South Korea Raises Leveraged ETF Cash Margin to 30 Million Won

South Korean retail investors have embraced leveraged trading, raising concerns that single-stock leveraged exchange-traded funds could amplify market swings and trigger repeated volatility halts. The Financial Services Commission is tightening safeguards as trading activity heats up, seeking to limit the risks that highly leveraged positions pose to individual investors and broader market stability.

The FSC said the new rules will take effect early on July 31, raising the minimum margin for single-stock leveraged ETFs to 30 million won and requiring the entire amount to be posted in cash. Market participants worry that retail investors unable to meet the higher requirement by the deadline could face forced liquidation, potentially unleashing concentrated selling and intensifying near-term volatility.