South Korea's financial regulator opened comment on rules letting stocks, bonds, and funds be issued as tokenized securities ahead of a February 2027 rollout.
Tokenization News
South Korea's Financial Services Commission (FSC) has proposed detailed rules that would let stocks, bonds, and funds be issued as security tokens under its existing capital markets framework. The regulator announced the proposal on Oct. 1, expanding a system that had so far focused mainly on fractional-investment products.
The FSC said the new rules would extend tokenization to traditional securities types, including stocks, bonds, and funds, alongside the fractional investment securities already covered under non-monetary trust beneficiary certificates and investment contract securities. The proposed subordinate regulations fall under the Financial Investment Services and Capital Markets Act and the Act on Electronic Registration of Stocks and Bonds.
Comment Period Runs Into November
The revision proposals enter a public comment period from Oct. 2 to Nov. 11. The rules are designed to implement the revised FSCMA and Electronic Registration Act, which take effect on Feb. 4, 2027, marking the start of the first phase of securities tokenization in South Korea.
Under the plan, security tokens would need to be recorded on a distributed ledger shared across at least two account management entities, including issuer account management entities, alongside the Korea Securities Depository as the electronic registration entity. The FSC said this structure is meant to preserve credibility and continuity in how ownership records are kept.
The proposal also sets capital requirements for firms that want to manage token security accounts for customers directly. Issuer account management entities would need a minimum equity capital of 4 billion won (around $2.97 million) and would be required to employ at least one account management professional, one internal control professional, and two information technology professionals.
New Trading Rules for Retail Investors
On the trading side, the FSC proposed adding an over-the-counter exchange licensing unit for debt securities. This would sit alongside the existing OTC licensing structure for unlisted stocks and non-monetary trust beneficiary certificates.
Retail investors trading on these OTC platforms would face an annual limit of 100 million won, or roughly $70,000, in net purchases per exchange. The FSC said the structure is intended to support orderly growth of the secondary market for token securities while keeping individual investors’ risk exposure within set bounds.
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The proposed rules would also allow firms that fall short of the capital and staffing requirements to issue token securities through qualified financial intermediaries rather than managing accounts directly. Distributed ledgers used for regulated securities must still connect with the Korea Securities Depository's existing infrastructure regardless of which entity manages the accounts.
Before the rules take effect, the proposal must clear FSC approval, a review by the Ministry of Government Legislation, and deliberation at a Cabinet meeting. The FSC said it would gather industry feedback during the comment period and continue discussing the broader token securities policy direction through the formal legislative process.
The move follows a September policy roadmap in which the FSC laid out a phased plan for bringing conventional securities onto distributed ledger technology, with a later stage intended to connect token securities infrastructure to on-chain payment systems pending separate stablecoin legislation. Firms such as KB Securities and Kakaopay Securities have already disclosed early tokenization projects ahead of the rules taking effect.
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