South Korea’s Financial Services Commission (FSC) proposed subordinate regulations on October 1, 2026 to bring stocks, bonds and funds onto distributed ledger infrastructure, setting the stage for a regulated tokenized securities market scheduled to begin on February 4, 2027. The public comment period runs from October 2 through November 11, 2026, after which the rules are expected to take effect alongside the amended capital markets legislation.
Under the framework, tokenized securities are legally treated as digitized forms of existing securities under the Financial Investment Services and Capital Markets Act, rather than as a separate crypto asset class. Distributed ledgers used for registration must be shared by at least two account-management entities together with the Korea Securities Depository. Issuers wanting to handle customer securities accounts directly must hold at least 4 billion won in equity capital and employ account-management, internal-control and IT personnel. Operators are prohibited from charging direct fees just to use the ledger, to preserve the reliability of ownership records.
On the trading side, the FSC will introduce an over-the-counter exchange licensing category for debt securities. Retail investors face a cap of 100 million won in annual net purchases per OTC venue, roughly $70,000, with the limit applied separately to each approved exchange. This is intended to allow retail participation while limiting risk in the early market.
The rollout is divided into three stages. From February 2027, the first phase covers privately placed money-market funds and institutional bonds, trust-based unlisted stocks, and publicly offered fractional investment securities. A later phase would expand tokenization to all publicly offered securities types. The final phase aims to move payment and settlement onchain, including stablecoin-linked settlement, though timing depends on separate stablecoin legislation and results from the initial phase. FSC Chairman Lee Eog-weon said overseas markets were already exploring stablecoins for 24-hour and T+0 securities settlement, and South Korea wants similar infrastructure capability.
For fractional products, the September guidance sets model standards allowing pooling of underlying assets of the same type when the purpose is clear, excluding distressed assets and requiring asset-level information. Suggested retail subscription limits for such products are the lower of 30 million won or 5 percent of the issue. The Korea Securities Depository has prepared screening criteria for firms connecting ledgers, including business-continuity requirements, and no separate license is planned solely for handling tokenized securities.
Technical groundwork is already underway. Hanwha Investment & Securities has completed a tokenized-securities platform with blockchain firm FairSquare Lab, supporting multiple distributed ledger technologies including Avalanche and Hyperledger Besu. The Korea Securities Depository is also developing infrastructure able to connect with Avalanche, Hyperledger Besu and Hyperledger Fabric, with participation expected to remain limited to regulated institutions.
