South Korean regulators face scrutiny over rushed launch of leveraged single-stock ETFs

South Korean authorities have been unable to explain who authorized the rapid introduction of single-stock leveraged exchange-traded funds that track Samsung Electronics and SK hynix. Financial Supervisory Service governor Lee Chan-jin confirmed the reviews were rushed to align with a policy timetable announced by the Financial Services Commission, yet he offered no details on who set that schedule. Opposition members Park Dae-chul and Park Sung-hun highlighted that one outlet's review process, normally taking up to 62 days, was compressed to just 29 days, and that the FSS began its assessment before the Korea Exchange completed its preliminary check.

Retail investors have incurred losses of roughly 2.32 trillion won between the funds’ May 27 launch and mid-August. Attempts to summon key figures, such as former presidential policy chief Kim Yong-beom, have been blocked by the ruling Democratic Party, and FSC chairman Lee Eog-weon has not clarified the decision-making chain. President Lee Jae Myung acknowledged design flaws in the policy but could not name who ordered the rollout. The episode raises concerns about regulatory oversight and the balance between attracting domestic capital and protecting investors.