The financial regulator of South Korea Financial Services Commission is planning to revise a capital market law, which will help in the formation of an onshore hedge fund sector, Asian Investor reports. The law is expected to be amended by the end of 2011.

The modification will allow funds to leverage up to 400% of total assets. The amendment will also eliminate a prerequisite that each fund invest at least 40% of its assets in companies targeted for restructuring.

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