South Korea will mandate simulated trading for single stock leverage ETFs.

South Korea will require first-time investors participating in single-stock leveraged exchange-traded funds (ETFs) to complete simulated trading, further tightening regulatory rules for these high-risk products that exacerbate market volatility. The Financial Services Commission of South Korea announced that first-time investors in single-stock leveraged ETFs must complete at least five trading days, totaling no less than five hours of simulated trading. This new regulation will take effect from August 19 and will apply to both domestic and foreign related investments. The recent market downturn had led to the evaporation of billions of dollars in investor assets, and this measure represents the latest action by regulators to restrict ordinary individual investors from participating in leveraged ETFs. Previously, the regulatory authority had increased the minimum margin for such trades to 30 million won and extended the mandatory online training duration for new investors in single-stock leveraged products to three hours. Market critics argue that leveraged products linked to chip giants Samsung Electronics and SK Hynix have amplified the volatility of the Korean Composite Stock Price Index, prompting the regulatory agency to impose these restrictions.