Controversy Over Single-Stock Leverage ETFs Reaches National Assembly... Financial Services Commission Chairman Lee Eok-won Attends, Clash Over Hasty Introduction and Dereliction of Duty
National Assembly-level criticism was directed at single-stock leverage exchange-traded funds (ETFs), which have been cited as one of the key factors amplifying

National Assembly-level criticism was directed at single-stock leverage exchange-traded funds (ETFs), which have been cited as one of the key factors amplifying volatility in the domestic stock market. On the 29th, the ruling and opposition parties clashed at a plenary session of the National Assembly's Political Affairs Committee. During the meeting, attended by Financial Services Commission Chairman Lee Eok-won, the opposition party raised suspicions that the products were hastily introduced for the purpose of boosting the stock market ahead of the local elections and called for a parliamentary investigation. The ruling party also urged the financial authorities to thoroughly analyze the impact on the market and supplement investor protection measures. Rep. Kim Yong-man of the Democratic Party of Korea pressed Chairman Lee about the proportion of leverage ETFs in recent market volatility and the reasons behind the delay in the authorities' countermeasures. Rep. Kim Hyun-jung of the same party pointed out that it is necessary to reconsider whether it is appropriate to use the name 'ETF' for high-risk products tied to specific stocks rather than diversified investment products. Criticism was also raised from the People Power Party side that the product approval process was handled too quickly. Rep. Park Dae-chul defined the current situation as a man-made disaster caused by the Financial Services Commission and the Financial Supervisory Service, while Rep. Park Sung-hoon demanded an investigation into whether sufficient stress tests and market risk analyses had been conducted. Rep. Park Sung-hoon also mentioned the need for a parliamentary investigation, saying that if the products were launched despite awareness of the side effects, it could constitute dereliction of duty. [This article was written with the assistance of AI.]
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