South Korea has pledged additional measures to stabilize its stock market and restrict retail investor involvement in leveraged exchange-traded funds, following a dramatic selloff that erased billions of dollars in market value.

Finance Minister Choi Sang-mok chaired an emergency meeting on Wednesday, which was attended by top financial regulators. After the session, the government released a statement detailing a series of new steps.

"Participants agreed that concentrated trading in single-stock leveraged products has amplified market volatility, and they committed to responding swiftly and decisively," the Ministry of Economy and Finance said in the statement.

According to the announcement, authorities plan to limit retail access to leveraged ETFs by capping their maximum share in an investor's overall portfolio and raising associated trading costs.

"The government will study overseas precedents, such as Hong Kong's flexible leverage system, to establish a legal basis that allows regulators to implement emergency market stabilization measures," the statement added.

South Korea will also maintain its highest alert level, monitoring the markets around the clock.

The benchmark Kospi index has now tumbled approximately 40% from its June peak. The downturn intensified after SK Hynix reported weaker-than-expected quarterly earnings on Wednesday, fueling doubts about the sustainability of the artificial intelligence investment boom and accelerating a wave of retail selling.

The sharp decline triggered a market-wide circuit breaker for the second consecutive trading session.