South Korea raises basic deposit for single‑stock leverage ETFs to 30 million won

South Korea’s Financial Services Commission announced that the basic deposit requirement for single‑stock leverage exchange‑traded funds (ETFs) and exchange‑traded notes (ETNs) will be raised from 10 million won to 30 million won, effective July 31. The change accelerates a plan originally slated for August and eliminates the previous practice of counting proxy securities—such as stocks, ETFs and bonds—up to 70 % of their market value toward the deposit. As a result, investors must hold at least 30 million won in cash in their accounts to purchase or add to positions in these high‑risk products, whether the underlying is a domestic giant like Samsung Electronics or SK Hynix or an overseas name such as Tesla or Nvidia.

The move follows President Lee Jae‑myung’s directive at a cabinet meeting on July 21 to act swiftly on “leveraged product” risks. The FSC indicated it will monitor market stability and may introduce additional measures if needed. A July 24 public‑opinion poll found that 59 % of respondents consider the government’s response insufficient, with many criticizing the rapid introduction of leverage ETFs earlier this year.

Securities firms that cannot meet the new cash‑only requirement by the deadline may be advised to refrain from offering new leverage‑ETF trades. The regulator also plans to increase the trade‑size unit from 11 shares to 20 shares to curb speculative turnover.