South Korean exchange-traded funds (ETFs) are experiencing a broad and significant sell-off.

At the time of writing, the CSOP 2x Long Samsung Electronics Daily ETF (HKEX: 07747) was down 14.52%, trading at HK$105.35.

The CSOP 2x Long SK Hynix Daily ETF (HKEX: 07709) fell 9.01% to HK$83.44.

The CSOP KOSPI 200 ETF (HKEX: 03121) declined 5.52%, reaching HK$6.415.

This market movement follows a sharp drop in the benchmark KOSPI index, which extended losses to 6% on Wednesday, marking a decline of over 20% from its June peak.

Individual stocks were also hit hard, with Samsung Electronics Co Ltd shares dropping more than 7% and SK Hynix Inc shares falling over 4%.

The sell-off coincides with heightened regulatory attention.

South Korea's Ministry of Finance announced that the Finance Minister and other economic policymakers have agreed to closely monitor risk factors that could amplify stock market volatility.

Several financial regulators in the country have issued warnings about extreme market swings, specifically pointing to leveraged ETFs linked to semiconductor stocks.

In a significant development, the National Assembly has initiated a review focused on single-stock leveraged ETFs.

The discussions are centered on potentially tightening regulatory controls, with measures under consideration including the possibility of delisting such products from the exchange.

Ahn Cheol-soo, a lawmaker from the ruling People Power Party and a former presidential candidate, issued a stark warning.

He cautioned that if the current "roller-coaster KOSPI" trend continues, the South Korean stock market risks being labeled by global investors as an unpredictable and unreliable market.

He emphasized that time is running out for regulators to take decisive action.