Bank-affiliated Process Description

2 Bank-affiliated Business Process Description 1. Bank-affiliated Business Process 1.1 Precondition - Securities firm makes an agreement with more than one bank in associated with ‘affiliated business,’ and counterpart bank should be systematically equipped to facilitate online business with the affiliated securities firm. - Securities firm opens 2 separate accounts(one for the firm’s own, the other for managing its customers’ fund respectively) with counterpart bank under the name of the firm.(The Firm-held separately managed account is similar to escrow account or agency account in concept, but slightly different functionally) - All customers who wish to trade securities open accounts(in KIP, USD) with the bank with which securities firm is affiliated. (The bank has to make sure that the account is linked to securities firm, when securities firm’s customer opens a bank account.) - A customer who has opened an account with the bank, visits a branch of affiliated securities firm in person along with ID card and passbook issued by his/her main bank, then opens a securities account and receives securities passbook. 1.2 Deposit - The fund to trade securities is to be deposited into client’s bank account which is opened under client’s name. And customer requests transfer (fund in his/her bank account) to Securities Firm’s bank account for customers’ fund management which is opened under the firm’s name (The bank transfers fund from customers’ bank account to the securities firm’s bank account for customers’ fund management, as is explained on page 5(4.Deposit Notification), and then sends deposit message to securities firm.) - On receiving ‘deposit’ message (from the bank), securities firm processes deposit into customer’s securities account, and then sends response message to the bank. - Customer may trade stock(bond) through securities firm, after transmit request is normally processed - Customer may print out deposit details on the passbook at the securities firm after sending fund 1.3 Withdrawal - If customer needs to withdraw deposited fund from securities firm, he/she visits bank in person and requests withdrawal to his/her bank account. (If bank finds that customer’s account is linked to securities firm, it confirms findings in accordance with the procedures illustrated on page 6(5.withdrawal confirmation request); confirms by sending message ‘Inquiry of Securities Account Name’ of customer, then sends ‘Withdrawal’ message to securities firm. After receiving ‘withdrawal confirmation’ response from securities firm, the bank transfers fund from the firm-held client’s account to client’s bank account ) - Customer withdraws after confirming deposit in his/her account. - If securities firm receives ‘inquiry of account name’ message, it checks customer’s information and notifies bank of customer name and withdrawable amount by means of response message. - If securities firm receives ‘withdrawal request’ message (from bank), it sends response message to the bank after checking withdrawable amount. - Customer may print out withdrawal details on the passbook, after making a withdrawal at securities firm(by visiting in person).

3 Bank-affiliated Business Process Description 2. Securities Firm’s Message Requesting Inquiry of Bank Account Balance (Request : , Response : ) SECURITIES BANK DB ② ① ③ ① Securities Firm sends ‘Bank Account Balance Inquiry’ ( ) ② Bank processes ‘Balance Inquiry’ of the account requested ③ Bank sends response message for ‘Balance Inquiry’ ( )

4 Bank-affiliated Business Process Description 3. Bank’s Message Requesting Inquiry of Securities Account Name (Request: , Response: ) SECURITIES BANK DB ② ① ③ ① Bank sends ‘Securities Account Inquiry’ ( ) ② Securities Firm inquires name and withdrawable amount of account requested ③ Securities Firm sends response message for ‘Securities Account Inquiry’( )

5 Bank-affiliated Business Process Description 4. Deposit Notification(Request: , Response: ) - Eligible after Opening Bank Account and Securities Account. Passbook is required to open Securities Account. 고객 SECURITIES BANK DB ① Customer visits Bank in person(deposits into his/her bank account), and asks Bank to transfer deposited fund to Securities Firm’s bank account which is opened for separately managing customers’ fund. ② Bank checks accounts and makes a transfer between bank accounts (from Customer’s bank account to Securities Firm’s bank account for customer fund management) ③ Bank sends ‘Deposit into Securities Account’ message ( ) ④ Securities Firm updates deposit in securities account ⑤ Securities Firm sends response message of ‘Deposit Confirmation’ ( ) * Unless reception has been properly processed at the Bank, even after response message of ‘Deposit Confirmation’ of ⑤ was sent, Bank will resend ‘Deposit into Securities Account’ message ① ② ③ ④ ⑤

6 Bank-affiliated Business Process Description 5. Withdrawal Confirmation Request (Request: , Response: ) - Transferable within the amount available to withdraw in Securities Account. 고객 SECURITIES BANK DB ① Securities Firm Customer visits bank in person and request transfer to his/her bank account ② Bank checks accounts ③ Bank sends ‘Inquiry of Account Name’ message ( ) ④ Securities Firm checks accounts and computes withdrawable amount ⑤ Securities Firm sends message responding to ‘Inquiry of Account Name’ ( ) ⑥ Bank sends ‘Withdrawal Request’ message ( ) ⑦ Securities Firm updates deposit in securities account (Makes a Withdrawal) ⑧ Securities Firm sends message responding to ‘Withdrawal Confirmation’ ( ) ⑨ Bank makes a transfer between bank accounts (from securities firm’s bank account to customer’s bank account) ⑩ Bank processes withdrawal(Customer) Unless receipt has been properly processed at Bank, even after the response message of ‘Withdrawal Confirmation’ of ⑧ was sent, Bank will resend ‘Withdrwal Request’ message ① ② ③ ④ ⑤ ⑥ ⑦ ⑧ ⑨ ⑩

7 Bank-affiliated Business Process Description 6. Account Transfer Request (Request : , Response : ) - Transferable within the amount available to withdraw in Securities Account, and only between accounts held under the name of securities firm 고객 SECURITIES BANK DB ① ② ③ ④ ⑤ ⑨ ① Securities Firm Customer visits a branch of the firm in person, and requests transfer from firm-held bank account(in firm’s name for customers fund management) to his bank account.(or transfer from firm’s own bank account to firm’s separately managed account held for customers’ fund management in firm’s name) ② Securities Firm checks securities account and withdrawable amount in it, makes deposit/withdrawal in securities account ③ Securities Firm sends ‘Account Transfer’ message ( ) ④ Bank makes transfer between bank accounts ⑤ Bank sends response message of ‘Account Transfer Result’ ( ) * Unless reception has been properly processed at the Securities Firm, even after response message of ‘Account Transfer Result’ of ⑤ was sent, Securities Firm will resend ‘Account Transfer’ message.

8 Bank-affiliated Business Process Description 7. Count Message (Request : , Response : ) 5.1 At Bank’s Request DB ① Bank computes transactions ② Bank sends Count Request message ③ Securities Firm computes transactions ④ Sends response message of count request DB 5.2 At Securities Firm’s Request DB ① ② ③ ④ ① ③ ② ④ ① Securities Firm computes transactions ② Sends ‘Count Request’ message ③ Bank computes transactions ④ Bank sends response message of count request BANK SECURITIES

9 Bank-affiliated Business Process Description 8. Initiating operation, Failure and Closing (Request: , Response: ) 2.1 When Bank requests DB ① Transforms ② Sends Message ③ Transforms ④ Sends Response DB 2.2 When Securities Firm requests DB ① ② ③ ④ ① ③ ② ④ BANK SECURITIES ① Transforms ② Sends Message ③ Transforms ④ Sends Response