South Korea Tightens Single-Stock Leveraged ETFs, First Month Shows Effect: Samsung, SK Hynix Sold Off, Retail Turnover Plunges Over 90%

August 30 news, according to South Korean media Edaily, South Korea's financial regulators raised the base margin for single-stock leveraged ETFs from 10 million KRW to 30 million KRW starting July 31, and from August 19 further required investors to complete mock trading before transactions. According to Korea Exchange data, from July 31 to August 28, South Korean retail investors net sold a total of 1.773 trillion KRW (approximately $1.3 billion) in 16 single-stock leveraged/inverse ETFs tracking Samsung Electronics and SK Hynix, with 8 products related to SK Hynix seeing net sales of 1.2415 trillion KRW and 8 products related to Samsung Electronics seeing net sales of 531.6 billion KRW. Trading activity also dropped sharply, with the average daily trading volume of the 16 ETFs falling from 11.6787 trillion KRW before regulation to 1.0059 trillion KRW in August, only about 8% of the previous level.