Korean financial watchdog chief rejects claim of rushed review of leveraged ETFs
In short
Financial Supervisory Service Governor Lee Chan-jin (이찬진) told a National Assembly committee on the 22nd that he cannot accept the charge that single-stock leveraged ETFs were reviewed in haste. He said the legal review period is 15 days and that the filings were accepted after 15 days. People Power Party lawmaker Park Sung-hoon (박성훈) had said the review took 29 days against the usual 60.
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Financial Supervisory Service Governor Lee Chan-jin (이찬진) said at the National Assembly Political Affairs Committee audit on the 22nd that he cannot accept the criticism that single-stock leveraged products were reviewed in haste. He was responding to Park Sung-hoon (박성훈) of the People Power Party, who said the listing review, which normally takes 60 days, was finished in 29. [ 1 , 2 ]
Park said the Financial Supervisory Service had said it moved quickly to meet the listing schedule announced by the Financial Services Commission. According to Asia Economy, he also asked who had requested that the review period be cut to 29 days. [ 1 , 2 ]
Lee said there was a misunderstanding. He said the review period under the law is 15 days, that the product structure and risks were examined strictly for each filing over those 15 days, and that the filings were accepted at the end of that time. He said that his earlier remark that the process went fast referred to the fact that the filings came to the service directly, whereas a preliminary listing review normally comes first and the securities filing follows. [ 1 , 2 ]
Asia Economy said Lee had said on the 19th, at the committee's audit of the Financial Supervisory Service, that the review was sped up to fit the Financial Services Commission's schedule, which led to the controversy. On the 22nd, according to the outlet, he said he had made the remark while answering about parallel review and launch timing. [ 2 ]
A Yonhap headline and summary say that at the comprehensive audit on the 22nd the People Power Party asked who would take responsibility over the leveraged ETFs, while the ruling party refrained from commenting. [ 3 ]
Why it matters
The exchange shows a dispute in the Assembly over how single-stock leveraged ETFs were screened before listing. The documents give no finding on whether the review was adequate.
Key facts
- Lee Chan-jin, head of the Financial Supervisory Service, spoke at the National Assembly Political Affairs Committee audit on the 22nd. [ 1 , 2 ]
- Park Sung-hoon of the People Power Party said the listing review, which usually takes 60 days, was finished in 29 days. [ 1 ]
- Lee said the review period under the law is 15 days and that the filings were accepted when the 15 days were up. [ 1 , 2 ]
- Lee said he cannot accept the criticism that the review was rushed. [ 1 , 2 ]
- Lee said some speed came from the product filings arriving directly, without the usual preliminary listing review. [ 1 , 2 ]
- On the 19th, Lee had said the review was moved ahead in line with the Financial Services Commission's schedule, which led to the controversy. [ 2 ]
Confirmed by several sources
Still unclear
- Whether the Financial Services Commission's schedule affected the length of the review. Park said the Financial Supervisory Service had said it sped up the review to meet the commission's listing schedule, while Lee on the 22nd called this a misunderstanding.
- Who asked for the review period to be shortened to 29 days. Park asked this, and Lee answered only that there was a misunderstanding and that his earlier remark was about parallel review and launch timing.
- What the People Power Party and the ruling party said in detail on the leveraged ETF issue. Only a headline and short summary from Yonhap is available, saying the opposition party asked who would take responsibility and the ruling party refrained from comment.