Korea Blockchain Industry Promotion Association Submits STO Rule Change Proposals to FSC - bloomingbit
The Korea Blockchain Industry Promotion Association submitted new proposals to financial authorities on Nov. 11 to ease entry barriers for tokenized securities.
The association delivered an 'additional opinion letter on the legislative notice for amendments to subordinate regulations related to tokenized securities' at an STO industry meeting hosted by the Financial Services Commission a day earlier.
Attendees included standing executive vice chairman Kim Sung-gon, Barun Law LLC lawyer Lee Seung-jun, and officials from LG CNS, Fair Square Lab, and the Kaia DLT Foundation.
This submission is a follow-up to the FSC's legislative notice issued on Nov. 2 for amendments to STO-related subordinate regulations.
The document consists of five proposed revisions or new provisions, one request for review, and five reference opinions.
Easing Distributed Ledger Requirements
A key proposal focuses on easing distributed-ledger operating requirements for issuer account management institutions.
The association proposed a special exception under which, when an issuer manages securities it issued itself, the ledger could be structured around the electronic registration institution and the issuer account management institution.
This structure would require at least one independent validation node operator to be included.
The association said easing distributed-ledger operating requirements and applying tiered capital standards for issuer account management institutions would help reduce upfront cost burdens for small and mid-sized issuers.
Tiered Capital Standards for Issuers
The association also called for capital requirements to be applied on a tiered basis according to business size.
At the initial registration stage, it proposed applying the statutory minimum of 1 billion won ($720,000).
That would rise to 4 billion won ($2.9 million) if the issuance value of the securities under management exceeds 100 billion won ($72 million).
The approach aims to preserve investor-protection safeguards while reducing upfront cost burdens for small and mid-sized issuers.
Retail Trading Limits and Next Steps
On over-the-counter trading limits for tokenized securities by retail investors, the association proposed maintaining the current cap and reassessing its adequacy two years after the system takes effect.
The existing standard of annual net purchases of 100 million won ($72,000) per brokerage firm would remain unchanged.
Any future review should comprehensively assess trading volume, liquidity, and cases of investor losses.
The association would continue facilitating communication between securities firms and technology companies and work to establish a Korean-style STO ecosystem that balances investor protection with active participation by non-financial innovative companies and tech firms.
The association is currently operating an STO working group comprising 21 securities firms and 17 technology companies.
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