'Ukraine Invasion' Leads Exchanges to Designate Russian ETFs as Cautionary Investment Items

Discrepancy Rate 30%... Single Price Trading Implemented for Three Days from the 3rd

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] The Korea Exchange announced on the 2nd that it will designate the exchange-traded fund (ETF) 'KINDEX Russia MSCI (Synthetic),' which has Russian stocks as its underlying assets, as an investment caution item starting from the 3rd.

The Exchange explained, "Within 10 trading days from the designation notice date (the 2nd), the real-time premium/discount rate at the close of trading exceeds twice the management obligation rate stipulated by regulations."

According to Exchange regulations, the premium/discount rate between the market price and the net asset value of ETFs with overseas underlying assets must not exceed 6%. However, this ETF's premium/discount rate surged to +30.46% the previous day.

With the designation as an investment caution item, the ETF will be subject to single-price trading for three trading days starting from the 3rd. During this period, if the premium/discount rate soars or if there is a sudden change in market conditions that the Exchange deems necessary for investor protection and market stability, trading may be suspended.

The underlying index of the Russian ETF is the MSCI Russia 25% Capped Index, composed of stocks listed on the Russian Exchange that meet market representativeness requirements.

Due to the Ukraine invasion and the impact of international sanctions, the Russian stock market sharply declined in late last month. The Russian securities market has been closed since the 28th of last month.

This content was produced with the assistance of AI translation services.