As leveraged financial products tied to single stocks Samsung Electronics and SK hynix are set to launch on the 27th amid investor interest, financial authorities have moved to crack down on promotional events by the asset management companies launching the products.
In the financial investment industry, complaints are rising that it does not make sense to be unable to publicize a new product when it is launched.
According to the financial investment industry on the 25th, a total of 16 single-stock leveraged financial products that track the single-day share price of Samsung Electronics and SK hynix at ±2 times will be listed simultaneously on the 27th. There are 14 leveraged products in total and two inverse leveraged (gearing-bear) products.
The asset management companies launching these products total eight, including top two players Samsung Asset Management and Mirae Asset Global Investments, as well as Korea Investment Management, KB Asset Management, Shinhan Asset Management, Hanwha Asset Management, Kiwoom Asset Management and Hana Asset Management. These managers had planned various events to attract investors to coincide with the product launch.
Samsung Asset Management and Mirae Asset Global Investments were set to explain the products through a press briefing and investor presentation on the 26th, the day before listing. Shinhan and Hanwha, which are launching inverse leveraged products, as well as Korea Investment & Securities Co., KB, Kiwoom and Hana, were also preparing events such as offering gifts for buying their ETFs.
However, it has been reported that the Financial Supervisory Service recently issued guidelines to these managers that effectively ban events that induce or spur investment. Asset managers that had prepared events are said to have withdrawn them.
The Financial Supervisory Service (FSS) also imposed strict limits on press briefings and investor seminars organized to explain the products, banning acts that encourage or promote investment and emphasizing that only product explanations and investment risk notices be highlighted.
There is pushback in the industry. While they understand the authorities' concerns given the high volatility of leveraged products, they say the restrictions are excessive because investing is done under investors' responsibility.
In addition, as eight managers are rolling out single-stock financial products based on Samsung Electronics and SK hynix, it is noted that differences among managers' products are not large. If events and the like are restricted, large firms will inevitably have the advantage.