The head of South Korea's Financial Supervisory Service admits that the single-stock leveraged ETF policy has failed and plans to introduce safety measures

Deep Tide TechFlow news: On June 23, according to the Korean Yonhap News Agency, Li Canzhen, head of the Korea Financial Supervisory Service, said at a press roundtable on June 22 that the launch of single-stock leveraged ETFs for Samsung Electronics and SK Hynix has been ineffective, with excessive side effects. He said he personally feels deeply regretful and admitted that the policy has effectively been declared a failure. He pointed out that the extremely high trading turnover rate for such products enables securities firms to earn massive commissions, while investors do not receive any substantial benefits; the highest turnover rate is close to 200%, allowing securities firms to make up to 10 trillion Korean won in transaction fees.

Meanwhile, he expressed serious concern about the continued expansion of leveraged investment in the market and the highly concentrated trading in semiconductor stocks, and emphasized that he will consult with policy authorities to introduce, in phases, safety measures targeting credit financing. In addition, regarding the future asset securitization company’s SpaceX public offering with zero stock allocation, he said it is “hard to understand.” The Financial Supervisory Service has also kicked off on-site inspections of Korea’s investment trust operating companies, and will conduct compliance reviews of Samsung Asset Management.