Oct 12, 2007

REAL ESTATE INVESTMENT COMPANY ACT (old)

REAL ESTATE INVESTMENT COMPANY ACT
(Amended as of January 14, 2005)
(New Law in effect on Oct, 2007)
CHAPTER I GENERAL PROVISIONS

Article 1 (Purpose)

The purpose of this Act is to contribute to the development of national economy by prescribing the matters concerning the establishment of a real estate investment company, the management methods of assets thereof and the protection of investors therein to provide citizens at large with more opportunities to invest in the real estate as well as to vitalize the sound investment therein.

Article 2 (Definitions)

The definitions of terms used in this Act shall be as follows:

1.The term "real estate investment company" means any company that is incorporated pursuant to Article 5 mainly for the purpose of investing its assets in real estate and managing invested assets, which falls under each of the following items:

(a) The self-managed real estate investment company: The company that has full-time officers and employees, including asset management specialists, on its payroll to invest and operate assets itself;

(b) The consigned-management real estate investment company: The company that commissions the investment and operation of its assets to any asset management company; and

(c) The corporate restructuring real estate investment company: The company that commissions the investment and operation of its sets to any asset management company to invest in the real estate provided for in each item of Article 49-2 (1) 1;

2.The term "securities" means the securities provided in the provisions of Article 2 (1) and (2) of the Securities and Exchange Act, and the security indices which are the subjects of transaction under subparagraph 1 (b) and (c) (iii) of Article 3 of the Futures Trading Act;

3.The term "securities related to real estate" means those that fall under one of the following items:

(a) The shares and bonds of any real estate investment company;

(b) Indirect investment securities provided for in subparagraph 13 of Article 2 of the Act on Business of Operating Indirect Investment and Assets, which are prescribed by the Presidential Decree as being related to real estate;

(c) Among the asset-backed securities provided in the Asset-Backed Securitization Act, those which are related to real estate and which are prescribed by the Presidential Decree;

(d) Mortgage-backed bonds and mortgage-backed securities provided in the Special Purpose Companies for Mortgage-Backed Bonds Act and Korea Housing Finance Corporation Act;

(e) National housing bond provided in the Housing Act;

(f) Urban railroad bond provided in the Urban Railroad Act; or

(g) Other securities related to real estate as prescribed by the Presidential Decree;

4.The term "real estate development project" means a project that is engaged in developing land into housing site or factory site, etc., and constructing or reconstructing buildings and other structures; and

5.The term "asset management company" means any company that is incorporated pursuant to the provisions of Article 22-3 for the purpose of running the business of investing and operating assets on commission of any consigned-management real estate investment company or any corporate restructuring real estate investment company.

Article 3 (Legal Status)

(1) A real estate investment company shall be a stock company.

(2) A real estate investment company shall be subject to the application of the Commercial Act unless otherwise specifically provided in this Act.

(3) No entity other than a real estate investment company under this Act shall use the name of "real estate investment company" or any other name confused therewith.

Article 4 (Scope of Business Activity)

No real estate investment company shall be engaged in any business other than investing its assets in the real estate, etc. in accordance with the methods under any subparagraphs of Article 21.

CHAPTER II ESTABLISHMENT, ORGANIZATION, ETC.

SECTION 1 Establishment

Article 5 (Incorporation of Real Estate Investment Company)

(1) Anyone who intends to incorporate a real estate investment company shall obtain an authorization therefor from the Minister of Construction and Transportation. The same shall apply to a case where he intends to change any authorized matter.

(2) Anyone who intends to obtain an authorization for the incorporation of his real estate investment company pursuant to paragraph (1) shall obtain a preliminary authorization therefor from the Minister of Construction and Transportation before he takes over shares.

(3) The Minister of Construction and Transportation shall, when he determines whether to grant the preliminary authorization referred to in paragraph (2), confirm the matters falling under each of the following subparagraphs. In this case, the Minister of Construction and Transportation may lay down terms needed to ensure the soundness of management and the protection of investors:

1.The abilities of incorporators to take over shares and the appropriateness of their social credits and the plan for their payment of shares;

2.The appropriateness and soundness of the business program;

3.The appropriateness of a plan to publicly offer shares; and

4.Other matters prescribed by the Presidential Decree.

(4) Anyone who obtains a preliminary authorization pursuant to paragraph (3) shall close the stockholders' inaugural plenary meeting for incorporating his real estate investment company within 3 months from the date on which he obtains such preliminary authorization and then file an application with the Minister of Construction and Transportation for an authorization for the incorporation of his real estate investment company. In this case, if he fails to file such application within the fixed period, the preliminary authorization shall be made invalid.

(5) The Minister of Construction and Transportation shall, upon receiving the application for authorizing the incorporation of any real estate investment company under paragraph (4), grant the authorization for incorporating such real estate investment company after confirming whether the terms that are laid down when the preliminary authorization is granted are implemented. In this case, the provisions of the partial latter part, with the exception of each subparagraph, of paragraph (3) shall apply mutatis mutandis to the authorization for incorporating every real estate investment company.

(6) The Minister of Construction and Transportation shall, when he grants an authorization for incorporating any real estate investment company, publish details of such authorization in the Official Gazette and post them on the Internet, etc.

(7) Necessary matters concerning procedures, etc. for the preliminary authorization and the authorization for incorporating the real estate investment company shall be prescribed by the Presidential Decree.
[This Article Wholly Amended by Act No. 7243, Oct. 22, 2004]

Article 6 (Minimum Capital Requirement)

The capital of a real estate investment company shall be not less than 25 billion won.

Article 7 (Promoters)

(1) A person who falls under one of the following subparagraphs shall not be eligible to be a promoter of a real estate investment company:

1.A minor, incompetent person or quasi-incompetent person;

2.A bankrupt person who has not been reinstated;

3.A person for whom five years have not elapsed since the completion (including the case where the execution is deemed to have completed) or exemption of execution of punishment after being sentenced to imprisonment without prison labor or heavier penalty or to a fine or heavier punishment under this Act, the Real Estate Brokerage Act, the Public Notice of Values and Appraisal of Real Estate Act, the Trust Business Act and other finance related Acts (hereinafter referred to as "related Acts") prescribed by the Presidential Decree;

4.A person who has been sentenced to the suspension of execution of imprisonment without prison labor or heavier penalty and whose probation period has not expired;

5.A person who was an officer or an employee of a corporation whose business license, authorization or registration, etc. was cancelled in accordance with this Act or related Acts (limited to any person who was directly or correspondingly responsible for the cause of cancellation of such business license, authorization or registration, etc. and prescribed by the Presidential Decree) and for whom five years have not yet elapsed from the date of cancellation of such business license, etc., against such corporation; or

6.A person for whom five years have not elapsed since the date of dismissal or removal from his office due to a violation of this Act or related Acts.

