REGULATORY CURBS:
Seoul’s mandatory mock trading course adds to other measures that aim to deter investors from trading the products, which have been effective
An onerous mock trading course is becoming an effective tool for South Korea to cool investor fervor over risky products that have turned the country’s US$4.3 trillion stock market extremely volatile.Leveraged exchange-traded funds (ETFs) targeting twice the daily returns of chipmakers Samsung Electronics Co and SK Hynix Inc have seen their trading value collapse to 4 percent of its June peak and are set for their first monthly outflow.Key to sapping demand has been a series of regulatory tightening moves, most recently a rule to complete five-day simulated trading. Investors must download a Windows-only program on PCs and spend at least one hour a day learning the ropes — and the risks — of leveraged trading with virtual cash.
Currency traders work near a screen showing the KOSPI and the foreign exchange rate between the US dollar and the South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul on Friday.
Interviews with several South Korean retail investors suggested that the requirement, effective on Aug. 19, is too cumbersome to meet.Gyeonggi Province resident Kim Jung-hoon said his first reaction to the mandatory mock trading was that he would not attempt it, as it was “too much of a hassle.”
