South Korea's FSC Refutes Single-Stock Leveraged ETF as Main Driver of Recent Market Volatility; Denies Delisting Demands

According to South Korea's Financial Services Commission director Byeon Je-ho, the regulator confirmed that single-stock leveraged ETFs issued domestically for companies such as Samsung Electronics and SK Hynix have successfully retained domestic investment demand and prevented capital outflow to overseas markets like Hong Kong and the U.S. between May 26 and July 10.

Refuting claims that leveraged ETFs caused recent market volatility, Byeon stated the core driver is shifting expectations in the global semiconductor cycle. Data showed U.S. Flash Memory companies (131%) and Micron (123%), as well as Japan's Kioxia (118%), experienced higher annualized daily return volatility than SK Hynix (113%) and Samsung (96%) during the period. The FSC rejected calls for delisting, citing absent legal termination conditions such as sharp market value declines or lack of liquidity providers.