South Korean Policy Chief Kim Yong-beom said Sunday that delisting single-stock leverage ETFs is unlikely due to potential market instability.

The decision is critical as regulators balance the need to protect retail investors from extreme volatility against the risk of triggering a massive market sell-off.

Speaking during an appearance on the KBS program "Sunday Diagnosis Live," Kim addressed demands to remove these financial products, which have been blamed for fueling abrupt stock price swings. He said the idea of delisting the funds is "hard to imagine" [1].

Kim noted that the scale of these products has already grown significantly. He said investors are already positioned in these assets and the total product size has exceeded 10 trillion won [1]. According to Kim, a forced delisting would likely cause a severe shock to the broader financial market [1].

To mitigate the risks associated with these high-leverage tools, the government has implemented specific regulatory measures. These include a basic deposit requirement of 30 million won in cash [1]. Additionally, the government has set the minimum allowable trading unit at 20 shares [1]. Kim said these adjustments are intended to reduce the negative side effects of the products without removing them entirely.

Beyond financial markets, Kim used the broadcast to address domestic housing concerns. He said he is sorry to the public regarding the rise in real estate prices [1]. While Kim offered an apology, some political opponents have disputed the sincerity of the gesture, describing his comments as an attempt to rationalize the government's responsibility [1].

“"Delisting is hard to imagine."”

The government's refusal to delist leverage ETFs suggests a priority on maintaining systemic liquidity and preventing a panic among high-volume traders. By opting for higher entry barriers—such as the 30 million won deposit—rather than a total ban, South Korea is attempting to shift these high-risk instruments away from inexperienced retail investors while keeping the capital within the domestic market.