South Korea Brings Forward Tougher Single-Stock Leverage Rules

South Korea’s Financial Services Commission, Financial Supervisory Service and Korea Exchange are tightening oversight of single-stock leveraged ETFs and ETNs after retail speculation amplified swings in AI-linked chip shares. The products, which seek to deliver twice the daily move in Samsung Electronics or SK hynix, debuted on May 27, 2026. Their combined market value surged to 11.9 trillion won from 4.4 trillion won in two months, heightening concerns about leverage-driven volatility and broader market stability.

The FSC said on July 24 that the tougher deposit rules would take effect on July 31, earlier than the phased rollout originally planned for August 5 and August 19. Investors making new or additional purchases must hold 30 million won in cash, up from a 10 million-won requirement that allowed a mix of cash and securities. Stocks pledged as substitute collateral, securities-backed loans and unsettled sale proceeds will be excluded; cash raised by selling shares will count only after settlement is completed on T+2.