South Korea’s financial authorities have proposed a 100 million won, or about $72,000, annual net purchase limit for retail investors using each over-the-counter token securities platform. The draft rules come ahead of the formal start of the revised legal framework for token securities, which is set to take effect on Feb. 4, 2027.
According to a report by Yonhap Infomax on Oct. 1, the Financial Services Commission will open proposed revisions to the enforcement decrees of the Electronic Securities Act and the Capital Markets Act, along with related rules, for public comment from Oct. 2 to Nov. 11. The measures are meant to spell out how the amended laws will work in practice.
Per-platform cap for retail buyers
Under the proposal, the 100 million won threshold would apply to each OTC token securities platform rather than across the entire market. The limit is based on annual net purchases, calculated by subtracting a retail investor’s total annual sales from total annual purchases on a given platform.
That approach would set a defined ceiling for retail exposure as the market is prepared for launch, while leaving room for the final standards to be adjusted after feedback during the consultation period.
OTC framework expands to tokenized debt
The FSC also proposed creating a new licensing unit for OTC platforms that can handle debt securities. The change would lay the groundwork for distributing tokenized bonds through the OTC market.
If adopted, the framework would expand beyond unlisted shares and non-cash trust beneficiary certificates, which have been central to the existing OTC design, and would formally include debt securities as well.
Requirements for issuer account managers
The draft revisions also set registration standards for issuer account management institutions, which would allow securities issuers to directly manage investor accounts. The proposed minimum equity capital requirement is 4 billion won, or about $2.9 million.
Firms seeking registration would also need staffing in several key functions: at least one specialist in account management, at least one in internal controls, and at least two information-technology specialists.
Scope of token securities and ledger rules
The proposal takes a broad view of what may be issued as token securities. In addition to fractional investment products such as non-cash trust beneficiary certificates and investment contract securities, conventional securities including stocks, bonds and funds could also be issued in tokenized form.
For distributed ledgers used to record rights relationships, the FSC would require participation by at least two account management institutions in addition to the electronic registration institution. Issuer account management institutions would also be allowed to take part. The stated aim is to support the reliability of ledger records and preserve business continuity if disruptions occur.
The draft would also prohibit direct payment in exchange for the use of a distributed ledger for electronic registration.
Consultation may still reshape the rules
The FSC has indicated that the standards are not final. During the public comment process, it plans further discussions on industry requests that include raising the 100 million won annual net purchase cap, lowering the 4 billion won capital threshold for issuer account management institutions, and easing the distributed-ledger requirements.
Once the comment period ends, the revisions are due to move through FSC approval, review by the Ministry of Government Legislation, and vice ministerial and cabinet meetings. The amended framework is scheduled to take effect on Feb. 4, 2027.
Source: en.bloomingbit.io