Korean Security Token Issuance and Distribution Approved by Regulator – Report

Written by Johnson Philip

The Financial Services Commission (FSC) of South Korea has announced that Korean investors will soon have the ability to effortlessly invest in and trade security tokens or fractionalized assets. Lee Su-young of the FSC stated that security token investors will receive the same level of protection as investors in traditional securities.

The Financial Services Commission (FSC), South Korea’s financial markets regulator, has given the green light for the issuance and distribution of security tokens, according to a recent report. Once the relevant laws have been revised by the regulator, Korean investors will be able to start trading security tokens, the report states.

According to The Korea Times, regulators aim to not only allow investors to make fractional investments but also provide security token holders with the same protection given to traditional securities investors.

“We have decided to allow the new form of digitized securities to be issued here. This will enable investors to make fractional investments with more ease via the security token. We will also protect security token investors on par with those investing in conventional securities,” Lee Su-young, an official from the regulator’s capital market division, reportedly said.

Brokerage Firms Preparing for Security Token Trades

The FSC’s decision to revise the relevant sections of the laws is motivated by a desire to align the Korean electronic securities and capital markets with the global investment shift, the report notes.

Kim Se-hee, an analyst from Eugene Investment & Securities, is also quoted in the report emphasizing the potential benefits of broadening the range of tradable assets. Some Korean brokerage firms, such as KB Securities, Shinhan Securities, and Kiwoom Securities, are reportedly updating their trading apps to allow for security token trading, the report adds.

The FSC’s recent actions have enabled investors to invest in fractionalized securities, however, an unnamed source in the report advises caution for those considering purchasing a security token. Despite this and other potential worries, the same source affirms that the FSC’s indication of loosening regulations on trendy investment areas is a positive development.

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