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- South Korea proposed rules allowing stocks, bonds, and funds to be issued as tokenized securities on distributed ledger infrastructure.
- The framework takes effect on February 4, 2027, following a public-comment period running through November 11.
- The first phase covers private funds, bonds, unlisted shares, and public fractional investment securities.
South Korea is preparing to let stocks, bonds, and funds be issued as tokenized securities under proposed rules that bring traditional financial assets onto distributed ledger infrastructure.
The Financial Services Commission announced draft regulations on Oct. 1, with a formal public-comment period running from Oct. 2 through Nov. 11. The framework is scheduled to take effect on Feb. 4, 2027.
First Phase Covers Private Funds, Bonds and Unlisted Shares
South Korea plans to introduce the system in stages rather than opening all securities to tokenization immediately. The first phase allows privately placed money market funds and bonds for institutional investors, alongside trust-based tokenization of unlisted shares. Public fractional investment securities will also qualify from the start.
Regulators plan to expand the framework to publicly offered securities after reviewing the first phase and the infrastructure developed by securities firms and the Korea Securities Depository.
Retail Investors Face 100M Won Annual OTC Limit Per Platform
Retail investors trading tokenized securities through approved over-the-counter platforms would face an annual net purchase cap of 100 million won, about $74,000, on each platform. Existing licensed financial investment firms will be able to handle tokenized securities within their permitted business areas without obtaining a separate token-specific license.
Companies managing tokenized securities accounts directly for their own issuance will face additional requirements, including at least 4 billion won in equity capital and dedicated personnel for account management, internal controls and technology.
Stablecoin Settlement Could Follow in Later Phase
The FSC’s longer-term roadmap includes moving payments and settlement on-chain by connecting tokenized securities infrastructure with payment instruments such as stablecoins.
That phase will depend on South Korea’s pending stablecoin legislation and the results of the earlier tokenization stages.
The immediate focus is finalizing the proposed implementation rules. Public comments will remain open through Nov. 11 ahead of the framework’s scheduled Feb. 4, 2027 launch.
