South Korea approved single-stock leveraged ETFs in January. By mid-2025, regulators are already hitting the pause button.
The Financial Services Commission (FSC) is temporarily stopping the expansion of new single-stock leveraged ETFs and raising deposit requirements for leveraged semiconductor funds. The move comes after extreme volatility in products tied to Samsung Electronics and SK hynix, the two giants that essentially are the Korean stock market’s center of gravity.
From green light to yellow light in record time
The original approval back in January was supposed to be a modernization play. South Korean regulators wanted to keep domestic capital from flowing overseas to chase leveraged products already available on US exchanges. The logic was straightforward: if Korean investors were going to trade leveraged single-stock ETFs anyway, better to have them do it on home turf where local rules apply.
One ETF linked to SK hynix reportedly moved by 40% in a single day.
