Samsung, SK hynix Leveraged ETFs Generate 117 Billion Won for KRX, Brokerages
In the roughly two months since the launch of single-stock leveraged ETFs tracking Samsung Electronics and SK hynix at 2x, fees collected by the Korea Exchange and brokerages have exceeded 117 billion won, or about $82.85 million. Critics argue that retail investors have been exposed to potentially
Since the introduction of 2x leveraged ETFs tracking Samsung Electronics and SK hynix roughly two months ago, fees generated by the Korea Exchange and brokerages have surpassed 117 billion won, or approximately $82.85 million. Critics argue that retail investors have been exposed to significant risks due to the highly volatile nature of these products, while the exchange and brokerages have profited from the surge in trading activity.
According to data submitted to Rep. Park Sung-hoon of the National Assembly’s Political Affairs Committee, total fee income from 16 issues launched on May 27 to the end of last month amounted to 117.26 billion won. Of this, consignment trading commissions earned by securities firms accounted for about 76%, while the Korea Exchange earned 27.91 billion won through trading and clearing fees.
During the 45-day period covered by the survey, the Korea Exchange averaged 620 million won in daily fees, with particularly high daily income on June 24 and July 14. The Korea Exchange's trading fees made up the vast majority of its earnings at 24.14 billion won, compared to 3.77 billion won in clearing and settlement fees. For brokerages, profits were nearly 90 billion won, even though earnings were calculated lower relative to actual trading volume due to some online consignment trading commission waivers.
The head of the financial authorities has expressed concern over the situation, stating that the extreme turnover rate of these products is primarily benefiting brokerages without providing practical benefits to investors. Rep. Park Sung-hoon also emphasized the need to examine whether the exchange fulfilled its role as a market manager.
In response to the controversy, financial authorities implemented supplementary measures starting July 31, raising the investment threshold and setting individual investment limits at around 20% of total investment. They also required prior education and imposed stricter obligations on securities firms to manage tracking error rates.
These measures are now in effect, and the authorities plan to continue additional management and supervision to protect retail investors from high-risk products.
Written by urgent.news from BusinessKorea's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
