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THE CREATION AND DEVELOPMENT OF FINANCIAL HUBS ACT

Amended by Act No. 8863, Feb. 29, 2008

Article 1 (Purpose)

The purpose of this Act is to contribute to the development of the national economy by providing for matters relating to the creation and development of a financial hub to strengthen the competitiveness of financial industry as well as to ensure the advancement of financial market.

Article 2 (Definitions)

As used in this Act:

1. The term "financial hub" means a hub of domestic and international financial transactions in which many financial institutions can raise, make transactions and manage funds, as well as making other financial transactions;

2. The term "Korean financial institution" means any entity falling under any of the following subparagraphs:

(a) An institution referred to in any of subparagraphs 1 through 14 of Article 38 of the Act on the Establishment, etc. of Financial Services Commission; and (b) An entity engaging in financial business or finance-related affairs in the Republic of Korea as provided by Presidential Decree; and

3. The term "foreign financial institution" means any entity established under Acts and subordinate statutes of a foreign country and engaged in the financial business therein. Article 3 (Basic Responsibilities of State)

(1) The State shall establish and implement policies for the creation and development of a financial hub.

(2) The Government shall submit to the National Assembly an annual report on policies THE CREATION AND

DEVELOPMENT OF

FINANCIAL HUBS ACT

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and trends with respect to the creation and development of a financial hub prior to the commencement of an ordinary session of the National Assembly. Article 4 (Relationship to Other Acts)

Except as otherwise provided in other Acts, the creation and development of a financial hub shall be governed by this Act.

Article 5 (Formulation, etc. of Basic Plan)

(1) In order to promote the creation and development of a financial hub, the Financial Services Commission shall formulate and implement a basic plan for such creation and development (hereinafter referred to as the "basic plan") every three years.

(2) The basic plan shall include the following matters:

1. Fundamental directions and objectives of policies on the creation and development of a financial hub;

2. Improvement of systems, acts and statutes related to foreign exchange and any other finance;

3. Support for and promotion of the financial market for the creation and development of a financial hub;

4. Improvement of finance-related control and financial supervision systems for the creation and development of a financial hub;

5. International cooperation for the creation and development of a financial hub;

6. Improvement of management and life environment for the creation and development of a financial hub;

7. Development of and support for the specialized finance carrying on financial business in the specific field by using the characteristic and condition of foreign financial market;

8. Development of and support for information and communication systems related to the financial business;

9. Training of experts in finance;

10. Integration of financial institutions and vitalization of the financial business;

11. Improvement of tax systems related to finance; and

12. Other matters necessary for the creation and development of a financial hub. Laws on Green Growth, and Economic Investment in Korea 857 05_LawsConcerningEconomicInvestment

(3) The Financial Services Commission shall confirm the basic plan after deliberation by the Financial Hubs Establishment Committee established under Article 6.

(4) The Financial Services Commission may, if necessary for the formulation of the basic plan, request the proper administrative agencies, education or research institutions related to finance or other corporations or organizations to submit necessary materials.

(5) The Financial Services Commission may, if deemed necessary for the integration of financial institutions and vitalization of financial business, designate many areas as financial hub. (6) Other matters necessary for the formulation and implementation of the basic plan shall be provided for by Presidential Decree

Article 6 (Financial Hubs Establishment Committee) (1) Under the Financial Services Commission, the Financial Hubs Establishment Committee (hereinafter referred to as the "Committee") shall be established to deliberate on the following matters:

1. Formulation and modification of the basic plan;

2. Establishment of major policies on the creation and development of a financial hub;

3. Coordination of opinions of the administrative agencies concerned on the creation and development of a financial hub;

4. Examination of implementation situation of policies related to the creation and development of a financial hub;

5. Review on status of treatment of matters relating to the improvement of management environment reported under Article 13 (3), and examination of performance and improvements of Acts and subordinate statutes and systems; and

6. Other matters necessary for the creation and development of a financial hub which are provided for by Presidential Decree.

(2) The Committee shall be composed of not more than thirty members, including one Chairperson.

(3) The chairperson of the Committee shall be the chairperson of the Financial Services Commission, and the members shall be the following persons:

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1. Persons who have much knowledge and experience in finance and are commissioned by the Financial Services Commission (hereinafter referred to as "commissioned members");

2. Vice ministers of the relevant administrative agencies provided for by Presidential Decree or other officials equivalent thereto; and

3. Heads of finance-related institutions provided for by Presidential Decree. (4) The number of members referred to in each subparagraph of paragraph (3) shall not exceed ten.

