South Korea's Financial Services Commission has proposed rules letting stocks, bonds and funds enter its token securities framework, with retail investors capped at 100 million won in annual net purchases per platform. The measures support amendments to the Electronic Securities Act and Capital Markets Act, which take effect on Feb. 4, 2027.
The Financial Services Commission announced the regulatory framework as the country prepares amendments to the Electronic Securities Act and Capital Markets Act for Feb. 4, 2027. The proposal sets which securities can be tokenized, issuer requirements, and over-the-counter trading rules. Earlier rules and pilots had focused mainly on fractional investment products such as non-monetary trust beneficiary certificates.
Stocks and bonds enter the token framework
Under the proposal, equities, debt securities and investment funds can fall within the legal tokenization framework. The FSC treats a token security as a securities format built on a distributed ledger, not a separate crypto asset class, so tokenized stocks, bonds and fund interests stay subject to existing capital-market rules.
The first implementation stage focuses on privately placed money-market funds and bonds for institutional investors, trust-based tokenization of unlisted shares, and publicly offered fractional investment securities. Publicly offered traditional securities would follow in a later stage once regulators assess the first phase.
Retail buyers face a won-denominated cap
The proposed rules would cap ordinary investors at 100 million won, roughly $73,700, in annual net purchases on each token securities OTC platform. The limit applies per platform and measures net purchases over the year. New OTC authorization categories will cover debt securities alongside unlisted shares and non-monetary trust beneficiary certificates, and approved venues must maintain surveillance against unfair trading.
Issuers can manage their own token accounts
The framework would also let qualifying non-financial issuers manage accounts for securities they issue, a function traditionally reserved for financial companies. To register, a company must hold at least four billion won in equity capital and employ one account-management specialist, one internal-control specialist and two information-technology specialists. Issuers that fall short of the requirements can still issue token securities through qualified financial intermediaries, while distributed ledgers used for regulated securities must connect with the Korea Securities Depository's infrastructure.
Financial firms prepare ahead of 2027
Several Korean institutions are building tokenization products before the law takes effect. KB Securities signed an agreement with Securitize and the Optimism Foundation in September to develop tokenized funds, starting with a money-market fund. Kakaopay Securities and Dinari disclosed a separate project on Sept. 29 to study tokenizing Korean-listed shares for eligible overseas investors.
Eugene Investment & Securities and BEATOZ recently agreed to test stablecoins for token securities subscriptions, examining whether subscription, payment and settlement can run on one blockchain process.
Public comment on the proposal runs from Oct. 2 through Nov. 11, after which the measures must clear FSC approval and Cabinet-level review before the February 2027 launch.
Source: crypto.news
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