[Edaily Reporter Kwon Oh Seok ] Lee Chan-jin, Chairman of the Financial Supervisory Service (FSS), stated on the 22nd that he is “reflecting on whether we should have done everything in our power—even if it meant lying down in the way—to block” the “single-stock leverage” exchange-traded fund (ETF) products launched last month. He was pointing out that these products are increasing volatility in the domestic stock market and thereby exacerbating investor losses.

Chairman Lee made these remarks during a press briefing held on the 22nd at the Financial Supervisory Service headquarters in Yeouido, Seoul, stating, “Since we had already accepted the securities registration statement, there was no other option.”
He admitted, “It seems we prepared this in a rush. We intended it as a measure to repatriate foreign investment related to the (SamsungElectronics) leveraged ETF in Hong Kong, but it doesn’t appear to have been very effective, while the side effects have become too severe,” adding, “The government is also facing many concerns.”
Previously, to stabilize exchange rates and enhance the global compatibility of investment products, the government authorized the launch of single-stock leverage products targeting SamsungElectronics(005930)and SK hynix(000660)starting on the 27th of last month. However, there have been persistent criticisms that these products cause investor concentration and extreme stock market volatility.
Director Lee also pointed out that only the asset management companies that launched single-stock leveraged products and the securities firms that broker them are profiting. He criticized the situation, asking, “Isn’t it the person who takes a cut—the so-called ‘commission’—at the gambling table who makes the most money?”