South Korea’s financial authorities have proposed capping retail investors’ annual net purchases on each over-the-counter token securities platform at 100 million won ($72,000) ahead of the market’s formal launch.

Yonhap Infomax reported on Oct. 1 that the Financial Services Commission will publish proposed revisions to the enforcement decrees of the Electronic Securities Act and the Capital Markets Act, along with related rules, for public comment from Oct. 2 through Nov. 11. The revisions were drafted to set out details of the amended laws, which take effect on Feb. 4, 2027.

Under the proposal, retail investors would be limited to annual net purchases of 100 million won per OTC token securities platform. Net purchases would be calculated by subtracting total annual sales from total annual purchases.

The FSC also proposed a new licensing unit for OTC platforms that can handle debt securities, laying the groundwork for the distribution of tokenized bonds. The move would expand the OTC market framework beyond unlisted shares and non-cash trust beneficiary certificates to include debt securities.

The proposal also spells out registration requirements for issuer account management institutions, which allow securities issuers to directly manage investor accounts. Minimum equity capital would be set at 4 billion won ($2.9 million). Firms would also need at least one specialist each in account management and internal controls, as well as at least two information-technology specialists.

The rules would broadly define the types of securities that can be issued as token securities. In addition to fractional investment securities such as non-cash trust beneficiary certificates and investment contract securities, conventional securities including stocks, bonds and funds could also be issued in tokenized form.

For distributed ledgers used to record rights relationships, the proposal would require the participation of at least two account management institutions in addition to the electronic registration institution. Issuer account management institutions would also be allowed to participate. The requirement is intended to ensure the reliability of distributed-ledger records and maintain business continuity in the event of disruptions. Direct payment in exchange for the use of a distributed ledger for electronic registration would be prohibited.

Still, the final standards could change during the public comment process. The FSC plans further discussions on industry proposals, including raising the 100 million won annual net purchase cap for retail investors, lowering the 4 billion won minimum equity capital requirement for issuer account management institutions and easing distributed-ledger requirements.

After the public comment period, the revisions will go through FSC approval, a review by the Ministry of Government Legislation, and vice ministerial and cabinet meetings before taking effect on Feb. 4, 2027.