. "Publicly placed securities investment company" means a securities investment company other than a privately placed securities investment company.  <Added January 3, 2003>

3. "Privately placed single securities investment company" means a privately placed securities investment company having a single shareholder.  <Added January 3, 2003>

4. "Publicly placed single securities investment company" means a publicly placed securities investment company having a single shareholder.  <Added January 3, 2003>

CHAPTER II.

REGISTRATION

Section 1.

Establishment and Registration of Securities Investment Companies

§3. Filing of Stock Issuance by Public Offering at the time of Establishment

(1) When intending to issue shares at the time of its establishment by a method prescribed under Article 2 paragraph (3) of the Securities and Exchange Act and Article 2-4 of the Enforcement Decree of the same Act, a securities investment company shall not issue such shares unless the FSC accepts the securities registration statement filed in accordance with Article 8 of the Securities and Exchange Act.

(2) The provision of Chapter III (excluding Article 12) of the Securities and Exchange Act and the Regulation on Securities Issuance and Disclosure (excluding Article 13 to Article 16 of the Regulation) shall apply mutatis mutandis to the case of paragraph (1).

(3) The format and the preparation method of the securities registration statement shall be determined by the FSS Governor

§4. Preparation and Provision of Prospectus

(1) Any promoter pursuant to Article 9 paragraph (2) of the Act (hereinafter, "promoter") and any securities investment company pursuant to Article 48 paragraph (2) of the Act (hereinafter, "securities investment company") shall keep the prospectus at the head office of the securities investment company concerned, and file the prospectus with the following persons:

1. Management companies and distributors;

2. The Governor of the FSS; and

3. The Korea Investment Trust Companies Association pursuant to Article 49 paragraph (1) of the Korea Investment Trust Companies Association (hereinafter, "the KITCA").

(2) The securities investment company and the person prescribed under each subparagraph of paragraph (1) shall keep the prospectus at their head offices and other business offices (the head office in the case of a securities investment company) and make them available for public inspection by means of disclosure through electronic media such as internet.

(3) The promoter or the securities investment company shall prepare the prospectus in plain language in order that any investor can easily understand the details concerning the securities investment company.

(4) The promoter or the securities investment company shall supplement the prospectus without delay when any information, which may significantly influence the investment decision of the investor (referring to the information to be registered with the FSC as amendment, from among the information required in the application for registration), is amended.

(5) The promoter, the securities investment company, or the distributors shall provide the prospectus to any person intending to subscribe to the shares of the securities investment company, and shall sincerely and faithfully explain the important details of the prospectus.

(6) The promoter, the securities investment company, or the distributors shall, when receiving from an investor subscription to the shares of the securities investment company, obtain an autographic signature (including signature and seal, or electronic signature pursuant to Article 2 subparagraph 2 of the Electronic Signature Act), of every investor confirming that the important information in the prospectus has been explained and that the prospectus has been delivered.

(7) When any investor who had previously acquired the shares issued by the securities investment company subscribes to additional shares, the securities investment company or the distributors may not supply the prospectus or explain the details thereof pursuant to paragraph (5). However, these provisions shall not apply to the case of the supplement of the prospectus pursuant to of paragraph (4).

(8) The securities investment company or the distributors may supply the prospectus via electronic media such as internet as determined by the FSS Governor.

(9) The format and the preparation method of the prospectus shall be determined by the FSS Governor.

§5. Preparation and Provision of Simplified Prospectus

(1) Notwithstanding Article 4, a securities investment company or distributors may solicit subscription to the shares of the securities investment company using a simplified version of the prospectus pursuant to Article 9 paragraph (4) of the Act (hereinafter, "simplified prospectus")

(2) The contents of the simplified prospectus shall not be different from those of the prospectus.

(3) The promoter, the securities investment company, or distributors shall, when soliciting subscription to the shares of the securities investment company using a simplified prospectus, clearly explain the contents thereof to investors.

(4) Article 4 paragraph (1) to (4) and (8), and (9) shall apply mutatis mutandis to the simplified prospectus. In such cases, "the prospectus" in Article 4 shall be construed as "the simplified prospectus.

