South Korea plans to impose individual investment limits on leveraged ETFs, with over 1.2 million retail investor accounts reaching margin call lines in July

(1) The South Korean financial regulatory authorities have decided that if excessive investment in single-stock leveraged products does not subside, they will introduce additional regulatory measures, including setting investment limits for individual investors. The authorities are currently focusing on a proposal to restrict single-stock leveraged investments to within 20% of the total investment in all financial products.(2) As of July 13, the cumulative scale of forced liquidations in July has reached KRW 344.2 billion (approximately RMB 1.57 billion), with over 1.2 million leveraged retail accounts reaching the margin call threshold.(3) Among them, around 320,000 to 360,000 accounts have been fully forcibly liquidated by brokerages, with some accounts even showing negative balances owed to the brokers, indicating that the risks of leveraged products have already caused a serious impact on retail investors.