Regulatory Improvement for KOSDAQ Active ETFs and Extension of ETF Trading Hours
The Financial Supervisory Service (FSS) is moving to improve the system in response to recent controversy over the advance disclosure of constituent stocks in KOSDAQ active ETFs. This comes after Samsung Active Asset Management faced criticism for revealing constituent stocks just before ETF listing, which allegedly disrupted market order. The FSS is now reviewing measures to eliminate regulatory blind spots and prevent market confusion. If implemented, these improvements are expected to enhance transparency and market stability in the KOSDAQ active ETF sector.
Concurrently, rising global market volatility has amplified calls from investors to extend ETF trading hours. Currently, domestically-listed ETFs in Korea can only be traded during regular hours, but the Korea Exchange plans to introduce pre- and after-market sessions for KOSPI and KOSDAQ from as early as September. This change is expected to alleviate trading restrictions, allowing investors to respond more flexibly to volatile market conditions. With ETF trading volume now exceeding half of KOSPI’s total, these reforms are poised to further fuel ETFs' standing as mainstream investment vehicles in Korea.
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