In a press briefing at Cheong Wa Dae on Friday, chief presidential secretary for policy Kim Yong-beom said that the government has been holding regular meetings with the country's top financial policymakers including officials from the Ministry of Finance and Economy, the Financial Services Commission, the Bank of Korea and the Financial Supervisory Service, to come up with measures.
"We are continuously monitoring market conditions while considering whether any adjustments are needed," Kim told reporters, referring to the side effects of such ETF products since their market debut on May 27.
"We will closely examine its impact on the market and whether any changes or measures are needed to protect investors," he added.
His comments came amid growing debate over whether these products are amplifying volatility in South Korea's stock market, which has seen sharp ups and downs over the past year, driven largely by an unprecedented semiconductor rally.
Unlike conventional ETFs that track a basket of stocks or a market index, single-stock leveraged ETFs seek to deliver twice the daily return of a single stock.
In South Korea, these products are concentrated almost entirely on Samsung Electronics and SK hynix, allowing investors to amplify gains when share prices rise but magnifying losses when they decline.
They faced growing scrutiny after sharp swings in the shares of the two chip giants resulted in steep losses for many retail investors.
Calls for tighter oversight have also emerged from political circles, with lawmaker Ahn Cheol-soo of the main opposition People Power Party (PPP) urging earlier this week that the products be delisted, saying they had turned the country's stock market into a "casino" and describing them as a "policy failure."
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