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

[Anchor]

Kim Yong-beom, Chief of Policy for the Presidential Office, stated that it is difficult to delist single-stock leveraged ETFs, which have recently been identified as a cause of extreme volatility in the KOSPI. Opposition parties have poured out demands for Kim's resignation, criticizing the lack of an apology for what they call a major disaster.

Reporter Kim Ayeong has the story.

[Reporter]

Single-stock leveraged ETFs, which are products that track the daily price fluctuations of specific stocks by two times or more, have been identified as a major factor increasing volatility in the domestic stock market recently.

Regarding arguments from some quarters that these products should be delisted, Presidential Policy Chief Kim Yong-beom said the following yesterday (July 19):

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

He also added that it is "hard to imagine" delisting them, asking, "How would we resolve those sell-off orders?"

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

Instead, Kim expressed hope for supplementary measures from financial authorities, such as 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 are measures that "accommodate a significant portion of the issues raised in 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 a downturn," and "authorities, asset management firms, and securities companies will need to discuss further how to minimize market shocks."

It is reported that Democratic Party lawmakers 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 today while reviewing policy tasks for the second half of the year at the National Assembly.

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

Voices demanding a parliamentary investigation and the resignation of Chief Kim have continued, with comments such as, "The 'gambling-like leveraged ETF' is a major disaster that has caused massive losses for 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.