On February 3, 2026, the amendments to the Act on Electronic Registration of Stocks and Bonds (the “Electronic Securities Act”) and the Financial Investment Services and Capital Markets Act (the “Capital Markets Act”), which had passed the plenary session of the National Assembly on January 15, 2026, were promulgated. Accordingly, most provisions of the amended Electronic Securities Act will take effect on February 4, 2027, while certain parts of the amended Capital Markets Act took effect immediately upon promulgation. The remaining provisions will take effect on February 4, 2027.
These amendments aim to permit the issuance of securities in the form of security tokens and the brokerage and distribution of investment contract securities in accordance with the Financial Services Commission’s (the “FSC”) plan to implement the regulatory framework for the issuance and distribution of security tokens announced on February 6, 2023. The key details are as set out below.
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1.
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Key Provisions of Amended Electronic Securities Act
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A.
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Definition of Key Terms
To enable electronic registration in the form of security tokens, Article 2 of the amended Electronic Securities Act defines the following key terms:
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Distributed Ledger: A ledger and its management systems as prescribed by the Enforcement Decree, where the information is recorded by multiple participants in accordance with prescribed standards (such as chronological order) and protected from unauthorized deletion or ex post facto alteration through joint management and technical measures (Subparagraph 3-2).
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Securities Registered in Distributed Ledgers (the “Distributed Ledgers Securities”): Securities electronically registered in an electronic securities registrar, consisting of a distributed ledger and a linked ledger, and the linked ledger is an electronically connected ledger (intended to separately manage only certain information regarding the establishment, change, or termination of the rights over securities that are not suitable for maintaining on the distributed ledger, as prescribed by the Presidential Degree) (collectively, the “Distributed Ledgers”) (Subparagraph 4-2).
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Issuer Account Management Institution: A person who is registered in accordance with Article 19-2 (Subparagraph 8) and intends to electronically register the securities it issues using the Distributed Ledgers.
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B.
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Registration and Maintenance Requirements for Issuer Account Management Institutions
The amended Electronic Securities Act introduces an issuer account management institution system to enable issuers to directly issue and manage security tokens, in addition to the existing account management institution system for securities operated by the securities companies. A person who is not an existing account management institution and wishes to become an issuer account management institution must be registered with the FSC after satisfying the prescribed requirements, including: (i) equity capital of at least KRW 1 billion (or a higher amount as prescribed by the Enforcement Decree); (ii) sufficient personnel and physical facilities to protect rights holders and to perform account management institution functions; and (iii) social credibility and a system to prevent conflicts of interest. In addition, the issuer account management institutions must accumulate and manage financial resources as prescribed by the Enforcement Decree in order to address any excess security tokens and ensure the stability of the electronic registration system.
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C.
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Use of the Distributed Ledgers
An electronic registry institution and an account management institution may use the Distributed Ledgers in compliance with certain standards to facilitate the preparation and management of an electronic securities register. However, an issuer account management institution for token security must use only the Distributed Ledgers.
Where an account management institution (including an issuer account management institution) intends to electronically register and use the Distributed Ledgers, it must notify the electronic registry institution in advance to enable total volume control. In such cases, the electronic registry institution may access, print, or copy the relevant customer account ledger in the manner prescribed by the Enforcement Decree. Procedures are also in place to facilitate conversion between the Distributed Ledger Securities and other types of electronically registered securities.
Lastly, considering the difficulties of physically destroying the personal credit information stored in the Distributed Ledgers, such information should be managed pursuant to the Enforcement Decree, taking into account relevant technical issues in accordance with the special provisions under the Credit Information Use and Protection Act.
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2.
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Key Provisions of Amended Capital Markets Act
To enable the distribution of investment contract securities, the proviso to Article 4(1) of the Capital Markets Act, —which previously treated investment contract securities as securities only for issuance purposes—has been deleted (effective February 3, 2026). As a result, security tokens structured as investment contract securities will now be subject to the same distribution regulations as other securities.
Moreover, Article 166 has been amended (effective February 4, 2027) to stipulate the following:
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(i)
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Multi-party transactions are permitted in over-the-counter (the “OTC”) transactions are conducted through an association, a comprehensive financial investment business entity, an OTC trading broker, or in other cases deemed necessary to facilitate smooth execution of OTC transactions in financial investment products;
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(ii)
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For investment brokers licensed to engage in the OTC brokerage business, certain provisions concerning concurrent businesses, investment solicitation conducted through registered solicitation agents, and credit extension—which are not necessary for regulating OTC multi-party securities transactions—do not apply when such brokers intermediate multi-party securities transactions in the OTC market; and
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(iii)
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Investor-specific investment limits on OTC transactions may be established, taking into account the investor’s investment objectives, financial condition, investment experience, type of securities, and other relevant factors. With the introduction of an OTC brokerage business license for conducting multi-party transactions involving investment contract securities and beneficiary securities, the establishment of specialized distribution platforms for security tokens is anticipated.
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Although the amendments to the Electronic Securities Act and the Capital Markets Act lay the groundwork for the issuance and distribution of security tokens, additional details of the regulatory framework are expected to be implemented. Therefore, it would be advisable to closely follow the legislative process for subordinate regulations and to proactively present comments by participating in the “Security Token Council,” consisting of the financial supervisory authorities, the Korea Securities Depository, the Korea Financial Investment Association, market participants, and experts from academia and research institutions.
[Korean Version]
