SEOUL, July 19 (AJP) - Senior presidential secretary for policy Kim Yong-bum on Sunday ruled out delisting single-stock leveraged exchange-traded funds (ETFs), which have come under scrutiny for fueling market volatility, saying doing so would deliver a significant shock to financial markets.
Appearing on a KBS program, Kim said it was "hard to imagine" delisting them because investors have already poured substantial funds into them.
"If they were delisted, that in itself would deliver a huge shock to the market," he said, adding that assets in the products had already exceeded 10 trillion won (US$7.2 billion).
His remarks came after financial authorities including last week announced measures to curb excessive speculation in those ETFs, which have fueled concerns about market volatility.
Under the tightened rules announced by a government-led committee comprising the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS), the minimum cash deposit required to trade those products will be raised to 30 million won from 10 million won starting early next month, while the minimum trading unit will increase to 20 shares in November.
The measures also require investors to complete three hours of training before trading these ETFs, up from the current two hours. Financial authorities will also temporarily halt new listings until market conditions stabilize and ban advertising and marketing of existing products.
Kim said these measures, which followed extensive consultations with brokerages, asset managers and industry officials, should address many of the concerns surrounding the products.
"Most of the concerns should be addressed once the new rules take effect," he said.
Kim, nevertheless, admitted that these ETFs can amplify market swings during sharp declines, vowing that regulators, financial authorities, and other relevant parties would continue discussing additional measures to curb volatility.
Separately, Kim apologized for the recent surge in home prices, saying a shortage of housing supply has made the situation especially difficult. He said the government would prioritize measures to boost housing supply in the near term.
Kim also said the government plans to apply different tax rules depending on how many homes a person owns and whether the property is owner-occupied.
Appearing on a KBS program, Kim said it was "hard to imagine" delisting them because investors have already poured substantial funds into them.
"If they were delisted, that in itself would deliver a huge shock to the market," he said, adding that assets in the products had already exceeded 10 trillion won (US$7.2 billion).
His remarks came after financial authorities including last week announced measures to curb excessive speculation in those ETFs, which have fueled concerns about market volatility.
Under the tightened rules announced by a government-led committee comprising the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS), the minimum cash deposit required to trade those products will be raised to 30 million won from 10 million won starting early next month, while the minimum trading unit will increase to 20 shares in November.
The measures also require investors to complete three hours of training before trading these ETFs, up from the current two hours. Financial authorities will also temporarily halt new listings until market conditions stabilize and ban advertising and marketing of existing products.
Kim said these measures, which followed extensive consultations with brokerages, asset managers and industry officials, should address many of the concerns surrounding the products.
"Most of the concerns should be addressed once the new rules take effect," he said.
Kim, nevertheless, admitted that these ETFs can amplify market swings during sharp declines, vowing that regulators, financial authorities, and other relevant parties would continue discussing additional measures to curb volatility.
Separately, Kim apologized for the recent surge in home prices, saying a shortage of housing supply has made the situation especially difficult. He said the government would prioritize measures to boost housing supply in the near term.
Kim also said the government plans to apply different tax rules depending on how many homes a person owns and whether the property is owner-occupied.
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