(2) At the time of establishment, promoters of a real estate investment company shall underwrite stocks within the limit not exceeding 30/100 of the capital but more than the stocks to the value of an amount corresponding with the rate prescribed by the Presidential Decree.

Article 8 (Articles of Incorporation)

(1) Promoters of a real estate investment company shall prepare the articles of incorporation including the matters of the following subparagraphs, and put their names and seals or signatures thereon:

1.Purpose;
2.Company name;
3.Total number of stocks to be issued;
4.Price of a stock;
5.Total number of stocks to be issued at the time of establishment;
6.Matters relating to the investment and management of assets;
7.Matters relating to the evaluation of assets;

8.Matters relating to the distribution of profits, etc.;
9.Location of main office;
10.Method of public notice;
11.Remuneration base for director and auditor;
12.Outline of asset custody contract to be made with an asset custody organization pursuant to Article 35 (1);
13.Where conclusion of an entrustment contract on the investment and management of assets is intended, such outline thereof;
14.Names, resident registration numbers and addresses of promoters; and
15.Other matters prescribed by the Presidential Decree.
(2) Total number of stocks to be issued at the time of establishment pursuant to the provisions of paragraph (1) 5 may be determined by fixing an upper and a lower limit.

Article 9 (Public Offering of Stocks Issued at Time of Establishment)

Promoters of a real estate investment company shall put up 30/100 or more stocks issued at the time of establishment for public offering.

Article 10 (Subscription for Underwriting of Stocks)

(1) Promoters of a real estate investment company shall prepare the application forms for stocks that include the matters in each of the following subparagraphs, and provide them to those who intend to subscribe for underwriting of the stocks to be issued at the time of establishment:

1.Matters referred to in Article 8 (1) 1 through 13;

2.Kind and number of stocks to be underwritten by the promoters;

3.Where a fixed period of existence or causes for dissolution are provided in the articles of incorporation, such contents;

4.Method of distributing stocks to be issued at the time of establishment and the date of payment for stocks;

5.Financial institutions that are assigned to receive the payment for stocks and the place of payment;

6.Statement that the establishment of a real estate investment company may be cancelled in case the number of stocks subscribed for underwriting is less than that to be issued at the time of establishment;

7.Statement that any person who has subscribed to underwrite stocks may cancel the subscription if the real estate investment company is not established by the fixed time; and

8.Other matters prescribed by the Presidential Decree.

(2) Where promoters of a real estate investment company solicit subscription to underwrite stocks to be issued at the time of establishment, they shall furnish the other party with investment prospectus that describes the aim of establishment of a real estate investment company, investment plan, and other matters prescribed by the Presidential Decree.

Article 11 (Incorporation of Real Estate Investment Company by Means of Investment in Kind)

(1) In case where any real estate investment company is incorporated by means of investment in kind pursuant to subparagraph 2 of Article 290 of the Commercial Act, the relevant property shall be the real estate.

(2) The total amount of the face value of shares that are issued based on investment in kind shall not exceed 50/100 of the capital of the relevant real estate investment company.

(3) The value of the real estate that is invested in kind pursuant to paragraph (1) shall be appraised by not less than 2 appraisal business operators provided for in the Public Notice of Values and Appraisal of Real Estate Act. In this case, necessary matters concerning the methods of appraising real estate shall be prescribed by the Presidential Decree.
[This Article Wholly Amended by Act No. 7243, Oct. 22, 2004]

Article 11-2 (Prohibition on Opening of Branch Office by Consigned-Management Real Estate Investment Company, etc.)

Every consigned-management real estate investment company shall be prohibited from opening any branch office other than its principal office and from hiring any employee or appointing any standing officer.
[This Article Newly Inserted by Act No. 7243, Oct. 22, 2004]

SECTION 2 Organization

Article 12 (Matters Subject to Resolution by General Stockholders' Meeting)

Each matter of the following subparagraphs is subject to resolution by the general stockholders' meeting: Provided, That the provisions of Article 434 of the Commercial Act shall apply mutatis mutandis to the resolution concerning the matters referred to in subparagraphs 4 and 5:

1.Decision on the business plan of the year concerned;

2.Borrowing plan and bond issuing plan of the year concerned;

3.Matters relating to the conclusion of important contracts regarding the investment and management of assets or amendments thereto;

4.Final decision on a plan for the real estate development project;

5.Matters concerning investment in kind in real estate under Article 19; and

6.Matters relating to the conclusion of an asset custody contract with an asset custody organization pursuant to Article 35 (1) or amendments thereto.

Article 13 (Matters Subject to Resolution by Board of Directors)

(1) Each matter of the following subparagraphs is subject to resolution by the board of directors:

1.Matters relating to the management of real estate including acquisition, disposal thereof;

2.Matters relating to the acquisition, disposal of securities with a value exceeding that prescribed by the Presidential Decree;

3.Matters concerning borrowings and the issuance of bonds; and

4.Matters concerning the setting and resetting of internal-control standards and the appointment and dismissal of law-abiding overseers.

(2) Directors shall inform the auditor of the date, time, place, agenda, etc. of the board of directors seven days prior to the commencement of the board of directors.

Article 14 (Qualifications for Directors, etc.)

(1) The provisions of Article 7 (1) shall apply mutatis mutandis to the directors of every real estate investment company.

(2) Anyone falling under any of the following subparagraphs shall be disqualified as a director of any consigned-management real estate investment company:

1.A specially-related one (referring to the specially related person provided for in Article 21 (1) of the Securities and Exchange Act; hereinafter the same shall apply) of any asset management company that is commissioned to invest and operate assets;

2.One who is incessantly paid remunerations by any asset management company that is commissioned to invest and operate assets; and

3.One who is prescribed by the Presidential Decree as being feared to undermine his neutrality as a director.

(3) When anyone who is selected and appointed as a director of any real estate investment company falls under paragraph (1) or (2) (limited to the director of any consigned-management real estate investment company) or he is found to fall under paragraph (1) or (2) at the time when he is selected and appointed as a director, he shall be rightly dismissed.

(4) The act in which any director is involved before he is dismissed pursuant to paragraph (3) shall not lose its effect.

(5) Necessary matters concerning the duties of directors shall be prescribed by the Presidential Decree.
[This Article Wholly Amended by Act No. 7243, Oct. 22, 2004]

Article 14-2 (Qualifications for Auditors, etc.)

(1) Every auditor of any real estate investment company shall be a certified public accountant provided for in the Certified Public Accountant Act.

