Strengthened Investor Protection Measures to Take Effect from August 19 for Single-Stock Leveraged Products

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Strengthened Investor Protection Measures to Take Effect from August 19 for Single-Stock Leveraged Products Aug 12, 2026

The Financial Services Commission announced that a set of strengthened investor protection measures will take effect for single-stock leveraged (including inverse) products from August 19. As a follow-up to the previously announced measures (July 16 and July 29), the premium/discount rate (disparate ratio) management duty of securities firms will be strengthened and investors will need to complete a mock trading session before being able to invest in single-stock leveraged products from August 19.

Key Measures

(1) Strengthening the management of premium/discount rates

On August 12, the FSC approved a revision to the Korea Exchange (KRX)’s KOSPI market regulations bolstering securities firms’ premium/discount rate management duty on all exchange-traded funds (ETFs) and exchange-traded notes (ETNs) from the current level of 3 percent to 2 percent for domestically listed products and from the current level of 6 percent to 5 percent for overseas listed products.

Along this line, the KRX is currently working on updating its own rules to effectively restrict securities firms (liquidity providers) that are found to have intentionally or repeatedly failed to observe the premium/discount rate management duty from newly supplying liquidity in the market. In addition, the process for designating an item to be included in the investment watchlist will be streamlined from the current three-stage process to a two-stage process.

The strengthening of the premium/discount rate management duty is expected to help improve investor protection as there will be less chances that leveraged products are purchased at a higher price than the value of their underlying assets and sold at a lower price subsequently.

(2) Offering a mock trading session for single-stock leveraged products

The KRX will expand its mock trading service offering currently in place for futures and options traders and short-sellers for those investing in single-stock leveraged products (both domestically and overseas listed products).

The free offering of mock trading session will help investors to gain sufficient experience prior to making actual investment and is intended to bolster investor protection. As a result, from August 19, retail investors planning to make new investment in either domestically listed or overseas listed single-stock leveraged products should have at least KRW30 million in minimum deposit (cash amount), have completed a total of three-hours of prior learning sessions (including a two-hour in-depth learning course), and have taken a mock trading session offered by the KRX before they become eligible to invest in single-stock leveraged products.

The mock trading service will be accessible through the KRX website and investors will be required to take mock trading sessions for at least one hour a day for minimum five trading days (does not have to be consecutive trading days) to gain sufficient experience and insight into the particular traits (e.g. negative compounding effect) of single-stock leveraged products.

Investors planning to make new investment in overseas-listed single-stock leveraged products will also be required to complete a mock trading service.

Further Plan

Since the minimum deposit requirement was raised to KRW30 million in cash value from July 31, the volume of transactions for single-stock leveraged products has dropped significantly (from KRW12.4 trillion on July 30 to KRW0.7 trillion on August 11). Meanwhile, single-stock leveraged products saw a net redemption of KRW1.4 trillion from August 4 and 10.

The financial authorities will continue to closely monitor market situation and make sure to swiftly implement the measures on single-stock leveraged products.

• Please refer to the attached PDF for details.

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