South Korea freezes new single-stock leveraged ETF listings
What's new: Regulators also lifted the minimum deposit for leveraged ETFs to 30 million won from 10 million won, effective Aug. 5.
South Korea will temporarily stop new listings of single-stock leveraged exchange-traded products as regulators move to contain volatility in the local stock market. The Financial Services Commission put the freeze in place until market conditions stabilize after a rush of investor demand for funds linked to Samsung Electronics and SK Hynix. Authorities also raised the minimum deposit for leveraged ETFs to 30 million won, about $20,300, from 10 million won starting Aug. 5. The move followed a meeting of regulators, the finance ministry and central bank officials as concern grew over swings in the country’s $4.1 trillion equity market. Market participants have blamed recently launched leveraged ETFs for amplifying share-price moves through large rebalancing trades.