Watchdog chief calls for better consumer protection amid market volatility
Lee Chan-jin, governor of the Financial Supervisory Service, speaks during an event held at Naver 1784 in Seongnam, Gyeonggi Province, Tuesday. Yonhap
The chief of the country's financial watchdog urged asset managers Monday to better protect consumers amid increased market volatility.
In a meeting with the heads of major asset managers, Lee Chan-jin, governor of the Financial Supervisory Service (FSS), said their role and responsibilities are increasingly important in selling and managing exchange-traded funds (ETFs) as the market size nearly doubled this year.
"Our capital market is facing increased risk factors such as explosive growth, extreme concentration, and increased market volatility," Lee said.
Lee cited sharp growth in the local ETF market as its net asset value spiked to 507.4 trillion won ($338 billion) as of end-May, from 297.1 trillion won at the end of last year.
Asset managers need to refrain from hurting fair competition in selling their products to consumers.
In particular, the FSS chief has been expressing concerns over the newly introduced single-stock leveraged ETFs, saying the products have been generating many side effects, and his agency is drawing up measures to better safeguard investors.
Earlier, Lee said the overheated rush to single-stock leveraged ETFs with underlying assets — Samsung Electronics and SK hynix — have shown extreme turnover since their introduction in late May, adding that his agency is reviewing measures to buffer potential adverse impacts on investors.