The popularity of single stock leverage and inverse exchange-traded funds (ETFs) has waned, but the controversy surrounding them continues to grow. A key point of contention is who first proposed the introduction of 'single stock leverage ETFs.'
According to financial authorities, discussions about the introduction of single stock leverage ETFs began on January 13. On that day, Kim Yong-beom, then head of the Presidential Policy Office, convened a closed meeting with representatives from five securities and asset management firms. Officials from the Financial Services Commission and the Financial Supervisory Service also attended. The private sector attendees included Park Jong-moon, CEO of Samsung Securities; Heo Sun-ho, Vice Chairman of Mirae Asset Securities; Kim Woo-seok, CEO of Samsung Asset Management; Bae Jae-kyu, CEO of Korea Investment Trust Management; and Kim Sung-hwan, CEO of Korea Investment Securities.
During the meeting, one participant expressed concerns that the domestic regulations on high-risk leverage ETFs were excessively strict. It was noted that the inability to trade single stock leverage and three-times index tracking ETFs in South Korea was driving investors to overseas markets.
Immediate communication with the government followed. Kim Yong-beom reportedly stated, "There are many leverage products and individual stock ETFs that are possible in the domestic market but not available in Korea." The next day, Kim mentioned in an interview with a media outlet that he had instructed financial authorities to consider the introduction of single stock leverage ETFs.
The process for introducing single stock leverage ETFs then proceeded swiftly. The Financial Services Commission designed the underlying asset requirements, and the Financial Supervisory Service reviewed compliance with these requirements before granting approval for actual listings.
However, the identity of the initial proposer remains unclear. Industry sources suggest that a representative from one of the asset management firms present at the January meeting was the first to make the proposal, which was subsequently accepted by Kim Yong-beom.
* This article has been translated by AI.
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