The controversy over single-stock leverage is escalating. As it becomes a point of contention between political parties, the Blue House has intervened. Kim Yong-beom, head of the Blue House Policy Office, stated on July 10, "If it is determined that improvements to the single-stock leverage system are necessary, decisions will be made at the market situation inspection meeting (F4) involving the Ministry of Finance, the Financial Services Commission, the Bank of Korea, and the Financial Supervisory Service." While the debate intensifies, solutions vary among stakeholders.
As of July 13, the Financial Services Commission is reviewing improvement measures for single-stock leverage products in collaboration with relevant agencies, including the Financial Supervisory Service, the Korea Exchange, and the Korea Financial Investment Association. On July 14, the commission plans to discuss market response strategies with representatives from major securities firms and asset management companies.
However, there are subtle differences in positions among the agencies. The Financial Services Commission, the primary regulatory body, is cautious about viewing single-stock leverage as a direct cause of recent market volatility. There is a prevailing sentiment against the possibility of delisting or halting the launch of new products, as doing so could lead to realized investor losses and undermine policy credibility. Nonetheless, there is consensus on the need to enhance investor protection, prompting a comprehensive review of entry requirements.
In contrast, the Financial Supervisory Service advocates for stricter regulations. The controversy was further fueled by Lee Chan-jin, the head of the Financial Supervisory Service, who criticized the launch of these products during a press conference on June 22, stating, "We should have prevented their release at all costs." However, the Financial Supervisory Service has not publicly clarified what additional regulatory measures should be implemented.
The final decision is expected to be made following the Financial Services Commission's presidential briefing on July 15 and subsequent F4 meetings. The market anticipates that the measures will focus on strengthening entry barriers. Proposed solutions include increasing the minimum deposit requirement and enhancing investor education. Currently, to invest in single-stock leverage products, investors must deposit a minimum of 10 million won and complete one hour each of general and advanced training through the Financial Investment Association's learning system. The association is reportedly considering a comprehensive overhaul of the training content.
* This article has been translated by AI.
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