South Korea Proposes Subordinate Rules to Launch Security Token Market by February 2027

South Korea's Financial Services Commission (FSC) issued draft revisions to secondary legislation under the Financial Investment Services and Capital Markets Act and the Electronic Registration Act on Oct. 2, setting the regulatory groundwork to activate the tokenized securities market starting Feb. 4, 2027 ¹. The proposals opened for a public comment period running until Nov. 11, 2026 ¹. Traditional asset classes including corporate stocks, debt bonds, and collective funds will qualify for digital issuance, alongside fractional instruments structured as investment contract securities and non-monetary trust beneficiary certificates ¹.

To safeguard record accuracy and operational continuity, the regulator mandates that distributed ledgers must be jointly maintained by at least two independent account management institutions in addition to the Korea Securities Depository ¹. Network operators will be explicitly barred from collecting direct user fees for distributed ledger access to avert friction when verifying legal rights to underlying assets ¹. Furthermore, organizations acting as issuer account management institutions—enabling them to run internal client accounts directly—must maintain a minimum equity balance of 4 billion Korean won, staffed by at least one account manager, one internal compliance specialist, and two information technology technicians ¹.

Secondary Trading and Investor Protections

The FSC is also expanding secondary market infrastructure by establishing a dedicated over-the-counter trading license category for debt instruments, complementing existing trading venues for unlisted equity and trust certificates ¹. To curb speculative risks as secondary trading expands to individual participants, regulators placed an annual net purchase cap of 100 million Korean won per retail investor for each over-the-counter trading platform ¹.

The policy package follows broader international initiatives to integrate institutional markets with distributed ledgers, including steps outlined in the ESMA digital innovation and tokenization framework ¹. At the time of writing, wider digital asset markets registered modest gains, with $BTC trading near $86,494 and $ETH around $2,733. Following the public notice window through Nov. 11, 2026, the FSC will advance the amendments through administrative approvals ahead of the scheduled February 2027 implementation ¹.