§6. Notice of Registration

(1) The Governor shall enter on its registration book the name of any securities investment company if it satisfies the registration requirements prescribed under Article 13 of the Act, and notify the company without delay.

(2) The notice pursuant to paragraph (1) shall be made by delivering a certificate of securities investment company registration which contains the following information:

1. Registration number;

2. Company name and location of the head office;

3. Name of a representative;

4. Contents of registration; and

5. Date of registration.

(3) The format and preparation method of the securities investment company registration statement pursuant to paragraph (1) shall be determined by the FSS Governor.

§7. Supplementation of Registration Application

(1) The Governor may, when he deems that information in the registration application filed by any securities investment company is incomplete pursuant to Article 13 paragraph (3) of the Act, request the company to supplement it within seven days from the date of the notice. In this case, the Governor shall promptly notice thereto with a letter specifying the reason for such request.

(2) The Governor may, when the securities investment company fails to supplement the documents within the period specified paragraph (1) without a fair reason, decline the registration application by stating the reasons.

(3) The format and the preparation method of the registration statement of a securities investment company pursuant to Article 12 paragraph (2) of the Act shall be determined by the FSS Governor.

§8. Change of Registration

(1) Any securities investment company shall, when there is any change in the registered information prescribed under Article 12 paragraph (1) of the Act, register such change with the FSS Governor within two weeks from the date of such change.

(2) Any securities investment company shall, when registering the change pursuant to paragraph (1), attach the documents providing the details of such change, including the minutes of the stockholder meeting or of the board of directors' meeting which adopted the resolution on such change, the corporate charter, the transcript of the company register, and major contract documents that evidence the change.

(3) Article 6 and Article 7 shall apply mutatis mutandis to the registration change pursuant to paragraph (1).

§9. Processing Period

(1) The processing period for a registration of any securities investment company and a change of registration pursuant to Article 12 paragraph (1) and Article 14 of the Act shall be within 20 days from the date of receiving such application for registration or for registration change.

(2) The change of registration for any securities investment company pursuant to Article 14 of the Act as prescribed under paragraph (1) shall be deemed to have been registered on the 21st day after the filing if the FSS Governor does not notify the acceptance of the registration within 20 days from the filing date.

(3) When the FSS Governor requests the supplementation of the registration application and the application for a change of registration pursuant to Article 7 and Article 8, the handling period shall not be include the period for document preparation.

(4) In counting the handling period pursuant to paragraphs (1) and (2), the first day shall be included therein, but public holidays under the Regulation on Public Holidays of Government Offices shall not be included therein.

§10. Delivery of Reference Materials for Absentee Resolution

(1) Any securities investment company shall, when sending a notice of shareholder meeting or forwarding documents necessary for the exercise of absentee voting rights upon the request of any shareholder pursuant to Article 16 paragraph (2) of the Act and Article 7 of the Decree, attach thereto the reference materials in which the following information is included:

1. If the agenda of such shareholder meeting is to appoint directors or statutory auditors:

a. the names, the dates of birth, occupations and recent career of records if candidates for directors or auditors are proposed; and

b. the number of directors and auditors to be appointed, if candidates for directors and auditors are not proposed;

2. If the agenda such shareholder meeting is to dismiss directors or auditors:

a. the names, the dates of birth, and recent career records of the directors or the auditors; and

b. the reasons for dismissal;

3. If the agenda of such shareholder meeting is to amend the AI, the purpose and contents of such amendment;

4. If the agenda of such shareholder meeting is to approve financial statements:

a. the business outline of the fiscal year concerned;

b. Balance sheet and income statement of the fiscal year concerned;

c. Cash distribution statement. However, if the cash distribution plan is not finalized, the matters on dividends of the latest two fiscal years; and

d. Asset management report;

5. If the agenda of such shareholder meeting is a merger:

a. the purpose and background of the proposed merger;

b. major contents the merger contract; and

c. the balance sheets and income statements of the merging and the merged companies for the latest fiscal year.

