The renewed political pressure comes just days after the FSC tripled the minimum deposit requirement for single stock leveraged ETFs, a move aimed at cooling speculative trading in a corner of the market that has drawn regulatory scrutiny for months. Continued lawmaker attention suggests further tightening cannot be ruled out if trading volumes or investor losses fail to moderate. Separately, progress on a Digital Asset Basic Act would mark a meaningful step for South Korea’s digital asset industry, though the timeline remains unset and lawmakers appear to be watching how similar US legislation develops before committing to a final approach. Bank governance reform and household lending oversight amid rising rates add two further threads that could shape financial sector policy in the months ahead.
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South Korean lawmakers pressed the Financial Services Commission for tighter oversight of single stock leveraged ETFs and progress on digital asset legislation, days after the regulator raised deposit requirements and as bank governance reform and rising rate risks also entered the discussion.
Earlier:
Summary:
- The Democratic Party’s National Policy Committee held a briefing with FSC Chairman Lee Eok-won on single stock leveraged ETFs
- Lawmakers called for stronger monitoring and assessment of market conditions, with additional measures to be devised if necessary
- The FSC had already announced on the 16th that it would raise the minimum deposit requirement for single stock leveraged ETFs from 10 million won to 30 million won
- The committee also discussed legislative priorities including bank governance structure reform and a Digital Asset Basic Act
- Lawmakers noted differing market forecasts around the US GENIUS Act and agreed to continue discussions on domestic digital asset legislation
- A separate briefing from Financial Supervisory Service Governor Lee Chan-jin covered risks tied to rising interest rates and the need to protect ordinary borrowers
South Korea’s ruling Democratic Party called on the Financial Services Commission on the 20th to conduct stronger monitoring of single stock leveraged exchange traded funds and to devise additional measures if necessary. Democratic Party lawmakers on the National Assembly’s National Policy Committee held a party government meeting with the FSC at the National Assembly in Yeouido, Seoul, receiving a briefing from FSC Chairman Lee Eok-won and other officials.
Rep. Park Sang-hyuk of the Democratic Party, the ruling party’s secretary on the National Policy Committee, told reporters there was a briefing on content the FSC had announced the previous Thursday. He said lawmakers had asked for stronger monitoring and assessment of market conditions and, if necessary, for additional measures to be devised. On the 16th, the FSC had announced supplementary measures raising the basic deposit requirement for domestic and overseas single stock leveraged ETFs from 10 million won to 30 million won.
Park also said the National Policy Committee had not operated smoothly in the first half of the year, leaving numerous legislative tasks pending, and that the briefing covered efforts to advance various legislative tasks aimed at inclusive and productive finance. He noted ongoing discussions around improving bank governance structures and said lawmakers had asked financial authorities to swiftly prepare improvement measures so those matters could proceed with transparency.
On the enactment of a Digital Asset Basic Act intended to foster the digital asset industry, Park said several lawmakers have proposed bills, but market forecasts differ on the likely effects if the United States’ GENIUS Act takes effect next year. He said there were general remarks that the government should move quickly to prepare legislation, and that lawmakers agreed to discuss the matter further. On timing, Park said the National Assembly Act requires a bill subcommittee to meet at least twice a month, so further discussions must take place before then, though no specific date has been set.
The National Policy Committee subsequently received a separate briefing from the Financial Supervisory Service, including FSS Governor Lee Chan-jin. Park said lawmakers noted that various risks can arise in financial markets as interest rates rise, and that while those areas are thoroughly managed and supervised, ordinary citizens must not suffer harm when taking out loans.
This article was written by Eamonn Sheridan at investinglive.com.