South Korea’s financial regulator has taken the next formal step toward putting tokenized securities into the existing capital markets system, publishing draft subordinate rules that would let the framework start operating in early 2027.
On October 1, 2026, the Financial Services Commission (FSC) proposed amendments to the implementing regulations under the Financial Investment Services and Capital Markets Act and the Act on Electronic Registration of Stocks and Bonds.
The drafts are meant to give practical effect to statutory changes already scheduled to take force on February 4, 2027.
Public comments run from October 2 through November 11, 2026, after which the proposals are expected to move through the remaining approval steps and become effective on the same date as the parent legislation.
Under the draft rules, tokenized issuance and circulation would not be limited to fractional products.
Conventional instruments—stocks, bonds, and funds—would also be eligible, together with fractional investment securities structured as non-monetary trust beneficiary certificates or investment contract securities.
In legal terms, a security token is treated as a digitized form of a security rather than as a separate asset class sitting outside capital-markets law.
The proposals also set conditions for the ledgers on which those instruments would be recorded.
A distributed ledger used for electronic registration would have to be shared by at least two account-management entities, including any issuer that itself manages customer accounts, together with the electronic registration entity, the Korea Securities Depository.
Because the ledger is treated as a public record of rights, operators would not be allowed to charge a direct fee simply for use of the ledger, a restriction intended to protect the reliability of ownership confirmation.
Issuers that want to manage customer securities accounts directly—designated as issuer account management entities—would face a minimum equity-capital threshold of 4 billion won.
They would also need at least one account management specialist, one internal-control specialist, and two information technology specialists, reflecting the view that ledger-based issuance can be stable enough to open account management beyond traditional financial firms, provided capacity and investor-asset safeguards are in place.
On the trading side, the drafts would add a licensing category for over-the-counter exchanges dealing in debt securities, alongside existing units for unlisted stocks and non-monetary trust beneficiary certificates.
Officials expect retail interest in tokenized debt to grow and want a dedicated authorization path ready.
Retail protection would be built into that market: an individual investor’s net purchases on any single OTC exchange would be capped at 100 million won a year.
The rulemaking follows a policy roadmap the Commission set out on September 4 after a public-private consultative meeting.
That roadmap divides infrastructure build-out into three stages.
From February 2027, the first stage would cover privately placed money-market funds and bonds reserved for institutions, unlisted shares issued through a trust structure, and publicly offered fractional investment securities.
A later stage would widen tokenization to publicly offered securities more generally.
A final stage would aim at on-chain settlement linked to stablecoins, with timing left flexible and dependent on the results of the first phase, market adoption, and separate stablecoin legislation.
The September guidance also covers fractional products more immediately.
Model standards would allow pooling of underlying assets of the same type when the purpose is clear, distressed assets are excluded, and information on each asset is provided.
Suggested retail subscription limits for those products are the lower of 30 million won or 5 percent of the issue.
The Korea Securities Depository has prepared screening criteria for firms that want to connect their ledgers, including business-continuity requirements so that distributed-ledger systems meet the stability expected of existing market infrastructure.
No separate license is planned solely for handling tokenized securities.
Firms already authorized for investment business would be able to deal in them within their existing scope, though intermediation of tokenized trades would require prior consultation with the Financial Supervisory Service. The Commission says it will keep consulting market participants while the subordinate rules move through the comment period and toward the February 2027 start date.