- South Korea proposed detailed rules allowing tokenized securities to be issued and traded starting Feb. 4, 2027.
- Retail investors would face an annual net purchase limit of 100 million won on each licensed over-the-counter platform.
- The first phase covers bonds, private funds, unlisted shares and publicly offered fractional investment securities.
South Korea has proposed detailed rules that would allow stocks, bonds, funds and fractional investment products to be issued and traded as tokenized securities from Feb. 4, 2027.
The Financial Services Commission opened the regulations for public comment on Oct. 2. The consultation runs through Nov. 11 before the subordinate rules move through the remaining approval process.
Retail Investors Would Face 100M Won Annual OTC Limit
Individual investors would be limited to 100 million won, about $74,000, in annual net purchases on each licensed over-the-counter platform handling tokenized securities.
The FSC also plans to create a new OTC licensing category for debt securities alongside existing categories covering unlisted shares and non-monetary trust beneficiary certificates.
Financial firms already licensed for investment services would be able to handle tokenized securities within their existing business areas without obtaining separate authorization solely because an asset is tokenized.
Issuer Account Managers Would Need 4B Won in Capital
Companies issuing tokenized securities would be allowed to manage investor securities accounts directly if they register as issuer account management entities.
Those firms would need at least 4 billion won in equity capital and dedicated personnel covering account management, internal controls and information technology.
Distributed ledgers used for the securities would also need to be shared by at least two account management entities alongside the Korea Securities Depository. The proposed rules would prohibit charging investors directly for use of the distributed ledger.
First Phase Would Cover Bonds, Private Funds and Unlisted Shares
South Korea plans to introduce tokenization in stages. The first phase would cover privately pooled money market funds and bonds for institutional investors, trust-based tokenization of unlisted shares and publicly offered fractional investment securities.
Regulators plan to expand the framework later to publicly offered securities more broadly. The FSC’s longer-term roadmap also includes moving settlement on-chain, potentially using stablecoins once separate legislation is in place.
For now, the immediate next step is the Nov. 11 consultation deadline ahead of the revised securities laws taking effect on Feb. 4, 2027.
