South Korea bans new single‑stock leveraged ETFs amid market turbulence

South Korean financial regulators announced a temporary suspension of all new single‑stock leveraged exchange‑traded funds linked to Samsung Electronics and SK Hynix. The measures also raise the minimum cash margin for existing funds from 10 million won to 30 million won, increase the trading unit from one share to 20 shares, impose a one‑hour pre‑trade education course and tighten the tracking‑error limit to 2 %. The action follows weeks of extreme KOSPI volatility – a roughly 25 % decline from its June peak – after leveraged ETFs amplified price swings in the two semiconductor giants, which together account for about half of the index. The products, whose assets exceed 10 trillion won, have triggered 19 side‑car trading halts and fueled concerns that a rapid unwind could shock the market. President Lee Jae‑Myung ordered the response, with Finance Minister Koo Yun‑cheol and the Financial Services Commission involved. Similar concerns were voiced in Taiwan, where the market fell more than 2,000 points after the Korean products’ launch, prompting Taiwanese regulators to warn against comparable leveraged ETFs.