TL;DR
- South Korean regulators will require a 1-hour online course to invest in foreign leveraged ETFs.
- The measure aims to curb the “buying frenzy” of retail investors, who reached a record in October.
- The new rule, effective December 15, aligns the rules for foreign products with local ones.
South Korea’s Financial Supervisory Service (FSS) wants to control the buying frenzy of high-risk ETFs by local investors, and to that end, it has announced a regulatory intervention. Starting December 15, South Korean investors will be required to complete a one-hour online training session before investing in leveraged or inverse ETFs listed outside the country.
The regulator seeks to align the requirements for foreign products with those for local products, which is why they are proposing the new rules for leveraged ETFs in South Korea. In addition to the online course, those seeking to buy derivative products in foreign markets will also be required to complete a three-hour mock-trading (trading simulation) program.
The measure responds to the strong risk-investment culture in the country, where retail investors have flooded into U.S.-listed ETFs that offer exposure to tech stocks.
Record investment drives the new regulation
This recent investor frenzy is no exaggeration. In fact, data from Bloomberg shows that direct investment by South Korean retail investors in U.S. stocks and ETFs has reached a new all-time high in 2025, totaling $28.3 billion so far this year. In October alone, investors added $6.9 billion, a historic monthly record since 2011.
The hunger and frenzy are centered on high-risk products. 14 of the top 21 foreign ETFs purchased in September offered leveraged or inverse exposure, including the Direxion Daily Semiconductor Bull 3X SHS ETF ($1.27 billion) and the Direxion Daily TSLA Bull 2X Shares ($1.01 billion).
Despite the regulator’s intervention, the overall appetite for risk might not diminish. Bora Kim, APAC strategy director at Leverage Shares Plc, stated that the new policy will allow investors to recognize the “compounding effects” and strategies of these products, something they often ignore.
Although the training could impact risk-neutral investors, the general appetite is expected to remain. The new rules for leveraged ETFs in South Korea seek to educate on how these products amplify both gains and losses.
