Deputy Prime Minister Koo Yoon-cheol to Strengthen Oversight of Leveraged Stock Products

Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-cheol announced on the 29th, following an emergency joint market situation review meeting with relevant agencies, that total volume management will be implemented for single-stock leveraged products, including setting individual investment limits. The meeting was attended by the Governor of the Bank of Korea, the Chairman of the Financial Services Commission, and the Governor of the Financial Supervisory Service, to assess key risk factors in the KOSPI and KOSDAQ markets.

This measure is designed to suppress the phenomenon of funds concentrating in specific products and to mitigate stock market volatility. Recently, cases have occurred where the stock prices of certain companies, underpinned by high-leverage products, experienced sharp fluctuations regardless of market conditions due to a surge in investment funds into high-multiple products based on these specific stocks. The Ministry of Economy and Finance analyzed that the supply-demand imbalance caused by single-stock leveraged products is amplifying market volatility and undermining the soundness of the capital market, and therefore decided to create an investment environment centered on actual demand by managing access to high-risk products.

According to the detailed plan, the individual investment limit for single-stock leveraged products will be restricted to within 20% of the total investment amount. The funds an individual investor can deploy into a specific single-stock leveraged product will be limited to less than one-fifth of their total investment. Furthermore, starting from the 31st, a basic deposit of 30 million won will be required for additional purchases of these products, and measures are being pursued to impose additional fees on excessive orders and short-term trading.

The Financial Services Commission and the Financial Supervisory Service will conduct system checks and distribute guidelines to minimize confusion during the initial implementation phase of the system. The government plans to monitor market conditions in real-time.