A platform that allows fractional investments in assets such as real estate, intellectual property (IP), artworks, and even premium Korean beef (hanwoo) is set to be officially institutionalized. Previously operating under a regulatory sandbox, this fractional investment platform has now secured a legal foundation through amendments to the Capital Markets Act.
 
What is Fractional Investment?

Fractional investment allows multiple individuals to invest in high-value assets, such as expensive artworks or real estate, by dividing ownership into smaller shares. For example, a 1 billion KRW artwork can be split into 1,000 shares, with each investor contributing 1 million KRW. Investors can then earn profits when the value of the asset appreciates.
 
Platforms like TogetherArt are leading examples of this investment model. TogetherArt enables multiple investors to collectively own high-value artworks, distributing profits when these works are resold or auctioned. Through this platform, even general investors can participate in the ownership of works by renowned artists like Picasso and Andy Warhol with small investments.
 
Key Points of Institutionalization

According to the amendment, platforms wishing to issue fractional investment securities must have 1 billion KRW in capital (or 500 million KRW for professional investors) and obtain a license for securities brokerage. This requirement aligns with existing standards for fund brokerage firms. Licensed platforms will be able to issue fractional art investment products and sell them to general investors. The system is expected to be fully implemented by the end of September.
 
Stronger Investor Protection

Fractional investment platforms will be subject to the same investor protection regulations as traditional securities firms. These include requirements for accurate product explanations, advertising regulations, and financial soundness standards, providing investors with a safer and more transparent investment environment.
 
Impact on the Art Market

This institutionalization is expected to significantly boost the fractional art investment sector. High-value artworks will no longer be exclusive to wealthy collectors but will become accessible assets for the general public. This shift is likely to enhance liquidity in the art market and promote a more capital-driven approach to art transactions. As artworks are increasingly perceived not only for their aesthetic value but also as financial assets, the art market may attract new waves of interest from diverse investor groups.
 
Platforms like TogetherArt, now entering the formal regulatory framework, will likely build greater trust among investors. This will contribute to increased trading activity in the art market and expand its size and participant base. Moreover, as the value of art as an asset strengthens, the market could see a blend of traditional collectors and new investors, driving further growth.
 
Future Outlook

The proposed amendments will be open for public consultation until March 17 and will undergo reviews by the Regulatory Reform Committee and the Ministry of Government Legislation, with implementation scheduled for June 16. Once fractional art investment takes hold, it is expected to broaden access to the Korean art market and attract a more diverse range of investors. The potential for significant capital inflow into the art market raises questions about how this new investment model might reshape the industry.
 
Whether artworks will evolve from objects of mere appreciation to new financial instruments remains to be seen, but the upcoming changes are drawing considerable attention.