Open Decision Ledger · Capital markets & finance
Whether Providing DMA Services Related to ELW Order Speed to Only Certain Investors Constitutes an Undue Means
Translated from the Korean original. Read the Korean
Supreme Court, Jan. 16, 2014, 2013Do4064 (judgment)
No holding summary · checked against points at issue. The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Case name: 자본시장과금융투자업에관한법률위반
Official text on the National Law Information Center
Question
On what criteria is it determined whether an act of a financial investment business entity providing investment opportunities or trading means only to certain investors constitutes an undue means, scheme, or artifice under Article 178, paragraph (1), subparagraph 1 of the Financial Investment Services and Capital Markets Act?
Holding
Undue means, scheme, or artifice refers to any means, scheme, or artifice that is recognized as undue in light of generally accepted social norms. Where investment opportunities or the like are provided only to certain investors, matters such as the characteristics of the market, the structure of the transaction, the motive and method of the provision, the risk of causing loss to ordinary investors, and whether the trust in the fairness of transactions has been impaired must be comprehensively considered, and the Supreme Court affirmed the court below's view that the provision of the order-speed-related services in this case did not fall within this category.
Points at issue, verbatim
금융투자업자 등이 특정 투자자에 대하여만 투자기회 또는 거래수단을 제공한 행위가 부정한 수단 등에 해당하는지 판단하는 기준
Unofficial English translation
the criteria for determining whether an act of a financial investment business operator, etc. of providing investment opportunities or trading means only to a specific investor falls under unfair means, etc.
Disposition
Dismissed Stated in the decision
상고를 모두 기각한다.
Unofficial English translation
All appeals are dismissed.
Form of the test
Circumstances weighed Stated in the decision
종합적으로 고려하여 판단하여야 할 것이다
Unofficial English translation
must be determined through comprehensive consideration
Factors
- 부정한 수단, 계획 또는 기교
- 금융투자업자 등이 특정 투자자에 대하여만 투자기회 또는 거래수단을 제공한 행위
- 부정한 수단 등에 해당하는지 판단하는 기준
Unofficial English translation
• unfair means, schemes or artifices
• an act of a financial investment business operator, etc. of providing investment opportunities or trading means only to a specific investor
• the criteria for determining whether it falls under unfair means, etc.
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2011. 10. 27. 선고 2011도8109 판결
Unofficial English translation
Supreme Court Decision 2011Do8109 decided October 27, 2011
Decisions referred to
대법원 2011. 10. 27. 선고 2011도8109 판결(공2011하, 2504), 대법원 2012. 6. 28. 선고 2012도3782 판결
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
Would the same conclusion be maintained even in an ordinary securities market without an opposing structure between investors and liquidity providers, where an advantage in order speed is provided only to certain investors?
This reading will be re-examined if Article 178, paragraph (1), subparagraph 1 of the Financial Investment Services and Capital Markets Act is amended, or if a legal obligation concerning the equality of order processing speed is established by statute or as a supervisory standard.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-16
In comparison with an independent reading by another AI (GPT-6 Astra), which read only the original text without seeing the primary reading, 7 of the 8 axes agreed, and the readings diverged on the eighth axis (Open question and revisit condition).
Axis 8 (Open question and revisit condition): Primary “Would the same conclusion be maintained even in an ordinary securities market without an opposing structure between investors and liquidity providers, where an advantage in order speed is provided only to certain investors?” vs Independent “In a market where the speed-favoring service substantially infringes upon the trading opportunities of ordinary investors or gives rise to a direct conflict of interest, what degree of risk of loss is required for it to be assessed as an undue means?”
The primary reading asks whether the conclusion is maintained even in an ordinary securities market without an opposing structure, whereas the independent reading asks what degree of risk of loss is required in a market where trading opportunities are infringed or a conflict of interest exists.
금융투자업자 등이 특정 투자자에 대하여만 투자기회 또는 거래수단을 제공한 행위가 부정한 수단 등에 해당하는지 판단하는 기준Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The court below, citing the first-instance judgment, held that it is in fact impossible to execute orders in the sequence of their receipt where the orders were received by different methods; that it is difficult to derive a legal obligation that there must be no difference in order processing speed from the relevant regulations and administrative guidance; that at the time most securities firms provided DMA services and this was widely known; and that the ELW market has an opposing structure between investors and LPs, so no direct conflict of interest arises with ordinary investors, and on these and other grounds determined that it is difficult to regard the defendants' provision of speed-related services to some investors as an act of using an undue means, scheme, or artifice.
Supreme Court standard: The Supreme Court confirmed the settled legal principle concerning the meaning of undue means, set out the circumstances to be considered where investment opportunities or the like are provided only to certain investors, then, in light of that legal principle and the Records, affirmed that the court below's determination was proper, and, not accepting the grounds for final appeal alleging misapprehension of legal principles and the remaining grounds for final appeal disputing the finding of facts, dismissed all grounds for final appeal.
Distinguishing conditions
- Where the service provided only to certain investors is expressly prohibited by statutes or regulations, or where a legal obligation concerning the equality of order processing is recognized
- Where, given the transaction structure, a direct conflict of interest arises between the favored investors and ordinary investors, creating a risk of infringing upon the investment opportunities of ordinary investors and causing them loss
- Where the relevant service was not widely known within the industry and was provided exclusively only to certain investors, thereby seriously impairing the trust in the fairness of transactions
Record verification notes
Before asserting the same conclusion, it must first be checked whether the market in question has an opposing structure with liquidity providers, as the ELW market does, whether the favored service was publicly offered across the industry, and whether there was any disclosure obligation or administrative guidance from the supervisory authority.
From the official text
Points at issue
자본시장과 금융투자업에 관한 법률 제178조 제1항 제1호에서 정한 ‘부정한 수단, 계획 또는 기교’의 의미 및 금융투자업자 등이 특정 투자자에 대하여만 투자기회 또는 거래수단을 제공한 행위가 부정한 수단 등에 해당하는지 판단하는 기준
Unofficial English translation
The meaning of 'unfair means, schemes or artifices' as provided in Article 178 (1) subparagraph 1 of the Financial Investment Services and Capital Markets Act, and the criteria for determining whether an act of a financial investment business operator, etc. of providing investment opportunities or trading means only to a specific investor falls under unfair means, etc.
Summary of the holding
The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Order
상고를 모두 기각한다.
Unofficial English translation
All appeals are dismissed.
Provisions referred to
자본시장과 금융투자업에 관한 법률 제178조 제1항 제1호, 구 자본시장과 금융투자업에 관한 법률(2013. 5. 28. 법률 제11845호로 개정되기 전의 것) 제443조 제1항 제8호
Read 2026-10-16 · Cross-read 2026-10-16. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
Every entry is published only after all quotes have been matched character by character against the official text, and audited by an independent second reading from a different model family across all eight axes. Both agreed axes and text-grounded interpretive divergences are recorded openly. The ledger is a research record, not an assessment of the court or advice on any matter.
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