From the 31st, the investment threshold for single-stock leveraged products at home and abroad, including Samsung Electronics and SK hynix, will be raised. The basic deposit will increase from 10 million won to 30 million won, and only cash—not stocks or exchange-traded funds (ETFs)—will be recognized as the deposit.
According to the financial investment industry on the 31st, from that day, a strengthened basic deposit system will apply to single-stock leveraged ETFs and exchange-traded notes (ETNs) that use Samsung Electronics, SK hynix, Tesla and others as underlying assets.
The biggest changes are the deposit amount and what qualifies. Previously, up to 70% of the market value of substitute securities in the account—such as stocks, ETFs, and bonds—was recognized as the basic deposit, but going forward, holding 30 million won in cash will be required to place a new buy order. The deposit requirement does not apply when selling products already held.
The timing of when sale proceeds are recognized as the basic deposit will also change. Previously, when substitute securities were sold, the proceeds were recognized immediately as equivalent to cash, but going forward, they will be included in the deposit starting on the second business day after the sale (T+2), when the funds actually reach the account.
Accordingly, even if an investor raises 30 million won by selling held shares, they cannot newly buy single-stock leveraged products on the day of the sale. They must wait until the sale proceeds are deposited. Loans received with the sale proceeds as collateral will also not be recognized as the basic deposit.
Financial authorities aim through this measure to curb day trading in single-stock leveraged products and reduce rapid rotation trades that quickly switch between products tied to Samsung Electronics and SK hynix. They also expect it to ease the phenomenon of intraday volatility in the underlying stocks as funds concentrate in specific large caps.
Additional regulations are also being pursued. Authorities plan to introduce an investment limit that caps the share of single-stock leveraged products within an individual's total financial investment holdings. Options under review include setting the per-account limit at around 20% of the total investment amount.
Measures to impose additional expenses on investors who excessively trade single-stock leveraged products and to introduce paper trading are also under discussion. A plan to move up the implementation—earlier than the originally scheduled November—of expanding the minimum trading unit for ETFs from 1 share to 20 shares is being considered.
Asset managers plan to spread out rebalancing transactions that had been concentrated just before the market close and to implement self-regulatory steps such as reducing the trading volume of liquidity providers (LPs) and tightening premium/discount management.