South Korea’s Financial Services Commission Issues Notice of Proposed Amendments to Subordinate Regulations for the Institutionalization of Security Tokens, Proposes Expanding the Scope of Tokenizable

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South Korea’s Financial Services Commission Proposes Broadening the Scope of Tokenized Securities: Stocks, Bonds and Other Traditional Securities May Be Allowed on Chain

PANews October 1 reported, citing Yonhap News Agency, that South Korea’s Financial Services Commission (FSC) issued a notice of proposed amendments to subordinate regulations related to the institutionalization of the security token (Token Securities) system, planning to expand the scope of securities eligible for tokenization to include traditional securities such as stocks, bonds and funds. Under the proposed amendments, in addition to fractional investment securities (non-monetary trust beneficiary certificates and investment contract securities), traditional securities may also be tokenized. The relevant electronic securities regulations will also clarify distributed ledger requirements, stipulating that participants must include an electronic registration institution and at least two account management institutions, and prohibiting the payment of direct fees for using a distributed ledger for electronic registration purposes. In addition, South Korea’s Financial Services Commission proposes allowing securities issuers to become “issuer account management institutions,” provided they meet requirements including minimum equity capital of 40000000000 KRW, and have account management, internal control and IT qualified personnel, among other requirements. The article...

Key points

South Korea’s Financial Services Commission has issued a notice of proposed amendments to subordinate regulations related to the institutionalization of security tokens.
The proposed amendments plan to include traditional securities such as stocks, bonds and funds within the scope of securities eligible for tokenization.
The relevant electronic securities regulations are expected to clarify distributed ledger requirements, with participants required to include an electronic registration institution and at least two account management institutions.
The proposed amendments would allow securities issuers to become “issuer account management institutions,” but they must meet requirements including minimum equity capital of 40000000000 KRW.
The article states that the information was reported by PANews, citing Yonhap News Agency.

AI-assisted interpretation

The following is analysis, separate from reported facts. Verify important claims independently.

Security tokenization is the recording and management of securities such as stocks, bonds or funds in token form. The notice of proposed amendments in South Korea proposes expanding the scope of securities eligible for tokenization and establishing requirements for distributed ledger participants and account management institutions.

Why it matters to readers

If the proposed amendments are ultimately approved, the scope of traditional securities eligible for compliant tokenization in South Korea may expand.

This means that some traditional financial assets may in the future be registered and managed through blockchain or distributed ledgers, but for now this remains only a notice of proposed amendments.

Risks and unknowns

The main text is truncated, and the complete terms have not yet been presented.
It remains unclear whether the proposal will ultimately be adopted.
The consultation period and final implementation arrangements have not yet been clarified.
The specific implementation requirements for distributed-ledger participants and account-management institutions have not yet been fully presented.

South Korea’s Financial Services Commission Issues Notice of Proposed Amendments to Subordinate Regulations for the Institutionalization of Security Tokens, Proposes Expanding the Scope of Tokenizable

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