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ZEC $1,413 South Korea proposes tokenized stocks, bonds and funds rules
The Financial Services Commission proposes rules to bring regular securities into its token framework, with a retail purchase cap.
Key takeaways
- Retail cap set. Ordinary investors face a 100 million won annual net purchase limit on each token securities OTC platform.
- Issuer rule. Qualified issuers need four billion won in equity capital before directly managing tokenized securities accounts.
- Start date. The token securities rules are scheduled to take effect on February 4, 2027, nationwide.
What happened
South Korea's Financial Services Commission has proposed rules to let stocks, bonds and funds enter its token securities framework. Retail investors would face a 100 million won annual net purchase limit on each approved over-the-counter platform. Qualified issuers would need four billion won in equity capital before directly managing tokenized securities accounts. The proposal sets which securities can be tokenized, issuer requirements and OTC trading rules. Public comment runs Oct. 2 through Nov. 11, followed by FSC approval, a ministry review and Cabinet consideration.
The framework treats a token security as a securities format built on a distributed ledger, not a separate class of crypto asset. Existing capital-market rules still apply. The first stage, starting in February, covers 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 come later, with no fixed date.
The rules prepare for amendments to the Electronic Securities Act and Capital Markets Act that take effect on Feb. 4, 2027. New OTC authorization categories will cover debt securities alongside unlisted shares and non-monetary trust beneficiary certificates. Approved venues must watch for unfair trading and can face penalties, account limits and other sanctions.
Why it matters
The proposal widens South Korea's tokenization push beyond earlier pilots that focused mostly on fractional investment products such as non-monetary trust beneficiary certificates and investment contract securities. It brings regular securities into the token rules. Non-financial companies could manage accounts for the securities they issue if they have at least 4 billion won in equity capital and meet staffing and cybersecurity standards.
Several Korean firms are preparing. In September, KB Securities signed a deal with Securitize and the Optimism Foundation to build tokenized funds for institutions, starting with a money market fund. On Sept. 29, Kakaopay Securities and Dinari announced a project to study tokenizing Korean-listed shares for eligible overseas investors, though no Korean stock has been issued through the partnership yet. Hanwha Investment & Securities has reportedly finished a platform that supports Avalanche and Hyperledger Besu, while Samsung SDS is building infrastructure for the Korea Securities Depository. Eugene Investment & Securities and BEATOZ also agreed to test stablecoins for token securities subscriptions.
Distributed ledgers must connect with the Korea Securities Depository. The first stage uses a hybrid model, with some shareholder rights still handled by existing systems.
What the data shows
The retail limit is 100 million won, roughly $73,700, in annual net purchases on each token securities OTC platform. The limit applies separately to each platform and measures net purchases during the year. Qualified issuers need four billion won in equity capital. Non-financial companies that manage accounts for their own issued securities need at least 4 billion won in equity capital.
South Korea's token securities rules are scheduled to take effect on February 4, 2027, nationwide. The public comment period runs from Oct. 2 through Nov. 11. The FSC unveiled a three-stage tokenization roadmap in September after discussions with financial companies, the Korea Securities Depository and technology providers.
Background
Earlier rules and pilot programs focused mostly on fractional investment products, including non-monetary trust beneficiary certificates and investment contract securities. The latest subordinate-rule proposal moves the system closer to implementation by setting the securities that can be tokenized, requirements for issuers and rules for OTC trading.
What is still unclear
- The FSC has not fixed a date for expanding the framework to publicly offered traditional securities.
- The final stage would connect tokenized securities with onchain payment systems, possibly including stablecoins, but timing depends on earlier phases, technology and unfinished domestic stablecoin legislation.
- No Korean stock has been issued through the Kakaopay Securities and Dinari partnership yet.
Questions readers ask
What securities can be tokenized in South Korea?
The proposal covers stocks, bonds and funds. The first 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.
What is the retail investor limit?
Ordinary investors would be capped at 100 million won, roughly $73,700, in annual net purchases on each token securities OTC platform. The limit applies separately to each platform.
When do South Korea's token securities rules take effect?
South Korea's token securities rules are scheduled to take effect on February 4, 2027, nationwide. Public comment runs from Oct. 2 through Nov. 11 before regulatory approvals and implementation next year.
What capital must issuers have?
Qualified issuers need four billion won in equity capital before directly managing tokenized securities accounts. Non-financial companies need at least 4 billion won in equity capital to manage accounts for the securities they issue.
