KB Securities announced on May 16 that it will abolish the basic deposit exemption system for single-stock leveraged and inverse exchange-traded products (ETPs) starting May 20. The brokerage notified customers via text message that all investors will be required to maintain a basic deposit of 10 million won to trade single-stock leveraged ETFs, regardless of their KB Star Club membership grade. The preemptive measure comes ahead of the Financial Services Commission's expected announcement of complementary measures for single-stock leveraged ETFs on the afternoon of May 16. KB Securities had previously exempted preferred customers from the 10 million won basic deposit requirement based on trading performance criteria.
KB Securities Implements 10 Million Won Deposit Requirement for Leveraged ETFs
According to the financial investment industry on May 16, KB Securities sent text notifications to customers announcing that the basic deposit exemption system for single-stock leverage and inverse ETP (ETF and ETN) trading will be abolished starting May 20. Under the new policy, all customers must maintain a basic deposit of 10 million won to invest in single-stock leveraged ETFs, regardless of their KB Star Club grade status.
KB Securities had previously provided basic deposit exemption benefits to preferred customers based on the company's trading performance criteria. A KB Securities representative stated that the measure abolishes the previous system where basic deposits were exempted or reduced according to customer grade levels.
Financial Services Commission Expected to Announce Regulatory Measures
The measure was implemented as the government is scheduled to announce complementary measures for single-stock leveraged ETFs on the afternoon of May 16. The Financial Services Commission's expected announcement is anticipated to include measures such as raising the basic deposit requirement from the current 10 million won and strengthening pre-investment education for investors.
KB Securities appears to have first applied the "abolition of exemption system" that it can implement independently, rather than immediately raising the basic deposit level. The Financial Services Commission had previously requested securities firms to submit self-regulatory action plans for investor protection last week.
FAQ
What did KB Securities announce on May 16?
KB Securities announced that it will abolish the basic deposit exemption system for single-stock leveraged and inverse ETPs starting May 20. All customers will be required to maintain a basic deposit of 10 million won to trade single-stock leveraged ETFs, regardless of KB Star Club membership grade.
Why did KB Securities implement this measure?
KB Securities implemented the measure as a preemptive investor protection action ahead of the Financial Services Commission's expected announcement of complementary measures for single-stock leveraged ETFs on the afternoon of May 16. The Financial Services Commission had requested securities firms to submit self-regulatory action plans for investor protection last week.
