South Korea Proposes Rules for Tokenized Stocks and Bonds Starting 2027

TLDR

• South Korea’s Financial Services Commission has proposed rules to allow tokenized issuance and trading of securities.
• Stocks, bonds, funds, and some fractional investment products could be issued in tokenized form.
• Firms that issue tokenized securities and manage customer accounts would need at least KRW4 billion in equity capital.
• Retail investors would face an annual net purchase limit of KRW100 million on each over-the-counter exchange.
• The comment period runs from October 2 to November 11, 2026, with rules set to take effect February 4, 2027.

South Korea’s Financial Services Commission (FSC) has proposed new rules that would allow stocks, bonds, and other securities to be issued and traded in tokenized form. The plan was announced on October 1, 2026.

The proposals revise lower-level regulations under two laws: the Financial Investment Services and Capital Markets Act and the Act on Electronic Registration of Stocks and Bonds.

Both laws were already revised to allow tokenized securities. The new rules set out the details needed to put that change into practice starting February 4, 2027.

What Securities Can Be Tokenized

Under the proposal, traditional securities can be issued in tokenized form. This includes stocks, bonds, and funds.

Fractional investment products would also be covered. These include non-monetary trust beneficiary certificates and investment contract securities.

The rules also explain how the digital records behind these securities must work. Distributed ledgers would need to be shared between the Korea Securities Depository and at least two account management entities.

The FSC said this setup is meant to support credibility and continuity. Issuer account management entities can count toward that total.

Fees for using the ledgers would be banned. The regulator said distributed ledgers are public in nature, and charging for their use could disrupt the confirmation of securities rights.

Rules for Issuers and Trading Venues

Some companies that issue tokenized securities will also be allowed to manage customer accounts directly. The FSC calls these issuer account management entities.

These firms would need at least KRW4 billion in equity capital. They would also need one account management professional, one internal control professional, and two information technology professionals.

The proposal also adds a new licensing category for over-the-counter (OTC) exchanges that handle debt securities. It would sit alongside licensing units for unlisted stocks and non-monetary trust beneficiary certificates.

The FSC said it expects trading of debt securities between retail investors to grow once bonds can circulate in tokenized form.

To protect investors, retail buyers would face a cap. Each person’s annual net purchases on a single OTC exchange would be limited to KRW100 million.

The FSC said it will keep talking with industry groups and other stakeholders about its tokenization policy. It plans to gather opinions and industry needs during the process.

The public comment period runs from October 2 to November 11, 2026. After that, the proposals will go through an approval process.

If approved, the new rules will take effect on February 4, 2027, the same day the revised laws begin to apply.

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