Inverse ETF Turnover Nears 70%... FSS "Checks Bull Market Risks"

In addition, it indicated its intention to simultaneously implement institutional improvements to enable Comprehensive Financial Investment Companies (CFIs) to supply high-quality venture capital. Hwang Sun-oh, Deputy Governor of the Capital Market and Accounting Division at the FSS, stated at a press conference held at the FSS headquarters in Yeouido, Seoul on the 11th, "Even amidst the recent overall market rally, performance differences are emerging depending on investors' holdings and investment strategies. " He added, "Rather than being optimistic based solely on the rise in the index, it is a time when it is necessary to examine the risks existing behind the rally.
58% last month. In particular, the turnover rate for some futures inverse ETFs that track the decline in the stock index at twice the rate has soared to 70%.
7 trillion won at the end of last month. As the likelihood of increased stock market volatility grows due to the launch of single-stock leverage ETFs based on Samsung Electronics and SK Hynix at the end of this month, the Financial Supervisory Service (FSS) is considering relevant response measures.
Deputy Governor Hwang stated, "With the introduction of single-stock leverage ETFs, volatility resulting from investor concentration appears inevitable. " He added, "However, since single-stock ETFs are being introduced to enhance regulatory consistency with global markets, we will devise response measures while closely monitoring investment trends following the launch.
" The FSS also announced plans to actively support the advancement of risk management systems for comprehensive investment firms in relation to the expansion of the issuance volume of promissory notes and IMAs. Financial authorities impose an obligation to maintain a liquidity ratio of over 100% for issued promissory notes and Investment Management Accounts (IMAs).
Additionally, when calculating the liquidity ratios of comprehensive investment firms, a certain amount is added to current liabilities for management purposes. Deputy Governor Hwang stated, "The average liquidity of the seven securities firms currently engaged in the promissory note business is just over 115%," adding, "The intention is not to treat this as a pressing issue due to existing problems, but rather to ensure that liquidity risks in the corporate finance process are properly monitored.
" He further announced, "We also plan to pursue mid-to-long-term institutional improvements, such as reforming the soundness ratios of comprehensive investment firms, to ensure a steady supply of high-quality venture capital. " Measures to strengthen accounting reviews and shorten the audit cycle are also being pursued to facilitate the early exit of distressed companies.
Deputy Governor Hwang explained, "We plan to establish a concrete mid-to-long-term roadmap within this year to reduce the accounting review and supervision cycles to 10 years for KOSPI companies and 5 years for KOSDAQ companies," adding, "We will prioritize shortening the review and supervision cycle to 10 years for KOSPI 200 companies, which represent the market. " Disclosure reviews will also be strengthened to enhance shareholder rights.
Previously, the Financial Supervisory Service (FSS) launched a task force last month to improve disclosure standards for listed pharmaceutical and biotech companies. Lee Dong-gyu, Director of the Disclosure Review Bureau at the FSS, explained at a meeting on the same day, "We plan to distribute disclosure guidelines by the end of June," adding, "The guidelines focus on guiding biotech companies to write disclosures in an easy-to-understand manner to improve investor understanding, while also aiming to reduce the discrepancy between voluntary press releases and statutory disclosures, as seen in the Samchundang Pharmaceutical incident.
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nodelay@fnnews.com Park Ji-yeon Reporter