Korea’s Financial Services Commission (FSC) released draft rules to govern tokenized securities issuances as well as fractional investments, following up on the roadmap it published last month. Legislation was passed earlier this year recognizing distributed ledger-based securities. The draft regulations are open for comments until November 11 and are scheduled to come into force on February 4, 2027, subject to FSC resolution, legislative review and cabinet approval.
Rules cover both tokenized traditional instruments as well as various types of tokenized fractional investments. For example, trust beneficiary tokens that represent the rights to real estate rental income or music revenue streams. Rather than recapping the roadmap, the different instruments are summarized in the table below.
It’s clear from FSC comments that certain rules have already received pushback from industry following the roadmap’s publication. One area of contention is the distributed ledger requirements. Each ledger used for electronic registration must include the Korea Securities Depository (KSD) and at least two account management entities as participants. Additionally, directly charging a fee for the use of distributed ledgers is prohibited, given their role as a public register. The KSD has been planning for years to have a node on each chain to ensure that issuances across multiple chains total to the expected amount, and there are practical limits to how many chains it can onboard. The minimum participant requirement also acts as a filter, limiting the number of chains in play.
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