South Korea Considers New Limits on Leveraged ETFs

South Korea leveraged ETFs could face further restrictions as regulators seek to reduce market volatility and strengthen protection for retail investors.

Finance Minister Koo Yun-cheol and senior financial officials recently discussed proposals that could limit single-stock leveraged exchange-traded funds to 20% of an individual's investment portfolio.

Officials said these products had contributed to heightened market volatility and agreed that further safeguards should be introduced.

The proposals build on earlier regulatory measures targeting high-risk leveraged investment products and reflect growing concern over speculative retail trading.

Authorities are expected to examine portfolio limits alongside other investor protection measures before announcing final rules designed to improve market stability while reducing excessive risk-taking by individual investors.