‘Too much of a hassle’: Tougher rules drive retail investors from South Korean leveraged chip ETFs
Regulatory tightening moves, including a rule to complete five-day simulated trading, key to sapping demand
Tougher rules, including a five-day simulated trading requirement, have driven retail investors away from South Korean leveraged chip ETFs. The one-hour-a-day mock trading course, effective August 19, is seen as too cumbersome by many. Kim Jung-hoon, a 41-year-old from Gyeonggi province, found the hours "too much of a hassle" and the PC-only requirement a barrier.
Despite satisfying other prerequisites like a 30 million won deposit, Kim decided against proceeding. Lee, another retail investor, also struggled with the mock trading system, citing the need for a new membership account and minimum time requirements. The single-stock ETFs, which doubled the daily returns of chipstocks Samsung Electronics and SK Hynix, saw their trading value drop to 4% of its June peak and are set for their first monthly outflow.
Combined outflows reached about US$1 billion in August, with assets under management shrinking to US$5 billion from US$11.4 billion at their peak in late June. The market stabilization, however, comes at the cost of regulatory restrictions that may deter further investor participation.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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