Leverage ETF Losses for Individual Investors Reach 6.3 Trillion Won

Lee Ok-yeon, chairman of the Financial Services Commission, and Lee Chan-jin, head of the Financial Supervisory Service, apologized repeatedly on October 22 during a National Assembly audit regarding the single-stock leverage exchange-traded fund (ETF) situation.

Both officials attended the National Assembly audit targeting the Financial Services Commission and the Financial Supervisory Service, expressing their regret, stating, "While there were policy considerations and intentions behind the introduction, we feel heavy-hearted about the results that ensued."

This response came after Kim Jae-seop, a lawmaker from the People Power Party, raised concerns about the losses incurred by individual investors due to the single-stock leverage ETFs and demanded an apology.

Chairman Lee remarked, "Despite the various policy necessities and intentions at the time, we feel a significant burden regarding the outcomes. We will be more meticulous and precise in protecting investors and ensuring market stability."

Director Lee also stated, "We humbly accept the concerns raised by the lawmakers and always carry a heavy heart. We apologize to the public."

He emphasized, "We will reflect on our role and responsibilities as a financial supervisory body regarding investor protection and use this as an opportunity for deep introspection."

Lawmaker Kim pointed out that since the launch of the single-stock leverage ETFs, individual investor losses have exceeded 6.3 trillion won, with significant losses reported among investors in their 40s and 50s. He stressed, "If there are individuals responsible for these decisions, there must also be accountability."

Meanwhile, according to statistics distributed by the Financial Supervisory Service to lawmakers on the National Assembly's Political Affairs Committee the previous day, the total losses for individual investors amounted to 6.313 trillion won from the launch of single-stock leverage exchange-traded products (ETPs) on May 27 until August 14, based on data from ten comprehensive financial investment firms (Korea, Mirae, NH, Meritz, Samsung, KB, Hana, Kiwoom, Shinhan, and Daishin Securities).

* This article has been translated by AI.