South Korea’s top financial regulator, Financial Supervisory Service Governor Lee Chan-jin, said this week that he has “regrets” about allowing leveraged single-stock funds to trade in the country, warning that the products can add significant volatility to the market. Lee also cited concerns regarding leveraged funds that track high-flying AI stocks, particularly for non-professionals, noting that about 92% of holders are retail investors. His remarks follow the US Securities and Exchange Commission’s decision last year to halt its review of ETFs providing more than 2x exposure to their underlying holdings. Joy Yang, global head of index product management at MarketVector Indexes, said regulators must balance investor protection and market integrity with promoting financial innovation, adding that capping leverage domestically could simply drive demand offshore to jurisdictions allowing 3x, 5x, or even higher multiples. Yang also stressed the need for investor education, noting that these are not buy-and-hold products and that there is a large gap between theoretical return opportunities and actual performance in volatile markets.