韩国证交所上市准则-Membership Regulation.doc

Membership Regulation Formulated on January 21 2005 Amended on August 26 2005 Amended on October 12 2007 Amended on January 28 2009 Rules and Regulations available from this English version do not warrant or assume any liability or responsibility for the accuracy completeness or usefulness of any information Only Korean version shall be deemed authentic Table of Contents CHAPTER I GENERAL PROVISIONS 1 1 Purpose 1 2 Definitions 1 CHAPTER II CATEGORIES AND QUALIFICATIONS OF MEMBERSHIP 2 3 Categories of Membership 2 4 Qualifications of Member 2 CHAPTER III MEMBER ADMISSION WITHDRAWAL AND CONVERSION OF MEMBERSHIP 4 5 Application for Membership and Examination and Approval Thereof 4 6 Criteria for Member Admission 4 7 Financial Criteria 5 8 Payment and Deposit of Admission Fees etc 6 9 Admission Date Revocation of Admission Approval and Notification Thereof 6 10 Voluntary Withdrawal 6 11 Obligatory Withdrawal 7 12 Notification of Membership Withdrawal 7 13 Succession of membership 7 14 Trading Suspension and Settlement of Unsettled Trades 8 15 Refund and Takeover of Joint Compensation Fund 8 16 Application Examination and Approval of Membership Conversion 9 17 Criteria for Membership Conversion 9 18 Payment Deposit and Refund of Conversion Fees etc 9 19 Conversion Date Cancellation of Conversion Approval and Notification Thereof 10 CHAPTER IV RIGHTS AND OBLIGATIONS OF MEMBERS 11 20 Scope of Market Participation 11 21 Settlement of Securities and Exchange traded Derivative Trades 11 22 Entry into Settlement Entrustment Agreement 11 23 Contribution to the Joint Compensation Fund 12 24 Contribution of Individual Clearing Member to Joint Compensation Fund 13 25 Use of Joint Compensation Fund 14 26 Payment of Transaction Fees 15 27 Compliance with Laws and Regulations 15 28 Principles of Good Faith 16 29 Observing the Admission Criteria 16 30 Reporting of Financial Status 16 31 Deposit of Fidelity Guarantee Money 17 32 Reporting to the Exchange 17 CHAPTER V MEMBER SUPERVISION 20 33 Request for Submission of Information etc 20 34 Request for Corrective Action 20 35 Reasons for Disciplinary Measures 20 36 Disciplinary Measures against Members 21 37 Postponement or Cancellation of the Measures Taken for Unsatisfactory Financial Conditions 22 38 Opportunity to Present Statements etc 22 39 Notification of the Measures Taken 23 CHAPTER VI SUPPLEMENTARY PROVISIONS 24 40 Alternative Trading System Members 24 41 Exceptions to the Rights to Trade Debt Securities 25 42 Enforcement Rules 26 ADDENDA 27 1 CHAPTER I GENERAL PROVISIONS 1 Purpose Pursuant to 387 of the Financial Investment Services and Capital Markets Act hereinafter referred to as the Act the purpose of this Membership Regulation hereinafter referred to as the Regulation is to stipulate the matters necessary for the administration of the members of the Korea Exchange hereinafter referred to as the Exchange including the membership category and qualifications the member admission and withdrawal and the rights and obligations of the members Amended on January 28 2009 2 Definitions 1 The term Member in this Regulation shall mean the market participants who are allowed to trade the securities in the securities markets or exchange traded derivative products in the Derivatives Market which are established and operated by the Exchange in their own name irrespective of the owner of the account used Amended on January 28 2009 2 The term Joint Compensation Fund in this Regulation shall mean the Joint Compensation Fund for Damages pursuant to 394 1 of the Act Amended on January 28 2009 3 The term Fidelity Guarantee Money in this Regulation shall mean the Fidelity Guarantee Money of the member pursuant to 395 of the Act Amended on January 28 2009 4 Deleted on January 28 2009 5 The terms in this Regulation other than those defined in Paras 1 through 4 shall have the same meanings given to them in the Act and the regulations of the Exchange that govern the Exchange s business Amended on January 28 2009 2 CHAPTER II CATEGORIES AND QUALIFICATIONS OF MEMBERSHIP 3 Categories of Membership 1 The membership of the Exchange shall be categorized into each of the following items according to the Market and the variety of financial investment products which they are entitled to participate in Amended on January 28 2009 1 Securities member A member who is entitled to take part in trading in the securities markets Amended on January 28 2009 2 Equity securities member A member who is entitled to take part in trading of equity securities excluding collective investment securities in the securities markets Amended on January 28 2009 3 Debt securities member A member who is entitled to take part in trading of debt securities in the securities markets January 28 2009 4 Derivatives member A member who is entitled to take part in trading in the Derivatives Market and January 28 2009 5 Equity Derivatives member A member who is entitled to take part in trading of exchange traded derivatives based on equity in the Derivatives Market January 28 2009 2 The members of the Exchange shall be categorized further into each of the following categories according to the extent of responsibilities that a member has in fulfilling the settlement obligations subsequent to the trading of securities or exchange traded derivative products 1 Clearing member A member who is entitled to settle the securities and exchange traded derivatives conducted in its name or the trades of securities and exchange traded derivatives that have been entrusted by the non clearing members in its own name Amended on January 28 2009 2 Non clearing member A member who is required to entrust the settlement of securities and exchange traded derivatives trades conducted in its name to a clearing member Amended on January 28 2009 4 Qualifications of Member 1 An entity that has obtained the license to engage in the investment trading or investment brokerage business pursuant to 12 1 of the Act is