Regulations Governing Futures Commission Merchants Article 18

Futures commission merchants (except those concurrently operated by other enterprises, as these are governed by other relevant acts and regulations) that have already issued securities under the Securities and Exchange Act shall take 20 percent from annual after-tax profit and set it aside as the special reserve set forth under Article 41 of the Securities and Exchange Act; provided that funds for this special reserve need no longer be set aside once the accumulated reserve equals the amount of the company's paid-in capital.Futures commission merchants that have not issued securities under the Securities and Exchange Act shall set aside a 20 percent special reserve from the annual after-tax profit; provided that funds for this special reserve need no longer be set aside once the accumulated reserve equals the amount of the company's paid-in capital.The FSC may increase or decrease the percentages under the preceding two paragraphs based on business needs.The special reserve referred to in the preceding three paragraphs shall not be used for purposes other than covering the losses of the company or, when the accumulated special reserve reaches 25 percent of the amount of paid-in capital, the portion in excess of 25 percent of the amount of paid-in capital may be capitalized; provided, that this rule shall not apply if the FSC has provided otherwise.