South Korea weighs delisting Samsung and SK Hynix leveraged ETFs

South Korean lawmakers and regulators have intensified scrutiny of single‑stock leveraged exchange‑traded funds that track Samsung Electronics and SK Hynix. Opposition party MP Ahn Cheol‑soo called for the products to be delisted, saying the KOSPI has become a “casino” and that the ETFs “eat away at trillions of won in corporate value.” The Bank of Korea and the Financial Supervisory Service warned that leveraged betting could amplify market volatility and pose systemic risks, urging tighter monitoring and possible restrictions on margin‑based trading.

Investors are already feeling the impact. Retail holdings in the leveraged ETFs total about 14 trillion won, with almost 92 % owned by individuals. Rapid price drops in the underlying chips have driven most of the 14 listed products below their issue price, generating substantial paper losses and prompting calls for stronger investor protection, including tighter qualification standards and enhanced risk disclosures. The debate reflects broader concerns about the growth of high‑risk, high‑leverage products in Korea’s fast‑moving equity market.