Institutions criticize Korean regulators for hastily approving single-stock leveraged products, saying it is "creating a casino" for retail investors.

Glonghui, July 17 – The South Korean stock market has recently seen extreme volatility, with leveraged ETFs linked to Samsung Electronics and SK Hynix amplifying sell-off pressure. So far this year, there have been 37 trading halts on the Korea Exchange, with more than half occurring after the launch of single-stock leveraged products in May. Namuh Rhee, chairman of the Korea Corporate Governance Forum, stated, “The memory chip business is highly cyclical and demand is difficult to predict. Allowing retail investors to use 2x leverage in this sector is a serious policy mistake.” What is unique about South Korea is the enormous scale of retail investor participation and the rapid approval of single-stock derivative products by regulators. Kim Hyung-kyoon, executive director at Tcha Partners, noted, “It’s hard to understand why regulators would approve these products after the market had already risen so much. They’ve essentially created a casino for retail investors.”