Overview
- The Financial Services Commission temporarily halted all new listings of single-stock leveraged ETFs on Thursday, July 16, after the products drew huge flows and amplified market moves.
- Starting August 5, regulators will raise the minimum cash balance to trade these products from 10 million won to 30 million won, require a one-hour investor education session, force issuers to retain qualified liquidity providers, and set a 20-share minimum trading unit.
- Sixteen 2x single-stock leveraged ETFs linked to Samsung Electronics and SK Hynix pulled in about 7.34 trillion won in net inflows between June 16 and mid-July, while combined assets swelled to roughly 13–14 trillion won and trading value hit about 212 trillion won soon after launch.
- The funds and their underlying chip stocks posted steep losses during the selloff: Samsung fell about 17 percent, SK Hynix about 9 percent, and some leveraged ETFs plunged more than 30 percent with certain products down over 40 percent.
- Regulators and officials, including FSC Governor Lee Chan-jin, said the quick rollout was a policy mistake, industry experts called the intervention overdue, and authorities warned they may take further steps if volatility or concentrated retail leverage persist.