Republic of Korea Blames Circuit Breaker on Leveraged ETFs? Regulator Eyes Retail Investors Chasing Samsung and SK Hynix Leveraged ETFs, Considering Separate Measures

Odaily Planet Daily News Recently, Lee Chan-jin, Governor of the Republic of Korea's Financial Supervisory Service (FSS), stated that the agency is considering introducing separate stabilization measures for single-stock leveraged ETFs. During a press conference held on June 22, 2026, Lee noted that the negative effects of single-stock leveraged ETFs have intensified. In addition to strengthening monitoring of trading activities, regulators are also weighing other market stabilization measures to hedge against the cascading risks potentially triggered by the volatile swings in single-stock leveraged ETFs tracking SK Hynix and Samsung Electronics. "I am deeply concerned that ordinary investors will find it difficult to realize substantial returns, while the profits and dividends are completely pocketed by the operating institutions," Lee said.

On May 27, 2026, single-stock leveraged ETFs with Samsung Electronics and SK Hynix as underlying assets were listed on the local Korean exchange, attracting a frenzy of market capital. According to statistics from the Republic of Korea's Financial Supervisory Service, the total market capitalization of these single-stock leveraged ETFs more than doubled from 4.5 trillion won on the listing date to 9.6 trillion won by June 12. The average daily turnover rate for these single-stock leveraged ETFs reached as high as 122.5%, far exceeding the 30.2% turnover rate of other leveraged and inverse ETFs. (Caixin)

Possibly influenced by this news, the Republic of Korea's KOSPI index once plummeted by 7% today, triggering a circuit breaker.