South Korea proposes rules for tokenized securities

South Korea’s Financial Services Commission has proposed detailed rules for issuing and trading tokenized securities, setting requirements for eligible securities, issuers and over-the-counter venues ahead of a legal framework scheduled to take effect on February 4, 2027. Public consultation on the draft runs from October 2 through November 11, 2026, and the measures remain subject to review and approval. The proposal would allow traditional securities, including stocks, bonds and investment funds, to be issued and traded in tokenized form. The FSC would treat them as securities recorded on distributed ledgers, rather than as a separate category of crypto assets, leaving them subject to existing capital-market rules. The draft also covers fractional-investment products such as trust beneficiary certificates and investment contract securities. The first phase is narrower than the eventual framework. It is planned to cover privately placed money-market funds and bonds for institutional investors, unlisted shares held through trust arrangements, and publicly offered fractional-investment securities.