South Korea suspends the listing of new single-stock leveraged ETF products, raising the margin requirement threefold to 30 million won.

PANews July 16, according to Sina Finance, citing reports from South Korean media including Yonhap News Agency, the Korea Financial Services Commission said today that, as additional measures to address the risks of stock-specific leveraged ETFs of Samsung Electronics and SK Hynix, the regulator will suspend the listing of such new products and prohibit related advertising and promotion. In addition, the basic margin required to invest in such products will be raised from the current 10 million won to 30 million won; only cash may be counted toward the basic margin, and substitute collateral securities other than cash (such as government bonds) will no longer be included in the margin scope. The measure to raise the basic margin requirement is planned to take effect in August. The regulator will also strengthen management of ETF premium/discount rates, tightening the current securities companies’ management standard for premium/discount rates from 3% to 2%. In addition, the investor education time required to invest in leveraged stock products will be extended from the current 2 hours to 3 hours. The regulator also plans to temporarily increase the minimum trading unit for leveraged stock products from the current 1 share to 20 shares.