South Korea’s financial regulator has put forward a comprehensive set of detailed rules governing the issuance and trading of tokenized securities, marking a significant milestone as the country prepares its overarching regulatory framework to officially take effect in February 2027. The newly proposed guidelines introduce clear-cut standards covering vital operational areas, including stringent capital requirements for issuers and platform operators, specialized licensing pathways for over-the-counter trading, and defined investment limits aimed at protecting retail participants in the emerging digital asset landscape.
The proposed regulatory changes are designed to bridge traditional finance and distributed ledger technology by formally allowing a wide range of conventional financial instruments—including traditional corporate stocks, bonds, collective investment funds, and certain qualified fractional investment securities—to be legally issued, held, and circulated in tokenized formats. By establishing these legal pathways, South Korea aims to foster institutional innovation while ensuring robust investor protection and market integrity within the rapidly evolving sector of tokenized finance.
Under the newly outlined proposals, companies seeking to engage in the issuance and management of tokenized securities while simultaneously maintaining direct custody or management of customer accounts will face rigorous entry and operational standards. Specifically, these entities will be mandated to maintain a minimum equity capital of at least 4 billion Korean won, which translates to approximately $2.8 million. In addition to meeting these financial thresholds, such institutions must employ dedicated compliance professionals and specialized technology staff to ensure the continuous security, stability, and regulatory adherence of their distributed ledger systems.
In a parallel move addressing the secondary market ecosystem, proposed revisions to broader capital markets regulations will establish a dedicated over-the-counter exchange license specifically tailored for debt securities issued on distributed ledgers. To safeguard everyday market participants from outsized volatility and systemic risks inherent in nascent digital asset classes, the framework introduces a strict cap on retail investors. Under the proposed limits, individual retail investors will be restricted to a maximum of 100 million Korean won, roughly equivalent to $70,000, in annual net purchases on each individual OTC exchange.
These detailed rules build directly upon a foundational three-phase roadmap originally unveiled by South Korean regulators on September 4. That strategic roadmap was designed to systematically transition traditional securities issuance and trading operations onto modern distributed-ledger infrastructure, ensuring a smooth, predictable migration path for the domestic financial industry.
The newly announced regulatory proposal is now set to undergo a formal public consultation period running from Friday through November 11, during which industry stakeholders, financial institutions, technology developers, and the general public can submit feedback. Following the conclusion of this public commentary phase, the proposal will enter the official legislative and regulatory approval process.
The comprehensive regulations are officially scheduled to take effect on February 4, 2027. This implementation date will coincide with broader legislative amendments designed to formally recognize distributed ledgers as legitimate, legally binding financial infrastructure for the issuance and circulation of regulated securities across the South Korean market.
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