(Nature of a Membership Stock Exchange and Membership Eligibility)
A membership stock exchange is a juristic association formed for the non-profit purposes; in addition to the provisions of this Act, a membership stock exchange shall also be governed by the provisions of the Civil Code.
The membership of a stock exchange referred to in the preceding paragraph shall be limited to securities dealers and securities brokers.

(Restriction on Number of Members)
The number of memberships of a membership stock exchange shall be no less than seven.

(Articles of Association)
The articles of association of a membership stock exchange shall contain the following particulars:
1. objectives.
2. name.
3. location of the head office and the location of the centralized securities exchange market.
4. matters concerning the eligibility for membership.
5. matters concerning the number of memberships.
6. matters concerning the discipline of members.
7. matters concerning the membership contributions to the stock exchange.
8. matters concerning the withdrawal from membership by a member.
9. matters concerning the directors and the supervisors.
10. matters concerning the meetings.
11. matters concerning the settlement and clearing fund to be deposited by members.
12. matters concerning the membership dues to meet operating expenses.
13. matters concerning the performance of business operation.
14. matters concerning the disposal of residual assets upon dissolution.
15. matters concerning accounting.
16. method of public announcement.
17. any other matters as required by the Competent Authority.

(deleted)

(Withdrawal from Membership)
A member may apply for withdrawal from membership in accordance with the articles of association or for any of the following reasons:
1. if the member has lost its membership qualifications.
2. if the corporate member dissolves or its company license is voided.
3. if the member is expelled from the stock exchange.

(Contribution to the Settlement and Clearing Fund and Payment of Transaction Charges)
A member shall deposit with the stock exchange a contribution to the settlement and clearing fund and pay securities transaction charges in accordance with the provisions of the articles of association.

(Contribution and Liability)
A member shall provide membership contribution in accordance with the provisions of the articles of association. Except for sharing the membership expenses in accordance with the provisions of the articles of association, its liability to the stock exchange shall be limited to the amount of its membership contribution.

(Penalties for Legal Violations by Members)
Where of any of its members commits the following acts, the membership stock exchange shall fine the member for breach of contract, and may warn, suspend or restrict such member from trading securities on its centralized securities exchange market, or may expel the member:
1. violated an act or regulation, or administrative disposition made pursuant thereto.
2. violation of the articles of association, business bylaws, standards for executing commission contracts, or other bylaws of the stock exchange.
3. violation of the principles of integrity and fair dealing in transactions, and the violation is sufficient to cause damage to others.
The provisions of the preceding paragraph shall be prescribed in the articles of association.

(Expulsion)
Where a membership stock exchange expels any member pursuant to the preceding Article, such expulsion shall be reported to the Competent Authority for its approval; where the expulsions of the member is approved, the Competent Authority may void its special permit for securities businesses.

(Winding Up of Trades After Withdrawal from Membership or Suspension of Trading)
Where any member withdraws from membership or is suspended from trading, the membership stock exchange shall, in accordance with the articles of association, require the said member or designate other members to wind up and settle its transactions effected on the centralized securities market; the member shall be deemed to have not withdrawn from membership or not suspended from trading to the extent and within the scope of winding up and settling the transactions.
Where another member is designated to wind up the transactions in accordance with the preceding paragraph, a trust relationship is deemed to exist between the withdrawing member and the designated member to the extent and within the scope of winding up and settling the transactions.

(Numbers and Qualifications of Directors and Supervisors)
A membership stock exchange shall have at least three directors and one supervisor elected from among its members in accordance with the provisions of the articles of association; however, at least one third of the directors, and at least one supervisor, shall be elected from related experts who are non-members.
The term of office of both directors and supervisors shall be three years; re-election shall be permissible.
The board of directors shall be formed by directors; the chairman of the board, who shall be a non-member director, shall be elected by a majority vote of the directors.
The board chairman shall be a full-time executive officer; however, this restriction shall not apply if the stock exchange has assigned a managerial officer vested with full authority to take charge of operations.
Standards and regulations governing the election of non-member directors and supervisors as referred to in paragraph 1 shall be prescribed by the Competent Authority.

(Mutatis mutandis Application of Article 53 to Directors, Supervisors, and Managerial Officers)
The provisions of Article 53 shall apply mutatis mutandis to directors, supervisors, or managerial officers of a membership stock exchange.
The violation of the provisions of the preceding paragraph by any directors, supervisors or managerial officers shall result in their automatic discharge.

(Prohibition of Concurrent Service)
The directors, supervisors, or managerial officers of a membership stock exchange shall not serve concurrently as the director, supervisor, or managerial officer of another stock exchange.

(Prohibition of Benefit Seeking by Insiders)
Representatives of member directors or supervisors, non-member directors, or any other employees of a membership stock exchange shall not, either for his own account or by commissioning others, purchase or sell securities in a centralized securities exchange market.
The persons referred to in the preceding paragraph shall be prohibited from providing funds to, sharing profits or losses with, or have any other business dealings or interests with members of the said stock exchange; however, this restriction shall not apply to persons who perform such acts on the behalf of the members they represent.

(Discharge of Directors, Supervisors, or Managerial Officers for Legal Violations)
In the event that the Competent Authority finds that the election of any director or supervisor of the stock exchange has irregularities, or if any director, supervisor or managerial officer has violated an act or regulation, the articles of association, or an administrative disposition issued pursuant to an act or regulation, the Competent Authority may notify the stock exchange to discharge such persons.

(Mutatis Mutandis Application of the Company Act)
Unless otherwise provided in this Act, the provisions of the Company Act relating to directors, supervisors or managerial officers shall apply mutatis mutandis to the directors, supervisors, or managerial officers of a membership stock exchange.

(Utilization of the Settlement and Clearing Fund)
With the exception of the following dispositions, a membership stock exchange shall not utilize the settlement and clearing fund in any manner unless otherwise approved by the Competent Authority:
1. the purchase of government bonds.
2. the deposit in banks, or saving deposits with the postal administration.

(Prohibition Against Disclosure of Confidential Trading Information)
The directors, supervisors, or employees of a membership stock exchange shall not disclose any confidential information relating to securities transactions.

(Provisions Regarding Directors and Supervisors Applicable Mutatis Mutandis to the Legal Representatives Thereof)
The provisions of this section relating to the directors and the supervisors of a membership stock exchange shall apply mutatis mutandis to the legal representatives of directors and supervisors of the members.

(Causes for Dissolution)
A membership stock exchange may be dissolved upon the occurrence of any one of the following events:
1. occurrence of the events of dissolution specified in the articles of association.
2. resolution of a meeting of members.
3. the number of memberships falls to less than seven.
4. bankruptcy.
5. voidance of approval for the establishment of the stock exchange.
The resolution referred to in subparagraph 2 of the preceding paragraph shall not become effective without approval by the Competent Authority.

(Provisions Applied Mutatis Mutandis to the Qualifications and Discharge of Associated Persons)
The qualifications of, and the dismissal of associated persons employed by a membership stock exchange shall be governed mutatis mutandis by the provisions of Articles 54 and 56.