Korea Financial Services Commission: If demand for single-stock leveraged ETFs does not cool down, it will consider setting individual investment limit caps

Deep Tide TechFlow news: On July 28, Lee Eo-yeon, chair of the Financial Services Commission of South Korea, announced that if demand for single-stock leveraged ETFs fails to cool sufficiently, regulators will study additional supervisory measures, including personal investment limit restrictions.

It is understood that South Korea may limit single-stock leveraged ETF investment size to no more than 20% of an individual’s total financial investment assets, and assess further raising investor eligibility thresholds, including introducing periodic re-education, simulated trading, and minimum investment experience requirements.

At the same time, the Financial Services Commission of South Korea has required fund companies to stagger ETF rebalancing timing to avoid concentrated reshuffling at the close that could amplify market volatility. It also called on liquidity providers (LPs) to reasonably control their quote sizes and trading frequency to reduce unnecessary transactions. The Financial Services Commission of South Korea had 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.