South Korean President Lee Jae-myung directed financial authorities to review regulations governing single-stock leveraged exchange-traded funds after criticism that the products excessively amplify market volatility.

Speaking at a cabinet meeting, Lee called for swift improvements to related rules and supporting measures to address the issues. He emphasized continued monitoring of market impacts and readiness to implement further steps if required.

The comments responded to debate surrounding leveraged products tied to shares of Samsung Electronics and SK Hynix.

The Korea Financial Services Commission noted that the ETFs were introduced to curb capital outflows to overseas markets and to bring investor activity under domestic oversight. Regulators pointed out that similar leveraged products with two to three times exposure exist abroad.

Overseas leveraged product volumes have decreased, while net South Korean individual investment in foreign stocks dropped from about $40 billion last year to $2.8 billion in the first half of this year. Officials said the development has helped stabilize the local currency.

Market observers have nevertheless questioned the role of these domestic products in intensifying recent swings in semiconductor stocks.