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South Korea to Unveil Leveraged ETF Measures

Bloomberg Markets •
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South Korea's Financial Services Commission (FSC) Chairman Lee Eok-weon announced that authorities will soon introduce supplementary measures concerning single-stock leveraged exchange-traded funds (ETFs). These products have been identified as a significant contributor to recent stock market volatility.

Lee stated that financial authorities are in close consultation and acknowledge their responsibility for market stability. While a temporary trading halt was considered, it was deemed potentially more disruptive. The FSC is comprehensively reviewing the issue to implement appropriate actions.

Beyond ETFs, Lee also highlighted the expanding global semiconductor industry, particularly the rapid growth of companies like Samsung Electronics and SK Hynix, as a driver of market swings. The increasing market capitalization weight of these semiconductor stocks, now representing 52-53% of the KOSPI, amplifies market shocks. The FSC is also addressing issues related to the collection of long-overdue debts, aiming to improve practices for borrowers and creditors.