Financial Services Commission Accelerates Token Securities Institutionalization... "Amendment Bill to be Submitted Within the First Half of the Year"

Financial authorities have announced plans to submit a bill amending laws related to token securities within the first half of the year, accelerating the establishment of the system.

On the 6th, the People Power Party Policy Committee and the Digital Asset Special Committee held the 6th Civil-Government-Party meeting titled "Financial Innovation Led by Blockchain, STO Empowering the Capital Market" at the National Assembly. On this day, Lee Soo-young, Director of the Capital Market Division at the Financial Services Commission, announced that the amendment bills to the Electronic Securities Act and the Capital Market Act, aimed at establishing a regulatory foundation for the issuance and distribution of token securities, will be submitted within the first half of the year.

Token securities refer to a form of securities issued using distributed ledger technology. This represents a new form of securities issuance following physical securities and electronic securities. While it differs from previous securities in that it uses decentralized distributed ledger technology, it is subject to the same legal investor protection measures as existing electronic securities.

The amendment to the Electronic Securities Act recognizes distributed ledger technology as one of the methods for electronic securities issuance and establishes an issuer account management institution. The amendment to the Capital Market Act introduces over-the-counter brokerage services and allows the distribution of atypical securities such as investment contract securities and non-monetary trust beneficiary certificates. The Financial Services Commission expects that, depending on the speed of legislative discussions, the token securities system could be implemented as early as the end of next year.

Additionally, the Financial Supervisory Service plans to support the industry in consistently determining whether digital assets qualify as securities. On this day, Lee Yoon-gil, head of the Securities Issuance System Team at the Corporate Disclosure Bureau of the Financial Supervisory Service, explained, "To support consistent industry judgments regarding securities classification, we plan to hold regular meetings and briefings with virtual asset exchanges and provide checklists." The Financial Supervisory Service also plans to organize the regulatory framework related to the issuance and distribution of token securities.

Kim So-young, Vice Chairman of the Financial Services Commission, requested support from the National Assembly. At the meeting, Vice Chairman Kim said, "In the process of pioneering the uncharted path of institutionalizing token securities, there may be various concerns and differing opinions based on interests," adding, "We ask for balanced suggestions and active support from the National Assembly."

She continued, "As atypical rights are issued as securities and distributed across various over-the-counter markets, the possibility of speculative markets cannot be ruled out," but also noted, "While there are industry voices calling for significant deregulation, we must be cautious of regulatory arbitrage and the potential for the market to grow abnormally simply because these are tokenized securities."

Seo Yoo-seok, Chairman of the Korea Financial Investment Association, also emphasized, "A system should be established that manifests the innovative and dynamic aspects of the capital market while thoroughly protecting investors," and stressed, "If institutionalization is achieved and firmly established soon, the issuance and distribution of token securities will become easier, which is expected to change the paradigm of the capital market."