The South Korea Financial Services Commission announced a package of measures to strengthen oversight of single-stock leveraged exchange-traded funds and exchange-traded notes after rapid growth in trading and market capitalization raised concerns about share price volatility and investor losses. The immediate steps temporarily suspend new listings of single-stock leveraged products, including inverse and covered call products, and bar securities firms and asset managers from advertising or marketing products already listed. The package also tightens investor protection and market management rules. For all ETFs and ETNs, the premium or discount management threshold for liquidity providers will be reduced to 2% from 3% in August, and the Korea Exchange will be given a basis to restrict liquidity provision on newly listed items after breaches. Asset managers may also face restrictions on new ETF listings if products they manage fail to trade within the exchange's acceptable premium or discount range. The investment watchlist process for ETFs with repeated excessive disparate ratios will be shortened from three stages to two. Investor safeguards for both domestic and overseas-listed single-stock leveraged products will be strengthened through a new additional hour of prior learning, bringing the total to three hours, stricter chapter testing with a 60% pass mark, and mobile trading system alerts that automatically notify holders of losses and loss rates unless they opt out. Demand controls will also be tightened. The minimum deposit for new or additional investment in domestic and overseas-listed single-stock leveraged products will rise to KRW30 million from KRW10 million around August 5, and from around August 19 only cash will count toward that threshold, excluding substitute securities. Securities firms will no longer be allowed to ease the minimum deposit requirement based on trading experience, although they may impose higher thresholds. In November, the minimum trading lot for domestically listed single-stock leveraged products is expected to increase from one share to 20 shares. Measures that do not require rule changes or system work will be implemented immediately, while the remainder will follow from August, and firms that miss system development deadlines may be restricted from making new offerings.
South Korea Financial Services Commission2026-07-16
South Korea Financial Services Commission tightens single-stock leveraged product controls, suspends new listings and raises minimum deposit to KRW30 million
The South Korea Financial Services Commission unveiled measures to curb risks in single-stock leveraged ETFs and ETNs after rapid market growth. New listings and marketing are being halted immediately, while August changes will tighten premium and discount controls, increase prior learning requirements and raise the minimum deposit to KRW30 million in cash. A higher minimum trading lot for domestic products is planned for November.