Key facts
- South Korea's Financial Services Commission (FSC) announced new measures for leveraged ETFs.
- The FSC will suspend new ETF listings tracking Samsung Electronics and SK hynix.
- The minimum deposit requirement for single-stock leveraged ETFs is raised to 30 million won.
- Trading of leveraged ETFs will be limited to batches of 20 shares to reduce turnover.
SEOUL, July 16 (Yonhap) -- South Korea's financial regulator announced new measures on Thursday aimed at ensuring market stability and protecting investors from extreme volatility in leveraged exchange-traded funds (ETFs). The Financial Services Commission (FSC) will temporarily suspend the listing of new ETFs that track Samsung Electronics and SK hynix. Additionally, the minimum deposit requirement for investors trading single-stock leveraged ETFs will be increased to 30 million won (US$20,000) in cash only, up from the previous 10 million won which allowed a mix of stocks and cash. The regulator also stated that investors will be permitted to trade these leveraged ETFs in batches of 20 shares, a move intended to reduce turnover. Leveraged ETFs, which multiply daily movements of underlying stocks by two times, debuted in May and have been contributing to extreme market swings. Retail investors have shown a strong interest in trading leveraged ETFs tied to Samsung Electronics and SK hynix, companies that have experienced a bull run driven by the artificial intelligence boom. On Wednesday, President Lee Jae Myung had urged regulatory authorities to develop measures to stabilize the market.