Source: Sisa Journal · 경제

What happened

Three months after single-stock leveraged exchange-traded funds listed in Korea, President Lee Jae-myung still cannot explain who decided to allow them — even though the route ran through his briefing chain and a presidential enforcement decree.

At a Sept. 18 press conference, Lee said he had not identified the detailed approval procedure. “Someone must have made a decision,” he added. He acknowledged receiving reports on the need for the products and conceded the initial policy design was insufficient, but did not name a decision-maker.

The remark stung because these are not purely market-driven listings. The government eased rules to permit them, and the Capital Markets Act enforcement decree was promulgated as a presidential decree on April 28. FSC materials from the Jan. 30 legislative-notice stage labeled the reform a “presidential briefing task.” Lee confirmed he was briefed at introduction and said the stated rationale — stabilizing the foreign-exchange market and expanding domestic investment — was “principle-wise correct.”

The breakdown

Accountability quickly pointed toward Kim Yong-beom, the former Blue House policy chief who left office on Sept. 1. On Jan. 13, Kim chaired a closed-door “enhance capital market attractiveness” session with regulators and securities executives, then told media he had directly asked the FSC to review products Nasdaq already allows — including leverage and single-stock ETFs. The FSC formalized introduction later that month.

Opposition lawmakers argue the industry did not ask. PPP office documents show a Korea Financial Investment Association opinion compilation lacked any request for single-stock leveraged ETFs; some firms reportedly opposed the idea, and Capital Market Research Institute meeting materials did not assess risk or market impact.

Regulators knew the risk. The FSC warned before listing that losses could exceed ordinary ETFs. FSS Governor Lee Chan-jin said in June side effects were “too big” and regulators “should have blocked it even lying down.” Lee agreed safeguards should have been built upfront but blamed timing near the end of a rally. Listing came May 27 though internal FSC targets once pointed to the second half; who accelerated the schedule remains unclear. The PPP filed a Sept. 10 Corruption Investigation Office complaint against Kim, Lee Chan-jin, and FSC Chairman Lee Eog-weon, and plans an October audit to summon Kim and securities executives.

Why it matters outside Korea

Korea’s single-stock leveraged ETF episode shows how fast amplified chip exposure can move a benchmark — and how opaque policy ownership looks when losses arrive. Overseas holders through local brokers, ADRs, or sector ETFs are watching whether Seoul adds portfolio caps or moratoriums after a product regulators now regret.

What travelers and expats should watch

• October audit calendar: Assembly hearings on approval paths could precede new FSC/FSS rules — re-check broker product notices if you trade Korea-listed leveraged or chip-tied ETFs through a local account.
• Deposit and education gates already live: Prior curbs, including higher cash-deposit thresholds and extended mandatory education, remain binding; political blame games do not reopen May-era access on the same terms.
• Complaint-driven probes: The Sept. 10 Corruption Investigation Office complaint against top financial regulators could slow rule tweaks; watch official FSC/FSS statements, not only press-conference quotes.

Context

Read this as a government-led product approval with an unresolved decision trail, not as proof leveraged ETFs were a spontaneous retail fad the market invented alone. Sisa Journal’s stack is presidential briefing plus April 28 decree promulgation versus Lee’s Sept. 18 admission that he cannot map the detailed procedure — with Kim Yong-beom’s Jan. 13 meeting and the May 27 listing sitting in an accountability gap headed into October audit season.

Source

Sisa Journal · 경제: 보고는 받았지만 결정자는 모른다…레버리지 ETF ‘책임 공백’ — Korean original; paraphrased for briefing. Soft briefing only — not personalized investment, tax, or securities advice.