(1) Reasons for Proposal

For crowdfunding brokerage to serve as a stable financing market for the growth of startups and SMEs, this Amendment aims to extend the limit on the issuance of securities therefrom, thereby strengthening investor protection.

(2) Major Provisions

A. Obligate crowdfunding brokers to notify investors of important matters modified and posted (Article 68, paragraph 5, subparagraph 13-4)

Obligate crowdfunding brokers to notify subscribers of important matters that have been modified and posted, and that may affect the subscribers in their investment decision, thereby preventing investors from subscribing to securities in such a circumstance where they may be unaware of the important matters that were modified and posted

B. Introduce an investment suitability test (Article 68, paragraph 5, subparagraph 13-5)

Obligate crowdfunding brokers to accept a subscription for online small-value securities by the investors who fully understand risks, etc., of a crowdfunding brokerage, only after ascertaining investors’ understanding through questions, etc.

C. Notify investors of the fact that the requirements for issuing securities are met (Article 68, paragraph 5, subparagraph 13-6)

Obligate crowdfunding brokers to notify investors of whether the requirements for issuing online small-value securities are met (the subscription amount shall be 80/100 or more of the amount offered) in a timely manner for their recognition thereof

D. Obligate crowdfunding brokers to reconfirm investors’ recognition of important matters modified and posted (Article 118-9, paragraph 2)

Obligate crowdfunding brokers to confirm that investors fully recognize matters regarding changes in the terms and conditions of issuance, etc., that have been posted and may affect investors in making their investment decisions.

E. Expand the limit on securities issued through crowdfunding brokerage (Article 118-15, paragraph 1)

Expand the limit on securities to be issued from the current 700 million won to 1.5 billion won, thereby allowing startups and SMEs to finance their business sufficiently for their growth through a crowdfunding brokerage

F. Expand matters to be posted when issuing online small-value securities (Article 118-16, paragraph 1)

Expand matters to be posted when issuing online small-value securities by adding thereto the method of calculating the issue price of a security, an audit report by an accounting auditor and interests between a crowdfunding broker and an issuer, for the reference to investors

G. Introduce the minimum subscription period (Article 118-16, paragraph 3)

Set the subscription period to be at least ten days, thereby allowing investors to make their investment decisions after a sufficient exchange of opinions among them