Financial Services Commission Chairman Lee Ok-kyun and Financial Supervisory Service Chief Lee Chan-jin repeatedly apologized for the issues surrounding single-stock leveraged exchange-traded funds (ETFs). Regarding the U.S. Nasdaq listing of Solidigm, a subsidiary of SK Hynix, they stated it falls under the "duplicate listing regulation" and expressed intentions to review compliance with shareholder protection obligations in the future. They also mentioned discussions on linking the total debt service ratio (DSR) regulations to the internal loan issues faced by some corporate and public institution employees.
During a comprehensive audit by the National Assembly's Political Affairs Committee on October 22, lawmaker Kim Jae-seop of the ruling People Power Party pointed out that individual investor losses have exceeded 6.3 trillion won since the launch of single-stock leveraged ETFs, particularly affecting investors in their 40s and 50s, who are crucial to the national economy. He emphasized that policymakers should feel a deep sense of responsibility, stating, "It is not sufficient to evade accountability by claiming neither of you are the final decision-makers. When a policy is created, there are decision-makers, and those responsible must be identified."
In response, Chairman Lee acknowledged that while there were policy considerations and intentions at the time, he felt a heavy heart over the resulting consequences, stating, "We will implement more careful and sophisticated policies regarding investor protection and market stability." Chief Lee also expressed his remorse, saying, "I always carry a heavy heart and apologize to the public," adding that he would reflect on the role and responsibilities of the financial supervisory authority regarding investor protection. However, he rejected claims of hasty implementation, stating, "I cannot accept that the product was rushed through the review process."
The issue of Solidigm's duplicate listing was also raised again. In response to a question from Democratic Party lawmaker Lee Kang-il about whether the same regulations apply to overseas listings, Chairman Lee replied, "When creating guidelines for duplicate listings, they should apply to both overseas and domestic listings." He added that SK Square and SK Hynix, as parent companies, must fulfill their five obligations based on shareholder loyalty, but noted that the listing plan for Solidigm has not been officially confirmed.
During the audit, the method of calculating loan interest rates in the banking sector and the fairness of household loan regulations were also scrutinized. Lawmaker Song Eon-seok pointed out that internal loans amount to a total of 9.14 trillion won, including 1.02 trillion won from public institutions, 1.7 trillion won from 29 securities firms, and 6.3 trillion won from seven major corporations. He criticized the disparity in regulations, stating that while DSR and other measures apply to the general public, some employees can utilize internal loans with looser regulations. Chairman Lee responded that discussions are ongoing with the Financial Services Commission, but no specific direction has been determined.
* This article has been translated by AI.
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