'Was Any Institution Opposed to the Introduction?' ... Lee Eok-won Gives Indirect Answer: "We Did Not Introduce 3x Leverage" [2026 Parliamentary Audit]

When asked whether any institutions had opposed the introduction of single-stock leveraged exchange-traded funds (ETFs), Financial Services Commission Chairman Lee Eok-won avoided a direct answer, offering an indirect response instead.

Yonhap News Agency

At the National Assembly Political Affairs Committee’s parliamentary audit of the Financial Services Commission on Oct. 8, People Power Party lawmaker Cho Jung-hoon asked, “You said you had heard from various industry players and relevant institutions during the process of introducing single-stock leveraged ETFs. Was there any institution or policymaker who opposed them?” Chairman Lee replied, “These products already exist in the United States, so we are familiar with their characteristics and other aspects.”

When Cho asked again whether anyone had opposed the introduction of leveraged ETFs, Chairman Lee said, “There was an opinion that they should have three times leverage, but we did not do that.” Cho asked once more whether there had been any opposition, and Chairman Lee responded, “Everyone agreed with the products as designed to be balanced.” Cho pointed out, “No one at the Ministry of Finance and Economy, the Financial Supervisory Service, the Korea Securities Depository or the Korea Exchange expressed support for introducing leveraged ETFs in relation to foreign exchange. You will have to take responsibility for the remarks you just made.”

Cho also said, “The Korea Financial Investment Association conducted a demand survey during the product issuance process, and many respondents said it would be good to launch products linked to the KOSPI’s top 10 stocks. I also asked why only two stocks were selected.” Chairman Lee explained that this was one way to reduce risk, adding, “If the scope is expanded too much, it affects the underlying stocks.”

The parliamentary audit also saw a heated exchange over the effects of leveraged ETFs on the exchange rate. People Power Party lawmaker Shin Dong-wook criticized the policy, saying, “Do you know that research institutions have concluded that introducing leveraged ETFs has no effect on the exchange rate whatsoever? They went ahead with it in a haphazard way, without assessing how much money would stay in the country instead of flowing overseas or how much the ETFs would help defend the won, on the grounds that similar products exist in Hong Kong. But they had no effect.”

Lee Kang-il of the Democratic Party of Korea argued that it was difficult to say there had been no effect on the exchange rate. “The exchange rate turned downward after leveraged ETFs were introduced,” he said. “It is a coincidence that the timing roughly overlaps with when the exchange rate began to turn down from the mid-1,500-won range. So it may be a stretch to say they had an effect, but we cannot say they had no effect either.”

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