Reasons for Proposal
The Amendment aims to prevent damage to investors caused by the illegal/unsound business activities of quasi-investment advisory business entities; prescribes grounds for disqualifying the registration of quasi-investment advisory business entities in order to encourage their sound business activities; requires such entities to recieve compulsory prior training to prevent unsound business; allows the cancellation, ex officio, of registration of such entities for their expedient business activities; and strengthens penalties against such offenses as refusal to submit information and unregistered quasi-investment advisory activities, thereby addressing and improving upon a number of weaknesses that have emerged from the operation of the current system.
A. Prescribe grounds for disqualifying the regisration of quasi-investment advisory business entities (Article 101, paragraph 5 newly inserted)
B. Periodic qualification checks and retraining of quasi-investment advisory business entities (Article 101, paragraph 6 newly inserted)
C. Compulsory prior training of quasi-investment advisory business entities (Article 101, paragraphs 7 and 8 newly inserted)
D. Introduce the right to cancel, ex officio, registration of quasi-investment advisory business entities for their expedient business activities (Article 101, paragraph 9 newly inserted)
E. Strengthen penalties against quasi-investment advisory business entities (Article 446, subparagraph 17-2; Article 449, paragraph 3)
Article 101 (Reporting on Quasi-Investment Advisory Business)
⑦ A person who intends to file a report in accordance with paragraph 1 shall receive training necessary for the operation of a quasi-investment advisory business to protect investors.
⑨ The Financial Services Commission may cancel by direct authority any registration of a person falling under any of the following subparagraphs:
1. A quasi-investment advisory business entity who has filed a business closure report to the head of the competent tax office in accordance with Article 8 of the Value-Added Tax Act or whose business registration has been canceled by the head of the competent tax office;
2. A person who has been subject to an administrative fine pursuant to Article 449 three or more consecutive times for failing to comply with paragraph 2 or the latter part of paragraph 3;
3. A person falling under any of the subparagraphs of paragraph 5.
Article 449 (Administrative Fines)
5-2. A person who, in violation of Article 101 (2), fails to file a report without justifiable reason or files a false report;
5-3. A person who, in violation of the latter part of Article 101 (3), fails to submit materials without justifiable reason or submits false materials