(2) Anyone falling under any of the following subparagraphs shall be disqualified as an auditor of any real estate investment company:

1.One who falls under any subparagraph of Article 7 (1);

2.One who belongs to any accounting corporation that is in the period of business suspension imposed by the Certified Public Accountant Act;

3.One who is in the period of the suspension of the performance of his duty imposed by the Certified Public Accountant Act; and

4.One who is prescribed by the Presidential Decree as being feared to undermine his neutrality as an auditor.

(3) The provisions of Article 14 (3) through (5) shall apply mutatis mutandis to dismissals and duties of auditors.
[This Article Newly Inserted by Act No. 7243, Oct. 22, 2004]

SECTION 3 Issuance of Stocks

Article 15 (Dispersion of Stocks)

(1) One shareholder and anyone who is specially related with the former shall not possess in excess of 30/100 (hereinafter referred to as the "upper limit of possession of stocks per person") of the total stocks issued by a real estate investment company.

(2) Where a stockholder and the specially related person (hereinafter referred to as the "same person") possess stocks of a real estate investment company in excess of the upper limit of possession of stocks per person in violation of paragraph (1), the extent of excercise of voting right shall be limited to the upper limit of possession of stocks per person.

(3) Where the same person possesses stocks in excess of the upper limit of possession of stocks per person, the Minister of Construction and Transportation may order him to dispose of the stocks that are in excess of the upper limit of possession of stocks per person.

(4) In case where the same person holds stocks in excess of the upper limit of possession of stocks per person after making his investment in kind, notwithstanding the provisions of paragraph (3), the Minister of Construction and Transportation may order him to dispose of his stocks that are in excess of the upper limit of possession of stocks per person during the period ranging from not less than one year to not more than one year and 6 months from the date on which the stocks are issued after the investment in kind is made.

Article 16 (Exemptions from Upper Limit of Possession of Stocks per Person)

(1) The provisions of Article 15 (1) shall not apply to the stockholders such as Fund prescribed by the Presidential Decree.

(2) The provisions of Article 15 (2) shall apply mutatis mutandis in respect of paragraph (1).

Article 17 (Stock Subscription Forms, etc.)

(1) Where a real estate investment company issues stocks after its establishment, it shall prepare stock subscription forms in accordance with the Presidential Decree and provide them to those who intend to subscribe to underwrite its stocks.

(2) Where a real estate investment company solicits subscription to underwrite stocks to be issued after its establishment, the provisions of Article 10 (2) shall apply mutatis mutandis.

Article 18 (Terms of Issuance)

(1) Where a real estate investment company issues stocks after its establishment, the price and other terms of issuance for the same kind of stocks that are issued on the same day shall be uniformly established.

(2) In the case of paragraph (1), the issuing price of stock shall be calculated on the basis of market value, asset value and earnings value of the real estate investment company concerned in such manner as prescribed by the Presidential Decree.

Article 19 (Investment in Kind)

(1) The asset to be invested in kind in a real estate investment company pursuant to the provisions of Article 416 (4) of the Commercial Act after the establishment thereof shall be real estate.

(2) The provisions of Article 11 (2) and (3) shall apply mutatis mutandis to the investment in kind referred to in paragraph (1).

(3) Deleted.

Article 20 (Listing of Stocks, etc.)

(1) When a real estate investment company becomes qualified to meet the listing standards of securities market of the Korea Stock Exchange pursuant to Article 71 of the Securities and Exchange Act, or the registration requirements of the Korea Securities Dealers Association pursuant to the provisions of Article 162 of the same Act, it shall, without delay, list its stocks on the securities market of the Korea Stock Exchange or register them with the Korea Securities Dealers Association and make them traded either in the securities market of the Korea Stock Exchange or in the association brokerage market of the Korea Securities Dealers Association.

(2) Where the Minister of Construction and Transportation finds that a real estate investment company, without reasonable causes, fails to list its stocks under paragraph (1) on the securities market of the Korea Stock Exchange or register with the Korea Securities Dealers Association, he may order the company to list or register its stocks within a period of time to be designated by him.

Article 20-2 (Stockholders' Rights to Claim on Purchase of Stocks by Real Estate Investment Company)

(1) In case where the board of directors of any real estate investment company resolves with respect to the matters falling under each of the following subparagraphs, any stockholder who is opposed to such resolution shall notify in writing the relevant real estate investment company of his intention of opposing the resolution before the general meeting of stockholders and claim in writing on the purchase of the stocks he holds, indicating the kind and number of the stocks he holds, within 20 days from the date on which the general meeting of stockholders resolves with respect to the same matters:

1.Changes in the articles of incorporation that restrict the number of shares or extend the term of existence of the company;

2.A merger with other real estate investment company; and

3.The issuance of new stocks after the investment in kind is made pursuant to Article 19.

(2) In case where any stockholder claims on the purchase of his stocks under paragraph (1), the relevant real estate investment company shall purchase such stocks within 20 days from the date on which the period of purchase claim expires. In this case, necessary matters concerning the purchase price of stocks and methods of paying purchase money, etc. shall be prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 7243, Oct. 22, 2004]

CHAPTER III BUSINESS OPERATIONS

SECTION 1 Investment and Management of Assets

Article 21 (Methods of Investment and Management of Assets)

A real estate investment company shall invest and manage its assets by a method falling under one of the following subparagraphs:

1.Acquisition, management, amelioration and disposal of real estate;

2.Real estate development projects;

3.Lease and rent of real estate;

4.Sale and purchase of securities;

5.Deposit in financial institutions; and

6.Acquisition, management and disposal of the rights on the use of real estate such as superficies, right of lease.

Article 22 (Asset Management Specialists of Self-Managed Real Estate Investment Companies)

(1) Every self-managed real estate investment company shall, for the investment and management of its assets, secure asset management specialists to enhance its expertise and protect investors pursuant to the following subparagraphs as prescribed by the Presidential Decree:

1.Certified public appraisers or certified real estate brokers who have worked in the respective fields for not less than five years;

2.Holders of master's or higher degree in the field of real estate or related field, who have worked for not less than three years in the profession related to the investment and management of real estate; or

3.Other persons who have the work experiences equivalent to subparagraph 1 or 2 and as prescribed by the Presidential Decree.

(2) The asset management specialists pursuant to paragraph (1) shall finish an education course on asset management beforehand. In this case, the necessary matters such as education institution, education program shall be prescribed by the Presidential Decree.

Article 22-2 (Business Commissioned by Consigned-Management Real Estate Investment Companies, etc.)
(1) Every consigned-management real estate investment company shall commission the business of investing and operating its assets to any asset management company and the business of issuing stocks and general clerical services to any institution that meets the requirements prescribed by the Presidential Decree (hereinafter referred to as the "institution commissioned to perform the general clerical services, etc.").

