The head of South Korea’s Financial Supervisory Service admitted the failure of the single-stock leveraged ETF policy and plans to introduce safety measures.

According to Yonhap News Agency, Lee Chan-jin, Governor of Korea’s Financial Supervisory Service (FSS), stated at a press briefing on June 22 that the launch of single-stock leveraged ETFs tracking Samsung Electronics and SK Hynix had yielded poor results and generated excessive side effects—causing him deep personal regret—and acknowledged that the policy had effectively failed. He pointed out that the extremely high trading turnover rates of these products enabled securities firms to collect massive commissions while delivering no substantive returns to investors; the highest turnover rate approached 200%, allowing securities firms to earn up to 10 trillion Korean won in transaction fees. Meanwhile, he expressed serious concern over the ongoing expansion of leveraged investment in the market and the extreme concentration of trading in semiconductor stocks, emphasizing that the FSS would consult with relevant policy authorities to introduce, in phases, safeguards targeting margin financing. Additionally, regarding Future Asset Securities’ zero-allocation policy for the SpaceX public stock offering, he remarked it was “difficult to understand.” The FSS has launched an on-site inspection of Korea Investment Trust Management Co., Ltd., and will conduct a compliance review of Samsung Asset Management Co., Ltd.