Chief regulator says more steps being reviewed to cool leveraged ETF market
Lee Eog-weon, chairman of the Financial Services Commission / Yonhap
The chief financial regulator said Wednesday that his agency may draw up more measures to cool the single-stock leveraged exchange-traded funds (ETFs), which have been cited as one of the factors rocking the local stock market.
In a report to parliament, Lee Eog-weon, chairman of the Financial Services Commission (FSC), said it will consider additional measures to dampen demand for recently introduced single-stock ETFs.
Earlier, the FSC unveiled a set of measures, such as a hike in the minimum cash deposit for single-stock leveraged ETF investment, effective Friday.
The government moved up the implementation of the deposit requirement by several weeks to help stabilize the market and protect investors amid heightened market volatility.
"The measures will be swiftly implemented to stabilize the market, and additional measures will be reviewed depending on the market situation," Lee stressed.
As one possible option, Lee has proposed a total volume management measure that would cap investment in such ETFs at 20 percent or less of an individual's total financial investment portfolio.