(2) Necessary matters concerning the scope of the work of the institution commissioned to perform the general clerical services, etc. and the commission of the work by every consigned-management real estate investment company shall be prescribed by the Presidential Decree.

(3) Any consigned-management real estate investment company, any asset management company that is commissioned to perform the business of investing and operating the assets of the former and any specially related person shall be prohibited from perform the act of trading real estate and securities among them: Provided, That the same shall not apply to the act of such trading them that is prescribed by the Presidential Decree as being not feared to undermine the interests of stockholders.
[This Article Newly Inserted by Act No. 7243, Oct. 22, 2004]

Article 22-3 (Authorization for Asset Management Company, etc.)

(1) Anyone who intends to incorporate an asset management company shall obtain an authorization therefor from the Minister of Construction and Transportation after meeting the requirements falling under each of the following subparagraphs:

1.The capital is required to exceed 7 billion won; and

2.The company is required to secure not less than 5 asset management specialists provided for in Article 22.

(2) The Minister of Construction and Transportation shall confirm the matters falling under each of the following subparagraphs when he determines whether to grant the authorization pursuant to paragraph (1):

1.The appropriateness of the business plan;

2.The composition of stockholders and the appropriateness of funds used to take over stocks;

3.The appropriateness of the divisional management plan between the inherent assets of the relevant asset management company and the commissioned assets; and

4.The expertise and management abilities of managers.

(3) Every asset management company shall be prohibited from concurrently running other business than the business commissioned by any consigned-management real estate investment company and any corporate restructuring real estate investment company: Provided, That the same shall not apply to the case falling under each of the following subparagraphs:

1.Where the concurrent business is permitted by this Act and other Acts;

2.Where anyone who is eligible to be commissioned to run the business provided for in each subparagraph of Article 21 in accordance with other Acts obtains an authorization pursuant to paragraph (1) after he is recognized to be fully able to protect investors; and

3.Where the concurrent business is prescribed by the Presidential Decree as being not to impede the investment and operation of consigned assets and the protection of investors.

(4) The provisions of Article 5 shall apply mutatis mutandis to a preliminary authorization, an incorporation authorization or an alteration authorization for any asset management company. In this case, the "real estate investment company" shall be deemed the "asset management company."

(5) The provisions of Article 7 (1) shall apply mutatis mutandis to the officers of every asset management company. In this case, the "real estate investment company" shall be deemed the "asset management company."
[This Article Newly Inserted by Act No. 7243, Oct. 22, 2004]

Article 23 (Registration of Real Estate Investment Advisory Company)

(1) Those who intend to carry on the business of advice, appraisal, etc. on the investment and management of assets on the entrustment of a real estate investment company shall register with the Minister of Construction and Transportation.

(2) Those who intend to register pursuant to paragraph (1) shall have the qualifications of the following subparagraphs:

1.The paid-in capital shall be not less than one billion won and more than the amount prescribed by the Presidential Decree; and

2.The secured number of asset management specialists under the provisions of Article 22 shall be more than that prescribed by the Presidential Decree.

(3) Where the Minister of Construction and Transportation finds that anyone who has registered pursuant to paragraph (1) (hereinafter referred to as "real estate investment advisory company") falls under one of the following subparagraphs, he may revoke the registration thereof: Provided, That it falls under subparagraph 1 or 2, the Minister shall revoke the registration thereof:

1.If the real estate investment advisory company has been registered by means of cheating or other fraudulent manner;

2.If the company fails to meet the qualifications referred to in paragraph (2);

3.If any measures pursuant to Article 39 (2) are not executed without justifiable causes; or

4.If the company has violated this Act, or orders and dispositions under this Act, thus it is acknowledged unsuitable to carry on its business.

(4) Any person who has not registered pursuant to the provisions of paragraph (1) shall not use the title of "real estate investment advisory" in his company name.

(5) Necessary matters concerning registration procedures, documents to submit, scope of business entrustment, etc. of real estate investment advisory company shall be prescribed by the Presidential Decree.

Article 24 (Limitations on Disposal of Real Estate, etc.)

(1) Any real estate investment company shall not dispose of its newly acquired real estate within the period of time which is to the extent of five years and to be prescribed by the Presidential Decree: Provided, That where the land or buildings created or built in accordance with real estate development project will be alloted and there exist such causes as prescribed by Presidential Decree for the protection of investors, this shall not apply.

(2) Any real estate investment company shall not dispose of its land devoid of buildings or other structures till it carries out the real estate development project: Provided, That the real estate investment company is merged, dissolved, etc. as prescribed by the Presidential Decree for the protection of investors, this shall not apply.

(3) In case a real estate investment company acquires or disposes of real estate, it shall prepare a first-hand report containing the status of real estate, transaction amount thereof, etc. in accordance with the Presidential Decree.

Article 25 (Composition of Assets)
(1) As of the end of each quarter, not less than 80/100 of the total assets of a real estate investment company shall be composed of real estate, securities related to real estate and cash. In this case, not less than 70/100 of the total assets shall be real estate (including buildings under construction).

(2) In calculating the rate of composition of assets pursuant to paragraph (1), the assets falling under one of the following subparagraphs shall not be counted in the total assets for the year whereto belongs the date on which the incorporation takes places, new shares are issued or real estate is sold and the next year:

1.Paid-in stock money at the time of establishment and the assets acquired by directly investing this money;

2.Money created through the issuance of new stocks and the assets acquired by directly investing this money; and

3.Proceeds from the sale of the real estate owned by any real estate investment company.

(3) The definite contents of assets and the standards of calculation pursuant to paragraph (1) shall be prescribed by the Presidential Decree.

Article 25-2 (Accounting)

(1) Every real estate investment company shall, when it performs the accounting of the operation of assets including real estate, etc., meet the accounting standards that are set by the Financial Supervisory Commission.

(2) The Financial Supervisory Commission may commission any non-governmental institution specializing in laying down the accounting standards to set such accounting standards referred to in paragraph (1) under the conditions as prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 7243, Oct. 22, 2004]

Article 26 (Investment in Real Estate Development Project)

(1) Any real estate investment company shall not invest in a real estate development project, till its stocks are listed on the securities market of the Korea Stock Exchange pursuant to Article 71 of the Securities and Exchange Act or registered with the Korea Securities Dealers Association pursuant to Article 162 of the same Act.

(2) Every real estate investment company shall be prohibited from investing in any real estate development project in excess of 30/100 of its total assets: Provided, That the same shall not apply to the real estate development project falling under any of the following subparagraphs:

1.The rental housing construction project provided for in subparagraph 2 of Article 2 of the Rental Housing Act;

2.The urban development project provided for in Article 2 (1) 2 of the Urban Development Act; and

3.The project that is prescribed by the Presidential Decree as being not feared to undermine the protection of investors and the stable operation of assets.

