Seoul: The country's financial regulator announced on Friday that the minimum deposit requirement for investors in single-stock leveraged exchange-traded funds (ETFs) will be increased, effective later this month. This decision is a part of broader measures aimed at ensuring market stability and providing protection to investors amid the current extreme market volatility.

According to Yonhap News Agency, the Financial Services Commission (FSC) had earlier indicated that these measures would be implemented early next month. However, President Lee Jae Myung has urged for their swift execution. As part of these new regulations, the listing of new ETFs that track Samsung Electronics and SK hynix will face a temporary suspension. Additionally, the minimum deposit requirement for investors in single-stock leveraged ETFs will be raised to 30 million won (approximately US$20,000) in cash, up from the current 10 million won in a combination of stocks and cash.

Furthermore, investors will now have the option to trade in batches of 20 shares within the leveraged ETFs, a move that the regulator believes will help decrease turnover. These leveraged ETFs, which were launched in May this year, double the daily movements of the underlying stocks, leading to significant market fluctuations.

Retail investors have shown a keen interest in trading these leveraged ETFs, particularly those with underlying assets tied to the chipmakers Samsung and SK hynix. Both companies have experienced a bull run, driven by the ongoing global boom in artificial intelligence (AI).