The South Korea Financial Services Commission published draft amendments to the Financial Investment Services and Capital Markets Act (FSCMA) enforcement decree and rules, and related subordinate regulations, to create legal bases for fractional investment platforms issuing non-monetary trust beneficiary certificates and for digital securities lending intermediary platforms, while expanding alternative trading system (ATS) activity to exchange traded funds (ETFs) and exchange traded notes (ETNs). The package also tightens conduct expectations for initial public offering (IPO) bookrunners and introduces targeted changes across listings, repos and bond trading. For fractional investment, the proposal creates a new, small licence category for investment intermediary businesses handling beneficiary certificates with an equity capital requirement of KRW1 billion, applying existing net capital ratio (NCR) and investor protection rules used for securities firms, and allowing issuance under the Asset-backed Securitization Act while an FSCMA amendment is pending. Securities registration screening would check underlying assets against the December 2023 guidelines, and ongoing disclosure, valuation and investment-limit supervision would continue. A separate small licence would be introduced for securities lending intermediaries, with equity capital set at KRW1 billion for retail-facing platforms and KRW500 million for services limited to qualified professional investors, and with activity confined to matching lenders and borrowers. On ATS, the rules would add ETFs and ETNs to eligible instruments and introduce a KRW10 billion capital-based licensing unit for ETF/ETN trading, exempt ATS from the NCR regime in favour of equity-capital-based corrective action triggers at 100 percent, 85 percent and 70 percent of the required equity capital, and subject ATS fee changes and KRW10 billion or more of IT investment to market efficiency promotion committee deliberation. Other changes would require IPO lead managers and bookrunners to conduct due diligence and prohibit compensation outside the contract, extend listing review to additional backdoor listings, broaden eligible collateral for investor-facing foreign currency repos to include supranational bonds and Korean paper subject to rating and disclosure conditions, and raise the retail T+0 eligibility threshold for small-scale OTC bond trades to less than KRW10 billion. Public comments are open until 17 March, with the amendments expected to take effect from 16 June 2025 following legislative review and subsequent approvals. The release also indicates regulatory groundwork for a beneficiary certificate distribution platform service, alongside an unlisted securities platform service, is expected to be completed by end-September 2025.

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