South Korea Raises Leverage ETF Deposit Requirement to 30M Won from 10M, Targeting 33% Decrease in Market Cap

According to South Korean financial authorities' announcement on July 16, single-stock leverage ETF minimum deposit requirement will increase to 30 million won from 10 million won starting August 5, with mandatory cash-only holdings from August 19. Previously, investors could use stocks, ETFs, and bonds valued at up to 70% of their market price to meet deposit requirements; the new rule eliminates this provision.

Financial regulators estimate the measure will reduce total leverage ETF market capitalization by approximately one-third, from the current 12 trillion won to 4-5 trillion won. Trading lot size will increase from 1 share to 20 shares beginning November, while mandatory advanced investor training will extend from 1 hour to 2 hours.