(2) The information, which has already been published in the Official Gazette and newspapers, may be omitted from the reference materials pursuant to paragraph (1). In this case, the names of the Gazette or newspapers in which such information has been published and the date thereof shall be clearly stated in the reference materials.

Section 2.

Registration of Asset Management Companies

§11. Registration of Asset Management Companies

Article 6 to Article 9 shall apply mutatis mutandis to the administration of registration of branch offices or business offices of an asset management company, a distributor, a transfer agent, and a foreign management company.

§12. Information Required in Registration Application of Asset Management Companies

(1) "Matters to be stipulated by the FSC, from among those which are necessary for registration" prescribed under Article 13 paragraph (1) subparagraph 5 of the Decree refer to those in the following:

1. Matters on internal control standards; and

2. Matters on compliance officers.

(2) Detailed provisions necessary for the registration of management companies shall be determined by the FSS Governor.

§13. Approval of Concurrent Businesses of Asset Management Companies

(1) Any asset management company shall, when intending to concurrently engage in a business other than those permitted under the Act or other statutes pursuant to Article 34 paragraph (1) of the Act, file with the FSS Governor an application in which the following information is stated and obtain his approval:

1. The company name;

2. The location of its head office;

3. The kind and the outline of the business to be concurrently engaged;

4. Reasons for concurrent engagement in such business; and

5. The commencement date of such business.

(2) In case a full-time officer of an asset management company intends to be a full-time officer or an employee of other companies or to engage in other business pursuant to Article 34 paragraph (3) of the Act, he shall file with the FSS Governor for his approval an application in which the following information is stated:

1. The company name;

2. The location of the head office;

3. The Names and the addresses of its officers;

4. Business specifics of the company in which such officer intends to hold concurrent engagement; and

5. Reasons for and the commencement date of such concurrent office and concurrent engagement; and

6. The position and duties of the applicant in the company concerned.

§13-2. Internal Control Standards  <Added January 3, 2003>

In defining matters pertinent to the division of responsibilities and organizational structure in the internal control standards pursuant to Article 19-3 paragraph (1) subparagraph 1 of the Enforcement Decree, the asset management company shall include matters for separating the entity that manages assets of the privately or publicly placed single securities investment company from the entity that manages asets of the publicly placed securities investment company, and vice versa.

§14. Approval of Selling of Shares by Custodians

(1) Any custodian shall, when intending to be a distributor of the shares issued by the securities investment company, which has entrusted of its assets to the custodian pursuant to Article 40 paragraph (5) of the Act, file with the FSS Governor for his approval an application in which the following information is stated:

1. The company name;

2. The location of its head office;

3. The reasons for the concurrent engagement in the business concerned; and

4. The commencement day of such business.

(2) The custodian shall not use the information on the securities investment company, which is obtained while conducting its custodian duties, for the purpose of distributing its shares.

(3) Detailed standards necessary for approval pursuant to paragraph (1) shall be determined by the FSS Governor.

CHAPTER III.

SUPERVISION

§15. Investment Ceiling on Privately-placed Bond Investments

(1) No securities investment company shall acquire privately-placed bonds (referring to the bonds issued by the methods other than the public offering or secondary distribution pursuant to article 2 paragraph (3) and (4) of the Securities and Exchange Act) in excess of 5/100 of its total assets.

(2) Article 47 paragraph (1) of the Regulation on Supervision of Securities Investment Trust Business shall apply mutatis mutandis to the scope of privately-placed bonds that can be acquired by securities investment company pursuant to paragraph (1).

(3) The securities investment companies under Article 79 paragraph (1) of the Act shall not be subject to paragraph (1), and the privately-placed bonds that can be acquired by securities investment company concerned are confined to those evaluated by credit rating agencies designated under Article 7-29 of the Regulation on Securities Business. In this event the credit rating grade of the privately placed bonds that can be acquired by securities investment company concerned must be written on both the AI and the prospectus.

