South Korea’s financial regulators are drafting an amendment to the Financial Investment Services and Capital Markets Act to create an emergency authority that would let them temporarily reduce leverage on single-stock leveraged products. The Financial Services Commission and Financial Supervisory Service would be able to cut leverage on single-stock leveraged ETFs — currently designed for 2x exposure — to 1.5x or 1x in stressed conditions to protect investors. Regulators are also considering li

South Korea’s financial regulators are drafting an amendment to the Financial Investment Services and Capital Markets Act to create an emergency authority that would let them temporarily reduce leverage on single-stock leveraged products. The Financial Services Commission and Financial Supervisory Service would be able to cut leverage on single-stock leveraged ETFs — currently designed for 2x exposure — to 1.5x or 1x in stressed conditions to protect investors. Regulators are also considering limits on leveraged investment allocations and higher initial margin requirements. YONHAP reported the moves target products seen as major contributors to sharp market volatility.