South Korea Vows Additional Measures to Curb Leveraged ETF Demand if Needed

Deep News09:10

South Korea's Financial Services Commission (FSC) Chairman Lee Eog-weon has stated that the country is prepared to implement further measures to curb investor demand for leveraged exchange-traded funds (ETFs) if the latest restrictions prove insufficient, including the potential imposition of investment limits for individual investors.

The FSC issued a statement indicating that if the measures, which took effect on July 31, fail to adequately dampen demand, regulators will consider tightening investment requirements further. Note: South Korea has moved forward the implementation of a new rule requiring a minimum cash deposit for leveraged ETFs to July 31.

The FSC also announced that it is in discussions to accelerate the previously planned process of increasing the minimum number of trading units. Chairman Lee met with investment industry executives on Tuesday to discuss leveraged ETF issues.

Among the options under consideration are: requiring regular mandatory online training, including simulated trading courses; and limiting an individual's investment in leveraged ETFs to a specific percentage of their total investment assets.

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