South Korea will suspend the listing of new single stock leveraged exchange trading products to curb market fluctuations. Previously, demand for leveraged funds linked to Samsung Electronics and SK Hynix surged. Korea's Financial Services Commission issued a statement on Thursday saying the ban will remain in effect until market conditions stabilize. Furthermore, the authorities will also raise the minimum deposit amount for leveraged ETFs from 10 million won to 30 million won starting August 5. This is the most comprehensive measure the Korean government has launched to date to curb the retail trading frenzy. This trading boom has turned the $4.1 trillion South Korean stock market into one of the hottest and most volatile markets in the world. The decision was made after a meeting between regulators, the Ministry of Finance, and central bank officials. Previously, the market was increasingly worried that leveraged ETFs linked to Samsung and SK Hynix were causing excessive market fluctuations. Byun Je-Ho, director general of the Korea Financial Services Commission, told reporters late Thursday: “These products were initially launched domestically because they are growing rapidly overseas, and we judge that local investment is critical to increasing the attractiveness of the Korean capital market,” he said. “But since then, stock market volatility has increased.”

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