Regulatory Alerts2026-09-04 | 87653Added
FSC Introduces Policy Roadmap on Digital Transformation and Tokenization of Securities Issuance and Circulation
A policy roadmap for the digital transformation and tokenization of securities issuance and circulation was introduced by the Financial Services Commission (FSC), with the first phase of tokenization set to begin in February 2027 following an update to the Act on Electronic Registration of Stocks and Bonds. This roadmap outlines a three-phase infrastructure development by securities companies and the Korea Securities Depository (KSD) for tokenized securities, initially covering privately pooled money market funds, institutional bonds, unlisted stocks via trust, and publicly offered fractional investment securities. Model standards for fractional investment include investor protection measures such as a maximum individual subscription of the smaller of KRW30 million or 5% of total issuance, and a retail investor investment limit of KRW100 million annually per Over-the-Counter (OTC) exchange. Additionally, an "issuer account management entity" system has been adopted, requiring entities to meet standards including KRW4 billion or more in equity capital and specific staffing, while existing financial investment businesses can handle tokenized securities with prior Financial Supervisory Service (FSS) consultation.
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