Financial Authorities to Conduct Special Inspection on High-Risk Overseas Investment Products
The government has decided to conduct a special inspection of securities companies' high-risk overseas derivative products and leveraged ETFs. This action follows the recent surge in individual investors, known as 서학개미 or 'overseas ants,' who have been identified as contributing to the rise in the won-dollar exchange rate. The Financial Supervisory Service aims to review the marketing practices of these securities firms until January next year, emphasizing that this inspection focuses on strengthening internal controls and enhancing the transparency of investment explanations for better investor protection, rather than regulating overseas investments per se.
Despite some investors arguing that the measures overlook fundamental issues such as the deterioration of economic fundamentals and increased liquidity, the financial authorities see this as necessary for ensuring exchange rate stability and investor protection. The inspection seeks to raise awareness among investors regarding investment risks and to encourage responsible marketing practices from securities companies.
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