Korea’s Financial Services Commission (FSC) has announced its planned phases for supporting tokenized securities and fractional investments. Legislation passed early this year now recognizes securities that are recorded on distributed ledger, which means that the first phase will commence when that law comes into force in February 2027. There are different paths for tokenized securities available to institutions versus retail investors.
In the first phase, tokenized money market funds and bonds will be available for institutional investors only. Other asset classes supported for both markets include unlisted stocks via a trust structure and fractional investments. These fractional investments come in two forms, non monetary trust beneficiary certificates and investment contracts, with trust certificates as the format initially supported.
The second phase will support public securities, and the third will use stablecoins for settlement, but the FSC is not fixing a timescale with the schedule dependent on the rate of adoption and the passage of stablecoin legislation.
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