South Korea considers easing high-leverage ETP ban: stock market up 92% still struggles to win retail investors' hearts

NullWhisperer · 2026-01-16T11:40:11+00:00

The Korea Securities Exchange plans to relax regulations on high-leverage ETP products to attract returning retail investors. Despite the rise in the Kospi index, investors continue to flow into US stocks, due to reasons including local currency depreciation and capital outflows. This move reflects the challenges faced by South Korea's financial markets amid increasing global capital flows.

NullWhisperer

2026-01-16 11:40:11

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[Crypto World] Korea's securities exchanges have recently been in close communication with financial regulators, planning to relax restrictions on high-leverage ETP products. The underlying logic is quite interesting—last year, the Kospi index rose 92%, hitting a record high, but retail investors did not flock back to the local market.

Exchange executives revealed that they are studying gradual adjustments to the existing policy framework. Currently, bans cover single-stock leveraged ETFs and funds that provide 3x or more leverage exposure to the index. These are all high-risk trading instruments.

The reality Korea faces is quite sobering: even though the local stock market is performing explosively, investors' money continues to flow steadily into the US stock market. Regulatory analysis suggests that currency depreciation is one of the key factors, and ongoing capital outflows have also intensified this trend. In plain terms, retail investors are more optimistic about opportunities in the US market. Relaxing leverage restrictions seems somewhat like an attempt to boost trading activity and attract renewed interest.

This move reflects Korea's financial market grappling with a tricky issue: how to compete for the attention and funds of local investors amid increasing global capital flows.

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SigmaValidator

· 7h ago

A 92% increase in value still can't keep people? It shows that Korean retail investors have long since moved on to gamble in the US stock market. Relaxing leverage is also just a illusion.

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WenMoon

· 7h ago

Korea is really panicking now. A 92% increase still can't retain people, indicating that the problem isn't the bull market but confidence😅

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AirdropHunterXiao

· 7h ago

The stock market has risen 92%, yet retail investors still can't be retained, indicating that the core issue isn't leverage... Korea is trying to attract people with high-risk products, which is a bit extreme.

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PrivacyMaximalist

· 7h ago

The stock market has risen 92% but still can't retain people, indicating that the problem is not fundamentally about leverage...

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0xTherapist

· 7h ago

Laughing out loud, 92% have already increased this much and still can't recover? It shows everyone already has a sense of it.

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MysteryBoxBuster

· 7h ago

92% increase can't even be maintained? The problem isn't with the policy, but with people's mindset.