ETF Regulation: International Experiences and Macroeconomic Implications

In the current global landscape, the regulation of exchange-traded funds (ETFs) is gaining prominence. This discussion arises as the U.S. Securities and Exchange Commission (SEC) initiates a public consultation to assess the implications of regulating innovative ETFs. By examining international experiences, particularly South Korea's, we can gain valuable insights into the challenges and benefits associated with this category of financial products. For instance, since 2013, South Korea has had pioneering experience with leveraged ETFs, which have been subject to regulation from an early stage. This experience highlighted the importance of a clear legal framework to protect investors and promote market transparency. However, it also revealed the complexities associated with risk management and ongoing monitoring of these products. This article explores how international experiences can inform the SEC's evaluation process for innovative ETFs in the U.S. market, emphasizing the need for a balanced approach between freedom and investor security.