South Korean President Responds to Controversy Over Single-Stock Leveraged ETFs for Samsung and SK hynix: Relevant Supporting Measures Should Be Formulated and Improved as Soon as Possible

ME News: On July 22 (UTC+8), South Korea President Lee Jae-myung said at today’s State Council meeting that the market controversy caused by single-stock leveraged ETFs for Samsung Electronics and SK Hynix requires financial regulators to promptly formulate and improve relevant supporting measures; if necessary, he said they should also study introducing further countermeasures. He said the market generally criticizes that single-stock leveraged ETFs “over-amplify market volatility,” and urged the relevant authorities to “quickly and thoroughly improve the relevant systems.” He said that although regulators have taken some measures, investors believe the related products have exacerbated market volatility and price declines, revealing efficiency issues at the policy level.

The Korean Financial Services Commission explained that the scale of leveraged products overseas has declined, and that South Korean individual investors’ net overseas stock investment also fell from about $40B for the full year last year to $2.8B in the first half of this year, which has played a certain role in stabilizing the exchange rate. (Source: PANews)