Ruling Party and Government Prepare Additional Measures on Samsung Electronics and SK hynix Leveraged ETF, with Announcement Expected Next Week

[Financial News] The Lee Jae Myung administration and the Democratic Party of Korea (DPK) said on the 31st that they are preparing additional measures for the Samsung Electronics and SK hynix leveraged ETF. The move comes on top of corrective steps, including a higher minimum deposit of 30 million won starting today, and the new measures are expected to be unveiled as early as next week.
At a Supreme Council meeting that day, DPK acting leader and floor leader Han Byung-do said the government is reviewing additional options such as setting individual investment limits, imposing heavier trading costs on frequent transactions, and making mock trading mandatory, in addition to the 30 million won cash deposit requirement. He added, "The party's special committee on K-capital markets will work closely with the financial authorities and the industry to carefully monitor the effectiveness of the measures being implemented in response to the Samsung Electronics and SK hynix leveraged ETF, as well as market reactions."
In related remarks, chief spokesperson Kang Jun-hyun told reporters after the meeting that the Financial Services Commission and DPK lawmakers on the National Policy Committee are working out countermeasures through party-government meetings and discussions. He said, "When the government comes up with a plan, it will be reported to the committee and discussed. We will keep deliberating, even over the weekend, to quickly prepare stabilization measures."
Earlier, the K-capital markets special committee visited the Korea Financial Investment Association and raised the possibility of increasing deposits to 50 million won and adjusting leverage ratios. At a debate among DPK leadership candidates, a temporary trading suspension and the injection of the Securities Market Stabilization Fund were also discussed.
Adjusting leverage ratios is technically possible, but it is not an easy step because it would require overcoming several hurdles, including a unit holders' meeting. A phased delisting, including a temporary trading suspension, is also seen as a difficult option because of its potential impact on the stock market and harm to investors. The Securities Market Stabilization Fund, which listed companies had built up with more than 1 trillion won in response to the COVID-19 shock in 2020, is reportedly ready to be deployed immediately.

[email protected] Kim Yoon-ho Reporter