Korean securities firms are discussing raising the minimum deposit requirements for leveraged ETFs focused on chip stocks.

Odaily reported that the Korea Financial Investment Association stated that CEOs of 10 major asset management companies in the country discussed investor protection measures for single-stock leveraged ETFs, including raising the minimum deposit requirements and diversifying rebalancing trading times. According to a statement released by the association, participants agreed on the necessity of increasing the minimum deposit requirement for investing in such leveraged products from the current level of 10 million won ($6,714).

To reduce the market impact of daily rebalancing trades, which are concentrated near the market close, the asset management companies indicated that efforts are needed to spread rebalancing activities across different times of the trading day. They also noted the need to strengthen the role of liquidity providers as market stabilizers.

The Korea Financial Investment Association, citing data from the Korea Capital Market Institute, estimated that the daily stock trading volume required for rebalancing since the launch of these related leveraged ETFs is approximately between 700 billion and 2.1 trillion won. (Sina Finance)