(3) Where a real estate investment company intends to invest in a real estate development project, it shall prepare a business plan and obtain appraisal thereof from a real estate investment advisory company in accordance with the Presidential Decree.

(4) The total assets referred to in paragraph (2) mean the total assets entered on the balance sheet as of the end of the immediately preceding quarter on the date preceding the date on which the general meeting of stockholders resolves to invest in any real estate development project.

(5) In the calculation of the ratio of the real estate development project referred to in paragraph (2), in the case of the real estate development project undertaken to newly construct or reconstruct any building, the value of the land that is owned by the relevant real estate investment company shall be included in the total assets, but excluded from the investment amount of such real estate development project.

Article 27 (Investment in Securities)

(1) Any real estate investment company shall not acquire in excess of 10/100 of the stocks of another company issued with voting right: Provided, That this shall not apply to a case falling under one of the following subparagraphs:

1.Where it acquires the stocks of a company which has been established with a fixed period of existence to develop specific real estate;

2.Where it merges with another company;

3.Where it takes over the whole business of another company;

4.Where it is necessary to achieve its goal in executing the rights of a real estate investment company; and

5.Where it is not feared to undermine the protection of investors and the stable operation of assets, which are prescribed by the Presidential Decree.

(2) Where a real estate investment company acquires in excess of 10/100 of the stocks of another company issued with voting right pursuant to paragraph (1) 2 through 4, it shall, within six months from the date it possesses in excess, make itself fit for the investment limit pursuant to paragraph (1).

(3) Any real estate investment company shall not acquire securities issued by the same person in excess of 5/100 of its total assets: Provided, That this shall not apply to where securities are state bonds, local government bonds or other securities prescribed by the Presidential Decree.

(4) Where a real estate investment company holds securities in excess of the investment limit pursuant to paragraph (3), it shall, within six months from the date it possesses in excess, make itself fit for the investment limit pursuant to paragraph (3).

Article 28 (Dividends)

(1) A real estate investment company shall distribute not less than 90/100 of its dividends limit of the year concerned to its stockholders pursuant to Article 462 (1) of the Commercial Act. In this case, the reserved profit pursuant to Article 458 of the same Act shall not be accumulated.

(2) The dividends of a real estate investment company shall be cash dividends.

(3) In case where any consigned-management real estate investment company pays its dividends in accordance with paragraph (1), it may pay such dividends in excess of its profits, notwithstanding the provisions of Article 462 of the Commercial Act. In this case, the standards for paying dividends in excess of profits shall be set by the Presidential Decree within the scope of the depreciation cost of the relevant year.

Article 29 (Borrowings and Issuance of Bonds)

(1) Every real estate investment company may borrow funds and issue bonds in order to operate and invest assets or redeem borrowings and issued bonds under the conditions as prescribed by the Presidential Decree.

(2) The borrowing of funds and the issuance of bonds referred to in paragraph (1) shall not exceed twice the equity capital.

(3) The equity capital referred to in paragraph (2) means an amount obtained by subtracting the total amount of debts from the total amount of assets that are entered in the balance sheet as of the end of the immediately preceding quarter on the date preceding the date on which the board of directors resolves to borrow funds or issue bonds.
[This Article Wholly Amended by Act No. 7243, Oct. 22, 2004]

SECTION 2 Prohibited Activities, etc.

Article 30 (Limitations on Transactions)

No real estate investment company shall enter into transactions falling under any subparagraph of Article 21 with anyone falling under one of the following subparagraphs: Provided, That the business connection is chosen by means of public sale, competitive bidding, etc., and is not apprehended to be detrimental to the stockholders' interest and prescribed by the Presidential Decree, this shall not apply:

1.Officers, employees and specially related person of the real estate investment company concerned; and

2.Holders of not less than 10/100 of the stocks of the real estate investment company concerned (hereinafter referred to as "major stockholders") and their specially related person.

Article 31 (Limitations on Concurrent Engagement)

(1) Any real estate investment company shall not be engaged in concurrent businesses except where it is allowed under this Act or other Acts and subordinate statutes.

(2) Any full-time officer of a real estate investment company shall not become a full-time officer or an employee of another company, or run other businesses.

Article 32 (Prohibition on Use of Undisclosed Asset Management Information)

(1) Those who fall under any of the following subparagraphs (including those for whom one year has not elapsed since they became not to fall under one of the following subparagraphs) shall not buy and sell real estate or securities by utilizing undisclosed information on the asset management of a real estate investment company, or allow other people to make use of such information:

1.Officers, employees and agents of the real estate investment company concerned;

2.Major stockholders;

3.Those who have signed an entrustment contract on the investment and management business with the real estate investment company concerned; or

4.Agents, employees or other workers of those who fall under subparagraph 2 or 3 (in case where those who fall under subparagraph 2 or 3 are legal persons, such officers, employees or agents thereof).

(2) Necessary matters with regard to the scope of undisclosed information on asset management, etc. pursuant to paragraph (1) shall be prescribed by the Presidential Decree.

Article 33 (Code of Conduct for Officers and Employees)

No officers or employees of a real estate investment company shall, concerning the investment and management business of assets, conduct any act falling under one of the following subparagraphs:

1.An act to guarantee or to promise a certain portion of profit for those who intend to invest;

2.An act to contrive to gain profit for himself or a third party concerning the investment and management of assets; or

3.An act apprehended as detrimental to the order of real estate transactions or stockholders' interest and prescribed by the Presidential Decree.

Article 34 (Responsibility of Officers, Employees, etc. to Indemnification for Damages)

(1) If an officer or employee of a real estate investment company causes damages to the real estate investment company by doing any act in violation of Acts and subordinate statutes or the articles of incorporation, or by negligence of his duty, he shall be responsible to pay for such damages.

(2) Where an officer or employee assumes responsibility for damages to his real estate investment company, and if there is a cause attributable to the involved directors, auditor, those entrusted with the investment and management of assets or the asset custody organization pursuant to Article 35 (1), they shall be jointly and severally liable to pay for such damages.

SECTION 3 Entrustment of Asset Custody

Article 35 (Entrustment of Asset Custody, etc.)

(1) A real estate investment company shall, in accordance with the Presidential Decree, entrust the custody of the real estate, securities, cash and related business thereof to a trust company (including a financial institution operating trust business) under the Trust Business Act, to the Korea National Housing Corporation under the Korea National Housing Corporation Act, to the Korea Land Corporation under the Korea Land Corporation Act or to the Korea Asset Management Corporation under the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation (hereinafter referred to as "asset custody organization").

