Korea proposes capital and trading rules for tokenized securities

South Korea’s Financial Services Commission proposed implementing rules on 1 October for a tokenized-securities regime scheduled to start on 4 February 2027. Consultation runs from 2 October to 11 November, followed by further approvals. For firms planning a launch, the proposals turn a broad digital-market opportunity into distinct decisions about which regulated function to perform.[1]

The legal change goes beyond recording conventional shares, bonds and funds on a distributed ledger. The legislation also opens a route for securities firms to intermediate investment-contract securities, previously distributed directly by their issuers. Tokenization retains ordinary securities licensing and disclosure obligations.[1][5]

Separate capital tests for separate businesses

Issuer account managers would also need one account-management specialist, one internal-control specialist and two IT specialists. The ledger would involve the Korea Securities Depository and at least two account-management institutions. Direct payment for ledger use in electronic registration would be prohibited.[1]

The commercial distinction is between owning an issuance workflow and operating a marketplace. A firm choosing the former must support a continuing record of customer rights; a venue must attract two-sided trading and operate a market. Shared software does not make those revenue models or operating obligations interchangeable. The proposed capital figures therefore belong in separate business cases, alongside staffing, resilience and client-service costs.

The retail limit measures net purchases

The draft capital-markets decree defines the retail annual limit as purchases minus sales. It sets KRW100 million per operator for each relevant OTC category, with separate calculations when one operator holds multiple permissions. The new debt venue would publish bids, offers and quantities, match coincident prices, disclose issuer information and avoid intermediating debt where it or a related party was the issuer, underwriter, arranger or party commissioning the issuance.[2]

A simplified illustration shows the limit’s economic effect. Within one year and one relevant licence category at one operator, KRW80 million of purchases, KRW30 million of sales and another KRW50 million purchase produce KRW100 million of net purchases: 80 − 30 + 50. Gross purchases are KRW130 million. This calculation illustrates the draft’s net-flow definition; it is not a trading allowance based on the portfolio’s current market value.[2]

For a venue, that distinction affects account controls as well as commercial forecasts. A customer’s ability to buy more depends on previous sales in the relevant calculation, so account balances alone cannot perform the check. For an issuer, the conflict restriction also makes distribution design consequential: placing a product and operating its secondary market cannot simply be treated as one unrestricted activity.[2]

The February start is a phased rollout

The September roadmap places institutional private MMFs and bonds, unlisted shares through trusts, and publicly offered fractional-investment securities in the first phase. Broader public securities follow later; stablecoin-linked on-chain payment infrastructure is a further ambition dependent on experience, technology and legislation.[4]

Existing investment firms would handle tokenized securities within their licensed activities, with prior Financial Supervisory Service consultation for OTC intermediation. The roadmap also puts KSD screening and operating tests around ledger connections, including business continuity.[4]

The immediate strategic question is therefore where a firm can add value within the first eligible products. An account platform can compete through reliable records and issuer servicing; a distributor through access and disclosure; a venue through usable liquidity. The technology investment becomes more credible when it is tied to that specific function and its launch conditions, rather than to a forecast that every security and payment method will arrive together.

Report an error or submit an update