15-2. Risk Calculation for Securities Option

(1) "Risks by transaction type incurred from securities option transactions of the identical category" under Article 28 paragraph (2) subparagraph 1-2 of the Act means the total sum of unsettled yield payment for securities options applicable under identical type of identical category. In this case the unsettled yield payment shall be calculated as follows;

Unsettled yield payment = Market value of underlying stock for securities option transaction Number of underlying stock Number of contracts

(2) "Identical category" under paragraph (1) means the category under which underlying stock is identical to the securities option transaction concerned, and "transaction type" means purchase of securities call option, sale of securities call option, purchase of securities put option, and sale of securities put option.

(3) "Market value of underlying stock certificate for securities option transaction" for calculating unsettled yield payment pursuant to paragraph (1) means the closing market price (or those related back in sequence, absent closing market price for the day concerned)_ applicable under the category of underlying stock for securities option from the day before ceiling provided under the provisions of Article 28 paragraph (2) subparagraph 1-2 of the Act is applied; "number of underlying stock" means the number of underlying stock traded and resulted from exercising rights under each contract for securities option transaction.

(4) "Total risks incurred from securities option transactions under identical category" under Article 28 paragraph (2) subparagraph 1-2 of the Act means the absolute value of the difference between the total sum of risks calculated for purchase of securities call option and sale of securities put option by transaction type and the total sum of risks calculated for sale of securities call option and purchase of securities put option.

§16. Transactions between Asset Management Company and Securities Investment Company

(1) A securities investment company may sell its own securities to the asset management company to which it has entrusted its businesses only in the following cases:

1. Cases where it is unavoidable to sell the securities (excluding stocks) held by any securities investment company that falls under the reasons prescribed under Article 11-4 paragraph (1) of the Decree;

2. Cases where it is unavoidable to sell such securities because of the liquidation of the securities investment company; or

3. Cases in which the sale shall not harm the interest of the shareholders of the securities investment company, and when the FSS Governor has approved of the sale.

(2) Article 41 paragraph (2) to (4) of the Regulation on Supervision of Securities Investment Trust Business shall apply mutatis mutandis to the of securities transactions between the securities investment company pursuant to paragraph (1) and the asset management company entrusted with the business of such securities investment company.

§17. Duties of the Asset Management Company when Acquiring Securities

(1) Any asset management company shall, when it has unavoidably acquired securities in the process of exercising its rights pursuant to Article 17 paragraph (1) subparagraph 1 of the Decree, dispose such securities without delay.

(2) Any asset management company shall, when it has unavoidably acquired the securities held by the securities investment company from which it has entrusted asset management business pursuant to Article 16 paragraph (1), dispose of such securities within six months from the date of acquisition. However, when it is difficult to dispose of such securities under inevitable reasons, the deadline can be extended if approved by the FSS Governor.

§17-2. Payment of Performance Fee

(1) The securities investment company under Article 79 paragraph (1) of the Act may pay the asset management company performance fees based on its performance (hereinafter, the "performance fee") on top of the designated, proportional fee.

(2) In the event any securities investment company pays the performance fee pursuant to paragraph (1), it must include the following items in both the AI and the prospectus under Article 4 (including the simplified prospectus under Article 5):

1. The calculation method of the performance fee;

2. The benchmark index used in measuring performance, and the properties and the measuring period of the benchmark index;

3. An explanation that the securities investment company paying performance fees may be exposed to greater investment risk than those that do not pay performance fees;

4. The compensation structure including the performance fees of the securities investment companies.

(3) The FSS Governor may determine the specifics of the payment of the performance fee.

§18. Management of Net Assets of Securities Investment Company

(1) Any securities investment company shall, when its net assets are less than the minimum net assets pursuant to Article 7 paragraph (3) of the act (hereinafter, "minimum net assets" in this article), promptly report such fact to the FSS Governor in writing where the following information is stated:

1. Company name;

2. Date on which the securities investment company failed to reach the minimum net assets and the reason thereof;

3. Net assets and net asset value per share as of the date on which such failure occurred;

4. Asset management status and details of the latest year (however, in the case of a securities investment company which has not passed one year since its establishment, asset management status and details during the period from its establishment to the reporting date);

