South Korea's Financial Services Commission has published a phased plan for expanding tokenized securities beyond the country's early fractional-investment market.

The roadmap is tied to amendments to the Electronic Securities Act that are scheduled to take effect on Feb. 4, 2027. In the first stage, regulators plan to support tokenization of private MMFs and private bonds for institutional investors, tokenization of unlisted shares through a trust structure, and public fractional-investment securities.

The FSC said the market should not treat tokenized securities as a separate asset class. Its policy paper frames them as a form of electronic security recorded on distributed ledgers, while the legal nature of the instrument still comes from existing securities law categories such as equity, debt, fund interests, and investment-contract securities.

Later phases would broaden the infrastructure to public securities where technically feasible, then explore on-chain settlement using stablecoins or similar payment instruments. The timing for those later stages remains variable and depends on first-stage stability, market demand, technical progress, and stablecoin legislation.

The plan also keeps tokenized securities inside existing brokerage and over-the-counter market permissions. Firms already licensed for securities brokerage or dealing may handle tokenized securities within their licensed scope, though OTC venues that want to support trading will need prior consultation with the Financial Supervisory Service.

For retail investors, the FSC proposed an annual net-buy limit of 100 million won per OTC venue. It also set planned requirements for issuer account-management institutions, including 4 billion won in capital and dedicated account-management, internal-control, and IT staff.