South Korea Raises Single-Stock Leveraged ETF Margin Deposit to $3M, Sets August Implementation

According to South Korea's Ministry of Finance, the government announced measures on July 16 to address volatility in single-stock leveraged exchange-traded funds (ETFs). The basic margin deposit requirement for trading single-stock leveraged ETFs will increase from 10 million Korean won to 30 million won, effective in August. Beginning November, the minimum trading unit will expand from one share to 20 shares to reduce speculative trading activity.

Currently, investors can use held stocks valued at up to 70% of the margin requirement to cover the deposit; new rules will require the full 30 million won in cash. These regulatory changes follow the launch of single-stock leveraged ETFs, which coincided with heightened market volatility including five circuit breakers and 17 trading halts.