Korea's Token Securities Rules Take Shape: What the October 2026 Draft Decrees Mean for Issuers and Platforms

Korea token securities now have draft operating rules. On October 2, 2026, the Financial Services Commission (“FSC”) pre-announced amendments to the Enforcement Decrees of the Act on Electronic Registration of Stocks, Bonds, etc. (전자증권법, the “Electronic Securities Act”) and the Financial Investment Services and Capital Markets Act (자본시장법, “FSCMA”), together with changes to three supervisory regulations. The drafts set out which securities may be tokenized, what a qualifying distributed ledger looks like, who may keep investor accounts, and how token securities will trade.

For foreign tokenization platforms, asset managers, infrastructure providers, and investors, this is the first point at which the 2026 statutory amendments can be read as a working licensing framework. Public comments are open until November 11, 2026, and the amended statutes take effect on February 4, 2027.

From Statute to Draft Rules

The amended Electronic Securities Act and FSCMA were promulgated on February 3, 2026. They recognize a distributed ledger (분산원장) as a legally effective electronic registration ledger and give investment contract securities (투자계약증권) a legal basis for secondary trading. As we noted when the STO tracks separated from the Digital Asset Basic Act, the token securities framework has moved on its own timetable.

On September 4, 2026, the FSC set out its policy direction for token securities at the third meeting of its public-private token securities council. That policy extends tokenization beyond fractional-investment products to conventional securities such as shares, bonds, and funds, in phases. The October 2 drafts turn the parts of that policy that require subordinate legislation into proposed text.

Which Securities Can Be Tokenized

Under draft Article 17-2 of the Electronic Securities Act Enforcement Decree, the securities that may be registered on a distributed ledger include, according to the FSC, shares, corporate bonds, government and municipal bonds, other debt securities, trust beneficiary certificates, asset-backed securities, and depositary receipts. Publicly offered investment contract securities are also covered, and their registration basis moves from the supervisory regulation into the Enforcement Decree itself (draft Article 2(3)).

The legal scope is therefore broad, but the rollout will be staged. The first phase, aligned with the February 2027 effective date, is expected to cover:

Fractional-investment securities: non-monetary trust beneficiary certificates and investment contract securities.
Conventional securities: private money market funds and private bonds offered only to institutional investors.
Unlisted shares: tokenized through a trust structure, with the trust’s beneficiary certificates recorded on the ledger.

Public offerings of conventional securities, and on-chain settlement against tokenized payment instruments, have no fixed timetable yet.

What Counts as a Qualifying Distributed Ledger

Not every blockchain can serve as a Korean securities register. Draft Article 17-3 requires that a ledger used for electronic registration meet several conditions:

Information must be recorded jointly by multiple participants and in chronological order.
Participants must consist of the electronic registration agency, in practice the Korea Securities Depository (한국예탁결제원, “KSD”), and at least two account management institutions (계좌관리기관), which may include issuer account managers.
Each participant must be able to perform its statutory functions on the ledger.
Registering securities must not require a direct fee for using the ledger. A model in which each registration triggers a native-token payment, such as a gas fee, would be difficult to fit within this requirement.
Further technical requirements will be set by the registration agency’s business rules.

Compliance is continuing, not one-off. The KSD may refuse to register securities on a non-compliant ledger. Where a ledger already in use stops meeting the requirements, the KSD may convert the securities into ordinary electronically registered securities on its own authority (draft Article 17-6).

Personal data stays off the chain. Holder names, addresses, and other identifying information are to be kept in linked off-chain books (연계장부). The ledger records the securities information and non-identifying codes for the account institutions (draft Article 17-4). Where ledger data cannot technically be deleted, access must be limited and access logs kept (draft Article 17-7), and ledger data must be stored by at least three participants at physically separate locations (draft Article 39(3)).

