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The Democratic Party, the Financial Services Commission (FSC), and the Financial Supervisory Service (FSS) will conduct a review of single-stock leveraged exchange-traded funds (ETFs) on the 20th. It marks the first party-government discussion since the government drew up measures on single-stock leveraged ETFs on the 16th.
According to the ruling bloc on the 19th, lawmakers of the Democratic Party's National Policy Committee will receive a closed-door briefing the following morning at the National Assembly through a party-government meeting with the FSC and the FSS. The move also reflects a determination to accelerate the passage of the Lee Jae-myung administration's legislative agenda amid the opposition's boycott of standing committees. A National Policy Committee official said, "This is an occasion that combines a party-government consultation and a business briefing ahead of the standing committee's full operation."
Democratic Party members of the National Policy Committee are expected to ask financial authorities for effective supplementary measures regarding the single-stock leveraged ETFs announced by the government. At a macroeconomic and financial affairs meeting (F4 meeting) on the 16th, the Ministry of Economy and Finance, the Bank of Korea, the FSC, and the FSS announced measures including sharply raising the basic deposit to 30 million won and expanding the minimum purchase unit, but criticism has been raised in various quarters that these fall short of reducing market volatility.
A Democratic Party lawmaker on the National Policy Committee said, "Amid the drive to normalize the capital market, there is much concern for the ruling party over Samsung Electronics and SK hynix leveraged ETFs, which are increasing KOSPI volatility," adding, "We will directly hear the financial authorities' position on their response measures and consider additional countermeasures."
The meeting is also expected to include discussions on enacting the Working-Class Finance Support Act, a core "inclusive finance" bill of the Lee Jae-myung administration, within the year. Democratic Party members of the National Policy Committee already received closed-door briefings last week from the Fair Trade Commission and the Office for Government Policy Coordination, and are expected to continue business briefings this week with the Personal Information Protection Commission and others.
Meanwhile, Kim Yong-beom, head of the presidential Office of Policy, drew a line on the 19th against calls to delist single-stock leveraged ETFs, saying, "Delisting is hard to imagine." Appearing on KBS's "Sunday Diagnosis Live" that day, Kim said, "Investors are already invested, and the product size has grown to more than 10 trillion won," and expressed confidence, "If we delist them, that itself would deliver a huge shock to the market. The supplementary measures the government has put forward will be able to resolve a considerable portion of the side effects."
