Financial Services Commission (FSC) Chairman Lee Eog-weon speaks during a Cabinet meeting at Cheogn Wa Dae, Seoul, Thursday. Yonhap
The chief of Korea’s financial regulator said Thursday the decision to launch single-stock leveraged exchange-traded funds (ETFs) reflected various views, denying allegations it followed instructions from the presidential office.
Financial Services Commission (FSC) Chairman Lee Eog-weon made the remarks during a parliamentary audit at the National Assembly in response to an opposition lawmaker’s question about the reasons behind the launch.
“We have listened to various opinions,” Lee said during the audit.
In May, 16 single-stock leveraged ETFs were listed on the main bourse, which led to extreme volatility on the market.
Korea later raised the minimum cash deposit required to invest in single-stock leveraged ETFs to 30 million won ($22,400) from 10 million won in late July to curb volatility.
“There had been calls (to introduce single-stock leveraged ETFs) as they are allowed overseas but not in Korea,” Lee said.
The FSC chief, however, disputed a recent market estimate putting individual investors’ losses from single-stock leveraged ETFs at around 54 trillion won, saying the figure was “not accurate.”
“Regardless of the need to introduce the policy, I am sorry for the losses, concerns and harm it has caused.”