Financial authorities announce review of supplemental measures for single-stock leveraged ETFs
Financial authorities said 7month 10day, that they would supplement the system for single-stock leveraged ETFs if necessary. The Financial Services Commission told securities firms to implement investor protection measures, and the Blue House said it is considering a system overhaul.
Financial authorities said 7month 10day that they would supplement the system for single-stock leveraged ETFs if needed. As the reason, they cited a growing number of cases in which related products have caused investor losses in a sideways market.
Kim Yong-beom, vice chairman of the Financial Services Commission, said he would look into the need for supplemental measures for single-stock leveraged products. On the same day, the Financial Services Commission ordered securities firms to prepare investor protection safeguards.
The Blue House said it is considering institutional reforms for single-stock leveraged products. In the market, leveraged ETFs linked to Samsung Electronics and SK Hynix were cited as representative examples.
Some reports said that in a sideways market period, when prices do not rise, cases emerged in which investors’ account valuation gains and losses worsened. As a result, calls were made for financial authorities to step up inspections and for securities firms to strengthen guidance to customers.
The FSC said it will for the time being inspect market conditions and how securities firms are carrying out investor protection measures. Securities firms are reportedly preparing measures such as stronger risk disclosures to investors and enhanced suitability reviews.