TechFlow News, June 23: According to Yonhap News Agency, Lee Chan-jin, Governor of South Korea’s Financial Supervisory Service (FSS), stated at a press briefing on June 22 that the launch of leveraged ETFs tracking individual stocks—specifically Samsung Electronics and SK Hynix—had yielded poor results and produced excessive side effects, expressing deep personal regret and acknowledging that the policy had effectively failed. He noted that the extremely high 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 trading fees.
Meanwhile, he voiced serious concerns over the continued 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 roll out, in phases, safeguards targeting margin financing. Additionally, regarding Mirae Asset Securities’ public offering of SpaceX shares—which allocated zero shares to retail investors—he described the outcome as “unfathomable.” 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.