(2) The Korea National Housing Corporation, the Korea Land Corporation and the Korea Asset Management Corporation shall, in carrying out the custody business of real estate pursuant to paragraph (1), obtain the authorization of trust business in accordance with the Trust Business Act. In this case, Articles 7 (1), 8-2, 15 and 21 of the Trust Business Act shall not apply.

(3) An asset custody organization entrusted with the custody of securities pursuant to paragraph (1) shall, as prescribed by the Presidential Decree, deposit them with the Korea Securities Depository under Article 173 of the Securities and Exchange Act.

(4) Necessary matters concerning the method of concluding a contract on the entrustment of an asset custody business, etc. pursuant to paragraph (1) shall be prescribed by the Presidential Decree.

Article 36 (Responsibility of Asset Custody Organization, etc.)

(1) An asset custody organization shall, in accordance with Acts and subordinate statutes, and asset custody contract, carry out its business faithfully as a bona fide caretaker for the sake of a real estate investment company.

(2) An asset custody organization shall, in order to abide by Acts and subordinate statutes and manage assets in a sound manner, provide its officers the basic procedures and standards and employees in accordance with the Presidential Decree.

(3) An asset custody organization shall separate and manage the entrusted asset of a real estate investment company from its own asset or other assets entrusted for custody by a third party.

(4) When an asset custody organization commits an act in contravention of Acts and subordinate statutes or an asset custody contract, or causes damages to a real estate investment company due to negligence, it shall assume the responsibility of indemnification.

SECTION 4 Public Notice of Information

Article 37 (Investment Report)

(1) Every real estate investment company and every asset management company shall, as prescribed by the Presidential Decree, prepare an investment report for each quarter and annual settlement and submit such investment report to the Minister of Construction and Transportation and the Financial Supervisory Commission within the deadline that is set by the Presidential Decree.

(2) The investment report pursuant to paragraph (1) shall include the important matters concerning asset management.

Article 38 (Keeping and Public Notice of Investment Related Documents)

A real estate investment company shall, as prescribed by the Presidential Decree, make public the financial statement and investment report of each quarter and annual settlement, provide them for stockholders' and creditors' perusal, and keep them.

CHAPTER IV SUPERVISION

Article 39 (Supervision and Inspection, etc.)

(1) The Minister of Construction and Transportation may, if it is deemed necessary to protect public interests and the stockholders of every real estate investment company, order every real estate investment company, every asset management company, every real estate investment advisory company, every asset custody organization and every institution commissioned to perform general clerical services (hereinafter referred to as the "real estate investment company, etc.") to submit or report material pertaining to the business or properties, etc. provided for in this Act and get his public officials to check such business and properties, etc.

(2) Where the Minister of Construction and Transportation finds any violation of this Act or orders or dispositions under this Act, he may take measures falling under one of the following subparagraphs against the real estate investment company, etc.:

1.The suspension of whole or part of the business;

2.The request for taking measures to dismiss or discipline officers and employees; and

3.The other measures prescribed by the Presidential Decree and necessary for the correction of violated matters.

Article 39-2 (Oversight of Financial Supervisory Commission)

(1) The Financial Supervisory Commission may, if it is deemed necessary to protect public interests or stockholders of a real estate investment company, order the real estate investment company, etc. to submit or report material pertaining to the work of overseeing financial affairs or get the Governor of the Financial Supervisory Service to check such work.

(2) The Financial Supervisory Commission may, if the real estate investment company, etc. violates this Act or any order or any disposition that is given or taken under this Act, ask the Minister of Construction and Transportation to take measures provided for in each subparagraph of Article 39 (2). In this case, the Minister of Construction and Transportation shall comply with such request unless special grounds exist that make it impossible for him to do so.
[This Article Newly Inserted by Act No. 7243, Oct. 22, 2004]

Article 40 (Matters for Authorization)
(1) A real estate investment company shall, as prescribed by the Presidential Decree, obtain authorization from the Minister of Construction and Transportation to conduct any acts falling under one of the following subparagraphs: Provided, That it falls under subparagraph 1 and the amendments of minor matters as prescribed by the Presidential Decree are intended, this shall not apply:

1.Amendments to the articles of incorporation;

2.Dissolution of the real estate investment company; and

3.Acquisition by transfer or transfer of the whole business.

(2) The provisions of Article 5 (4) shall apply mutatis mutandis to the authorization pursuant to paragraph (1).

Article 41 (Matters to Report)

(1) A real estate investment company shall, within ten days from the date of occurrence of causes falling under one of the following subparagraphs, report to the Minister of Construction and Transportation as prescribed by the Presidential Decree:

1.Investment in kind pursuant to Article 19 (1);

2.Change of officers;

3.Conclusion of a contract falling under the proviso of Article 30; and

4.Other important matters on the management of the real estate investment company that are prescribed by the Presidential Decree.

(2) The Minister of Construction and Transportation may, where it is acknowledged that the contents of the report received pursuant to paragraph (1) are in violation of the relevant Acts and subordinate statutes or detrimental to the stockholders' right and interest, order the real estate investment company concerned to correct or supplement them.

Article 42 (Revocation of Establishment Authorization)

(1) The Minister of Construction and Transportation may, where any real estate investment company and any asset management company fall under one of the following subparagraphs, revoke the establishment authorization thereof pursuant to Articles 5 and 22-3: Provided, That if it falls under subparagraph 1 or 2, he shall revoke the establishment authorization thereof:

1.Where it obtains an establishment authorization provided for in Articles 5 and 22-3 by means of fraud and illegality;

2.Where it is found to be incompatible with the requirements for the establishment authorization or violates the terms for the establishment authorization;

3.Where the measures pursuant to Article 39 (2) have not been executed without reasonable causes; and

4.Where it violates this Act or any order or any disposition that is given or taken under this Act.

(2) The provisions of Article 5 (6) shall apply mutatis mutandis to the revocation of establishment authorization pursuant to paragraph (1).

CHAPTER V MERGER AND DISSOLUTION

Article 43 (Merger)

Any real estate investment company shall not merge with other companies that are not real estate investment companies.

Article 44 (Dissolution)
A real estate investment company shall be dissolved due to one of the causes of the following subparagraphs:

1.Expiration of the period of existence stipulated in the articles of incorporation or occurrence of other causes of dissolution;

2.Resolution of general stockholders' meeting;

3.Merger;

4.Bankruptcy;

5.Dissolution order or dissolution ruling of the court; or

6.Revocation of establishment authorization pursuant to Article 42.

CHAPTER VI REGISTRATION

Article 45 (Registration of Establishment)

(1) The registration of establishment of a real estate investment company shall be made within two weeks from the date of closure of the stockholders' inaugural plenary meeting.

