Lee Eok-won, Chair of the Financial Services Commission, sounded an alarm in the market on July 28, 2026, warning that if demand in the overheated single-stock leveraged ETF market does not cool down, he will consider implementing an ultra-strong additional measure to limit individual investment to "20% or less" of the total investment amount.

This measure could be taken after first monitoring the effectiveness of supplementary plans, including strengthened basic deposits scheduled to be implemented on July 31, demonstrating the financial authorities' firm resolve. Despite supplementary policies announced by the Financial Services Commission on July 16, concerns remain about excessive demand for single-stock leveraged ETFs and amplified market volatility. In particular, as more than "20 liquidity providers (LPs)" per single stock participate, continuous concerns have been raised about excessive transaction amounts due to increased inter-LP trade settlements and expanded arbitrage.

Chair Lee held a meeting with major securities firms (Korea Investment & Securities, NH Investment & Securities, Kiwoom Securities) and asset management companies (Samsung Asset Management, Mirae Asset Asset Management, KB Asset Management, Shinhan Asset Management) at the Korea Securities Industry Association in Yeouido, Seoul that morning to discuss market conditions with industry stakeholders. The financial authorities plan to carefully monitor the impact of the basic deposit enhancement measure that takes effect from July 31.

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However, in case single-stock leveraged ETF demand does not sufficiently cool down despite these initial measures, the financial authorities are prepared to review and prepare additional measures in advance. Chair Lee mentioned specific examples including limiting individual investment to "20% or less" of total investment amount, introducing preliminary simulation trading, periodic re-education, and establishing prerequisites for prior investment experience, signaling ultra-strong measures.

At the meeting, Chair Lee instructed the asset management industry to mitigate market volatility by dispersing rebalancing timing. He also urged the securities industry (LPs) to autonomously regulate market overheating through appropriate liquidity supply.

The financial authorities reiterated that they view the situation of investors' expectations being shaken by recent increased market volatility very seriously. Chair Lee stated, "If demand does not sufficiently cool down, we will review and prepare additional measures in advance," expressing strong policy implementation will as the ultimate responsible party for market stability. As prospects emerge that high-intensity regulations such as "20% investment limits" could become reality if industry's autonomous improvement efforts fall short, market-wide vigilance is increasing.