South Korea Imposes Exam for Leveraged Trading

The Financial Services Commission (FSC) approved a new rule on August 12 requiring individuals who have never traded leveraged products to complete at least 5 hours of simulated trading before investing. This requirement, which will take effect on August 19 for leveraged ETFs and ETNs, aims to familiarize investors with the specifics of these products. The requirements include a minimum deposit of 30 million won and a minimum lot size of 20 shares. This decision follows a crash that resulted in losses of nearly $38.7 billion, affecting approximately 320,000 to 360,000 investors. Korean households invested 49 times more in stocks between 2020 and 2025 than in the previous nine years, with 78 trillion won injected into the Kospi in May and June. The question remains: is this measure an effective solution to market volatility and the risks of leveraged products?

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