The judgment of the court below is reversed, and the case is remanded to the Seoul Northern District Court Panel Division.

1. The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

The lower court acknowledged the facts as indicated in its reasoning with respect to the assertion of misapprehension of the legal doctrine as to the operation of financial investment business by unmanneds, and determined that the products traded at the private futures trading site G (hereinafter “G”) operated by the Defendant constitutes derivatives that refer to contractual rights under each subparagraph of Article 5(1) of the former Financial Investment Services and Capital Markets Act, linked to “undermining risks belonging to economic phenomena, etc. and that can be calculated or assessed by price index units in a reasonable and appropriate manner” under Article 4(10)5 of the former Financial Investment Services and Capital Markets Act (amended by Act No. 11845, May 28, 2013; hereinafter “former Financial Investment Services and Capital Markets Act”). The lower court determined that the Defendant engaged in financial investment business by engaging in trading derivatives on its own account.

However, we cannot accept the above determination by the court below for the following reasons.

The principle of no crime without the law requires that crimes and penalties should be prescribed by law in order to protect individual freedom and rights from arbitrary exercise of the state penal authority.

In light of such purport, the interpretation of the penal law must be strict, and it is not permitted to expand or analogically interpret the meaning of the explicit penal law in the direction unfavorable to the defendant as it is against the principle of no punishment without law.

(See Supreme Court Decision 201Do7725 Decided August 25, 2011). Article 11 of the former Capital Markets Act provides that “No person may engage in financial investment business (excluding investment advisory business and discretionary investment business) without obtaining authorization (including authorization for changes) for financial investment business under this Act.” Article 444 Subparag. 1 of the same Act provides that “No person shall engage in financial investment business (excluding investment advisory business and discretionary investment business).”