The Financial Services Commission claimed that it went through a regulatory impact assessment by the Government Coordination Office (GCO) during the process of introducing single-stock leveraged exchange-traded funds (ETFs), but the GCO stated that it did not actually conduct the assessment.
According to materials submitted to Rep. Song Eon-seok (People Power Party) of the National Assembly's Finance Committee on the 18th from the GCO, the GCO's Regulatory Review and Management Office stated, "The related amendments, such as the relaxation of single-stock investment limits, are deregulatory measures and were not subject to regulatory review." The GCO's position is that since Article 7 of the current Administrative Regulations Basic Act mandates the preparation of a regulatory impact analysis only when establishing or strengthening regulations, this amendment was not subject to statutory regulatory impact analysis.
The GCO answered that it does not possess any related materials. As a result of Rep. Song's office confirming with the relevant GCO department by phone, it was found that neither the Financial Services Commission nor the Financial Supervisory Service requested a preliminary review or consultation with the GCO regarding the introduction of single-stock leveraged products, and the GCO did not participate in any separate review.
Meanwhile, the Financial Services Commission stated in its press release materials that "GCO regulatory impact assessment" was the basis for lawful procedures. FSC Chairman Lee Eok-won answered "yes" to a question about whether a stress test was conducted at the National Assembly's Finance Committee plenary meeting on the 29th of last month, and promised to submit related materials. Rep. Song's office explained that it was confirmed that the subsequently submitted materials did not include quantitative stress test results assuming extreme situations.
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Is this just Lee Eok-won's arbitrary test?
▶ Original source: https://news.nate.com/view/20260818n09178
