ETF After-Hours Trading Faces Reconsideration Amid Growing Market Volatility Concerns

The implementation of exchange-traded fund (ETF) after-hours trading, which had been pushed for introduction next month (September 2026), has become uncertain once again about a month ahead of its scheduled rollout.

This comes as growing concerns are raised that extending ETF trading hours amid recently expanding stock market volatility to record levels could heighten price distortion and speculative demand.

Financial authorities and the Korea Exchange (KRX) reportedly planned to open a system this week to accept applications for ETFs eligible for after-hours trading from asset management companies, but the plan has entered a reconsideration phase.

An official from the financial investment industry stated, "There is a consensus across the industry that after-hours ETF trading should be postponed, and even the complete scrapping of the introduction is being considered."

Concerns have been raised that measures to expand trading opportunities could stimulate turnover and speculative demand, thereby amplifying market volatility.

Due to these concerns, while there was an informal process between the exchange and working-level staff at some asset managers to check participation intent, official demand surveys or application receptions to finalize trade target products have not been conducted.

Financial authorities are reportedly re-discussing whether to include ETFs in after-hours trading targets, and if so, to what extent to permit them.

This effectively amounts to returning to square one to review the implementation and scope of the system itself before accepting product applications.

Previously, financial authorities and the exchange planned to operate the after-hours market starting September 14, 2026, including ETFs applied for by asset managers and liquidity providers in the trading targets.

Even if asset managers were left to decide whether to participate voluntarily, the exchange had expected a certain level of applications, mainly from large firms, considering profitability and market share competition.

However, the atmosphere changed following recent overheating controversies surrounding single-stock leveraged ETFs and sudden stock market fluctuations.

To stabilize the market, financial authorities accelerated the implementation of measures, raising the basic deposit for single-stock leveraged ETFs from 10 million won to 30 million won, and excluding substitute securities such as stocks, ETFs, and bonds from the deposit calculation earlier than originally planned.

Analysts suggest that with demand suppression measures activated just about two months after the launch of these products, the pressure has also grown that further extending ETF trading hours could send contradictory policy signals.

Reported by Jung Da-eun | Video by Seo Byeong-wook | Graphics by Yang Hye-min | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.