"Delisting Leveraged ETFs Is Difficult"... "No Apology for the Disaster"

[Anchor]

Kim Yong-beom, Chief of Policy for the Presidential Office, has dismissed calls to delist "leveraged ETFs," which have recently been identified as a cause of extreme volatility in the domestic stock market, stating that "delisting is difficult." The opposition party is demanding Kim's resignation, criticizing the lack of an apology for "a catastrophe that has caused massive losses for investors."

Reporter Kim Ayeong has the story.

[Reporter]

Single-stock leveraged ETFs, which track the daily volatility of specific stocks by two times or more, have been pointed to as a primary factor fueling recent volatility in the domestic stock market.

Regarding the arguments raised in some quarters that these products should be delisted, Kim Yong-beom, Chief of Policy for the Presidential Office, stated the following today (July 19):

[Kim Yong-beom/Chief of Policy for the Presidential Office (Source: KBS Sunday Diagnosis Live): It is actually difficult to consider delisting. These products currently hold over 10 trillion won in assets, and if they were to be delisted, that in itself would cause a massive shock to the market.]

He also remarked that it is "hard to imagine" such a move, questioning "how one would even resolve those sell-offs" if a delisting were to occur.

He effectively drew a line against the so-called "market exit" theory.

Instead, Kim expressed confidence in the financial authorities' supplementary measures, which include raising the minimum deposit required for leveraged ETF trading from 10 million won to 30 million won in cash, and increasing the minimum trading unit to 20 shares.

He argued that these measures "accommodate a significant portion of the issues raised by the market" and that "many of the problems will be largely resolved."

However, he added, "Leveraged products have an aspect where their impact doubles during market downturns," and noted that "authorities, asset management firms, and securities companies will need to discuss further how to minimize market shocks."

It is reported that members of the Democratic Party on the National Assembly's National Policy Committee, along with officials from the Financial Services Commission and the Financial Supervisory Service, will discuss this issue while reviewing policy tasks for the second half of the year at the National Assembly tomorrow (July 20).

Criticism has poured in from the People Power Party and others.

Voices demanding a parliamentary investigation and Kim's resignation have continued, with critics stating, "This 'gambling-like leveraged ETF' is a catastrophe that has inflicted massive losses on retail investors, yet there is not even an apology," and "We must hold someone accountable for who introduced this and with what goal, leading to this situation."

(Video Editing: Won Hyeong-hee)
※ Please note: This article was translated by AI and may contain errors.