(5) Commissioned members shall hold office for a term of two years and may be commissioned consecutively.

(6) Other matters necessary for the composition and operation of the Committee shall be provided for by Presidential Decree.

Article 7 (Enhancement of Transparency in Financial Market) The Government shall repeal unnecessary financial regulations and restrain the establishment of inefficient financial regulations in order to vitalize the financial market. Article 8 (Promotion of Competition)

The Government shall endeavor to establish efficient and competitive systems on the financial market, as well as to create a fair and competitive environment. Article 9 (Promotion of Financial Reform)

The Government shall promote financial reform, such as the launch of new financial products based on creative idea and growth in sales, to enhance the productivity of financial institutions through management improvement.

Article 10 (Training of Experts in Finance)

(1) The Government shall formulate and implement policies for the training of experts in finance in order to develop human resources necessary for the creation and development of a financial hub.

(2) The Financial Services Commission shall make and publish an annual report on the status and prospect of supply and demand of experts in finance. Provided, That it may entrust such creation and publication to specialized institutions or organizations in accordance with Presidential Decree. Laws on Green Growth, and Economic Investment in Korea 859 05_LawsConcerningEconomicInvestment

(3) In order to train experts in finance, the Financial Services Commission may designate universities, research institutes, or other finance-related institutions or organizations as training institutions for experts in finance and have them conduct education and training. (4) The Financial Services Commission may provide expenses necessary for education and training under paragraph (3), to such an extent as its budget permits.

Article 11 (Support for International Exchange and Cooperation) (1) In order to prepare and develop a financial hub, the Government shall formulate the following international exchange and cooperation promotion methods:

1. Survey of international trends related to the creation and development of a financial hub;

2. Cooperation with international organizations related to finance and foreign governments in finance-related affairs;

3. Exchange of financial personnel between a domestic enterprise, university, research institute, institution or organization (hereinafter referred to as "enterprises.") and a foreign enterprise;

4. Establishment of international cooperation systems to promote the export of technology and equipment related to payment and settlement affairs, securities deposit and storage affairs or other financial affairs; and

5. Other projects necessary for the promotion of international exchange and cooperation. (2) If domestic enterprises implement projects falling within paragraph (1) 1 and 3 through 5, the Government may provide support necessary therefor. Article 12 (Support for Mutual Relocation of Domestic and Foreign Financial Institutions)

The Government shall establish and implement policies on the following matters for the creation and development of a financial hub:

1. Improvement of situation for the relocation of domestic financial institutions into foreign countries;

2. Improvement of situation for the relocation of foreign financial institutions into the Republic of Korea;

3. Expansion of financial transactions between domestic and foreign financial institutions; and 860 Ministry of Government Legislation

4. Improvement of situation necessary for the internationalization of the financial industry. Article 13 (Financial Hub Support Center)

(1) Any institution or organization provided for by Presidential Decree, taking into account the specialty of finance-related affairs, shall have a financial hub support center to perform the following duties comprehensively:

1. Support the relocation of domestic financial institutions into foreign countries;

2. Support the relocation of foreign financial institutions into the Republic of Korea; and

3. Manage matters for the improvement of business environment related affairs conducted by financial businesses in the Republic of Korea, including domestic and foreign financial institutions.

(2) The head of a financial hub support center may, if necessary to perform duties referred to in paragraph (1) 3, request the proper administrative agencies, corporations or organizations to provide necessary assistance. If the relevant administrative agencies, corporations or organizations fail to comply with such request, they shall notify the head of the financial hub support center of the reasons therefor. (3) The head of a financial hub support center shall report the status on treatment of matters relating to the improvement of business environment under paragraph (1) 3 and performance to the Committee.

In such case, he/she may, if it is necessary to improve Acts and related statutes and systems in connection with such treatment, include the methods for improvement in such report.

(4) The Financial Services Commission may provide the expenses necessary for the establishment and operation of a financial hub support center, to such an extent as its budget permits. ADDENDA

Article 1 (Enforcement Date)

This Act shall take effect on the date of its promulgation. Articles 2 through 5 Omitted.