FSC chief says launch of single-stock leveraged ETFs reflected various views

Korea's financial watchdog chief defended the introduction of single-stock leveraged exchange-traded funds (ETFs), stating it reflected diverse perspectives and was not dictated by the presidential office. FSC Chairman Lee Eog-weon clarified this during a parliamentary audit at the National Assembly, responding to a query from an opposition lawmaker on the rationale behind the launch.

"We have taken into account various opinions," Lee asserted during the inquiry. In May, 16 single-stock leveraged ETFs were introduced onto the main stock exchange, resulting in significant market turbulence. Consequently, Korea raised the minimum cash deposit needed to invest in these ETFs to 30 million won from 10 million won in late July to mitigate volatility.

Lee acknowledged that there had been requests to permit single-stock leveraged ETFs, as they were permissible in other countries but not in Korea. However, the FSC chief refuted a recent estimate suggesting individual investors had suffered losses of approximately 54 trillion won due to single-stock leveraged ETFs. Lee contended that this figure was not accurate.