Rushed single-stock leveraged ETF rollout leaves questions of responsibility unanswered
Policymakers have yet to explain who decided to introduce single-stock leveraged exchange-traded funds (ETFs) or why their reviews were expedited, even as retail investors have sustained more than 2 trillion won ($1.5 billion) in losses on the products tracking Samsung Electronics and SK hynix. The funds have also drawn criticism for amplifying stock market volatility. At a National Assembly…
The introduction of single-stock leveraged exchange-traded funds (ETFs) remains shrouded in questions regarding responsibility. Policymakers have not provided clarity on who decided to expedite the reviews of these products, or the reasoning behind their rushed evaluations. Despite retail investors suffering over 2 trillion won ($1.5 billion) in losses from these Samsung Electronics and SK hynix tracking funds, authorities have not offered a concrete explanation as to why the reviews were conducted at such a rapid pace.
At a National Assembly audit on Monday, Financial Supervisory Service (FSS) Governor Lee Chan-jin admitted that the ETFs underwent unusual quick reviews to meet a predetermined policy schedule. However, he failed to provide concrete details about who established this schedule or the justification behind it. The expedited process was made possible by a government decision to ease regulations.
On April 21, an amendment to the Capital Markets Act enforcement decree cleared the Cabinet for implementation. The Financial Services Commission (FSC), the country's leading financial regulator, announced at the time that these products could be listed as early as May 22. The planned listing date was set to May 27, and on that day, 16 such ETFs made their debut on the market.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
