South Korea's financial regulator on Thursday announced tighter rules for single-stock leveraged ETFs to curb volatility and protect investors.
The Financial Services Commission on July 16 unveiled measures on leveraged exchange-traded funds to ensure market stability and protect investors amid extreme volatility.
New ETFs tracking Samsung Electronics and SK hynix will be temporarily suspended from listing. The minimum deposit for a single-stock leveraged ETF rises to 30 million won in cash only from the current 10 million won in mixed stocks and cash.
Investors will trade the leveraged ETFs in batches of 20 shares to reduce turnover. The products, launched in May, amplify daily moves in the underlying stocks by two times.
President Lee Jae Myung called for stabilization measures on July 15. The deposit changes take effect on August 5, the cash-only rule on August 19, and the trading unit change in November.
