South Korea's top financial regulator is considering standalone stabilizing measures for single-stock leveraged ETFs, particularly those tracking tech giants Samsung Electronics and SK Hynix, warning of cascading risks from their extreme volatility.
Lee Chan-jin, Governor of the Financial Supervisory Service (FSS), made the remarks during a press conference on June 22, 2026. He expressed deep concern that ordinary investors are struggling to achieve meaningful returns while profits are largely captured by the operating institutions. The FSS is already strengthening trade monitoring and exploring additional market stabilization tools to counter the ripple effects of sharp fluctuations in these leveraged products.
Surge in Trading Activity Since Listing
The single-stock leveraged ETFs tracking Samsung Electronics and SK Hynix were listed on the Korea Exchange on May 27, 2026, attracting massive capital inflows. According to FSS data, the total market capitalization of these ETFs surged from 4.5 trillion won on the listing date to 9.6 trillion won by June 12 — more than doubling in just over two weeks. Their average daily turnover rate reached 122.5%, far exceeding the 30.2% turnover rate of other leveraged and inverse ETFs, underscoring the frenzy among retail investors chasing high returns.
KOSPI Slumps 7% Triggering Circuit Breaker
Amid the regulatory concerns, the benchmark Korea Composite Stock Price Index (KOSPI) plunged up to 7% on June 23, 2026, triggering a circuit breaker halt. Market participants attributed the sell-off partly to the regulator's warning and the prospect of tighter rules, which may have prompted unwinding of leveraged positions built up in recent weeks. The FSS stated it will monitor market conditions and decide whether to further tighten trading rules for such products.