Korea proposes to restrict single stock leverage trade: only professional investors, or double the reduction Bar Bar

On 29 July, according to the Korean daily newspaper Lee Eog-weon, Chairman of the Korean Financial Services Commission, indicated that “single stock leverage products”, which were alleged to be one of the incentives for sharp fluctuations in domestic stock markets, would be considered for restricting to professional investor-only transactions, if necessary. In response to a query from a Member of Parliament of the Union Democratic Party about the need to limit the investment eligibility of single-stock leverage-related products to professional investors, Mr. Li, who attended the Council's Business Report in Seoul on 29 and 29 February, responded that “if necessary, there are options to raise (the investment entry threshold) to professional investors”. Professional investors are investors with an average end-of-month balance of more than 50 million won over the last five years in financial investment products, while meeting related requirements such as income, professional qualifications, assets, etc. This statement was interpreted as suggesting that, given the high-risk nature of the single-stock leverage product, the official implication might be to consider restricting the access of ordinary bulk investors. For the programme to reduce the single-stock leverage leverage multiple, Bill Bill Li has also indicated that the bill will be reviewed by the official authorities once it is ready in Congress. “As it is true that two times (trace multiple) is too large, it is expected that if it is lowered, it will be effective in reducing market volatility.”