TL;DR
- South Korea’s FSC proposed rules enabling tokenized securities issuance and circulation from February 4, 2027, covering stocks, bonds, funds and fractional investment products.
- Distributed ledgers must involve multiple account-management entities alongside the Korea Securities Depository, while qualifying issuers face KRW4 billion minimum capital requirements.
- Retail investors would face a KRW100 million annual net purchase cap on each OTC exchange, with the proposals open for public comment through November 11.
South Korea is moving from legislation to implementation on blockchain-based capital markets, with regulators proposing rules for tokenized securities ahead of a February 4, 2027 launch. The Financial Services Commission said revisions under the Financial Investment Services and Capital Markets Act and Electronic Registration Act will enter consultation from October 2 through November 11. The framework covers stocks, bonds and funds alongside fractional investment products. The rules turn tokenized securities from a policy concept into a regulated issuance and trading framework.
South Korea Builds the Infrastructure for Tokenized Securities
The proposal sets technical conditions for distributed ledgers used to record tokenized securities. Ledgers must be shared among at least two account management entities alongside the Korea Securities Depository, while direct fees for using the distributed ledger will be prohibited. This infrastructure builds on South Korea’s earlier three-phase tokenization roadmap, which starts with institutional and fractional products before expanding further. The design aims to combine blockchain-based recordkeeping with continuity and securities-rights protections.
Issuers that qualify as issuer account management entities will be allowed to manage customer securities accounts, but they must meet operational requirements. The FSC proposes minimum equity capital of KRW4 billion, plus at least one account management professional, one internal control professional and two information technology professionals. Those thresholds create a regulated gateway for companies seeking to issue and administer securities on distributed ledgers rather than leaving account management entirely to traditional intermediaries.
The FSC also plans a new over-the-counter exchange licensing unit for debt securities, adding to existing categories for unlisted shares and non-monetary trust beneficiary certificates. Retail investors would face an annual net purchase limit of KRW100 million on each OTC exchange. The investor cap places boundaries around secondary-market participation as South Korea develops tokenized trading infrastructure, while similar regulatory work in the U.S. shows authorities separating tokenization technology from the securities obligations attached to underlying assets.
The proposed subordinate rules remain subject to consultation and approval before taking effect. They follow legislation approved earlier in 2026 that legally recognizes security tokens as digitized forms of securities and schedules implementation for February 4, 2027. South Korea’s broader roadmap later envisions expanding tokenization to publicly offered securities and eventually connecting onchain settlement with stablecoins, although those phases remain flexible. For now, the immediate milestone is establishing operational, capital and investor-protection rules for the first regulated phase, as Asian tokenized capital markets continue developing.
