South Korea’s Financial Services Commission has unveiled a policy roadmap for the digital transformation of securities markets, setting out plans to introduce tokenised stocks, bonds and funds from February 2027.
The roadmap was presented on 4 September at the third meeting of the FSC’s public-private consultative body on securities tokenisation. It follows amendments to South Korea’s Electronic Registration Act, which are due to take effect on 4 February 2027 and will formally recognise security tokens as a digital form of securities.
The first phase of the programme will cover privately pooled money market funds and bonds for institutional investors, unlisted shares issued through trust structures and publicly offered fractional investment securities.
The FSC plans to subsequently expand tokenisation to all publicly offered securities before moving towards a third phase focused on establishing on-chain payments infrastructure linked to stablecoins.
The regulator said the timing and scope of the second and third phases will depend on the results of the initial rollout, technological developments and progress on stablecoin legislation.
Alongside the roadmap, the FSC has introduced model standards for fractional investment products, including requirements around the pooling of underlying assets and investor protection. Retail investors will face a maximum individual subscription of the lower of KRW30 million or 5% of the total issuance volume.
The regulator is also planning to expand over-the-counter infrastructure for tokenised securities. Existing financial investment businesses will be able to handle tokenised securities within their authorised activities, although firms seeking to intermediate tokenised securities transactions will require prior consultation with the Financial Supervisory Service.
An additional OTC licensing category is planned for debt securities, alongside existing categories covering unlisted stocks and non-monetary trust beneficiary certificates.
Retail investors will also be subject to an annual net purchase limit of KRW100 million on each OTC exchange, with platforms required to maintain systems to monitor and respond to unfair trading.
The Korea Securities Depository (KSD) is meanwhile developing technical screening guidelines for distributed ledger systems. The framework will cover the infrastructure’s ability to support the issuance and circulation of tokenised securities, alongside requirements for contingency planning, business continuity and system stability.
South Korea will also introduce requirements for issuer account management entities operating within the tokenised securities framework. These entities will need to meet minimum capital, staffing, IT and cybersecurity standards, including at least KRW4 billion in equity capital.
The FSC plans to publish proposed revisions to subordinate legislation under the Financial Investment Services and Capital Markets Act and Electronic Registration Act by the end of September.
