South Korea sets Feb 2027 tokenized securities rollout

South Korea's Financial Services Commission published a policy roadmap on 4 September for tokenizing the issuance and circulation of securities. The readout came out of the third private-public consultative body meeting. This is a roadmap tied to an Electronic Registration Act update, not a trading venue that opened today.

Security tokens become legally recognized as digitized securities when the Act on Electronic Registration of Stocks and Bonds update takes effect on 4 February 2027. Phase one starts that same month. Tokenization is written to cover stocks, bonds, funds, and fractional investment securities, not fractionals alone.

Phase one covers privately pooled MMFs and bonds for institutional investors, unlisted stocks through a trust structure, and publicly offered fractional investment securities. Phase two opens tokenization to all publicly offered securities types. Phase three is an on-chain payments layer linked to stablecoins. Phases two and three stay flexible, based on phase-one results, how fast firms adopt the tech, and pending stablecoin legislation.

Korea's entire listed market is not already on-chain, and stablecoin settlement is not live. The FSC said those later phases depend on the first run and on a stablecoin law that is not finished. That hedge matches other unfinished stablecoin files, from Treasury's GENIUS Act Section 3 NPRM to MAS's Payment Services Act consultation.

The FSC plans to introduce revision proposals for the subordinate statutes of the FSCMA and the Electronic Registration Act by the end of September 2026. That package is the near-term document, not February 2027. Korea Securities Depository has already prepared distributed-ledger screening criteria, and infrastructure work with KSD and securities firms is supposed to happen before phase one.

Existing financial-investment licensees can handle tokenized securities inside their current license. There is no separate authorization just for the token. OTC intermediation still needs prior consultation with the Financial Supervisory Service. Retail investors face an annual net purchase cap of KRW100 million per OTC exchange.

Issuers can manage customer securities accounts if they qualify as an issuer account management entity under the Electronic Registration Act. That path needs KRW4 billion or more in equity capital, named staffing (account management, internal control, and two IT roles), and cybersecurity standards. The same recordkeeping question is moving in the SEC's transfer-agent rewrite. Staying inside an existing license is a different decision from seeking a new charter, the split in Revolut's OCC national-bank path.

Model standards for fractionals suggest an individual subscription cap of the smaller of KRW30 million or 5 percent of the issuance. That is a suggested standard, not the February legal-recognition date.

If you run a Korea desk, digital-asset counsel, or securities ops book, watch the FSC subordinate-statute package due by the end of September. Decide this month whether to prep KSD ledger connectivity and the KRW4 billion issuer-account path, or stay a licensed intermediary under existing financial-investment licenses and take the FSS OTC consultation route.