South Korea proposes tokenized securities rules for February 2027 rollout

South Korea's Financial Services Commission proposed detailed rules for issuing and trading tokenized securities. The proposed regulations are scheduled to take effect on Feb. 4, 2027. The changes would allow stocks, bonds, funds and certain fractional investment securities to be issued and circulated in tokenized form. Companies issuing tokenized securities while directly managing customer accounts would need at least 4 billion Korean won ($2.8 million) in equity capital. Those companies would also need dedicated compliance and technology staff. Separate revisions to capital markets regulations would create an additional over-the-counter exchange license for debt securities. The revisions would cap retail investors at 100 million won ($70,000) in annual net purchases on each over-the-counter exchange. The proposal builds on a three-phase roadmap unveiled on Sept. 4 for moving securities issuance and trading onto distributed-ledger infrastructure. The rules will undergo public consultation from Friday to Nov. 11 before an approval process begins. The proposed regulations are scheduled to take effect alongside amendments recognizing distributed ledgers as infrastructure for issuing and circulating securities.