SEOUL, July 16 (Reuters) – South Korea’s top financial regulator Financial Services Commission will announce new measures on single-stock leveraged ETFs soon, its chief said on Thursday.
The regulator will “closely inspect and review improvement measures” on the ETFs soon, FSC Chairman Lee Eog-weon said in a radio interview on Thursday, when asked how the product affected the high volatility of South Korea’s stock market.
“This is basically a high-risk product,” Lee said. “We have explained to investors its risks.”
When asked whether the regulators are considering a temporary suspension of trading in the product, Lee said such a measure could cause a “bigger side-effect” in markets.
The regulators are focusing on improving stability in the Korean stock market, such as attracting more long-term investors by urging companies to improve corporate governance and increase dividend payouts as well as making efforts for South Korea’s inclusion in an MSCI developed-market index.
(Reporting by Heejin Kim; Editing by Muralikumar Anantharaman)
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