South Korea's Financial Services Commission Announces: Token Securities (STO) Regulatory Amendments to Take Effect on February 4, 2027

Coin Circle (120btC.coM): On October 1, Beijing time, the Financial Services Commission of South Korea officially announced that the amendments to the Electronic Securities Act and the Capital Markets Act related to token securities (STO) will be fully implemented on February 4, 2027. The draft of the relevant implementation details will open for public opinion collection starting from October 2, Beijing time, and will continue until November 11. The core breakthrough of this regulatory revision is the expansion of the access boundaries for underlying assets. In addition to fragmented assets such as non-monetary trust beneficiary rights and investment contracts, standardized securities such as mature stocks, bonds, and funds in the traditional financial market are now officially allowed to be issued in tokenized form.

In terms of technical specifications for distributed ledgers, regulators have proposed stricter node requirements. To ensure the high reliability of public ledger data and business continuity under extreme conditions, the ledger network must connect at least two independent account management institutions, in addition to electronic registration institutions. At the same time, to prevent delays in the rights confirmation process, the draft explicitly prohibits operators from charging users directly for the use of ledger channel fees under the pretext of electronic registration.

Clear Account Management Qualifications

For securities issuers attempting to independently serve as account management institutions, the draft sets clear access standards: applicants must have a minimum 4 billion KRW in their own capital and must be equipped with one account management professional, one internal control professional, and two information system professionals.

On the circulation side, regulators have expanded the scope of targets for over-the-counter exchanges. Considering the profound restructuring that asset tokenization may bring to the fixed income market, the draft proactively includes debt securities in the list of permitted over-the-counter transactions, despite the current limited demand for bond turnover on the retail side. However, due to risk isolation considerations, the regulations impose strict limits on retail investors' exposure: the annual net purchase amount (i.e., total purchase volume minus total sale volume) for ordinary investors in a single independent over-the-counter exchange is capped at 100 million KRW.

New Compliance System Ready to Launch

The draft details publicly announced this time essentially implement the policy direction established at the third official-private cooperation token securities agreement meeting on September 4, Beijing time. However, the existing strict indicators have triggered widespread feedback from market participants. Various industry representatives actively called for a significant increase in the annual trading limit for ordinary investors, a reduction in the 4 billion KRW capital threshold for issuers, and a moderate relaxation of the rigid requirements for the distributed ledger structure during the legislative consultation phase.

According to legal procedures, after the opinion collection ends, the draft still needs to pass through internal resolutions of the Financial Services Commission, compliance review by the Legal Affairs Office, and final approval by the State Council. Against this backdrop, traditional financial institutions have begun to position themselves in advance, such as Hanwha Securities actively building a tokenization testing platform based on the Avalanche underlying network to seize early market share after compliance.

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