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South Korea's FSC Responds to ETF Controversy Over Market Volatility

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2026-07-17 05:26:24
South Korea's Financial Services Commission said single-stock leveraged ETFs have played a clear role in preventing funds from flowing into overseas equity markets. According to Jin10, the commission also said U.S. and Japanese semiconductor stocks have recently seen a marked rise in volatility, responding to claims that single-stock leveraged ETFs were the main cause of the recent increase in volatility in the South Korean stock market.

Byun Je-ho, head of the FSC's capital markets bureau, said some investment demand that had been flowing overseas has returned to the domestic market, and the products have also helped stop new funds from moving abroad. He added that the stronger volatility in South Korea's stock market since the products were listed cannot be explained simply by single-stock leveraged ETFs, saying the concentration of market funds in Samsung Electronics and SK Hynix, along with repeated shifts in global semiconductor industry expectations and concerns, has widened volatility in related products.
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