eligible to become a member of the Exchange Amended on January 28 2009 3 2 Deleted on January 28 2009 4 CHAPTER III MEMBER ADMISSION WITHDRAWAL AND CONVERSION OF MEMBERSHIP Section 1 Member Admission 5 Application for Membership and Examination and Approval Thereof 1 An entity that wishes to become a member of the Exchange shall file an application according to the membership category using the format specified by the Exchange 2 An applicant eligible for filing the application for membership stipulated in Para 1 shall be the entity that has obtained the license or preliminary permit to engage in the investment trading or investment brokerage business from the Financial Services Commission hereinafter referred to as the FSC or has submitted a request for the concerned permit Amended on January 28 2009 3 The Exchange shall examine whether or not the applicant satisfies the member admission criteria by validating the accuracy of the details stated in the application while taking into account the opinions presented by the related institutions 4 To verify the details stated in the application form and interview the managers the Exchange may carry out a site investigation 5 Approval for member admission shall be made by the Board of Directors hereinafter referred to as the Board In this case the Board may approve the member admission with certain conditions attached 6 In case where a member participating in the securities markets wishes to participate in the Derivatives Market or a member participating in the Derivatives Market wishes to participate in the securities markets such member shall submit an application for membership pursuant to Para 1 Amended on January 28 2009 7 Matters relating to the application for membership and other matters necessary for member admission shall be stipulated in the Enforcement Rules of this Regulation hereinafter referred to as the Enforcement Rules 6 Criteria for Member Admission 1 To become a member an applicant for membership shall satisfy each of following criteria in accordance with the category of membership and the 5 variety of securities or exchange traded products that the concerned applicant wishes to handle Amended on January 28 2009 1 To satisfy the financial criteria stipulated in 7 2 To be equipped with adequate facilities including computer equipments required for efficient accomplishment of the business operation 3 To have the adequate manpower who have the expertise and integrity necessary for conducting business and 4 To have a sufficient social credibility 2 An entity that has voluntarily withdrawn the membership pursuant to 10 shall not be admitted as a member before three 3 years have elapsed from the date of such withdrawal 7 Financial Criteria 1 To become a member an applicant for membership shall satisfy the financial criteria specified in each of the following items However the financial criteria for an applicant who operates the financial investment business as an additional business shall be stipulated in the Enforcement Rules Amended on January 28 2009 1 Case of clearing members a Net capital ratio pursuant to the Regulation on Supervision of Financial Investment Business of the FSC shall be at least 180 100 and Amended on January 28 2009 b Equity capital shall be no less than KRW 10 billion Amended on January 28 2009 2 Case of non clearing members Net capital ratio pursuant to the Regulation on Supervision of Financial Investment Business of the FSC shall be at least 150 100 Amended on January 28 2009 2 Deleted on January 28 2009 3 Deleted on January 28 2009 6 8 Payment and Deposit of Admission Fees etc 1 An applicant who obtained an admission approval shall pay the admission fee contribute to the Joint Compensation Fund pursuant to 23 1 applies only to those applicants who obtained an approval for clearing membership and deposit the Fidelity Guarantee Money pursuant to 31 2 The admission fee stipulated in Para 1 shall be determined by a resolution of the Board 3 The amount that an applicant who has obtained admission approval as a clearing member pursuant to Para 1 must contribute to the Joint Compensation Fund shall be the basic contribution stipulated in 24 1 1 or 24 2 1 9 Admission Date Revocation of Admission Approval and Notification Thereof 1 An applicant who has obtained admission approval shall become an Exchange member on the day hereinafter referred to as the admission date after the applicant have completed all admission procedures established by the Exchange including the fulfillment of the conditions for admission pursuant to 5 5 p payment and deposit of the admission fee etc pursuant to 8 and entry into the agreement for settlement entrustment applies only to the non clearing member pursuant to 22 Amended on January 28 2009 2 In cases where an applicant who has obtained the admission approval has failed to fulfill the admission requirements or failed to complete the admission procedures stipulated in Para 1 by the date determined by the Exchange the Exchange may withdraw the admission approval granted to such applicant 3 When the admission of an applicant is certain pursuant to Para 1 the Exchange shall notify such fact to other members Amended on January 28 2009 Section 2 Membership Withdrawal 10 Voluntary Withdrawal 7 1 In case of intending to withdraw its membership the member shall file an application for membership withdrawal according to the format established by the Exchange 2 The membership withdrawal shall be approved by the Board In this case the withdrawal date shall be the day after the date of Board approval 11 Obligatory Withdrawal Title amended on January 28 2009 In cases where a member comes under any of the following causes such member shall deem to have withdrawn its membership In this case the member who comes under Item 1 shall deem to have withdrawn only from the category of membership which is related to the cause 1 Revocation of the license for investment trading or investment brokerage business or closure