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About Laws and Regulations

Financial legislation and regulations consist of laws enacted by the National Assembly, enforcement decrees approved by the president’s state council (cabinet), enforcement rules approved by the Office for Government Policy Coordination under the prime minister, and regulations written by the Financial Services Commission and the Financial Supervisory Service. Although enforcement decrees, enforcement rules, and supervisory regulations differ in hierarchy, they are all intended to implement and support specific legislation enacted by the National Assembly.

Laws

A law, enacted by the National Assembly, supersedes enforcement decrees, enforcement rules, and regulations that are written and enforced by the administrative agencies of the executive branch.

Enforcement Decrees and Enforcement Rules

An enforcement decree, also called presidential enforcement decree, is a regulation immediately subordinate to laws. It is approved by the president’s state council (cabinet) to implement legislation enacted by the National Assembly. An enforcement rule is a regulation subordinate to enforcement decree and approved by the Office for Government Policy Coordination under the prime minister. Enforcement rules complement enforcement decrees with additional detailed rules in support of legislation passed by the National Assembly.

Laws passed by the National Assembly are not always backed by both the enforcement decree and enforcement rule. For example, the Banking Act that the National Assembly enacted in May 1950 is accompanied only by the Enforcement Decree of the Banking Act, but the Financial Investment Services and Capital Markets Act, the governing statute for securities and investment services that the National Assembly passed in August 2007, is accompanied by both the Enforcement Decree and the Enforcement Rule for Financial Investment Services and Capital Markets Act.

Regulations and Detailed Regulations

In respect of financial regulation and supervision, regulations are written by the Financial Services Commission (FSC), a regulatory agency of the executive branch, to complement enforcement decrees and enforcement rules and ensure full enforcement of statutes. Regulations are subordinate to both enforcement decrees and enforcement rules. The Regulation on Supervision of Banking Business is thus subordinate to the Enforcement Decree of the Banking Act. Because the FSC and the FSS share financial regulation and supervision, the FSC assigns or delegates most of the enforcement functions to the FSS.

Detailed regulations are written by the FSS to complement enforcement decrees, enforcement rules, and regulations and ensure effective performance of supervisory duties and functions. In respect of hierarchy, the Detailed Regulation of the Banking Business is subordinate to the Regulation on Supervision of Banking Business.