Financial Services Commission pushes for enactment of 'Digital Financial Safety Act'…also promotes STO institutionalization

The Financial Services Commission is pushing to enact the 'Digital Financial Safety Act' to prevent repeated hacking and financial incidents in the digital financial environment, while also advancing the institutionalization of tokenized securities (STO) to connect and expand the capital market structure.

On the 19th, the Financial Services Commission presented the enactment of the Digital Financial Safety Act as a key task to prevent the recurrence of digital financial incidents in a joint report with the Fair Trade Commission. This reflects the assessment that recent successive hacking and security incidents have shown limits in managing digital financial risks under existing systems.

Through the Digital Financial Safety Act, the Financial Services Commission plans to clarify the security responsibilities of financial companies and electronic financial service providers and to establish grounds for imposing punitive administrative fines in the event of hacking or other incidents. In addition, it intends to build a prevention-focused security framework by conducting penetration testing and regular joint exercises across the financial sector.

Alongside strengthening digital financial stability, the Financial Services Commission will also pursue restructuring of the capital markets. To spread the momentum of the KOSPI 4000 era across the entire capital market, it plans to carry out regulatory arrangements in preparation for the institutionalization of tokenized securities (STO).

The Financial Services Commission plans to establish the institutional foundation to settle STOs as a new financing method for early-stage venture and innovative companies and to expand growth pathways for startups and innovative companies through the capital market. Through this, the goal is to complement the existing stock- and bond-centered capital market structure and improve small and venture companies' access to funding.