On the 27th, after a leveraged exchange-traded fund (ETF) that tracks Samsung Electronics and SK hynix shares at twice the rate listed on the domestic stock market, concerns have been growing that it is becoming a factor amplifying market volatility. Against this backdrop, the Board of Audit and Inspection said on the 25th it will review whether the financial authorities are properly overseeing whether financial firms are engaging in misselling of high-risk products.
That day, the Board of Audit and Inspection said it has begun an audit of the "actual state of protection for financial investors" targeting the Financial Services Commission (FSC) and the Financial Supervisory Service. The Board of Audit and Inspection said, "The KOSPI index has surpassed 8,000 and high-risk products such as leveraged ETFs are becoming mainstream, raising investment risk." It added, "Ordinary financial investors may shoulder excessive transaction expenses when trading stocks due to information asymmetry and a lack of expertise, and may invest without knowing the risks embedded in financial products due to factors such as misselling."
Accordingly, the Board of Audit and Inspection decided to examine whether the financial authorities, including the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS), are formulating effective measures to prevent misselling and whether they are properly conducting supervision and inspections of financial companies that sell high-risk financial products.