On February 6, 2023, the Financial Services Commission (the “FSC”) announced its plan to overhaul the regulatory framework for the issuance and distribution of security tokens (the “Plan”).
The Plan defines a “security token” as a new form of security that is digitized using distributed ledger technology and thereby announces that security tokens must be issued or otherwise distributed in accordance with the Financial Investment Services and Capital Markets Act (the “Capital Markets Act”) and its related laws and regulations. Under the Plan, digital assets that are not considered security tokens would be governed by the Framework Act on Digital Assets when enacted at the National Assembly.
The Plan further introduces (i) the Guideline for Security Tokens (the “Token Guideline”), setting out the principle for the classification of digital assets as “security tokens,” and (ii) how the issuance and distribution of security tokens would be institutionalized under the Act on Electronic Registration of Stocks and Bonds (the “Electronic Securities Act”) to be amended (including via an electronic securities issuance system, issuer account management agencies and over-the-counter brokerage).
The details are available in the link below.
Attachment Overhaul of the Regulatory Regime around the Issuance and Distribution of Security Tokens in Korea.pdf