5. Changes in the stock price during one-month period preceding the date of the occurrence of such failure;

6. Changes in share-holding status of principal shareholders and officers in the past year; and

7. Measures and plans to maintain the minimum net assets.

(2) The FSS Governor shall notify the securities investment company in writing that he would revoke the registration pursuant to Article 63 of the Act if it fails to reach the minimum net assets for three consecutive months. Such notice should state:

1. The date on which such failure occurred;

2. The date on which the registration is scheduled to be revoked;

3. The reasons and contents of registration revocation; and

4. Matters on the reporting procedures when the company regained the minimum level of net assets.

§19. Disclosure of Issuance Price

Open-end securities investment companies and distributors are required, pursuant to Article 24 of the Decree, to disclose the stock issuance price by posting the notice in its business offices or via electronic media such as internet.

§20. Valuation of Assets

The provisions of Section 3 of Chapter Ⅳ of the Regulation on Supervision of Securities Investment Trust Business shall apply mutatis mutandis to the valuation of the securities and other assets held by any securities investment company.

§21. Method of Expressing the Management Performance

(1) When securities investment companies and distributors advertise their management performance in order to solicit for subscriptions to its shares, they shall observe the following:

1. The method of expressing the management performance in both the prospectus and the simplified prospectus should be the same;

2. The life span of the company and the final base date of valuation of the securities investment company should be stated;

3. The management performance as of the most recent date should be expressed;

4. The fact that the management performance recorded is of the past and that the future performance may be different from the past should be stated;

5. The performance of the benchmark index which is used to evaluate the performance of the securities investment company should be stated together with the management performance thereof; and

6. The annual average yield as well as simple realized yield should be expressed.

(2) When any securities investment company and distributor advertise their management performance in comparison with those of other securities investment companies, the selection of the comparable securities investment companies and the comparison standards should be fair and reasonable.

(3) Detailed standards of advertisement expressing management performance and comparison advertisement pursuant to paragraph (1) and (2) may be determined by the FSS Governor.

22. Comparative Disclosure of Management Performance

(1) The KITCA shall prepare data on management performance of each securities investment company including the following information and disclose them in writing or in electronic media such as internet and etc.:

1. The name of the securities investment company;

2. The names of the management company and its fund managers;

3. The amount and the weight of investment of respective securities;

4. Asset size and net asset value per stock;

5. Rate of increase in net asset value (yield); and

6. Other peculiar matters related to asset management.

(2) The KITCA shall classify and prepare the data reflective of the comparative management results of each securities investment company by type, privately placed securities investment company, and publicly placed securities investment company, based upon net asset value per share, rate of return, dividend payout ratio and size of the assets under management, then shall disclose them through publication and electronic media such as the Internet. <Amended January 3, 2003>

(3) The KITCA may, in case the comparative performance of securities investment companies pursuant to paragraphs (1) to (2) is to be disclosed, request the securities investment companies, management companies and transfer agents to submit data on prospectus and net asset value per share of each securities investment companies within the necessary boundaries.

(4) The KITCA may determine the detailed standards necessary in implementing other performance data in comparative disclosure classification of the securities investment companies such as period of disclosure, method of comparison, standard of disclosure as well as the method of providing data from the securities investment companies etc.

§23. Information Required in Closing Documents

The information required in the closing document pursuant to Article 52 paragraph (3) of the Act shall be as follows:

1. Balance sheet and income statement: information required pursuant to Accounting and Auditing Standards of Trust Property;

2. Assent management report: annual yields and details of trading of securities; and

3. Calculation sheet concerning cash distribution: information required pursuant to Accounting and Auditing Standards of Trust Property.

§24. Maintenance and Disclosure of Books and Documents

(1) Any securities investment company, management company, custodian, distributor, and transfer agent shall prepare the following documents, maintain them at their head office and business offices (the head office in the case of a securities investment company and management company), and provide the service upon the request by the shareholders and creditors for perusal of the document or delivery of a copy if there is no justifiable reason to refuse such request:

1. Securities investment companies and transfer agents: documents prescribed under Article 56 paragraph (1) of the Act; monthly reports and annual reports prescribed under Article 60 of the Act, and prospects.

