South Korea Proposes Tokenized Securities Rules Ahead of February 2027 Rollout

South Korea’s Financial Services Commission has put forward detailed rules for issuing and trading tokenized securities, ahead of a regulatory framework that takes effect in February 2027. The changes would let stocks, bonds, funds and certain fractional investment securities be issued and circulated in tokenized form. The proposal builds on a three-phase roadmap announced on Sept. 4 to move securities issuance and trading onto distributed-ledger infrastructure.

Capital Requirements for Tokenized Securities Issuers

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

OTC Exchange License and Retail Investment Limits

Revisions to capital markets rules would create an extra over-the-counter exchange license for debt securities. Retail investors would be capped at 100 million won, around $70,000, in annual net purchases on each OTC exchange.

Public Consultation and Effective Date

Public consultation runs from Friday to Nov. 11, after which the approval process begins. The rules are set to take effect on Feb. 4, 2027, together with amendments that recognize distributed ledgers as infrastructure for issuing and circulating securities.