Korean Regulator Greenlights Issuance And Distribution Of Security Tokens

The Financial Services Commission (FSC) in South Korea has reportedly said that investors in the country would soon be able to trade and invest in fractionalized assets or security tokens easily.

Lee Su-young of the FSC said that the same level of protection would be given to investors of security tokens as provided to those who invest in conventional securities.

Security tokens

A report revealed that the financial markets regulator in South Korea has given the green light to issue and distribute security tokens in the country.

The report said that the approval of the Financial Services Commission (FSC) means that Korean investors would be able to start trading security tokens as soon as the relevant laws have been revised.

It was further asserted that the changes would allow Korean investors to make fractional investments and also award the same level of protection to security token holders as given to conventional securities investors.

An official from the capital market division of the regulator, Lee Su-young said that they had decided to give approval for the new form of digitized securities to be issued in the country.

He stated that making fractional investments would become easier and more convenient for investors via security tokens.

He also added that they would protect investors of security tokens on the same level as people who invest in traditional securities.

Brokerage firms

The report also said that the FSC had decided to make amendments to the relevant sections of the securities law.

The reason for this decision was to ensure that the global shift in the investment paradigm should be reflected in the Korean capital and electronic securities market.

Meanwhile, analysts also talked about the benefits that investors in South Korea would be able to enjoy once the list of tradeable assets has expanded.

There are a number of Korean brokerage companies that are already working on updating their respective trading apps.

This would enable them to incorporate security tokens on their platform for facilitating their clients in making these investments.

Some of the prominent brokerage firms that are taking this step include Kiwoom Securities, Shinhan Securities, and KB Securities.

The risks

It is thanks to the FSC in South Korea that investors would be able to explore the option of acquiring and trading fractionalized securities.

However, an unnamed source in the report said that investors still need to take the decision of buying a security token with utmost care because there are risks involved.

Just because the financial regulator has given its approval does not mean there are no risks involved, even with the level of protection provided.

But, the unnamed source also added that despite the risks and other concerns, there is no denying that it is a good sign that security tokens have been approved by the FSC.

The source said that this was an indication that the regulator was making regulations easier in some of the innovative and trendy areas of investment.

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