South Korea proposes tokenized securities rules for 2027

South Korea’s Financial Services Commission proposed rules for issuing and trading tokenized securities before a regulatory framework takes effect on Feb. 4, 2027. The framework would allow stocks, bonds, funds and some fractional investment securities to be issued and traded using distributed-ledger technology.

Companies that issue tokenized securities while managing customer accounts directly would need at least 4 billion Korean won ($2.8 million) in equity capital. They would also need dedicated compliance and technology staff.

Separate changes to capital markets rules would create an additional over-the-counter exchange license for debt securities. Retail investors would be limited to 100 million won ($70,000) in annual net purchases on each OTC exchange.

The proposal is part of a three-phase plan announced Sept. 4 to move securities issuance and trading onto distributed-ledger systems. The technology records transactions across a network of computers and supports the digital issuance and transfer of financial assets.

The rules will be open for public consultation from Friday through Nov. 11. They will then go through an approval process and are scheduled to take effect with amendments recognizing distributed ledgers as infrastructure for issuing and trading securities.