Seoul: The chief of the country's financial watchdog urged asset managers Monday to better protect consumers amid increased market volatility.

According to Yonhap News Agency, in a meeting with the heads of major asset managers, Lee Chan-jin, governor of the Financial Supervisory Service (FSS), emphasized their critical role and responsibilities in selling and managing exchange-traded funds (ETFs) as the market size nearly doubled this year.

Lee highlighted the growing risk factors within the capital market, including explosive growth, extreme concentration, and increased market volatility. He noted that the local ETF market experienced a sharp growth, with its net asset value spiking to 507.4 trillion won (US$338 billion) by the end of May, up from 297.1 trillion won at the end of the previous year.

The governor urged asset managers to maintain fair competition practices when selling their products to consumers. He expressed particular concern over the newly introduced single-stock leveraged ETFs, which have reportedly caused various side effects. The FSS is actively working on measures to improve investor protection in response to these issues.

Lee previously mentioned the overheated demand for single-stock leveraged ETFs, particularly those with underlying assets like Samsung Electronics and SK hynix. These products have exhibited extreme turnover since their introduction in late May. The FSS is currently reviewing potential strategies to mitigate adverse impacts on investors.