South Korea's financial regulator urges spreading leveraged ETF rebalancing across the trading day.

Odaily Planet Daily reports, according to Yonhap News, South Korea’s Financial Services Commission Chairman Lee Eog-weon urged asset management firms on Tuesday to spread out their intraday rebalancing trades for single-stock leveraged ETFs throughout the trading day to curb sharp price swings caused by a surge of orders before market close. Fund managers typically concentrate the majority of their rebalancing activities between 3:20 p.m. and 3:30 p.m. local time to achieve a daily return target twice that of the underlying stocks. Concentrating these trades just before closing can accelerate rallies and deepen declines. Lee Eog-weon stated, “There is market concern that clustering rebalancing trades near the close amplifies volatility—trade timing needs to be dispersed.” He also noted that some products, due to involvement with over 20 liquidity providers, have led to excessive turnover, increased interdealer trading, and expanded arbitrage activity.