Is tokenized securities institutionalization nearing the final stretch? Financial authorities to hold further talks this month [Crypto Briefing]

[Financial News] The financial authorities will continue additional discussions on the detailed design of the tokenized securities system and infrastructure in mid-September. With the revised Act on Electronic Registration of Stocks and Bonds and the Financial Investment Services and Capital Markets Act set to take effect in February next year, the talks are expected to mark a turning point in refining practical issues to be reflected in enforcement decrees and supervisory rules.
According to the financial authorities and industry sources on the 11th, the second round of discussions by the public-private Tokenized Securities Consultative Body will focus on an interim review of detailed institutional design proposals drawn up by four subcommittees covering technology and infrastructure, issuance, distribution and settlement, as well as the Open Private Advisory Group.
Tokenized securities are securities issued and managed using a blockchain-based Distributed Ledger Technology (DLT) as the securities register. The revised Act on Electronic Registration of Stocks and Bonds provides the legal basis for issuing tokenized securities and regulates account management methods. Because they are securities under the Financial Investment Services and Capital Markets Act, they are subject to all related rules on financial investment business, disclosure and over-the-counter trading.
As the revised law recognizes the distributed ledger as a securities register with legal effect, future discussions on subordinate regulations are expected to center on practical infrastructure design, including blockchain technical requirements, registration standards for issuers and account management institutions, and systems for node management and total volume control. Another key issue is setting technical standards for automating dividend and interest payments and collateral management through blockchain-based smart contracts, as well as enabling Real-time gross settlement (RTGS) through integrated trading, clearing and settlement.
According to an analysis by the Korea Capital Market Institute, tokenized securities are expected to do more than introduce new technology. They could also drive structural efficiency in the capital market. With distributed-ledger-based registers now being institutionally recognized alongside the existing centralized electronic registration system, the efficiency of issuance, distribution, custody, clearing and settlement procedures is expected to improve. In particular, if fractional investment in unstructured real assets such as real estate, artworks and Intellectual Property (IP) becomes more active, investor access is likely to improve. New low-cost financing channels are also expected to open up for venture firms, small and medium-sized enterprises, and operators of specific projects.
However, securing interoperability between platforms to prevent market fragmentation remains a challenge. If tokenized securities issued on different mainnets cannot be exchanged smoothly, liquidity constraints could arise. As a result, whether standard guidelines between mainnets will be established is also likely to become a key topic of discussion.
Global market moves are also accelerating. The Depository Trust & Clearing Corporation (DTCC) recently formed a working group on a tokenized securities platform with BlackRock, Goldman Sachs and JPMorgan Chase. HSBC Holdings plc has described tokenization as a fundamental shift in financial infrastructure that links deposits, bonds and collateral.
In line with this trend, South Korea's financial authorities must also give top priority to global standard alignment when designing next-generation securities settlement systems, including blockchain-based On-chain payments.
In a recent report, Hwang Se-woon, a Senior Research Fellow at the Korea Capital Market Institute, said the key significance of the new system lies in recognizing the distributed ledger as a securities register with legal effect, thereby expanding the forms of securities issuance. He added, however, that for the market to take root, the authorities must first clearly define registration standards for issuers and account management institutions, while also improving infrastructure to ensure system security and market transparency.
Industry players are also highly anticipating the second meeting. A representative from a tokenized securities company said, "This meeting can be seen as a stage for refining the detailed issues that will be reflected in the actual enforcement decrees, supervisory rules and infrastructure development direction." The representative added, "If issuer requirements are narrowed too much or the scope of underlying assets is overly restricted, it will be difficult to secure initial liquidity and the market could shrink more than it did before institutionalization, so caution is needed."

elikim@fnnews.com Kim Mi-hee Reporter