1.

Addition and Change of Finance-Related Laws and Regulations That Serve as the Basis for “Responsibilities”

Fourteen laws have been added to the scope of the “finance-related laws and regulations” that serve not only as a basis for passive qualifications of officers, compliance officers, and chief risk officers (collectively, “Officers and Others”) under the current Corporate Governance Act, but also as a ground for establishing responsibilities under the amended Corporate Governance Act. They include the Act on the Protection of Virtual Asset Users, the Act on the Management of Personal Financial Claims and Protection of Individual Financial Debtors, the Special Act on the Management of Public Funds, and the National Pension Act (limited to Article 124), in addition to the currently effective 51 laws. If an officer becomes subject to a sanction exceeding a certain level for a violation of finance-related laws and regulations, the sanction would result in an event of disqualification of Officers or Others under the Corporate Governance Act. The scope of requirements for sanctions that may constitute an event of disqualification of Officers or Others will also be expanded upon the enactment of the Proposed Amendment.

A number of the 26 “financial laws and regulations” set forth under the Former Proposed Amendment as laws which serve not as a basis for passive qualifications of Officers and Others, but as a ground for establishing responsibilities under any law other than finance-related laws and regulations were again included, as amended, among the “finance-related laws and regulations” referred to above. The overall number of financial laws and regulations was reduced to eight under the Proposed Amendment, while additional grounds for delegation to add financial laws and regulations were established under the Supervisory Regulations.
 

2.

Expansion of Scope of Cases Subject to Report on Qualifications of Officers

Under the Former Proposed Amendment, the cases requiring a financial company to review and report whether qualifications as officer subject to the preparation of the chart of responsibilities are defined as “case(s) where the officer’s responsibilities are added.” Under the Proposed Amendment by comparison, such cases are defined as cases “where the officer’s responsibilities are changed or added.”
 

3.

Deletion of Provision on “Employees of the Korean Branch of an Overseas Financial Company” From Officers Subject to the Preparation of the Chart of Responsibilities

The Proposed Amendment omits the Former Proposed Amendment’s stipulation that, as the responsibilities map applies also to the employees designated by the Presidential Decree in addition to the existing officers subject to inclusion in the responsibilities map under the amended Corporate Governance Act, “employees of the Korean branch of an overseas financial company who perform duties equivalent to those of an officer” should be explicitly set forth as officers subject to inclusion in the responsibilities map, together with compliance officers and chief risk officers.

If a Korean branch of an overseas financial company with a small-scale workforce has only junior level employees under the command of the branch manager in a certain department, the branch should determine, at its own discretion, whether or not to include those employees among those subject to inclusion in the responsibilities map. The Proposed Amendment, which continues to explicitly stipulate the inclusion of compliance officers and chief risk officers in the responsibilities map, is understood to be intended to address some of the difficulties associated with preparing the responsibilities map of a domestic branch of an overseas financial company by deleting relevant content.
 

4.

Clarification of Management Measures for Internal Control by Officers

The Proposed Amendment further clarifies the meaning of management measures for internal control etc., by officers delegated under the Enforcement Decree, and modifies such measures to those that can be actually implemented by officers.
 

5.

Partial Change of Definition of “Responsibilities” in the Responsibilities Map

Annex 1-2 (Examples of Duties) of the Former Proposed Amendment sets forth examples of the “detailed duties” by types as the responsibilities of internal control and risk management (“Internal Control, Etc.”) regarding (i) duties to be performed comprehensively and enterprise-wide by designating a specific person in charge of compliance, risk management and similar functions in accordance with laws and regulations, (ii) business-related duties by divisions, such as proprietary, concurrent and ancillary businesses, that are performed by financial companies after obtaining licenses and permits, and (iii) business management-related duties by divisions that are performed by financial companies for the operation of financial business for which licenses and permits have been granted.

The Proposed Amendment sets forth the “duties” as responsibilities under Annex 1, which classifies the responsibilities into “responsibilities related to designated persons,” “responsibilities related to financial business” and “responsibilities related to business management,” corresponding to the respective conceptual duties set forth in (i), (ii) and (iii) mentioned above under the Former Proposed Amendment and defines “duties” as the “responsibilities regarding execution and operation of Internal Control, Etc.” for each category of duties, and allows a financial company to make an adjustment, including subdivision or consolidation of the disparate responsibilities listed by types under Annex 1, in accordance with the organization, business characteristics, business scope and similar considerations of each financial company.

In addition, Annex 1 (Responsibilities) to the Proposed Amendment (unlike Annex 1-2 (Examples of Duties) to the Former Proposed Amendment) reflects certain changes to the duties subject to execution and operation of Internal Control, Etc.: (i) the “establishment and management of the responsibilities map” newly applies as one of the responsibilities related to a designated person, (ii) matters related to the “operation of the board of directors” have been reclassified to “business management-related responsibilities,” (iii) “reinsurance” has been deleted from, and “facility leasing” added to, “finance business-related responsibilities,” and (iv) the “operation and management of computer systems” has been added to “business management-related responsibilities.”
 

6.

Clarification of Overall Management Measures, Such as Internal Control, by the Representative Director and Others
 
With respect to the details of overall management measures, such as internal control, etc., by the representative director and others delegated under the Enforcement Decree, the Proposed Amendment further clarifies the meaning of the measures or revises the wordings thereof, and revises such measures to those that can be actually implemented by the representative director and others.
 

7.

Transitional Measures for the Internal Control Committee Chaired by the CEO

The Proposed Amendment specifies that the internal control committee chaired by the CEO established pursuant to Article 19 (2) of the Enforcement Decree of the Corporate Governance Act shall continue to exist until the internal control committee is established as a committee within the board of directors as prescribed in the Corporate Governance Act.