or transfer of the business Amended on January 28 2009 2 Dissolution and 3 Expulsion 12 Notification of Membership Withdrawal In cases where a member has withdrawn its membership pursuant to 10 or 11 the Exchange shall notify such facts to other members Amended on January 28 2009 13 Succession of membership 1 In cases where a member withdraws its membership as a result of business transfer or merger upon obtaining the approval of the Exchange the surviving company or newly incorporated company after the merger or the company taking over the business may succeed the membership of the withdrawn member In this case non member surviving company or newly incorporated company or the company taking over the business shall deem to have been admitted as a member 2 In case of succeeding the membership pursuant to Para 1 any unsettled securities or exchange traded derivative trades of the member who has withdrawn its membership as a result of merger or business transfer shall be construed as the trades carried out by the surviving company or newly 8 incorporated company after such merger or the company taking over the business Amended on January 28 2009 14 Trading Suspension and Settlement of Unsettled Trades 1 In cases where a member has filed an application for membership withdrawal pursuant to 10 or a member has withdrawn its membership pursuant to 11 the Exchange shall suspend the concerned member from trading of securities or exchange traded derivatives products from the next day Amended on January 28 2009 2 In cases where a member has been suspended from trading securities or exchange traded derivatives products pursuant to Para 1 the Exchange shall settle the unsettled trades of the concerned member by transferring the rights and obligations relating to such unsettled trades to another member or by making other arrangement which the Exchange deems it necessary Amended on January 28 2009 15 Refund and Takeover of Joint Compensation Fund 1 In case where the member who has withdrawn its membership is a clearing member the Exchange shall refund the amount that the concerned member contributed to the Joint Compensation Fund within twenty 20 days from the withdrawal date However in cases where the withdrawn member owes an outstanding balance to the Exchange the Exchange shall use the contribution of withdrawn member to pay off the outstanding balance first and then refund the remaining amount 2 In case where a member has withdrawn its membership the Exchange shall refund the Fidelity Guarantee Money of the withdrawn member within twenty 20 from the withdrawal date In this case the proviso of Para 1 shall be applied mutatis mutandis 3 In cases where the membership has been taken over pursuant to 13 notwithstanding Para 1 it shall be deemed that the Joint Compensation Fund of the withdrawn member is transferred to the surviving company or newly incorporated company after the merger or the company taking over the business Section 3 Conversion of Membership Category 9 16 Application Examination and Approval of Membership Conversion 1 In cases of intending to convert the member categories which corresponds to any of the following items such members shall submit an application for membership conversion according to the format established by the Exchange Amended on January 28 2009 1 Conversion from non clearing member to clearing member or vice versa January 28 2009 2 Conversion of a member category noted in 3 1 through 3 to another category noted in 3 1 through 3 and January 28 2009 3 Conversion of a member category noted in 3 4 Amended on January 28 2009 2 Term of settlement entrustment agreement 3 Types of transactions to be entrusted for settlement 4 Settlement method and deadline 5 Matters relating to the good faith deposit that the non clearing member deposits with the clearing member Amended on January 28 2009 6 Matters relating to the measures that the clearing member takes such as the trading restriction disposal of the possessions held such as the cash or securities etc in cases where the non clearing member fails to fulfill the settlement obligations for the clearing member Amended on January 28 2009 7 Matters relating to the expenses including the commission for settlement and 8 Other matters necessary for the settlement entrustment 3 In cases where a member intends to enter into an agreement for settlement entrustment or to amend or terminate the existing agreement such member shall report its intension to the Exchange in advance according to the manner stipulated in the Enforcement Rules 23 Contribution to the Joint Compensation Fund 1 The clearing members shall make contributions to the Joint Compensation Fund in order to compensate any damages caused by non fulfillment of settlement obligations for the trades executed in the securities markets or Derivatives Market Amended on January 28 2009 2 The Exchange shall accumulate the Joint Compensation Fund stipulated in Para 1 separately for the securities markets and the Derivatives Market Amended on January 28 2009 13 3 Total accumulation of Joint Compensation Fund for the securities markets and the Derivatives Market shall be KRW 100 billion for each Market However this provision shall not be applied to the cases where the Fund temporarily exceeds or fall short the total accumulation due to the admission or withdrawal of clearing member or the conversion from clearing membership to non clearing membership Amended on January 28 2009 4 The amount that a clearing member contributes shall be the amount calculated for each quarter pursuant to 24 and each clearing member shall pay to receive from the Exchange the difference between the amount calculated and the total contribution made as of the end of previous quarter including the gain or loss pursuant to Para 5 within twenty 20 days from the first day of the concerned quarter However in cases where the Joint Compensation Fund has been used up due to the non fulfillment of settlement obligations following the