(2) Matters to be registered for establishment pursuant to paragraph (1) shall be as follows:

1.Matters regarding Article 8 (1) 1 through 5, 9 and 10;

2.Period or causes where the period of existence or causes of dissolution of the real estate investment company is provided in the articles of incorporation;

3.Names and resident registration numbers of the directors and auditor;

4.Name, resident registration number and address of the representative director; and

5.Where it is concluded that more than two directors are to represent a real estate investment company, such purport thereof.

(3) Where the registration of establishment is applied pursuant to paragraph (1), such documents as the one authorizing establishment, articles of incorporation, and meeting minutes of the inaugural plenary meeting as prescribed by the Presidential Decree shall be attached thereto.

Article 46 (Commissioning Registration of Dissolution)

(1) Where a real estate investment company has been dissolved due to the revocation of establishment authorization pursuant to Article 42, the Minister of Construction and Transportation shall commission the registry, having jurisdiction over the real estate investment company, to register dissolution thereof.

(2) Where the Minister of Construction and Transportation commissions the registration pursuant to paragraph (1), he shall attach documents evidencing the grounds of registration.

CHAPTER VII SUPPLEMENTARY PROVISIONS

Article 47 (Setting of Internal Control Standards, etc.)

(1) Every real estate investment company and every asset management company shall lay down and implement fundamental procedures and standards (hereinafter referred to as the "internal control standards") with which officers and employees are required to comply in order for them to abide by Acts and subordinate statutes, manage assets in a sound manner and protect stockholders.

(2) Every self-managed real estate investment company shall post law-abiding overseers tasked to check whether the internal control standards are observed and to investigate any violation of the internal control standards and to report the results of such investigation to the auditor.

(3) Details of the internal control standards, requirements and duties of law-abiding overseers and other necessary matters shall be prescribed by the Presidential Decree.
[This Article Wholly Amended by Act No. 7243, Oct. 22, 2004]

Article 48 (Hearing)

The Minister of Construction and Transportation shall, where a disposition falling under one of the following subparagraphs is intended, hold a hearing pursuant to the Administrative Procedures Act:

1.Revocation of registration pursuant to Article 23 (3); or

2.Revocation of establishment authorization pursuant to Article 42 (1).

Article 49 (Relation with Other Acts)

(1) The provisions of Article 415-2 of the Commercial Act shall not apply to a real estate investment company.

(2) The provisions of Articles 191-7, 191-16 and 191-17 of the Securities and Exchange Act shall not apply to a real estate investment company.

(3) The provisions of Article 191-12 of the Securities and Exchange Act shall not apply to any consigned-management real estate investment company.

(4) The provisions of Article 94 of the Act on Business of Operating Indirect Investment and Assets shall apply mutatis mutandis to restrictions on the exercise of the right to vote of every consigned-management real estate company. In this case, the "investment company" shall be deemed the "consigned-management real estate investment company" and the "asset operation company" shall be deemed the "asset management company" respectively.

Article 49-2 (Special Case of Corporate Restructuring Real Estate Investment Company)

(1) Every corporate restructuring real estate investment company shall meet the requirements falling under each of the following subparagraphs in addition to the requirements for the real estate investment company that are stipulated by this Act:

1.Not less than 70/100 of the total assets are required to consist of assets that are used to purchase and acquire the real estate falling under each of the following items:

(a) The real estate that any enterprise sells to redeem its debts and liabilities it owes to any creditor financial institution;

(b) The real estate that is sold to implement an agreement that is concluded with any creditor financial institution for the purpose of improving the financial structure;

(c) The real estate that is sold according to the procedures for company reorganization provided for in the Company Reorganization Act and to the composition plan provided for in the Composition Act; and

(d) The real estate that is recognized by the Financial Supervisory Commission as being necessary to back up the corporate restructuring of any enterprise; and

2.The term of the existence of the company is required to be entered in the articles of incorporation.

(2) The Minister of Construction and Transportation shall, if he intends to grant a preliminary authorization for any corporate restructuring real estate investment company in accordance with Article 5, hear in advance the opinion thereabout of the Financial Supervisory Commission.

(3) Stockholders of every corporate restructuring real estate investment company may, if it is deemed inevitable to protect their interests, which is prescribed by the Presidential Decree, ask the relevant selling company to buy back their stocks. In this case, necessary matters concerning the methods of paying purchase prices and purchase money, etc. shall be prescribed by the Presidential Decree.

(4) The provisions of Articles 9, 15, 24 (1) and (2), 25 (1) shall not apply to every corporate restructuring real estate investment company.

(5) The provisions of Articles 11-2, 14 (2), 22-2, 28 (3) and 49 (3) and (4) shall apply mutatis mutandis to every corporate restructuring real estate investment company. In this case, the "consigned management real estate investment company" shall be deemed the "corporate restructuring real estate investment company."

(6) The provisions of Article 22 of the Corporate Restructuring Investment Companies Act shall apply mutatis mutandis to the equity investment limit on every corporate restructuring real estate investment company. In this case, the "corporate restructuring investment company" shall be deemed the "corporate restructuring real estate investment company" and the "creditor financial institution" shall be deemed the "financial institution," respectively.
[This Article Wholly Amended by Act No. 7243, Oct. 22, 2004]


Articles 49-3 through 49-7
Deleted.

CHAPTER VIII PENAL PROVISIONS

Article 50 (Penal Provisions)

Any person who falls under one of the following subparagraphs shall be punished by imprisonment for not more than five years or by a fine not exceeding one hundred million won:

1.A person who makes a public offering or secondary distribution of stocks, making use of the name of "real estate investment company", without obtaining a preliminary authorization, an incorporation authorization or an alteration authorization pursuant to Article 5;

2.A person who obtains a preliminary authorization, an incorporation authorization or an alteration authorization pursuant to Article 5 by fraudulent or other improper means;

3.A person who invests and manages assets in violation of Article 21;

4.A person who is engaged in trading real estate or securities by making use of undisclosed information regarding the asset management of a real estate investment company or allows others to use such information in violation of Article 32 (1); and

5.A person who obtains a preliminary incorporation authorization or an alteration authorization for the asset management company provided for in Article 22-3 by means of fraud and illegality.

