South Korea's financial regulators are discussing measures to raise the minimum trading unit for single-stock leveraged ETFs to 20 shares and allow individual investors holding fewer than 20 shares to sell the remaining positions through after-hours closing-price trading. According to Sina Finance, the Financial Services Commission plans to release detailed guidance on the revised rules next month.

The proposal follows July policy measures that suggested lifting the trading unit to 20 shares to curb speculative trading in single-stock leveraged ETFs. Under the current system, regular trading closes at 15:30, while after-hours closing-price trading runs from 15:40 to 16:00.

If the minimum trading unit is raised to 20 shares, investors holding 1 to 19 shares would not be able to sell during normal trading hours. As a remedy, regulators are considering allowing investors to sell fractional holdings below 20 shares through the after-hours closing-price trading system for a limited period.

Even after that window ends, investors would still be able to apply for securities firms to directly repurchase the remaining shares to complete liquidation.

Since the regulatory adjustment was introduced, the previously overheated single-stock leveraged ETF market has shown signs of stabilizing. The combined market value of 16 single-stock leveraged ETFs surged from 4.4 trillion won on May 27, when they listed, to 16.5 trillion won on June 25, before recently falling back and stabilizing in the 6 trillion won to 7 trillion won range.