Kim Yongbeom: "Leveraged ETFs to Be Closely Reviewed by F4, Supplementary Measures to Be Discussed if Needed"

Presidential Secretariat Policy Chief Briefing

Leveraged ETFs: Expanding Concerns Over Individual Investor Protection and Market Stability

Kim Yongbeom, policy chief of the Presidential Secretariat, stated on the 10th regarding leveraged exchange-traded funds (ETFs), "A market situation monitoring meeting attended by the Ministry of Economy and Finance, the Financial Services Commission, the Bank of Korea, and the Financial Supervisory Service is closely examining the market situation and considering the issue."

Kim Yongbeom, policy chief of the Presidential Secretariat, is giving an opening remark at the Gwankun Debate held at the Press Center in Jung-gu, Seoul on June 24, 2026. Photo by Yonhap News Agency

At a briefing at the Presidential Secretariat that day, Kim addressed concerns that leveraged ETFs are excessively increasing volatility in the domestic stock market, saying, "At the market situation monitoring meeting, commonly known as the F4, each agency is looking into this topic." He explained that F4 (Finance4) is the highest-level meeting of economic, monetary, and financial authorities, attended by the heads of the Ministry of Economy and Finance, the Bank of Korea, the Financial Services Commission, and the Financial Supervisory Service.

Kim went on to say, "The system was introduced on May 27, and about a month and a half has passed," adding, "Since it is a newly introduced system, the F4 plans to closely monitor what impact it has had on the market over the past month and a half of operation."

He continued, "As this is a system introduced for the first time, if there is a need for supplementary measures, I believe the F4 market situation monitoring meeting will discuss the issue and make a decision."

Recently, the controversy surrounding leveraged ETFs has expanded to issues of individual investor protection and market stability. Due to their structure of tracking approximately twice the return of the underlying index, investors can potentially amplify short-term returns in a rising market, but losses can also escalate rapidly in a declining or highly volatile market.

In particular, there are concerns that if individual investors' funds become concentrated in specific products, the resulting buying and selling pressure linked to index fluctuations could further amplify stock market volatility.

This content was produced with the assistance of AI translation services.