Top economic policymakers pose before a market conditions review meeting at the Korea Federation of Banks in Seoul, Thursday. From left are Financial Supervisory Service Gov. Lee Chan-jin, Bank of Korea Gov. Shin Hyun-song, Finance Minister Koo Yun-cheol and Financial Services Commission Chairman Lee Eog-weon. Courtesy of Ministry of Finance and Economy
Korea will triple the minimum deposit for single-stock leveraged exchange-traded funds (ETFs) to 30 million won ($20,303) from the current 10 million won as regulators seek to curb speculative trading in the products.
Investors will be required to pay the full amount in cash. Previously, investors could meet up to 70 percent of the 10 million won deposit requirement with the value of stocks they already owned.
The measures were announced Thursday after the country's top economic policymakers, known collectively as the F4, agreed at a meeting in Seoul to tighten oversight of single-stock leveraged ETFs tracking Samsung Electronics and SK hynix. The group comprises the Ministry of Finance and Economy, the Financial Services Commission, the Financial Supervisory Service and the Bank of Korea.
Regulators agreed to temporarily halt new product launches, ban advertising for existing products and raise the minimum order size to 20 units from one until market conditions stabilize. They plan to strengthen risk-disclosure requirements and investor education as well.
