South Korea Leveraged ETFs Face Stricter Marketing and Trading Rules

New South Korea leveraged ETFs are facing tighter regulatory controls after the Financial Supervisory Service ordered asset managers to halt advertising for domestically listed single-stock leveraged and inverse exchange-traded funds with immediate effect.

The directive follows broader investor protection measures requiring buyers to deposit at least KRW30m (USD20,291), purchase a minimum of 20 shares and complete three hours of mandatory education before trading the products.

Regulators have also suspended approvals for additional single-stock leveraged ETFs until market conditions stabilise.

Industry participants said the notice was issued late on a Thursday, leaving insufficient time to remove online promotions and outdoor advertising before the weekend.

The Financial Supervisory Service said immediate implementation was necessary to prevent continued promotion of products regarded as carrying elevated investment risks.

The measures form part of South Korea's wider effort to strengthen retail investor protection within increasingly sophisticated capital markets.