South Korean regulators unveil comprehensive framework for tokenized securities by 2027
Detailed regulatory framework for tokenized securities has been introduced by South Korea's financial watchdog, featuring equity capital thresholds, over-the-counter trading permits and caps on individual investor purchases.
The Financial Services Commission of South Korea has put forward comprehensive regulatory guidelines governing the issuance and trading of tokenized securities, with the nation's regulatory structure scheduled to become operational in February 2027.
These modifications would permit equities, debt instruments, investment funds and specific fractional investment products to be issued and traded in their tokenized formats.
The regulatory proposal further establishes criteria for entities that issue and oversee tokenized securities. According to the proposed modifications, entities that issue tokenized securities while simultaneously maintaining direct control over customer accounts would be required to hold a minimum of 4 billion Korean won ($2.8 million) in equity capital and employ dedicated personnel for compliance oversight and technical operations.
In addition, modifications to capital markets regulations would establish a new over-the-counter exchange license specifically for debt securities and impose a limit on retail investors of 100 million won ($70,000) in annual net purchases on each OTC exchange.
The regulatory proposal expands upon a three-stage implementation plan announced on Sept. 4 for transitioning securities issuance and trading operations onto distributed-ledger infrastructure.
The regulatory framework will be subject to public consultation beginning Friday through Nov. 11 prior to commencing an approval process. The proposed regulations are slated to become effective on Feb. 4, 2027, in conjunction with amendments that recognize distributed ledgers as infrastructure for the issuance and circulation of securities.