KOREA PLANS TO RAISE THE SINGLE-STOCK LEVERAGE ETF THRESHOLD IN SEPTEMBER, WITH THE SMALLEST TRADING UNIT TO 20 SHARES

ON 12 AUGUST, THE KOREA INSTITUTE FOR FOREIGN AFFAIRS (KONXIN) INTRODUCED AN AMENDMENT TO THE RULES FOR THE IMPLEMENTATION OF THE PROVISIONS FOR THE CONDUCT OF SECURITIES MARKETS, INCREASING THE MINIMUM TRADING UNIT OF THE SINGLE-STOCK LEVERAGE ETF FROM ONE CURRENT SHARE TO 20 SHARES AND ETN FROM ONE SECURITY TO 20 SECURITIES, AND IS CURRENTLY SEEKING MARKET ADVICE. ACCORDING TO THE INFORMATION RECEIVED, THE FINANCIAL REGULATORY AUTHORITY OF KOREA HAD PLANNED TO IMPLEMENT THE MEASURE IN NOVEMBER, BUT THE EXCHANGE WAS PUSHING FASTER THAN NEXT MONTH, GIVEN THE WARMING OF THE SPECULATIVE TRADE IN SINGLE-STOCK LEVERAGE PRODUCTS, WHICH REQUIRED EARLY COOLING. IN ADDITION TO INCREASING THE NUMBER OF TRADING UNITS, KOREAN REGULATORS WILL ALSO STRENGTHEN INVESTOR PROTECTION MEASURES BY COMPLETING AT LEAST FIVE TRADING DAYS, ONE HOUR A DAY AND FIVE HOURS A YEAR, BEFORE NEW ENTRANTS CAN PARTICIPATE IN A SINGLE-STOCK LEVERAGE TRADE。