Regardless of the entities that operate financial investment businesses,the Financial Investment Services and Capital Markets Act(FSCMA) covers all financial investment products and defines professional and individual investors separately in accordance with risk capacity, applying appropriate regulatory measures for given business activities. Distinguishing investors in such a manner promotes the efficient distribution of regulatory resources and strengthens investor protection. Previous discussions on the classification of investors were confined to a dichotomy of professional investors and individual investors. The FSCMA goes further by distinguishing investors via investment method and applying appropriate regulations. This thesis aims to provide a more comprehensive understanding of the aforementioned division of investors as well as present new ways toward overall improvements. First, In terms of the classification of investors, it would be more rational, logical and easier to apply to define professional investors in detail based on risk-taking capability and then establish separate rules for the addition/removal of an investor type according to specific policy goals. Moreover, when establishing criteria for investor classification, taking into account investors’ risk-taking capability rather than categorizing the legal nature/form of each professional-investor type and applying relevant investor protections would be more reasonable. In this regard, investor eligibility requirements for certain investment instruments, including securities issuances for private placements, collective investment vehicles for private placements, corporate bonds for qualified institutional investors and professional collective investment vehicles for private placements, need to be based on investor-classification criteria more consistently.