South Korea tightened rules on single-stock leveraged ETFs as the KOSPI headed for a record monthly drop and senior officials reviewed market conditions and policy options. Measures announced on July 29 include higher trading costs and a cap limiting each retail investor’s holdings of single-stock leveraged ETFs to no more than 20% of total invested assets. Authorities are also reviewing further changes, including a Hong Kong-style variable leverage framework that market participants say could allow leverage ratios to be reduced from two times to as low as 1.5 times depending on market conditions. The move followed a roughly 40% market slide over a month that erased about $2 trillion from the KOSPI since its June record high, fueling political and public criticism. Finance Minister Koo Yun-cheol said he was sorry the leveraged products had been introduced without careful consideration, while the Citizens' Coalition for Economic Justice called the launch of single-stock leveraged ETFs and ETNs a policy failure that encouraged risk-taking and worsened volatility. Analysts said the steps may help curb new inflows but may be insufficient to address existing leverage, forced-selling risks and broader liquidity strains.