Korea Blockchain Group Urges FSC to Ease Entry Rules for Tokenized Securities

Follow-up submission after FSC meeting

The association said it delivered the additional opinion letter at an STO industry meeting hosted by the FSC on the previous day. Participants included standing executive vice chairman Kim Sung-gon, Barun Law LLC lawyer Lee Seung-jun, and officials from LG CNS, Fair Square Lab and the Kaia DLT Foundation.

It described the document as a follow-up to the FSC's earlier legislative notice and said the contents reflected practical concerns raised by companies active in the sector. The submission contains five proposed revisions or new provisions, one request for review and five reference opinions.

Requests on ledger structure and capital rules

Among the main proposals was a request to relax distributed-ledger operating requirements. Under the current draft, a ledger must include the electronic registration institution and at least two account management institutions. The association proposed a special exception for cases where an issuer manages securities it has issued itself.

In that case, it said the ledger should be allowed to operate with the electronic registration institution and the issuer account management institution, as long as at least one independent validation node operator is included. The group also called for capital requirements for issuer account management institutions to be applied in stages based on business scale.

Its proposal would apply the statutory minimum capital requirement of 1 billion won, or about $720,000, at the initial registration stage. That threshold would increase to 4 billion won, roughly $2.9 million, if the issuance value of managed securities exceeds 100 billion won, or about $72 million. The association said this approach could reduce upfront cost pressure on small and mid-sized issuers while preserving protections for investors.

Other requested changes

The association also asked for clearer rules on whether issuer account management institutions can continue existing businesses while taking on the new function under the STO framework. It further requested that standards and procedures for reviewing the suitability of distributed ledgers be disclosed in advance.

Other suggestions focused on operational requirements. The group said professional staffing standards should recognize experience in blockchain development, operations and information security, and that physical facility requirements not tied to actual operations should be adjusted more reasonably.

Retail trading cap left unchanged for now

On over-the-counter trading of tokenized securities by retail investors, the association did not seek an immediate increase in the existing limit. Instead, it proposed keeping the current annual net purchase cap of 100 million won per brokerage firm and reviewing whether that level remains appropriate two years after the system comes into force.

It said any later reassessment should consider trading volume, liquidity and instances of investor losses in a comprehensive way. The association said it is currently running an STO working group that includes 21 securities firms and 17 technology companies as industry discussions on regulatory improvements continue.

What comes next

Association chairman Kim Jong-won said the meeting gave the group a chance to convey discussions from the STO working group, share the practical difficulties faced by technology companies and confirm the position of financial authorities. He said the association plans to continue acting as a channel between securities firms and tech companies.

For now, the confirmed next step is continued discussion around the FSC's draft subordinate regulations and the association's submitted opinions. The proposals remain recommendations to financial authorities rather than adopted rule changes.