South Korea’s Financial Services Commission announced that cabinet-approved revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act will allow the introduction of domestically listed single-stock exchange-traded funds (ETFs) and exchange-traded notes (ETNs), alongside strengthened investor protection measures. The revisions will be promulgated and take effect from April 28. The revised framework permits single-stock ETFs tracking blue-chip stocks, with maximum exposure capped at 200 percent. Subordinate rules will set eligibility criteria for underlying stocks, including minimum thresholds for market capitalisation ratio (10 percent), trading volume (5 percent), an investment-grade rating, and derivatives trading volume (1 percent), and will allow single-stock 2x leveraged and inverse ETFs as well as single-stock covered call ETFs. Korea Exchange rule changes establish the basis for listing and provide that if the underlying stock is suspended or delisted, the related single-stock ETF or ETN will also be suspended or delisted; additional amendments expand product development by enabling single-stock and ETF weekly options, with first listings planned for June 29 and the second half of the year respectively, and by introducing daily-expiring weekly options on the KOSPI200 and KOSDAQ150 indices and ETF monthly options in the second half of the year. For single-stock leveraged ETFs and ETNs, the Korea Financial Investment Association has updated its rules to require an additional hour of intensive pre-trade education (available from April 28) and to apply this prior learning requirement to both domestically and overseas listed single-stock leveraged products. The KRW 10 million base deposit requirement currently applied to domestically listed leveraged ETFs and ETNs will also apply to overseas listed leveraged ETFs and ETNs for new investors, and product descriptions must clearly display terms such as "single-stock", "leverage" or "inverse" rather than simply "ETF". Single-stock leveraged ETFs could be listed for trading from as early as May 22 after completing securities registration and listing reviews.
South Korea Financial Services Commission 2026-04-21
South Korea Financial Services Commission allows domestically listed single-stock ETFs and ETNs with 2x leverage cap
The South Korea Financial Services Commission has approved revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act to permit domestically listed single-stock exchange-traded funds and exchange-traded notes, including 2x leveraged, inverse and covered call structures, subject to eligibility criteria and a 200 percent exposure cap. Related Korea Exchange and Korea Financial Investment Association rule changes introduce new single-stock and ETF options, extend base deposit requirements to overseas leveraged products, and mandate enhanced pre-trade education and clearer product labelling to strengthen investor protection.