South Korea's Financial Services Commission: If Demand for Single-Stock Leveraged ETFs Does Not Cool Down, Will Consider Setting Individual Investment Quota Limits

TechFlow reports that on July 28, Korea Financial Services Commission Chairman Lee Eok-yeon announced that if market demand for single-stock leveraged ETFs fails to cool down sufficiently, regulators will study further regulatory measures, including limits on individual investment quotas.

It is reported that South Korea may limit the investment scale of single-stock leveraged ETFs to within 20% of an individual's total financial investment assets and assess further raising investor access thresholds, including introducing periodic re-education, simulated trading, and minimum investment experience requirements.

At the same time, the Korea Financial Services Commission requires fund companies to stagger ETF rebalancing (Rebalancing) timing to avoid concentrated position adjustments at the close amplifying market volatility, and calls on liquidity providers (LP) to reasonably control quotes and trading frequency to reduce unnecessary trading. The Korea Financial Services Commission previously announced that starting from July 31, the minimum margin for single-stock leveraged ETFs will be increased to 30 million won, and investor education and premium rate management will be strengthened.