Seoul: Finance Minister Koo Yun-cheol said Tuesday the government is considering measures to address problems arising from newly introduced single-stock leveraged exchange-traded funds (ETFs), which have been blamed for heightened volatility in the stock market. "I am well aware that leveraged ETFs have brought significant volatility to the stock market," Koo said during a parliamentary session.

According to Yonhap News Agency, the finance minister acknowledged that when the policy was introduced, a thorough assessment of its potential impact on the foreign exchange and capital markets was conducted. However, unforeseen issues have since emerged, prompting discussions on how to address and minimize these problems.

In May, the Korea Exchange introduced single-stock leveraged ETFs that track the daily performance of two major companies, Samsung Electronics Co. and SK hynix Inc. These companies together represent nearly half of the Korea Composite Stock Price Index (KOSPI)'s total market capitalization. As a result, the leveraged ETFs have been identified as contributing to the increased volatility in the benchmark index.

Despite a strong rally since the beginning of the year, the KOSPI has experienced significant fluctuations in recent months. The Korea Exchange has had to activate market-wide circuit breakers six times this year after the KOSPI fell more than 8 percent from the previous session's close. This is a notable increase compared to the period before 2026, when circuit breakers were triggered only six times in total.

Additionally, a record 32 sidecars have been triggered this year, surpassing the previous high of 26 set in 2008. The government is now focused on finding complementary measures to mitigate the volatility caused by these financial products.