South Korea’s Financial Services Commission will publish detailed tokenized securities rules in July 2026, creating the operational bridge between amended capital-markets laws and full enforcement on February 4, 2027. The framework will define how digital securities can be issued, traded and recorded using distributed ledger technology under the Capital Markets Act and Electronic Securities Act.
Tokenized securities will be legally treated as securities, not as a separate crypto category. That means issuers, custodians and platforms will face capital-markets obligations around investor protection, recordkeeping, trading limits and operational resilience as blockchain-based market infrastructure moves into the regulated perimeter.
Tokenized Stocks, Bonds and Funds Move Into the Rulebook
The July package is expected to cover tokenized versions of traditional instruments, including stocks, bonds and money market funds. The FSC is also preparing rules for fractional investment securities created by bundling similar underlying assets, giving issuers a path to structure tokenized claims on portfolios rather than only single assets.
Legal recognition will depend on technology and control standards. Tokenized securities will need distributed-ledger recordkeeping that supports multi-party transaction verification, protection against post-transaction manipulation and clear evidence of rights without relying on a separate virtual asset wrapper.
The framework also introduces regulated roles for new market participants. Issuer Account Management Institutions will be allowed to issue and maintain tokenized securities on DLT, while a new Over-the-Counter Trading Brokerage Business category will govern smaller-scale trading in investment contract securities and non-monetary trust beneficiary certificates.
Investor limits will shape early market liquidity. The proposed structure includes annual investment limits of KRW 10 million to KRW 20 million for platforms issuing fractional investment securities, a KRW 5 million crowdfunding cap per project, a KRW 10 million total crowdfunding cap, and OTC annual sales limits of KRW 300 million for non-listed stocks and KRW 40 million for investment contract securities.
Custody, Trading and Compliance Standards Tighten
The FSC’s market-design work also targets conflicts of interest. Brokers are expected to be restricted from trading securities they issue or underwrite, preserving separation between issuance, brokerage and secondary-market activity.
Existing investor protections under the Capital Markets Act will extend to tokenized securities. That includes presumptions of rights, third-party enforceability and investor safeguards calibrated to product risk, with stricter exposure thresholds for higher-risk investment contract securities.
The rulebook will create concrete operational obligations. Firms should expect prescriptive standards for DLT recordkeeping, asset segregation, process audits, personnel requirements and capital adequacy in newly regulated business categories.
The FSC is also continuing market-infrastructure tests, including work on on-chain settlement systems. Those trials are designed to validate interoperability, settlement resilience and operational readiness before the amended framework fully takes effect in February 2027.
The July rules will determine how quickly South Korea’s tokenized securities market can scale without compromising investor protection. For issuers, custodians and trading platforms, the preparation window is now operational rather than theoretical: systems, controls and governance models need to be ready before the February 4, 2027 enforcement date.