South Korea's Financial Services Commission has proposed detailed regulations for issuing and trading tokenized securities, laying out capital requirements, licensing terms and retail investment limits as the country prepares for a framework scheduled to take effect on Feb. 4, 2027.

The proposal, published as part of the government's push to move securities issuance onto distributed-ledger infrastructure, would allow stocks, bonds, funds and certain fractional investment securities to be issued and circulated in tokenized form. It represents the most concrete regulatory step yet under a three-phase roadmap the FSC unveiled on Sept. 4 for bringing securities issuance and trading onto distributed-ledger infrastructure.

Capital and staffing thresholds for issuers

Under the proposed rules, companies that issue tokenized securities while directly managing customer accounts would need at least 4 billion Korean won ($2.8 million) in equity capital. They would also be required to maintain dedicated compliance and technology staff.

The thresholds signal that the FSC intends to confine account-managing issuance to firms with institutional-grade operational capacity, rather than allowing lighter-weight entrants to custody tokenized securities on behalf of retail clients. Issuers that do not manage customer accounts directly would fall outside the equity floor, according to the structure of the proposal.

New OTC license and retail purchase caps

Separately, revisions to South Korea's capital markets regulations would create an additional over-the-counter exchange license specifically for debt securities. The move would expand the venue structure for secondary trading of tokenized instruments beyond the country's existing exchange framework.

The proposal also caps retail investors at 100 million won ($70,000) in annual net purchases on each OTC exchange. The per-exchange design means an investor's aggregate limit scales with the number of licensed venues available, a detail that will shape how platforms compete for retail flow once the framework goes live.

For brokerages and exchanges, the licensing category opens a new line of business in tokenized debt trading, but the retail cap constrains the addressable volume per investor. Institutions would face no equivalent restriction under the proposal as drafted.

Consultation window and timeline

The rules will undergo public consultation from Friday through Nov. 11 before an approval process begins. The consultation gives market participants — brokerages, exchanges, custodians and blockchain infrastructure providers — a defined window to push back on the capital thresholds or the retail limits before the amendments advance.

The proposed regulations are scheduled to take effect on Feb. 4, 2027, alongside amendments to South Korea's legal framework recognizing distributed ledgers as infrastructure for issuing and circulating securities. That legal recognition is the foundational change: it converts ledger-based records from a technical curiosity into a recognized issuance and settlement medium under capital markets law.

The timing places South Korea on a parallel track with other Asian jurisdictions building tokenized securities regimes, and the Feb. 4, 2027 effective date now serves as the fixed deadline against which Korean financial institutions must build compliance staffing, technology and licensing applications.