SEOUL — South Korea's financial regulators moved Thursday to temporarily block any new single-stock leveraged exchange-traded funds tied to Samsung Electronics and SK Hynix while sharply raising the requirements for investors already trading the products. The measures aim to reduce the risk that these vehicles will continue to amplify swings in the Kospi, the benchmark index that has seesawed violently since the products debuted in late May.
The Financial Services Commission and other regulators said they will suspend the launch of additional products and related promotional activities "until market conditions stabilize." At the same time, authorities are raising the minimum cash deposit required to trade the existing funds to 30 million won ($20,300) from 10 million won, effective in coming weeks. The minimum trading unit will jump to 20 shares from one, and investors will face a new one-hour advanced education course on top of the existing two-hour mandatory program. Those who fail the mid-course assessment must repeat sections of the training.
