South Korea’s main stock exchange is negotiating with financial authorities to relax a ban on high-risk leveraged ETFs. This move comes as a record-setting rally in local shares has failed to lure retail investors back to the domestic market.

The proposed rule change aims to boost retail investor participation, which has been stagnant despite soaring equity prices. For years, strict regulations have limited access to complex products, pushing traders toward overseas markets and alternative investments.

If approved, the shift could reshape Korea’s ETF landscape, offering more tools for active traders. However, regulators remain cautious about potential market volatility and investor losses, balancing innovation with consumer protection ahead of any final decision.