South Korean lawmakers call for delisting of Samsung and SK Hynix leveraged ETFs, stating that KOSPI has' become a casino ' According to BlockBeats, on July 6th, the regulatory controversy surrounding single stock leveraged ETFs in South Korea continued to heat up. South Korean National Power Party member and former presidential candidate Ahn Cheol soo publicly called for strong measures, including delisting, to be taken against single stock leveraged ETFs tracking Samsung Electronics and SK Hynix, stating that the Korea Composite Index (KOSPI) has "become a casino". Ahn Cheol soo stated that the current amount of funds flowing into Samsung Electronics and SK Hynix leveraged ETFs has reached KRW 212 trillion, with the two companies accounting for approximately 60% of KOSPI's total market value. The combination of high weighted stocks and leveraged funds has amplified market volatility. Since the beginning of this year, the South Korean stock market has triggered the "border car mechanism" (program trading suspension) 31 times, the circuit breaker mechanism has been activated 5 times, and the KOSPI panic index has risen to a historical high of 90.8. South Korea launched its first domestic single stock 2x leveraged ETF at the end of May this year, aiming to attract high-risk trading demand back to the domestic market. However, after the product was launched, there was a significant price deviation due to the daily adjustment mechanism and liquidity issues. In early June, a leveraged ETF tracking SK Hynix rose about 50% in a single day, while the underlying stock fell nearly 8% during the same period. The secondary market price of the fund was once as high as 86% higher than its net asset value, but the premium quickly disappeared the next day, and the ETF fell about 27%. As market volatility intensifies, both the Bank of Korea and financial regulatory agencies have recently issued more cautious regulatory signals. The Bank of Korea warns that the continued expansion of single stock leveraged ETFs may further increase market concentration, exacerbate market volatility, and amplify the risk of losses for retail investors. The South Korean National Assembly has initiated a review of such products, discussing further tightening regulatory measures and even pushing for the delisting of related products. [Original link]