The amendments to the relevant laws of ST0 in South Korea will be submitted in the first half of this year, and will be implemented at the earliest by the end of 2024

On March 6, Lee, head of the Capital Market Department of the Korea Financial Commission (KFC), announced that amendments to the Electronic Securities Law and the Capital Market Law would be submitted in the first half of this year to lay the foundation for the issuance and distribution of token securities (ST0) in the first half of this year. Lee predicted that according to the legislative discussion of the National Assembly, the Token Securities (ST0) system could be implemented as early as the end of 2024. It is reported that the amendments to the Electronic Securities Law include the recognition of distributed ledger technology as one of the ways to digitize securities and the establishment of a new issuer account management institution. The amendments to the Capital Market Law include the establishment of over-the-counter brokerage business and the issuance of non-typical securities, such as investment contract securities and non-monetary trust beneficiary certificates.

Interpretation of this information:

The announcement by Lee regarding the submission of amendments to the Electronic Securities Law and the Capital Market Law, in order to facilitate the issuance and distribution of token securities, indicates that South Korea is adopting a forward-looking approach towards the financial technology sector. This move also highlights the country’s strong commitment towards the development of a robust digital securities ecosystem.

The proposed amendments to the Electronic Securities Law, aimed at recognizing distributed ledger technology as a means of digitizing securities, will help to unlock the potential of blockchain technology for the issuance and trading of securities. This will not only increase the efficiency of the securities trading process but will also allow for greater transparency and security in the transfer of ownership of securities.

The proposed establishment of a new issuer account management institution will also help to strengthen the regulatory framework for securities issuers. This institution will help to ensure that issuers are held accountable for maintaining accurate records of shareholder ownership and also help to prevent fraudulent activities in the securities market.

The proposed amendments to the Capital Market Law, including the establishment of over-the-counter brokerage business and the issuance of non-typical securities such as investment contract securities and non-monetary trust beneficiary certificates, show that South Korea is willing to embrace innovative financial instruments.

The introduction of over-the-counter brokerage business will bring more flexibility to the securities market, allowing for more customized sales of securities. The issuance of new types of securities will also attract a broader range of investors to participate in the securities market.

The prediction by Lee that the Token Securities (ST0) system could be implemented by the end of 2024 shows that South Korea is taking a phased approach towards the implementation of new digital securities regulations. This phased approach will allow South Korea to adopt a comprehensive regulatory framework that will provide clarity for issuers, investors, and regulators alike.

Overall, South Korea’s proposed amendments to the Electronic Securities Law and the Capital Market Law are a significant step towards the development of a thriving digital securities market. These amendments show the country’s commitment towards innovation and financial inclusion and highlight the potential for blockchain technology to transform the securities market.