President Lee Jae-myung has ordered swift regulatory fixes for the single-stock leverage exchange-traded funds (ETFs) tied to Samsung Electronics (005930.KS) and SK hynix (000660.KS), which have been cited as a key cause of the recent volatile swings in the domestic stock market.
Attending the "2026 Second-Half Ministry Work Report," held under the theme "An Irreplaceable Korea Felt in Everyday Life" at the Yeongbin Hall of the Blue House on the morning of the 15th, President Lee asked Korea Exchange Chairman Jeong Eun-bo, "The (single-stock leverage) ETFs are causing a stir, aren't they?" and instructed him to "prepare remedial measures quickly and thoroughly."
President Lee then turned to Financial Supervisory Service (FSS) Governor Lee Chan-jin, noting the criticism pouring in from inside and outside the market: "It seems you've been taking quite a beating recently over the Samsung and hynix (leverage) ETFs." In response, Governor Lee said, "As the market administrator, we bear responsibility, and we are accepting that responsibility willingly."
In fact, at a press conference held last month, Governor Lee expressed strong regret over the product, saying, "I regret that I should have laid down in front of it to block (the system's introduction)." The single-stock leverage ETFs, which made their debut on May 27, have been pointed to as a trigger fueling stock declines amid recent extreme market volatility. Criticism has also followed that the product was hastily launched at the strong insistence of Blue House Policy Chief Kim Yong-beom, despite opposition from the market and authorities.
Following President Lee's instruction, the authorities' efforts to overhaul the system—which they had until now avoided giving clear answers on—are expected to gain momentum. Earlier, on the 10th, Policy Chief Kim Yong-beom said in a briefing at the Chunchugwan press center, "The Market Situation Review Meeting (F4), which includes the Ministry of Economy and Finance, the Financial Services Commission, the Bank of Korea, and the Financial Supervisory Service, is closely examining and deliberating on market conditions." He added, "As this is a newly implemented system, we will carefully review its market impact at the F4 meeting, discuss necessary supplementary measures, and make a decision."
On the same day, Governor Lee also disclosed the progress on the police raid of Jaseng Hospital, which was triggered by a recent complaint filed by four major non-life insurers. The insurance industry suspects that the hospital defrauded huge sums in improper insurance payouts by issuing excessive herbal medicine prescriptions to traffic accident patients. Governor Lee explained, "The FSS is providing overall support," adding, "We are organizing information from the insurers and providing it to investigative agencies."
