[Edaily Reporter Shin Ha-yeon ] The trading unit for single-stock leveraged products based on SamsungElectronics(005930)and SK hynix(000660)will be increased from the current 1 share to 20 shares as early as this coming September. This measure aims to mitigate excessive volatility in single-stock leveraged products by raising the minimum trading unit.

According to the financial investment industry on the 11th, the Korea Exchange (KRX) has drafted amendments to the “Implementing Rules for the Stock Market Operating Regulations” to expand the trading unit for single-stock leveraged exchange-traded funds (ETFs) and exchange-traded notes (ETNs) to 20 shares and 20 notes, respectively, and is soliciting market feedback until the 12th.

Although this measure was originally scheduled to take effect in November, efforts are now underway to bring forward the implementation date as much as possible due to growing concerns over market overheating surrounding single-stock leveraged products.

Financial authorities and the Korea Exchange are proceeding with the relevant procedures with the goal of implementation in September, but the actual implementation date is expected to be determined based on the completion of the exchange’s amendment process for the enforcement rules and the system development by securities firms and the exchange.

To change products currently traded in units of one share to units of 20 shares, the trading system must be overhauled to prevent orders for fewer than 20 shares from being accepted. Procedures must also be established to handle fractional shares (less than 20 shares) held by existing investors. Since this requires modifying systems to allow securities firms to purchase these fractional shares, a certain amount of development time is expected to be required.

An exchange official explained, “While the government wants to implement the expansion of trading quantities as soon as possible to maximize the policy’s effectiveness, since this requires system development, implementation in August is unlikely; however, we are working to bring the implementation date forward as much as possible,” adding, “We are proceeding with the goal of implementing it in September.”

If the trading unit is expanded to 20 shares, the minimum amount required for investors to actually trade will also increase significantly. Taking a single-stock leveraged product for SamsungElectronics—which currently trades at around 10,000 won—as an example, the minimum transaction amount would rise to approximately 200,000 won. The intent is to raise the trading threshold to reduce excessive short-term trading and volatility in single-stock leveraged products.

Starting on the 19th, simulated trading will also be mandatory for new retail investors. Previously, retail investors had to complete a simulated trading course along with pre-trading education to participate in the exchange-traded derivatives market; this requirement will now be extended to single-stock leveraged products as well.

In addition, measures to strengthen the management of price deviations for securities firms acting as liquidity providers (LPs) and asset management companies operating ETFs are also scheduled to be implemented.

These measures are part of the additional regulations on single-stock leveraged products announced by the government during an emergency market situation review meeting on the 29th of last month. Previously, starting in late July, the Financial Services Commission implemented supplementary measures to protect investors, such as raising the minimum margin requirement for single-stock leveraged products from 10 million won to 30 million won and expanding the required training hours.