A draft proposal compiled by the Korea Digital Convergence Industry Association suggests South Korea's security token offering (STO) sub-regulations could allow pooling of similar underlying assets. The non-official outline also includes OTC trading limits for retail investors, licensing conditions and business scope for non-standardized securities OTC exchanges, and a phased route toward tokenizing standard securities. Technical and financial requirements for issuer account management institutions may be added. If pooling is permitted, multi-asset products backed by music copyrights and real estate could emerge in a market currently dominated by single assets. Retail OTC limits are likely to exceed current sandbox levels, but final caps must balance investor protection with liquidity. The status of existing OTC platforms and operators, plus the roadmap for tokenizing stocks and bonds, remain key points. Industry players warn that firms may have little time to adjust systems and controls once rules take effect.
South Korea’s security token offering (STO) sub-rules may soon spell out a few things, according to a draft proposal put together by the Korea Digital Convergence Industry Association. Think: allowing similar underlying assets to be pooled, setting OTC trading caps for retail investors, defining licensing terms and business scope for OTC exchanges that handle non-standardized securities, and laying out a step-by-step road map for tokenizing standardized securities. It may also include technical and financial requirements for the institutions that manage issuer accounts.
This draft leans on public policy directions and industry talks. It is not the government’s official version. No final standard yet. That only comes after legislative notice and regulatory review.
For now, the STO market has mostly been a single-asset game. Pooling could change that fast. Multi-asset products backed by music copyrights, real estate, and similar assets could start showing up. Retail OTC trading limits are expected to be higher than those in current regulatory sandbox cases, but the final numbers still have to strike a balance between investor protection and market liquidity.
Then there’s the issue of non-standardized securities OTC platforms, plus the operators already in the field, and where tokenizing standardized securities like stocks and bonds goes from here. Industry players have warned that once the rule takes effect, firms may not get much time to get their systems and internal controls ready.
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