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

Odaily Planet Daily News The Korea Financial Investment Association stated that the CEOs of 10 major asset management companies in the country discussed introducing investor protection measures for single-stock leveraged ETFs, including raising the minimum deposit requirements and diversifying the rebalancing trading times. According to a statement issued by the association, the participants agreed on the need to increase the minimum deposit requirement for investing in such leveraged products from the current level of 10 million Korean won (USD 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 time periods of the trading day. They also pointed out the need to strengthen the market stabilizing role of liquidity providers.

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