Regulations Governing Internal Operating Systems and Procedures for Banks Conducting Financial Derivatives Business Article 24

A bank shall establish a product suitability system for its financial derivatives transaction services for customers other than professional institutional investors and high net worth corporate investors, which shall include at least evaluation of the attributes of a financial derivative product, a "Know Your Customer" procedure, evaluation of customer’s attributes and basis for customer classification and product classification to understand the customer's investment experience, financial condition, trading purpose, and understanding of the product, as well as the suitability of trading the financial derivatives in question.A bank shall assign a proper unit or person to review the customer’s attributes and classifications resulted from the product suitability system in the preceding paragraph, and to reassess the results at least once every year, and shall ask the customer to confirm the results, and any revision thereof, by affixing his/her signature or seal on file or in another manner agreed by the parties.A bank shall not provide retail customers with financial derivatives transaction services that exceed the level appropriate to the customer, nor may it sell to retail customers any financial derivative product that is restricted to investment by professional customers only. This restriction, however, does not apply to trades of financial derivatives other than structured products that a retail customer enters into with a bank for hedging purposes.