Brokerages and the Korea Exchange reaped approximately 120 billion won in fee revenue over about two months following the launch of single-stock leverage exchange-traded funds (ETFs) for Samsung Electronics and SK Hynix, while retail investors suffered massive losses.

According to data submitted to Representative Park Sung-hoon of the People Power Party by the Financial Supervisory Service and the Korea Exchange, combined fee revenue for the Korea Exchange and securities firms totaled 117.3 billion won from May 27, when 16 single-stock leverage ETFs for Samsung Electronics and SK Hynix were launched, through July 31.

During this period, brokerage commissions from retail trading totaled 89.4 billion won, while the Korea Exchange's trading and clearing settlement fees combined amounted to 27.9 billion won.

Critics point out that as trading activity increased, retail investors' losses snowballed while management fees for securities firms grew.

Asset management companies applied fee rates based on total expense ratios ranging from 0.0901% to 0.29% for single-stock leverage ETFs on Samsung Electronics and SK Hynix, and from 0.1% to 0.49% for 2x inverse products.

Recently, global investment bank Citi estimated the cumulative losses of South Korean retail investors on leveraged ETFs, including single-stock leverage products, at 38.7 billion dollars, or approximately 55 trillion won.

Previously, FSS Governor Lee Chan-jin remarked during a press conference in June regarding single-stock leverage products, saying, "It is leading to a result where only securities firms fill their bellies with extreme turnover rates," and adding, "I personally have serious concerns about a setup where players gain no real benefit while only the systems that manage and operate them profit."

As the controversy grew, financial authorities implemented supplementary measures on July 31 raising the basic deposit requirement from 10 million won in available securities to 30 million won in cash.

Authorities plan to further raise investment barriers soon, such as limiting individual investment limits to around 20 percent of total investment funds.

Reported by Kim Minjeong | Video by Kim In-sun | Graphics by Yook Do-hyun | Produced by SBS Digital News