Regulators will impose curbs on leveraged ETFs linked to Samsung Electronics and SK hynix to reduce volatility amid recent sell-offs.
South Korea’s Financial Services Commission will introduce new restrictions on single-stock leveraged ETFs following repeated sell-offs in the Kospi and Kosdaq. The measures aim to curb volatility tied to hedging flows in underlying stocks like Samsung Electronics and SK hynix, which regulators and analysts blame for amplifying market swings.
The FSC ruled out a temporary trading suspension, citing potential side effects, but confirmed curbs are imminent. Details may include higher deposit requirements or listing restrictions. The announcement comes as both indices triggered sell-side sidecars Thursday, driven by weakness in US semiconductor stocks and geopolitical risks.
Regulators are also pursuing broader stability measures, such as improved corporate governance and higher dividends, to support market resilience. The focus remains on balancing risk mitigation with market liquidity.