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) has left policymakers struggling to explain the decision-making process and the expedited reviews that accompanied their implementation. Retail investors have suffered losses exceeding 2 trillion won ($1.5 billion) on products tracking Samsung Electronics and SK hynix, while these funds have also been criticized for exacerbating stock market volatility.
During a National Assembly audit on Monday, Financial Supervisory Service (FSS) Governor Lee Chan-jin admitted that the products underwent unusually rapid reviews to meet a policy timetable. However, he failed to provide any concrete explanation regarding who set that timetable or on what grounds it was established. The ability to create these ETFs was made possible by a government decision to ease regulations, with an amendment to the enforcement decree of the Capital Markets Act approved by the Cabinet on April 21.
The Financial Services Commission (FSC), the country's top financial regulator, had previously announced on May 15 that the products could potentially be listed as early as May 22. By May 27, 16 such products had made their debut, sparking questions about the decision-making process and the responsibilities involved in the rushed rollout of single-stock leveraged ETFs.
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.
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