Government and industry efforts in South Korea to expand exchange-traded fund and derivatives products have lost momentum after the recent launch of single-stock leveraged products increased stock-market volatility. Discussions on introducing fully active ETFs have effectively stopped as of Aug. 13, even though the Financial Services Commission had planned a first-half revision to the Capital Markets Act that would relax the correlation requirement now used to police active ETFs. Under current law, an active ETF can be delisted if its correlation with its benchmark stays below 0.7 for three consecutive months, a rule market participants say leaves little room for flexible management. With that broader reform delayed, some in the asset-management industry want authorities at least to extend the delisting test to six consecutive months. A separate plan to expand weekly option expiries for Kospi 200 and Kosdaq 150 from Monday and Thursday to every weekday has also moved down the agenda, as regulators weigh concerns that daily expiries could revive volatility and spur ultra-short-term derivatives trading. The Korea Exchange is also taking a cautious stance on listing ETF weekly options in the second half of this year, saying it will review steps such as diversifying weekly option expiries while checking market demand.