South Korea’s Financial Services Commission (FSC) is issuing for public comment from October 2 through November 11 proposed amendments to the enforcement decrees of the Financial Investment Services and Capital Markets Act and the Electronic Securities Act, along with related supervisory regulations, to implement the token-securities framework. The underlying legislation is scheduled to take effect on February 4, 2027, and the amendments set out detailed standards for the “Token Securities Policy Direction” announced in September.
Assets eligible for issuance as token securities would include not only fractional-investment securities, such as non-monetary trust beneficiary certificates and investment contract securities, but also stocks, bonds and funds. Introduction will be phased. According to the FSC’s September 4 policy direction, the first stage is expected to cover the tokenization of privately placed money market funds (MMFs) for institutional investors, privately placed bonds, unlisted shares held through trusts and publicly offered fractional-investment securities.
A distributed ledger on which multiple institutions jointly record and manage securities rights and transactions must include at least two account-management institutions in addition to the electronic-registration institution. An issuer account-management institution may count as one of the two. Because the distributed ledger serves as an official record and delays in finalizing rights must be prevented, the proposal also prohibits directly paying consideration for use of the ledger for electronic registration.
An issuer that directly opens and manages investors’ securities accounts must register as an “issuer account-management institution.” Registration would require at least KRW 4 billion in equity capital, as well as one account-management specialist, one internal-control specialist and two information-technology specialists.
For trading, the proposal creates a new licensing category for over-the-counter platforms that intermediate debt securities such as bonds, extending beyond the existing categories for unlisted shares and non-monetary trust beneficiary certificates. For retail investors, it proposes a KRW 100 million annual limit at each OTC platform, measured as net purchases - the total purchase amount minus the total sale amount.
During the comment period, the FSC plans to discuss industry requests including a higher investment cap, a lower equity-capital threshold for issuer account-management institutions and more flexible distributed-ledger requirements. It plans to implement the amendments in time for the statute’s effective date after collecting comments and completing the relevant review and approval procedures.