Trading volume plummeted by 75% on the first day South Korea tightened its leverage ETF regulations.

According to South Korean media reports, on the first day that South Korea’s financial regulators imposed restrictions on individual stock leveraged ETFs, the trading volume of related products plunged to a quarter of the prior day’s level. Data from South Korea’s exchange KRX shows that on the first day of the new rules, the combined turnover of 16 individual stock leveraged and inverse ETFs reached 3.3071 trillion won, a sharp 75.3% drop from the previous day’s 12.4485 trillion won. Compared with the average daily turnover of 12.27 trillion won in July, the regulators’ strict control measures have clearly had an immediate effect in curbing capital flows. Excluding inverse products, the turnover of 14 major individual stock leveraged ETFs also fell by 64.4%, from 6.9354 trillion won the day before to 2.4686 trillion won.