The roadmap, announced after a public-private consultative meeting on September 4, covers conventional assets including stocks, bonds and funds as well as fractional investment products. It is tied to amendments to the Act on Electronic Registration of Stocks and Bonds that take effect on February 4, 2027, giving tokenised securities legal recognition as digitised securities.
The first phase will concentrate on products suited to a controlled introduction. These include privately pooled money market funds and bonds reserved for institutional investors, unlisted shares issued through a trust structure, and publicly offered fractional investment securities.
A second phase would widen tokenisation to all types of publicly offered securities. The final stage envisages an on-chain payments infrastructure connected to stablecoins, allowing the payment and settlement legs of tokenised transactions to take place on distributed-ledger systems.
Regulators have not fixed dates for the second and third stages. The Financial Services Commission said their timing would depend on the performance and stability of the first phase, the pace of technological adoption by market participants and progress on separate legislation governing stablecoins.
The framework is designed to integrate distributed-ledger technology into the existing capital-market regime rather than create a parallel, lightly regulated market. Firms already licensed to conduct financial investment business will be allowed to handle tokenised securities within their authorised activities without obtaining a separate token-specific licence.
Over-the-counter intermediaries will, however, be required to consult the Financial Supervisory Service before entering the tokenised-securities business. Regulators also plan an additional over-the-counter licensing category for debt securities, as bond transactions could expand with tokenisation.
Retail participation on each over-the-counter exchange will be capped at an annual net purchase amount of 100 million won. Existing surveillance obligations covering unfair trading will continue to apply, with violations subject to sanctions available under the Financial Investment Services and Capital Markets Act.
The roadmap also establishes requirements for issuers seeking to manage investor accounts directly. Such issuer account-management entities must have at least 4 billion won in equity capital and maintain dedicated personnel for account management, internal controls and information-technology systems. They will also have to comply with specified cybersecurity and operational standards.
The Korea Securities Depository will play a central infrastructure role. It has prepared screening criteria for distributed ledgers and will conduct reviews and operating tests when securities companies seek to connect blockchain-based systems to the electronic-registration framework. The criteria include business-continuity provisions for system failures.
Regulators said securities companies must preserve the same level of reliability and investor protection expected in the existing market while adding distributed-ledger technology. Tokenisation changes the form in which securities are recorded and transferred, but does not remove disclosure, licensing, market-conduct or other obligations that apply to securities under current law.
The commission also issued model standards for fractional investments. For non-monetary trust beneficiary certificates, the standards permit pooling of underlying assets subject to conditions on asset type, disclosure and investor protection. Future receivables may also be included where adequate safeguards are in place.
Individual subscriptions to such offerings are proposed to be limited to the smaller of 30 million won or 5 per cent of the total issue. The standards also call for a defined retail allocation and a minimum portion to be distributed equally among retail investors to improve fairness.
South Korea’s legal foundation for security tokens was approved by the National Assembly in January. The amended framework recognises distributed ledgers as valid securities account books and permits blockchain-based issuance while keeping tokenised instruments within the scope of securities regulation.
The Financial Services Commission launched a consultative body in March, bringing together regulators, the Korea Securities Depository, financial-investment firms, fintech participants and experts to work on technology, issuance, circulation and settlement rules.
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