Web3: South Korea Requires New Investors in Leveraged ETFs to Complete Simulation Trading First

CoinWorld reports:

South Korea is continuing to tighten access for retail investors to high-risk leveraged products. According to the latest requirements from the Financial Services Commission of South Korea, new investors must first complete free simulation trading on the Korea Exchange's website before purchasing a single leveraged ETF. The new regulation will take effect on August 19 and will cover both domestic and foreign related investment products.

Simulation Trading Becomes a New Barrier

Under the new rules, new investors must complete at least 5 days and a total of 5 hours of simulation trading before they can buy a single leveraged ETF. This move by regulators indicates that the entry requirements for such products are further aligning with those for derivatives and short selling.

Recently, South Korean regulatory authorities have continuously raised related thresholds. Previously, the minimum cash deposit requirement for a single stock leveraged ETF was increased to 30 million won, and the online training duration for new investors was extended to 3 hours.

Transaction Volume Drops Significantly in the Short Term

Following the tightening of regulations, market trading activity has shown signs of cooling down. Since the cash threshold was raised on July 31, the transaction volume for a single stock leveraged ETF has dropped from 12.4 trillion won on July 30 to 700 billion won on August 11, a decline of over 90% in a short period.

This change indicates that the cash threshold and training requirements have directly constrained retail participation, leading to a noticeable decrease in the trading activity of high-volatility products.

South Korea Continues to Restrict High-Risk Trading

In recent years, South Korean regulators have consistently limited individual investors' access to high-risk trading through capital requirements, investor education, and simulation trading. Previously, individuals participating in derivatives trading and stock short selling were also required to meet similar simulation trading conditions.

The expansion of simulation trading requirements to single leveraged ETFs shows that South Korea is gradually establishing a more comprehensive access system for high-risk products. Against the backdrop of significant volatility in related products and concerns over retail investor losses, regulatory focus is shifting towards pre-emptively restricting participation qualifications.

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