Issuer Account Managers: Entry Requirements and Ongoing Costs

The issuer account manager (발행인계좌관리기관) is one of the most commercially significant features of the 2026 amendments. It allows an issuer to keep investor accounts for its own token securities without going through a securities firm. The drafts set the following requirements:

Capital: minimum equity capital of KRW 4 billion, with at least 70% of that amount maintained after registration.
Personnel: at least one account management specialist with four or more years of relevant experience, one internal control specialist, and two IT specialists.
Infrastructure: IT, communications, security, and business-continuity facilities, plus a ledger that meets the requirements above.
Governance: major shareholder requirements, social credibility, and a conflict-of-interest prevention system.
Reserve: a reserve for resolving over-registered securities, equal to the lesser of 1% of the total issue price of securities in the customer account books and KRW 4 billion, held in trust or on deposit.

Applications go to the FSC. The Financial Supervisory Service reviews the application, and an electronic registration agency designated by the FSC reviews ledger suitability (draft Article 45). Business must begin within six months of registration.

For many issuers, these costs make direct registration a strategic choice rather than a default. The realistic alternatives are to partner with a securities firm that already qualifies as an account management institution, or to obtain a narrower fractional-investment license that carries account management status.

Trading: A New Bond OTC Exchange and Retail Limits

A new license unit for debt securities. The draft FSCMA Enforcement Decree adds an over-the-counter exchange (장외거래소) license unit for debt securities, alongside the existing units for unlisted shares and beneficiary certificates. Minimum capital is KRW 6 billion, the same as the existing OTC exchange units. The operator must match orders only where bid and ask prices meet, provide issuer information to investors, and publish rules on admitting and removing debt securities. It may not broker debt securities that it or its affiliates issued, underwrote, or arranged (draft Article 178-2).

Trust-based unlisted shares. Beneficiary certificates issued by entrusting unlisted shares to the KSD or a trust company may trade on the unlisted-share OTC exchange in place of the shares themselves.

Retail limits. Retail investors face an annual net purchase limit (purchases minus sales) of KRW 100 million per OTC exchange license unit (draft Article 177(4)). The limit applies per brokerage operator, and an operator holding several license units calculates it separately for each.

What is not included. A separate license unit for investment contract securities OTC exchanges is not part of this round. The drafts also extend the small-offering exemption from the registration statement requirement to debt securities traded on the new exchange, subject to issuer disclosure (draft Articles 120(2) and 137(3)).

What Foreign Market Participants Should Do Now

The drafts are not final. The FSC has said that industry requests to raise the KRW 100 million retail limit, lower the KRW 4 billion capital requirement for issuer account managers, and relax the ledger requirements will be discussed during the formal rulemaking process. Even so, the structure is clear enough to plan around.

A practical readiness review should cover the following:

Confirm whether the product is a security under the FSCMA and, if so, which type. Tokenization changes how a security is issued and recorded, not whether it is a security.
Decide which role to take, whether issuer, platform, ledger participant, or technology vendor, and identify the license or registration that role requires.
Test the ledger’s participant structure, fee model, data separation, and node arrangements against the draft requirements and the KSD’s ledger standards.
Compare the cost of issuer account manager registration with partnership or license alternatives.
Build the retail limit, issuer disclosure, and conflict-of-interest rules into platform design.
Submit comments by November 11, 2026 through the National Participatory Legislation Center or to the FSC’s Capital Markets Division if a requirement would block a planned structure.

Cha & Kwon advises foreign token projects, issuers, and platforms on securities classification and market entry under Korean law. Our team authored the South Korea chapter of the Chambers Blockchain & Crypto-Assets 2026 Global Practice Guide, including its analysis of the 2026 capital-markets amendments and the token security framework.

Related reading: Korea Passes STO Legislation, Fueling Expectations for Tokenized Securities Market Growth — how the tokenized securities amendments were enacted.

Related reading: Token Issuance & Listing in Korea: Securities Law Analysis — the threshold question of whether a token is a security.

Related reading: Korea Crypto Law: Complete Legal Guide for Foreign Businesses & Investors — our hub covering VASP registration, CARF, STO regulation, and more.

Sources and further reading: FSC notice on the token securities draft amendments; National Participatory Legislation Center.

Cha & Kwon Law Offices advises virtual asset businesses, fintech companies, and foreign investors on Korean regulatory compliance. For consultation, contact us at contact@chakwon.com or visit chakwon.com.

This article provides general legal information and does not constitute legal advice for your specific situation. Please consult qualified Korean legal counsel regarding your particular circumstances.