South Korean government: Will explore ways to minimize the market impact of leveraged products during specific periods and reduce the deviation rate between ETF net asset value and actual closing price.
10 hours ago
Kim Yong-beom, Chief of Policy Office of South Korea’s Presidential Office, clearly stated today on a KBS program that delisting single-stock leveraged ETFs—blamed as a main driver of recent sharp stock price swings—is "unthinkable". Investors are deeply engaged in these products, whose total size exceeds 10 trillion won. "Forcing delisting would itself cause massive market shocks, and we would also have to absorb selling pressure," he said. Kim also affirmed supplementary measures recently rolled out by South Korea’s financial regulators, including raising the margin requirement for leveraged ETFs to 30 million won in cash and setting a minimum trading unit of 20 shares. He noted that the measures "have largely addressed issues raised by the market and will mitigate side effects significantly once implemented." Kim further pointed out that leveraged products amplify their market impact twice over during downturns, calling for further discussions with regulators, asset management firms, and securities companies on minimizing market shocks during specific periods—especially narrowing the deviation between ETF net asset value (NAV) and actual closing price, and properly managing selling pressure generated to reduce this gap.
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2 hours ago
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