South Korea: Regulators Announced Tighter Measures for Single-Stock Leveraged ETFs

Research evidence excerpt

South Korea: Regulators Announced Tighter Measures for Single-Stock Leveraged ETFs

Update

July 16, 2026 09:42 AM GMT

Morgan Stanley & Co. International plc, Seoul Branch+MSouth Korea | Asia Pacific Joon Seok

Equity Analyst

Regulators Announced Tighter Joon.Seok@morganstanley.comHeewon Choi +82 2 399-4934

Heewon.Choi@morganstanley.com +82 2 399-4836

Measures for Single-Stock Minseo Kang

Research Associate

Minseo.Kang@morganstanley.com +82 2 399-4816

Leveraged ETFs

Key Takeaways

There had been building concerns over excessive leverage and high market

volatility among financial authorities, leading to a policy focus on managing risk

No investment recommendation is made with

The rule changes for single-stock leveraged ETFs were within market

respect to any of the ETFs or mutual funds

expectations, with harsher actions such as delisting or trading halts not

referenced herein. Investors should not rely on

considered

the information included in making investment

Investor concerns over volatility have increased, and these actions could provide decisions with respect to those funds.

some mitigation of market volatility

With concerns surrounding regulatory action now eased, we believe sentiment

could improve but more measures may be introduced if volatility remains high

On July 16, Korean financial regulators announced tighter rules on single-stock

leveraged ETFs in response to elevated market volatility. Key measures include: (1) a

temporary suspension of new single-stock ETF/ETN listings and a ban on advertising;

(2) tighter price-to-NAV deviation requirements (2% vs. 3% currently) for brokers

and asset managers with stronger penalties; (3) an increase in the minimum investor

deposit to W30mn from W10mn, payable fully in cash with substitute securities