South Korea’s Financial Services Commission (FSC) introduced a policy roadmap on September 4 to digitize the issuance and circulation of securities, a three-phase plan that begins with tokenized money market funds for institutions in February 2027 and eventually reaches on-chain payments tied to stablecoins, according to the regulator’s announcement.
A Three-Phase Tokenization Timeline
The FSC unveiled the roadmap at its third private-public consultative meeting on securities tokenization and will direct securities firms and the Korea Securities Depository (KSD) to build the supporting infrastructure. An amendment to the Act on Electronic Registration of Stocks and Bonds takes effect on February 4, 2027, legally recognizing security tokens as a digitized form of securities and marking the start of the first phase.
That phase covers privately pooled money market funds and bonds reserved for institutional investors, unlisted stocks issued through a trust structure, and publicly offered fractional investment securities. The second phase would widen tokenization to all publicly offered securities, while a final stage targets on-chain payment infrastructure linked to stablecoins. The FSC said the later phases stay flexible, depending on the first phase’s outcome, market adoption, and pending stablecoin legislation.
Guardrails for Fractional Investing
The roadmap also sets model standards for fractional investment, which can take the form of non-monetary trust beneficiary certificates or investment contract securities. For trust certificates, the FSC caps an individual subscription at the smaller of 30 million won or 5 percent of total issuance and recommends reserving a portion of public offerings for retail investors. Retail investors would additionally face an annual limit of 100 million won in net purchases on each over-the-counter exchange.
OTC Access and Issuer Accounts
Rather than create a separate licensing regime, the FSC said firms already authorized for financial investment business can handle tokenized securities within their licensed scope, subject to prior consultation with the Financial Supervisory Service for OTC intermediation. It plans an additional OTC licensing unit for debt securities and will require issuer account managers to hold at least 4 billion won in equity capital. The push parallels tokenized-securities infrastructure built by ICE and tZERO on the NYSE and follows India’s plan to settle tokenized corporate bonds in the digital rupee.