2. Management companies

a. The balance sheet and the income statement;

b. A copy of the documents prescribed under subparagraph 1;

c. The specification of assets such as securities held by securities investment company; and

d. Details of securities transactions

(2) If the transfer agent prepares and maintains the documents prescribed under paragraph (1) subparagraph 1, it shall be deemed that the securities investment company thereof has prepared and maintained such documents.

(3) Securities investment company, management company, custodian, distributor, and transfer agent shall disclose the documents prescribed under paragraph (1) via an electronic media such as internet

(4) Every securities investment company shall hand over or deliver asset management reports provided under Article 60 paragraph (4) of the Act to the current shareholders concerned within a month from each base date provided under Article 30-3 paragraph (5) subparagraph 1 of the Enforcement Decree (hereinafter referred to as "base date of preparation" in this Article) as of the base date of preparation.

(5) The format of asset management report provided under paragraph (4) shall be determined by the Governor.

CHAPTER IV.

DOMESTIC SALE OF STOCKS ISSUED BY FOREIGN SECURITIES INVESTMENT COMPANIES

§25. Declaration of Stock Sale by Foreign Securities Investment Companies

(1) Any foreign securities investment company shall, when intending to sell, pursuant to Article 80 paragraph (1) of the Act, the stocks issued in foreign countries in accordance with foreign statutes in the domestic market, file with the FSS Governor a declaration containing the following information:

1. An outline of the company;

2. Information on issued stocks;

3. Information on share repurchases such as whether shares can be purchased upon requests of shareholders;

4. Minimum net assets to be maintained by the company;

5. Basic policy direction of asset management;

6. Information on the distribution of profits;

7. Information on shareholders' rights and officers;

8. Valuation method of assets;

9. An outline of an asset management entrustment contract;

10. An outline of the business entrustment agreement made with a custodian and distributor;

11. Annual yields for the last three years;

12. Investment registration with foreign supervisory institutions, if any; and

13. Other information demanding attention to investment.

(2) Any foreign securities investment company shall, when there is any significant change in the information declared pursuant to paragraph (1), promptly declare such change to the Governor. In this case, the documents certifying such change shall be attached thereto.

(3) Necessary provisions such as the formats, preparation method of the declaration of domestic sale of the stocks of foreign securities investment companies pursuant to paragraph (1) and (2) shall be determined by the FSS Governor.

§26. Asset Management Size of Foreign Securities Investment Companies

(1) When a foreign securities investment company intends to sell in the domestic market the stocks issued in foreign countries in accordance with foreign statutes, an asset management size of such foreign management company shall be 5 trillion won or more at the end of the latest fiscal year.

(2) Article 76 paragraph (2) of the Regulation on Supervision of Securities Investment Trust Business shall apply mutatis mutandis to the calculation of asset management size of any foreign management company pursuant to paragraph (1).

§27. Method of Distribution

(1) Any distributor shall, when soliciting investors for purchase of the stocks issued by foreign securities investment companies pursuant to Article 39 paragraph (2) of the Decree, deliver in document the information demanding attention to the risk associated with the price fluctuation as well as the exchange rate fluctuation, and confirm this by obtaining an autographic signature (including signature and seal, or electronic signature pursuant to Article 2 subparagraph 2 of the Electronic Signature Act).

(2) The provisions of Section 5 of Chapter IV of the Regulation of Supervision of Securities Investment Trust Business shall apply mutatis mutandis to the domestic distribution of the stocks of any foreign securities investment company, except the cases as otherwise specified in this Regulation.

CHAPTER V.

