Korean securities firms discuss raising minimum deposit requirements for leveraged ETFs focusing on chip stocks

Odaily Planet Daily News The Korea Financial Investment Association stated that CEOs of 10 major asset management companies in the country have discussed introducing investor protection measures for single-stock leveraged ETFs, including raising minimum deposit requirements and dispersing rebalancing transaction times. According to a statement released by the association, the participants agreed that it is necessary to raise the minimum deposit requirement for investing in such leveraged products from the current level of 10 million won ($6,714).

To reduce the impact of daily rebalancing transactions (concentrated before market close) on the market, the asset management companies stated that efforts are needed to spread rebalancing activities across different periods of the trading day. They also pointed out the need to strengthen the role of liquidity providers as market stabilizers.

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