South Korea Tightens Single-Stock Leverage Rules, Mandating 5 Hours Simulated Trading

New regulations effective August 19 impose stricter ETF deviation limits and require retail investors to complete 5 hours of simulated trading for single-stock leverage products.

Woofun AI reports that the South Korean Financial Services Commission approved regulatory revisions on August 12, taking effect on August 19. The new framework extends simulated trading requirements to single-stock leverage products, including inverse instruments listed domestically or abroad. Retail investors must complete at least five trading days of simulation, with each session exceeding one hour, totaling no less than five hours, to demonstrate understanding of leverage risks.

Additionally, price deviation thresholds for ETFs and ETNs are reduced from 3% to 2% for local listings and from 6% to 5% for overseas listings. Liquidity providers found to have deliberately or negligently violated these rules face restrictions on providing new liquidity.