KOREAN REPUBLIC: FSC Proposes Capital Market Rules Change on Domestic ETF Market

Monday February 2 2026

On 30^th January 2026, the Financial Services Commission (FSC) proposed capital market rules change to upgrade regulations on the domestic exchange-traded fund (ETF) market and help close the regulatory gap existing between domestically listed ETFs and overseas listed ETFs.

The revision proposal for the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) and the regulation on financial investment businesses will enter a 40-day comment period from January 30 to March 11^th, 2026.

Due to the presence of regulatory gap existing between domestically listed ETFs and overseas listed ETFs (with overseas ETFs being subject to eased regulations in their jurisdictions), it has been pointed out that the domestic ETF market has not been able to sufficiently absorb the demand of investors for diverse types of ETFs. In this regard, an upgrade to relevant regulations is proposed to improve regulatory consistency with global standards and boost the competitiveness of domestic capital markets, while ensuring stronger protection and greater convenience for investors to encourage investments in the domestic market.

Key Revision Details

1. Introducing single-stock ETFs (same rules to be applied on ETNs)
2. Strengthening protection for leveraged ETFs (same rules to be applied on ETNs)
3. Facilitating the development of diverse types of ETFs including covered call ETFs
4. Introducing active ETFs in the domestic market

In this regard, the FSC will seek to amend relevant rules in the FSCMA to introduce active ETFs in the domestic market. The FSC plans to promptly work on a revision bill for the introduction at the National Assembly in the first half of 2026.

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