South Korean President responds to controversy over a single-stock leveraged ETF market involving Samsung and SK hynix: relevant supporting measures should be formulated and improved as soon as possible

PANews July 22, according to South Korean media outlet NATE, President Lee Jae-myung of South Korea said in today’s cabinet meeting that the market controversy caused by single-stock leveraged ETFs for Samsung Electronics and SK hynix requires financial regulators to promptly develop and improve relevant supporting measures. If necessary, he said, the government should also study further countermeasures. He noted that the market widely criticizes single-stock leveraged ETFs for “excessively amplifying market volatility,” and he called on the relevant authorities to “quickly and fully improve the relevant regulations.” He said that although regulators have taken some measures, investors believe the related products have increased market volatility and downside moves, exposing efficiency issues at the policy level.

The Financial Services Commission of South Korea explained that the size of overseas leveraged product holdings has declined, and South Korean individual investors’ net overseas stock investment also fell from about $40 billion for all of last year to $2.8 billion in the first half of this year, which has played a certain role in stabilizing the exchange rate.