Allowing Asset Pooling for Fractional Investing; Token Securities Trading Limits to Be Set More Flexibly [Crypto Briefing]

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\r\n[Financial News] To help the token securities (STO) market take root, financial authorities have decided to explore allowing pooling of underlying assets for fractional investing and setting over-the-counter (OTC) market investment limits at a level that can secure liquidity. With the law on token securities set to take effect in February next year, detailed guidelines reflecting feedback from the market are being prepared for release in July.
The FSC held the second meeting of the public-private token securities consultative body at Government Complex Seoul on the 15th, chaired by Vice Chairman Kwon Dae-young, and discussed the measures. The meeting was attended by related institutions such as the Financial Supervisory Service (FSS) and the Korea Securities Depository (KSD), as well as industry experts from the Fintech Industry Association, who reviewed the direction of system design in three key areas: issuance, infrastructure, and distribution.
The FSC plans to allow pooling of underlying assets, which had previously been prohibited, within a certain range for assets of the same type. Under the current system, underlying assets must be managed individually when issuing fractional investment securities. Under the new approach, however, assets of the same type can be bundled together and issued as securities. The move is intended to improve the efficiency of issuance structures and support the launch of a wider range of new securities in the market.
However, assets for which objective valuation is impossible or whose risks are excessive will be restricted to protect market order and investors. The FSC plans to announce the final version of the Best Practices for Issuance of Fractional Investment Securities in July.
Infrastructure innovation, drawing on overseas examples, will also move forward. The authorities plan to prepare a phased roadmap in response to tokenization efforts involving existing standardized securities such as stocks and bonds, following cases such as Hong Kong’s green bond and the United States’ tokenized Money Market Fund (MMF).
In particular, the government plans to work with related institutions on infrastructure improvements and testing in preparation for technological innovation across the entire process of securities rights, trading, and settlement, including on-chain payments. This phased approach is designed to prevent conflicts with the existing electronic securities system and encourage a stable transition.
As for the distribution market structure, the focus is on revitalizing the OTC market. The FSC said it will set the trading limits for OTC markets, which will be delegated to the enforcement decree, at a level that does not constrain liquidity in the early stage of the market.
It will also improve the predictability of OTC market approval policies. The agency said it will include specific standards in the guidelines to address market questions, such as whether venues already approved under the electronic securities framework need additional approval to trade token securities, and how far the scope of concurrent approvals can extend for various OTC transactions, including unlisted shares and investment contract securities.
Kwon said, "From a global perspective, we must closely monitor new technologies and business experiments and continuously consider the best model that fits the environment and system of the capital market."
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elikim@fnnews.com Kim Mi-hee Reporter