South Korean brokerage firms discuss raising investment threshold for chip leveraged ETFs
According to the Korea Financial Investment Association, the CEOs of ten leading Korean asset management companies held a meeting to discuss the launch of investor protection measures for single stock leveraged ETFs, including increasing the minimum investment margin and diversifying the timing of position adjustment transactions. The association issued a statement saying that all parties participating in the meeting reached a consensus and planned to increase the minimum investment access capital for such leveraged products. The current standard is 10 million won (equivalent to US$6,714). Asset management institutions stated that in order to alleviate the impact of daily position adjustment transactions concentrated on the market during the closing period, the position adjustment operations need to be spread out throughout the day's trading hours. Participating companies also proposed that the market stabilizing role of liquidity providers should be further strengthened. Citing data from the Korea Capital Market Research Institute, the Korea Financial Investment Association said that since the listing of relevant leveraged ETFs, the daily stock trading volume required for rebalancing is estimated to be approximately 700 billion to 2.1 trillion won.