TOKYO -- Leading Japanese brokerages will form an organization Tuesday to set rules for issuing blockchain-based digital securities that represent a new way of raising capital from assets like real estate.

Security token offerings will become a fundraising option in Japan next April following a legal change that clarifies disclosure requirements and other rules. Such offerings have already gone ahead in the U.S., Singapore and other financial technology hotbeds.

Big Japanese brokerages that had been waiting on the sidelines of this unfamiliar territory are now moving to position themselves for business opportunities in security token offerings.

SBI Securities will lead the association, joined by old-line brokerages Nomura Securities and Daiwa Securities Group. Online brokerages Kabu.com Securities, Rakuten Securities and Monex Group will also take part.

Security tokens start with assets like real estate and accounts receivable. From there, digital proofs of ownership are generated, and they can be traded like stocks and bonds. Blockchain, the distributed ledger technology behind bitcoin, is used to verify ownership.

The association will seek to propose rules for self-regulation by next March, aiming for approval from the Financial Services Agency.

How well the organization does in establishing a framework for protecting investors will play a role in determining security token offerings' viability in Japan. Unregulated initial coin offerings -- a similar blockchain-based investment arrangement -- flourished for a time, only to lose momentum amid a rash of fraud cases.

Other associations have formed around security tokens, but they have lacked the involvement of brokerages, presenting a hurdle to FSA approval as self-regulating bodies.

The securities watchdog will choose an association to work with to develop regulatory proposals and other guidelines for these offerings.