South Korea’s financial regulator has proposed detailed rules for tokenized securities, covering capital requirements, over-the-counter trading licenses and limits on retail investment. The framework is being advanced ahead of a planned 2027 rollout.
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South Korea's financial regulator has proposed detailed rules for tokenized securities, according to a Cointelegraph report dated Oct. 2, 2026. The proposal covers capital requirements, over-the-counter trading licenses and retail investment limits. It is being advanced ahead of a planned 2027 rollout, giving the market a clearer compliance path. The move signals that authorities want tokenized securities to operate inside the existing securities framework rather than outside it. This matters because tokenization can change how ownership, settlement and trading of securities are recorded and transferred.
The proposed framework includes capital requirements for firms that intend to issue or intermediate tokenized securities. It also creates a licensing path for over-the-counter trading, rather than leaving such transactions in an unregulated space. Retail investment limits are included as an investor-protection measure. Together, these components suggest that the regulator is focusing on who can operate, how trading can occur and how much retail exposure is allowed. The exact thresholds and definitions were not fully detailed in the initial summary, so final rules may still be subject to consultation.
OTC trading licenses are significant because tokenized securities may not fit neatly into conventional exchange trading models. A licensed OTC venue can allow dealer-mediated or bilateral transactions while keeping activity under supervisory oversight. This would affect brokerages, custody providers and technology platforms that want to support security tokens. It also creates compliance duties around record-keeping, client suitability and anti-money laundering checks. For the broader framework, OTC licensing helps connect blockchain-based issuance with regulated secondary trading.
Retail investment limits are intended to shield individual investors from risks that may be less familiar than those in traditional listed securities. Such risks can include technology failures, custody issues, liquidity gaps and valuation challenges. By setting caps, the regulator can allow retail participation without exposing households to unlimited losses. The limits also influence product design, because issuers and distributors must build offerings that fit the permitted retail scope. This part of the proposal shows how the 2027 rollout is being shaped by both innovation and investor-protection goals.
Tokenized securities are digital representations of traditional securities, such as equities or bonds, that are issued or recorded on a blockchain or distributed ledger. They aim to combine securities-law protections with the programmability and settlement features of digital assets. South Korea's proposed rules would place them within the existing securities regulatory perimeter.
The proposal includes capital requirements, over-the-counter trading licenses and retail investment limits. It was advanced ahead of a planned 2027 rollout. Exact thresholds were not fully detailed in the initial report, so the final requirements may change after consultation.
OTC trading licenses would allow regulated intermediaries to facilitate tokenized securities transactions outside centralized exchanges. This matters because many security tokens may need dealer-mediated or bilateral trading models. Licensing would keep those activities under supervisory oversight and impose compliance duties.
Regulator Moves From Principles to Detailed Rules
What the Proposed Framework Covers
Why OTC Trading Licenses Matter
Retail Investment Limits and Investor Protection
Timeline Toward the 2027 Rollout
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The 2027 rollout timeline gives market participants time to adjust operations, apply for any required licenses and meet capital rules. It also allows the regulator to refine details after feedback from industry and public consultation. Coordination will be needed among issuers, brokerages, custodians and blockchain infrastructure providers. If the framework is finalized, South Korea would join other jurisdictions that are trying to bring tokenized securities into mainstream regulation. The proposal is therefore a preparatory step, not an immediate product approval.
Regulators could cap how much retail investors are allowed to put into tokenized securities or specific offerings. The aim is to limit exposure to risks such as technology failures, custody issues and liquidity gaps. The proposal includes such limits as part of its investor-protection framework.
The rules are being advanced ahead of a 2027 rollout. This timeline gives firms time to build systems, obtain licenses and meet capital requirements. The final schedule may depend on the outcome of the consultation process.
No. The proposal sets out detailed rules for how tokenized securities could be regulated, but it is not an approval of specific products. The framework is still being advanced ahead of the 2027 rollout. Market participants will need to meet the final requirements before offering such products.
