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South Korea Curbs ETF Speculation

24 Jul

Summary

Deposit requirement for leveraged ETFs increased to 30 million won.
New rules aim to curb speculative trading by retail investors.
Implementation accelerated to July 31 due to market volatility.

South Korea's financial regulator has announced an accelerated implementation of stricter deposit requirements for retail investors trading single-stock leveraged exchange-traded funds (ETFs). The new rule, mandating a 30 million won cash deposit, will now take effect on July 31, moving up from an initial August timeline.

This decisive action by the Financial Services Commission aims to address recent market volatility. The introduction of domestic single-stock leveraged ETFs, particularly those linked to prominent companies like Samsung Electronics and SK Hynix in late May, has drawn criticism for contributing to market fluctuations and encouraging speculative trading among retail investors.

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