DISSOLUTION AND LIQUIDATION OF SECURITIES INVESTMENT COMPANIES

§28. Report on Dissolution

In the case where securities investment company is dissolved, the bankruptcy administrator or liquidator thereof shall report in writing to the Governor the following information within 30 days from the date of dissolution in accordance with Article 65 of the Act:

1. Name of securities investment company;

2. Representative director;

3. Location;

4. Date of establishment;

5. Date of registration;

6. Capital stock;

7. Information of shareholders;

8. Date of dissolution and net assets as of the date of dissolution;

9. Reasons for dissolution;

10. Personal details of bankruptcy administrators or liquidators; and

11. Other information on shareholders' interests.

§29. Remuneration for Liquidators and Liquidation Supervisors

The remuneration for liquidators and liquidation supervisors appointed pursuant to Article 66 paragraph (3) and (4) of the Act shall be determined by the FSS Governor in consideration of the following matters:

1. The remuneration to the executive director and supervisory directors of the securities investment company concerned;

2. The asset size of the securities investment company concerned;

3. The degree of difficulty involved in the liquidation process; and

4. The career experience of appointed liquidators and liquidation supervisors.

§30. Restriction on Waiver of Procedure of Peremptory Notice to Creditors

"Cases to be stipulated by the FSC" prescribed under Article 33-2 paragraph (2) subparagraph 3 of the Decree refer to the case where there is any debt unredeemed due to the borrowing of funds pursuant to Article 11-4 of the Decree

§31. Orders Related to Liquidation Supervision

The FSC may issue an order to the securities investment company, management company, distributor, custodian, or transfer agent concerned to take the following measures pursuant to Article 74 of the Act when it deems that such order should be necessary:

1. Deposit of properties;

2. Conclusion of the existing operation related to the management of the assets invested by such securities investment company;

3. Collection of such securities investment company's claims and repayment of its liabilities;

4. Delivery of the remaining assets of such securities investment company;

5. Public notice and peremptory notice on declaration of claims to its creditors;

6. Preservation of the books and the important documents related to the liquidation of such securities investment company;

7. Preparation and submission of shareholder list; and

8. Implementation of necessary procedures for liquidation and filing of relevant data.

CHAPTER VI.

SUPPLEMENTARY PROVISIONS

§32. Filing and Disclosure of Documents

(1) The documents to be filed with the FSC or the FSS Governor by any securities investment company, management company, custodian, distributor, transfer agent pursuant to this Regulation shall be two copies each.

(2) The Governor shall, among those filed pursuant to paragraph (1), disclose for a period between the date of registration and the date of registration revocation if the documents are registration related and disclose for a period of two years from the date of receipt if the documents are prescribed in Article 52 paragraph (2) of the Act.

§33. Documents Prepared in Foreign Languages

(1) Any documents prepared in a foreign language, from among those to be filed with the FSC or the FSS Governor by any securities investment company, management company, custodian, distributor, transfer agent pursuant to the provision of this Regulation shall be accompanied with a Korean version thereof.

(2) If there is any discrepancy between the contents of the documents prepared in a foreign language and those translated into Korean, from among the documents filed with the FSC or the FSS Governor pursuant to paragraph (1), those translated into Korean shall prevail.

§34. Delegation of Powers

The FSC shall delegate its powers to carry out any of the following duties to the FSS Governor:

1. Duties to notify to any person on whom the disposition of negligence fine is imposed, to grant an opportunity to express his opinion, to receive his objection, and to notify to the competent court in accordance with Article 53 paragraph (2) to (4) of the Act;

2. Duties to receive closing documents and audit reports of securities investment companies pursuant to Article 53 paragraph (2) of the Act;

3. Duties to receive, and to form the formats of, monthly report and annual report pursuant to Article 60 paragraph (1) of the Act;

4. Duties to receive a notice of appointment and dismissal of compliance officers pursuant to Article 19-4 paragraph (3) of the Decree; and

5. Duties to receive a notice of omission of procedures for peremptory notice to creditors pursuant to Article 33-2 paragraph (1) of the Decree.

Addendum

(December 29, 2000)

This Regulation shall be effective on the date of promulgation.

Addendum

(July 3, 2001)

This Regulation shall be effective on the date of promulgation.

Addendum

(August 1, 2002)

This Regulation shall be effective on the date of promulgation.

Addendum

(January 3, 2003)

This Regulation shall be effective on the date of promulgation.