Korea Publishes the Working Rules for Tokenised Securities: What Issuers and Platforms Should Know Before February 2027
Readers who followed our recent series on tokenisation in Korea will recall that the legislative foundation is already in place. Amendments to the Act on Electronic Registration of Stocks and Bonds (the Electronic Registration Act) and the Financial Investment Services and Capital Markets Act (FSCMA) were promulgated on 3 February 2026, and the provisions that allow securities to be registered on a distributed ledger take effect on 4 February 2027. What the statutes left open was the operational detail:
which securities may be tokenised, what a qualifying ledger must look like, who may keep investor accounts, and how tokenised securities may be traded.
On 1 October 2026 the Financial Services Commission (FSC) answered most of those questions by publishing draft amendments to the Enforcement Decrees of both Acts and to three sets of FSC regulations. The drafts implement the policy direction on token securities that the FSC announced on 4 September 2026, and the comment period runs until 11 November 2026.
Which Securities May Be Tokenised
The draft Enforcement Decree of the Electronic Registration Act takes a broad approach. In addition to fractional investment securities, namely non-monetary trust beneficiary certificates and investment contract securities, conventional securities such as shares, corporate bonds, government and municipal bonds, trust beneficiary interests, asset-backed securities, depositary receipts and funds will be eligible for registration on a distributed ledger. Equivalent securities issued in Korea by foreign corporations are also covered.
Breadth on paper does not mean an immediate market for everything. Under the September policy direction, the tokenisation of conventional securities will proceed in stages, beginning with private money market funds and private bonds for institutional investors, and with unlisted shares held through a trust structure.
What Counts as a Qualifying Ledger
A distributed ledger must be jointly recorded by multiple participants in chronological order, and a ledger used for official registration must also meet structural conditions. Its participants must include the Korea Securities Depository (KSD), as the electronic registration institution, and at least two account management institutions, which may include issuer account management entities. In addition, registering securities must not require any direct payment for use of the ledger. The FSC explains these conditions by reference to reliability and continuity, and to the ledger’s role as a public register of rights.
The consequences of failing these conditions are significant. The KSD may refuse to register securities on a non-compliant ledger, and if a ledger already in use ceases to qualify, the KSD may convert the securities on it into ordinary electronically registered securities on its own authority. For anyone designing a platform, the no-fee condition is likely to require a fresh look at how the costs of building and running the ledger are shared, since the business model cannot rest on charging for registration itself.
Data Protection on an Immutable Record
Data written to a blockchain cannot easily be deleted, which sits uneasily with Korea’s rules on personal credit information. The drafts therefore separate the records. Names, addresses and other identifying details of rights holders are to be kept in linked ledgers, such as customer account books, connected electronically to the distributed ledger but maintained apart from it, and only non-identifying information is to be recorded on the ledger itself. Where deletion is required, the linked record must be deleted; for ledger data that cannot technically be removed, restricted staff access and access records will satisfy the rules.
Issuer Account Management Entities
The most commercially interesting innovation in the amended Electronic Registration Act is the issuer account management entity. Until now, only financial institutions such as brokers, banks, insurers and savings banks could open and manage securities accounts for investors. The new category allows an issuer, including a non-financial business that issues investment contract securities, to manage the customer accounts for the tokenised securities it issues, by participating as a node on the ledger.
The draft Decree sets the entry requirements: minimum equity capital of KRW 4 billion; at least one account management professional with four or more years of relevant experience, one internal control professional and two IT professionals; adequate IT, security and business continuity facilities; and the usual major shareholder, social credit and conflict-of-interest requirements. The FSC benchmarked the capital figure against the KRW 4 billion required for an investment brokerage licence. Once registered, an entity must maintain at least 70 percent of the minimum capital, tested at each month end, and must begin business within six months of registration. It must also set aside a reserve against any excess issuance, equal to the lesser of 1 percent of the total issue price of the securities in its customer accounts and KRW 4 billion, held in trust or on deposit. The Financial Supervisory Service will review applications, while ledger suitability is to be reviewed by an electronic registration institution designated by the FSC, which in practice is likely to be the KSD.
Trading: A New OTC Exchange for Debt Securities
On the FSCMA side, the drafts add a new licensing unit for over-the-counter exchanges dealing in debt securities, alongside the existing units for unlisted shares and beneficiary certificates. The FSC accepts that retail demand for bond trading is modest today, but expects tokenisation to change that. An operator may not broker debt securities that it or its related parties have issued, underwritten or arranged. Beneficiary certificates issued over unlisted shares held in trust will trade on the unlisted-share exchange. No exchange for investment contract securities has been proposed yet.
Retail investors will be limited to annual net purchases, meaning total purchases less total sales, of KRW 100 million on each exchange, calculated separately for each licensing unit.
Practical Implications
The FSC has openly acknowledged that industry participants consider the KRW 100 million retail limit too low, the KRW 4 billion capital requirement for issuer account management entities too high and the ledger conditions too strict, and it has said these points will be discussed during the formal legislative process. These figures may therefore move. Businesses with a view should file comments by 11 November 2026, either online through the National Participatory Legislation Centre or directly with the FSC’s Capital Markets Division.
Issuers considering acting as their own account manager should weigh the cost of registration against alternatives, such as working with an existing broker or obtaining a fractional investment licence with lower capital requirements that carries account manager status. Foreign platforms and asset managers should note that a Korean tokenised security will remain a registered Korean security, recorded on a ledger in which the KSD and Korean licensed institutions participate, so access will need to be structured through those participants.
After the comment period, the drafts must pass an FSC resolution, legislative review and Cabinet approval before taking effect, as planned, on 4 February 2027. With less than four months to go, the time to prepare is now.
Sources
1. Financial Services Commission, “FSC Proposes Rules Change to Pave Way for Tokenization of Securities Issuance and Circulation” (press release, 1 October 2026), https://www.fsc.go.kr/eng/pr010101/87834
2. 금융위원회, 「토큰증권 관련 전자증권법·자본시장법 하위법규 개정안 입법예고 실시」 (보도자료, 2026년 10월 1일, 예고기간 10.2~11.11), https://www.fsc.go.kr/no010101/87838
3. 금융위원회 공고 제2026-670호, 「주식ㆍ사채 등의 전자등록에 관한 법률 시행령」 일부개정령안 입법예고 (2026년 10월 2일) and regulatory impact statement, https://www.fsc.go.kr/po040301/view?noticeId=4182
4. 금융위원회 공고 제2026-667호, 「자본시장과 금융투자업에 관한 법률 시행령」 일부개정령안 입법예고 (2026년 10월 2일), https://www.moleg.go.kr/lawinfo/makingInfo.mo?lawCd=0&lawSeq=88924&lawType=TYPE5&mid=a10104010000
5. Bae, Kim & Lee LLC, 「토큰증권 관련 전자증권법·자본시장법 하위법규 개정안 입법예고: 주요내용 및 시사점」 (Legal Update, 7 October 2026), https://www.bkl.co.kr/law/insight/newsletter/6791