South Korean financial authorities are considering advancing the implementation of increased deposit requirements for single-stock leveraged ETFs to the end of this month, following President Lee Jae-myung's directive on July 21. The Financial Investment Association held a working-level meeting on July 21 with securities firms' IT staff, Korea Exchange, and KOSCOM to review preparation for the new system. President Lee instructed officials to swiftly implement bold measures during a cabinet meeting on July 21, responding to criticism of the supplementary measures for single-stock leveraged ETFs.
President Lee Directs Swift Implementation of ETF Measures
President Lee Jae-myung addressed the single-stock leveraged ETF supplementary measures during the cabinet meeting on July 21, stating "there are criticisms about whether this will be sufficient" and directing officials to "swiftly implement bold response measures." The meeting reviewed the Financial Services Commission's announced supplementary plan and checked preparation status for implementing the measures in computer systems.
Financial Authorities Advance Implementation Timeline
Authorities originally considered implementing the increased basic deposit requirement in early next month but are now reviewing advancing it to the end of this month. The actual implementation timing and application method will be finalized by financial authorities. A financial investment industry official stated the July 21 meeting discussed practical preparation matters such as how to implement the basic deposit system in computer systems, noting that implementation timing and schedule are matters for the government and related agencies to decide.
New Deposit Requirements Set at 30 Million Won
Under the new standard, investors seeking to newly purchase or add to single-stock leveraged ETF positions must hold 30 million won in basic deposits in cash, replacing the previous 10 million won requirement. Securities substitutes such as stocks and bonds are currently accepted as basic deposits, but authorities are pursuing a plan to accept only cash going forward. Financial authorities are also reviewing advancing the implementation timing of the measure to not recognize securities substitutes as basic deposits.
FAQ
What did President Lee Jae-myung direct on July 21 regarding single-stock leveraged ETFs?
President Lee Jae-myung directed officials during a cabinet meeting on July 21 to swiftly implement bold response measures for single-stock leveraged ETF supplementary plans, stating there are criticisms about whether the current measures will be sufficient.
How much will the basic deposit requirement increase for single-stock leveraged ETFs?
The basic deposit requirement will increase from 10 million won to 30 million won in cash for investors seeking to newly purchase or add to single-stock leveraged ETF positions, with securities substitutes no longer accepted as deposits.
