Svmuu News: Recently, Lee Chan-jin, Chairman of the Financial Supervisory Service of South Korea, stated that the agency is considering implementing separate stabilization measures for single-stock leveraged ETFs. At a press conference held on June 22, 2026, Lee Chan-jin said that the negative effects generated by single-stock leveraged ETFs have intensified. In addition to strengthening monitoring of trading activities, regulators are also considering other market stabilization measures to hedge against the potential chain risks triggered by the sharp volatility of single-stock leveraged ETFs tracking SK Hynix and Samsung Electronics. Lee Chan-jin said, “ I am deeply concerned that retail investors find it difficult to realize substantial returns, while all the profits end up in the pockets of the operating institutions.”
On May 27, 2026, individual stock leveraged ETFs tracking Samsung Electronics and SK Hynix were listed on local South Korean exchanges, attracting a frenzy of capital inflows. According to statistics from the Financial Supervisory Service of South Korea, the total market capitalization of these single-stock leveraged ETFs has doubled from 4.5 trillion won on the day of listing to 9.6 trillion won as of June 12. The average daily turnover rate for these leveraged ETFs reached 122.5%, far exceeding the 30.2% turnover rate of other leveraged and inverse ETFs. (Caixin)
Possibly influenced by this news, South Korea’s KOSPI index plummeted by as much as 7% today, triggering a circuit breaker.
What is the main cause of the circuit breaker in South Korea? South Korean regulators are concerned about the risk of retail investors chasing high prices in leveraged ETFs tracking Samsung and SK Hynix, and are considering taking separate measures to address this.
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Disclaimer: This content reflects the author's personal views only and does not constitute investment advice.
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