Article 51 (Penal Provisions)

Any person who falls under one of the following subparagraphs shall be punished by imprisonment for not more than three years or by a fine not exceeding fifty million won:

1.A person who invests in kind and gets any investment in kind without having the value of the real estate appraised pursuant to the provisions of Article 11 (3) (including a case where the provisions are applied mutatis mutandis under the provisions of Article 19 (2));

1-2.A person who has his real estate investment advisory company registered pursuant to Article 23 (1) by means of fraud and illegally;

2.A person who manages assets in violation of Article 25 (1);

3.A person who invests in a real estate development project in violation of Article 26 (1) or (2);

3-2.A person who performs the act of transaction in violation of the provisions of Article 22-2 (3) (including a case where the provisions are applied mutatis mutandis under the provisions of Article 49-2 (5));

4.A person who manages assets in violation of Article 27 (1) or (3);

5.A person who borrows any fund or issues any bond in violation of the provisions of Article 29;

6.A person who makes deals in violation of Article 30 with anyone falling under any subparagraph of the same Article; or

7.A person who manages assets in violation of Article 49-2 (1) 1.

Article 52 (Penal Provisions)

Any person who falls under one of the following subparagraphs shall be punished by imprisonment for not more than one year or by a fine not exceeding ten million won:

1.A person who uses the name of "real estate investment company" in violation of Article 3 (3);

2.A person who fails to offer stock subscription forms or investment prospectus or offer fraudulently made stock subscription forms or investment prospectus in violation of Article 10 or 17;

3.A person who violates the disposal order pursuant to Article 15 (3) or (4);

4.A person who uses the name of "real estate investment company" in violation of Article 23 (4);

5.A person who disposes of real estate in violation of Article 24 (1) or (2);

6.A person who fails to prepare or fraudulently prepares the firsthand report pursuant to Article 24 (3);

7.A person who violates the code of conduct pursuant to Article 33;

8.A person who fails to deposit securities with the Korea Securities Depository in violation of Article 35 (3);

9.A person who fails to separately manage assets in violation of Article 36 (3);

10.A person who fails to make an investment report or makes a false investment report in violation of the provisions of Article 37 (1);

11.A person who performs any activity falling under any subparagraph of Article 40 (1) without obtaining authorization in accordance with the same paragraph of the same Article; or

12.A person who fails to implement the correction order or supplement order pursuant to Article 41 (2).

Article 53 (Joint Penal Provisions)

Where a representative of a juristic person, or an agent, employee or other worker for a juristic person or an individual violates Articles 50 through 52 with regard to the business activities for such juristic person or individual, a fine falling under each pertinent Article shall be imposed on such juristic person or individual, as well as a punishment against the offender.


Article 54 (Fines for Negligence)

(1) Any person who falls under one of the following subparagraphs shall be punished by a fine for negligence not exceeding five million won:

1.A person who invests in a real estate development project in violation of Article 26 (3);

1-2.A person who fails to submit an investment report in violation of the provisions of Article 37 (1);

2.A person who fails to maintain, notify the public and provide for perusal the quarterly or annual financial statements or investment reports in violation of Article 38;

3.A person who rejects, interferes with or evades the submission of data and a report or an inspection, or submits false data or a false report under the provisions of Article 39 (1) or 39-2 (1);

4.A person who fails to implement the measures pursuant to Article 39 (2);

5.A person who fails to fulfill the responsibility of report pursuant to Article 41 (1); or

6.Deleted.

(2) The fine for negligence as prescribed in paragraph (1) shall be imposed and collected by the Minister of Construction and Transportation in such manner as prescribed by the Presidential Decree.

(3) Any person, who has a complaint against the disposition of a fine for negligence under paragraph (2), may file an objection with the Minister of Construction and Transportation within thirty days from the date he is informed of such disposition.

(4) Where a person is imposed with a fine for negligence pursuant to paragraph (2) and files an objection pursuant to paragraph (3), the Minister of Construction and Transportation shall, without delay, notify the court, which has the jurisdiction, of the fact. The court shall decide on the case of fine for negligence in accordance with the Non-Contentious Case Litigation Procedure Act.

(5) Where neither any objection is filed nor any fine for negligence is paid within the period of time under paragraph (3), such fine shall be collected in accordance with the examples of the disposition of national taxes in arrear.

ADDENDA

(1) (Enforcement Date) This Act shall enter into force on July 1, 2001.

(2) (Special Case of Fictitious Authorization for Korean National Housing Corporation, Korea Land Corporation and Korea Asset Management Corporation under the Trust Business Act) In conducting any such custody business of real estate as entrusted under Article 35 (1) of this Act, the Korean National Housing Corporation, the Korea Land Corporation and the Korea Asset Management Corporation shall be deemed to have been authorized under the Trust Business Act for one year after this Act enters into force notwithstanding the provisions of paragraph (2) of the same Article and the Trust Business Act.

(3) (Transitional Measures concerning Subparagraph 1 (b) and (c) (iii) of Article 3 of Futures Trading Act) "Subparagraph 1 (b) and (c) (iii) of Article 3 of the Futures Trading Act" as referred to in subparagraph 2 of Article 2 of this Act shall be deemed to be "Article 2-2 (1) of the Securities and Exchange Act" until the day before the enforcement date of Article 6 of Addenda of the Futures Trading Act (Act No. 5041) under the proviso of Article 1 of the said Addenda.


ADDENDUM
This Act shall enter into force on July 1, 2001: Provided, That the amended provisions of Article 22 (2) shall enter into force on July 1, 2002.

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)

Articles 2 through 13
Omitted.

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on March 1, 2004. (Proviso Omitted.)

Articles 2 through 12
Omitted.

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force six months after the date of its promulgation.

Article 2 (Transitional Measure concerning Corporate Restructuring Real Estate Investment Company and Asset Management Company)

Any corporate restructuring real estate investment company and any asset management company that are each granted an authorization for their incorporations pursuant to the previous provisions at the time of the enforcement of this Act shall be deemed the corporate restructuring real estate investment company and the asset management company that are each incorporated pursuant to this Act.

Article 3 (Transitional Measure concerning Internal Control Standards)

Any asset management company that obtains an authorization for its incorporation pursuant to the previous provisions at the time of the enforcement of this Act shall lay down its internal control standards provided for in the amended provisions of Article 47 (1) within 3 months after the enforcement of this Act.

Article 4 (Transitional Measure concerning Penal Provisions and Fine for Negligence)

The application of the penal provisions and the fine for negligence to the act performed prior to the enforcement of this Act shall be governed by the previous provisions.

Article 5 (Special Case concerning Conversion of Corporate Restructuring Real Estate Investment Company into Consigned-Management Real Estate Investment Company)

Any corporate restructuring real estate investment company that is incorporated pursuant to the previous provisions at the time of the enforcement of this Act may convert into a consigned-management real estate investment company provided for in this Act after going through a resolution of the general meeting of stockholders provided for in the provisions of Article 434 of the Commercial Act and obtaining an authorization for its incorporation from the Minister of Construction and Transportation pursuant to the amended provisions of Article 5.

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation.

Articles 2 through 12
Omitted.

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SeanHayes@ipglegal.com