Financial Authorities Prepare and Announce Measures on Single-Stock Leveraged Products (ETFs and ETNs)

The Financial Services Commission announced that the government and related authorities have prepared and unveiled a set of measures intended to improve the management of single-stock leveraged products (exchange-traded funds and exchange-traded notes) at the joint market situation review meeting held on July 16.

With various types of leveraged products available for trading in overseas markets, such as 3x leveraged products and single-stock leveraged products, from 2025, single-stock leveraged products having domestically listed stocks as underlying assets began to list in Hong Kong. Meanwhile, since there were no such products available in the domestic market, it was pointed out that domestic investors had no other option but to directly invest in these overseas listed products that provided relatively weaker levels of investor protection mechanisms. The rapid growth in the size of the overseas market presented concerns about the possibility of a continuously growing number of domestic investors making investments in these overseas listed products having domestically listed stocks as underlying assets. Therefore, the FSC sought to introduce single-stock leveraged products (ETFs and ETNs) in the domestic market by removing the regulatory inconsistency that existed between the domestic and overseas markets to make Korean capital markets more attractable and provide more diverse investment options for investors and to ensure the provision of strengthened investor protection mechanisms under the domestic regulatory framework for investing in single-stock leveraged products at home.