Seoul: The country's financial regulator announced a series of measures on Thursday aimed at stabilizing the market and protecting investors amidst recent extreme market volatility. The focus of these measures is on leveraged exchange-traded funds (ETFs), which have been experiencing significant fluctuations.

According to Yonhap News Agency, the Financial Services Commission (FSC) has temporarily suspended the listing of new ETFs that track Samsung Electronics and SK hynix. Additionally, the minimum deposit requirement for a single-stock leveraged ETF will be increased to 30 million won (US$20,000) in cash only, from the current 10 million won in mixed stocks and cash. This change is intended to mitigate risk and ensure that investors have a sufficient financial buffer.

Investors will now also be allowed to trade a batch of 20 shares in the leveraged ETFs, a move that the regulator believes will help reduce turnover and stabilize trading activities. These leveraged ETFs, which were introduced in May, amplify daily movements in the underlying stocks by a factor of two, contributing to the observed market swings.

Retail investors have been eager to trade these leveraged ETFs, particularly those with underlying assets tied to the performance of Samsung and SK hynix. These chipmakers have witnessed a surge in their stock prices, driven by the increasing demand and excitement around artificial intelligence technologies.

In response to the market conditions, President Lee Jae Myung on Wednesday urged regulatory authorities to implement measures to help stabilize the market, leading to the FSC's recent actions aimed at curbing volatility and protecting investors.