Regulations Governing Securities Firms Article 66

When the regulatory capital adequacy ratio of a securities firm falls below 100 percent, the FSC, in addition to doing as set out in Article 64, subparagraphs 1 and 2 and Article 65, subparagraphs 1 and 2 herein, additionally may take the following actions:1. Deny approval for its application for establishment of any additional branch office or simple branch office.2. If the capital adequacy ratio has not been corrected by the end of the month preceding any proposal by the board of directors for distribution of profits, in addition to requiring the securities firm to deduct from its undistributed earnings those items required to be set aside according to regulations, it shall further be required to set aside the total amount as special reserve in accordance with Article 41, paragraph 1 of the Act.